India imposes ban on export of pig iron by PSUs

ET reported that, in yet another move to check spiraling steel prices, the government has imposed a temporary ban on export of pig iron by public sector companies like Steel Authority of India Limited, Rashtriya Ispat Nigam Limited and MMTC controlled Neelachal Ispat Nigam Limited.

The move is aimed at supporting the export oriented foundry and casting units that have been complaining about supply constraints and steep rise in prices of pig iron.

Official sources said that the centre is planning to hold an auction for the pig iron produced by the public sector companies for domestic buyers at their existing prices. Domestic buyers will get 10 days to make purchases, following which the PSUs will be allowed to export the left over metal. The advertisement for the auction will be released soon.

A government official said that "Since the auction for domestic players will give opportunity to all buyers to source as much as they want at existing prices, the problem of supply constraint and rising prices is expected to be addressed. Export of pig iron from SAIL and NINL has already stopped. We are going to come out with the advertisements soon."

Since prices of PSUs are much lower than those maintained by private companies, giving first preference to domestic buyers will ensure the foundry and casting units will have access to more supplies from them than before. This may also encourage other private sector players to reduce prices and look for opportunities in the domestic market itself.

Pig iron production in India is around 5.5 million tonnes. Even though the quantum of exports is low, it is likely to grow with more players entering the business. PSUs are expected to play a stabilizing role by preventing widening of demand supply mismatch in the domestic market.

TATA Steel raises INR 2,000 crore non convertible débentures

TATA Steel Limited has raised INR 2,000 crore, including green shoe option, through a private placement of redeemable non convertible rupee debentures as part of the long term financing plan of. The issue opened with an initial size of INR 750 crore on May 5th and closed on May 6th 2008. The deemed date of allotment for the non convertible rupee debentures is May 7th 2008.

The issue consists of 3 series including a 7 year maturity fixed rate series of INR 620 cores, a 3 year maturity floating rate series of INR 1,090 crore and a 3 year maturity fixed rate series of INR 290 crore.

The non convertible rupee debentures were assigned a rating of AAA (ind) by Fitch Ratings India Private Limited for the aggregate amount of INR 2,000 crore. The rating agency also affirmed the national issuer rating of AAA (ind) for TATA Steel.

An application has been made to list the non convertible rupee debentures on the wholesale debt market segment of the National Stock Exchange. Each debenture carries a face value of INR 1 million and is being issued at par.

Indian government may force cement makers to curb prices

It is reported that, after forcing steel makers to roll back prices, Indian government is now aiming the gun at cement in its fight against inflation and is planning a slew of steps, if the cement industry fails to hold prices.

Dr Ashwani Kumar union minister of state for industry said that "We have talked to cement producers and they have assured us that in the course of the next 2 days to 3 days they would reduce prices after consultations among themselves. They will come forward with proposals on how best cement prices can be brought down further."

Dr Kumar said that "Cement firms have cited certain constraints, including the tax structure. We have taken them up with the finance ministry and hope to resolve them soon. The government is not helpless and has means to ensure prices are brought down. More measures are in the offing."

Meanwhile, Mr HM Bangur president of the Cement Manufacturers’ Association said that excise duty on cement was calculated on retail price unlike other commodities where ad valorem rates based on manufacturing cost were used. He added that "If the 20% ad valorem rate is fixed for cement, prices of cement can come down by INR 15 per bag."

Dhaka to seek revised proposal from TATA Group - Report

The Daily Star newspaper reported that Bangladesh government is likely to inform TATA Group that they cannot spare gas supplies for its proposed projects under USD 3 billion investments and it should seek for alternate sources. This could further delay TATA Group’s investment plans in Bangladesh.

The report cited an official of Bangladesh’s energy ministry as saying that the government will ask TATA to submit revised proposals so that instead of gas it can use other raw materials in the projects.

TATA and the government are scheduled to resume talks on Sunday. The agenda for talks was set last week when Mr Manzer Hossain resident director of TATA met Mr Hossain Zillur Rahman commerce adviser and Mr Kamal Uddin Ahmed chief of board of investment.

In 2005, the TTATA group initially proposed setting up a 1,000 MW power plant, a steel mill with an annual production capacity of 420,000 tonnes and a 1 million tonne fertiliser unit in Bangladesh.

Burma cyclone damages container terminal

Lloyd’s List reported that Myanmar’s main gateway container terminal was badly damaged in the Nargis storm this week and the international relief efforts could be hampered.

Hutchison Port Holdings which owns Myanmar International Terminals Thilawa confirmed the terminal’s cranes had been wrecked during tropical cyclone Nargis, which packed 190 kilometers per hour winds and a 3.5 meter sea surge. Mr Anthony Tam of Hutchison Port told Lloyd’s List “Equipment is badly damaged and cranes will need to be replaced. This has already been started.”

He added that, “In view of HPH’s ability to source alternative handling equipment we hope to put our port area back in operation in a reasonable time to match the time needed for removal of wrecks and other debris. Priority will be to get wharves ready for relief supplies.”

The terminal, which has five container berths totaling 1,000 meters with a depth alongside of 10 meters, is 25 kilometers from the former capital Yangon. MITT had two container quay cranes and three rubber tyred gantry cranes together with seven forklifts and three front loaders. There is also a 20,000 sq m capacity warehouse which has also been badly wrecked according to insiders.

Some steel users terms price cuts as an eyewash

HT reported that some of the small and medium enterprises doubt that if the latest decision by the steel producers to cut prices would bring any immediate benefit to them. AS per report, they feel that steel prices have been slashed is steel categories mainly used by secondary steel manufacturers, who produce finished products like pipes and sheets.

The report cited Mr Naven Jain secretary of Uttar Pradesh Welding Electrodes Manufacturing Association as saying that "The price cut is just an eyewash. The steel companies had already taken an undertaking from us in April 2008 according to which we will have to buy steel at a determined price up to June 2008. The price cut would mostly benefit the construction sector, which uses large sheets of steel. It would not anyway have made any difference to us as there is no cut announced in the specialized steel that is required for manufacturing electrodes."

Mr SK Narula president of Phase I and II of the Naraina Industrial Association said that "Whether small scale industry benefits or not would depend on whether secondary steel manufacturers pass on the price cut to consumers."

SMEs said that they have seen prices of steel products they use rise close to 60% since December 2007. They added that the spike in input costs had dented their competitiveness against imports from China and hurt their profitability.

Steel price cuts to hit profitability – JSPL

Mr Naveen Jindal MD of Jindal Steel & Power Limited said that it sees profitability hit by a cut in steel prices. He added that "But how much is a matter of calculation."

It may be noted that leading Indian steel firms bowed to government pressure to cut prices this week

AIFI welcomes price cut initiative by government

Association of Indian Forging Industry, following the announcement of reduction of steel prices by INR.4000 per tonne, has welcomed the move.

Mr Vidhyashankar Krishnan president of AIFI and MD of MM Forgings Ltd said that "We will welcome the initiative and move by the government. We have to wait and see how this translates reduction of forging quality steel."

NCDEX may shift focus towards metal & energy

BL reported that, as the uncertainty over ban on futures trading of agri products continues, National Commodity & Derivatives Exchange Limited may change focus towards metals and energy contracts to boost its depleting turnover.

An NCDEX Board member said that "The board will take a view of all factors including the Abhijit Sen Committee report to decide its future course of action." He added that the board had earlier asked NCDEX to explore more options apart from the agri commodities.

He said that there is speculation in the market that the government may ban futures trading of some more commodities, so NCDEX will decide how to increase its turnover that has dropped significantly during the last year.

Although the Abhijit Sen Committee, set up to study the impact of futures trading on prices of essential commodities, is silent on the issue regarding ban on agri futures, Mr P Chidambaram union finance minister said that the government may prohibit some more commodities.

JSW to ink 25:75 JV with Toshiba for critical steam turbine units

JSW Group has announced that it will form a 25:75 JV with Japanese major Toshiba to manufacture and market super critical steam turbines and generators for thermal power plants in India. The JV, expected to be formed in June 2008 with an initial capital of INR 200 crore, will invest nearly INR 1,000 crore.

Of the JSW group’s 25%, JSW Steel will hold a 5% stake while JSW Energy will control 20% stake.

The scope of the JV included designing, manufacturing, marketing and maintaining medium and large steam turbines and generators, ranging from 500 MW to 1,000 MW. These turbines will be deployed in thermal power plants.

Mr SS Rao joint MD & CEO of JSW Energy said that "This alliance is aimed at giving us an advantage in the Indian energy sector. The JV is aimed at responding to expanding electricity demand in tandem with India’s economic growth."

Mr Atsuhiko Izumi executive VP of Toshiba’s Power Systems Company said that "This is a significant step for Toshiba, one that will give us a firm foothold in the Indian market for thermal power generation."

The JV partners are now seeking a site of some 400,000 square meters on which the facilities will be developed. Toshiba’s power equipment production facility in Yokohama Keihin Operations will complement the JV’s effort to ramp up the manufacturing process in the beginning, as the JV aims to establish an independent production scale of 3,000 MW a year.

Driven by strong economic growth, the Indian power generation equipment market is expected to see demand growth of 15,000 MW to 16,000 MW per year for the next decade. Coal fired thermal power stations will account over 60% of the capacity growth, far surpassing other energy sources.

Indian economy to grow by about 8% in 2008-09 – Report

Reuters reported that India's economy is expected to grow by around 8% in the current fiscal year and annual inflation may moderate in a few weeks.

India’s central bank and most other forecasts have pegged growth in Indian economy at 8% to 8.5% in the 2008-09 financial year as the global economic slowdown and monetary tightening takes its toll. Indian economy is estimated to have grown at 8.7% in 2007-08, slower than the previous year as higher interest rates hurt consumer demand.

Mr Montek Singh Ahluwalia deputy chairman of India's Planning Commission said that "My projection was 8% to 8.5%. I will be happy at the lower end. A growth of around 8% is quite acceptable. I do hope that in the next few weeks inflation will moderate. The government can take more measures if prices are contained."

Meanwhile, Mr P Chidambaram union finance minister expects the economy to grow more than 8% in the current fiscal year. The government wants growth of 9% or above to reduce widespread poverty and create jobs. He said that 9% plus with 4% inflation is the ideal rate although a ministry report has said just sustaining 9% growth would be a challenge due to inflation pressures and infrastructure constraints.

It may be noted that the government and the central bank have taken fiscal and monetary steps to calm price pressures ahead of key state elections later in 2008 and federal polls in 2009.

Murugappa Group to invest INR 1,300 crore until 2010 – Report

BS reported that the INR 9,600 crore Murugappa Group will invest approximately INR 1,300 crore every year until 2010 to achieve a group turnover of INR 14,000 crore. The investments will be made in the core businesses of the group which are sugar, fertilizer, abrasives, distilleries, co generation and tube products.

Mr A Vellayan VC & director of Murugappa Group, while presenting the group's financial performance in 2007-08, said that overall group performance was below expectation and hoped to recover some ground in the current financial year. He added that "For a group of our size, we expected to grow 3 times the country's GDP growth rate which would be 24%. In the current year we hope to grow by 20%."

Murugappa Group's turnover in 2007-08 nearly touched INR 10,000 crore growing at 15.5% YoY over 2006-07. Net profit was INR 535 crore in 2007-08 down by 13% YoY due to extraordinary income of INR 197 crore reported in the previous fiscal due to realization of some investments.

In terms of EBIDTA, it has reported a growth of 17.4% YoY to INR 1075 crore. The two major laggards in the group that pulled down the EBIDTA margin were sugar company EID Parry and tubes and cycle making company Tube Investments of India. The downward cycle in the sugar industry and rising cost steel were cited as reasons for the poor performance of these two companies.

National safety awards for TATA Steel units

TATA Steel's relentless efforts towards ensuring safety in all its areas of operations was recognized and acknowledged at prize distribution ceremony of National Safety Award 2004-2005 and 2006 organized by union ministry of labor & employment and directorate general of mines safety.

TATA Steel’s West Bokaro and Jharia divisions received awards from Ms Pratibha Patil President of India for their exemplary performance in the area of safety. Bhelatand Amalgamated Colliery and Sijua Colliery of Jharia Division of TATA Steel have been given the National Safety Awards. Mr C Divaker GM of Jharia division and his team from Jharia along with Mr Nageshwar Prasad Saroj mining sirdar & president RCMS received the awards for Jharia Division of TATA Steel

In the category of difficult underground mines, Bhelatand amalgamated colliery has received the award for the longest accident free period for year 2004 and 2006. Sijua colliery was given the runners up for the longest accident free period for the year 2005.

While this is the first time Sijua colliery has received a National Award, Bhelatand amalgamated colliery was declared the Winner in 2003 also. Sijua and Bhelatand colliery are the underground coal mines in Jharia division of TATA Steel. They are both degree II gassy mines with a maximum working depth of over 450 meters.

Two open cast mines of West Bokaro division of TATA Steel also received the National Safety Awards. Quarry South East of West Bokaro which has been developed as a world class mines received the winner trophy for the year 2006 and Quarry AB got the runner up trophy for the year 2004.

L&T secures INR 344 crore orders from Power Grid Corporation

Larsen & Toubro Limited recently announced that it has bagged orders totaling to INR 344 crore from Power Grid Corporation of India Limited for the construction of 755 kilometer of transmission lines associated with Western Region System Strengthening Scheme-Il.

The scope of work for this project, to be executed by L&T’s engineering, construction & contracts division, involves survey, fabrication & supply of towers and erection of 400 kV direct current transmission lines from Bhadrawati, Urnarkhand, Parli & Raipur, Sakoli and Wardha in Maharashtra. The project will be completed in 30 months.

Larsen & Toubro Group is a USD 7 billion technology, engineering and construction company, with global operations. It is one of the largest and most respected companies in India’s private sector. A strong, customer focused approach and the constant quest for top class quality has enabled L&T to attain and sustain leadership in its major lines of business over 7 decades.

Bharati Shipyard Q4 2008 net profit up by 6% YoY

Exim News Service reported that Bharati Shipyard has earned a net profit of INR 32.6 crore in January to March 2008 quarter up by 6% YoY.

In 2007-08 fiscal, the net profit was increased by 47% YoY to INR 107 crore as against INR 73 crore in 2006-07. Total income was up by 65% YoY at INR 703.1 crore as against INR 424.8 crore.

The order book position of Bharati Shipyard has gone up by 57% YoY at INR 4,635.35 crore as on March 31st 2008 as against INR 2,946.65 crore as on March 31st 2007.

IFGL Refractories plans facility at Kandla SEZ

IFGL Refractories Limited has firmed up plans to set up a continuous casting refractory manufacturing facility at the Kandla SEZ in Gujarat at an investment of INR 50 crore.

Mr Pradeep Bajoria director & CEO of IFGL Refractories Limited said that the Kandla plant will be IFGL’s second manufacturing facility in India and have a capacity to manufacture 300,000 refractory units annually. He added that land for setting up the new unit in Gujarat had already been acquired on lease. The project would have a debt equity ratio of 2:1 and is scheduled to be completed in 2009.

Mr Bajoria said that an additional INR 25 crore would be invested in introducing new products at the company’s manufacturing facility located in Brazil.

On a stand alone basis, IFGL recorded a total income of INR 172.16 crore in 2007-08, up from INR 151.49 crore in 2006-07. The profit before tax was INR 26.17 crore as against INR 25.25 crore. The profit after tax stood at INR 16.86 crore as against INR 16.38 crore.

GE plans windmills and gas turbines unit in India

It is reported that General Electric Company is planning to manufacture windmills and gas turbines in India.

General Electric Aviation, a unit of GE, received a USD 321.7 million contract to supply engines and device kits and related equipment for the American Navy's fighter jets recently.

ABG Shipyard to build sub sea vessels

It is reported that India largest private sector shipyard AGB Shipyard is looking at building sub sea vessels, which can be employed underwater for exploration and production activities.

A source said that the shipyard is currently in talks with a Middle East company for strategic technology tie up and as a packaged deal, it is also looking to secure contracts for the vessels. He added that the deal is expected to be finalized soon.

The source said that "With E&P spend increasing, the strategy to enter sub-sea vessels would work well for ABG and it would be going one step ahead of their offshore vessels expertise.”

He added that ABG's plan to enter this segment comes at a good time, given the shortage of suitable specialist vessels and robust global demand for sub sea intervention work in the oil and gas industry. At present, these vessels are sourced from yards in Norway, Japan and Korea.

Era Infra bags INR 61 crore contract from Lanco

It is reported that construction firm Era Infra Engineering has won a INR 61 crore contract from Lanco Infratech.

Era Infra in a filing to the Bombay Stock Exchange said that the contract involves civil works in the Lanco's Anpara Thermal Power Project. It said that the contract, which would be completed by June 2009, comprise construction related works in the 1,200 MW power project.

CSN unveils USD 10 billion CAPEX plan

Brazilian steelmaker CSN has unveiled investments of USD 10 billion over the next 5 years to expand its production capacity to 16.7 million tonnes per annum in 2014.

Mr Otavio Lazcano executive financial director of CSN said that the construction pipeline includes 2 Brownfield projects at its main plant at Volta Redonda, plus two new mills, one at its Itaguaí port in Rio de Janeiro and one at Congonhas in Minas Gerais state. He added that one of the Volta Redonda projects is due to add production capacity of 600,000 tonnes per annum of long steel. CSN is investing USD 113 million and the plant should be operational by 2009.

The other Brownfield is the restoration of an existing facility shut down in 1991. It purchased new blast furnaces for the project and is set to produce 1.5 million tonnes per annum of pig iron. For this project the feasibility study has been concluded and the mill is slated to be up and running by 2009.

Mr Lazcano said that as for the 2 Greenfield projects, CSN is building a 10,000 square meter facility in Itaguaí that will produce 4.5 million tonnes per annum in slabs, long steel, heavy plates and steel sheets near the port on Sepetiba bay. Meanwhile the Congonhas plant is set to churn out 4.5 million tonnes per annum of long steel and steel plates. Between them the Greenfield projects have a price tag of USD 6 billion and are expected to be ready by 2013.

Capesize freight rates go reach quarter of a million a day

It is reported that strong demand in the Atlantic from South America and the US is pushing Capesize spot prices to new highs likely to crack November's record USD 253,000 a day.

As per reports, Capesize ships were fixed for around USD 250,000 a day and prices are likely to remain stratospheric for the coming couple of weeks as tonnage remains stretched in the Atlantic.

SDI to acquire Recycle South

Steel Dynamics Inc announced that OmniSource Corporation, a wholly owned subsidiary of Steel Dynamics and Recycle South, LLC have executed a definitive agreement whereby OmniSource will acquire the remaining equity interests in Recycle South, one of the largest regional scrap metal recycling companies in the nation.

Pursuant to the agreement, which has been unanimously approved by the boards of directors of both companies, OmniSource, which already owns 25% of Recycle South, will acquire the remaining equity interests in a transaction valued at approximately USD 500 million. Current Recycle South equity owners will receive 3,938,000 shares of Steel Dynamics common stock, valued at approximately USD 138 million and USD 232 million in cash. The aggregate transaction value includes the assumption of certain liabilities, including net debt, which are expected to total approximately USD 135 million at closing. Completion of the transaction is subject only to regulatory approval, and is expected to close before the end of the second quarter of 2008.

Recycle South employs 600 people in 19 locations throughout North Carolina, South Carolina and Georgia. On an annualized basis using actual results from September of 2007 to March of 2008, the company generated revenues of approximately USD 670 million from the processing of 1.4 million tonnes of ferrous scrap and 150 million pounds of nonferrous scrap. The company will operate as a division of OmniSource Corporation and will be called OmniSource Southeast. As part of OmniSource all current management will remain in place and will continue to focus on ferrous and nonferrous scrap processing, brokerage, and the industrial scrap management needs of its customers.

Mr Keith Busse chairman & CEO of Steel Dynamics said that "This transaction significantly expands our recycled metals business platform created by the acquisition of OmniSource in October 2007. It demonstrates SDI's strategic commitment to the continued expansion of ferrous and non-ferrous recycling, which is an important element of our overall growth plan. The additional capacity of the Recycle South operations brings our company's total annual ferrous scrap processing capacity to approximately seven million tons."

Mr Danny Rifkin president of OmniSource added that "This transaction demonstrates the company's willingness to capitalize on growth opportunities within the scrap processing segment and expand our geographic footprint into a region where both industrial and obsolete scrap generation is increasing. Having been partners with the members of Recycle South for some time, we are confident that integration efforts will be accomplished in a timely and efficient manner, allowing us to pursue further growth in this and other regions."

Mr Marvin Siegel chairman & CEO of Recycle South said that "We look forward to the next stage of our involvement with OmniSource and are excited to join the Steel Dynamics team. Our existing working relationship will make for a natural transition allowing us to sustain our growth pattern and maintain the highest level of service to our customers. Our strength has always been based in the Southeast and we are now excited to provide regional leadership as part of a larger network of companies."

EUROFER welcomes AD investigations on wire rods

The European Commission said that it opened anti dumping proceedings against imports of wire rod from China, Turkey and Moldova as was requested by EUROFER, the European Confederation of Iron and Steel Industries on March 25.

Mr Gordon Moffat director general of EUROFER said that “We welcome the news that the preliminary analysis of the European Commission confirms that there is sufficient evidence both in terms of dumping and injury caused to the European industry to justify the initiation of a proceeding.”

Mr Moffat said that similar to other steel products, notably hot dipped metallic coated products and stainless cold rolled flat products currently subject to anti dumping investigations, the main cause of the massive flood of wire rod imports into the EU market witnessed in 2007 is the excessive capacity development in the exporting countries concerned, fuelled by subsidization and the fragmentation of the local industry.

Mr Moffat added that EUROFER is actively monitoring the situation for other steel products and recalls that both the HDMC and SSCR complaints enjoy the support of European producers representing a vast majority of European production. The assertions from some Chinese sources that only a single European producer supports the SSCR case are therefore utterly false, said Moffat who added that the same Chinese sources have also alleged that the injury on the EU market was mainly self-inflicted by a European company's own exports of SSCR to Europe by its Chinese affiliate. Moffat states that these allegations are misleading and this specific issue was addressed in detail in the EUROFER complaint fully documented and subject to careful analysis by the European Commission prior to the official opening of the AD investigations.

ArcelorMittal files suit against Esmark/E2

ArcelorMittal announced that it filed suit against Esmark Inc, E2 Acquisition Corporation in the Supreme Court of the State of New York.

The release said that “ArcelorMittal is seeking in excess of USD 540 million in connection with Esmark/E2's breach of its August 1st 2007 contract to purchase the Sparrows Point steel manufacturing facility from ArcelorMittal for USD 1.35 billion. That contract was terminated on December 16th 2007, after Esmark/E2 failed to complete the transaction.”

Sparrows Point was sold to OAO Severstal for USD 810 million, net of debt on May 7th 2008.

German April crude steel output down 1.3% YoY

According to Germany’s Federal Statistical Office, German crude steel production in April 2008 was 4.03 million tonnes down by 1.3% YoY, while pig iron output fell by 5.7% YoY to 2.46 million tones.

The Federal Statistical Office said that on a month on month basis, crude steel production decreased by 3.6% MoM, while pig iron production retreated by 4.8% MoM.

It added that adjusted for seasonal and calendar effects, crude steel production declined by 2.3% MoM in April from March 2008.

Nippon Steel to hike SQ bar prices by JPY 30,000 per tonne

JMB reported that Nippon Steel has increased the selling price of special steel bar and wire rod by more than JPY 30,000 per tonne for April retroactively.

Nippon Steel already offered more than JPY 20,000 per tonne hike at negotiation from February adding JPY 10,000 per tonne after jump of coking coal price and ferrous scrap.

ArcelorMittal ready to pay up to USD 700 million for Kremikovtzi

Dnevnik daily quoting a bondholder of the steel mill reported that ArcelorMittal is prepared to pay between USD 400 million and USD 700 million for a majority stake in Bulgaria’s ailing steel mill Kremikovtzi.

The paper said that the exact figure would depend on the amount of hidden debts Kremikovtzi has. Such obligations would include the costs of the viability and environmental program of the steelworks, which the mill has to carry out in order to comply with mandatory European Union environmental regulations. If it does not meet the EU requirements, Kremikovtzi faces closure.

The newspaper also said that ArcelorMittal is also ready to invest USD 500 to USD 650 million in operating funds and capital expenditures within a five year period. This investment backlog is set to be sufficient to upgrade the mill to the standards of the steel maker’s other production facilities.

The acquisition price is enough to pay off what the mill owes to bondholders the full principal of the bond and interest, worth EUR 347 million but not all of Kremikovtzi's other debt, the bondholders’ committee said, as quoted by Dnevnik. Those debts are estimated at an extra USD 300 million.

Messer to set up ASU at Salzgitter Flachstahl

Industrial gas specialist Messer announced that it is constructing a production plant at Salzgitter AG for approx EUR 50 million, thereby exceeding the company’s own expectations for its return to the domestic German market.

The Messer Group has signed a contract with Salzgitter Flachstahl GmbH, a subsidiary of Salzgitter AG to construct and operate an air separation plant. This contract has a validity period of 15 years. The industrial gas specialist will invest around EUR 50 million in the production plant for the industrial gases oxygen, nitrogen and argon.

The air separation plant on the site of Salzgitter AG will supply more than 30,000 standard cubic meters of oxygen and optionally 40,000 standard cubic meters of nitrogen to the steelworks in gaseous form. Messer will also produce oxygen, nitrogen and argon in liquid form to cater for the local market. Salzgitter Flachstahl GmbH plans to expand its crude steel production at its location in Salzgitter. At the same time production of electric steel at the location of the subsidiary Peiner Träger GmbH in Peine will also be increased. More technical oxygen will be required to guarantee the increased production volume, and Messer will cover this need by building its air separation plant in Salzgitter. The site in Peine which is approx. 30 kilometres away will also be supplied with oxygen from Salzgitter over a new pipeline.

Mr Stefan Messer explained that “The partnership with Salzgitter AG opens up totally new potential for our activities in Germany. We are certain that we will be able to gain the trust of our partner not only on account of our technical concept, but also through our dynamic plans for our return to the German market. After a four year absence from our domestic market the operational start-ups of our air separators have put us in a position to establish ourselves as a supplier of industrial gases again in the west, north and east of Germany.”

CSC develops high strength grade EH40 SBQ plates

It is reported that Taiwan China Steel Corp has successfully developed high tension steel plate EH40 which can meet the requirement from the shipbuilding industries.

This steel plate has already gotten several approvals including Lloyds Register, American Bureau of Shipping, Nippon Kaiji, Det Norske Veritas and China Corporation Register of Shipping.

(Sourced from Yieh.com)

H1 scrap prices in US continue to surge this week

It is reported that American H1 scrap price on May 5th 2008 was at USD 512.5 per long tonne in Pittsburgh, Chicago and Philadelphia up by USD 8.33 per long tonne WoW.

Bundle scrap average price was USD 454.5 per long tonne which keeps at the same with last week. Among them, Pittsburgh's H1 scrap average price was USD 499.5 per long tonne, Chicago’s was USD 541.5 per long tonne flat with that in previous week. Philadelphia's was USD 523.5 per long tonne increasing by USD 25 per long tonne WoW. H1 scrap average price was USD 475.83 per long tonne in New York, Boston and Houston.

(Sourced from Yieh.com)

Rebar price likely to increase in US for June shipment

It is predicted that American steel mills’ rebar price for June shipment will be increased due to the rebound in scrap price this month.

However, manufacturers are worried about the increased price will greatly reduce their profit margin. At present, the traders’ spot price of rebar is around USD 1,080 per tonne up by USD 66 per tonne WoW.

Due to foreign steel mill prices continuing to increase, the American imported rebar price will be the same as the domestic price, following the strong trend of increasing prices.

(Sourced from Yieh.com)

500 workers join law suit against US Steel

Nwitimes.com reported that more than 500 employees of US Steel have joined in a federal lawsuit alleging that it is not compensating them for time they spend preparing for work, which was filed by 15 people f in US District Court at Hammond in December alleging violations of the Fair Labor Standards Act.

As per report, so far, 534 people from Lake and Porter counties and Illinois are listed in the case and lawyers for the group are still awaiting a ruling on whether the case will become a full blown class action lawsuit.

Mr Aaron Maduff one of the Chicago lawyers representing the workers, said a person who was not paid for one hour of work every day for the past two years could be entitled to about USD 15,000 in overtime.

The lawsuit says the workers spend an hour or two every day putting on and removing protective gear, showering after their shifts, working through their lunch hours and taking transportation across the sprawling factory grounds.

Mr Maduff said "Our argument is, if you're donning protective clothing, you're doing that for work. If you are dealing with poisonous chemicals, your health requires you to take a shower."

In court filings, US Steel lawyers have said the lawsuit is invalid because the workers failed to file grievances alleging the denial of overtime pay, and because the workers' union contracts specifically say workers are not eligible for pay for the kind of activity described in the case.

Union Steel and POSCO to increase domestic prices for PPGI in May

It is reported that 2 of the major South Korean mills, Union Steel and POSCO, are planning to increase the domestic prices of pre painted hot dipped galvanized steel coils for home appliance industry by USD 144 per tonne to USD 167 per tonne in May 2008. The move is in response to increasing raw material costs.

Currently the price of color steel coil with 0.4mm thickness is prevailing between USD 1,268 per tonne to USD 1,287 per tonne by USD 77 per tonne WoW.

PPGI price in South Koreas had increased by about USD 77 per tonne in March 2008 also.

(Sourced from Yieh.com)

Builders in New Zealand resorting to price escalation clauses

The Dominion Post reported that builders in New Zealand have decided to take recourse to escalation clauses in contracts to recoup the cost of skyrocketing steel prices.

The report cited Mr Richard Michael CEO of New Zealand Contractors' Federation said that it is imperative for such clauses to be added to long term contracts at a time when commodity price pressures are so volatile.

He said that "For larger organizations used to dealing with multi year contracts, they are pretty familiar with some kind of escalation process and while they do not like them, they can accept a need for them. There's always a lot of pressure from the client not to do that because they want a fixed price contract, so how that clause sits in a contract remains to be seen, but it is becoming harder and harder to offset rising commodity prices.”

He said that "And good risk management says the risk must be shared by both parties."

Mr Michael added that "It's not just steel either. Other commodities need to be factored in, fuel and concrete for example. The problem for the industry is quoting prices for the jobs."

A move toward steel price adjustment resolutions in contracts comes as global demand pushes the price of scrap metal close to USD700 a tonne and coking coal jumped beyond USD 300 a tonne. New Zealand Steel and Pacific Steel Group have both announced price rises across their product ranges of up to 25%.

Fletcher Building chief executive Jonathan Ling says it is impossible to factor the additional costs into contracts because volatile market prices maker

Linde Group sells its valve production facility MAPAG to Metso

World leading gases and engineering company the Linde Group announced that it has sold its valve production facility Germany’s MAPAG Valves GmbH to the international technology corporation Finland’s Metso at an enterprise value of EUR 36 million. The contract will enter into effect on approval from the relevant anti trust authorities.

With the divestiture of this non core activity Linde's Engineering Division further focuses on its core competencies. MAPAG is a specialist in producing high performance butterfly valves for different types of plants in the petrochemical, air separation and Liquefied Natural Gas industry.

ThyssenKrupp and Siemens recall Transrapid activities to parent companies

Following the termination of the Transrapid project in Munich, ThyssenKrupp and Siemens decided at an advisory council meeting in Erlangen to restructure their Transrapid activities.

Due to the reduction in sales and planning activities, the Berlin based office of the joint venture Transrapid International GmbH & Co KG, which currently has 38 employees, is to be closed effective October 1st 2008. The employees assigned to the office will return to their respective parent companies.

The core competencies of Transrapid technology will remain with ThyssenKrupp and Siemens. The two companies are keeping faith with the Transrapid system and will continue their negotiations with interested customers e.g. in China and the USA.

Transrapid International was established in 1998 by the member companies of the Transrapid consortium to carry out the Transrapid project Berlin - Hamburg. They subsequently worked on the Transrapid Shanghai project and on the Metrorapid projects in North Rhine-Westphalia and Munich. Most recently, their main task has been planning for the Transrapid project in Munich.

Linde Q1 sales up by 7.5%

Linde Group in the first quarter of the 2008 financial year announced that it achieved an increase in sales of 7.5% after adjusting for exchange rate effects, to EUR 2.917 billion and an increase in operating profit after adjusting for exchange rate effects of 11.1% to EUR 602 million.

Linde’s operating profit therefore increased at a faster rate than sales. The operating margin at Group level rose by 70 basis points to 20.6 percent. Synergies arising from the acquisition of BOC contributed to this positive trend. Earnings before taxes on income at the end of March were EUR 239 million. However, this decrease is mainly due to the fact that the figure for the first three months of 2007 included a book profit of EUR 510 million on the sale of businesses.

Professor Dr Wolfgang Reitzle CEO of Linde AG said that "We have seen a solid start to the new financial year and are therefore confident about the remaining part of the year. We confirm our short term and medium term forecasts. We continue to assume that Group sales will increase in the current financial year and that earnings will increase at a faster rate than sales. By 2010, we are seeking to achieve a Group operating earnings of more than EUR 3 billion. We want to achieve a return on capital employed, our key performance indicator, of at least 13% by 2010."

Alcoa board elects Mr Kleinfeld as president and CEO

Alcoa's Board of Directors has elected Mr Klaus Kleinfeld president & CEO of the Company. He will succeed Mr Alain Belda as CEO. The change is effective immediately.

Mr Belda said that "In the short amount of time Mr Klaus Kleinfeld has been an Alcoan, he has made a significant difference for the company. Our election of him to the position of CEO reflects our confidence in him as a truly global leader, capable of continuing to capture the growth opportunities ahead. Mr Klaus has extraordinary energy, a keen understanding of global issues, is committed to continuing the strong operating performance of Alcoa and embraces our Values. We are fortunate to have his leadership.”

Mr. Kleinfeld was named president & COO of Alcoa in August 2007. He has served as a director of Alcoa since 2003. He earned a Master’s degree in Business Administration/Economics from the University of Goettingen in 1982.

California Steel announces appointment of new chairman

California Steel Industries Inc announced that Mr Vicente Wright the current chairman of the board of directors of the Company has been selected to assume the position of president & CEO of the Company effective July 1st 2008.

Additionally, the Company also announced that the current president and CEO of the Company, Mr Masakazu Kurushima will be appointed to the board of directors, also effective July 1st 2008, where he will take the position of chairman of the board.

California Steel said that the appointments are in accordance with the policy of periodically rotating senior management positions between representatives of the Company's shareholders, JFE Steel Corporation and Rio Doce Limited, a wholly owned subsidiary of Companhia Vale do Rio Doce.

Aker Yards Q1 revenue up by 8.7% YoY

Europe's largest shipbuilder Aker Yards ASA announced that in the first quarter of 2008, Aker Yards' continuing operations had revenues of NOK 7 471 million, up by 8.7% YoY as compared with NOK 6 874 million in the corresponding period of 2007. The EBITDA result was NOK 211 million as compared with NOK 459 million in the corresponding quarter of 2007. Order intake in the first quarter 2008 was NOK 870 million, giving an order backlog of NOK 61 550 million comprising 101 vessels at the end of the quarter.

Aker in a statement said that its net profit for the January through March 2008 period was NOK 41 million (USD 8.2 million) as compared to NOK 242 million in January to March 2007 excluding the accounts of three shipyards that were split off into a joint venture during the quarter.

It added that while the market and the operational environment in the entire shipbuilding industry was very heated in 2007, it is now expected that the growth rate will level out. Access to qualified personnel will remain a key focus area in most of the countries in which Aker Yards operates.

Malaysia removes steel price ceiling to support availability

It is reported that Malaysian government has decided to remove the ceiling price on steel in the local market effective Monday May 12th 2008. This was announced by Datuk Seri Abdullah Ahmad Badawi prime minister of Malaysia

Mr Abdullah, who is also finance minister, said that “This liberalization is in line with the government's efforts to ensure that the development projects in the country are carried out smoothly, while the market for steel remains transparent and efficient.”

He said that the “government has been receiving numerous complaints on the increasing price of steel products, namely billets and steel bars, following difficulties in obtaining steel products at the ceiling price. The problem in getting steel supply at ceiling price has given negative impact to the construction industry where it could jeopardize the country's development projects.”

The fallout of this major policy change would include

1. With the ceiling price removal, contractors for the government's conventional projects can apply to change their contract prices based on the market price for steel.

2. Importers of steel will be also exempted from getting import licenses and paying import duties

3. Local steel manufacturers will be allowed to export their steel products.

ThyssenKrupp denies interest in Serbian RTB

It is reported that ThyssenKrupp AG, rebuffing media reports, denied that it is interested in acquiring Serbian copper maker RTB.

The Serbian government in early April vowed to cancel a contract on the sale of RTB to Austria's A-Tec Industries AG after it failed to meet a payment deadline and asked for more time. A sale to SMR of Russian billionaire Mr Oleg Deripaska also fell through last week.

Steel rebars price reach new highs in Egypt this week

Daily Star reported that rebar prices in Egyptian market reached new highs on May 6th with percentages increase between 8.7% and 12.20%.

A source said that rebars in the Egyptian market have gone from EGP 6000 per tonne to EGP 6600 per tonne with a raise of 10%. The source also added that these prices will push the market to a state of standstill, expecting no more raises in the upcoming period.

On the other hand, steel makers declared that the new prices for May with an increase of EGP 400 per tonne as compared to last month which brings the price for one tonne from EGP 5850 per tonne to EGP 6250 per tonne.

Sources have revealed that the new raise will take the selling price for the consumer to between EGP 6500 per tonne and EGP 7000 per tonne for the first time in history.

Iranian private steel sector can supply 7 million tonnes

Tehran Times reported that Iran has the capacity to produce 20 million tonnes of steel annually.

The report cited Mr Taghi Bahrami Noshahr manager of Iran's Steel Producers Association as saying that "Currently, 10 million tonnes of steel is produced annually by the state run sector and 3 million tonnes by the private sector.”

He said that “In case the private sector is supported by the government, it will meet the domestic demand for 7 million tonnes of steel.”

Mr Noshahr also referred to the 40% rise of steel import in the previous Iranian calendar year ended March 19th 2008 and noted that in the event of allocating sufficient budget for supplying the required raw materials and launching the private run steel mills not only will the domestic markets be adequately supplied but also exports will be feasible and there would be no need to import steel from China, Russia, Ukraine and Kazakhstan as was the case in 2007.

Iran may cut import duties on I beam imports

It is reported that domestic prices of I beam in Iran are continuing their upward trend and Iranian government may cut import duties on I section to keep them under check.

As per report, current quoted price for I section steel had risen from USD 1,010 per tonne to USD 1,050 per tonne.

The main reasons for these increases are higher raw material cost and limited square billet resources and Iran’s major I beam producer Esfahan Steel Co has halted its production for around 40 days.

(Sourced from Yieh.com)

UAE boosts its share in global trade to AED 1 trillion

It is reported that UAE has become a top 30 global trading nation as it boosted its share in global trade to AED 1 trillion from AED 150.4 billion in 2007. Ms Shaikha Lubna Al Qasimi UAE minister for foreign trade said that "Our government’s vision of progress will further enhance our business environment and strengthen our external trade."

She said that the ministry of foreign trade is focusing on key regulatory reforms and intensified enforcement of trade policies that will improve the UAE’s trading environment. She added that "My ministry is also collaborating with regional leaders to enhance inter Gulf trade and thus make this region an even more attractive international investment and business destination."

She said that during her tenure as minister of economy, UAE achieved double digit growth in foreign direct investment. She added that "I look forward to attaining the same level of success as we partner for more progress for our respective nations."

She lauded the efforts of Swiss Business Councils in Dubai and Abu Dhabi in particular for being instrumental in promoting business opportunities in the country. She said "This non profit, independently managed branches have been aggressively promoting the interests and activities of companies and individuals with interests in the UAE and Switzerland."

It may be noted that European delegates from Germany, Sweden, France, Italy, Spain, Denmark and the Netherlands discussed the strengthening of ties among their respective countries with Switzerland and the UAE, and also affirmed their commitment to the goals of the Swiss British Council.

DP World London Gateway project gets approval

Gulf News reported that the UK government has put its final seal of approval on the development of the UK's most advanced container port at London Gateway, which incorporates Europe's largest logistics park.

As per report, the Department for Transport has issued a “Harbor Empowerment Order” to London Gateway, which enables official and statutory powers to the new port. Construction work will begin later this year on the 1,850 acre site, 25 miles from central London.

Mr Mohammad Sharaf CEO of DP World said "We are very pleased with the UK Government's approval of the Harbor Empowerment Order. This represents a significant milestone for the project and will allow us to progress with the development.”

Mr Simon Moore CEO London Gateway said that "London Gateway will be a port centric logistics platform of a size and scale unique in the UK. Our customers will be able to cut costs from their supply chains, increase efficiency and reduce their environmental footprints.”

DP World is investing more than GPB 1.5 billion (AED 11 billion) over the next 10 to 15 years. London Gateway will become a national hub port for the UK and will accommodate the world's largest container ships. The port will add an additional 3.5 million TEUs to the nation's port capacity.

Major construction expo opens in Bahrain

The third edition of Gulf international exhibition for construction, interiors and furniture had opened at the Bahrain International Exhibition Centre, with Prime Minister Mr Shaikh Khalifa bin Salman Al Khalifa inaugurating it.

Mr Jubran Abdulrahman MD of Hilal Conferences & Exhibitions said that "The exhibition is now established as the leading building and interiors exhibition for the northern Gulf. More than 200 companies have signed up for the event from 19 different countries and the organizers expect more than 5,000 of the region's building and construction leaders, decision makers and technical professionals to attend this year."

Mr Abdulrahman said that "The continued pace of development in Bahrain, Kuwait, Qatar and Saudi Arabia is now outstripping whatever has been happening in the lower Gulf and Bahrain is perfectly placed at the heart of this region. In Saudi Arabia, to which we are linked by road, developments are taking place, which will offer massive opportunities in the construction and interiors sectors."

According to the Saudi Arabian General Investment Authority, businessmen can look forward to USD 300 billion worth of opportunities in various fields which include steel, glass and ceramics in these six cities.

The event, which runs till May 8th 2008, is a JV between DMG World Media, organizers of the Big 5 and Index Exhibitions in Dubai and Hilal Conferences and Exhibitions, which is a part of the Al Hilal Group.

PT Pertamina and NIORDC to halve capacity of planned refinery in Java

Bloomberg reported that PT Pertamina and Iran’s National Iranian Oil Refinery & Distribution Company will halve the capacity of a planned refinery in western Java because of limited crude supply.

Mr Priyo Utomo head of strategic and business development at Pertamina said that the refinery in Banten province will be able to process 150,000 barrels of crude a day compared with an earlier plan of 300,000 barrels a day. The new refinery is expected to help Indonesia cut dependence on imports as crude rose to a record.

It may be noted that Pertamina and National Iranian signed a JV agreement in April 2008 to take a 40% stake each in the project, with Petrofield Refining Co of Malaysia having the remaining 20%.

Mr Utomo said that the venture plans to start building the refinery in 2009 and complete it by 2011. The plant may cost as much as 60% of the USD 7.1 billion required for a 300,000 barrels a day refinery. The partners have hired United Overseas Bank Limited to recalculate the costs for the project.

Iranian drilling industry can not be sanctioned – Mr Bahmani

Mehr News Agency quoted Mr Heydar Bahmani MD of National Iranian Drilling Company as saying that Iran’s drilling industry makes use of the world’s most complicated technologies and it can not be sanctioned.

Mr Bahmani said that "Before the victory of the Islamic revolution in Iran, 46 foreign companies used to take care of the country’s drilling activities. While buying a drilling rig from foreign countries costs about USD 50 million, the local producers will construct one with only USD 15 million."

He went on to note that the first National Congress of Iran’s drilling industry will provide the foundation for discussions about achievements and scientific experiences of this local industry. He said that "In this congress about 800 experts will gather to study the latest findings in the drilling industry."

The first National Congress of Iran’s drilling industry will be held in Ahwaz on May 7th to May 8th 2008.

UAE to launch fourth international airport in mid 2009

Gulf News reported that work on the USD 3.3 billion, 60 million square feet Ajman International Airport is expected to begin by the middle of 2009.

The plan for the UAE's fourth international airport was approved by the emirate's ruler Mr Sheikh Humaid Bin Rashid Al Nuaimi in May 2008. The new hub will serve one million passengers a year, handling a minimum of 400,000 tonnes of cargo, which will account for 70% of airport services.

The Spanish corporation, Grupo Inmobiliario Whitelake is to lead the project, developing both the airport and nearby residential and commercial properties.

Mr Alex Mond director of finance at Whitelake said that "Initial investment of over USD 400 million has come in from Spanish companies looking to develop the property and another amount was financed from local banks." He added that letters of intent for landing rights had been received from 25 airlines so far, though none had been confirmed.

South Korean firms win more projects in Middle East

Arirang News reported that South Korean construction companies are on a plant rush in the Middle East where oil cash has brought on a boom in big scale projects.

As per report, Qatar, home to the world's third largest natural gas reserves is offering a big market for Korea's construction businesses. In Ras Laffan construction of an industrial complex is in full swing and Hyundai Engineering and Construction is building a plant there that changes gas into liquid.

LG Engineering and Construction is building a factory in Egypt that will turn crude material into synthetic detergents. The first shovel hit the ground for the 200,000 square meter plant in 2005 and it is about to be completed months before the date on the contract.

The amount of overseas construction projects by Korean companies has been on the rise in recent years, posting a twofold increase in just a year from 2006 to 2007. Projects won during the first four months of this year have already surpassed those won in all of 2006.

The latest big deal was the winning of a project to construct an ultra size oil refinery plant in Kuwait worth USD 15 billion by a consortium of Korean companies.

With greater competitive edge in technology and shorter construction times, Korean businesses are expected to continue to pave the way in the Middle East's booming high end construction market.

Chinese steel plate export price at a high level in May

It is reported that steel plate export market is still quite strong in China and prices are expected to keep at a high level in May2008. Mysteel believes that the strong demand and high cost are bolstering the upward trend and it is not going to alter in the short term.

Chinese domestic plate price is always edging up steadily, though by small range. On Shanghai market, 16mm plate by Yingkou Steel is being quoted at CNY 6430 per tonne which compares with CNY 6200 per tonne for similar products by tier two producers. Low alloyed 40mm plate goes at CNY 6950 per tonne.

Quotations for commercial plate by tier two steel makers are at about USD 1100 per tonne FOB up by USD 20 per tonne than late April 2008. By comparison, that by tier one steel producer is around USD 1160 to USD 1180 per tonne FOB.

Tianjin Steel indicated that it is quoting ship plate at USD 1180 to USD 1190 per tonne FOB for July shipment. Most shipments are destined for South Korea and the EU.

Currently, ship plate and high end plates account for most part of steel exports from China due to much higher profits. Ship plate by tier two steel makers are being offered at USD 1180 per tonne to USD 1250 per tonne FOB, while that by tier one producer is at USD 1280 to USD 1320 per tonne FOB.

A Jiangsu based major steel maker told Mysteel that it has concluded 50,000 tonnes ship plate exports to South Korea at USD 1250 per tonne FOB as base price July shipment.

Though transaction is not ideal, steel makers are still confident that prices would continue to go up.

(Sourced from Mysteel.net)

Chinese welded steel pipe output in surges

Good demand and increasing raw material costs have prompted China’s welded steel price and production to soar in April.

China’s production of welded steel pipe was around 2.06 million tonnes in March an increase of 736,500 tonnes over February. The total production of welded steel pipe during January to March was 4.92 million tonnes up by 355,800 tonnes YoY.

The export of welded steel pipe in March was 166,500 tonnes down by 50.73% YoY and China’s import of welded steel pipe rose by 308.07% to 62,887 tonnes.

Scrap price surging in Chinese domestic market

Under the influence of the rising prices of raw materials and steel products, the prices of steel scrap continues hiking Analysts said that the situation will continue for prices of steel scrap in international market are also rising sharply. By May 6th, the prices of steel scrap continue hiking.

For example, the purchase price of Xingcheng steel is CNY 3,900 per tonne an increase of CNY 50 per tonne and price of heavy scrap is CNY 3,710 per tonne.

The rising price of steel scrap in international market is the direct cause for the increase of domestic price. Following the increase of USD 155 per tonne in April, US auto banding scrap reached to USD 561 per tonne on FOT basis. At present, the storage of scrap and steel products is low, so the expected price must be higher.

The price in May continued the situation in April, which made favorable environment for the prices of steel scrap. On the other hand, the continuing tense situation of scrap resources also gave support for the rising price. Domestic storage of scrap continued to be low but the demand of the market was strong, all of which pick up the present situation.

Analysts concluded that domestic market functions well, the resource supply is tense, and the international scrap price hike. All of these factors will put the later scrap market to function better and the price is expected to be higher.

Not the best time to buy iron ore – CITIC

Mr Rong Zhijian president of CITIC Pacific said that it is not the best time to buy iron ore from overseas market now due to the high price of mineral resources and iron ores at present.

Mr Li Songxing vice GM of CITIC revealed that special steel capacity of the company reached more than 7 million tonnes now and would expand to 15 million tonnes for the long run.

He expressed that the company has already established a special steel group and acquired three special steel companies, XingCheng Steel, Hubei Xinye Steel and steel plants in Shijiazhuang city.

Baotou Steel output crosses 3 million tonnes in 2008

It is reported that both outputs of pig iron and crude steel in Baotou Steel were over 3 million tonnes by the end of April up by 8% YoY and 10% YoY respectively. Baotou Steel Group has produced 3.01million tonnes of pig iron, 3.05 million tonnes of crude steel and 2.9 million tonnes of commercial billet up by 8% YoY, 10% YoY and 12% YoY respectively.

Despite of the big scale of maintenance in Baotou Steel Group in April, both outputs of pig iron and crude steel were as high as over 710,000 tonnes and the production of commercial billet was 670,000 tons.

Meanwhile, Baotou Steel Group strengthened to reduce inventories and to make delivery and has totally delivered almost 880,000 tonens of steel products.

By April, International Trade Company of Baotou Steel have cumulatively earned over USD240 million by export, up by USD 60 million YoY.

Canadian steel frame technology at Beijing Olympics

It is reported that a Canadian company is part of an international construction composition showcasing steel walls for residential and commercial buildings and expanded polystryrene foam in a green building technology at the Beijing Olympics.

The technology from QB Technology Canada, Edmonton, AB will be used in Future House Canada at the Beijing Olympics.

QB licenses the technology to manufacture expanded the steel walls and the foam. The walls are made through the insertion of steel studs into pr cut 6 in. EPS panels. They are built according to each project's specifications, pre-fabricated and shipped to the construction site for assembly. The technology has been on the market and in use by the construction industry for some time. QB received Canadian patent approval to the technology in October 2007.

The company will join forces with more than 30 other Canadian renewable energy and green building products in the completion of Future House Canada, which will feature cutting-edge eco-friendly technologies such as geothermal heating, solar panels, wind power, waste water treatment, water saving devices, architectural skylights and a roof garden.

QB's walls will form Future House Canada's exterior, or 'thermal envelope'. They boast an R value nearly three times that of conventional wood and fiberglass construction, meaning that Future House Canada will consume 30 per cent less natural resources to heat and produce one third the emissions of a conventional home.

Project organizers estimate that some five million people from around the world will visit Future House Canada during the six years it will remain open to the public.

Chinalco invests USD 2.15 billion in copper mines in Peru

Shanghai Securities News reported that Aluminum Group of China and Empresa Minera del Peru SA have signed an exercise contract on May 8th 2008 on copper exploiter in Toromocho in Peru, setting a new milestone in Chinalco’s development.

Chinalco will pour USD 2.15 billion to exploit the copper mine. The total fund that invested in this project would be afforded by China Development Bank, about 67% in maximum, and Chinalco, about 33%.

Toromocho copper mine is one of the oversize copper mines to be exploited in the world, which owns about 15 million tonnes of metal resources in equivalence and as much copper as 19% of the total in China. It is expected to yield 2.5 million tonnes of fine copper each year, equaling one third of China's domestic output.

Chinalco have successfully purchased the entire stocks of Empresa Minera del Peru SA with USD 860 million in August 2007. Empresa Minera del Peru SA is a Canadian company listed in Canada, US and Peru.

China heavily depends upon imported copper, with about 70% of its demand met by imported copper. As a result, overseas copper exploitation becomes one of the major tasks for Chinese enterprises. Chinalco has prepared much and has acquired several domestic enterprises before this deal.

IMF cuts Chinese economic growth forecasts to about 9%

Xinhua reported that International Monetary Fund has adjusted its forecasts for the global economic growth in 2008 downward to below 4%, with a growth of just above 9% for the Chinese economy.

Mr Olaf Unteroberdoerster IMF's resident representative in the Hong Kong Special Administrative Region said that the recovery in the global economy will also come slower than a previous projection put forward by the IMF six months ago. He added that "The outlook for the global economy today is much worse than it was a year ago."

Mr Unteroberdoerster said the world economic growth would be below3% in 2008 and did not rule out a global repression. The world economy averaged a growth of 4.9% in 2007, down by 0.1 percentage points from the previous year and the IMF has projected a growth of 3.7% in its forecasts announced in mid April 2008. China had a growth of 11.4% in 2007.

Mr Unteroberdoerster said the advanced economies, such as the United States and the European Union, were most affected by the current financial turbulence. He added that "If you look at the housing sector in the United States, it is obvious that there is no sign of a recovery yet."

China, which has had a rising exposure to demand from the United States and the EU over the past decades, will grow at just above 9% in 2008. India, less exposed to demand from the advanced economies, will be less affected by the slowdown.

ArcelorMittal clarifies for cooperation with Angang

ArcelorMittal in a press release said that ArcelorMittal and Angang did have informal discussions about possible cooperation opportunities, but ArcelorMittal never proceeded to the stage of preparing or presenting a formal proposal to Angang.

Huaneng denies report on Australia power interest

Huaneng Power has denied a media report that it may join the bidding for power assets slated for sale by Australia's New South Wales state. An official at Huaneng Power said that "We are unaware of this news. We have never heard of anything related to the Australia assets. Our company has never said we are interested in assets in Australia."

The Sydney Morning Herald reported that Huaneng has asked its Australian team to follow the New South Wales state privatization process and send suggestions back to senior management, citing an unidentified source with knowledge of Huaneng's foreign investment plans.

New South Wales state premier, Mr Morris Iemma said that he would push ahead with plans to privatize the state's power assets even though his own ruling party had voted against the proposal.

The state government hopes to raise about AUD 15 billion to fund infrastructure projects. It has yet decide on the form a privatization might take, with options believed to include trade sales or the listing of a new entity on the Australian stock exchange.

WISCO and State Grid Corporation of Italy ink CDM pact

It is reported that WISCO and State Grid Corporation of Italy signed Clean Development Mechanism cooperation agreement on 5th May 2008.

The report added that state Grid Corporation of Italy will purchase greenhouse gas emission from WISCO, while WISCO would use the capital to strengthen energy saving, emission reduction and environmental protection.

WISCO pays high attention on environmental protection, energy saving and emission reduction. During “11th five-year plan”, the investment in fields above accounts for 15% in total investment in WISCO. In order to make the best of international cooperation mechanism and to further promote environmental protection, energy saving and emission reduction.

WISCO has been actively developing the application for CDM project since 2006. By now, five CDM projects in WISCO have been approved by authentication authorities in UN. Total investment in these five projects is over CNY 3 billion. When projects reach the design level, it is predicted to produce 3.16 million tonnes of carbon dioxide emission. According to the purchase price settled by WISCO and State Grid Corporation of Italy, WISCO may obtain an income of CNY 3 million per year during the contract period.

Caspian Pipe to be expanded by 2012

RIA Novosti reported that Russia and Kazakhstan have agreed to double the capacity of the Caspian Pipeline Consortium by 2012. The decision was agreed during a visit to the ex Soviet republic by Mr Viktor Khristenko industry and energy minister on May 6 and 7.

The minister said that "The expansion should take place in two stages by 2012. As a result the pipeline's capacity will be increased from 32 million to 67 million tonnes of oil.”

The ministry added that the parties also agreed to supply an extra 17 million tonne of Kazakh oil through the Burgas to Alexandroupolis pipeline. The trans Balkan oil pipeline, being built by Russia, Bulgaria, and Greece, will pump 35 million tonnes of oil a year a volume that could eventually be increased to 50 million tonnes.

The Caspian Pipeline Consortium is designed to carry Kazakh and Russian crude to a terminal on the Black Sea, was commissioned in October 2001. Its capacity currently stands at around 30 million tonnes of oil a year.

Chevron is the largest corporate owner of the Caspian Pipeline Consortium with a 15% stake. Russia, the single largest shareholder in the project with 24% has withheld approval for the link's expansion in a dispute over transportation prices. The government of Kazakhstan owns 19%.

Gazprom becomes world 3rd largest capitalization company

Kommersant.com reported that OAO Gazprom has become the third largest company in the world by market capitalization. Its stock gained 5.34% on the MICEX on May 8th 2008, raising the monopoly’s market value to USD 348 billion and knocking the Chinese cellular communications operator China Mobile, worth USD 341 billion, out of third place in the world ranking.

According to Reuters, the American company ExxonMobil occupies first place on that list at USD 476 billion and Petrochina is in second place with USD 447 billion.

Analysts link the jump in Gazprom’s value with the assumption of the Russian presidency by its chairman of the board. As Mr Medvedev will leave the post of Gazprom chairman next month, after a new board of directors is approved. Besides that, growth in the price of oil and gas companies is the result of Mr Vladimir Putin’s speech at the time of the consideration of his candidacy as prime minister. He said at that time that the taxes paid by companies in that sector had to be reduced in order to stimulate production and processing growth.

OMK held a conference for consumers

It is reported that Trubodetal part of United Metallurgical Company during April 24th to 25th 2008 held a conference on Future Plans for enterprises and the development of relations with customers.

The conference was attended by over 70 representatives from 20 different enterprises and organizations from 11 cities in the Russian Federation, the Republic of Belarus and Kazakhstan.

Delegates met with the peculiarities of construction of adapters pipelines in OAO Trubodetal the development and prospects for the plant in production, quality, find out about investment projects in the coming years.

Representatives of JSC OMC, which initiated the conference, described the outcome of the work with consumers in 2007 and further development strategy for the company. The Conference helped to identify consumer demands for products factory, to adjust interaction with consumer organizations.

Rail and electricity charges to go up in Russia

Interfax reported that rises in railway freighting charges and electricity prices to be in effect from 2008 under new Russian government regulations, will undercut the profits of Russian enterprises.

Mr Elvira Nabiullina economic development and trade minister of Russia said that the revised natural monopoly tariffs was approved at a government meeting, mean electricity prices in both the regulated and free markets will rise by averages of 16.7% in 2008, 26% in 2009, 22% in 2010 and 18% in 2011.

The meeting also raised rail freighting charges 8% with effect from July 1. This means freighting charges will go up by an average of 16.3% for 2008.

Mr Nabiullina in a report said that higher electricity prices would deal their heaviest blow to the production of aluminum, to manufacturing to sectors such as the chemical industry and production of ferroalloys and cement and to poultry farming. He added that the increased railway charges would have their heaviest impact on sectors such as coal and ore mining, the timber industry, construction and the chemical industry.

He added that high profitability sectors such as production of coke, nonmetal and mineral goods and the steel industry would show a respective decline of 0.8% points for this period.

Stainless steel sheet prices in US to increase in May

Purchasing.com reported that despite sluggish buying, cold rolled stainless steel sheets in 304 series could rise by 10% this month to USD 4726 per ton up by 18% as compared to December 2007.

The report said that “The current stainless steel market is being described as confused with tight domestic supply and flat imports supporting stronger than expected transaction prices, even though purchasing by end users and service centers is down 14% from year ago tonnage. Economically sensitive end markets remain challenging” for stainless and specialty steel mills.”

It said that “What has not changed since March is that buying continues on an as needed basis. Demand is solid in the aerospace, energy and medical market sectors but down dramatically in the larger industrial, automotive and consumer goods sectors. Yet, market economists anticipate further increases in stainless steel prices, perhaps even back toward the record levels of last summer, even if market supply outweighs demand. That’s because the recent moderation in alloy surcharges that have restrained the price inflation in North American stainless steel products is about to come to an end.”

The report added that “Ferrochrome is rising again and now is 25% higher than at the end of December, while nickel is 10% more expensive. Atop that, stainless steel scrap supply is tight because of reduced industrial activity and expanded exports and prices have increased by at least 5% recently.”

POSCO orders electrical systems and automation for CR SS line

Siemens Metals Technologies announced that it has received an order POSCO to supply special equipment, drives and the automation system for a cold strip annealing, pickling and finishing line at the company's Pohang plant. The new equipment is intended for the processing of stainless steel strips and is scheduled to start production in the middle of 2009.

POSCO operates two integrated production facilities in Pohang and Gwangyang. The production of stainless steel is concentrated at the Pohang location. In the course of expanding its production capacities, POSCO is building a cold strip annealing, pickling and finishing line, designed for the annual processing of around 400,000 tonnes of austenitic and ferritic steel grades. The new line will be able to process cold strip with widths of between 600 and 1350 millimeters and thicknesses of 0.3 to three millimeters. The process speed will be up to 150 meters per minute.

For the new processing line, Siemens is designing and engineering special equipment, including the skin-pass mill, the tension leveler and the side-trim shears, which will be manufactured at the Montbrison facility in France. The scope of supply also includes 270 speed controlled AC drives, the automation as well as the operator control and visualization system.

Japanese SS majors to push up CR prices amid week demand

It is reported that Japanese stainless steel CR producers are seeking to increase prices by USD 100 per tonne to USD 200 per tonne in June to July and increase export price as raw material cost are up in tandem with global SS price rises.

But buyers are expected to adopt a wait and watch attitude, as to whether China’s market will remain weak and Japanese SS mills will find it hard to negotiate new export prices with buyers in the Asia market.

China’s main stainless steel producers have announced that that its output will be reduced by 50% in May in order to stabilize the market.

(Sourced from Yieh.com)

Low carbon ferrochrome prices soaring

It is reported that the prices of low carbon ferrochrome have continued their climbing trend due to present situation amid tight supply and soaring raw material costs.

Current import prices of low carbon ferrochrome in Japan have soared to USD 5 per lb to USD 5.1 per LB on CIF basis in the second quarter and European steel makers are reported to have paid USD 5 per lb in April.

As per reports, South Africa’s Samancor's Ferrometal has halted its production due to an explosion in February, as around 5 months are needed for fixing the facilities. Besides, South Africa has cut its electricity supply to the metal industry.

Japanese stainless steel exports in March up by 13% YoY

According to the latest figures, Japan exported 153,276 tonnes of stainless steel in March 2008 up by 13.1% YoY but down by 31.1% MoM.

In tonnes
Change is YoY

(Sourced from YIEH.com)

SASSDA appoints Mr Raaff as new MD

Southern Africa Stainless Steel Development Association recently announced that it had appointed Mr Tim Raaff as its new MD, replacing Mr Michael Campbell, who resigned in March 2008 after nearly two years in the leadership position.

Mr Raaff said that "Over the last 2 years, SASSDA has had tremendous success in not only profiling the stainless steel industry locally and abroad, but also made significant strides in developing training initiatives. I look forward to adding my experience to the wealth of knowledge and skills already in the organization."

Mr Raaff has held previous managing directorships at industrial systems and services provider for the pulp and paper, hydropower, and steel industries, Andritz, as well as products and services provider for the oil and natural gas industry, Baker Hughes. He has over 35 years of experience in the mining and engineering fields.

SASSDA provides a platform for a growing base of nearly 600 members to collectively promote local growth and development of stainless steel and the export of stainless steel products from South Africa.

POSCO and Hyundai to increase stainless steel price in May

YEIH reported that POSCO is going to increase its stainless steel price on May 2008. The main reason is high price on ferrous alloy recently. As a result, newest quotation price of stainless steel wire rod products for 200, 300, 400 series are predicted to raise by USD 194.17 per tonne. Also, stainless steel bar products for 300 series and 400 series are up by USD 291.26 per tonne and USD 194.17 per tonne respectively.

Hyundai steel also announces that it will increase its market price of stainless steel cold rolled coil for 304 and 430 series by USD 485.44 per tonne and USD 417.48 per tonne respectively.

Iron ore price negotiations –CISA dismisses 85% rumor on poor spot sentiments

The flurry of reports in the Australian media claiming the Australian iron ore miners will likely to win 85% rise over 2008 prices has left the Chinese decidedly unmoved.

Senior official of China Iron & Steel Association has reiterated on Apr 29th 2008 that Chinese steel mills would not concede to freight premium demand, and they have already been well prepared once the benchmark ore talks with Australian have failed to bear fruit before June 30th 2008.

The report argued that a strong view was building within the Chinese industry that the Australian miners would get the 85% hike because Chinese steel mills are already paying much higher prices on spot compared to the benchmark price.

The report cited a Hong Kong trader as saying that "It is widely expected that the market risk is accumulating at the moment, since the iron ore fever has already persisted for nearly 7 months since July 2007. Right now, everyone is very cautious in purchasing new stock."

Iron ore stockpiles held at Chinese ports reached a record 62 million tonnes at the moment because buyers increased imports on expectations prices will rise couple of weeks before. The iron ore stock has occupied some USD 4.2 billion given the average import price of USD 180 per tonne.

(Sourced fromMySteel.net)

Kiwara forms iron ore JV with LM Engineering

Zambian based mining exploration company Kiwara announced that ion ore, historically identified in the Kalumbila area now forms part of its joint venture agreement with LM Engineering Ltd.

The release said that “Kiwara will pay LM Engineering USD 100,000 to add Iron Ore to the joint venture, which currently includes copper, nickel, cobalt, uranium and platinum group metals.”

Highlights are
1. Iron Ore now integral to the Kalumbila joint venture
2. Kalumbila concession is known to host significant areas containing Iron
3. Historic results indicate grades in excess of 60% Fe
4. The licence area includes large unexplored targets for Iron Ore

Mr Colin Bird chairman of Kiwara said that “The inclusion of iron ore has the potential to significantly enhance shareholder value and it is the company's intention to commence exploration on the Iron Ore targets as soon as is reasonably possible.”

Indonesia to impose checks on mineral exports from July 5th 2008

It is reported that Indonesia will tighten control of its mining exports by checking shipments of all exported mining products from July 5th 2008.

Mr Diah Maulida Indonesia's director general for international trade said that the move is aimed at curbing illegal exports of mined products by increasing the level of supervision. Checks will be conducted on shipments of coal, ores and concentrates of minerals classified as strategic and vital such as copper, nickel, bauxite, lead, zinc and gold.

Previously, exporters were only required to submit export documents to the customs office. Few checks were made to ensure shipments tallied with the documents given. Apart from checking volumes being exported, the process will also check the quality of the mined products.

Mr Diah said that Indonesia passed a similar regulation on tin and Type C mining products such as granite, kaolin, marble and pumice in February last year. The regulation resulted in an increase in the export value of both tin and Type C products.

In 2006, exports of Type C products reached 11,489 tonnes, with a total value of USD 61.6 million. But after the regulation was passed, the export value shot up to USD 90 million, even though only 6,019 tonnes were exported.

He added that "We're looking at encouraging the export of higher grade mining products. So even though the volume may be smaller, the value remains higher because of the better quality." He added that similarly, tin exports also rose in value. In 2006, tin exports reached 118,555 tons valued at USD 913 million. After the regulation, the export value surged to USD 1.2 billion from the export of 86,304 tonnes.

CIL BCCL to invest INR 12 billion by 2011-12

IANS reported that Bharat Coking Coal Ltd which operates mines in Jharkhand and West Bengal will invest INR 12 billion in equipment by 2011-12 as part of its revival strategy.

Mr AK Paul CMD of BCCL told IANS that BCCL has set a target of producing 26.5 million tonnes of coking coal in the current financial year and will further increase the production volume to 30 million tonnes by 2011-12.

He said that "We will invest about INR.12 billion in phases by 2011-12. The amount would be spent on buying equipment used in all our operative mines across the two states. This equipment would be bought as part of the revival plan and would help achieve the projected production target of BCCL.”

Mr Pual said that "We are very hopeful that BCCL would come out of the Board for Industrial and Financial Reconstruction list by 2012. The company was first referred to the list in 1994-95."

He added that "Against the production plan of 26.5 million tonne of coking coal in 2008-09, BCCL has placed 5 million tonne under e auction, of which 4 million tonne will be spot auction and 1 million tonne would be through forward e auction.”

He said the coal ministry had proposed in March this year that eight washeries with a capacity of 2.5 million tonne be set up in BCCL for washing of non coking coal. He added that "We are expecting that the sales figures will increase from INR 33.38 billion in 2007-08 to INR 39.57 billion in 2011-12.

BCCL has 66 operative mines of which 36 are underground mines, 12 opencast and 18 mixed mines. These coalmines are in the two eastern states of West Bengal and Jharkhand, with a workforce of over 80,000 people.

SA miners welcome government promise of power to mines

It is reported that South African Chamber of Mines has welcomed a government pledge to shelter South African mines from power cuts this winter.

Mr Roger Baxter the chief economist at the SA Chamber of Mines said that "I think this is all about the government adopting a more strategic approach to the way the economy is managed. This is an industrial policy decision and is one the government must deal with very carefully."

Mr Baxter said that the mines were among the country's 138 largest industrial users, consuming around half of the country's power, and also brought in two thirds of South Africa's export earnings. He said that "We need to support exports as our export growth is weak, as is our current account, which makes our currency very vulnerable.”

Mr Alec Erwin minister of South Africa’s public enterprises had told parliament in Cape Town that in the interests of keeping up production, power would not be cut to the mines this winter.

Coal situation worsens at Indian power plants

BL reported that coal reserves at power stations have hit a record low. Nearly a third of the country’s thermal stations are now reported to be facing critical stocks, where coal stocks are expected to last less than seven days.

According to the Government’s latest data on coal stock positions at power stations up to May 5th 2008, 77 thermal stations in the country, 25 have now been bracketed as having critical stocks of which 13 are reported to be super critical with precariously low levels of coal stocks of under four days.

A NTPC official said that “We are currently managing on a day to day basis at some stations. A decision has already been taken to double imports to 5 million tonnes in 2008-09.”

While a coal shortage has been brewing since the beginning of 2008 domestic production is unlikely to be ramped up significantly in the near future. The import option is increasingly getting tougher as China, which is also facing low domestic reserves and acute power shortage, has stepped up coal purchases internationally.

Lower coal production by Coal India Ltd, higher than anticipated power generation at some stations and unloading constraints at others, combined with lower imports, have compounded the problem further.

Siemens supplies gearless mill drives for Aurox iron ore project

Siemens Industry Solutions Division has received an order from Aurox Resources Limited to supply 'Simine Mill GD' gearless drives for two ore mills which are part of the Balla Balla iron ore project in Western Australia. The two mills are to be equipped with frozen charge shakers, which allow the controlled removal of charge stuck to the sides of the grinding pipe. The order has a volume of more than EUR 20 million and the project is scheduled for completion in the third quarter of 2010.

For the plant's 2 ore mills, Siemens is supplying gearless motor drive systems which are supplied with power by direct converters. The SAG mill has a diameter of 34 feet and will be fitted with a 14 MW drive, whereas the 26 foot ball mill will have a 17 MW drive. The drive systems are based on Simine Mill GD, a solution specially developed for ore mills by Siemens.

The variable speed drives will be controlled with the help of the patented transvector control principle. This makes it possible to set the operating point of a drive easily and precisely to match varying requirements. Soft stopping and restarting reduces wear. Due to the lack of gears, maintenance and repair costs are considerably lower than for conventional drives while shorter downtimes and longer service intervals increase availability. Moreover, gearless drives are more efficient and consume less energy, reducing operating costs in the process.

The ore mills are to be equipped with the frozen charge shaker. Developed by Siemens, this procedure is used for the controlled removal of frozen charge which has become stuck to the inner wall of the mill. The frozen charge no longer needs to be removed manually in the pipe. This reduces downtimes, increases availability and avoids damage to the mill caused by material falling down in an uncontrolled manner.

Aurox is currently developing the Balla Balla magnetite deposits in the Pilbara region of Western Australia. FLSmidth & Co A/S is building an ore processing plant with an annual capacity of 6 million tonnes of iron ore concentrate. It is also installing loading facilities in nearby Port Headland. The ore processing plant has been designed so that its processing capacity can be expanded to up to 10 million tonnes a year.

India not keen to allot coal blocks for CTL projects

It is reported that centre is not keen to allot coal blocks for coal to liquid projects even as a number of corporate from India and abroad, including the TATA Group, Reliance and Sasol have expressed their interest in such projects.

Mr Santosh Bagrodia union minister of state for coal said that "We are not too keen on CTL projects. We are not giving too much priority to these project proposals. Our first priority is to produce enough coal to meet the increasing demand in India."

According to available information, coal liquefaction projects generally require coal blocks capable to produce approximately 20 million tonnes a year.

Japanese domestic coal takes spotlight again

An upsurge in energy costs around the world is beginning to affect coal prices in Japan as coal is becoming more expensive and less readily available. But this could be a boon to the shrinking domestic coal industry in Japan, which is welcoming a shift by heavy industry and the energy sector toward considering coal as an important domestic energy source.

The industries were shocked when high import prices for Australian coal were agreed on between major Japanese steelmakers, including Nippon Steel Corporation and a foreign mining giant. The price of coking coal to be imported in fiscal 2008 is USD 300 per tonne, nearly three times the price in fiscal 2007. About 60% of coking coal imports comes from Australia. As prices of coal from the other countries also are bound to increase, the steel industry is facing a large increase in its costs. The price of fuel coal for thermal power generation is predicted this fiscal year to be about USD 125 per tonne, a more than twofold jump from the price in fiscal 2007.

Domestic production of coal has been hovering around 1.4 million tonnes per year for several years. Annual output has been decreasing after it hit the postwar peak of 55.4 million tonnes in fiscal 1961. Today, only 8 coal mines remain in operation in Japan, all of them in Hokkaido. This is the result of domestic coal losing out to cheaper foreign coal.

The current import volume of foreign coal is 180 million tonnes a year. Compared to this, domestic coal production is marginal. However, the price gap between domestic and imported coal is quickly narrowing. Domestic coal prices are hovering at around 10,000 yen per ton and are projected to fall below the price of foreign fuel coal within this fiscal year.

This has prompted Mitsubishi Material Corporation to start using domestic coal at its cement factories in Japan for the first time in 18 years. Hokkaido Electric Power Co increased its purchases of domestic coal from 700,000 tonnes in fiscal 2006 to 1.1 million tonnes in fiscal 2007 and plans to maintain the same volume in fiscal 2008. With such situations taken into consideration, coal mines in Hokkaido have begun to increase output and the developments of new mines are being considered.

Energy industry officials predict that import prices of foreign coal will increase further in the future. Coal is running short in the international market, while demand for it keeps increasing in China and India.

Jharia coal belt fire rehabilitation plan finally cleared

BS reported that the long awaited INR 6,358 crore compensation cum rehabilitation package worked out by Central Mine Planning and Design Institute, a subsidiary of Coal India Limited for 0.4 million coal fire and subsidence affected victims of Jharia coal belt of Dhanbad has finally been cleared by the Jharkhand government.

The Jharkhand government gave the nod to the package on May 7th when the Mr PS Bhattacharya Coal India chairman and the Mr AK Pal chairman of Bharat Coking Coal Limited met the Mr A K Basu Jharkhand chief secretary.

Mr Bhattacharya said that "Now that the package has been cleared by the Jharkhand government a huge task lay in front of BCCL and the Jharkhand Rehabilitation Development Authority to carry out the compensation cum rehabilitation job." He said that the rehabilitation cum compensation package consists of setting up about 79,000 housing units avoiding the coal fire zones and in safe places for the 0.4 million victims.

Mr Bhattacharya said that while BCCL will set up 25,000 houses the remaining 54,000 will be set up by non BCCL entities which could be housing development corporations and also other private parties.

The package was revised twice in 2003 and 2006 and was confronted with a public interest litigation before the Supreme Court with the director general of mines safety playing an active role for its passage.
The package, till date, one of the biggest worked out for rehabilitation and compensation by any public sector, was hanging fire since 1999 and would be implemented over the next 10 years till 2018. As for the financial disbursements, INR 4258 crore would be spent on rehabilitation and compensation measures and INR 2100 crore would go in for fire fighting in the coal beds of Jharia coalfields.

Peabody Energy sees 2008 profit doubling

Reuters reported that coal producer Peabody Energy has raised its full year 2008 earnings estimates, saying profits could double from 2007 as a result of soaring global coal demand and prices.

Mr Gregory Boyce chairman & CEO of Peabody Energy said that increased by USD 500 million its 2008 EBITDA target to a range of USD 1.5 billion to USD 1.8 billion. In 2007, it earned USD 955.9 million in EBITDA.

He added that "We provided a 64% total shareholder return in 2007 and are targeting 2008 earnings that could nearly double last year's results."

Japan biggest importer of Kotabaru coal in February

Antara News Agency reported that among the 16 countries regularly importing coal from Kotabaru district in Indonesia's South Kalimantan province, Japan was the biggest buyer in February 2008. Kotabaru's overall coal exports in February 2008 were recorded at 3.1 million tonnes valued at USD 112.5 billion.

Ms Ratnawati head of the trade & cooperatives section of Kotabaru's industry office said that the district's coal exports to Japan in February 2008 stood at 656,000 tonnes worth USD 24.5 million.

The second biggest importer of Kotabaru coal in February 2008 was India with a total import of 485,500 tonnes worth USD 14.9 million. China was the third biggest importer with an import realization of 407,300 tonnes worth USD 16.1 million. The fourth position was occupied by Thailand with an import of 289.800 tonnes valued at USD 8.9 million, followed by Taiwan with a volume of 207,100 tonnes worth USD 7.9 million. Other importers of Kotabaru coal in February 2008 were Malaysia, the Netherlands, Hong Kong, South Korea, Spain, Italy, the United States, Croatia, Pakistan, the Philippines and Cambodia.

SUEK raises syndicated credit of USD 800 million

SUEK recently announced that it has raised the syndicated credit in the volume of USD 800 billion. The credit covers two tranches, the 3 year USD 533.3 million at LIBOR+140 and the 5 year USD 266.6 million LIBOR+150. The credit is backed by the export revenues.

The credit was arranged by Societe Generale Corporate and Investment Banking, Banque Societe Generale Vostok, Barclays Capital, BNP Paribas SA, CALYON, ING Wholesale Banking, Raiffeisen Zentralbank Oesterreich AG, Sumitomo Mitsui Banking Corporation Europe Limited. The agent was ING Wholesale Banking, Societe Generale Corporate and Investment Banking being the coordinator.

The credit will be spent to purchase the energy and refund the debts.

SUEK covers 30% of the coal delivery market and 20% of the exports from Russia. It has the subs in Krasnoyarsky, Primorsky and Khabarovsky reg., Irkutsky, Chitinsky and Kemerovsky regions, Buryatia. Besides, it is the largest strategic investor of the Far Eastern and East Siberian energy systems. It has the blocking stakes in Altaienergo, Chitaenergo, Buryatenergo, Khabarovskenergo, Kuzbassenergo, Dalenergo, Amurenergo, Khabarovskenergo, Kuzbassenergo, Dalenergo, Amurenergo, Omskenergo, Krasnoyarskenergo and Yakutskenergo.

The major holder is the Cyprus based Donalink Limited, beneficiaries MDM Bank and EuroKhim owners. In 2006 the entities produced 89.7 million tonnes of coal with 23.7 million tonnes being exported.

Zinifex welcome health service agreement of Rosebery

Zinifex has welcomed the announcement by the Minister for Health and Human Services of an agreement between the Government and company to strengthen health services at Rosebery.

Mr Stuart Gula GM of Zinifex Rosebery Mine said that the partnership would deliver improved health services to Rosebery and the surrounding area with a combined investment of USD 1 million over two years. He said that "Under the terms of the agreement the Government and Zinifex will each contribute USD 500,000 over two years to strengthen health services in the area. The agreement will deliver 24 hour emergency services to Rosebery including on duty after hours nursing cover as well as observation and disaster response capability.”

Mr Gula said that while the local community would benefit from these improved service levels, the agreement also was attractive to the mine which will be able to use the facility for many of its occupational health needs as well as have access to 24 hour emergency services. He said that "By combining clinical services with the mine's health service requirements, we have been able to assist the Government to deliver improved health facilitates to the Rosebery community while at the same time enhancing our on site medical capacity.”

Mr Gula said that the Zinifex Rosebery mine has been a long time contributor to West Coast Tasmania making a substantial contribution to the local and State economy. He said that "We are investing heavily in exploration and infrastructure upgrades to ensure that we continue to play an important role here for many years to come. This agreement is just one more way that Zinifex intends to demonstrate its ongoing commitment to the communities it operates in and West Coast Tasmania.”