FM has no proposal for steel export duty roll back

Mr P Chidambaram Indian finance minister has ruled out any cut in import duty on crude oil, arguing the move would not have a direct impact on retail prices of petrol and diesel.

He also said that there is no proposal to withdraw the export cess on steel. He said “I have not received any formal proposal from the Ministry of Steel. If there is rethinking, I suppose the Ministry of Steel will send me a proposal.”

The comments on steel export duty indicate divergence of views within the government. While the steel ministry has been claiming the cess would be reconsidered, Mr Chidambaram hinted otherwise.

Steel industry representatives had met Prime Minister Manmohan Singh recently and announced price cuts to keep the export cess at bay. While the industry was under the belief that the cess would not be imposed, the revenue department decided to go ahead with it and notified it.

Indian government may link steel export to input imports

It is reported that Indian government is considering a request from steel producers to relax norms for levying export duty on steel.

A delegation of secondary producers, pipe makers and galvanizers met Mr RS Pandey steel secretary of India on May 14th 2008 and apprized him of the effect of recent announcement of price cut by INR 4000 per tonne by domestic HR makers, demand supply scenario for galvanized and pipes in India and effect of export tax on their business.

Steel makers said that there is overcapacity in cold rolled coils and other flat products and the domestic industry should be allowed to export flat products after meeting domestic demand. The Industry made a request to withdraw export tax with retrospective effect and said that export tax should not be levied on exports against advance license.

Mr Pandey informed the delegation that “The price reduction given by steel producers is only for domestic sales. And if any secondary producer is exporting their product, the price to the extent of export will be charged accordingly. If you are buying at domestic price than you should not be allowed to export. Whatever you buy domestically you must sale in domestic market.”

Mr Pandey has asked industry to submit production, raw material and sales data for year 2007-08 and plan for 2008-09.

The meeting was attended by Mr NR Dash director in the ministry of steel, Mr Vinod Mittal MD of Ispat Industries Limited, Mr Shankar Batra of Bhushan Steel Limited, Mr Santosh Sahara chairman of National Steel, Mr B Goenka chairman of Welspun, Mr RV Sridhar of Shree Precoated Steel Limited, Mr Naresh Singhal of Surya Roshni Limited, Mr HK khanna of Maharashtra Seamless, Mr.Pankaj Nigam of Man Industries and Mr SC Mathur of CORSMA.

Indian Railways cut port levy on iron ore for local use

BL reported that freight rate for iron ore is set to come down further with Indian Railways deciding to remove the 30% port congestion surcharge levied on the mineral meant for domestic use.

The move is set to benefit steel companies such as Essar Steel, Ispat Industries and Vikram Ispat which do not have captive mines. These companies depend mainly on rail transport for moving raw material to their steel plants.

A fortnight ago, Indian Railways had shifted iron ore from class 180 to 170. The reclassification had resulted in freight cut of ore by 4% to 5%. According to industry sources, the move to remove the port congestion surcharge would act as an added cooling effect on the economy. The government has been fighting inflation due to rise in prices of various raw materials. However, the port congestion surcharge on iron ore meant for exports would continue to remain at 100%.

A senior Rail official said that "We have done every possible policy change to bring down inflation in prices of domestic steel. However, iron ore for exports would continue to attract 100% surcharge as the companies command a significant margin outside India due to surge in global steel prices."

The proposed changes follow a series of high level government meetings over finalizing a steel package to contain inflation. The reduction in railway freight was also discussed last month in a meeting of committee of secretaries, and the finance minister had also met the concerned secretaries for taking steps to cut input costs.

Iron ore constitutes an important cost element in the entire process of steel making. Raw material prices often constitute 30% of the cost of steel. With iron ore prices rising 100% in a year and expected to rise further, India Railways’ initiative is expected to reduce cost pressure on the steel sector.

Indian Railways transported 53.59 million tonnes of iron ore for exports in 2007-08 up by 37.9% YoY as against 38.84 million tonnes of iron ore transported in 2006-07.

Secondary steel makers cut prices by INR 4,000 per tonne

BL reported that secondary steel producers have reduced prices by INR 4,000 a tonne, following a INR 4,000 a tonne price cut effected by hot rolled steel producers earlier this month. The move is expected to contain spiraling prices of downstream steel products such as cold rolled coils, galvanized steel, tubes and pipes.

The decision emerged out of a meeting convened by union ministry of steel with the secondary steel manufacturers. In the meeting it was also decided that the secondary producers will hold prices for three months, similar to the announcement made by the primary producers after their meeting with the Prime Minister earlier this month.

Mr RS Pandey union steel secretary said that "The secondary steel producers have assured that they will reduce prices of their flat products by INR 4,000 a tonne and maintain the new price line for the next 3 months."

Mr Pandey said that in order to increase availability of steel in the domestic market, the producers have also pledged to import raw material, process it and export it under the Advance Licensing Scheme to improve the domestic supply side situation. He added that the fiscal measures taken by the government have already brought down prices of long steel products by around 20%.

Mr SC Mathur secretary general of Cold Rolled Steel Manufacturers Association said that the government had assured the producers that it would consider their request to remove export duty on steel products. He added that "The ministry said that it will consider our request to keep the implementation of the notification on steel export duty in abeyance."

NTPC to borrow INR 105,000 crore to meet target in 11th Plan

PTI reported that National Thermal Power Corporation Limited is looking to borrow over INR 105,000 crore from domestic and overseas markets in the next 4 or 5 years to meet its target of adding 22,430 MW power generation capacity by 2012.

An NTPC official said that "Out of the INR 160,732 crore fund requirement during the 11th Plan, INR 55,224 crore will come from internal resources and the rest will be borrowed." He added that domestic borrowings are being pegged at INR 45,199 crore while external commercial borrowings are being tentatively pegged at INR 60,309 crore.

NTPC is also planning to invest INR 65,278 crore in coal and gas based power plants set for commissioning during the plan period. Another INR 7,525 crore is earmarked for hydroelectric foray and INR 14,080 crore in coal mining and LNG ventures, while INR 2,446 crore is the outlay for JVs and INR 4,897 crore the spillover investment from the previous plan.

In preparation for the 12th Plan projects, NTPC would invest INR 61,180 crore by 2012, including INR 41,981 crore for thermal plants and INR 15,926 crore for hydro units.

NTPC owns 15 coal based and 7 gas or liquid fuel plants with a total capacity of 27,350 MW. It also has 4 JV plants with a capacity of 2,044 MW. It plans to add 22,430 MW of new electricity generation units during 2007-12. Of this, 15,180 MW would be through coal based power generation, 4,550 MW through gas based generation and the balance from hydroelectric power.

The official further added that "Out of NTPC’s 11th Plan target, 1,990 MW has already been commissioned. Construction work is in full swing for another 16,680 MW projects. Contracts for the balance projects would be awarded in 2008."

India may allow more cement import from Pakistan

ET reported that Pakistan has turned out to be an unusual ally in India’s fight against inflation. The two governments are working on ways to enable greater supply of cement from Pakistan by removing infrastructure and procedural constraints at the Wagah Attari border.

Indian Railways is in talks with Pakistan Railways to allow 4 rakes to transport cement instead of the existing one. Additionally, India has decided to allow Pakistani trucks carrying cement to cross into Amritsar for unloading.

The move is expected to increase total cement imports from Pakistan to 600,000 tonnes by end of June 2008 as compared to 300,000 tonnes imported in the last 6 months. This will not just address India’s problem of supply constraint for cement but will also help in checking price rise.

A union government official said that "Supplies from Pakistan so far has been 300,000 tonne over the past 6 months since India allowed import of cement from Pakistan. The amount of import will at least double by end of June 2008."

Talks are also on to put in place a conveyor belt at the border on which cement can be loaded from Pakistan’s side, pass through an x ray machine attached on the Indian side, and then unloaded. This would save the authorities the hassle of unloading sacks one at a time from trucks and screening them individually.

Although, under pressure from the government, some companies have reduced prices marginally this week, prices are still high. New capacities are also being created by the domestic industry to bridge the supply gap, but it would not make a substantial difference immediately.

SAIL RSP eye camp project benefits many villagers

Project Sunayana, launched by SAIL Rourkela Steel Plant to restore eyesight of the elderly persons affected by cataract in peripheral villages, has been extended to the underprivileged sections of Rourkela. The endeavor has been immensely successful, with 120 poor people benefiting from this.

Under the project, individuals detected with cataract in health camps, were operated at Ispat General Hospital of the plant free of cost. Pre operative preparations, medicines and post operative care were also provided by the plant.

States to add green power to their energy portfolio

It is reported that states are increasingly warming up to the idea of including green power in their energy portfolio. At the last count, power regulators across 12 states had firmed up Renewable Purchase Obligation, which makes it mandatory for all distribution utilities in that state to source a minimum quantum of electricity annually from renewable sources.

Expressed as a percentage of its total consumption, the RPO varies from 1% to 10% across the states that have implemented it so far, with regulators in States such as Karnataka, Madhya Pradesh and Tamil Nadu pegging the limit at up to 10%.

On a pan India basis, the total RPO commitment by these 12 states cumulatively adds up to around 35,518 million units, which is around 5.33% of the total power consumed in India during 2007-08.

With the RPO mechanism still in the evolution stage in India, more states are likely to follow the example of the 12 states, where regulators have already implemented the scheme. Coming at a time when prices of hydrocarbon resources across the world are touching all time highs, the mandatory purchase of green power by regulators is expected to give a new lease of life for the renewable sector.

RPO fixed per annum
RPO estimates in million units

CDM clearance received for Ramsarup captive power plant

Ramsarup Industries has received the clean development mechanism clearance from UNIFCCC for its 20 MW WHRB captive power project at Kharagpur in West Bengal.

The proposed plant is slated to generate up to 20 MW of power hourly using waste gas emanating from MBF and DRI kilns, which will help reducing the dependence on the power grid as well as making the plant eco friendly and green.

The project will reduce annually 114,996 tonnes per annum of carbon dioxide that will have been otherwise emitted into the atmosphere. Apart from reduced carbon dioxide emission, the plant will be saving substantial energy costs.

48 firms show interest in eastern DFC KK line

It is reported that at least 48 companies including Larsen & Toubro, Gammon India, Punj Lloyd, Alstom Projects India and Afcons Infrastructure have expressed interest to participate in the EPC contract for the 300 kilometer long Kanpur Khurja section of the eastern dedicated freight corridor project.

The scope of work involves commissioning of double track electrified railway lines with signaling and telecommunication system and other related infrastructure for operation of freight trains on turnkey basis.

The request for proposal for the project is likely to be invited by August 2008 and the final contract for the work will be awarded by October 2008.

The Bhaupur Mandrak section on the Kanpur Khurja route is the first stretch on, which the process for the construction work has been initiated out of the entire 2,700 kilometer long dedicated freight corridor comprising of the eastern corridor from Sonnagar to Khurja and Western Corridor from Dadri to JNPT.

The total cost of the entire project is estimated to be INR 28,121 crore.

IRCON bags USD 1 billion construction deal in Malaysia

BL reported that Indian Railways' subsidiary IRCON International has won a USD 1 billion contract to construct a 103 kilometer long high speed rail segment in Malaysia.

The scope of work involves building an electrified double line between Seremban and Gemas in southern Malaysia. It also includes electrification and signaling works.

The Seremban Gemas stretch is part of the double tracking of Malaysia's north south railway and involves construction of 34 river bridges and 13 road over bridges.

The formal signing of the contract is scheduled to take place on May 16th 2008.

ADB grants INR 445 crore loan for GPEC wind energy projects

Asian Development Bank has given in principle approval to provide a loan of INR 445 crore to Gujarat Paguthan Energy Corporation's wind energy projects in Gujarat and Karnataka.

The loan, which will be used to set up wind farms at Samana in Gujarat and Saundatti in Karnataka totaling 183 MW. The loan will have a maturity of 13 years from the date of the first disbursement.

GPEC will bring in INR 198 crore as equity for the projects and other co lenders will provide loans of INR 364 crore.

Ambuja Cement keen on port terminals

BL reported that Ambuja Cements is keen on setting up port terminals and has bid for a port terminal at Karwar in Karnataka.

Each port terminal to be built by Ambuja Cements will have a capacity of over 0.5 million tonnes per annum. Also its port terminal at Cochin Port will be ready and operational by December 2008, with an investment of INR 85 crore.

Ambuja Cements already has 3 terminals at Panvel, Surat and Mul Dwarka ports.

Lanco Infra consortium wins bid for Vizhinjam project

BS reported that Hyderabad based Lanco Infratech Limited, in consortium with Pembinan Radzai Sdn Bhd of Malaysia, has won the bid for development of the USD 2 billion Vizhinjam International Container Port project in Kerala. The port project would be developed in 4 phases with an ultimate capacity of 6.5 million TEUs.

According to Mr Sanjay Joshi director (infrastructure) of Lanco Infratech Limited, the first phase would be completed in 60 months and the remaining 3 phases would be initiated after reaching the stipulated traffic levels. It will raise 70% of the required funds through debt and the remaining through equity. The financial closure would be two years down the line.

Mr Joshi said that "This is the first major port for Lanco Infratech.'' He added that it is currently building a captive coal terminal for its power project at Mangalore.

The Vizhinjam port, when developed would attract a fair share of the container transshipment traffic meant for India, currently handled by international ports at Colombo, Malaysia, Al Salalah and Singapore.

It may be recalled that Kerala government had called for bids in August 2007 through Vizhinjam International Seaport Limited on a 33 year concession basis. NCC Maytas, Videocon Gammon Sical, Apollo Enterprise DS Construction and Zoom Developers Portia Management Services were the other contenders for the project.

Flat Products revises open offer schedule

Edelweiss Capital Limited, on behalf of Cockerill Maintenance & Ingenierie SA, has announced that Flat Products Equipments India Limited has revised the open offer period.

Accordingly, the offer opens on May 16th 2008 instead of March 10th 2008 announced earlier and then closes on June 4th 2008.

Auto component makers calls for reduction in alloy steel prices

BL reported that the price cut announced by Indian steel makers last week has not helped auto component manufacturers as they are mostly using alloy steels for making components.

Automotive Component Manufacturers Association of India vide a release said that “Auto component industry largely utilizes alloy steels for manufacturing high value added and safety critical components such as drive, transmission and steering systems, chassis and suspension parts and a variety of engine parts. The steel is used initially for making forgings or alloy steel castings, which is then machined to produce fully finished auto components.

Mr Sanjay Labroo president of ACMA said that “These alloy steels have not been impacted by the price cuts.”

Mr Srivatsaram chairman of ACMA South has called for an immediate reduction of Customs Duty on all grades of alloy steel to zero and to suspend export benefits on exports of alloy steels.

RINL inaugurates coke oven battery No 4

It is reported that Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited lighted up the newly built fourth coke oven battery in Vizag on May 15th 2008.

There are 67 ovens of 7 meter height. It is built with an investment of INR 300 crore.

It is designed capacity to produce 0.8 million tonnes of coke per year.

India to maintain economic growth despite pricing curbs

Indian government is not sacrificing growth to control inflation, as the economy needed to keep growing at 8% or more.

Mr Montek Singh Ahluwalia deputy chairman of India's Planning Commission told reporters that "We are not sacrificing growth to control inflation. High inflation will kill the medium term growth process. It is important to control inflation while keeping growth at 8%.”

He said that the Indian Economy is expected to expand by 8% to 8.5% range in the fiscal year ending March 2009. He said "We have consistently said the growth target laid by government is 8% to 8.5%. I will not be surprised if it is at the lower end of the range."

Soaring inflation, which hit a 3-½ year high of 7.61 percent in late April, is proving to be a policy headache for India, forcing the government and the central bank to announce a slew of measures to calm prices.

Ankit Metal unveils expansion plans

It is reported that Kolkata-based Ankit Metal & Power is planning to expand capacity at its existing unit in West Bengal and set up a new unit at Jamshedpur

Mr Ankit Patni MD of Ankit Metal & Power said that "We have huge future expansion plans to double our existing capacity in the West Bengal unit and soon to propagate another vast project in the steel city Jamshedpur."

It will invest INR 250 crore to double the capacity of the Bankura unit in West Bengal to 200,000 tonnes per annum and around INR 750 crore will be invested in a new plant, to come up at Jamshedpur with a capacity to produce 300,000 tonnes per annum of steel.

It has recently invested around INR 120 crore to set up a fully integrated steel plant to produce 100,000 tonnes per annum rolled products with captive production of sponge iron, billets and power at Jorehira of Bankura district. Prior to the expansion, the company had a sponge iron unit operational since October 2005.

L&T and GE Energy join hands for power control systems

Indian construction major Larsen & Toubro announced that it has entered into a partnership agreement with GE Energy, a unit of General Electric, for power plant control systems in India.

Rail Wheel Factory Bangalore bags safety award

Rail Wheel Factory Bangalore has won the prestigious “Golden Peacock Award for Occupational Health & Safety – 2008”

The award will be presented at a special function during the Global Convention on climate change on May 31st 2008 at Palampur in Himachal Pradesh.

SAIL sets new performance landmarks in 2007-08

Indian steel major Steel Authority of India Limited has announced audited financial results for 2007-08, after they were taken on record by the SAIL board of directors.

High production and productivity, market-driven product mix, substantially higher value added, special steel production, several initiatives towards cost reduction, along with strong demand for steel enabled Steel Authority of India Limited to achieve new financial and physical performance landmarks during the year 2007-08. The highlights are as under
1. All time high annual turnover of INR 45555 crore up by 16% YoY
2. Highest ever annual PBT of INR 11469 crore and PAT of INR 7537 crore up by 21.7% and 21.5% respectively.
3. 37% dividend to shareholders including 19% interim dividend

The performance for the financial year was buoyed by stupendous performance in January to March 2008 quarter
1. All time high Q4 turnover of INR 15530 crore up by 35% YoY
2. 25% YoY higher Q4 PBT of INR 3665 crore

SAIL Board has recommended its highest-ever dividend at 37% on paid up equity amounting to over INR 1,500 crore for the company's shareholders for the year 2007-08. This includes the 19% interim dividend paid in February 2008. Previous highest dividend payout was 33% for the year 2004-05.

Commenting on the company's performance, Mr. S.K. Roongta, Chairman, SAIL, said: "SAIL has proved its fundamental strengths once again, the most significant of which is its committed workforce – ever eager to attain new peaks in performance and to meet the growing demand for steel in the country.

The production highlights for 2007-08 are as under
1. Highest ever saleable steel production of 13 million tonnes
2. Capacity utilization of 118%
3. Special quality and value added products production of 3.5 million tonnes up by 30% YoY.
4. Over 30 new products were developed for special applications during the year
5. Achieved record production through the energy-efficient continuous casting route at 8.9 million tonnes, showing a growth of 7% and capacity utilization of 128%
6. The special steels plants of SAIL also recorded highest-ever saleable steel production of 0.513 million tonnes up by 13% YoY
7. For the first time, production by SAIL's captive collieries crossed the million tonne mark up by 47% YoY
8. Best ever sales of 12.3 million tonnes during the year with substantial growth in sales of value-added products like long rails of 130/260 meters at 56%, plates at 8%, HR coils at 7% and medium structurals 20%.
9. For the first time, SAIL's marketing network covered all districts in the country during 2007-08, with addition of about 1,200 new dealers. SAIL thus became the first steel company in the country to have a distribution network covering each and every district.
10. SAIL achieved lowest-ever energy consumption at 6.95 giga calories per tonne of crude steel and coke rate at 533 kgs per tonne of hot metal in 2007-08 by fine-tuning operational efficiencies.
11. Thrust on cost reduction continued, resulting in a saving of over INR 300 crore.

SAIL develops 30 new products in 2007-08

Indian steel major Steel Authority of India Limited has announced that Over 30 new products were developed for special applications during 2007-08.

Some of the prominent ones are listed below

1. High corrosion and earthquake resistant TMT rebars for construction

2. High tensile plates for hydel power projects and high yield strength SAILMA 550 HI plates

3. SUP-11A/9 grade spring steel for auto sector

4. Environment-friendly C-5 coated CRNO sheets

5. Armour steel plates for the defense sector

6. Boron treated aluminum killed low carbon steel, vanadium micro alloyed rails for application in tracks for higher axle load at high speed

7. Low carbon HR coils with titanium for extra deep drawing

Global HRB spot prices eruption slows down

SteelBenchmarker reported that the US hot rolled band spot price for May 12th 2008 surged by 5.2% to USD 1,154 per ton, FOB the mill for the thirteen consecutive rise totaling USD 577, world export HRB price rise by 2.9% to USD 1,024 per tonne FOB the port of export, for the eleventh consecutive rise totaling USD 443, Chinese HRB ex works price surged by 3.9% to USD 697 per tonne for the third consecutive rise and the Western European HRB surged by 2.1% to USD 1.088 per tonne ex works for the sixth consecutive time totaling USD 375.

USA
USD 1,154 per metric tonne FOB the mill
Up by USD 57 per tonne from USD 1,097 two weeks ago
Up by USD 594 per tonne from the recent low of USD 560 on August 13th 2007
Up by USD 524 per tonne from the recent high of USD 630 on April 9th 2007

China
USD 697 per metric tonne, ex works
Up by USD 26 per tonne from USD 671 two weeks ago
Up by USD 227 per tonne from the recent low of USD 470 on October 22nd 2007
Up by USD 210 per tonne from the previous high of USD 487 on September 10th 2007

Western Europe
USD 1,088 per metric tonne ex works
Up by USD 22 per tonne from USD 1,066 two weeks ago
Up by USD 425 per tonne from the recent low of USD 663 on July 23rd 2007
Up by USD 392 per tonne from the recent high of USD 696 on June 11th 2007

World Export Price
USD 1,024 per metric tonne FOB the port of export
Up by USD 29 per tonne versus USD 995 two weeks ago
Up by USD 474 per tonne from the recent low of USD 550 on July 23, 2007
Up by USD 428 per tonne from the recent high of USD 596 on March 26th 2007

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

BDI surges to new record on Chinese Demand

Bloomberg reported that commodity shipping rates jumped to a record on increasing Chinese demand for iron ore and may advance further as rising finance costs curb growth in shipbuilding.

The Baltic Dry Index gained 418 points or 3.9% to reach 11,067 points on the Baltic Exchange in London.

On one hand, Chinese steel production growth has to be fed from imported iron ore, which is growing in tandem, requiring ever increasing shipping capacities. On the other hand, new ships faces delay or cancellation because of tighter credit markets and rising steel costs.

NYMEX expects steel futures launch in 2008

Reuters reported that the New York Mercantile Exchange is going ahead with its steel futures plan and anticipates to launch the contracts this year.

Mr Robert Levin senior VP of NYMEX said that "We are going ahead with this full steam. We anticipate having steel futures launch for trading this year and we'll be making announcements very soon.”

There was speculation NYMEX might have suspended or dumped its plans to launch steel futures after the CME Group's bid to takeover the Exchange.

Nucor applies permit for green steel mill in Louisiana

Nucor Corporation announced that it has applied for a permit to build a state of the art iron making facility at St James Parish in Louisiana. The new company would be called Nucor Steel Louisiana.

The project is not a certainty. Regardless of the ultimate site chosen for the project, permits have to be issued and Nucor's board must approve the selection of the site and the capital investment. If the project is ultimately built in the US, it would be the first Greenfield pig iron facility built here in more than 30 years.

Nucor has selected advanced heat recovery coke technology to be used in this facility. Unlike conventional coke facilities, this coke plant would capture waste heat and use it to produce power, making our operation self sufficient in power. Nucor's blast furnaces will have the latest designs for emissions controls and energy efficiency. This facility would capture waste energy from the blast furnaces to produce power over and above our own requirements. By the second phase of this project, the facility would be producing 500 MW of power, of which 250 MW would be supplied to the grid, completely offsetting the emissions that would have been released had a facility been constructed to generate this new source of power. The facility will have slag granulation technology that produces a valuable by product used by the cement industry, completely offsetting the emissions they would have created to manufacture the same product.

Mr Daniel R DiMicco chairman & CEO of Nucor said that "Nucor would build one of the most modern iron making facilities in the world to produce 3 million tonnes of pig iron, employing the latest technologies to reduce emissions. This facility would create hundreds of good jobs for American workers and demonstrate the effectiveness of new technology to protect the environment. At the same time, this project would help Nucor achieve our long term goal of increasing control over our raw materials supply."

Louisiana Governor Mr Bobby Jindal said that "We are proud that Nucor, a company with a great reputation for creating jobs in the US is considering Louisiana for this important project. This would provide a tremendous boost to Louisiana's economic development and further job creation. We will continue to work with local communities here to attract a facility that can become a national model for responsible manufacturing and economic growth."

Toyota agrees 30% plus steel price hikes –Report

The Asahi Shimbun daily reported that Nippon Steel Corp and other big Japanese steelmakers have reached broad agreement with Toyota Motor Corp to raise steel prices by more than 30%.

The paper said that the increases above JPY 25,000 (USD 238) per tonne would push steel prices up over JPY 100,000 a tonne for the first time, topping a previous high of JPY 99,000 in 1982/83. The paper added that Toyota rejected such a price hike, but agreed on a price just below the suggested increase.

Officials at Nippon Steel and Toyota were not immediately available for comment.

Nippon Steel has said recent spikes in iron ore, coal and other materials prices would cost it JPY 1 trillion more this business year, which equates to a 38% cost increase, or JPY 30,000 yen per tonne.

CSC may raise prices by 10% - Report

Commercial Times reported that China Steel Corporation may raise prices for Taiwan customers by more than 10% in the third quarter of 2008 as the earthquake in China boosts demand for the alloy on the mainland.

The report added that also helping bolster prices, some steel companies near Beijing cut production before the Olympic Games.

BE Group acquires Ferram Steel in Czech

BE Group announced that it is acquiring Ferram Steel as to continue the strategy of growth in Central and Eastern Europe.

Ferram Steel is a subsidiary of Ferram as and concentrates on flat products. The company has sites in the eastern Czech Republic cities of Opava and Ostrava, where the head office is also located. Ferram Steel as recently invested in a sophisticated logistics facility in Ostrava, which is creating substantial opportunities for further business growth in the Czech Republic, Slovakia and southern Poland. The proximity to nearby steel producers will reduce both costs and the environmental impact of shipments.

BE Group in a statement said that “Ferram Steel as will make a positive contribution to growth and profit and generate cost and capital synergies combined with BE Group’s current Czech operations. Ferram Steel as reported sales of SEK 343 million and operating profit of SEK 15 million in 2007. With the acquisitions of Ferram Steel as and Czechprofil finalized earlier this year, BE Group has multiplied turnover in the Czech Republic tenfold to become one of the five largest distributors in the country, with sales of almost SEK 750 million.

Mr Hakan Jeppsson president and CEO of BE Group said that “BE Group is taking a significant step in the Czech Republic with the acquisition of Ferram Steel as to achieve the critical mass needed for profitable operations in the long term.”

Mr Jeppsson added that “Ferram Steel as is a strategic acquisition that strengthens our position not only in the Czech Republic but throughout Central Europe. The company enjoys a favorable geographical location, expansive logistics and a strong supplier network in Ukraine, all of which enhance the value proposition for BE Group as a whole. The acquisition is expected to make an immediate positive contribution to growth and profit and yield synergies including lower costs, improved inventory turnover and higher sales. Subject to approval by the Czech competition authorities, the transaction is expected to be finalized during the summer.”

BE Group AB is one of the leading trading and service companies within steel and other metals in Europe. The company has about 10,000 customers, primarily within the construction and engineering industries. The group provides service in the steel and aluminum sectors.

PT Krakatau to modernize its hot strip mill

SMS Demag announced that Indonesia’s PTKS has placed an order with for the modernization of its hot strip mill at Cilegon in West Java.

SMS Demag said that through the modernization PTKS will be enabled to increase the production of its hot strip mill by approx. 20 % and at the same time improve the product quality and extend the product range.

The modernization comprises the revamp of the edger including commissioning of an Automatic Width Control system to improve strip width tolerances and to minimize crop losses. Furthermore, new work roll cooling systems in the finishing mill, as well as anti peeling and interstand cooling systems will be installed.

The use of CVC plus® systems and work roll bending in mill stands F1 to F3, along with a new Profile, Contour and Flatness Control will further improve the product quality. Upon completion of this order all finishing mill stands will possess CVC plus® technology. The new laminar cooling system will enable PTKS to improve its cooling strategies.

Algoma Steel Q1 performance improves significantly

Algoma Steel Inc announced in a call with their lenders significant performance improvements for the first quarter of 2008 as compared to the first quarter of 2007. Algoma’s shipments increased by 6.2% YoY, sales increased by 4.6% YoY and EBITDA was USD 71.4 million, an increase of USD 17.6 million from the same period last year and USD 22.5 million over the previous quarter.

Algoma further reported a net loss of USD 25.3 million, essentially attributable to a USD 26.2 million non cash foreign exchange loss on US dollar denominated debt that must be reported for accounting purposes.

Mr Armando Plastino COO of Algoma said that “We remain optimistic about Algoma’s overall financial performance throughout the course of this year. We expect that the increased volumes will be sustainable over the long term and the Company’s demonstrated performance improvements of this quarter will continue.”

Klöckner Q1 profit up by 12.4% YoY

Klöckner & Co Group announced that in Q1 of 2008 it improved its sales volume by 5.6%, supported by its successful acquisition strategy and boosted its sales by 7.1% YoY against the first quarter of the previous year. Its operating result EBITDA was improved by 18.3% YoY to EUR 109 million in the same period and the consolidated net profit for the period by 12.4% YoY to EUR 52 million. The Group, which is excellently positioned in Europe and North America, benefited from the ongoing good demand situation and the favorable price and margin trend against the end of 2007.

Klöckner said that “As a result of the acquisitions of Multitubes in Great Britain and especially Temtco Steel in the USA, the expansion strategy was successfully continued. As part of the further focus on the core business, the agreement to sale the Canadian subsidiary Namasco Limited to the Canadian company, Samuel, Son & Co Ltd was signed on May 14th 2008. The acquisition is still subject to the approval of the Canadian antitrust authorities. Following the full takeover of the Swiss country operation, Klöckner & Co is currently examining the disposal of one of its Swiss subsidiaries, Koenig Verbindungstechnik whose products are not part of the core business at Klöckner & Co. The company generated sales of around EUR 120 million in financial year 2007.”

Dr Thomas Ludwig CEO of Klöckner & Co AG said that “By selling the Canadian subsidiary, which mainly operates in the automotive sector, and purchasing Temtco Steel, which specializes in plates, we have substantially expanded our product portfolio in North America in faster-growing areas with a high share of preprocessing. By selling KVT, we would be continuing to concentrate on our core business and freeing up additional funds for further expansion.”

He added that “The good first quarter and the unchanged bright prospects for the second quarter form a solid foundation for further earnings growth in the current financial year. We are very satisfied with our start in the financial year 2008. The expansion driven by acquisitions, the continuous optimization of the company and the sound demand and price development has all had a significantly positive effect. We expect earnings growth in the second quarter to be even better due to the sharp increases in prices for steel products and the integration of Temtco Steel. We also anticipate that the sound demand and price development will continue throughout the rest of the year and expect net profit for 2008 that is substantially higher than the previous year’s level.”

Malaysian domestic tin price breaches USD 25,000 per tonne

Platts reported that the Malaysian domestic tin price has gathered upward momentum over the past two days breaching the USD 25,000 per tonne level on the Kuala Lumpur Tin Market.

As per report the Kuala Lumpur Tin Market price gained USD 300 per tonne to settle at USD 25,100 per tonne a new high for the bourse, erasing the previous record at USD 24,800 per tonne.

A Kuala Lumpur Tin Market source said that buyers were seen eagerly bidding, providing support to the domestic price. He added that the Malaysian tin price was also tracking stronger tin prices on the London Metal Exchange, which firmed up above USD 25,000 per tonne Tuesday.

According to European sources, tin prices on the LME continued to be courted by canny investors, who are now trading in a very dangerous market. Tin was once again making fresh records due to supply concerns emanating from Indonesia and China.

The LME official cash price for tin on Tuesday was USD 25,390 to USD 25,395 per tonne and the three month level at USD 25,250 to USD 25,300 per tonne compared with Monday's USD 24,675 to USD 24,700 per tonne and USD 24,525 to USD 24,540 per tonne respectively.

ArcelorMittal wins EU approval to buy stake in Gonvarri Brasil

It is reported that European Commission has cleared steel group ArcelorMittal's proposed acquisition of a 50% stake in Gonvarri Brasil, forming a steel service centre joint venture.

The transaction was reviewed under the EU's 'simplified' merger review procedure for cases which the commission believes do not pose competition concerns.

No financial details were disclosed.

ArcelorMittal already holds a significant stake in the Gonvarri group, which services automotive, industry and distribution customers and has been a major supplier for several years. The two groups already own a common facility in Senica, Slovakia, which started operations in 2007.

US March steel shipments down by 1.9% YoY

The American Iron and Steel Institute reported that for the month of March 2008, US steel mills shipped 9.158 million ton down by 1.9% YoY from the 9.331 million net tons shipped in March 2007 and a 0.2%MoM decrease from the 9.174 million net tons shipped in the previous month, February 2008.

A year to year comparison of year to date shipments shows the following changes within major market classifications:
1. Service centers and distributors up by 4.1%
2. Automotive down by 1.2%
3. Construction and contractors’ products down by 1.2%
4. Oil and gas up by 8.8%

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months and year.

Rautaruukki strike disturb HR production

Thomson Financial reported that Rautaruukki Oyj ongoing strike action by workers at its Raahe steel plant is disrupting hot rolling production at the site.

Mr Sakari Kallo production manager of Rautaruukki told Thomson Financial News that the company has been informed that staff will return to their posts on Friday morning.

He said that around 800 people at Raahe had staged a 24 hour strike earlier this week in a dispute over pay. Raahe Works in all employs around 2,100 people.

The company said it plans to publish details of the financial impact of the action later.

ArcelorMittal wants amicably settlement of disputes in US

Dow Jones reported that ArcelorMittal would like to amicably resolve two lawsuits it has filed in the past three months in the US and Canada regarding the initial sale of Sparrows Point and the acquisition of iron ore producer Wabush Mines from US Steel and Cleveland Cliffs.

ArcelorMittal filed a lawsuit with the Supreme Court of the State of New York in May, claiming more than USD 540 million in compensation from E2 Acquisition, a consortium spearheaded by Esmark Inc after it failed to fulfill a USD 1.35 billion contract to buy Sparrows Point, a steel mill which produces 3.9 million metric tons of crude steel annually. The lawsuit came a day after ArcelorMittal completed the sale of Sparrows Point to Russian steel maker OAO Severstal for USD 810 million, net of debt.

ArcelorMittal had filed in March a lawsuit in Canada against two owners of Canada's Wabush Mines, saying they had reneged on a deal to let ArcelorMittal buy them out. ArcelorMittal agreed to buy out US Steel Canada Inc and Ohio based Cleveland Cliffs Inc's stakes in Wabush mines before the contract was breached without disclosing reasons. ArceloMittal wants the Ontario Supreme Court of Justice to force the two companies to comply with the contract and also pay USD 400 million in compensation or then pay USD 1.3 billion for failure to fulfill the contract.

Mr LN Mittal CEO of ArcelorMittal said that "I am surprised by the situation that emerged among the steel companies whereby one breached it's contract to buy Sparrows Point steel and the other two breached their contract to sell their stakes in Wabush Mines to ArcelorMittal.”

He added that "ArcelorMittal does not like to file lawsuits among peer groups. It will always be available for discussion to" resolve the issues amicably.”

ThyssenKrupp selects Broner for Alabama plant

World’s leading provider of supply chain planning, scheduling and manufacturing execution systems, specifically for the Metals Industry Broner Metals Solutions, has been selected by ThyssenKrupp Steel USA LLC as a supplier of planning, scheduling, MES and warehouse management solutions for their major Greenfield carbon steel processing plant project at Alabama in USA.

Broner is participating in this project in partnership with IBM who was appointed by ThyssenKrupp as its main contractor. The project starts in May 2008, and the carbon steel plant will begin its operation in 2010.

Broner is to provide its world class planning, scheduling and MES solutions for the carbon steel processing facilities: hot strip mill, cold and hot rolling mills and galvanizing mills, covering processes from the arrival of trucks at the slab yard to the shipping of finished products. Broner will be supplying the following standard modules: Production Planner, Production Scheduler, Schedule Editor, Material Planner, Production Management, Quality Management, Inventory Management and Equipment Management.

ThyssenKrupp is building new steel and stainless steel plants in the state of Alabama, with combined annual capacities of 5 million tonnes.

Broner Metals Solutions specializes entirely in delivering value to the Steel and Aluminium industries. It provides Supply Chain Planning, Scheduling and Manufacturing Execution Systems and Consultancy, which improve shareholder value, through: reduced inventory; shorter manufacturing lead times; increased throughput; improved delivery performance and better customer service.

Stalprodukt gets permission to acquire Cynk Mal SA

Stalprodukt SA announced that it received permission to acquire Cynk-Mal SA based at Legnica in Poland.

The Company, as investor, will take over 10,300,000 of the shares of Cynk-Mal S.A. of the nominal value of PLN 1 per share, for the issue price of PLN 3.2 per share. The total price of the shares is PLN 32,960,000. After the transaction Stalprodukt will hold 51% of the company's share capital.

CSC sees Q2 earnings surge by 30% QoQ

It is reported that China Steel Corporation will see a 30% quarterly increase in earnings in the second quarter of 2008. As CSC has raised the selling prices of its products slated for delivery in the second quarter, an industry insider believed the steel maker will see substantial growth in earnings in the second quarter.

Based on the projected quarterly shipments of between 2.5 million and 2.7 million tonnes of steel products, CSC is expected to see second quarter sales hit a historic high of over TWD 65 billion. Its quarterly pretax earnings will challenge TWD 18 billion in the second quarter.

CSC said that it had to offer a higher price to procure spot raw material in the first quarter of 2008 than in the first quarter, leading to a drop in gross profit margin. CSC saw monthly gross operating margin slip to 22.52% in the first quarter of 2008 from 23.4% in the fourth quarter of 2007.

CSC has registered TWD 20.427 billion in sales for April 2008 down by of TWD 20 million from March 2008 but still up by 24.74% YoY. It scored TWD 77.78 billion in cumulative sales in January to April 2008period, up by 18.74% YoY. It saw average selling price increased to TWD 24,400 per tonne in March 2008, up by 7% MoM from TWD 22,800 in March 2008.

Firm rebar price in Tokyo and Osaka

JMB reported that concrete reinforcing steel bar market price accelerates to increase toward JPY 110,000 per tonne in Tokyo and Osaka.

The price level is JPY 103,000 for base size for direct shipment from makers to users in Tokyo and JPY 105,000 in Osaka, which increased by JPY 33,000 or more than 40% from the beginning of the year due to the makers price hikes one after another with pressure of higher raw materials cost. The market price could reach JPY 110,000 level when the dealers try to pass the higher cost price on the market.

Ruukki launches solution for single storey construction in Poland

Ruukki introduces in Poland its new solutions package that simplifies and makes the design and construction of commercial and industrial buildings more efficient. Innovative solution includes fast design, manufacture and installation of foundation, steel frame and envelope structures for premises suitable e.g. for retail, logistics or industrial operations.

Ruukki’s new solution enables flexible scaling of building dimensions. It also enables flexible choices for cladding material as well as for window, door and gate openings. At best, the foundation, frame, walls and roofing can be completed within a couple of months of the customer’s order.

Mr Daniel Mach senior vice president of Ruukki Construction said that “We work and further develop innovations that serve the interests of our customers in the construction market. A fast planning and construction process saves our customers and partners’ time and resources. This is especially important for the end user who can begin using the building much faster. Our solutions also mean less financial and operational risk when the various parts of the building are designed and manufactured to fit each other.”

Mr Piotr Gebicki vice president of Ruukki Construction said that “The biggest time saving is reached by the easy and fast design and offering process. We have created a tool a software application that enables efficient structural planning together with the customer. A detailed offer can be provided at once. Also erection of industrial halls is easy with our integrated and prefabricated structures.”

Ruukki has a strong presence in Poland providing solutions for customers in the construction and engineering industries, and supplying a wide selection of metal products and services to other end users. Ruukki currently employs about 1,400 people in Poland, mainly in production units in Oborniki, Żyrardów and Wrocław.

EIB to grant EUR 12.5 million loan to Safal Steel

It is reported that the European Investment Bank is lending EUR 12.5 million to Safal Steel to support the establishment of a Greenfield metal coating production facility at Cato Ridge in KwaZulu Natal of South Africa.

The bank said that the project will impact positively on the economic and social conditions of South Africa and the other African countries in which the group is active.

The Safal Group is the leading manufacturer and distributor of steel used for residential roofing in Africa and a major exporter to other continents.

Siemens to supply 140 wind turbines to Britain

Siemens Energy announced that it has received an order for the supply of 140 wind turbines for the world’s largest offshore wind farm Greater Gabbard located 25 kilometers off the coast of Suffolk in Great Britain. The order includes also a 5 year service and warranty agreement.

The purchaser is Greater Gabbard Offshore Winds Ltd, owned by Scottish and Southern Energy plc. The delivery of these turbines is scheduled in 2009 and 2010. The order volume for Siemens Energy is approximately EUR 800 million.

Mr René Umlauft CEO of the Siemens’ Division Renewable Energy said that “Siemens is delighted to have signed this prestigious order with SSE as this marks a major milestone in the offshore business for Siemens as the clear market leader in the offshore wind energy business.”

WCI Steel announces raw material surcharge

WCI Steel, Inc announced that, because of continued significant increases in basic raw material and energy costs, it is revising its original raw material and energy surcharge on fixed price long term supply agreements from about USD 130 per net ton to USD 250 per net ton. The revised surcharge of USD 250 per net ton will become effective with shipments June 1st 2008 through June 28th 2008.

Mr David A Howard vice president commercial of WCI Steel said that “The surge in raw material costs that began late Q4 of 2007 has continued unabated into May 2008. This continued rise in raw material costs makes it necessary for WCI Steel to revise its raw material and energy surcharge to reflect this changing reality.”

As previously announced, the surcharge is based on the rate of escalation in costs since the fourth quarter of 2007. Any additional increases will be calculated on a month to month basis.

Nippon settles HRC prices with Korean re rollers

It is reported that Japan’s biggest steelmaker Nippon Steel may settle hot rolled coil prices to Korean re rollers at more than USD 1000 per tonne for the third quarter.

Trelleborg complete acquisition of NPC Inc

Trelleborg’s acquisition of NPC Inc an American specialist in pipe seals, has been finalized. NPC Inc has approximately 100 employees and sales of SEK 110 million.

This acquisition strengthens Trelleborg’s leading position in pipe seals, primarily for newbuilding and replacement in the infrastructure market. NPC Inc. specializes in large seals for such applications as drains and manholes. NPC has its head office and production in Milford, New Hampshire, US, plus another minor production facility in the US.

Trelleborg is a global industrial group whose leading positions are based on advanced polymer technology and in depth applications know how. It develops high performance solutions that seal, damp and protect in demanding industrial environments. The Trelleborg Group had annual sales 2007 of approximately SEK 31 billion, with about 25,000 employees in 40 countries.

Moody assigns A2 rating to JFE Holdings

Moody's Investors Service said that it has assigned an A2 rating to Japan's JFE Holdings Inc's series 10 domestic senior unsecured bonds of JPY 40 billion due 2011 reflecting the company's stabilized earnings, improving capital structure and enhanced technological resources. The outlook is stable.

Moody's said that the rating also takes into account potential medium term volatility and uncertainties in the global steel industry.

Timah update on CAPEX and acquisition plans

Senior executives of Indonesia’s state controlled tin company PT Timah told reporters on Monday that the company plans capital spending of IDR 4 trillion (USD 432 million) in the next three years and will also invest a further IDR 2 trillion in acquiring three coal operations. The company is currently finalizing a loan package of IDR 4 trillion with four local banks to fund the program.

Mr Wachid Usman president of PT Timah told AFX that “This years capital spending of IDR 1.4 trillion (USD 151 million) includes the purchase or construction of seven small cutter suction dredges and one large bucket ladder dredge. Timah currently operates 14 large dredges. Going forward, we will boost our exploration in offshore areas as a large portion of our tin reserves are located in offshore areas. A new detailed survey of the company’s reserves is currently being carried out by an independent consultancy, with results due to be announced shortly.”

Mr Usman told Bloomberg that “Meanwhile the company’s inland production has been adversely affected by competition from independent smelters, 16 of which now have export licenses. More licenses led to more collectors, who sometimes also operate to buy ores in our mining areas.”

The coal assets on which Timah is currently conducting due diligence are located in South Sumatra and Kalimantan. Acquisitions could be completed in the next few months, boosting the company’s coal reserves to 50 million tonnes and annual coal production capacity to some 5 million tonnes.

(Sourced from ITRI.co.uk)

Worker dies at ArcelorMittal Trinidad and Tobago plant

It is reported that members of the Steel Workers Trade Union of Trinidad and Tobago are protesting working conditions at ArcelorMittal steel plant which they claim factored into the death of Mr Anil Bickramdass.

As per report Mr Bickramdass died at the plant located in the Point Lisas Industrial Estate yesterday morning, just a few hours into the workday when a piece of machinery used to compress rolls of steel was somehow turned on while he was in the process of doing some work on it. Death was instantaneous as his head was reportedly crushed by the large machine.

Steel Workers Trade Union officials are demanding an enquiry into the organization’s operations by the Occupational Safety and Health Agency as well as the Ministry of Labor. They contend that inferior safety standards at Arcelor Mittal have contributed to previous accidents which resulted in workers being injured.

Reports in Trinidad’s local media indicate that ArcelorMittal along with SWUTT and OHSA will be jointly investigating the incident that caused Mr Bickramdass’ death.

US H1 scrap price up

The average price of H1 scrap in Pittsburgh, Chicago and Philadelphia on May 12th 2008 was at USD 519.17 per long ton, increased by USD 6.67 per long ton than previous week’s figure.

In the meanwhile, No 2 bundle scrap average price was at USD 462 per long ton, an increase of USD 7.5 per long ton from the prior week.

Among them, Pittsburgh's H1 scrap average price was USD 519.5 per long ton, up by USD 20 per long ton; Chicago’s was USD 514.5 per long ton and Philadelphia's was at USD 523.5 per long ton, relatively unchanged since the previous week.

For eastern coast, the average price of H1 in New York, Boston and Huston was at USD 475.83 per long ton, which was as same as last week; for western coast, the average price for H1 scrap was at USD 214.33 per long ton, up by USD 11.66 per long ton from the last week.

(Sourced from YEIH.com)

Abal forecasts record aluminum usage growth in Brazil

According to forecasts from Brazilian aluminum association Abal, Brazilian aluminum consumption is due to go up an unprecedented 38% in 2008.

For 2008, Abal is projecting consumption in Brazil to hit 1.27 million tonne as compared to 919,000 tonne in 2007 and up almost 50% from the 837,600 tonnes consumed in 2006.

Mr Claudio Chaves Albal economist told BNamericas that "On the consumption side we've had four consecutive years of strong growth.” He said that the rampant growth is happening due to what he calls a repressed demand in Brazil. The population has a much stronger purchasing power than in the past due to a more robust economy.

However the economist warned that Brazil's consumption, despite growth, remains a fraction of what is consumed in developed countries.

Mr Chaves said that "We still have a long way to go citing aluminum annual consumption in developed countries of 30 kilogram per capita, versus Brazil's roughly 5.5 kilogram per capita.

Indonesia sees PT Krakatau sale as strategic move

Reuters reported that Indonesia is looking for a strategic investor for state owned PT Krakatau Steel and will invite South Korea's POSCO to take a stake.

Mr M Lutfi chairman of the state investment agency told reporters that "Strategic sales are more suitable to double the company's capacity. Besides, conditions are not so favorable for IPOs. The steel industry is very competitive, which forces us to strike an alliance with global steel players."

He said that several potential strategic investors have already expressed an interest in Krakatau Steel, including ArcelorMittal and BlueScope Steel Ltd. He added that the agency is also inviting POSCO to participate in the privatization of Krakatau Steel.

The government scrapped a memorandum of understanding to sell Krakatau Steel to Ispat International NV in 1998 following protests over the price, which was seen as too low, and the lack of competitive bids. The government wants to keep a majority stake in Krakatau Steel, which produced 1.8 million tonnes of steel products in 2007, or 30 percent of Indonesia's total steel demand.

Krakatau Steel with assets worth an estimated IDR 11 trillion (USD 1.18 billion), is one of 37 state firms slated for privatization to help fund a widening budget deficit. While the government has considered an initial public offering for the Java based steel firm, the head of the country's investment board said that it would be better to find a strategic investor who could help it to expand.

Indonesia is aiming to raise IDR 500 billion from privatization, according to the revised 2008 budget, down from an earlier target of IDR 1.5 trillion.

CMA acquires Meretec Limited

Metal recycling group CMA Corporation Limited announced that it has entered into a conditional agreement to acquire UK based Meretec Limited.

Meretec Limited is the developer and owner of the de zincing technology that is currently used under licence at CMA’s plants in Melbourne and Chicago. The patented Meretec Process recycles galvanised steel, removing and recovering the zinc coating from the metal to produce clean black steel and high grade zinc particulate.

Under the terms of the proposed acquisition, CMA would purchase 100% of the issued capital of Meretec Limited for a total purchase price of AUD 30 million. The acquisition will be settled through the issue of 37,500,000 fully paid ordinary shares in CMA Corporation Limited at an issue price of A$0.80 per share. The shares will be held under escrow for a two year period from their date of issue.

The acquisition is subject to satisfactory completion of due diligence, documentation and to any regulatory approval that may be required.

Mr Doug Rowe MD of CMA said that discussions were underway with a number of overseas companies in relation to licensing and joint venture proposals. He said that “The backing of CMA will take the Meretec business to a new level, allowing it to leverage our established international trading network and relationships,. This transaction opens up abundant opportunities for us and we expect Meretec will become a very significant contributor to group earnings.”

ArcelorMittal gets approval for issuing 15 billion shares

ET reported that shareholders of global steel giant ArcelorMittal have authorized the company's board to issue fresh shares worth an estimated USD 15 billion to finance future acquisitions.

ArcelorMittal shareholders approved the proposal to issue 147 million fresh equity shares, representing about 10% of its outstanding share capital, worth about USD 14.3 billion at the current share price of USD 97.23.

Authorization for issuing shares comes along with power to limit or cancel preferential subscription rights of existing shareholders for a period ending on November 5th 2012.

Japanese automakers not able to pass steel prices to users

Platts reported that Japanese automakers are finding it difficult to pass on increased prices of steel, while steelmakers continue to press automakers to shoulder the JPY 30,000 per tonne rise in the cost of steel production.

A spokesman for Honda Motor said his company had no plans to raise car prices. He said that "It is not that easy. We have to see the car market trends and we are seeing difficult times ahead adding that his company was still in negotiations with the Japanese steelmakers for annual prices of steel sheet used for car bodies.

Japanese local press reported that a major automaker gave into the request of a steelmaker to raise prices of steel sheet by JPY 30,000 per tonne for shipments from April. Automakers Toyota Motor, Honda Motor and Nissan Motor, and steelmakers JFE Steel and Sumitomo Metal Industries, however, all said that negotiations were still continuing.

Steelmakers said that stalling price negotiations was not affecting their shipments and automakers would continue to receive the steel they need on time this month.

Steelmaker officials said they had told their customers that costs of steelmaking have risen by JPY 30,000 per tonne on average this year, on the back of surging iron ore and coal prices.

Nucor to raise plate price for June

Nucor has announced to add its carbon steel plate prices by at least USD 270 per ton effective from June 1st 2008.

The main reason is due to continued strong demand and soaring raw material costs. Consequently the price of A36 medium plate is expected to be around USD 1,300 per ton.

Demand for plate remains strong, especially for shipbuilding. The shipbuilding boom is fueled primarily by robust global demand.

(Sourced from YEIH.com)

voestalpine publishes cash settlement offer for BOEHLER-UDDEHOLM

voestalpine AG announced that it has set the amount of reasonable cash settlement payment for the squeeze out of BOEHLER-UDDEHOLM AG at EUR 70.26 per share.

voestalpine AG said that the cash settlement contains the accumulated profits attributable to each individual share for the 2007 business year and the 2008 short business year from January 1st 2008 until March 31st 2008. Therefore, no separate payment of any dividends is contemplated.

ISRI warns of increase in theft in US due to surge in scrap prices

City county and state governments are warned to be on the lookout for a new wave of material thefts. The Institute of Scrap Recycling Industries Inc, US trade association for the scrap recycling industry announced that it is seeing an increase in the theft of ferrous infrastructure metals, such as manhole covers and sewer/storm water grates in the past few weeks, joining the list of other metal materials that have been targets of thieves for several months.

Mr Chuck Carr vice president of member services of ISRI said that "Government agencies, police and the public should be on alert that the metal theft epidemic that we have been experiencing for the past two years has now apparently spread to ferrous materials.”

Mr Carr said that “ISRI has worked hard over the past two years to develop tools to help law enforcement fight material theft crimes and to educate stakeholder groups about the need for comprehensive efforts to solving this problem. The best place to stop a metal theft crime is to stop it before it occurs. Loss of infrastructure metals not only causes a significant financial burden to our communities, it can create serious safety problems for the public at large."

Mr Carr said that “ISRI maintains a Theft Alert System that allows the association to notify scrap yards when material theft is reported to the association. This tool, available free to any law enforcement agency, is vitally important to help recyclers identify stolen material.”

Mr George Adams president of SA Recycling said that "It is nearly impossible to tell the difference between stolen material and legitimate material that comes to a scrap yard unless you know to be on the lookout. Despite the recent rash of theft, stolen material makes up a very small percentage of the material that comes to scrap yards each day. ISRI developed its theft alert system to help police and recyclers identify both the material and the thief."

Mr Adams said that “In the past two years, thieves have targeted a variety of nonferrous material primarily copper, bronze and aluminum. ISRI's theft alert system has received reports of stolen materials as diverse as cemetery urns, copper wiring from rural irrigation systems, and bleachers from ball fields. Recently, the system has begun to receive reports of other target materials. In addition to ferrous metal materials, the system has received reports about the theft of newsprint, cardboard and plastic milk crates.”

He added that “In addition to its theft alert system, ISRI provides a variety of other tools aimed at reducing material theft. The industry created recommended practices for reducing the risk of accepting stolen materials almost two years ago long before the crime became a prominent problem. Those practices include establishing cooperative relationships with police and victims, training police on identifying possible stolen material, working with victims groups to help reduce the risk of theft, improving record keeping and taking identification of sellers to help police track thieves and the materials they steal. The association has also become a member of the National Crime Prevention Council.”

Mr Adams said that "The scrap recycling industry recognizes that it is a stakeholder in reducing material theft. We are working hard to be a part of a solution to a community wide problem."

H beam inventory of Tokiwakai drops to lowest levels

Tokiwakai Group, the domestic distributor of Japan Nippon Steel, said that its H beam inventory has decreased to 209,700 tonnes in the end of April 2008 and the current inventory is at the lowest level in the past twenty years.

Nippon Steel said that the H beam demand in April 2008 is slower than that in March 2008 and therefore Nippon Steel intended to maintain its H beam price for its domestic distributor.

(Sourced from YEIH.com)

Outokumpu to invest EUR 10 million in its UK facilities

Thomson Financial reported that Outokumpu Oyj will spend EUR 10 million in its Long Products finishing facilities in Sheffield in the United Kingdom to widen its offering to end users.

US DOC to put AD duty on rectangular pipes from Turkey

The United States International Trade Commission has determined that a US industry is materially injured by reason of imports of light walled rectangular pipe and tube from Turkey that the US Department of Commerce has determined are sold in the United States at less than fair value.

As a result of the Commission's affirmative determination, the Department of Commerce will issue an antidumping duty order on imports of this product from Turkey.

Boulder Steel reports progress on its Sharjah plant

Boulder Steel has posted progress report on its Sharjah finishing plant. During the quarter under review, the following targets have been achieved

1) A very positive technical and commercial feasibility study report for the project has been received from UK-based consultants McLellan

2) The contract for obtaining Environmental Clearance has been awarded to TÜV Middle East of Abu Dhabi. Provisional clearance permitting land leveling was obtained from HFZA

3) QHC Architects and Engineers of Sharjah have been appointed as local construction consultants

4) Final quotes and offers from all major equipment suppliers have been received through the company's Italian based consultants, Engineering Management Services Srl

5) Land leveling of the proposed plant site by UAE contractor Al Sahel General Transport Est. started on March 26th 2008

6) Land leveling is expected to be completed by the end of the June 2008 quarter

Further targets for the June quarter include

1) Approval of the scoping study for the environmental clearance process and start of sampling

2) Completion of the concept drawings for the project by QHC

3) Completion of the preliminary design drawings for the project by QHC

4) Negotiations with potential strategic partners in the seamless tube industry

5) Signing of preliminary delivery contracts for major plant equipment

6) Financial close of the UAE finishing plant project

PSM raises prices of its products

Daily Times reported that Pakistan Steel Mills has formulated price adjustment policy of its products and announced a price raise with immediate effects.

According to the official handout released Wednesday, the prices would be reviewed after every 15 days of a month as per directives of federal minister for production and industries.

PSM has continued its price spiral activity and announced another increase in various products by PKR 1,000 to PKR 3,000 per tonne. It increased the ex prices of galvanized rolled coil increased by PKR 1,000 on its different sizes to stand at the maximum level of PKR 76,000 per tonne and the prices of the hot rolled coil have escalated by PKR 2,000 and PKR 3, 000 to reach at PKR 64,500 per tonne, the prices of cold rolled products have surged by PKR 1,000 to PKR 3,000 to reach at PKR 66,800 per tonne. Besides, prices of steel billets have surged by PKR 1,000 to reach its maximum level of PKR 55,950 per tonne.

These all above mentioned prices exclude sales tax. Dealers charge 18.5% sales tax with the ex mill prices along with their margin.

PS statement said that prices of the main products have not been changed despite the continued surge in international market. Now the cost of production has also gone up by PKR 2,000 to PKR 5,000 per tonne as compared to previous month. It further said that the nominal adjustment in prices of galvanized products have been necessitated due increase in cost of production.

Tuwairqi Steel to be ready by early 2009

Mr Abdul Rauf Siddiqui Sindh minister of industries & commerce laid the foundation stone of induction furnace project of the upcoming first private sector steel project Tuwairqi Steel Mills near Port Qasim.

The furnace is the intermediary phase of the 1.28 million tonnes per annum capacity art of state Tuwairqi Steel based on Midrex process.

The project is expected to be completed by the first quarter of 2009 when the direct reduction plant will also be approaching its completion. The direct reduced iron plant will be completed at a total cost of USD 265 million. The induction furnace includes the installation of a 60 MW capacity power plant, while another power plant of 25 MW will be installed for DRI.

Mr Tariq Barlas VC & CEO of Al Tuwairqi Group of Companies said that his company was keen to promote steel making industry in Pakistan because of its great potential and immense prospects in future.

Mr Zaigham Adil Rizvi director projects spoke on fast rising steel prices around the world because of the mounting demand. He added that with increasing local production, Pakistan would be able to save considerable foreign exchange now being spent on import.

Linde Group acquires 51% stake in SIGAS

It is reported that Linde Group has acquired 51% of the shares in Saudi Industrial Gas Company Limited. Closing of the acquisition will take place following approval from the relevant Saudi Arabian regulatory authorities.

Dr Aldo Belloni member of the executive board of Linde AG said that "We are delighted to be entering into this partnership with one of the leading industrial gas companies of the dynamic Saudi Arabian market. This geographical expansion of our gases business combined with the strong presence of our engineering division in the whole Arabian Peninsula will fundamentally strengthen our position in a highly attractive region and demonstrates our commitment to the area."

SIGAS is the second biggest industrial gases company in Saudi Arabia and achieved sales of around EUR 28 million in 2007 financial year. The industrial gases market in Saudi Arabia is expected to grow by more than 10% per annum.

The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide. In the 2007 financial year it achieved sales of EUR 12.3 billion. The strategy of The Linde Group is geared towards sustainable earnings based growth and focuses on the expansion of its international business with forward-looking products and services.

ISMA calls for activating steel taskforce to create balance

Mr Taqi Bahrami head of Iranian Steel Manufacturers Association said that the steel taskforce should start its activities as soon as possible to create a balance in domestic market and increase production.

He added that although one month has passed since the formation of the taskforce, no practical measure has been undertaken yet. The price of steel bars is rising rapidly in global markets.

Given the new capacities created in the private sector, he said that if steel mills get their supply of raw materials, domestic demand would be met and steel exports would increase.

As per planning, domestic steel output should hit 28 million tonnes by the end of fourth Five Year Economic Development Plan.

He added that the private sector which has so far produced 10 million tonne of steel annually operates at only 30% of its capacity. He urged the government to pave the way for industrialists to borrow from Oil Stabilization Fund to import raw materials for steel plants.

UAE's trade surplus to surge to USD 73 billion in 2008

International Monetary Fund said that UAE's current account balance is projected to grow by a record USD 24.2 billion or 58% in 2008 to USD 65.9 billion while the country's balance of trade is poised to surge by 60% to USD 72.5 billion in 2008.

Analysts said that in 2007, UAE's current account balance rose by 16% YoY to USD 41.7 billion from USD 35.9 billion in 2006. The surge in the current account balance is driven by a record jump in exports of goods and services.

According to the latest findings by the IMF, UAE's balance of trade will swell by USD 27.3 billion to USD 72.5 billion in 2008. In 2007, the country recorded a balance of trade of USD 45.2 billion and in 2006 it was USD 38.7 billion. IMF's latest statistics projects UAE's exports of good and services to reach USD 206.5 billion in 2008 from USD 165.7 billion in 2007, while imports to grow from USD 120.5 billion in 2007 to USD 134 billion in 2008.

With a predicted 58% growth this year, the current account balance will account for 27.5 per cent of the country's GDP in 2008. In 2007, current account balance accounted for 21.6% of the GDP. According to IMF projections, UAE's nominal GDP is expected to surge by 24.5% from USD 192.6 billion to USD 239.9 billion in 2008.

UAE external debt constitutes mostly foreign liabilities of UAE commercial banks and private institutions. It is estimated that the UAE foreign liabilities have almost tripled over the past two years. For the period 2008-2012, it is expected that UAE's external debt to average 61 per cent of the GDP. Presently, there are no signs of external debt vulnerability associated with such borrowing given that UAE external position is a net creditor, but it would need to be monitored.

Abu Dhabi to ramp up power generation capacity

Gulf News reported that Abu Dhabi is aiming to raise power generation capacity by 35% within 5 years, but may face challenges in attracting foreign firms as competition for projects across the Gulf Arab region heats up. As per report, demand will rise almost 80% in the same period to 10,600 MW, while capacity reaches 12,503 MW in 2010.

Mr Abdulla al Nuaimi director of privatization at Abu Dhabi Water & Electricity Authority said that the industry is facing challenges to meet growth needs due to a lack of contractors to build new power plants. He added that "Fuel is not the problem. The challenge is engineering, procurement and construction contractors. There is too much competition in the market with too many projects coming up."

As per report, demand for power in Gulf is surging on population growth and commercial and industrial expansions fuelled by record oil prices. Projects across the region have increasingly suffered delays over the last two years as soaring construction costs, labor shortages and a lack of qualified contractors have hit market.

ADWEA said that it planned to build a new power and water desalination plant at a cost of about USD 2 billion at Shuweihat. The Shuweihat 3 plant will have power capacity of about 1,500 MW and 100 million gallons of water.

Mr Sheikh Diyab bin Zayed al Nahayan chairman of ADWEA said that it expects to receive proposals from consortium in the coming days for the Shuwiehat 2 plant. The plant, also scheduled to be commissioned by 2012, will have power capacity of 1,600 MW and pump 100 million gallons a day of water.

Power demand is also growing due to a rapid growth in Abu Dhabi's population, which is expected to surge to nearly 3.17 million by 2030 from around 1.3 million at present. The emirate also plans to include private investors in its sewerage industry.

RAKIA inks JV with Becker Industrie for new coating facility

Ras Al Khaimah Investment Authority has announced that it has recently signed a partnership with Becker Industrie to establish a new manufacturing facility for industrial coatings and paints within the Industrial Zone.

The new coatings factory will cater to the coil, metal and plastic coatings segments, providing an extensive range of coil coatings and special coatings to strategic markets such as consumer electronics firms, mobile phone manufacturers, agricultural and construction equipment, transportation and automotive, among others.

Mr Serge H Guillaume executive director of RAKIA said that "RAKIA is pleased to form this partnership with Becker Industrie as this will help solidify Ras Al Khaimah's reputation as a highly conducive investment destination for leading global corporations. In addition, this will open new business opportunities for Ras Al Khaimah, as Becker Industrie's coatings factory will naturally attract new market players and customers into the emirate because of its status as one of the world's two largest manufacturers of coil coatings."

Mr Guillaume added that "Positioning Becker Industrie's newest venture within Ras Al Khaimah is likewise an excellent strategic decision that will definitely deliver long term value to its ultimate goal of strengthening its presence in the Middle East market. Ras Al Khaimah offers a whole range of advantages, particularly in terms of cost effectiveness, location, flexibility, investor-friendly economic policies and world-class infrastructure."

Becker Industrie belongs to the Becker Group owned by AB Wilh. It is now the leading supplier to the European market and is considered the second largest manufacturer of coil coatings in the world with a global market share of 15 per cent.

Plan underway for 17,000 MW hydro project in Iran

Mehr News Agency reported that feasibility studies are underway for generating 17,000 MW of hydroelectricity in Iran.

Mr Abbas Aliabadi advisor to energy minister said that hydroelectricity can account for 30% of the country’s needed energy. He added that water and energy shortage will be the two major predicaments facing societies.

He went on to say that Iran is among the semi arid countries of the world and its annual precipitation is lower the world average, but the country has also mountainous regions apt for establishment of hydropower generation facilities. He added that "Each year, floods impose great losses to the agricultural yield."

He further added that for the time being, steam power plants, combined cycle, and diesel fueled plants account for 39.7%, 16.7% and 0.3% of the nation’s required electricity.

Saudi Aramco and Total to go ahead with new refinery

Saudi Aramco and France's Total have decided to go ahead with plans to build a new 400,000 barrels per day refinery in Saudi Arabia. The plant is one of four that Saudi Arabia aims to build to boost domestic refining capacity by as much as 1.6 million barrels per day from 2.1 million barrels per day.

The refinery on the Gulf coast at Jubail will start up at the end of 2012.

Equipment and labor shortages have pushed costs up globally in the energy sector, raising industry concerns about whether the new Saudi plants would be built. Industry sources have pegged the cost of the new plant at over USD 10 billion, up from the initial estimate of around USD 6 billion. The refinery will be a complex plant able to convert the increasing quantities of heavy crude Aramco plans to produce in the future into transport fuels.

Mr Michel Benezit president of refining and marketing at Total said that "Saudi Aramco and Total will contribute to supply growing demand for transportation fuels and petrochemicals, especially in Asia and the Middle East, but also in Europe where the deficit of diesel is growing."

Aramco will own 62.5% of the plant and Total 37.5%. Aramco will later offer 25% to the Saudi public, leaving both Aramco and Total with an equal 37.5% share in the plant.

Aramco and Total signed a deal to build the plant in 2006. Aramco also signed a similar deal for another 400,000 barrel per day refinery with ConocoPhillips, but has yet to announce a final investment decision on that plant.

Delta Steel Mills issues request for registration of suppliers

Al Akhbar reported that Delta Steel Mills has issued a request for registration of suppliers of steel scrap & of contractors to transport steel scrap from Upper Egypt & Lower Egypt to the company location in Mostorod before May 15th 2008.

Delta Steel Mills said that interested parties may contact it for further details.

Gasco to invest USD 25 billion in gas plants and pipelines

Reuters reported that Abu Dhabi Gas Industries is investing about USD 25 billion in gas processing plants and pipelines as it develops more fields to meet surging demand.

Mr Abdullah Al Darei maintenance superintendent for the pipelines division at Gasco said that "Two major gas processing plants and around 10 new onshore gas pipelines covering a total of 1,500 kilometers are being built in and around Abu Dhabi over 5 to 6 years. The total cost will be approximately USD 25 billion."

Mr Al Darei said that Gasco can process as much as 5.3 billion cubic feet per day of natural gas, though it is only operating at two thirds capacity. The two planned gas processing plants will be built at Habshan and Maqta. He added that "New gas fields, like the Shah, with huge sour gas reserves, are being developed and additional gas processing will be undertaken by Gasco. Rapidly growing demand for gas from industrial and other users has to be met."

Gasco is 68% owned by Abu Dhabi National Oil Company, 15% by each of Royal Dutch Shell and Total and 2% by Partex. It operates 2,500 kilometers of pipelines, moving gas and related products such as crude oil, condensates, natural gas liquids and water.

Qatar signs USD 3.8 billion deals for desalination and power plants

Qatar has signed a series of deals to build a USD 3.8 billion desalination and power plant part owned by Japanese and French firms.

The statement from Qatar General Electricity & Water Corporation said that the facility will be completed in 2011 and will be owned and operated by Ras Girtas Power Company, which is jointly owned by Qatar Electricity & Water Company with 45%, a consortium of Japan's Mitsui and France's Suez Energy International with 40% and Qatar Petroleum with 15%. The plant will have eight gas turbine generators, eight heat recovery steam generators, four steam turbine generators and 10 desalination units.

Officials from Qatar and the companies involved in the project signed deals to build the facility at a cost of QAR 14 billion.

Mitsui is the main contractor for the plant, which will produce 2,730 MW of electricity per hour and will have a capacity of 63 million gallons a day.

This will give Qatar a total power generating capacity of 9,000 MW and a desalination capacity of more than 320 million gallons per day.

Lucky Cement enters into MoU with Noor Investment

Daily Times reported that Lucky Cement Limited has entered into a MoU with Noor Financial Investment Company for supply of 500,000 tonnes clinker per annum for a period of 5 years with additional option of 150,000 tonnes each year.

This MoU will allow the Lucky Cement to increase its growing exports to the Middle East under a guaranteed off-take arrangement, which will further strengthen its dominant position of exports from the country. The Lucky is the only cement exporter in Pakistan with infrastructure facilities at Karachi port for the storage, handling and loading of loose cement.

According to a notice sent to the Karachi Stock Exchange, Middle East is at present undergoing a construction boom and countries like UAE, Kuwait, Iraq and Qatar are severely facing shortfall of cement. Pakistan with its growing cement industry has an excellent opportunity for export of cement/clinker to these countries due to its close proximity to the region. The Lucky Cement is ideally placed due to location of its southern plant close to Karachi Port from where most of the exports take place.

The Noor Financial Investment Company is a Kuwaiti investment company and the financial arm of the National Industries Group, which is one of the largest and best performing industrial conglomerates in Middle East and one of its subsidiaries the National Industries Company specializes in manufacturing and marketing building materials and infrastructure products. NIC has the largest industrial complex for construction materials in the Middle East with the largest market share of building materials in Kuwait.

Red Sea wins contract from Hyundai Heavy Industries

Zawya reported that Red Sea Housing Services has been awarded a major contract worth SAR 140.5 million by the Hyundai Heavy Industries Company Limited.

Dr Majid Al Kassabi chairman of Red Sea Housing Services said that the contract is to supply, deliver and install a 6,400 man housing facility for the leading heavy industry company at the Mesaieed Industrial Complex to support the Qatar Fertilizer Company's Ammonia and Urea Project. The project is due for completion by the end of June 2009.

Mr Glen Warren executive VP of International Marketing & Operations for Red Sea Housing said that "In the past two and a half years we have built and secured contracts with a total value of SAR 620 million for housing accommodation in Qatar, which puts us into the ranks of the leading housing suppliers in the country."

Mr Don B Sumner MD of Red Sea Housing said that "Winning repeat business from a major global company like Hyundai gives us a strong sense of achievement and is recognition that we are successfully following our strategy of building quality accommodation products for our customers."

Established in 1986, Red Sea Housing Services is a world leader in the manufacture of remote site housing solutions for the Middle East, Africa and Asia. It has supplied hundreds of turnkey camps and utilities in 56 countries around the world. With 3 modern manufacturing facilities, all ISO certified and strategically located in Saudi Arabia, United Arab Emirates and Ghana, Red Sea Housing Services is capable of serving its diversified clients with quality products in a timely manner.

Dolphin Energy evaluates bids for Taweelah and Fujairah pipeline

MEED reported that Abu Dhabi based Dolphin Energy has started evaluation of the 5 commercial bids it received on May 7th 2008 for the contract to build a new gas pipeline between Taweelah and Fujairah.

Prices have not been released, but sources close to the project say that the client may issue a further addendum to the tender to add items to the job scope. If that is the case, bidders will be invited to submit revised commercial offers at a later date.
Five international and local contractors are bidding for the estimated USD 500m design and build contract. They are
1. Al Jaber Energy Services – Abu Dhabi
2. Consolidated Contractors International Company – Athens
3. Dodsal – Dubai
4. Snamprogetti – Italy
5. Stroytransgaz – Russia

The project covers the engineering and installation of a 240 kilometers long, 48 inch diameter gas pipeline between Taweelah in Abu Dhabi and Qidfa in Fujairah.

The pipe itself has been procured by the client from Germany's Salzgitter Mannesmann International in a deal worth more than USD 200 million. The gas, which originates in Qatar, will serve the Fujairah II independent water and power project at Qidfa.

Erdemir Net Profit Up 68% YoY to TRY 121M

Turkish steel major Erdemir posted a 68% YoY increase in its net earnings in Q1 to TRY 121 million. Its revenues also increased by 17% YoY to TRY 1.1 billion.

Chinese steel output growth slows down in April

It is reported that China's crude steel output has retreated slightly in April 2008 to 44.68 million tonnes from the previous month's record volume, constrained by tight supplies of coke and other key inputs. Crude steel output in April 2008, while down a marginal 0.4% MoM from March's all time high of 44.87 million tonnes, was up by 10% YoY.

Mr Henry Liu analyst at Macquarie said that "It seems that the steel mills were not able to ease bottlenecks in raw materials sourcing. I think they were willing to produce more with the high prices, but they might have faced problems purchasing more materials such as coke. That is not a good indicator, because the second quarter is seen as a peak production season and it is believed that some steel mills have been moving their production ahead of schedule before the Beijing Olympics."

Mr Liu further added that steel products, especially bar, rod and section steel used for construction, will be badly needed in Sichuan Province, where buildings and infrastructure such as roads and bridges were seriously damaged by the magnitude 7.9 earthquake. Steel prices have been soaring in China due to rising raw material and labor costs as well as brisk demand, especially for products used in construction as the country spends heavily on fixed asset investments.

Baosteel may take stake in FMG – Report

Caijing magazine, citing industry sources, reported that China's top steelmaker Baosteel Group is in a slow waltz to take a stake in new Australian iron ore producer Fortescue Metals Group Limited.

Caijing said that no agreement has yet been reached between Fortescue and Baosteel, who already has agreements to buy iron ore from mines that opened this year. Baosteel has long been rumored as a potential investor in Fortescue.

Caijing said that, in late 2004, Chinese firms led by China Metallurgical Construction Group had pulled out of a deal to construct facilities in Fortescue, because the National Development & Reform Commission was insisting that the Chinese firms take an 85% stake. Later, in 2006, Fortescue offered Chinese investors a 20% stake, which the NDRC also took because it wanted control.

Meanwhile, Mr Luo Bingsheng secretary general of China Iron & Steel Association said that Fortescue had only been interested in financing for its project, not a strategic investor.

Baosteel and Hyundai ink SBQ plate supply pact

It is reported that Baosteel Group and Hyundai Heavy Industry Company signed strategic cooperation agreement on May 13th 2008. According to the agreement, Baosteel will provide 300,000 tonnes to 500,000 tonnes of ship plates to Hyundai Heavy Industry per year, taking 10% in total demand.

Meanwhile, Baosteel will further develop technology communication and cooperation on high end ship plate such as TMCP with Hyundai Heavy Industry and construct a perfect supply and demand mode from supply and utilization to feedback, in order to raise products quality.

In the end of 2005, Baosteel exported the first batch of ship plates to Hyundai Heavy Industry Company and Baosteel always develop high strength and high value added products afterwards. Both the quality and the service enjoy high reputation in Hyundai Heavy Industry Company.

Hyundai Heavy Industry Company is one of largest shipbuilding companies in the world and the demand for ship plate is increasing year by year. It is expected that the demand could reach 3.9 million tonnes in this year and to 5 million tonnes by 2010.

Baosteel likely Q3 price hike heating up Chinese market

Baosteel is slated to unveil Q3 delivery price next week and the market is heating up.

The price adjustment would come against the backdrop of escalating raw materials prices, price lift by global leading steelmakers and thriving market climate both at home and abroad. Baosteel would take into account of a couple of factors before releasing the delivery price, such as cost, profit, demand, market climate and macro economy etc.

Market analysts estimate that 65% benchmark ore hike would result in cost rise of some CNY 550 per tonne for Baosteel, quite trivial compared with its accumulative price hike of CNY 1000 to CNY 1400 per tonne in the first two quarters. However, other steelmaking ingredients like coking coal and coke have also witnessed ballooning price. In this case, the most effective solution for protecting profit margin is to lift up the EXW price.

Meanwhile, steel consuming sectors such as infrastructure, real estate, machinery, automobile and home appliances all have posted healthy growth, placing a solid floor under steel demand outlook.

On the export front, rising international prices are set to steam ahead in the months ahead, although some worry that summer holiday might dampen steel demand in European markets.
(Sourced from MySteel.net)

Chinese tin output down again in April 2008

Official non ferrous metals production figures published by China’s National Bureau of Statistics showed that tin is again the only major metal for which a fall in output was reported. April production of refined tin was 11,703 tonnes, down by 10.5% YoY, while cumulative production in the January to April 2008 period, at 42,183 tonnes, and is down by 11.9% YoY.

The decline in tin production was partly due to extreme bad weather in January to February 2008, but also reflects a continuing shortage of concentrates and scrap for smelters. However the recent earthquake in Sichuan has not had any impact on tin operations.

Despite the fall in production, tightness in the Chinese refined tin market has eased considerably since March 2008. Domestic spot prices including duty and VAT are currently quoted at around CNY 159,000 per tonne.

(Sourced from ITRI)

Benxi Steel releases June prices

China's Benxi Steel has released its prices adjustments for June 2008 productions, based on prices published on April 16th 2008.

HR
Up by CNY 150 per tonne
Up CNY 50 per tonne for SPHC
Q235 3.0mm HRC is priced at CNY 5050 per tonne
Q235 5.5*1500mm HRC at CNY 4800 per tonne

CR
Up CNY 150 per tonne
Ex Work price stands at CNY 5820 per tonne for Q195 1.0mm*1250 cased sheet
CNY 5750 per tonne for 1.0mm CRC

GI
Up CNY 150 per tonne for products yielded by No. 1 and No. 2 Mills
ST01Z1.0mm*1250 galvanized coil is offered at CNY 6000 per tonne

Color coated steel unchanged
Ex work price for TDC51D0.47mm*1250 color coated steel is quoted at CNY 7100 per tonne

Prices listed above are exclusive of 17% VAT, effective as of May 13th 2008.

(Sourced from MySteel.net)

China to close down 42 small companies during Olympic

21st Century Business Herald quoted Mr Jianlong executive of Tangshan Steel as saying that Hebei provincial government has already convened a meeting to discuss the output reduction and 42 small companies from steel, cement, glasses sector are to be shut down during the Olympic Games.

In Tangshan alone, 6 mills will be required to halt production for 1 or 2 months around the Olympics, including Tangshan Stainless Steel, Tangshan Xingye Industrial & Trade Group, Tangshan Hangu Steel, Tangshan Ganglu Steel, Tangshan Ruifeng Steel Group and Tangshan Jianlong Industrial.

However, the authority has yet to give a clear voice to relieve market concerns, like who will be ordered to suspend production, how the environmental assessment will proceed and to what extent will that impact on steel output nearby Beijing. A host of smaller mills have heard verbal request to limit production during the Olympics, and the authority might cut power or water supply and even resort to administrative measures against them in a bid to impose control on steel output.

However, Mr Luo Bingsheng vice secretary general of China Iron & Steel Association, noted that the output cut on mills around Beijing would be too trivial to impact the fundamental supply and demand.

Market analysts estimate that pig iron output from Shougang and six would be affected mills in Tangshan adds up to 1.98 million tonnes per month, representing 19% of the combined production in Hebei, Beijing and Tianjin, and 5% of China’s total output.

They also suggest that Beijing might take advantage of the Games to wield more over the fragmented steel sector and accelerate the industrial consolidation. The central government hopes to lift up the production ratio of leading steel mills in North China from 40% to 50% to 70% in coming years.

(Sourced from MySteel.net)

Chinese steel sector seen lifting iron ore prices

Reuters reported that planned expansions by major iron ore producers will not be enough to curb prices as China raises steel output and steel sector margins are big enough to pay more for raw materials.

China’s major mining groups have been touting big plans to boost iron ore production, raising concerns that within a few years the market could be overwhelmed with surpluses that might bring a collapse in prices. But the combination of several forces is due to keep prices buoyant on the seaborne traded market, even after contract price hikes of 65% to 71% this year.

Mr Jim Lennon analyst of Macquarie said hat "We believe there will be another step change upwards over the next 3 to 5 years in the seaborne trade for iron ore on the demand side and it's a challenge to the iron ore industry. We don't believe there's enough non Chinese steel capacity being built at the moment and the shortages outside China will get worse. We believe they will have to ramp up steel production and exports at a much faster rate than they have done so far."

Mr Daniel Brebner analyst at UBS said that while China has been the main recent driver of the market in iron ore, the raw material to make steel, other emerging countries seeking to build up infrastructure will also boost demand in coming years. He added that "Their populations are going through this industrialization phase, exactly the same kind of situation that China has been going through."

While steel firms have complained about rising raw material prices, analysts said their price rises have more than compensated, giving them very attractive profit margins. Mr Lennon further added that since the start of 2008, steel prices on average have risen by over USD 400 a tonne, well in excess of the rise in costs of iron ore and coal of around USD 160 per tonne.

China quake closes railway and disrupts mineral shipments

Bloomberg reported that Chinese shipments of steel, copper and other commodities were disrupted after closing the main railway in central region due to earthquake. As per report, Yunnan Copper Industry Company, Panzhihua Iron & Steel Group and other companies have been affected by damage to railways and plants.

Mr Wang Yongping a spokesman of ministry of railways said that "The available capacity should be used for aid as a first priority.'' He added that rail traffic is being diverted onto other lines to bypass blockages on the main Baocheng line. Mr Wang said that at least one tunnel on the Baocheng line caved in. He added that a train hauling gasoline was trapped in the collapse, leading to a fire that has now been extinguished.

The 669 kilometer long Baocheng line runs from Chengdu to Baoji in Shaanxi province. It also connects with the major railway from Yunnan province. The line passes through more than 300 tunnels as it crosses through mountainous central China.

Three zinc smelters in the provinces of Shaanxi and Gansu provinces have also halted production on government orders. Zinc for July 2008 delivery rose by the exchange imposed 4% daily limit in Shanghai, reaching a one month high of CNY 18,920 a tonne.

Taizhou Huadi to start production in July 2008

It is reported that the preparation for the construction of Taizhou Huadi Industrial Company Limited invested by Haudi Steel Group of Zhejiang is getting along smoothly with its first stage in construction and equipment installation, which is planned to be put into production in July 2008, when annual output of crude steel will reach 200,000 tonnes.

In 2006, the project team had an additional land requisition of 506mu in eastern coastal development zone followed with the preparation for a new industrial park, with 300,000 square kilometer in construction and they planned to implement one-stop production from steelmaking, steel rolling, hot puncturing, cold drawing and cold rolling to testing and chemical analysis. The first stage mainly deals with steelmaking, which will later develop into production of stainless plate, rod, pipe, and wire etc, with an expected annual production of 200,000 tonnes, valued CNY 6 to CNY 8 billion.

Baosteel organizes relief supplies to support disaster areas

Xinhua reported that Baosteel has organized 7 trucks with the first batch of relief supplies marching to Sichuan, the area being damaged by the recently broken earthquake.

Departments of public relations, resources and spare parts procurement, and distribution and development responded quickly to the orders of Baosteel Group. They immediately implemented the work of relief materials procurement and transaction even it was night. In Shanghai, relief materials were delivered in 3 trucks, including 2000 quilts, 500 tents, 40,000 batteries, 10,000 flashlights and 200 semiconductors.

JISCO CR project enters into equipment installation phase

It is reported that recently, JISCO held the carbon steel cold rolled project’s equipment installation ceremony. Leaders and staff from the Group Company and Japan Mitsubishi Corporation, Mitsubishi Hitachi Company and some other companies took part in this ceremony.

The carbon steel cold rolled project is the major project for JISCO’s products restructuring. The main equipments adopt the 5 rack pickling continuous rolling unit with the annual output of 1.5 million tonnes which was deigned by Japan Mitsubishi Hitachi Company and two hot dip galvanized units with the annual output of 750,000 tonnes which was designed by Nippon Steel Company. The construction period of the project is 33 months.

The cold rolled equipment installation is mainly the installation of pickling continuous rolling units, including the entrance walking-beam, open book m