Indian steel sector abuzz with incoming measures by government

Indian steel sector is abuzz with speculations and rumors over the decisions and measures to be taken by the Indian government for steel sector to curb domestic prices as they are likely to affect business in some of the segments to a great extant.

ET reported that Mr KM Chandrasekhar union cabinet secretary has finalized the duty restructuring exercise and sent it to the prime minister for approval and the government is set to announce following measures
1. Removal of import duty on pig iron, mild steel, met coke
2. 10% export duty on bars, rods, HR coils, HR sheets, HSM plates, CR coils, CR sheets, galvanized steel products, pipes and tubes.
3. Export duty of 10% is likely to be imposed on semi-finished products like pig iron, sponge iron, steel and iron scraps.

The report added that Indian government is not in favor of following measures
1. Banning steel exports
2. Putting the commodity under the purview of the Essential Commodities Act
3. Suspending futures in iron and ore.
4. Reduction excise duty on steel from 14% to 8%
5. Reduction in countervailing duty on steel imports to nil from present 14%
6. Reduction in duty on some inputs like zinc and ferroalloys

Only an official announcement detailing final measures can put these speculations to rest….

SAIL to mitigate cost pressures through internal efficiencies

FE reported that Steel Authority of India Limited is looking at increasing its internal efficiencies to mitigate rising input cost.

Mr SK Roongta chairman of SAIL said that though there is tremendous pressure with regard to the increase in the cost of raw materials, it will not very adversely affect SAIL.

He said that "We are meeting rising input cost through internal efficiencies like increasing productivity, reducing energy consumption and increasing the share of value added and special steel products. In 2007, we reduced our energy consumption by 3%. Through other value added measures, we will compensate it."

Mr Roongta said that coking coal has made a big difference to the input costs. He added that "There has been a three fold increase in the price of coking coal from USD 98 per tonne to USD 300 per tonne in the space of one year. There is no doubt that there is tremendous pressure with regard to input costs."

Indian CR makers and galvanizers in peril

Indian secondary steel producers would be hit hard if the proposal to impose export duty on cold rolled steel and galvanized steel becomes reality. Imposition of export duty on CR and galvanized steel would result in heavy losses which may lead witness retrenchment of workers.

Mr SC Mathur president of CR Steel Manufacturers’ Association said that “Since the installed capacities of CR and galvanized steel are not being utilized fully at present, export duty on these products would result in the closure of some steel mills. This in turn would lead to contraction of labor engaged in the sector.”

At present, there are nearly 70 CR and galvanized steel manufacturers in the secondary steel sector providing direct and indirect employment to over 200,000 people across the country.

As per the association, while the installed capacity of CR steel in India is close to 13 million tonnes a year, the production during 2007-08 stood at 11.27 million tonnes. The total installed capacity of galvanized steel in the country is 6 million tonnes while output was just 3.82 million tonnes last year. Domestic consumption was around 2.19 million tonnes while the rest was exported.

SAIL to setup steel processing unit at Gaya in Bihar

UNI reported that Mr Ram Vilas Paswan union steel minister announced that Steel Authority of India Limitedwould establish a steel processing unitin Gaya district of Bihar.

Mr Paswan told reporters here that after Bettiah and Mahnar, SAIL had decided to establish SPU in Gaya district of Bihar, while Industrial Training Institute would be set up in Samastipur district.

He said that '' Foundation stone of SPU in Gaya and ITI in Samastipur will be laid within two months.’

Production in SPUs at Bettiah and Mahnar would begin by the end of this year.

RINL focusing on special steels to boost income

Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited said that it is shifting focus to special steels and as a result it expects to sell 1.82 million tonnes of value added steel during 2007-08 up by 64% YoY.

Mr Bishnoi said that despite the abnormal increase in prices of raw material such as coking coal RINL is likely to post excellent financial results. He said that it was a year of challenges and disruptions in raw material supplies, steep increase in input prices and other problems. But the plant could improve its financial performance as it focused on special steel production for improved sales realization. He added that "The plant is likely to post net profit of INR 1,850 crore on a turnover of INR 10,425 crore during 2007-08 as against INR 1,363 crore during 2006-07 on a turnover of INR 9,131 crore."

However, he admitted that there was a slight dip in saleable steel production during the year to 3.07 million tonnes from 3.29 million tonnes in 2006-07. Dwelling on the problems faced by the plant during the year, Mr Bishnoi said there was disruption in supply of iron ore for some time and the fact that special steel manufacture requires more time should also be taken into account. Repairs also had to be carried out to the blast furnaces during the year and that also explains the slight slump. But still the plant is functioning well above its rated capacity and we have met the ministry’s targets.

TATA ranks 57th among top 100 brands by Brand Finance

According to a UK based independent consultancy firm Brand Finance, TATA has emerged as one of the largest global brands. Valued at USD 11.4 billion, TATA is ranked 57th among top 100 brands listed.

Expressing his happiness, Mr R Gopalakrishnan executive director of TATA Sons and also a member of the group corporate centre said that it is a first for an Indian brand to be listed among the world's largest. He added that "For the first time, an Indian brand has got into the list of the largest global brands, although it is number 57 and they have valued it at USD 11.4 billion."

Mr Gopalakrishnan said that "If you see the three biggest acquisitions in value, the Anglo Dutch steel company Corus is the biggest. When completed and approved, Ford's Jaguar and Land Rover will be second and the third will be TATA chemicals' purchase of General Chemicals. The total amount of acquisitions done by TATA is probably around USD 25 billion in the last 4 to 5 years. A lot of TATA companies are focused on extracting value from these acquisitions by setting up integration committees, by cutting costs, by enhancing values, market access, so on and so forth."

Coca Cola heads the list followed by fellow American companies Microsoft, Google, WalMart, IBM and GE while UK's HSBC is placed 7th.

RINL update on expansion plans

Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited said that orders worth INR 5,600 crore had been placed during 2007-08, taking the total to INR 10,728 crore.

He informed that the equipment for the third blast furnace had been imported and work was proceeding briskly.

He said that RINL is in a position to finance the expansion and, if necessary, it can borrow from the market the additional amount.

He said that the additional capacity would be available by February 2010, taking the plant’s total capacity to 6.3 million tonnes from 3 million tonnes at present.

JSPL works in Orissa delayed by land problems

SNS reported that the construction works of INR 15,113 crore Jindal Steel & Power Limited has been further delayed due to land problem despite paying all the land compensation money to state authorities.

After rescheduling the date for thrice earlier, JSPL authorities had set the date of April 1st 2008 to begin their construction work of its steel and power plant on their acquired land. But they could not operate on their acquired land due to opposition by some local villagers for more compensation and other benefits. JSPL hopes to launch its much delayed construction works at least before monsoon.

According to a district official source, JSPL so far acquired and took possession of 1,750 acres of government and private land out of total required 4,400 acres of land. Meanwhile the company authorities are also worried over the delay in selection of the rehabilitation site even as the sub committee of the Rehabilitation & Peripheral development Advisory Committee had okayed it.

Mr Rajesh Kumar Jha executive director of JSPL Angul project said that it has prepared a unique community development package of staggering INR 50 crore to bring about radical changes in the economic lives of the people in all respects. About the demand by some land oustees for INR 1.5 million land per acre he clarified that the company will follow whatever is logical.

Kalinga Nagar firing victims families accept ex gratia

SNS reported that the families of 9 of the Kalinga Nagar police firing victims have accepted the ex gratia money offered as compensation. With this 12 of the 14 families of victims of Kalinga Nagar police firing accepted the ex gratia money of INR 1 million announced by both the central and the state governments. The Visthapan Virodhi Janmanch, a forum of the tribals fighting against displacement and industrialization in the area, was opposed the government compensation offer. The acceptance of compensation was, therefore, in defiance of the Visthapan Virodhi Janmanch stand.

Earlier, the families of the firing victims were firm in their decision not to accept the ex gratia money from the district administration till the government announced a complete stop of industrial activity and displacement in the industrial complex area. But due to initiative of the new Jajpur district collector Mr Dhiren Kumar Das who assumed his post a couple of days ago the impasse broke. Mr Das observed that the acceptance of the ex gratia money by the families was a positive sign. He informed that the remaining two families could not receive the ex gratia money due to technical reasons. They would be paid the money soon.

The Janmanch, however, made it clear that it would continue its agitation against TATA Steel project as usual. Mr Rabindra Jarika general secretary of Janmanch said that "We have been agitating for our lives and livelihood, and our opposition to TATA Steel project in Kalinga Nagar will continue until our demands are fulfilled. We received government compensation for the loss of the lives of our fellowmen who were killed while opposing the steel project. TATA Steel has nothing to do with it. Besides, receiving ex-gratia money will have no impact on our ongoing agitation."

It may be noted that 14 tribal men and women, including a high school student, were killed in police firing on January 2nd 2006 while protesting against construction of boundary wall for the proposed 6 million tonne steel project of the TATA steel in the Kalinga Nagar steel hub.

Ghodawat to spend INR 400 crore for wind turbines unit

It is reported that Ghodawat Industries is planning to invest over INR 400 crore to set up manufacturing facilities for wind power turbines and core components, such as generators and gear boxes at Kolhapur in Maharashtra.

In the initial phase, slated to take off in 2009, Ghodawat Industries plans an investment of INR 100 crore to manufacture 1.65 MW wind turbines.

Mr Shrenik Ghodawat MD of Ghodawat Industries said that "In the next phase, we will make 100 MW wind turbines with an annual production of about 60 units initially. We aim to garner revenues of INR 500 crore from wind energy by 2010." He added that it also plans to tap markets in West Asia, Latin America and Africa.
Ghodawat has been involved in wind turbine tower manufacturing and supplies major players like Suzlon, Vestas and Enercon. Currently, it has a turnover of about INR 60 crore in the wind tower business. Recently, Ghodawat Industries had announced its foray into wind turbine manufacturing with exclusive technology licensing from US based wind energy major American Superconductor Corporation.

TATA Metaliks Board recommends dividend

TATA Metaliks Limited recently announced that its board of directors at its meeting held on April 26th 2008, inter alia, has recommended a dividend of 70% for the year 2007-08.

National Mineral Awards 2006 announced

It is reported that National Mineral Awards 2006 presentation ceremony was held recently with Mr Ram Ola union minister of mines conferred the awards.

22 eminent geoscientists, engineers and technologists received National Mineral Award for the year 2006 and Dr SM Naqvi senior geoscientist of NGRI received the prestigious National Mineral Award for Excellence 2006. The list of awardees along with their field of specialization is as follows

Mr Ola appreciated the role played by geoscientists in national development. He emphasized upon a more proactive role in the wake of New Mineral Policy that has been recently approved by the union cabinet.

Mr BK Handique union minister of state of mines spelt the need for developing technology for the utilization of low grade ore deposits while protecting the environment and taking care of the safety of people engaged in the mineral and mining industry.

National Mineral Awards instituted by union ministry of mines in the year 1966 are presented every year for outstanding contribution in the fields of mineral discovery & explorations, fundamental and applied geosciences and mining & allied disciplines. Besides, a National Mineral Award for Excellence is also conferred on an eminent earth scientist for his lifetime achievement.

Vedanta to be growth engine of Orissa – Mr Agarwal

SNS reported that unfazed by the controversies dogging his pet multi crore projects in Orissa, Mr Anil Agarwal chairman of Vedanta Group of Industries continues to be positive and excited about the projects while discussing with Mr Naveen Patnaik chief minister of Orissa.

Issues relating to availability of raw material and water were deliberated as Vedanta is to draw water from Hirakud and the bauxite from Niyamgiri which is being thrashed out at the apex court level. As far as the international university project at Puri is concerned, there have been protests over land acquisition. It is to be spread over 6000 acres of land and is planned on lines of the varsity city concept matching the best in the world.

Mr Agarwal said that "I am the engine for growth and development of Orissa. We have complied with each and every stipulation of the apex court." About the alumina plant project, he said that 5000 people have worked tirelessly for over 4 years and majority of them are locals, that’s the kind of commitment that leads to success.

Brushing aside questions on the controversies and opposition to his projects, Mr Agarwal insisted on being positive and on the issue of water from Hirakund said that that "There is enough water and agriculture will not be affected." Similarly, he seems confident of the international varsity project coming up near Puri. He said that "It is going to be much bigger than any of its kind. Preference will be given to students of the state. 25% of the seats will be reserved for meritorious students of the state and the modalities are being worked out."

Bihar accepts NTPC proposal for power distribution

PTI reported that Bihar government has accepted the center’s proposal to allow the National Thermal Power Corporation at Kahalgaon to directly distribute electricity to the areas within a radius of 10 to 12 kilometers, meeting the long pending demand of locals.

Mr Jairam Ramesh union minister of state for energy met Mr Nitish Kumar chief minister the state recently with the proposal from the NTPC in this connection. Emerging from the meeting, Mr Kumar said that the state government agreed to the NTPC's proposal in the interest of the people of Kahalgaon.

Mr Ramesh directed the authorities to start preparations for supplying power to the promised areas without delay. Describing his meeting with Kumar as fruitful, he said that the construction of the NTPC plant at Barh was moving at a slow pace due to some problems of the Russian company, which was assigned the job. However, it would soon be accelerated.

Official sources said that NTPC proposes to cover areas within a radius of 10 kilometers to 12 kilometers from the plant in the wake of the recent unrest in Kahalgaon. Three people had lost their lives in police firing at Kahalgaon in January 2008 when demonstrators seeking uninterrupted power supply from the NTPC turned violent and attacked the policemen. The firings had sparked off protests by opposition parties in Bihar which demanded resignation of chief minister.

Subsidy sought for ICD traffic in NE

It is reported that although Railway Budget for 2008-09 has proposed 6% freight subsidy for inward traffic by rail into the North East and a similar subsidy is already in force for outward traffic. Unfortunately, but both inward and outward, handled by Guwahati Inland Container depot, operated by the Container Corporation of India, remains outside the purview of the subsidy schemes.

As per report, Federation of Industries & Commerce North East Region therefore has taken up with the appropriate authorities the need for extending the subsidy, as applicable to North Eastern region’s both inward and outward rail traffic, to cover the traffic handled by Amingaon ICD.

Right now, the empties from Kolkata are repositioned at the ICD at a cost, as there is hardly any import from Kolkata Dock system to the ICD and, as a result, the exporters are required to pay through their noses.

The extension of the subsidy will take care of at least part of the cost and the exports from the region will get a big boost.

Uttarakhand to explore gas based projects

It is reported that Uttarakhand government is planning to tap alternative sources of energy, particularly the gas based sector, to meet the growing power demand. For this purpose, the government has already roped in Gas Authority of India Limited to jointly examine various project opportunities for natural gas and undertake extension of the National Gas Grid to Uttarakhand.

Official sources said that a possible pact with other private players like Reliance Industries is also being explored. After the declaration of state's new hill industrial policy in 2008, power demand in the state, which is around 20 to 22 million units, is likely to increase by 17% to 20% annually as industries continue to set up new units in the state.

State Industrial Development Corporation of Uttarakhand Limited, which has developed several modern industrial estates, has signed a MoU with GAIL to give a fillip to gas based energy projects. And now, a feasibility report is being prepared on the gas-based projects. An assessment exercise for natural gas and allied products is also being conducted in the state.

Sources said that GAIL's existing Hazira Bijaipur Jagdishpur trunk pipeline networks in Uttar Pradesh and its nearest tapping point is at Bareilly from where clean fuel could be made available to Uttarakhand via two routes. It added that the first route will lay a pipeline network to Rudrapur, Ramnagar and Haldwani from Bareilly while, the other route would be an extension of gas pipeline from Dadri.

DMRC to build green metro station for Gurgaon by 2010

Delhi Metro Rail Corporation is planning a green metro station at Sushant Lok in Gurgaon. The last station on the 7.05 kilometer long Gurgaon line from Haryana border to Sushant Lok will have a 7 floor eco friendly building, complete with a shopping and entertainment complex. The station is expected to be ready by January 2010. Bangalore based architect firm Viswanath Associates is designing the project.

Delhi Metro Rail Corporation is working out architectural and engineering details in association with The Energy Research Institute and the architect. The line will have a total of 5 stations namely Sushant Lok, Garden Estate, Sikandarpur, DT City Centre and Iffco Chowk.

Mr Gaurav Shorey area convener of Green Rating for Integrated Habitat Assessment said that "The project has got approval from the government. It may be rated under Green Rating for Integrated Habitat Assessment system as endorsed by the ministry of new and renewable energy. Teri will assist in providing service and information on relevant technologies."

Mr Anuj Dayal chief public relations officer of DMRC said that Sushant Lok Metro Station, which will be on an elevated line, will have three and a half floors above the station and another three floors below, including the basement. One of the plans is to make the station building eco friendly by using clay tiles that provide weather insulation. He added that "These extra floors will be part of a big shopping complex. 95% foundation work has been completed and the building will be ready by January 2010, around the time when this line is supposed to be opened. We also plan to adopt proper water and waste management strategies."

According to DMRC officials, other features would include utilization of climactic factors such as wind load, solar energy and air movement pattern, optimum combination of water, material and energy, recycling of waste water, rain water harvesting, minimizing the use of water during construction, optimizing the use of natural light inside the building and restricting the indoor noise level.

The building will try to minimize water demand with waste water treatment plants and solid waste management strategies will be adopted for disposal and handling. The landscape would employ native tree species for negligible water demand for horticulture, and rain water harvesting will also help cater to the water demand.

ASSOCHAM urges centre to withdraw CTT

Associated Chambers of Commerce and Industry of India has stated that the commodity transaction tax will render commodities markets unviable and therefore should be withdrawn. In addition, it has sought withdrawal of 5% hike in short term capital gains tax, excise levy on bulk cement imposed in 2008-09 budget and reduction of 4% across the board excise duty for small and medium enterprises.

Mr Venugopal N Dhoot president of ASSOCHAM has emphasized that the current turnover of all commodities exchanges taken together is around INR 4,000,000 crore per annum. If CTT is imposed at 0.017% and the turnover remains at current level, the maximum revenue collection would be INR 680 crore. He added that "If the turnover drops to the level of 10% of the current figure, the revenue collections would drop to INR 68 crore per annum only. Therefore, the CTT is uncalled for as with its imposition, the annual turnover of commodities exchange is bound to fall down and government is unlikely to collect much of revenues through CTT. Therefore, this be dropped."

Mr Dhoot has urged the finance minister to reconsider his decision for imposing 15% short term capital gains tax on Indian Inc in budget proposals for 2008-09 from 10% and bring back the ceiling to previous levels of 10% only. He argued that since a very few sops have been availed to Indian Inc in budget of 2008-09, increasing short term capital gains tax by 5% would be an additional burden on it and therefore, it should be revoked.

He said that similarly, excise on bulk cement has been increased by INR 50 per tonne while that on clinker, it has been hiked by INR 100 per tonne. The cement industry alone would not be adversely affected by it but it would have a cascading impact on the entire real estate sector as cement manufacturers would pass on this burden to end users only.

He also made a strong case for withdrawal of Commodity Transaction Tax, pleading that commodities trading would have an adverse impact due to impose of this tax which should be withdrawn immediately, as commodities market have started growing up from its nascent stage.

On the issue of mineral wealth exports, particularly those of iron ore, the ASSOCHAM holds that steel sector might witness a price hike as internationally, steel prices are set to rise and as a matter of fact have been rising. Therefore, a heavy export duty on mineral wealth is called for. In case, heavy export duty is not possible on ore exports, another suggested alternative is a cess which should be INR 500 per tonne.

REL becomes Reliance Infrastructure Ltd

Reliance Energy Ltd announced that its name has been changed from Reliance Energy Ltd to Reliance Infrastructure Ltd with effect from April 28, 2008.

The release said that the company has received the certificate from the Registrar of Companies of Maharashtra registering the aforesaid change in name.

The release added that “The new name appropriately reflects the current nature of businesses. The new identity redefines the Company's vision and focus to emerge as a premier infrastructure company. The new name reflects the branding philosophy followed by the Reliance Anil Dhirubhai Ambani Group, where the name signifies the space in which it operates and creates a sharper brand presence among the stakeholders.”

Reliance Infrastructure has either directly or through subsidiaries or through investee Companies and on its own or in consortium, been engaged in a number of projects under implementation or under consideration in the field of not only power generation, transmission and distribution businesses but also in several other infrastructural projects such as highways, roads, bridges, metro rail and other mass rapid transit systems, airports, special economic zones, real estate, etc.

India imposes export tax on steel and cuts import duty

Mr P Chidambaram Indian finance minister has announced a series of measures to cool down the surge in steel prices in India by improving availability.

While announcing a slew of duty cuts on raw and finished material, he said that currently, steel prices contribute over 21% in the inflation rate and with a view to controlling prices exports would be disincentivised with levy of export duty.

1. Imposition of export tax
HR – 15%
CR and tubes – 10%
HDG - 5%
(Details for other steel products like semis, rebar, plates etc is not available as yet)

2. Reduction of custom duty to zero
Iron and steel
Zinc
Metallurgical coke
Ferroalloys
(Full details awaited)

3. Abolishing Countervailing duty on re bar imports

Mr Chidambaram said that changes in import duty would come into effect today and changes in export duty would come into effect from the day the Finance Bill is passed by Parliament.

These announcements have set to rest all speculations on impending fiscal measures being mooted by the government to contain rise in steel prices.

LME launches steel futures trading

Trading in steel futures commenced on the London Metal Exchange Ring today following the successful test phase trading on its telephone and electronic market, LME Select.

Two regional steel billet contracts have been launched, for Mediterranean and Far East delivery. Each contract is for 65 tonnes of billet. During recent trading billet prices have been in the region of USD 950 per tonne, giving a contract value of over USD 60,000. In volatile markets billet prices have trebled since 2003, driven largely by the worldwide construction boom.

Mr Martin Abbott CEO of LME noted that “The LME derives its strength from creating contracts which meet the needs of producers, consumers and merchants in the metals business. We are confident the billet markets will find the LME contracts a useful and valuable tool which will in due course bring clarity and risk management capabilities where previously there were none. We also look forward to extending the contracts to other regions as required.”

Ms Liz Milan commercial director of LME said that the 131 year old LME has a 95% share of the non ferrous metals market and this launch marks an important shift into a new market for the Exchange. She said that “Billet has key commodity characteristics, in that it is a standardized, fungible product with numerous producers and consumers and a strong merchant element. We have worked closely with all these groups to produce a contract which meets their requirements and which will bring transparency, reference pricing and risk management to this important market.”

During test phase trading, since February 25th, almost 500 contracts have been traded on both Select and the telephone market with a value in excess of USD 27 million. From today the first prompt date for the new contract will be July 28th. On the July 24th Ring trading with a daily cash prompt date out to 3 months will commence.

The LME contract model for steel mirrors that for non ferrous, which allows for the option of physical delivery to or from LME authorized warehouses, although historically less than half of one percent of non ferrous contracts are settled in this way. The option of physical delivery ensures that the LME and Physical market price remain aligned. The LME authorizes producer brands that are then good for delivery into LME authorized warehouses.

The Mediterranean contract currently has 17 approved brands and delivery points in the Marmara region of Turkey and in Dubai. The Far East contract has 17 approved brands and delivery points in Malaysia and South Korea.

Hyundai Steel Q1 profit up by 35% YoY

South Korea's second biggest steelmaker Hyundai Steel Co said that its first quarter profit surged by 35% YoY after increasing exports of steel used in autos and appliances and raised prices for construction products.

Hyundai Steel in a in a regulatory filing said that its net income rose to KRW 137.1 billion (USD 138 million) for the three months ended March 31st 2008 from KRW 101.9 billion a year earlier. That beats the KRW 133 billion median estimate of 14 analysts surveyed by Bloomberg.

Hyundai Steel's sales climbed by 28% to KRW 2.14 trillion with exports taking up 20%. Operating profit or sales minus the cost of goods sold and administrative expenses, jumped by 44% to KRW 223.5 billion. Rising demand for Hyundai Steel's products is enabling it to weather record increases in raw materials costs better than rivals such as Nippon Steel Corp. Hyundai Steel, which gets 62% of sales from construction products, raised prices as much as 46% this year.

Ms Kim Sung Woo a fund manager who helps manage USD 1 billion at Tong Yang Investment Trust Management Co said that “The steel industry in general looks in a good shape because companies are raising prices by more than increases in raw material costs.” She added that “Going forward, Hyundai's profit in the second quarter will be good as well since it is actively raising prices.''

Japan's Nippon Steel, the world's second-biggest mill, forecast last week a 41% decline in profit as material costs rise faster than it can raise prices. Annual iron ore costs jumped at least 65 percent from this month and coking coal tripled.

Sumitomo Industries net profit in 2007-08 down by 20% YoY

Japan's third largest steelmaker Sumitomo Metal Industries Ltd said that its net profit in the fiscal year ended in March 2008 fell by 20% YoY after higher procurement and depreciation costs more than offset the impact of higher sales and delivery prices.

Sumitomo Metal posted a net profit of JPY 180.5 billion (USD 1.7 billion), down from JPY 226.7 billion a year earlier. Pretax profit fell by 9% to JPY 298.2 billion. Revenue rose to 8.9% to JPY 1.74 trillion as crude steel output reached 13.62 million tonnes, up from 13.38 million.

Sumitomo Metal said that the higher procurement costs of materials such as coke, steel scrap and ore subtracted some JPY 104 billion from pretax profit. The average price of its steel products stood at JPY 105,700 per tonne, up from JPY 100,000 a year earlier.

In February, the company forecast a year to March 2008 net profit of JPY 190 billion a pretax profit of JPY 280 billion and revenue of JPY 1.73 trillion.

ArcelorMittal takes Indian firms for global IT supply model

ArcelorMittal announced that it has undertaken a detailed review of its IT subcontracting activities in Western Europe and is moving towards a more global IT supply model. This includes efforts to consolidate sub contractors activities, currently provided by a multitude of vendors, with two global IT providers.

After an in depth evaluation process, the decision has been made to formalize Framework Agreements with Satyam Computer Services and Mindtree Limited, who will deliver services in combination with their European partners for this work. The Framework Agreements are valid until end 2011. Specifics of the services to be provided by these companies will be further defined following discussions with key stakeholders.

The release said that “The objective of these transformation efforts is to improve the cost effectiveness and flexibility of the IT organization, whilst maintaining current processes and service levels. It is expected that approximately 70% of the currently subcontracted activities in the scope of this initiative will be carried out by the new vendors, allowing internal ArcelorMittal IT employees to focus on high value adding activities. There will be no direct ArcelorMittal job losses as a result of this initiative.”

Nippon Steel targets over JPY 100 billion cost down

JMB cited Mr Kiichiroh Masuda vice president of Nippon Steel as saying that the firm targets more than JPY 100 billion of cost cutting mainly for upper stream operations for fiscal 2008 started April compared with JPY 35 billion in fiscal 2007.

As per report the firm launches special task force for the cost cutting to review the cost for raw materials and operations. The firm tries to deal with unprecedented higher raw materials cost through the across the board effort while the firm secures profitability to pass more than JPY 1 trillion of higher cost for raw materials, energy and freight by increasing the steel selling price by around JPY 30,000 per tonne.

Global steel wire market to reach USD 23.7 billion by 2012

According to new report by Global Industry Analysts Inc, a tremendous growth in developing economies, particularly China and India is fuelling market growth. Backed by various favorable trends, the steel wire market is projected to reach USD 23.7 billion in 2012.

Steel wire market in Asia Pacific is estimated at USD 9.4 billion, as stated by Global Industry Analysts, Inc. Asia Pacific and Europe collectively account for more than 70% of the global steel wire market.

The report said that European carbon steel wire market is expected to reach USD 4.6 billion by 2010. Global market for alloy steel wires is expected to grow at a compounded annual rate of 4% over the period 2001-2010. Asia Pacific accounts for about 43% of the global stainless steel wire market.

The steel industry's business cycles reflect the general economic activity of a nation. Steel wire being a part of steel industry is highly dependent on the buoyancy of its end use industries. Conditions in construction and automotive industries largely determine demand for wire products worldwide. Rampant economic expansion in China has catapulted the nation as the largest and fastest growing consumer of steel and steel products in the world. Growing investment in infrastructure and higher disposable incomes in several developing economies are key factors driving growth in steel and its derivative products.

Mr McConnell dies at the age 84

Mr John H McConnell a steel magnate who was the founder of Worthington Industries died on last Friday. He was 84.

Ms Cathy Lyttle a spokeswoman with Worthington Industries said that Mr McConnell who had been diagnosed with cancer last year died at a Columbus hospital.

A USD 3 billion year steel processing company Worthington Industries that Mr McConnell started in 1955 with USD 600 he borrowed against his car.

Working in Columbus as a salesman for Weirton Steel in 1954, Mr. McConnell decided to start his own business as a broker between steel mills and their customers. With USD 1,200 in savings, he took out a loan against his 1952 Oldsmobile and worked from the basement of his home. He made USD 600 on his first deal.

A son of a steel worker, Mr McConnell, who was known as Mr Mac, championed the idea that workers should partake in their company’s success and set up an employee profit sharing plan in 1966.

His views were recognized by Mother Jones, a magazine for progressive causes, which in 1986 named Worthington Industries one of the best companies to work for in the United States. Fortune magazine also gave the company that distinction four times.

Hyundai Steel announces amendment to investment into steel plant

Hyundai Steel Co Ltd announced that it has made an amendment to its investment into steel plant, which was initially announced on October 27th 2006. The investment amount has been changed to KRW 5,840 billion from KRW 5,240 billion.

LME plans steel futures trading launch in Americas

The Wall Street Journal reported that the London Metal Exchange is planning to launch steel futures trading in the Americas by the end of the year, with barely two months of steel trading under its belt.

Mr Martin Abbott CEO of LME said that LME wants to launch a contract that will be focused on North America but, because a lot of steel shipments travel from North to South America, would also include the southern continent, The LME is considering locating its steel warehouses in the southern part of the US, close to consumer areas and far from producers, in order to avoid steel dumping into warehouses.

The LME's steel futures contracts are aimed at tapping a USD 500 billion plus steel construction market by allowing investors to use the contracts as a benchmark to lock in product prices at a premium or a discount to billet. The LME steel futures contract will allow buyers to lock in prices for up to 15 months ahead.

Daehan Steel to establishes a Korea based subsidiary company

Daehan Steel Co Ltd announced that it has established a Korea based wholly owned subsidiary on April 24th 2008. The new entity, capitalized at KRW 450 million, is mainly engaged in the logistic and consulting businesses.

Sunoco subsidiary setting up plat to supply coke to US Steel

Sunoco Inc said that its Gateway Energy and Coke Co. subsidiary will build a plant to supply coke and steam to US Steel Corp's steel works at Granite City in Illinois.

As per report the plant will have 120 heat recovery ovens capable of producing 650,000 tons of coke per year, which will be sold to US Steel under a 15 year contract. The plant also will supply steam to a cogeneration plant that US Steel will build and run.

Gateway expected to begin work on the plant and take 18 months to complete it. The plant will cost USD 290 million, excluding capitalized interest, to build.

Gateway is a subsidiary of SunCoke Energy Inc, Sunoco's coke business, which is located at Knoxville in Tennessee and sets up subsidiaries to build and run each of its plants. The Granite City plant, a second Haverhill, Ohio, plant that it expects to complete later this year and a plant it plans to build in Middletown, Ohio, will give SunCoke seven plants producing more than 6 million tons of coke per year.

Taiwanese tube mills to raise prices in May

After Taiwan’s Chung Hung Steel announced to increase TWD 400 per tonne on its hot rolled product in May, domestic carbon steel and galvanized tube mills are going to raise the price.

As per report carbon steel tube mills will raise about 2%to TWD 600 this month. Current selling price is between TWD 32,000 to TWD 32,500 per tonne and new price is expected to reach between TWD 32,500 to TWD 33,100 per tonne.

On the other hand, galvanized tube mills are seeing to increase between TWD 500 and TWD 600 per tonne. However, some of the mills hope to observe the market a few days and expect to have new price this week.

(Sourced from YIEH.com)

Esmark receives notice from Nasdaq due to delay in result filing

Esmark Incorporated confirmed that, due to the failure to timely file its 2007 Annual Report on Form 10 K with the Securities and Exchange Commission, it received from Nasdaq on April 24, 2008 a Staff Determination letter dated April 17th 2008 stating that the Company is not in compliance with Nasdaq Marketplace Rule for continued listing.

Esmark on April 1st 2008, previously disclosed that it was unable to timely file its Annual Report on Form 10 K for the year ended December 31st 2007 without unreasonable effort or expense because finalization of the financial statements had been delayed due to the complexity of accounting related to the business combination involving the Company, Wheeling Pittsburgh Corporation and Esmark Steel Service Group, Inc consummated on November 27th 2007. While the Company has been diligently preparing its Annual Report on Form 10 K, it was nonetheless unable to file its Form 10 K on or before the extended filing date for the Annual Report on Form 10 K of April 15th 2008.

The Staff Determination Letter states that Nasdaq would suspend trading of the Company's common stock at the opening of business on April 28th 2008, and file a Form 25 NSE with the Securities and Exchange Commission to remove the Company's securities from listing and registration on The Nasdaq Stock Market unless the Company requests an appeal of the Determination with the Nasdaq Listing Qualifications Panel in accordance with Nasdaq Marketplace Rules.

Esmark has requested such an appeal, automatically staying the suspension of the Company's common stock and the delisting and deregistration from The Nasdaq Stock Market, pending the issuance of a written decision by the Panel. While the Company expects the notice of delisting would be withdrawn by Nasdaq in the event the Company files its Form 10-K before the hearing date, there can be no assurance, if a meeting of the hearing panel is held, that the hearing panel will grant the Company's request for continued listing.

Brazil cuts import duties on steel sheets

It is reportedly that Brazil has reduced the import duties from 14% to 2% on steel sheets of chrome molybdenum (NCM 7225.40.90) and cold rolled (NCM 7225.99.90).

The import quotas were 1.5 million tonnes for chrome molybdenum sheets and 2.5 million tonnes for cold rolled sheet. The move is in an effort to ease rising cost on producers.

(Sourced from YIEH.com)

Japanese scrap prices pick up

During the fourth week of April, Japan's H2 scrap average price was at JPY 57,913 per tonne in the Kanto region, Kansai region and middle part.

Among them, H2 scrap price was JPY 59,000 per tonne in the Kanto region, increasing by JPY 3,833 per tonne than last week; JPY 56,940 per tonne in the middle part, up by JPY 2,300 per tonne and JPY 57,800 per tonne in the Kansai region, rising by JPY 2,333 per tonne.

Japan's H2 scrap average price was at JPY 57,849 per tonne in the fourth week of April, increasing by JPY 2,496 per tonne than last week.

(Sourced from YIEH.com)

Metals USA announces Q1 sales of USD 489 million

Metals USA Holdings Corp announced its operating results for the quarter ended March 31st 2008. Sales revenues for the first quarter were USD 489.0 million, a number USD 26.4 million higher than the USD 462.6 million recorded during the first quarter 2007.

Adjusted EBITDA a non GAAP financial measure used by Metals USA and its creditors to monitor the performance of the business, was USD 40.3 million for the first quarter of 2008, USD 5.6 million better than first quarter 2007. The Company recognized depreciation and amortization expenses during the quarter of USD 5.5 million. Interest expense for the quarter was USD 25.1 million. Operating income, the GAAP measure that we believe is most comparable to Adjusted EBITDA, was USD 31.2 million for the first quarter, a number USD 5.7 million better than the same period last year. Net income was USD 3.8 million which was in line with the USD 3.8 million recorded for the first quarter 2007.

Mr Lourenco Goncalves chairman, president & CEO of Metals USA said that "Everyone is now fully aware that steel prices are increasing rapidly as mills pass along their rising costs. We saw this coming and successfully positioned Metals USA accordingly. In addition to expanded margins our results were also influenced by a 2.4% increase in shipped volume. Our customer base has demonstrated a resiliency that appears to be contrary to the economic news of the day."

Mr Goncalves added that "Our objective is to keep our customers well positioned versus their competitors. One of the more valuable services we provide is insight regarding future metal price and demand trends. Fortunately we are able to position our customers to be in front of the curve. Where many end users worry about physical delivery as well as price, Metals USA customers continue with business as usual knowing we have them covered."

Metals USA provides a wide range of products and services in the heavy carbon steel, flat rolled steel, non ferrous metals and building products markets.

BlueScope Steel executive leadership team changes

BlueScope Steel announced that Mr Brian Kruger president of BlueScope North America, corporate strategy and innovation is intending to leave the Company to pursue a career in the corporate advisory and merchant banking industry.

Mr Mark Vassella currently CEO of BlueScope's Australian Distribution and Solutions business has been appointed president BlueScope North America to replace Mr Kruger. He will lead the Company's growth in the key North American market and will operate from the Company's head office at Kansas City in Missouri from August 1st.

Mr Kruger and Mr Vassella will transition their responsibilities over the next few months. Announcements about a replacement for Mr Vassella's current role as head of Australian Distribution and Solutions and the reporting structure for Corporate Strategy and Innovation will be made in due course.

Announcing the senior management changes, Mr Paul O'Malley CEO & MD of BlueScope congratulated Mr Brian Kruger on an outstanding 25 year career in BlueScope Steel and its former parent company BHP. He said that "Mr Brian has had a distinguished career and has made an invaluable contribution to the growth and development of this Company over many years. More recently he had a major influence in two major strategic acquisitions that are shaping the future of our Company; in Australia, last year's acquisition of Smorgon Steel Distribution, and in North America the acquisition of IMSA in February."

Mr O'Malley said that "I'm very pleased that Mark Vassella will take over the reins in North America, a key market for growth and opportunity. Mark has shown great leadership skills at Australian Distribution and Solutions. With his world-class steel industry experience and business acumen, I'm confident the Company will be well led in North America as we seek to extract synergies from the IMSA acquisition.”

Sumitomo Metals names new executives

Sumitomo Metal Industries, Ltd has announced planned changes to the Board of Directors and executive officers. The planned change to the Board of Directors requires approval at the General Shareholders Meeting to be held in June.

1. Changes to Board of Directors
A) To be appointed, pending approval at the general shareholders meeting in June Mr Ichiro Miyasaka senior managing executive officer, to director
B) To retire on the date of the general shareholders meeting in June Mr Shozo Nishizawa, director

2. Changes in executive officers
To retire on the date of the general shareholders meeting in June:
Mr Shozo Nishizawa executive vice president

Siemens to modernize aluminum CR stand for Alunorf

Siemens Metals Technologies has received an order from Aluminium Norf GmbH Neuss to modernize cold rolling stand No 4. The scope of supply consists of the basis automation including the technological controls, the process automation system, the power units of the drives and the digital drive controllers. Siemens is also responsible for all the installation work and for commissioning. Modification will start as early as 2008 and will be completed in December 2009.

In the framework of continuous investment in its production facilities, Alunorf is now modernizing its four high cold rolling stand No 4. This part of the plant was commissioned in 1987 and was also fitted with electrical and automation equipment from Siemens. After modernization of the technological controls, the operator control system and the drive controllers, the plant will be in line with the latest state of the art, the aim being to improve product quality and increase productivity. The rolling stand will be equipped on the basis of the Siroll ALU CMA concept developed by Siemens for aluminum cold rolling mills.

On top of all this, Alunorf intends to refurbish the mechanical equipment. This includes the use of a new cooling beam for selective roll cooling and an inductive edge heating. Both serve to improve strip flatness control. The main reason why the contract was awarded to Siemens was the successful collaboration of Alunorf and Siemens in numerous preceding projects.

Established in 1965, Aluminium Norf GmbH is a JV of Novelis Deutschland GmbH and Hydro Aluminium Deutschland GmbH. In Norf near Neuss, it operates the largest aluminum melting plant cum rolling mill in the world. The company employs more than 2,100 people. Sales amount to around 1.5 million tonnes per year.

TATA Steel Thailand furnace project facing construction delays

Reuters reported that Thai steel major TATA Steel (Thailand)’s mini blast furnace project would be delayed and cost slightly more than expected due to construction delays.

The furnace project, operated by its 99.66% owned subsidiary NTS Steel Group, is expected to be completed in second quarter of 2009 instead of the third quarter of 2008.

TATA Steel (Thailand) has also raised the project budget to THB 3.8 billion (USD 120 million) from an earlier THB 3.4 billion.

Brazilian steel sector riding on bullish domestic demand

The Brazilian Steel Institute announced that Brazilian steelmakers produced 2.960 million tonnes of crude steel in March 2008 up by 6.3% YoY as compared to 2.785 million tonnes in March 2007.

Brazilian production of rolled steel products also increased by 1.6% YoY to 2.213 million tonnes as compared with 2.178 million tonnes in March 2007 as output of long steel products continued to grow but flat steel production slipped slightly in March. In March, long steel output reached 896,300 tonnes up by 11% YoY whereas flat steel production tumbled to 1.316 million tonnes in March down by 3.8% YoY.

IBS said that strong demand from the civil construction industry and a surge in infrastructure projects has fueled demand for long steel products in Brazil but the flat production slumped despite strong demand from automobile and the oil, gas and naval sectors.

March domestic sales increased by 13% YoY to a record 1.922 million tonnes as compared to 1.697 million tonnes in March 2007. Domestic rolled steel sales jumped by 13% YoY to 1.858 million tonnes and sales of semis surged by 30% YoY to 63,900 tonnes.

March export sales continued a recent string of declines, which started last year as local steelmakers shifted production to meet local demand. Export sales dipped by 2.3% YoY to 867,900 tonnes in March 2007.

In 2007, Brazil produced a record 33.784 million tonnes of crude steel up by 9.3% YoY as compared to 30.901 million tonnes in 2006.

MindTree inks IT agreement with ArcelorMittal

India based MindTree Consulting Ltd announced that it has signed a multi year IT Offshoring agreement with ArcelorMittal.

Under this agreement, MindTree will deliver IT services to ArcelorMittal's Western European operations in partnership with Sopra Group who are an incumbent provider to ArcelorMittal.

In this program, MindTree will partner ArcelorMittal to consolidate current sub contractor activities with an objective to increase cost efficiencies, flexibility and service levels.

Mr Krishnakumar Natarajan CEO of MindTree said "The framework agreement with ArcelorMittal is strategic to MindTree and represents an important milestone in our journey towards MindTree 2.0. It reflects the confidence and trust which global corporations are placing on MindTree being a trusted partner for their Enterprise transformation efforts."

EMF EUROFER statement on the EC proposal for revision of EU-ETS

The European Metalworkers’ Federation and the European Confederation of Iron and Steel Industries has released a joint statement on the European Commission proposal for the revision of the EU Emissions Trading System.

They said that the European steel industry is committed to contribute to the EU’s objective to reduce greenhouse gas emissions by 20 % in 2020 compared with 1990 and by 30 % provided that other countries commit to comparable efforts in the framework of a global agreement.

They have urged EC for adequate provisions in order to
1. Ensure a fair balance between climate change measures and the competitiveness of EU industry
2. Allow the steel sector to remain internationally competitive through the continued allocation of free allowances as long as no international or global sectoral agreement which provide for equal footing of industrial competitors are in place
3. Secure sustainable investment and high quality jobs in the European steel industry to maintain the European Union as a region with a strong industrial backbone in which the steel industry remains a driver of technological innovation.

The release added that “In this context, the EMF and EUROFER call on the decision makers in the European Parliament, the Council and the Commission to bear in mind that only a balanced recognition of social, economic and environmental aspects can secure a high level of employment, high social standards and the well-being of European citizens. Consequently decision makers should support the following proposals for strengthening of the EU Emissions Trading System”

1. Immediate identification of sectors at risk of carbon leakage plus listing in the text of the ETS Directive. Any prolonged uncertainty threatens investment
2. The sustainable use of unavoidable carbonaceous residues of production processes must be fostered and maintained. Especially the sustainable use of co-generation gases, which are an unavoidable product of primary steel making, must not be subjected to auctioning.
3. The determining allocation method shall be performance based benchmarking and take into account process-relates emissions.
4. 100 % free allowances as defined by the benchmarks for installations identified as being at risk of carbon leakage, as long as no international agreement that provides for a level playing field is in force.
5. Compensation for pass-through of CO2-costs in electricity for electricity intensive activities at risk of carbon leakage, without increasing the burden of other energy intensive industries. This is imperative, especially for the recycling of steel and high-tech special steel producers.
6. Readjusting the burden sharing between the ETS-sector and the non-ETS-sector, based on evaluation of economic, social and environmental impacts. This refers to the reductions assigned as well as redistribution of funds and access to project-credits. 7. Recognition of early action. The proposal’s reference to 2005 discounts early actions and punishes early movers.
8. Sustainable growth must be possible. The planned ban of industrial growth directly results in carbon leakage.

The European Confederation of Iron and Steel Industries – represents the European steel industry with a turnover of EUR 140 billion and direct employment of 370,000 people, producing 200 million tonnes of steel per year.

The European Metalworkers’ Federation is representing the interests of 5.5 million metalworkers in Europe and is a member of the ETUC.

ThyssenKrupp recognized by GM supplier of the year

ThyssenKrupp Steel announced that has received the General Motors 2007 Supplier of the Year award for its significant contributions to GM’s global product and performance achievements. The 16th annual award themed the “Best of the Best” was given during ceremonies on April 26th 2008 at the Sawgrass Marriott Hotel at Jacksonville in Florida US.

Mr Bo Andersson GM group vice president, Global Purchasing and Supply Chain said “GM is proud to honor ThyssenKrupp as a GM Supplier of the Year winner. This award is our way of telling the winners that we appreciate all of their efforts in working together with GM to manufacture world-class vehicles. ThyssenKrupp is among the best of the best. They understand that our mutual success can only be achieved by sharing common goals and priorities.”

Dr. Ulrich Jaroni, member of the Executive Board of ThyssenKrupp Steel AG responsible for the Auto business unit said “We are delighted to receive this recognition of our work and the quality of our products and services. At the same time this award is motivation to keep on improving our performance even further.”

The GM Supplier of the Year award began as a global program in 1992. Winners are selected by a global team of executives from purchasing, engineering, manufacturing and logistics who base their decisions on supplier performance in quality, service, technology and price. This year, General Motors honored 92 suppliers for their outstanding performance throughout 2007.

Within ThyssenKrupp Steel, the Auto business unit is responsible for business with global automotive customers. The company supplies General Motors with electro galvanized and hot dip coated sheet as well as cold-rolled coil. High strength and advanced high strength steels for automotive weight reduction are also an important part of the supplies. Tailored Blanks are supplied by ThyssenKrupp Steel’s affiliate ThyssenKrupp Tailored Blanks GmbH.

Wheeling-Pitt plans to idle some lines

The State Journal reported that Wheeling Pittsburgh Steel Corp plans to idle its Allenport plant as well as two of three galvanizing lines at its Marlins Ferry mill.

The report cited Mr Jim Bouchard chairman Wheeling Pittsburgh Steel as saying that as many as 342 workers could be affected by the reductions but it is too soon to say how many jobs will be eliminated. He said that "Again, nobody has been laid off.”

Mr Bouchard added that the company complied with the federal Worker Adjustment and Retraining Notification that requires larger employers to give workers a 60-day notice of shutdowns and major layoffs. He said "We just issued the WARN notice and over the next 60 days we will bargain with the union on retirements, transfers, everything."

He said that closing the Allenport plant and eliminating the two galvanizing lines clearly is part of the right sizing. He said "It breaks my heart to have to do it. We are not here to shut down facilities, we a here to build. But this needs to be done so that the company can return to profitability and stay profitable."

The report added that Mr Bouchard has on several occasions spoken of the need to right size the company to bring costs in line and in October had confirmed that they were considering closing Allenport's cold mill and shifting its production to their Steubenville plant and and in November, when Wheeling-Pitt's merged with Esmark, he promised a company wide restructuring.

LME steel billet futures crosses USD 1,000 mark on the first day

SBB reported that on the first day of trading of billets future contracts on the London Metal Exchange, steel billet contract on the LME ring ended with a total of 16 contracts traded, representing 1,040 tonnes of billet.

As per report, traded prices exceeded USD 1,000 per tonne for the first time since informal futures trading began in February. The Far East contract, which began the session at Friday’s closing price of USD 950 per tonne, traded up to USD 985 per tonne and the Mediterranean contract, starting at USD 975 per tonne broke through USD 1,000 per tonne with traded prices of USD 1,005 per tonne

Dubai Group acquires 40% stake in Chiranjjeevi Wind in India

Dubai Group has acquired a 40% stake in India based Chiranjjeevi Wind Energy Limited. The investment was made by Dubai Ventures, the equity investment company of Dubai Investment Group.

Dubai Group and Chiranjjeevi Wind Energy Limited will jointly explore the possibility of setting up wind farms in other regions, especially in West Asia and Africa.

Chiranjjeevi Wind Energy has recently signed a MoU with German company Frisia GmbH for acquiring the entire design, technology, intellectual property of 850 KW wind turbines, and with Euros for transfer of technology to manufacture rotor blades. It has already installed over 150 wind turbine machines in India.

Chiranjjeevi Wind Energy have also received a USD 25 million order from India Globalization Capital Inc for setting up a 24 MW wind farm in Karnataka. It will operate and maintain the wind energy farm, which is expected to be operational by 2009.

APM to sell 20% stake in Qasim terminal to DP World

It is reported that APM Terminals has agreed to sell its 20% equity stake in Karachi based Qasim International Container Terminal Pakistan Limited to DP World, which is currently the operator and the majority shareholder of the facility.

The sale price and the details of deal have not been disclosed in the statement issued by the company.

Dubai World lines up USD 5 billion investment in Nigeria

It is reported that energy, real estate, port development and petrochemicals top the log in a USD 5 billion investment being lined up to be ploughed into Nigeria’s economy from Dubai World.

The investment will be made over the next 5 years and would be ploughed into the building of a new seaport in Lagos, a refinery and petrochemical plant, building of new satellite city in Abuja, hotels and power plants. In the case of power plants, Dubai World will focus on the construction of coal fired electricity generating plants with Enugu as the projected site.

A 22 man executive management team of Dubai World led by Mr Sultan Ahmed bin Sulayem chairman of Dubai World was in Abuja where they held strategy talks with Nigerian President Mr Umaru Musa Yar’Adua. The delegation was accompanied by their Nigerian partner Mr Sam Iwuajoku chairman of Corporate Oil & Gas.

Mr Sulayem said that "Historically, Nigeria is a major trading partner of Dubai and the purpose of our visit is not only to augment these ties, but to identify ways and opportunities to strengthen them further for the mutual benefit of both countries." He added that its subsidiary Limitless would send a team of experts to Nigeria to evaluate the investment opportunities and finalize various master planning and development deals.

Mr Sulayem said that by focusing on the utilization of coal in the planned power plant, Dubai World would be able to avoid the vagaries and prospects of disruption of supplies associated with gas powered plants.

20% of Qatalum Mesaieed aluminum project complete

Doha Times reported that about 20% work on the USD 5.6 billion Qatalum’s aluminum project at Mesaieed has been completed. Qatalum plans to produce the first aluminum in late 2009. The first stage capacity will be 585,000 tonnes per year while the project targets ramping up capacity to 1.2 million tonnes per year.

Official at Qatalum said that site preparation at Mesaieed is already complete. Some 10 million tonnes of landfill have been used for site preparation in 200,000 truck loads. An average 1,500 truck loads of material were used every day.

Mr Truls Gautesen CEO and Mr Hassan al Rashid Qatalum deputy CEO of said that the project is being set up based on Hydro’s technology successfully implemented at its Sunndal 4 aluminum plant in Norway.

The Mesaieed plant will focus on producing aluminum casthouse materials such as extrusion ingots and primary foundry alloys. The facilities will include a 1,325 MW gas fired captive power plant, a modern casthouse, carbon plant and a new port for unloading raw materials. Mesaieed Industrial City, under Qatar Petroleum, will build a container berth adjacent to Qatalum’s berth eight to handle the export of final products. The project has already received the environmental impact assessment from the supreme council for the environment & natural reserves in 2007.

GCC inks free trade agreement with EFTA

It is reported that a free trade agreement between the GCC and the European Free Trade Association has been finalized after 5 rounds of talks in Geneva. European Free Trade Association includes the European states of Iceland, Liechtenstein, Norway and Switzerland.

Mr Abdulrahaman Al Atiyya secretary general of GCC said that the deal would improve economic co operation, increase goods trade and open up new investment opportunities between the two regions.

Merchandise trade in 2007 between the EFTA and GCC amounted to more than USD 5.4 billion. Exports from EFTA states, worth USD 4.4 billion, consisted mainly of clocks and watches, precious stones, pharmaceuticals and machinery.

The GCC is holding ongoing talks with the European Union over a long delayed wider FTA between the two blocs. Qatar’s deputy prime minister said in January negotiations could drag on for months, blaming endless conditions by the EU which were impossible to meet.

The GCC and EU signed a framework economic co operation agreement in 1988, but have been unable to agree a FTA because of issues including market access, government procurement rules and intellectual property rights.

The GCC is also in talks with Iran and Korea and finalized an agreement with Singapore earlier in 2008.

Dubai to expand reach in global logistics business

It is reported that Dubai will strengthen its position as the region’s logistic hub with the completion of USD 1.5 billion terminal 2 expansion projects at Jebel Ali Port by early 2009. The project, due to be completed in February 2009, will boost DP World’s flagship port capacity up to 15 million TEUs to supplement the strong growth in the GCC region.

Mr Mohammed Al Muallem senior VP & MD of DP World UAE said that "Infrastructure work at Jebel Ali Port will be completed by June 2008 after which installation of state of the art equipment will be initiated to bring around 3 million TEUs online by early 2009."

Mr Al Muallem said that "Dubai is situated at the gateway between the East and the West, strategically positioned to be a natural hub for the global shipping industry and providing access to a market of 1.5 billion people.”

He added that “A significant benefit for our customers is our location within Jebel Ali Free Zone, which has over 6,000 companies covering manufacturing, trade, logistics and a range of industrial and service-oriented units. After expansion, Jebel Ali Port is set to play a key role in the development of Dubai in particular and the GCC in general amid considering huge projects under progress in the region. Completion of Terminal 2 expansion project will further strengthen our position in the region as 50% of operations at Jebel Ali Port are for Dubai while the rest is destined for Kuwait, Qatar, Saudi Arabia and other regional states."

He added that "We have extensive plans in place that would expand capacity at Jebel Ali to around 80 million TEUs by 2030 in over 14 stages, as market demand dictates. Operations at Khalifa Port in Abu Dhabi will start in early 2011."

DGK signs MoU with Dhabeen for power plant in Karachi

The Dawn reported that City District Government Karachi has signed a MoU with Dubai based Dhabeen Power Engineering Limited for construction of a 1,800 MW power plant in Karachi.

Under the agreement, work on installation of power turbines will start within 3 months and would generate 360 MW electricity.

Mr Khalfan Saeed Al Mazrooi official at Dhabeen Power Engineering Company said that the work on the project would be visible within 3 months and on completion of the plant the city’s power to be resolved to a great extent.

Mr Mustafa Kamal City Mayor of Karachi, while thanking the UAE government for donating the turbines, said the installation of the power plant would help CDGK to overcome power crisis.

Aramco may award USD 3 billion Manifa work by May

MEED reported that three international contractors namely Snamprogetti, JGC Corporation and TR have emerged as frontrunners to win more than USD 3 billion worth of engineering, procurement and construction contracts on Saudi Aramco's 900,000 barrel a day Manifa oil field.

The first package worth about USD 1.8 billion covers the construction of central processing facilities including a gas oil separation plant. Snamprogetti is in pole position for the package, edging ahead of JGC, TR, South Korea's Hyundai Engineering & Construction Company, France's Technip, Japan's Chiyoda Corporation and Italy's Techint.

JGC is the favorite for the second package worth USD 800 million, covering utilities, storage and shipping at the central processing facility. It is thought to have won the deal over Techint, Snamprogetti and Hyundai Engineering & Construction.

TR is expected to take the USD 500 million final package covering power generation and the main substation, from South Korea's Hyundai Heavy Industries and Italy's Technimont.

Aramco is expected to finalize its technical evaluation of bids and issue the contracts by mid May 2008. The latest bidding activity caps a frantic few months for Aramco. The development of Manifa is regarded as crucial for Riyadh to hit its target of increasing production capacity from 10.8 million barrels a day to 12.5 million barrels a day by 2009.

Global US oil service giants Schlumberger and Halliburton have been awarded separate drilling deals on Manifa worth up to USD 1 billion in total, covering horizontal drilling, stimulation and cementing.

Aramco is investing heavily in oil production and refining over the next 5 years, with much of that spending expected to consolidate existing fields and more effectively develop downstream production opportunities.

Baosteel Q1 net profit up by 16% YoY

Chinese steel giant Baoshan Iron and Steel Co has reported a 16% rise in first quarter earnings as increased steel prices offset surge in raw material costs.

It posted a net profit of CNY 4.26 billion against CY 3.68 billion a year earlier. Its operating revenue in the first three months was CNY 47.03 billion up by 9.43% YoY and operating costs were up by 9.7% YoY to CNY 41.43 billion.

Its profits rebounded sharply from the October to December quarter, when earnings shrank to about CNY 2.17 billion because of weakness in the stainless steel market following a plunge in nickel prices.

It said "Deep cost cutting and increased efficiency maintained stable earnings growth in the first quarter, despite rising materials costs and fierce winter weather in China, which disrupted power supplies.”

Financing costs shrank by 69% to CNY 92.8 million during the quarter because the company made a foreign exchange profit as it increased US dollar financing and the yuan appreciated. Depreciation costs also improved by about CNY 370 million yuan because of a write back as the profitability of its stainless steel business improved.

Baosteel raised its major steel product prices as much as 8% for the first quarter of 2008 and then lifted second quarter prices a further 17% to 20%.

Canada decide AD and CVD rates for line pipes from China

It is reported that the Canada Border Services Agency made preliminary determinations of dumping and subsidizing pursuant to subsection 38(1) of the Special Import Measures Act in respect of carbon steel welded pipe made originating in or exported from the People’s Republic of China.

Estimated margins of dumping, estimated amounts of subsidy and provisional AD and countervailing duties rates

As percentage of the export price

Pipes are in the nominal size range from 1/2 inch up to and including 6 inches inclusive in various forms and finishes, usually supplied to meet ASTM A53, ASTM A135, ASTM A252, ASTM A589, ASTM A795, ASTM F1083 or Commercial Quality or AWWA C200-97 or equivalent specifications including water well casing, piling pipe, sprinkler pipe and fencing pipe, but excluding oil and gas line pipe made to API specifications exclusively, originating in or exported from the People’s Republic of China. The goods are commonly classified under the following Harmonized System classification numbers:

Xinyu Steel supplies 70% of steel strand for Hangzhou Bay Bridge

It is reported that Hangzhou Bay Bridge, the world's longest sea bridge, with a total investment of CNY 11.8 billion is formally open to traffic as of May 1st 2008. The bridge is designed to serve 100 years and boasts several No 1 records across the world.

Approximately 30,000 tonnes of pre stress stranded steel wire made by Xinhua Metal Products Co Ltd affiliated with Xinyu Iron & Steel Co Ltd were used in the bridge construction as much as 68% of total consumption of this resource.

The materials purchasing and bid invitation of this project are reported to have some different features from normal ones, with not only offer prices of producers to be taken into account, but strict bid process and quality products to be highlighted.

Xinhua company China's first pre stress stranded steel wire maker and the firstly certified enterprise with ISO quality assurance system has produced steel strand for over 20 years and formed their own sophisticated and stable production techniques. It now can provide 220,000 tonnes of products annually.

Apart from the Hangzhou Bay Bridge, pre stress wire product made by Xinhua has also been applied in a string of domestic key and large scaled items such as the Three Gorges Dams, Dock of Macao, Jiangyin Yangtse River Bridge, Beijing Kowloon Railway and Shanghai Oriental Pearl.

Chinese steel prices predicted to keep rising

China Iron & Steel Association forecast that although the world faces a slow economic growth, China's boosting steel demands will drive the domestic steel market price to largely rise.

Rising steel prices will be impelled by four factors
1. Reducing inventory
2. Slow steel production growth
3. Tight supply situation
4. Surge in international steel market prices

At the end of March 2008, China’s steel composite price index hiked 5.28% or 7.14 points from a month ago and 29.61% or 32.51 points from a year earlier to 142.31 points hitting a record high. In the first quarter of this year, the growth of China's steel prices approached 20%.

Meanwhile, insiders predicted that the world's steel prices would keep jumping, chiefly due to the resource supply shortages and escalating prices of related raw materials.

Hunan Valin suffers loss in Q1 due to snowstorms

It is reported that Hunan Valin Steel Tube & Wire Co Ltd, in which ArcelorMittal holds a 29.48%, booked a net loss of CNY 263.49 million in the first quarter as against net profit of CNY 272.76 million a year earlier due to the impact of snowstorms in late January and early February.

In its first quarter financial report filed with the Shenzhen Stock Exchange, the steelmaker said snowstorms accounted for losses of about CNY 900 million. It said production was fully restored in March. In the first quarter of 2008, the company booked operating revenue of CNY 11.2 billion up by 20.93% YoY.

The company did not provide production data for 0the first quarter, but it noted that in March it produced 900,000 tonnes of steel products and sold 926,000 tonnes with a profit for the month of CNY 339 million.

The company said “Although the company tried to fully restore production in March, net profit in the first quarter still fell sharply compared to the level from a year earlier.”

Chongqing to invest CNY 4 billion in capacity expansion

According to Mr Chen Shan general manager of Chongqing Iron & Steel Co Ltd, the company would spend about CNY 4 billion lifting the capacity of its two projects to 4 million tonnes of steel products a year and would injected CNY 1.5 to CNY 2 billion of proprietary funds into the projects in 2008.

The two expansion projects are scheduled to start production in 2009 and 2010 one by one. And the company had about CNY 970 million cash in hand at 2007 end.

Chongqing Iron & Steel Co Ltd targets to produce 2.96 million tonnes of pig iron up by 0.3% YoY, 3.4 million tonnes of steel up by 1.5% YoY and 3.25 million tonnes of steel billet this year up by 4.2% YoY from last year respectively. Mr Song Ying its financial manager explained the growth in output was limited by the current capacity and the company would strive to lift the upper end of its output and improve product mix.

Datang Corp and EDF set up power plant JV in Henan

XFN-Asia reported that Datang Corp, a major power producer, has set up a power joint venture with Electricite de France in central China's Henan province. The joint venture will build a coal fired power plant with capacity of 1.2 million kilowatts in Sanmenxia city.

The report added that Datang will hold 60% of the joint venture with EDF taking 35% while a local construction and investment fund will hold the remainder.

The company did not provide further details.

Datang Corp is the parent of Datang International Power Generation Co Ltd.

Yangtze Power 2007 net profit up by 48.61% YoY

It is reported that China Yangtze Power Co Ltd, operator of the Three Gorges hydropower dam 2007 net profit up by 48.61% YoY to CNY 5.37 billion due to higher power output and investment income.

Yangtze Power Co Ltd said it generated 43.97 billion kWh of electricity last year up by 23.03%. About 15.46 billion KWH came from Gezhou Dam up by 5.69% and 28.51 billion KWH from the Three Gorges complex up by 35.05%. It said investment income in 2007 rose to CNY 2.1 million from 870.03 million a year earlier after it sold 400 million H-shares in China Construction Bank.

According to its annual report filed with the Shanghai Stock Exchange operating revenue rose 23.92% to CNY 8.74 billion in 2007 while operating costs and other expenses were up by 25.32%.

In April 2007, China Yangtze Power signed an agreement to sell an additional 400 million H-shares in CCB to Hong Kong's Reca Investment Ltd for CNY 1.6 billion. In addition, the company also received dividends of CNY 366 million in 2006 and the first half of 2007 from CCB.

Auditors confirm NLMK’s compliance with international standards

NLMK announced that its Quality Management System has passed the regular audit for compliance with International Standard ISO 9001:2000.

NLMK also announced that its quality system for carbon hot rolled steel flats complies with the requirements of EC Directive 97/23/EG and German technical regulations AD 2000 W.

Furthermore, NLMK’s steel products comply with the European Council Directive’s 89/106/EEC requirements to be used in construction, and the company has gained the right to apply the #1028; marking to these products. The audit was performed by representatives of the certifying body TÜV CERT.

The release added that “Under the audit procedure experts investigated the company’s current Quality Management System as well as the execution of standards and production facilities. NLMK’s technical services were also inspected. The auditors confirmed the company’s Quality Management System compliance with International and European requirements as well as the right to apply the #1028; marking to steel products for the construction industry.”

NTRP gains certification for wheels supply to Czech and Hungary

Ukrainian Journal Staff reported that Interpipe’s Nyzhniodniprovsky Pipe Plant has gained certification to supply finished machined railway wheels to the national railway operators of the Czech Republic and Hungary.

The report added that the certification gives Interpipe the opportunity to supply railway wheels directly to end users in the Czech Republic and Hungary.

RusAl Wants Norilsk tie up in a year

It is reported that RusAl would seek to combine with Norilsk Nickel, the country's biggest mining company in the next year and may buy shares on the open market.

Mr Alexander Bulygin CEO of RusAl said “A merger is n the interests of all shareholders. If the combination completes within a year in 10 years we can become the leader in metals and mining, producing all the metals traded on the London Metal Exchange.”

Mr Bulygin said closely held RusAl may seek to raise its stake in Norilsk by buying shares on the market if conditions are favorable. He said "If not, increasing the stake is not a must. We will review different ways to merge discussing it with Norilsk shareholders large and small."

Mr Bulygin said RusAl formed in March 2007 in a merger between Russian Aluminum, SUAL and the alumina assets of Glencore International has unique experience in unifying three companies. He said we are consolidators. He added that RusAl would not take an "aggressive" position to block a deal with Metalloinvest. RusAl doesn't want to spoil relations with global funds that hold stakes in Norilsk as the aluminum company itself plans to sell shares next year.

Metalloinvest said that it would continue to pursue merger talks with Norilsk.

Ukraine clears Russian gas debt

RIA Novosti cited Ms Yulia Tymoshenko PM of Ukraine as saying that the country has paid Russia the last installment of its natural gas debt.

The report added that Mr Viktor Zubkov PM of Russia told Ms Tymoshenko at a meeting that full payment of the debt will pave the way for the two countries to reach an agreement for long-term gas cooperation eight to ten years ahead.

Ms Tymoshenko said "Resolving all issues in the gas sector is a serious achievement. Ukraine has paid off all its commitments."

Mr Zubkov said Russia and Ukraine should cooperate in the hi-tech sphere to be competitive on world markets. He said "Through joint efforts we will be able to ensure a worthy place for Ukraine and Russia in world labor division."

Ms Tymoshenko praised bilateral relations and said the Russian and Ukrainian governments had drafted a joint action plan. She said bilateral trade grew 28% for the first three months of 2008.

Italian PM denies plans to head South Stream pipeline

RIA Novosti reported that Mr Romano Prodi Italy's outgoing PM will not head South Stream a natural gas project by Gazprom and the Italian Eni company.

Mr Silvio Siriana was quoted by ANSA as saying that Russia had earlier proposed Mr Prodi also former head of the European Commission, the presidency of South Stream, but that he had not found it possible to accept the job. Mr Siriana said "It is highly unlikely that anything will change."

Russian business daily Kommersant said citing a government source "Analysts believe that Gazprom will do exactly as they did with Nord Stream and former German chancellor Mr Gerhard Schroeder who heads the shareholders' committee." The post is roughly equivalent to board chairman.

The estimated cost of the South Stream project is USD 14 billion.

Slavneft Q1 oil production down by 5.9% YoY

RIA Novosti reported that Oil Company Slavneft ranked among Russia's top ten crude producers reported its Q1 oil production drop by 5.9% YoY to 4.97 million tonnes.

Slavneft natural gas production grew 5.8% in the reporting period to 236.8 million cubic meters.

Slavneft is co owned by Gazprom Neft the oil arm of the Russian energy giant Gazprom and Russian-British joint oil venture TNK-BP.

ThyssenKrupp Nirosta to focus on strategic product development

The supervisory board of ThyssenKrupp Nirosta has decided to expand its executive board to include a new strategic product development directorate with the aim of placing an even stronger focus on new materials, new finishes and new applications.

Dr Alfred Otto executive board member responsible for the sales directorate will take over this new function. Mr Karsten Lork currently chairman of the management board of ThyssenKrupp Stainless International, will assume the position of sales director on the executive board of ThyssenKrupp Nirosta effective from May 1st 2008.

The creation of this new executive board directorate will reposition the entire ThyssenKrupp Stainless group. In his new function, Dr Alfred Otto will be responsible for the company’s strategic product development and will coordinate these activities in all areas of the segment. In this way, the company will place an even stronger emphasis on product and applications development throughout the segment in response to increasingly demanding customer requirements and growing international competition.

ThyssenKrupp Nirosta, a subsidiary of ThyssenKrupp Stainless AG, is one of the world’s leading manufacturers of stainless flat products with a wide range of grades, sizes and finishes. ThyssenKrupp Stainless is the holding company for all the ThyssenKrupp Group’s activities in flat rolled stainless steel, nickel alloys and titanium. Its seven subsidiaries with plants in Germany, Italy, Mexico, China and the USA employ a total of 12,200 people.

Corus plans to cuts tinplate capacity in EU by 20%

It is reported that Corus Packaging Plus has embarked on a plan to cut its European tinplate capacity from 1.5 million tonne per year to 1.2 million tonne per year.

Corus said that the re structuring plan, announced to union representatives on April 18th, involves the closure of the 150,000 tonne per year Bergen plan in Norway and a similar capacity reduction at the Trostre plant in the UK. The plan is expected to involve over 500 job losses.

Commenting on the planned cuts at Trostre in South Wales, Mr Hugo Loudon MD of Corus Packaging Plus said that “It is after extensive consideration and with great sadness that we make this announcement. Corus Packaging Plus has an excellent record of continuous improvement and it is despite the best efforts of our employees that we must take these measures. The European tinplate market continues to experience very difficult market conditions due to significant overcapacity. To ensure the longer term viability of our packaging steels business we must take action to improve our operating results.”

According to analysts, last week the works council at Corus Packaging Plus’s third European plant at Ijmuiden in Netherlands called on the company to increase its investment in the packaging steels business. Although the plant has not been directly affected by the cuts, it does supply hot rolled coil to Bergen. Supply shortages and high prices of this feedstock are part of the reason for the tinplate cuts.

The Bergen plant is due to close by July, while the cutbacks at Trostre are the subject of a 90 day consultation process which has just commenced.

(Sourced from www.itri.co.uk)

Tenova Pyromet commissions first furnace for TATA Steel

Tenova Pyromet has just commissioned its first furnace for the Indian steel giant TATA Steel at Richards Bay in South Africa.

In May 2006, Tenova Pyromet was awarded the project to supply the TATA Steel ferrochrome plant, in Richards Bay, with a complete furnace package covering the design, construction and commissioning of two 38 MW submerged arc furnaces.

The scope included also the plant control system, with electrical and mechanical equipment. This consisted of the entire gas-cleaning scrubber system for the furnace off gas, as well as the tap hole off-gas extraction bag filter systems.

Commissioning of the second furnace is expected for May 2008.

SS producers report improved market conditions in Q1 of 2008.

Outokumpu said in its first quarter interim report released recently that end user demand for stainless steel was healthy with improved demand from the distributor sector, gradual base price increases achieved during the quarter. Operating profit in the first quarter was EUR 100 million including nickel related inventory losses of some EUR 60 million, underlying operational result about EUR 160 million. And production running close to capacity, stainless deliveries up by 28% YoY to 449 000 tonnes.

Spanish stainless steel producer Acerinox also saw production recover in first quarter of 2008. It reported meltshop stainless steel production of 626,300 tonnes in Q1 of 2008 up from 606,100 tonnes in Q4 of 2007 and the 389,500 tonnes produced in Q3 of 07. However, Q1 production was still 5.1% off the pace of the 659,800 tonnes produced in the Q1 of 2007.

Acerinox said that the stainless sector had recovered in the period helped by relative stable nickel prices. It said its order book had improved and demand strength allows us to be optimistic with regard to the price evolution in the next months. Brazilian metals giant VALE said that despite relatively high stocks of nickel in the LME warehouse system, the near term scenario has improved, as demand is increasing and prices are holding firm.

It also said that global stainless steel production is gradually recovering from the vicious de stocking cycle of Q3 and Q4 of 2007. Critically for nickel usage in the stainless sector, it said that the ratio of austenitic stainless is also recovering as substitution pressures subside.

Chromex buys Stellite chrome project in South Africa

It is reported that Chromex Mining has finalized the acquisition of the Stellite chrome project on the Western Limb of the Bushveld Complex in South Africa and plans to start producing chrome ore from the open pit operation within the next few months.

AIM listed Chromex will pay ZAR 14 million and issue just over 6 million new Chromex shares for Mkhombi Stellite which holds a 51% stake in Ilitha Mining which, in turn, owns the Stellite chrome project.

Chromex Mining said that "The Stellite project will more than double Chromex's controlled chrome resources from 9 million tonnes to approximately 24 million tonnes and reduce the company's operational risk through the development of two mines instead of a single, standalone operation."

Chromex will use contract miners initially and has no plans to move into smelting to convert the chrome ore into higher value ferrochrome. Stellite has a chrome resource of 15 million tonnes and the Mecklenburg project a resource of about 9 million tonnes.

Mr Nigel Wyatt CEO of Chromex said that he is confident that it would receive mining rights for that property soon. He added that Chromex aimed to ramp up production to produce about 20,000 tonnes per month of chrome ore and chrome sands at Stellite.

Mr Wyatt said that about 3 million tonnes of the Mecklenberg resource could be mined through an open pit with the rest likely to be accessible through the development of a decline shaft. Chromex should be able to start building-up production at Mecklenburg in nine to 12 months after receiving the mining rights and successfully securing surface rights from the communities in the area. The company plans to build a washing plant at Mecklenburg.

Mr Wyatt further added that Chromex may consider investing in beneficiating the ore from Stellite by building a washing plant but added the company would only look at that in due course.

Vale raises Onca Puma nickel project CAPEX by 60%

Brazilian mining giant Vale said that rising costs and impact from gains in the local currency made it lift the total investment estimate in the Onca Puma nickel project by about 60% to USD 2.3 billion.

Mr Roberto Castello Branco investor relations director of Vale said that a third of nearly USD 900 million in the CAPEX increase for the Amazon project stemmed from the currency effect and the rest from rising costs of equipment and electromechanical assembly. He added that "This cost increase is in line with the environment the mining industry is facing, where currency volatility and input prices are rising."

Onca Puma, with a planned 58,000 tonne annual ferronickel capacity, is scheduled to start producing in the first half of 2009. Investment this year should total USD 581 million.

Vale put the budget estimate for Vermelho nickel mine in Brazil at USD 1.91 billion up from USD 1.42 billion estimated a year ago, but Mr Branco said the project was still being structured for the board's approval and the numbers were preliminary. He said that Goro and Onca Puma's coming on stream would help the development of Vermelho, which should start producing only in 2012, as Vale will acquire more expertise in nickel. Vale became a major nickel miner through the acquisition in 2006 of Canada's Inco.

Mr Branco said that Vale had several laterite and limonite nickel projects in the pipeline for the next decade, including in Indonesia. Referring to iron ore, Vale's core business, he said that it maintained its projection for a key Carajas mine expansion project to be delivered in the second half of 2009. Carajas has high quality ore reserves and additional capacity there will cut Vale's operating costs for iron ore.

Outokumpu sells copper tube assets to Cupori Group

Outokumpu has signed a sale and purchase agreement with Cupori Group Oy whereby Outokumpu will sell its remaining copper tube assets to Cupori Group Oy, a company owned by the current top management of Outokumpu's Copper Tube and Brass division.

The total consideration of the sale is some EUR 50 million. Outokumpu will book a capital loss of some EUR 65 million on the transaction. Subject to usual conditions, the transaction is scheduled to be closed mid May 2008.

The assets sold comprise the copper plumbing installation and industrial tube manufacturing companies at Pori in Finland, Zaratamo in Spain, Västeras in Sweden and Liège in Belgium, as well as the copper tube sales companies in France, Germany and Italy. In 2007, the businesses in question generated sales of some EUR 510 million with a net loss of some EUR 5 million. The number of personnel in the sold companies is some 730.

The buyer has informed Outokumpu about their intention to divide the business into two independently operating companies under different ownership after the transaction is completed. As a result of this, Cupori Group Oy will own the sales company in Italy and production facilities in Finland and Sweden, and Leaf Business Holdings S.L. will own the sales companies in France and Germany, as well as the production facilities in Belgium and Spain.

The transaction all but completes Outokumpu's exit from the copper fabrication business, started in 2005, when the majority of Outokumpu Copper was sold to Nordic Capital. Of that business, two brass producing units still remain in Sweden and the Netherlands. It is Outokumpu's intention to exit from these businesses, as well.

Tenova Pyromet to build 2 furnaces for ASA Metals

Tenova Pyromet, the South African designer and supplier of electric submerged arc smelting furnaces is in an advanced phase of the construction covering two ferrochrome 66 MW closed furnaces for the charge chrome producer ASA Metals.

ASA Metals commissioned Tenova Pyromet to design, fabricate, and install the two 66 MW ferrochrome furnaces as part of the expansion project at its Dikolong chrome mine, located 125 kilometer south of Polokwane in South Africa.

The project was started in October 2007 and Tenova Pyromet is progressing on schedule; another 17 months are expected before completion is reached.

Tenova Pyromet accepted this challenging project which represents the largest project the company has done to date in terms of value and scope. Its scope is a lump sum turnkey project for the lion’s share of the expansion project, representing about 65% of the total work. It had already completed two furnace turnkey projects for ASA Metals during 1998 and 2003, on which it managed all civil, structural, materials handling work and furnace technology on a turnkey basis.

Philip Cornes celebrates 50 years of service

Philip Cornes & Company Limited has celebrated its golden jubilee foundation day recently.

Founded in 1958 in Greet, Philip Cornes specializes in the supply of nickel alloys and also heat and corrosion resistant stainless steels to various industries throughout the UK where it successfully fulfilled the demand for the fast and efficient delivery of these vital materials. As a result Philip Cornes rapidly expanded and moved to its own purpose built distribution and service centre in Redditch, near Birmingham.

With the growth of the North Sea oil boom in the UK, Philip Cornes quickly established a track record of excellence in the service and supply of specialist materials for this demanding industry. Towards the end of the seventies, Philip Cornes could see that the European market was slowly opening its frontiers and the need for a one market philosophy was essential. Developing world markets and seeking reliable suppliers of specialized materials ensured the continued growth of the organization.

Today, Philip Cornes has retained its sales office in Redditch with its head office, service and distribution centre in Southampton serving the UK and the rest of the world. There are also sales offices in Singapore and Shanghai serving South East Asia and the Pacific Rim. During the last decade, Philip Cornes became part of the TW Metals group and one of the leading providers of complete packages to many of the world’s leading industrial and technological projects. Substantial and ongoing capital investment in the latest cutting equipment means that they have the capacity to offer close tolerance processing of sheet, plate, pipe, tube and bar.

Now Philip Cornes is committed to continuously improving its quality of service and the development of its personnel, thereby demonstrating that it is a partner that its worldwide customers can rely on.

Import price of chrome ore at Tianjin port

Import price of chrome at Tianjin port is under

Price in CNY per MTU

(Sourced from MySteel.net)

Vale and ArcelorMittal ink 10 year pact for 480 million tonnes of iron ore

Companhia Vale do Rio Doce announced that it has signed new long term contracts with ArcelorMittal Sourcing SA and Companhia Siderúrgica de Tubarão (ArcelorMittal Tubarão) to supply iron ore and pellets to its plants in Europe, Africa and Americas.

Under these long term contracts, Vale will supply approximately 480 million tonnes of iron ore and pellets to ArcelorMittal plants over the next ten years.

Vale release said that “These contracts are aligned with Vale, the world’s largest iron ore and pellet producer and ArcelorMittal, the world's largest steel company, desire to further strengthen their relationship.”

It added that “It highlights Vale’s unique capability as a long term reliable supplier of high quality iron ore and pellet, given its large scale operations and excellence.”

Iron ore price negotiations – China denies considering premium

Reuters cited Chinese steel industry officials as saying that China's mills are not considering paying a freight premium demanded by Australian iron ore miners BHP Billiton Ltd and Rio Tinto Ltd denying a media report.

The Australian newspaper said that Mr Zou Jian chairman of the China Metallurgical Mining Association told an industry gathering in Shanghai that steel firms were considering including freight rates in their annual iron ore supply contracts.

But Mr Zou told Reuters that the report misquoted him and that high freight rates were an unusual factor this year that did not warrant altering the long-term pricing system.

Mr Zou said "If you look at it from the Australian side, it would be understandable to ask that freight fees be added to iron ore prices. He added that freight rates from Australia to China are USD 11 per tonne clearly lower than fees from Brazil to China of USD 25 to USD 30 a tonne.

He also said that "We don't want to abandon the long term system just because of the freight rates, because the rates are volatile and will change in the future."

The demand has become a sticking point in tense negotiations over annual term contracted iron ore supplies, which the Chinese officials said should continue to be based on free on board prices that exclude freight rates.

Chinese Iron and Steel to increase strake in Apollo Minerals

AAP reported that Chinese Iron and Steel Group is set to increase its interest in Apollo Minerals to 19.9%.

Apollo said that it has been advised that Chinese Iron and Steel Group through Hugo Natural Enterprises proposes to increase its stake to 19.9% from 12% now. Apollo said once this transaction is completed it expects its cash position to be in excess of USD 10 million, assisting it with its aim of becoming a significant Australian iron ore company.

It said that Hugo's intention to increase its stake in Apollo confirmed the strong Chinese interest in its projects.

Apollo is currently exploring two iron ore projects, in Western Australia and South Australia and is looking for further opportunities in the sector.

Indian iron ore spot prices remain flat

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on April 28th 2008.