Indian steel import jump up sharply in 2007

According to statistics from UK based Iron and Steel Statistics Bureau, India has recorded a sharp YoY jump in import of steel in 2007 whereas the exports have reduced.

In million tonnes
(Sourced from Iron and Steel Statistics Bureau)

India’s rank among global majors for exports and import has been as under

(Sourced from Iron and Steel Statistics Bureau)

CIL announces 2007-08 results

Coal India Limited has reported a profit before tax of INR 9,576.22 crore for 2007-08 on the back of a 5.1% YoY increase in production to 379.49 million tonnes. Coal India’s sales revenue in 2007-08 is also expected to be more than INR 40,000 crore compared with INR 35,000 crore a year ago.

Mr PS Bhattacharyya chairman of CIL said that “The profit figure is provisional, pending the final audit of accounts and without provisioning for wage revision. However, on a like to like basis, this is 12.37% more than the INR 8,522.22-crore profit in the previous fiscal.”

It is reported that while all subsidiaries of CIL posted an improved performance in terms of production and profitability, ECL suffered a loss of INR 647 crore after a 9.35-million tonne shortfall in production from the target as it produced 24.06 million tonnes which is 6.41 million tonnes less than in 2006-07.

Mr Bhattacharyya said that “ECL could not achieve its production target because the outsourcing contract for the Rajmahal project could not be finalized. Bid prices were not remunerative. This problem was mostly solved in the last financial year and ECL is expected to achieve its production target of 31 million tonnes in 2008-09.”

CIL aims to produce 520.5 million tonnes in 2011-12, which is the last year of the Eleventh Five Year Plan 2007-12, 44.2% more than the 360.9 million tonnes it produced in 2006-07, the final year of the Tenth Plan. This means the company will have to increase its raw coal production at the rate of 7.6% YoY every year.

FIMI accuses Indian steelmakers of cartelization

PTI reported that Indian mining industry has accused the steelmakers of indulging in cartelization and creating scarcity to reap profits and asked the government to break it to reduce the demand supply mismatch, besides imposing a 25% export duty on steel.

As per report, the Federation of Indian Mineral Industries in a letter to Dr Manmohan Singh prime minister of India said that "It is quite obvious that a cartel of 7 to 8 primary steel producers have joined together to raise steel prices to the phenomenal level at the cost of consumers. It is the cartel which is creating scarcity conditions to reap wind fall profits."

Mr RK Sharma secretary general of FIMI in the letter said that "Under these circumstances, the only way by which steel prices can be brought down is to break the cartel and to improve the supply side of steel in the domestic market to balance the demand supply gap.”

He added that "This wind fall profit generated in India is being diverted by some steel companies to acquire either sick steel plants abroad to maintain jobs in those countries or in developing new mines or steel plants in far flung areas such as Bolivia, Chile, Canada, the US, and creating jobs in those countries rather than ploughing profits in creating more steel capacities and generating employment within India.”

Steel and coal ministries get new state ministers

Indian President Mrs Pratibha Patil has appointed Mr Jitin Prasada as new minister of state for steel in place of Dr Akhilesh Das.

She has also appointed Mr Santosh Bagrodia as new minister of state with independent charge for coal in place of Mr Dasari Narayan Rao. Mr Bagrodia is from Rajasthan

OSPC orders closure of 7 more sponge iron units

It is reported that in a surprise visit, Orissa State Pollution Control Board found as many as seven sponge iron units of violating pollution norms in the districts of Sambalpur and Jharsuguda. While three units located in Sambalpur district, the rest are situated in Jharsuguda.

1. Veeraj Steel & Energy
2. Samaleswari Industries
3. Samaleswari Ferro Metallick
4. LN Metallicks
5. Pawansut Sponge Iron
6. Jai Hanuman Sponge Iron
7. Seven Stars Steel

After receiving the report, the Member Secretary of OSPCB has issued closure notices to these polluting units on Friday through the Regional Office of the OSPCB at Sambalpur. Collectors, SPs and Wesco officials of both the districts have also been informed about the closure notice. Mr Shitikanta Sahu regional Officer of OSPCB said all the units have been asked to proceed with closure procedure and they will be shut down on Monday.

Earlier, a similar exercise was also undertaken in Sundargarh district and as many as nine sponge iron units were closed on April 2nd 2008 for violation of pollution norms.

CIL delays forward auction launch to April

Mr K Ranganath director marketing of Cola India Limited announced that the launch of forward auction scheduled in March has been postponed.

He said “The prospective participants in the forward auction have appealed for simplification of the procedure. Accordingly, the auction is now slated for rollout in April.”

Steel minister suggests putting steel back as essential commodity

As per media reports, Indian government is considering reversing its decision of taking steel out of Essential Commodities Act if the steel producers do not hold the price line as they may hike prices in tune with international trend after having reduced prices by about INR 2,000 a tonne last week.

As per reports, Mr Ram Vilas Paswan steel minister has written a letter to Dr Manmohan Singh PM of India suggesting various fiscal and non fiscal measures, including putting steel back into the Essential Commodities Act.

Mr Paswan in his letter said “In the three month period since December 2007, steel prices have risen by 20% to 24%. Possibilities of setting up a regulatory mechanism for steel and its inputs, and re classifying steel as an essential commodity may be considered.”

Indian government has already withdrawn export incentives being offered to steelmakers in the form of Duty Entitlement Pass Book scheme and is reported to be considering following measures as well
1. Abolishing import duty
2. Lowering the excise duty to 8%
3. Levying of export tax

CIL to start talk with ArcelorMittal for JV only after nod

PTI reported that Coal India Ltd has hinted at initiating talks with ArcelorMittal for a JV its abandoned and unexplored mines only if the government gives it green signal.

Mr Bhattacharya CMD of CIL said "ArcelorMittal wants to have joint venture with CIL in abandoned mines and unexplored reserves for which we need to have a dialogue with them. If the government directs us, we will talk to them.”

He said public sector CIL could not enter into a joint venture on a nomination basis unless directed by the government. He stressed that “We follow expression of interest route for any joint venture company.”

He added that the company has asked the Central Mine Planning Development Institute to give details about abandoned mines and their reserves.

SCCL performance update for 2007-08

It is reported that Singareni Collieries Company Ltd has recorded sales revenues of INR 5,157 crore with profit before tax of INR 270 crore for the financial year ended March 31st 2008 against total sales income of INR 4,140 crore and profit before tax of INR 117 crore last fiscal.

SCCL collieries exceeded the targets set by both the government and internally by registering record production of 40.60 million tonnes for 2007-08 up by 8% YoY and over 100% against target of 40.5 million tonnes. SCCL’s productivity measured as output per man shift overall mines in 2007-08 has been 2.64 tonnes with 10% achievement with a growth rate of 9% over the year 2006-07.

Mr S Narsing Rao CMD of SCCL said “This is the highest ever production achieved by SCCL in its 119 year history. The company in the sixth consecutive year achieved the coal production targets after a spectacular turn around. He said this growth was due to all round improved performance and significantly led by higher output from underground mines. From a decelerating production from underground mines, we have managed to change course and this has resulted in 6.7% higher output this year.”

SCCL has set a target of 43.56 million tonnes for 2008-09 with 30.25 million tonnes from opencast and 13.3 million tonnes from underground mines.

GMDC to undertake mining at Naini coal block in Orissa

BS reported that the state owned mining and mineral company, Gujarat Mineral Development Corporation has initiated talks with the Pondicherry Industrial Promotion and Development Corporation to mine the entire Naini coal block in Orissa, in order to achieve better synergies.

Sources said “PIPDC does not have rich expertise in the mining sector. On the other hand, GMDC is one of the major mining and mineral companies having ample expertise in the field. Also, it has announced its plans to foray into power generation in a big way. GMDC's intention to mine the entire Naini block is aimed at having better synergies to get maximum benefits from the project,”

Sources close to the development said recently, GMDC officials held a meeting with PIPDC to express its intention to mine the entire coal block. We have already approached the corporation and are awaiting their response to our proposal.
GMDC is also learnt to have submitted an application to lease half of the coal block awarded to PIPDC.

Union ministry of coal has allocated half the block, with coal reserves of 250 million tonne to GMDC and the remaining 250 million tonne to PIPDC in 2007.

Indian economy to expand 8.5% in 2008-09

It is reported that the Indian economy is expected to grow by 8.5% in the 2008-09 .

Recent fiscal steps will help check price rise as inflation has raced to its highest in more than three years to 7% in the 12 months to March 22, pulling down the stock market and sending bond yields higher.

The Associated Chambers of Commerce and Industry said in a statement said "Government has taken sufficient corrective measures to contain inflation the measures would yield results and bring down prices of essential commodities to manageable limits in next few days."

ASSOCHAM said "A few more steps should also be taken by Reserve Bank of India for curtailment of interest rates as also ensures sufficient liquidity." It said the growth in gross domestic product for the current fiscal would exceed 8.5% compared with an estimated 8.7% in the previous fiscal year.

Burma and India sign pact for on new Burmese port

It is reported that India will build a transportation and seaport system in Myanmar under an agreement that was signed after talks between Indian officials and Mr Maung Aye vice chairman of Myanmar. Kaladan transport corridor agreement was signed in the presence of Mr Maung Aye and Mr Mohamed Hamid Ansari VP of India in New Delhi recently.

The agreement will allow India’s northeastern states access to the sea and Southeast Asia bypassing the transit through Bangladesh. The project includes construction of a road from Setpyitpyin in Myanmar to the Indo Myanmar border at a cost of MMK 5.3 billion as well as upgrading of the Kaladan waterway and Sittwe port.

The ministry said in a statement that “The project will greatly enhance connectivity between Myanmar and India, in particular with India’s northeast states. The ministry said several agreements, including the one on the Kaladan multi modal project and a pact for avoidance of double taxation were signed after talks between Mr Maung and Mr Ansari.

India has been investing in Myanmar, particularly its hydrocarbon sector, despite international criticism for its support for the military regime which violently suppressed pro-democracy protests last year.

Paradip Port to double capacity in 5 years

It is reported that Paradip Port Trust will invest INR 2,500 crore over five years to double its vessel handling capacity to 111 million tonnes per annum. Mr K Raghuramaiah chairman of Paradip Port Trust said "The present capacity of the port is 56 million tonnes per annum with 14 berths. To meet the future demands, we are implementing several projects to double its capacity to 111 million tonnes per annum in five years.”

Mr Raghuramaiah said that as many as 30 projects have been taken up for expansion and development of the port and the major one are

1. INR 253.36 crore for deepening of the channel. On completion of this project, the depth of the entrance channel will go up from 12.8 meter to 17.1 meter

2. To construct a berth for handling of iron ore with back up facilities to meet the growing demand, adding the estimated cost of the project was INR 504.77 crore

3. In view of setting up of several steel plants in Orissa, it has been proposed to construct a berth for handling coal with back up facilities at an investment of INR 387.83 crore

4. Railway line between Haridaspur and Paradip - Rail Vikas Nigam is taking up construction of the 82 km long rail link at an estimated cost or INR 590 crore.

He said efficiency of the port, which handled 1,636 vessels during 2007-08 as against 1,452 in 2006-07, would increase substantially when the ongoing projects are completed.

While dismissing suggestions those new ports at Dhamra and Gopalpur could pose threat to its business, he said that “Paradip Port will not lose anything even after new ones come up. The kind of cargo we are handling will remain with us."

Paradip Port handled a record traffic of 42.44 million tonnes during 2007-08 up b y 10.8% YoY as against 38.52 million tonnes in 2006-07.

DP World Chennai posts 27.22% growth in box throughput

Exim News Service reported that DP World Chennai has achieved a total throughput of 1,121,500 TEUs during 2007 to 2008, thereby registering a robust 27.22% growth over 2006 to 2007. The terminal also handled a record monthly volume of 108,271 TEUs in March 2008.

Mr Ennarasu Karunesan director & CEO of DP World Chennai said that the terminal had handled a total of 759 vessels during the period under review, besides commencing four new mainline services. He observed that Shreyas shipping’s coastal feeder also commenced operations this year making the terminal a truly global hub port.

The report added that in order to cater to the increasing volumes of trade and to enhance operational efficiency, the terminal had procured new container handling equipment including 4 new RTGs and 1 new empty container handler.

Mr Ennarasu assured the trade and terminal users that DP World Chennai would continue to surpass many more such milestones with the continued support and assistance of all of its customers, terminal users, stakeholders and our team of dedicated and committed employees.

US undecided on clean coal technology transfer to India

It is reported that US have not yet made up its mind on sharing clean coal technology with India. The report quoted Mr Clarence Albright a visiting official of the US Department of Energy as saying that “There is no change from our earlier stand.”

Mr Albright co chaired a meeting of the steering group of the US India Energy Dialogue with India’s Foreign Secretary Mr Shivshankar Menon.

When asked about the transfer of clean coal technology under the FutureGen project. FutureGen is a public private partnership project of the US government to build a zero emission power plant based on coal, with the help of carbon capture and storage.

Mr Albright, however, did not rule out the possibility of technology transfer in future. He said that “We are still working on it to figure out how we are going to do that technology transfer.”

When asked if the India US nuclear deal came up during talks, he said that“We talked about all sorts of energy matters, not directly nuclear. Mostly, the discussions were fairly general.”

Mr Albright said that with rising oil prices, the US was working on renaissance in nuclear power as a cost effective, clean source of energy.

AP approves lease of land for Machilipatnam Port

It is reported that the Andhra Pradesh cabinet has approved lease of 6,262 acre of land and a concession period of 30 years for the Machilipatnam port at Gilakaladinne.

As per report the project is executed by Maytas Infrastructure, Nagarjuna Construction Co, SREI Infrastructure Finance and Sarat Chatterjee & Co consortium.

The government has okayed the concession period of 30 years from the date of commercial operations, extendable by 20 years provided the concessionaire shall develop the port asset as per the agreement. After signing the agreement, the port will have to commence commercial operations within 36 months.

BHEL Hyderabad posts INR 3,321crore turnover in 2007-08

BS reported that the Hyderabad operations of Bharat Heavy Electricals Limited posted a turnover of INR 3,321 crore for the year ended 2007 to 2008 up by 15% YoY over last year. Its profit before tax stood at INR 801 crore up by 22% YoY as against last year.

Bharat Heavy Electricals received orders worth INR 5,639 crore during the year, taking the total order book at INR 8,766 crore. It secured engineering, procurement and construction orders from Sulaymanyah, Iraq, for four a 500 MW open cycle power plant, apart from an order from an Oman refinery.

Mr GV Rami Reddy executive director of BHEL Ramachandrapuram unit said faced with severe competition from Chinese engineering companies, BHEL is in the process of upgrading its designs. Post this, the equipment would be of higher capacity, cost-effective and reduce the delivery time. This is expected to be completed in a year.

He said the unit had been under pressure due to rise in metal prices in the recent few months. Accordingly, it has increased the sale price of the products by about 8% in the last six months. The unit would also invest INR 578 crore for augmenting the capacity to 15,000 MW.

The unit has drawn up a strategic plan for achieving a turnover of INR 7,000 crore by 2011-12 by introducing new products like gas turbines for gas transportation projects, air cooled condensers and pumps for nuclear power plants, pulverisers for non-coal applications and oil rigs.

Top steel trading countries in 2007

According to statistics from Iron and Steel Statistics Bureau, China having jumped from 5th to largest exporter in 2006, it recorded a further 33% growth in exports in 2007 to 65.2 million tonnes. This increase came despite exports falling every month from a peak in April 2007 to 7.6 million tonnes to a 19 month low in November 2007 of 3.9 million tonnes as changes to export rebates and taxes reduced export levels.

Exports

(Sourced from Iron and Steel Statistics Bureau)

EU27 imports surged 25% in 2007 to over 49 million tonnes. Meanwhile US imports fell 27% to 29.5 million tonnes on the back of a slowdown in the US economy. Chinese imports continued to fall, down 9% to 16.9 million tonnes. In conjunction with their escalating exports this took the Chinese trade surplus in steel to over 48 million tonnes, an increase of 18 million tonnes in 2007 and a swing of 83 million tonnes since their peak trade deficit of 35 million tonnes in 2003. Exports to the Middle East were particularly strong in 2007 increasing 35% to 35 million tonnes, and led by shipments to Iran, up 60% to 12 million tonnes, and UAE, up 36% to 9 million tonnes. The dominant origins were China, up 200% to 8.5 million tonnes, Russia up 60% to 5.7 million tonnes and Ukraine up 21% to 5.0 million tonnes.

Imports

(Sourced from Iron and Steel Statistics Bureau)

FMG rails first iron ore from mine to port

It is reported that Fortescue Metals Group has reached a significant milestone by running its first loaded train on part of a new rail line running from its Cloudbreak iron ore mine to Port Hedland.

FMG said that the successful 185 kilometer trip marks the start of a week when the entire 260 kilometer track, including from its Cloud Break mine to its loading siding, will be completed.

Mr Andrew Forrest CEO of FMG said that the train, named the Alannah MacTiernan Express, was loaded at the company's Hunter Siding, and ran to the newly named Herb Elliot Port in Port Hedland. He said "And then on to the train unloader and then on to the stackers, so it was basically the major part of the commissioning of the rail and port systems and yes we are very excited."

Mr Forrest says other parties will have access to the new track. He has also renewed his call for access to BHP and Rio Tinto's rail line, which follows a similar route.

FMG is due to ship its first load of iron ore to Asian steel mills by mid May.

CAP considering major steel expansion plan

Reuters reported that Chilean steel group CAP is planning to decide this year whether to increase its steel production capacity by between 1 million and 1.5 million tonnes in gradual increments, starting in 2012.

Mr Jaime Charles CEO of CAP during Latin America Investment Summit in Santiago told Reuters that the plan could cost between USD 1 billion and USD 1.5 billion.

He added that "The company would make this kind of investment to be well positioned to meet growing demand for at least the next ten years that is until 2017 or 2018 at least. It wouldn't be aimed at growing in the market, but to stay where we are in terms of market share adding that a decision regarding the expansion would be made at some point this year.”

Mr Charles also said that CAP expects sales to grow this year, fueled by greater volumes and higher prices, although he said costs are expected to rise as well. He added that "This year prices will be higher and volumes will grow and that will be reflected in higher sales revenue, gradually over the year. The first quarter was favorable from the point of view of revenue and very unfavorable from the point of view of costs.”

Mr Charles said that CAP will also decide this year whether to increase its iron ore production capacity through two new projects in northern Chile, which would cost some USD 500 million and involve business partners from China and Japan. Some of the company's investments this year will be financed by the sale of up to USD 250 million in bonds on the local market.

Mr Charles added that starting in May, the company's steel division will raise its production capacity to 1.45 million tonnes of liquid steel from the current level of 1.2 million tonnes.

Japanese steelmakers shares fall on cost pressures

Reuters reported that shares in Nippon Steel Corp and other Japanese steelmakers fell on Friday on concerns coking coal prices could triple this business year, forcing them to seek bigger price hikes to offset the cost increase.

As per report the stock of Nippon Steel, the world's second biggest steelmaker closed down 2.4% at JPY 530, while third ranked JFE Holdings Inc finished down by 3.1% at JPY 4,620 and Tokyo Steel Manufacturing Co, Japan's biggest construction use steelmaker fell 2.7% to JPY 1,417.

The report further added that a stronger yen could also take a toll on their earnings in the new business year started this month as it would make prices of steel, cars and other finished products more expensive in overseas markets, cooling their demand. The yen last month hit a 13 year high against the dollar.

Allegheny Technologies may be takeover target - Report

Pittsburgh Tribune reported that that shares of metals processor Allegheny Technologies Inc jumped more than 10% and its option volume surged last weekend on renewed speculation that it was a takeover target of US Steel.

Mr William Lefkowitz option strategist at brokerage firm vFinance Investments said that "There is a rumor that US Steel might have an interest in Allegheny Techs. Going into the weekend, traders are buying both the stock and its calls."

Mr Frederic Ruffy independent options trader said that "Allegheny Tech has been cited as a takeover target in the past, following several other mergers in the steel industry.”

There was no immediate comment from either US Steel or Allegheny Technologies.

Southern Steel Berhad to upgrade EAF and caster

It is reported that Southern Steel Berhad of Malaysia has awarded Concast AG of Switzerland for the upgrade of its existing electric arc furnace and five strand continuous caster. The upgrade will be completed by the end of 2008.

The scope of supply includes a furnace platform and a gantry system with roof lifting device including hydraulic components for the existing DC electric arc furnace. Following last year's revamp by Concast of the existing five strand continuous caster to allow submerged casting, the current expansion project will include hydraulic oscillators and mold stirrers as well as cartridge molds.

Corinth update on new pipe orders

Corinth Pipeworks SA informed the investment community about the award of 6 contracts amounting to a total value of EUR 170 million of which EUR 113 million concern large diameter spiral welded steel pipes, while the remaining EUR 57 million concern medium diameter steel pipes.

The agreements were concluded with Energy Transfer and Spectra Energy two of the largest North American grid operators, Bïrd Gáés Eireann (National gas company of Ireland) and with constructors Bechtel, Petrofac and J&P Paraskevaides, for projects in Agola, Syria and Libya.

The execution of all these projects is expected to be completed into 2008 and the first half of 2009.

US DOC finds Thai pipe supplies below nominal value

US Department of Commerce, which in response to a request from Allied Tube and Conduit Corporation and Wheatland Tube Company, is conducting an administrative review of the antidumping duty order on circular welded carbon steel pipes and tubes from Thailand, has determined that sales of subject merchandise have been made by Saha Thai Steel Pipe Company Ltd below normal value.

US DOC said that “If these preliminary results are adopted in our final results, we will instruct US Customs and Border Protection to assess antidumping duties based on the difference between the export price and the NV.

This review covers the period March 1st 2006 through February 28th 2007.

The products covered by this antidumping order are certain welded carbon steel pipes and tubes from Thailand. The subject merchandise has an outside diameter of 0.375 inches or more, but not exceeding 16 inches and is commonly referred to in the industry as standard pipe or structural tubing.

ARP sees strong steel sector growth in Colombia

BNamericas reported that Colombian steelmaker Acerías Paz del Río believes that growth in the domestic steel industry will continue in 2008.

The report quoted Mr Wilson Moraes executive VP of Acerías Paz del Río as saying that however it is feasible that momentum will slow in the second half if the recession threatening the US has a substantial impact on Colombia's economy and causes construction to drop off.

Colombia's construction chamber Camacol forecasts domestic demand at 2.6 million tonne of steel products in 2008 with 5.7% growth over 2007, when it reached 2.46 million tonne and grew 10%.

Although Acerías Paz del Río's consumer price only improved by 0.8% last year, the local industry is expected to raise them nearly 10% this year.

The report said that "International steel prices could go up because steel companies around the world have to compensate for increased production costs and the rising cost of raw materials.”

Acerías Paz del Río controlled by Brazilian group Votorantim, registered net income of COP 6.32 billion (USD 3.4 million) in 2007, down by 93% YoY from COP 95.4 billion.

US economy shed 80,000 jobs in March

It is reported that US employers cut payrolls for a third month in a row in March and the unemployment rate jumped to a 2-1/2 year high, adding more evidence that a housing downturn and credit crisis may have pushed the economy into a recession.

US Labor Department on Friday reported that March non-farm payrolls fell 80,000, the biggest decline in five years. The March unemployment rate jumped to 5.1% from 4.8%, the highest since a matching rate in September 2005.

Adding to the bleak picture, the department revised the first two months of the year’s job losses to a total of 152,000 from a previous estimate of 85,000.

US DOC announces preliminary results on AD of SS bars from France

The US Department of Commerce, which is conducting an administrative review of the antidumping duty order on stainless steel bar from France has announced preliminary results.

US DOC said that “We preliminarily determine that Ascometal did not sell stainless steel bar below normal value during the period of review. Interested parties are invited to comment on the preliminary results.”

It added that “If the preliminary results are adopted in our final results of administrative review, we will instruct US Customs and Border Protection to assess antidumping duties on all appropriate entries.”

The period of review is March 1st 2006 through February 28th 2007.

The products under review are stainless steel in straight lengths that have been either hot rolled, forged, turned, cold drawn, cold rolled or otherwise cold finished or ground, having a uniform solid cross section along their whole length in the shape of circles, segments of circles, ovals, rectangles including squares, triangles, hexagons, octagons, or other convex polygons. SSB includes cold finished stainless steel bars that are turned or ground in straight lengths, whether produced from hot-rolled bar or from straightened and cut rod or wire, and reinforcing bars that have indentations, ribs, grooves, or other deformations produced during the rolling process.

The petitioners include Carpenter Technology Corporation, Crucible Specialty Metals Division, Crucible Materials Corporation and Electroalloy Corporation.

ArcelorMittal offers jobs to French workers - Report

IANS cited an announcement of ArcelorMittal as saying that all workers being made redundant at an ArcelorMittal steel plant in northeast France will be offered jobs at nearby steel plants owned by the company.

The assurance comes ahead of a planned meeting between French President Mr Nicolas Sarkozy and ArcelorMittal CEO Mr LN Mittal to discuss the future of steel plant in Gandrange.

Some 60 French workers ransacked an office at the plant and threw furniture and files out of the window after management confirmed 575 job cuts on Friday as part of a decision to close down part of the Gandrange plant.

ArcelorMittal's plans, announced on January 16th 2008 to close its Gandrange plant in eastern France by early next year. The steel plant has an annual production of 900,000 tonnes and the closure is estimated to affect about 600 workers. The company has said that relocation of affected employees would be its priority and every employee would be offered a solution.

South Korean scrap imports in 2 months up by 3.1% YoY

South Korean scrap imports in January to February 2008 totaled 992,000 tonnes up by 3.1% YoY.

Among them, Japan provided 49% of total volume with 486,000 tonnes down by 11.6% YoY and US ranked the second with 269,000 tons up by 27.7% YoY. Russia shipped 142,000 tonnes to South Korea up by 14.3% YoY.

(Sourced from YIEH.com)

Alter Trading acquires SCI Recycling for an undisclosed amount

Creve Coeur based scrap metal recycling company Alter Trading Corp announced that it has acquired SCI Recycling and its three facilities located at Anoka in Minnesota, Hayfield in Minnesota and Mason City in Iowa for an undisclosed amount.

Minnesota based SCI's three locations will continue to accept both ferrous and non ferrous metals as they transition into Alter Metal Recycling locations. It has 61 employees.

An Alter spokeswoman said Alter cannot specifically comment on employment issues, but they are confident that all key employees of SCI will remain with Alter Metal Recycling. He added that Mr Tim Bernstein vice president, operations will be responsible for the Anoka and Mr Hayfield yards and Mr Tim Rosengren will serve as the regional manager for both yards. Mr Bob Rosencrants vice president, operations, will assume responsibility for the Mason City yard.

Mr Robert Goldstein CEO and president of Alter "This is a wonderful opportunity for Alter to expand further in the Twin Cities area as well as in Iowa. As we continue to grow in the Midwest, we want our customers to know that with Alter, they can always expect facilities that are convenient and readily available to meet their needs."

Alter Trading is a processor of scrap metal and currently employs 973 people. The company moved more than 3.5 million tonnes of scrap metal in 2007 and posted an estimated USD 1.25 billion in revenue.

SNCF makes offer for Geodis

French national railways SNCF announced plans to bring the country's biggest freight firm, Geodis back under state control in an effort a create a major European transport and logistics company.

SNCF said that it would pay EUR 135 euros a share for the 58% of Geodis stock it does not already own, a premium of more than 30% on its last traded price and valuing the company at EUR 1.1 billion.

Mr Guillaume Pepy chairman of SNCF' said that "This is the first takeover in the history of the SNCF. Perhaps it won't be the last.” But He gave no further details.

SNCF expects the board of Geodis to make a decision on the offer within three weeks and said it did not need any regulatory approval for the deal.

Geodis and SNCF's freight division had a combined turnover of EUR 7.7 billion in 2007

Mexico condemns cement nationalization in Venezuela

Reuters reported that Mexico has condemned Venezuela's planned nationalization of the cement industry, which will affect Cemex a major Mexican company.

Mr Agustín Carstens finance minister of Mexico in the city of Acapulco said that "We can only condemn this action. The property and rights of Mexicans are not being respected by the leftist government of Venezuela.”

Mr Chávez has frequently accused private cement companies of exporting their production rather than selling it into the domestic market to help ease a housing shortage that has drawn complaints from his supporters. Last year he warned of corrective actions against Venezuelan Cemex, a local division of Cemex after residents accused it of polluting. Mr Chávez during a televised speech last week said that "Nationalize it and as of this instant take all the legal measures to nationalize in the short term all of the national cement industry.”

IMO discusses ship dismantling procedures

It is reported that during a recent meeting the International Maritime Organization, the Marine Environment Protection Committee discussed the draft text of a new convention providing globally applicable ship recycling regulations for international shipping and for recycling activities. The aim is to complete the draft convention in time for its final consideration and adoption by a diplomatic conference in 2009.

The Committee noted that the report of the third session of the intersessional Working Group on Ship Recycling met this past January, and further developed the draft convention.

The new convention will provide regulations for the following areas:

1. The design, construction, operation and preparation of ships so as to facilitate safe and environmentally sound recycling, without compromising the safety and operational efficiency of ships;

2. The operation of ship recycling facilities in a safe and environmentally sound manner; and

3. The establishment of an appropriate enforcement mechanism for ship recycling, incorporating certification and reporting requirements.

The Marine Environment Protection Committee will consider submissions from International Maritime Organization Member Governments and non governmental organizations in consultative status with International Maritime Organization, including documents presented by the International Organization for Standardization, the International Labor Organization and the Secretariat of the Basel Convention.

NASA scientist urges Australian PM to stop coal exports

Reuters reported that Dr James Hansen chief climate scientist of NASA has written to Mr Kevin Rudd prime minister of Australia asking him to consider halting plans for mining and export of coal in Australia.

Dr Hansen, one of the world's leading climate scientists, in a letter addressed to Mr Rudd has asked him to show leadership on the issue. He said that the continuing mining of coal, export of coal and the construction of new coal fired power plants should be halted and a transition is needed to solve the global warming problem.

He said that choices of alternative energy sources are local considerations but a decision to phase out coal use is a global imperative.

Former head of the CSIRO's Climate Impact Group Mr Barrie Pittock supports the letter and says Australia must take urgent action if climate change is to be addressed. He said that "We are increasing the global emissions at the rate of about 3% every year now, and what we have to do is decrease emissions by 2% or 3% every year. That's the only way we are going to keep global temperatures down to something that might be safe.”

BHPB Escondida copper mine exploring to extend life

Reuters reported that an exploration program at Chile's Escondida, which is majority owned by global miner BHP Billiton and is the world's largest copper mine is seen extending the life of the operation beyond the current 40 years.

Mr Diego Hernandez president of Billiton Base Metals told Reuters during a televised that the company started an aggressive exploration program three years ago that was bearing fruit. He added that "We have good opportunities to increase our resource of primary ore. Then Escondida will be in production for many years.”

Mr Hernandez said the company's groundbreaking sulfide leach project was developing well, producing 124,000 tonnes of copper in 2007 and likely hitting 180,000 tonnes a year over the next 18 months.

Escondida located in Chile's mineral rich northern mining region, produced 1.483 million tonnes of the red metal last year up by 18% YoY. To maintain that output Escondida is looking at a series of alternatives, including an expansion of concentrator capacity to boost mineral throughput.

Mr Hernandez also said that the company was working to improve access to electricity supplies amid industry wide shortages in the north. He added that "By 2012 we will be in a normal situation in terms of power supply.”

US trade show organizers form alliance

It is reported that 4 leading trade show organizers in US have formed an alliance to better serve the needs of trade show exhibitors and manufacturers in North America in the fields of fabricating, tube & pipe, welding and cutting, metal forming and related processes.

The show alliance between the three organizers of the Fabtech International & AWS Welding Show the Society of Manufacturing Engineers, the Fabricators and Manufacturers Association International and the American Welding Society and the organizer of METALFORM, the Precision Metalforming Association, will result in a combined annual exhibition.

While the first official combined exhibition will take place in November 2009, the partners have agreed to a soft start at the 2008 FABTECH International & AWS Welding Show, to be held October 6 to 8 at the Las Vegas Convention Center in Las Vegas. The Vegas show will include a METALFORM pavilion, displaying innovations in stamping technology. An estimated 20,000 people from around the world are expected to visit the show, which will feature more than 800 exhibits.

By uniting the industry under one roof, the newly combined event will be significantly more inclusive, adding value for both exhibitors and attendees. The 2009 show is expected to cover 650,000 net sq. ft. with 1,300 exhibiting companies, becoming the "one-stop shop" in North America where attendees can access the latest materials, equipment and services for all metal forming, fabricating, tube & pipe, welding and cutting technologies.

ICTSI bags rights for Mindanao terminal project

CargoNews Asia reported that Philippines’ International Container Terminal Services Inc beat five other bidders, including Maersk Lines, to secure the much coveted concession contract for the Mindanao Container Terminal in Tagoloan

International Container Terminal Services Inc in a statement said that it has won the right to operate Mindanao Container Terminal over five other bidders, including one of the world's biggest shipping companies, Maersk Lines.

Under the deal with Phividec Industrial Authority, International Container Terminal Services will operate and manage Mindanao Container Terminal one of the biggest and most advanced terminal ports in Mindanao, for 25 years.

The bidding was Phividec's third attempt to privatize Mindanao Container Terminal after two failed bids. With a capacity of more than 2.7 million tonnes, Mindanao Container Terminal was designed to handle cargo from Brunei, Indonesia, Malaysia and other countries in the Asia Pacific region.

South Korean builder overseas orders in Q1 up by 50% YoY

Yonhap reported that South Korean builders' overseas orders grew more than 50% YoY in Q1 of 2008 due to increased demand from the Middle East and Asian markets.

According to the report by the Ministry of Land, Transport and Maritime Affairs, local builders gained overseas orders amounting to USD 14.03 billion in Q1 of 2008 up by 53% YoY.

The report said that the sharp growth stemmed mostly from a solid increase in orders from the Middle East and Asian countries.

Can Tho to dig for Latorite in Cambodia

VNA reported that Can Tho Cement Sadico has signed a USD 900,000 cooperation agreement with Cambodia’s Omsaura Co to exploit Latorite ore in Cambodia’s Compongthom province.

Under the deal, the project will begin in July and expire 40 years later. The mining operation has an estimated output of 50,000 tonnes of ore per month.

Zambia to resume mining rights applications next months

The Post reported that Zambia is to resume receiving new applications for mining rights from next month after 10 months suspension.

The report quoted Mr Kalombo Mwansa mines minister of Zambia as saying that all the technical work required to open the new cadastre system had been completed. He said that to this effect, the government had re organized codified and digitalized cadastral data and all the required logistics had been put in place in readiness for opening to the pubic.

Mr Mwansa said that the system had been tested and had satisfied the government objective to have a more transparent, efficient administration and management of mining rights licensing process. He added that "The processing of license applications, renewals and transfers will now be done in a timely manner, further the system is designed to avoid overlaps of mining rights areas.”

Mr Mwansa said that efforts would be made for the mining cadastre regulations to be aligned with the new mines and minerals development act.

Zambia announced in June last year a halt effective from July 1st 2007 of new applications for mining rights in order to computerize its licensing system announcing the suspension, Mr Mwansa said the suspension is part of Zambia's efforts to weed out irregularities and simplify licensing procedures regarding the industry with massive inflows of foreign capitals.

Cookson and Foseco scheme of arrangement becomes effective

Cookson Group plc and Foseco plc announce that, further to Foseco's announcement on April 3rd 2008, the Scheme of Arrangement by which the Acquisition is being implemented has now become effective in accordance with its terms.

Under the terms of the Scheme, Shareholders on the register of members of Foseco as at the Scheme Record Time will receive 295 pence in cash for each Foseco Share held. The latest date for despatch of cheques and crediting of CREST accounts for the cash consideration due under the Scheme is expected to be 18 April 2008.

Trading in Foseco Shares on the London Stock Exchange's market for listed securities was suspended with effect from close of business on April 3rd 2008.
In October 2007, Cookson agreed to buy Foseco for about EUR 497 million in cash. As per the terms of the deal, the Foseco shareholders will receive 295 pence in cash for each Foseco share.

Merrill Lynch is acting as lead financial adviser and Lazard is acting as joint financial adviser for Cookson. For Foseco, Greenhill is acting as exclusive financial adviser and Collins Stewart is acting as corporate broker.

Foseco Plc is a supplier of products to the foundry and steel industries.

Steel price hike hitting construction sector in Turkey

Turkish Daily news reported that the recent price surge in steel sector in the last few months had negatively affected many other sectors from concrete to home textiles

Mr Murat Yalcıntaş chairman of the Istanbul Trade Chamber said that mine demand in international markets and the effect of petroleum prices on iron prices were normal, but that those who increased iron prices by 30% in one month, taking advantage of the recent political ambiguity, were actually damaging the national benefits of Turkey.

Mr Yalcıntaş said that that costs in the construction sector increased parallel to the increase in iron prices, which put the construction sector into difficulty. Construction works might end soon.

Reminding the importance of prices in the construction sector together with the prices of iron and its byproducts in order to maintain economic development, Mr Yalcıntaş further noted that it is impossible to overcome the recent period of stagnation in the economy without vitality in the construction sector, the economic locomotive.

He added that it was unlikely for the sector representatives to keep their promises under the current increases. If the construction sector were negatively impacted by this increase, not only the contractor companies but also construction industrialists and iron steel producers would suffer.

Mr Yalcıntaş who emphasized that the increases by 13% in January and more than 30% in March in many products led to unexpected costs and this caused the construction sector to be damaged a lot said that “The increase in the prices of construction iron has almost built a shield made of iron in front of the sector.”

Nakheel plans to build tallest tower in the world

ArabianBusiness.com reported that Dubai developer Nakheel plans to build a tower 1,200 meters high, comfortably surpassing the Burj Dubai as the tallest building in the world.

The source at Australian architects Woods Bagot, which was recently awarded a contract for the project, said the tower is to be located on the Arabian Canal, a USD 61 billion project being developed by Limitless.

Nakheel confirmed to ArabianBusiness.com that it was working with Woods Bagot, but said it could not discuss details about the project. It said "We are still finalizing the design concept of a new project involving an iconic structure - Woods Bagot are a consultant on this project. As we are still in the design concept stage, it would be premature to discuss any details at this early stage."

Nakheel told ArabianBusiness.com the location had yet to be finalized. It said "The location of the project has not yet been confirmed, as we are currently conducting test piling to ascertain the suitability of a potential site.”

At 1,200 metres high Al Burj would be significantly taller than Emaar Properties' Burj Dubai, which is expected to be up to 900 meters once complete in early 2009, although the final height remains a closely guarded secret.

Both Limitless and Nakheel are part of state owned conglomerate Dubai World.

Mr Deora to attend IPI pipeline meeting

It is reported that the much delayed Iran Pakistan India gas pipeline project is expected to receive momentum when the officials from three countries meet in Pakistan on April 23rd 2008 to sort out the issues stalling its progress.

Mr Murli Deora union petroleum minister of India on the sidelines of a CII organized seminar confirmed that "I have been invited by the Pakistani Energy minister to go to that country. We will discuss various matters stalling the project.”

He said that "The project is on. We don't see much difference. There are some pricing and cess issues, which we need to discuss.”

The USD 4.7 billion, 2,100 kilometer gas pipeline project has been facing rough weathers due to issues pertaining to the pricing and cess issues.

Domestic iron ore supplies start for PSM

Business Recorder reported that Pakistan’s government has decided to exploit local iron reserves and as a first step, has started supplying 15,000 tonnes ore to Pakistan Steel Mill from Chaghi in Balochistan.

Sources in Engineering Development Board said that the steel sector was facing problems owing to high iron ore prices in the international market. Pakistan Steel Mill was not getting required iron ore and whatever it got was very expensive. The EDB has set up three committees comprising professionals, stakeholders and representatives from all provinces asking them to come up with practical suggestions to move forward.

The issue was also discussed with the steel industry which fully supported the initiative. Initially, a contract was signed with the PSM for supply of 15,000 tonnes iron ore from Chaughi as a pilot project. The locally produced iron ore will be blended with the imported one to meet the utilization requirements.

About major iron reservoirs in Pakistan, they said that 1 billion tonnes iron ore was scattered in different parts of the country varying in iron content. About 350 million tonnes iron ore reserves, with 30.35% Fe content in Kalabagh/Chichali, Mianwali District, 200 million tons, with 30 to 35% Fe at Dilband in Kallat District, 110 million tonnes up to 60% Fe iron content in Kirana, Sargodha District, 100 million tonnes with 25 to 35% Fe content in Nazampur and 66 million tonnes with 30 to 34% Fe in Pezu.

Similarly, 45 million tons iron ore reserves with 30% to 34% Fe content are in Pachinkho, Chaughi District, 30 million tonnes with 30% to 34% Fe in Langrial, Hazara Division, 23 million tonnes with 10% to 55% Fe in Chilghazi, Chaughi District, 12 million tonnes with 50% to 60% Fe in Amir Chah, Chaghi District, 6.5 million tonnes with 605 to 65% Fe in Dammer Nisar, Chitral District, and 5 million tonnes with 20% to 60% Fe in Chigendik, Chaghi District.

Two major elements used for ore making are Haematite Ore and Magnetite Ore with iron content ranging between 50% to5/67% for rich ore and 30% to 35% lean ore. Sources said it was a fact that not all local iron ore reserves have the required content but these could be initially utilised through blending with imported ore.

Cement prices in Pakistan may soften a bit

The New reported that according to Karachi Cement Dealers Action Committee, cement prices in Pakistan would soon retract to original range of PKR 200 to PKR 220 per 50 kg bag.

The report cited Mr Walibhai Patel president of Karachi Cement Dealers Action Committee as saying that the new government has assured of taking steps to bring down the cement price to normal levels that in between PKR 200 to PKR 220.

He said that “The cement manufacturers are responsible for the recent increase in cement rates that went up almost PKR 80 per bag. Cement companies stoked rumors of impending cement price hike that triggered hoarding leading to artificial cement shortage and ultimately gave cement makers the reasons to raise prices.”

Mr Walibhai added that the government has been informed about the malpractices of cement companies. He said that “The government has assured that no one would be allowed to manipulate the market. Action would be taken against cement cartels that are supposedly involve in recent cement price hike.”

He appealed to the retailers and wholesalers to buy cement carefully, purchasing only according to their needs.

However, cement makers negate this and say that there are clear indications of high cost of production in cement industry and that manufacturers are justified in raising cement prices in the country. An industry official said that “cost of production has increased due to which on average there has been an increase of PKR 25 to PKR 30 per 50 kilogram bag.”

Gulf region turning ship repair services hub

It is reported that the Gulf region is fast turning into a major hub for ship repair services and conversion projects, with Dubai Drydocks in the UAE and the Arab Ship Repair Yard in Bahrain, experiencing a significant increase in business volumes.

Gulf region has been constantly witnessing a substantial increase in maritime trade and a large number of cargo ships, which traditionally sailed through to the Indian Subcontinent and beyond to South East Asia, are now choosing to turnaround at the Middle East ports instead, and rely on feeder vessels to carry cargo for the regional deliveries. What this essentially means is that demand for repair services for the large number of mother vessels and feeders plying in the region is on the rise.

As ship owners always seek the best deal possible when negotiating repair operations, the most important driving them to Gulf based repair yards is the cost, which is low due to availability of cheap labor from close traditional maritime markets of India, Bangladesh, Sri Lanka and the Philippines.

In addition, despite the low repair costs in Far East based ship repair yards, what works towards the advantage of the UAE and Bahrain is the large number of ‘westbound traffic’ out of the Gulf region.

Ships prefer to drydock on the routes on which they trade. Since dry docking is a highly expensive operational exercise, most ship owners prefer to dry dock their vessels within the confines of the routes on which they operate. Deviation is avoided as it would add to repair costs and operating expenses. The expansion of the regional ship repair sector has also resulted in a new development. It has led to a massive demand for new ship repair technology and related products.

DP World to develop King Abdullah Economic City Port

It is reported that Saudi developer Emaar Economic City has signed an initial accord with Dubai's DP World to develop and operate a port at King Abdullah Economic City, which will be the largest in the Red Sea and one of the top 10 ports in the world with a capacity to handle 20 million TEUs.

A multi purpose cargo terminal is scheduled to be operational by end of 2010 and a 1.6 million TEU container terminal by mid 2011 after which the capacity of the port will be increased on several phases.

Extending over 14 square kilometers, the KAEC Sea Port will be equipped to receive the new generation mega-vessels, with a nominal capacity of around 10,000 TEU and more and will utilize global positioning technologies, advanced information management systems and automated processes.

King Abdullah Economic City has six zones
1. Sea Port
2. Industrial Zone
3 Central Business District including financial district
4. Educational Zone
5. Resort District
6. Residential Communities
Work is progressing on schedule on the first phase of the project including the Sea Port, Industrial Zone, Resort District and Residential Communities.
Emaar Economic City, an affiliate of Dubai based Emaar Properties, is spearheading the development of the USD 26.7 billion project.

DP World is currently the fourth largest port operator in the world and has a portfolio of 43 terminals and 13 new developments across 28 countries. It has established expertise in designing, building and operating ports in developed and developing countries. A team of over 30,000 professionals serve the customers of DP World, which also provides logistics, infrastructure development and consultancy services.

Iranian ports to get USD 567 million investments this year

MNA reported that Iran’s Ports and Shipping Organization has outlined execution of development plans worth IRR 5,150 billion (USD 567 million) in the current Iranian year.

Mr. Ali Jahandideh deputy director of the Organization for administrative and financial affairs said that the lion’s share of the required budget for the plans will be provided through the Organization’s revenues and the balance will be secured through foreign finance and selling participation bonds.

He noted that the budget allocated to the PSO for the current Iranian year is some seven trillion rials, while the figure was to the tune of IRR 6.7 trillion in the previous year.

He concluded that the Organization’s revenues amounted to IRR 4.25 trillion in the past Iranian year and it is expected that the figure to rise to IRR 4.5 trillion in the current year.

Petrofac won USD 477 million Syria gas contract

TradeArabia reported that British based oil and gas services company Petrofac has won a USD 477 million lump sum contract from Petro Canada to build a gas treatment plant for the Ebla project in Syria.

The Ebla plant will be designed to produce 88 meter standard cubic feet of sales gas per day and 150 tonnes of liquefied petroleum gas per day. Under the agreement, Petrofac will take a 10% stake in the Ebla production sharing contract.

Mr Maroun Semaan CEO of Petrofac Engineering and Construction said that "This is another significant award in Syria for Petrofac which, taken together with the Jihar gas plant award, provides us with almost USD 1 billion of work in a country where we have successfully worked on a number of projects.”

Mr Peter Hitchens analyst of Seymour Pierce in a note said that "This is good news for the company. However, we are concerned over the group wanting to take a 10% stake in the project.”

He added that "The management wants to build up the Energy Development business by bringing its engineering skills to progress upstream projects. However, we are concerned if this will add much shareholder value, given that the company will only be a minority partner in this project.”

Shell shows interest in Iraqi oil sector

Reuters reported Royal Dutch Shell is ready to help Iraq to increase its oil production once that country's government finalizes a petroleum law covering big energy projects.

CEO of Royal Dutch Shell stressed that Shell employees must be able to work safely in the country and a petroleum law must be passed. The law would provide conditions for investment and international participation in Iraq's oil and gas industry.

According to the US Energy Department, Iraq holds the world's third biggest oil reserves at 115 billion barrels and has some of the cheapest extraction costs.

Chinese steel export prices remain on upward trend last week

It is reported that Chinese plate export prices are still on an upward trend last week and are expected to remain firm in April 2008.

On shanghai market, commercial 16mm plate by Yingkou steel was being quoted at CNY 6050 per tonne to CNY 6100 per tonne, 16mm to 20mm plate by tier two steel producers was at CNY 5750 per tonne to CNY 5780 per tonne and low alloyed 40mm plate was at CNY 6650 per tonne.

However, export offers for commercial plate were at USD 1050 per tonne to USD 1060 per tonne on FOB basis while those by tier one steel producers jumped to about USD 1100 per tonne on FOB basis.

China to consume 56% of world's iron ore in 2011

It is reported that China will continue to exhibit strong demand for iron ore in next few years and would increase its share of consumption to 56% by 2011.

Mr Michael Zhu president of Companhia Vale do Rio Doce China at a recently held conference said that "In 2000, China consumed just 15.4% of the world's iron ore, but that rose to 49% in 2007 and will hit 56% by 2011.”

He informed that Vale will keep pace with expected demand increases by steelmakers and plans to put up the capital to make it possible. He said that "Between 2003 and 2007, we invested a total of USD 20 billion in iron ore projects. But between this year and 2012, we plan a CAPEX of USD 59 billion. Our capex for this year is USD 11 billion, 70% of which is in new projects.”

Mr Zhu said that increased iron ore mining is based on robust forecasts for steel output worldwide. He said "We expect 8.8% to 9% average annual global steel output growth over the next five years, reaching 1.7 billion tonnes by 2012.”

CISA sees balanced supply and demand for iron ore in 2008

It is reported that Mr Luo Bingsheng deputy secretary general of China Iron and Steel Association during a recent meeting said that the iron ore supply and demand in the global market will keep basically balanced in 2008.

He said that all 3 iron ore giants CVRD, Rio Tinto and BHP are expanding iron ore output with huge investment at present. He said that “The newly added iron ore demand this year all over the world predicted to be 70 million tonnes and the overall newly added output of CVRD, Rio Tinto and BHP Billiton predicted to be 70 million tonnes.”

He outlined that “Iron ore export of CVRD in 2007 was 265 million tonnes and the designed iron ore output in 2008 would be around 290 million tonnes, export increased 25 million tonnes. Iron ore output of Rio Tinto last year was 170 million tonnes and predicted to be increased 15 million tonnes this year. Output of iron ore of BHP last year was 120 million tonnes, but predicted to increase 10 million tonnes this year. The overall iron ore supply of these three iron ore giants will increase 50 million tonnes last year.”

He added that “In addition, FMG in Australia predicted to build an annual 50 million tonnes of iron ore capacity on May of 2008 and supply 28 million tons of iron ore for the whole year. Iron ore demand from India in 2008 predicted to be decreased about 8 million tonnes affected by the increasing demand from domestic market.”

Shortage of chrome may drive ferritic SS growth in China

It is reported that during the 9th Asian Ferro Alloys conference recently held at Hong Kong, the overall outlook for Asian ferroalloy demand was upbeat for the year 2008 especially with strengthening in Chinese demand.

As per report, participants at the conference widely believed that a global shortage of chrome might cause another cost explosion at stainless steel mills in 2008.

This situation is likely to result in lower growth in ferritic stainless steel production and higher growth in austenitic materials, especially in China, which has easier access to nickel pig iron as a raw material feed with lower input value.

Right time for steel futures trading in China

It is reported that the Shanghai Futures Exchange, which has already set out its wire rod and rebar futures contracts and formulated guidelines on delivery and risk control and is awaiting government approval, feels that this is the right time to launch them.

Mr Yang Maijun president of SHFE at the Far East Steel Conference in Beijing said that "The market conditions are right. It is a good time to launch steel futures trading this year."

Mr Qi Xiangdong vice chairman of the China Iron and Steel Association said hedging tools are urgently needed because China, the world's largest, but highly fragmented, steel market is increasingly vulnerable to international commodity price swings. He said "Once there is steel futures trading, users and producers can sign futures contracts to minimize risks associated with volatile prices."

Mr Yang, a former director of the China Securities Regulatory Commission, said the regulator is likely to approve the scheme very soon. He said rebar and wire rods are among the most common steel products used for construction in China and it will be relatively easy to introduce them as futures contracts.

The exchange's plan to trade steel futures dates back to early 2006, but was delayed due to the CISA's fears of volatile futures trade impacting the spot market and causing excessive market speculation.

Lion Group awards contract to Shougang International

Lion Diversified Holdings Bhd's wholly owned subsidiary Lion Blast Furnace Sdn Bhd has secured a USD 239 million contract for the supply of plant and machinery for the 2.2 million tonne coke oven and 2.8 million tonne sinter plant.

As per report Lion Blast signed an Engineering, Procurement, Construction & Commissioning contract with Beijing Shougang International Engineering Technology Co Ltd of China.

Mr Tan Sri William Cheng chairman & CEO of Lion Group said the projects are part of Lion's iron making project to be undertaken at its steel complex at Banting in Selangor. He added that "The capital expenditure for the iron making project consisting of blast furnace, coke oven, sinter plant, pellet plant, raw material yard and port jetty facilities is estimated to be about CNY 2 billion, with the facilities to be operational from July 2009.”

Mr Cheng said the group is also planning to install another 1.6 million tonnes capacity LD converter ladle furnace vacuum oxygen degassing-slab caster medium size plate mill with an investment of CNY 1.75 billion. The blast furnace project, including coke oven and LD converter, will produce substantial waste gas. He added that the group also plans to install a dedicated power plant with an investment of CNY 400 million to reduce its energy cost.

Currently, the total steel investment in the pipeline (for the blast furnace project, slab caster and plate mill, and dedicated power plant) is about CNY 4.15 billion. Mr Cheng said that "With all these new projects, the steel making capacity at the Lion Steel Complex in Banting will be more than 6.5 million tonnes, boosting Lion Group's total steel making capacity from all its plants in the country to over 8.2 million tonnes.”

Mr Cheng said that with the completion of these projects, the group will be able to produce high grade and clean steel as well as special steel. He added that "It will also further improve the quality of our products and reduce our costs and make the Lion Group one of the biggest steel producers in Asean.”

Fosun plans to pump CNY 8 billion in 10 projects in 2008

It is reported that Mr Guo Guangchang chairman & president of Chinese large scale private conglomerate Fosun International Ltd said the company plans to invest CNY 8 billion into 10 projects in 2008, spanning pharmaceutical, property, mining, and financial service.

He said Fosun will infuse more than USD 100 million into the pre IPO business in 2008 and intends to make it as the regular business of the company, since the business has lower risks and higher returns. But the target companies are supposed to gain net profits of more than CNY 20 million annually.

Mr Ding Guoqi CFO of Fosun International Ltd said mining is expected to contribute to more than 25% of the company's net profit in 2008, compared with the current 18%.

Fosun on March 25th 2008 posted its annual results for the year ended December 31st 2007. In the year, Fosun's net profit soared 206% YoY to CNY 3.354 billion and total revenues up by 32.1% to CNY 31.977 billion.

Chinese galvanized sheet imports in February 2008

According to the recently released information by Chinese custom authorities, Chinese galvanized sheet imports during February 2008 amounted to 264,372 tonnes.

In tonnes

China pushing miners to list overseas to fund growth

Xinhua reported that China will encourage domestic mineral exploration companies to list on overseas exchanges to raise funds for their development. Analysts said overseas listings would address the lack of funds that had stymied the development of China's mining and minerals sector, which had long relied on state finance.

According to China's first geological exploration plan, which was issued by the ministry the government will support their foreign and domestic listings. The plan stated that exploration should focus on commercially viable projects and the government wouldn't invest in profit making projects in principle.

Mr Hu Cunzhi director of the ministry's planning department Government backed exploration had dominated the sector, which did not suit a market economy and weakened the industry.

By 2010, China aims to have established a group of overseas bases for the exploration and production of oil, natural gas, coal, iron and copper.

Chinese tinplate imports in February 2008

According to the recently released information by Chinese custom authorities, Chinese tinplate imports during February 2008 amounted to 12,237 tonnes.

In tonnes

Sinotruck's heavy duty truck hit monthly sales high

Xinhua reported that China National Heavy Duty Truck Group Corp. one of the county's largest truck producers sold a monthly record of 15,000 heavy duty trucks in March 2008.

China National Heavy Duty Truck Group Corp sales of heavy duty trucks in the first quarter hit 32,500 units, an increase of 41% YoY over the same period of last year. It sales revenue totaled CNY 10 billion in the first quarter up more than 40% YoY.

It attributed good sales performance to the efforts on technology improvement and a robust demand from both domestic and overseas markets. Sinotruck has devoted more than CNY 500 million in technology upgrading. It also admitted that the company was under the pressures of soaring steel price, and environment protection measures implemented in some overseas markets in Russia, West Asia and Middle East.

Sinotruck said earlier that it aimed to produce 125,000 units of heavy duty truck in 2008 up from last year's 100,000.

Offshore fields to be key oil and gas sources in China

Interfax reported that offshore oil and gas fields will be China's key source for oil and gas in the future as energy demand and environmental stresses grow.

Mr Zhou Dadi former director of the National Development and Reform Commission's Energy Research Institute said that 25% to 33% of China's oil and gas will be sourced from offshore fields during the 2020 to 2030 period. Correspondingly, domestic oil demand is likely to reach 500 million to 600 million tonnes in 2020, and approximately 700 million tonnes in 2030.

Mr Zhou said China's onshore oil and gas fields will struggle to increase their output to meet such demand, so offshore oil and gas development needs to be sped up, and future oil and gas imports expanded. He said this means that now is a good time for Chinese companies to develop offshore oil and gas resources, providing they are conscious of key issues, such as ongoing sovereignty disputes in the South China Sea, the high risks and costs associated with offshore work and the limits of their own technical capabilities.

Mr Zhou said it is unlikely that the Chinese government will establish an organization to specifically assist local companies overcome these problems, so such companies should lobby for other forms of support, such as tax concessions and favorable policies. He also encouraged local and foreign companies to work together over offshore exploration. He said the current situation, whereby China meets 68.9% of its energy demands with coal, is unsustainable, adding that when environmental factors and resource reserves are taken into account, the country can only afford to exploit another 3 billion tonnes of coal.

Mr Zhou said energy pressures will build as the country's rapid economic growth will lead annual energy consumption to reach 4 billion to 5 billion tonnes of standard coal in 2020, and 6 billion to 9 billion tonnes in 2050. He said to deal with this, China needs to change its energy structure, transforming from being a coal reliant country to a country that can utilize liquid fuels and renewable energy to meet market demands.

Evraz likely to increase revenue by 60% in H1 of 2008

Evraz Group recently forecast revenue growth of more than 60% to USD 3 billion in the first half of this year as steel prices rose and it integrated acquisitions that will make it Russia’s largest steelmaker.

Mr Alexander Frolov CEO of Evraz said the company could now pause before making more purchases after a buying spree last year that included the purchase of Oregon Steel Mills in the US and Highveld Steel & Vanadium in South Africa.

He said “Our main focus as of now is to complete the transactions we have already started and to integrate the assets we have announced we are going to buy. We are also working on a number of other opportunities but we don’t have anything concrete.”

Evraz Group said net profits rose 56% to a record USD 2.1 billion in the 2007 financial year, slightly below analysts’ expectations because of foreign exchange losses and one off amortization and depreciation costs. EBTDA rose 61% to USD 4.25 billion. The company forecast a 15% rise in steel output in 2008.

Severstal update on Lucchini performance in 2007

Severstal announced that Lucchini Group’s consolidated profits in 2007 stood at EUR 149.9 million as against EUR 102.3 million in 2006, while total revenues came in at EUR 2,747 million in 2007 as against EUR 2,648.7 million in 2006.

The release said that this result is affected by a different basis of consolidation as compared to the previous year due to the disposal of a number of companies during 2006. Consolidated EBITDA showed an increase of EUR 15.7 million compared to 2006 standing at EUR 314.5 million.

The release said that Lucchini Group’s Employees totaled 6,992, while over EUR 131 million was spent on investment in industrial and environmental plants.

It added that the shareholders’ meeting of Lucchini SpA approved the 2007 financial statements as well as the Group’s consolidated accounts.

Steel production at Piombino site was 2.1 million tonnes while production at Trieste site was 400,000 tonnes of liquid cast iron.

Russian coal production in 2 months up by 3.1% YoY

Interfax reported that Russia has increased coal production by 3.1% YoY to 56.38 million tonnes and exports 5.2% to 12.67 million tonnes in January to February 2008.

Coal production by the open cast method rose 11% while output by deep mines fell 7%. Coal production rose 36.9% in the Kansk-Achinsk basin 9.1% in the Donets basin and 1.9% in the Kuznetsk basin but down 18.8% in the Pechora basin.

Coal sales in Russia itself rose 9.1% YoY in the two months to 38.4 million tonnes including 18.9 million tonnes to power stations up by 13.2%YoY, 7.1 million tonnes to coking plants up by 0.5% YoY and 5.7 million tonnes to households, utility providers and the agro industrial complex down by 0.8% YoY.

Coal exports to non CIS countries rose 6% YoY to 19.91 million tonnes and exports to the CIS rose 0.3% YoY to 1.76 million tonnes.

Kryukiv Railcar plant plans USD 12 million CAPEX in 2008

Millennium Capital reported that Ukrainian Kryukiv Railcar Plant intends to spend USD 12 million in modernizing the company in 2008. These capital expenditures are a part of KVBZ's long term program of technical development for 2007 to 2017.

About USD 7 million will be spent for the increase of passenger railcar and metro car production capacities. Another USD 2.5 million will be invested in CHPP reconstruction.

It was announced in December, 2008 that KVBZ will invest USD 20 million into designing a new passenger carriage, subway train with an asynchronous motor, freight cars and escalators. KVBZ also intends to build a passenger carriage line of 200 units per annum. The plant will also invest USD 15 million over 2008 to 2012 to reconstruct its energy generating capacity and purchase energy saving equipment.

Natural gas transit via Ukraine to Europe in Q1 up by 29.5% YoY

Ukrainian Journal Staff reported that transit shipments of natural gas across Ukraine to European countries from January through March 2008 grew by 29.5% from the first quarter of 2007 to 34.7 billion cubic meters. This is a record high in the history of the operation of Ukraine's gas transport system.

Azov Port traffic in January to March 2008 down by 2.8% YoY

It is reported that in the first quarter of the current year the Azov port complex decreased its handling by 2.8% to 644,200 tonnes.

As per report, Azov Port handled 490,700 tonnes of traffic in March 2008.

Ukraine may sell stakes in power generators by October

Ukrainian Journal Staff reported that Ukraine may start selling majority strakes in state owned fossil burning power generators at auctions in October.

According to the decision, the government may sell 60%+1 share stakes in power generating companies DniproEnergo, DonbasEnergo, ZakhidEnergo and TsentrEnergo at the auction due before October 31st 2008.

Russian railways to complete some investment projects

It is reported that Russian Railways plans to complete works on development of transport corridors Kuzbass the Far East Transport Hub, Kuzbass, the Azov-Black Sea Transport Hub and Kuzbass, the North-West in 2008.

As per report to complete these projects there will be invested with RUB 19.3 billion including RUB 6.2 billion for Kuzbass, the Far East Transport Hub corridor, RUB 5.7 billion for Kuzbass, the Azov-Black Sea Transport Hub corridor and RUB 7.1 billion rubles for Kuzbass, the North-West.

Russia may return to coal for domestic power

It is reported that Russia is planning to switch its energy balance away from gas, in favor of coal and atomic energy. The idea of regulating Russia’s fuel balance has dominated the annual energy forum in Moscow, with some participants calling for a regulatory role for the government.

As per report to reduce the dependence on gas and increase the share of other fuels Mr Valery Yazev Deputy Duma Speaker wants the government to step in.

Mr Yazev said “The country’s energy balance should be approved at government level. There are a number of measures that can regulate the balance and reduce the share of gas. For example, you can regulate tariffs for coal transport and make coal generation more attractive.”

Mr Anatoly Yanovsky Russian Deputy Energy Minister said “The government is investing USD 800 billion in the electricity sector, mainly to increase generating capacity. We plan to double the output of coal and atomic energy.”

Norlisk to support EuroNickel conference in Moscow

It is reported EuroNickel Conference, the first ever international nickel event to be held in Russia which is organized by Adam Smith Conferences with Informa Nickel will take place in Moscow on April 8th 9th 2008. This event will be endorsed by Nickel Institute, and MMC Norilsk Nickel will be its major sponsor.

According to Mr Denis Morozov GD of MMC Norilsk Nickel, the company being the world’s major nickel producer positively regards the fact that it is Russia that was selected to host such a top flight industry forum.

Mr Denis Morozov said “This event demonstrates that the industry of our country is highly integrated in the global economic space. Notably, European manufacturers of hi tech nickel based products have a long history of business partnerships with the Company. At the same time Norilsk Nickel Harjavalta nickel refinery based in Finland is one of the major minerals processing plants in the European Union.”

The Conference will bring together Russian and international nickel producers as well as representatives of investment and academic institutions, experts in nickel and stainless steel markets. Special focus areas will include nickel industry development in Russia, CIS and Finland.

Gazprom may decide Central Asian gas price by July 1st 2008

RIA Novosti reported that Gazprom could coordinate the price for Central Asian natural gas which it supplies primarily to Ukraine by July 1st 2008.

Mr Alexander Medvedev deputy chairman of Gazprom's Management Committee said "We plan to coordinate the price by July 1st 2008. In any case this will be done before the year's end."

Uzbekistan, Turkmenistan and Kazakhstan announced in early March that they would begin exporting their natural gas at European level prices from 2009. Kazakhstan also warned it could raise tariffs for gas transit via its territory.

Any new deals are likely to entail a gas price hike for Ukraine, which buys Russian supplied Central Asian gas at USD 179.5 per 1,000 cubic meters in 2008. The average price in Europe currently stands at USD 370.