Indian steel makers may find it hard to hold price line – Report

HT reported that steel makers may find it difficult to hold the price line beyond July 2008 in the face of a sharp escalation in prices of key raw materials such as coking coal and iron ore.

Mr SK Roongta chairman of SAIL said that it expects a 200% price increase in long term contracts for coking coal.

He said that "Despite the fact that we have captive iron ore reserves, the cost pressure is the steepest that the industry has ever witnessed. We are currently negotiating our annual coke contracts which should be finalized by the end of May 2008. As opposed to USD 96 to USD 97 per tonne coal in 2007, prices will be around USD 300 per tonne in 2008. We remain committed to holding our price line till July 2008 but the cost of coking coal for us inclusive of freight will see an increment of around INR 8000 to INR 9000 per tonne. In the longer term some of it will have to be passed on."

Companies without much captive linkages like JSW Steel, Jindal Steel & Power Limited, Essar Steel and Ispat Industries are likely to face an even trickier position after July 2008.

Steel producers have agreed to refrain from increasing prices for 3 months in a bid to help the government rein in inflation that is inching closer to a rate of 8%. But fresh contracts that they have to sign for procuring coking coal and iron ore are not coming cheap.

Indian government hopes to start mega steel projects by June

Indian government hopes that construction of proposed mega steel plants by POSCO and TATA Steel would start by June 2008 and land acquisition for the steel plant proposed by ArcelorMittal is also expected to be over by end of October 2008.

Mr RS Pandey steel secretary recently conducted a review in progress for steel projects in Orissa and said that "I did notice seriousness at all levels. Orissa, endowed with rich mineral resources, has the potential to produce 75 to 80 million tonnes of steel per annum. A lot of businessmen are trying to invest in steel sector in Orissa. I have a feeling that by 2011-12, capacity of producing 40 million tonnes to 45 million tonnes of steel per annum should be created in the state."

Stating that the land acquisition for POSCO’s 12 million tonnes per annum steel plant near Paradip port is in final stage, he said that construction of the plant was expected to start by June end. Asked as to how he was so much optimistic when not a single acre of land had been acquired, he said bulk of the required land all of forest category was under consideration of the Supreme Court for forest diversion clearance and he was hopeful that the apex court would grant the permission.

Mr Pandey said that construction of the 6 million tonnes per annum steel plant of TATA Steel at Kalinga Nagar is also expected to begin by June end. He added that TATA Steel is trying its best to set up a transit camp. Similarly, land acquisition process for the 12 million tonnes per annum steel plant of ArcelorMittal in Patna tehsil of Keonjhar district has begun and is expected to be completed by October 2008.

Stressing on the need to step up steel production in India, Mr Pandey said that there was a significant rise in demand for steel in India, outpacing the growth in steel production. India had been a net importer of steel to meet the growing demand. During 2007-08, India’s steel import had gone up by 45%, while the export had declined by 6%.

Update on SAIL modernization in 2007-08

During 2007-08, Indian steel major Steel Authority of India Limited’s modernization & expansion program was given a special thrust.

Orders were placed for investments of over INR 20,000 crore for projects at IISCO Steel Plant and Salem Steel Plant, besides some key packages at Bokaro, Rourkela and Durgapur Steel Plants.

The company implemented some strategic measures, including strengthening of its project set up with introduction of Integrated Project Management system, adoption of latest monitoring techniques and empowerment of employees at various levels, to ensure timely implementation of the expansion plans.

IRCON bags mega railway project in Malaysia

Cooperation between India and Malaysia in the railway sector reached new heights with the government of Malaysia entrusting the mega project of electrified double tracking project between Seremban Gemas to IRCON International Limited.

The singing ceremony and the award of contract to IRCON for this mega project was done in presence of Mr Lalu Prasad union minister of railways, who is currently in Malaysia and Mr Datuk Ong Tee Keat minister of transport of Malaysia.

The project will be completed within 48 months time with an approximate cost of USD 1 billion. This mega project will involve the construction of 34 river bridges, 107 small bridges and one 8 kilometer long tunnel. In the first phase of this project, the work up to Sangai Gaddud will be completed by July 2010.

Mr Lalu Prasad said that award of this contract to IRCON is an important achievement in the bi lateral cooperation and this cooperation in the field of infrastructure will be further strengthened between the two countries.

Indian Railways’ presence in Malaysia dates back since 1988 with IRCON executing the rehabilitation of Railway track from Paloh to Singapore and Slim River to Seremban. Since then, IRCON has successfully completed and commissioned 11 major railway projects, which included approximately 441 kilometers of track rehabilitation and construction 200 kilometers of new track. Besides this, IRCON is having a contract or leasing of locomotives to Malaysian Railways for the past few years which is being extended on yearly basis.

Nalagarh Steel to set up rebar mill in HP

PTI reported that Nalagarh Steel Rolling Mills Private Ltd will set up a new steel rolling facility in Himachal Pradesh with an investment of INR 25 crore. It manufactures TMT steel bars and sell it under the brand of DevBhumi and this would be the second such facility at Nalagarh.

Mr Ravinder Bansal MD of Nalagarh Steel Rolling Mills told reporters that "The new facility, which will be soon set up, will enable us to meet the emerging requirement for steel from the industries of Haryana, Chandigarh and some parts of Punjab.”

He said that "Presently, the demand for the steel is 7,500 tonnes per month against our total production capacity of 6,000 tonnes per month. With the commissioning of new plant, the total manufacturing capacity of the company would reach 9,000 tonnes per month.”

With the setting up of this new plant, it expects over 70% jump in its total turnover at INR 300 crore in 2008-09 from INR 175 crore in 2007-08.

SAIL RSP trains villagers under CSR initiative

SNS reported that, with the objective of improving the standard of living of the residents of peripheral villages and making this progress sustainable, SAIL Rourkela Steel Plant has launched an array of activities under its corporate social responsibility initiatives.

In the 16 model steel villages adopted by RSP, it is providing farmers with means and skill for advanced agricultural activities, while the landless villagers are being provided animal and poultry farming facilities. A significant step in this direction has been distribution of cattle and goats of improved breed to beneficiaries in these villages.

As a part of this unique program goats were distributed to 20 villagers of Kapatmunda, Jabapanposh, Jabaghat, Jamshera, Bijadihi and Pograbahal of Bisra block on May 8th 2008. Each beneficiary was presented with five goats and a male buck. In all 100 goats and 20 male bucks were given away on this occasion. Plans are afoot to distribute goats amongst the villagers of Kuarmunda block in the near future. The goats belonging to the special Black Bengal variety reproduce twice as fast as the native variety and produce more number of off springs. Moreover the goats yield more milk and flesh as compared to the local breeds. The beneficiaries were trained on cross breeding of goats and rearing of these improved breed of goats at the Institute for Peripheral Development of Corporate Social Responsibility Department.

In addition to this, experts in this field will also be visiting the goat farms regularly to advise the beneficiaries regarding the practical aspects. By providing the resources to begin and skill to sustain a profitable enterprise, RSP is helping the beneficiaries to have a regular source of income in the years to come.

VW and Nissan Renault to use steel from TATA

BS, citing reliable sources, reported that Volkswagen and Nissan Renault have agreed for sourcing steel for their respective needs from TATA Steel and project specific products will be developed by the steel maker for them.

VW and Nissan Renault have major plans for India. In partnership with Renault, Nissan is in the process of setting up a plant in Chennai. VW, too, is thinking big for India and is expected to introduce two cars in 2008 and build 110,000 cars once its plant starts its operations in 2009.

As per report, steel for their projects will be sourced from TATA steel’s Jamshedpur plant, which is on the verge of expanding the capacity of the plant, which will go on stream by June 2008. The total capacity is expected to be 10 million tones by 2010.

The other car makers who also source their requirements from TATA steels are Ford, Maruti, Hyundai and Toyota from their Jamshedpur plant. TATA steel has a deal for supply of skin panel for Ford and Hyundai.T ATA Steel is also a 100% supplier to Maruti Suzuki India for its inner panels and 96% steel for the Toyota Innova.

Texmaco turnover in 2007-08 up by 97% YoY

Texmaco has reported a turnover of INR 937.18 crore for the year ended March 31st 2008 up by 97% YoY as against INR 476.13 crore recorded in year ended March 31st 2007.

Gross profit surged by 127% YoY to INR 109.58 as against INR 48.37 crore and profit before tax by 133% YoY to INR 100.72 crore as against INR 43.14 crore. Net profit rose sharply by 143% YoY to INR 69.09 crore as against INR 28.48 crore.

Texmaco has maintained a compound annual growth of over 48% over the last 5 years. The current order book of Texmaco is over INR 2,000 crore. It has recommended a dividend of 75% on the equity capital of the company as against 40% declared in the last fiscal.

The rolling stock division of the company was the best performer during 2007-08. The wagon turnout was up by 45% to the Indian Railways and private operators. Texmaco was awarded the highest ever order by the Indian Railways in 2007-08. It booked orders worth INR 1100 crore for 6814 wagons.

Texmaco is progressively switching over from conventional to special purpose wagon manufacture. It delivered 325 stainless steel BOXNLW wagons to Indian Railways and a series of container freight rakes. The company is also diversifying in the area of manufacture of EMU coaches and loco components.

NMDC recommends a final dividend of INR 214.09 crore

National Mineral Development Corporation Limited has informed BSE that its board of directors at its meeting held on May 16th 2008 has recommended a final dividend of INR 214.09 crore or 54% of post bonus capital in addition to interim dividends of INR 437.44 crore for 2007-08.

Hyundai to launch USD 3,500 car in India by 2012

Hyundai Motor India has announced that it is planning to roll out its low cost car at USD 3,500 in India by 2012. The low priced car is in the process of evolution stage at its research and development centre in South Korea.

Mr HS Lheem MD & CEO of Hyundai Motor India said that "It will take at least 4 years to develop the car and we think we will be able to introduce this car by 2012 for Indian market."

However, he said that this car would not be competing against the TATA's Nano car.

TATA may sell towers unit to SERI Quippo Infrastructure Equipment

Bloomberg reported that TATA Group may sell 49% of its phone transmission towers business to a unit of SREI Group for about USD 1.9 billion.

As per report, SREI Group’s Quippo Infrastructure Equipment Limited is among the leading bidders for the stake in Wireless TATA Telecom Infrastructure that owns about 13,500 transmission towers.

The report added that Citigroup Inc and Lehman Brothers Holdings Inc. are advising TATA while JM Financial Ltd. is advising Quippo.

BHEL gets award for Excellence in cost management 2007

It is reported that Bharat Heavy Electricals Limited has won the “ICWAI National Awards for Excellence in Cost Management 2007.”

The annual award is presented by the Institute of Cost & Works Account of India to corporate entities for excellence in cost, quality and delivery.

During 2007-08, BHEL recorded the highest ever turnover of INR 21,608 crore, crossing the INR 20,000 crore mark for the first time. It aims to become an INR 45,000 crore firm by 2011-12 and has unveiled a 'Strategic Plan 2012' that would enable it to grow at an annual growth rate of 20%.

Indian debt in 2007-08 seen at 41.7% of GDP

Mr Pawan Kumar Bansal union state minister of finance said that India's total debt is estimated at INR 19.57 trillion or 41.7% of gross domestic product in the fiscal year ended March 2008. He added that internal debt of the federal government was estimated at INR 18.44 trillion while external debt was at INR 1.13 trillion at the end of 2007-08.

Mr Bansal said that "While the internal and external debt of government has been increasing in absolute terms, as a percentage of GDP, it has gone down from 43.1% in 2003-04 to 41.7% in 2007-08." He added that India's GDP, which is estimated to have grown by 8.7% in 2007-08, has crossed the USD 1 trillion mark.

Mr Bansal said that external debt rose to 2.4% of GDP in 2007-08 from 1.7% in 2003-04, while internal debt declined to 39.3% from 41.4%. The federal government has to borrow large amount from domestic and overseas sources to fund its budget deficits as its spending continues to outpace revenue receipts.

He further added that "The government has been following a comprehensive strategy to moderate growth in public debt through a policy of fiscal rectitude, recourse to sources of lower cost of borrowings, debt restructuring measures, pursuing appropriate tax policies that result in higher tax GDP ratio, in order to facilitate the process of fiscal consolidation."

Power shortage makes firms rely on liquid fuel captive plants

BL reported that many industries are meeting their power requirements by running their captive liquid fuel based power plants, due to unreliable power supply despite high generation costs. With the power shortage, industries that require uninterrupted and good quality power have no option but to continuously run their liquid-fuel based captive plants.

The state wise position is reported to be as under

Capacity in MW

According to industry sources, the cost of electricity from an efficiently run furnace oil based captive plant of 6 to 8 MW capacity is INR 6.50 to INR 7 a kWh. A year ago, this was about INR 5. A unit of electricity from a naphtha based plant costs about INR 7.75 as against INR 4.50-5.00 a year ago.

According to an industry representative, furnace oil prices have gone up by two and half times. Almost 80% of the cost of generation is accounted for by furnace oil. Despite global oil prices at an all time high, petroleum fuel oils, mainly diesel and naphtha, continue to be used for power generation.

With the nationwide peak power shortage climbing to 17.1%, industry has resorted to increased use of captive power generation. Nearly 40% of the captive power capacity of about 22,500 MW is estimated to be based on diesel or furnace oil.

Usha Martin to become largest wire rope maker in the world

Commodity Online reported that Indian specialty steel major and world’s second largest wire rope manufacturer Usha Martin Limited post its planned expansion of INR 21 billion, would become world’s largest wire rope manufacturer dislodging KISWIRE of Japan.

Usha Martin Limited is undertaking capacity expansion in a phased manner that is expected to drive volumes for the company.

Usha Martin Limited will be the only global producer to have a complete presence across the value chain starting from iron ore and coal to offshore utility ropes as most of the players in the industry process wire rods directly into wire ropes and do not have any captive mineral linkages.

UML has an integrated business model with captive iron ore for manufacturing sponge iron and pig iron, which is converted to steel, which then becomes a feedstock for its value added products like wire ropes.

Steel prices in India to remain firm in 2008 - CMIE

PTI reported that steel prices in India are expected to remain firm in 2008 as supply side constraints continue to persist with major Greenfield projects hitting roadblocks due to delays in acquiring land.

The Centre for Monitoring Indian Economy in its monthly report said that "Notwithstanding government pressures to bring down prices, we believe that global price movements, strong demand and rising production costs would continue to dictate the trend in domestic prices.”

CMIE added that “In a buoyant demand scenario, supply side constraints continue to persist with major Greenfield projects hitting roadblocks due to land acquisition delays.”

Steel inventories in US and Canada start increasing in April

According to the latest Metals Activity Report from US based Metals Service Center Institute, US and Canadian metals service centers rebounded in April from unseasonably low levels in March, with year over year shipment increases in nearly all metals categories.

Inventories of both metals remained at levels well below total stocks at the end of April 2007 and were down, as well, from inventories reported at the end of March 2008, with one important exception, the Metals Activity Report from the Metals Service Center Institute shows.

The one exception was inventories of steel products in the United States, which rose slightly, to 12.4 million tons or 2.6% above US steel stocks at the end of March. Metals customers appear to buy only when they need product and service centers have maintained inventories closely aligned with demand.

Shipments of steel products from US service centers rose 3.3% in April, to 4.65 million tons as compared with April 2007. For the year to date, shipments of 17.7 million tons were down 2.8% from volume during the first four months of 2007. Month end inventories of 12.4 million tons were 15.1% lower than April 2007 stockpiles and, at current shipping rates, represented a 2.7 month supply.

Steel product shipments from Canadian metals service centers totaled 328,400 tons, a 6.6% increase from shipments in April 2007. Steel shipments for the first four months of 2008 totaled 1.28 million tons, a decline of 0.7% from the same period a year ago. Steel inventories held by Canadian service centers at the end of April totaled almost 1.1 million tons, or 15.2% below year earlier levels and, at current shipping rates, equal to a 3.3 month supply.

The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third party econometrics and strategy firm, McCoy, Scott & Co.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers.

ThyssenKrupp to renegotiate steel contracts – Report

Bloomberg reported that ThyssenKrupp AG plans to renegotiate steel contracts because raw material costs jumped.

Mr Ulrich Middelmann CFO of ThyssenKrupp at a presentation to analysts in London said that “The company is trying to open annual and half year contracts during the remainder of its financial year, which ends September 30th 2008.

He said that “Steel prices will increase substantially. The full year contracts are legally binding, but you can apply a certain pressure on the clients.”

Mr Middelmann said that ThyssenKrupp will also change the date on which customer contracts begin to match accords with raw material suppliers. Contracts for iron ore and coal typically start in April, while those for steel begin in January. The difference has delayed the steelmaker passing on cost increases.

Benchmark coking coal contract prices tripled this year on booming global demand and supply disruptions. Iron ore contract prices have increased for a sixth successive year.

Nippon raises SBQ plates prices by 40% for Mitsubishi Heavy

Nikkei newspaper, without saying where it obtained the information, reported that Nippon Steel Corp has reached an agreement with Mitsubishi Heavy Industries Ltd to charge the shipbuilder about 40% more for steel.

The newspaper said that Mitsubishi agreed to pay Nippon Steel an additional JPY 30,000 (USD 288) a ton, as it had few other sources for steel plate.

According to the paper, the price increases will begin with a JPY 20,000 surcharge per ton on shipments made since April, with an additional JPY 10,000 to be paid beginning in September.

The paper added that Universal Shipbuilding Corp and IHI Marine United Inc. have also consented to the JPY 30,000 price increase.

US to continue CVD case on pipes from China and South Korea

The United States International Trade Commission determined that there is a reasonable indication that a US industry is materially injured or threatened with material injury by reason of imports of certain circular welded carbon quality steel line pipe from China that are allegedly subsidized and imports of this product from China and Korea that are allegedly sold in the United States at less than fair value.

All six Commissioners voted in the affirmative.

As a result of the Commission's affirmative determinations, the US Department of Commerce will continue to conduct its countervailing duty investigation on imports of this product from China and antidumping investigations of imports of this product from China and Korea, with its preliminary countervailing duty determination due on or about June 27th 2008 and its preliminary antidumping determinations due on or about September 10, 2008.

Petitioners are Maverick Tube Corp, Tex Tube Co, US Steel Corp and the United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL CIO CLC.

Taiwanese export of welded pipe drops in April

Taiwan exported 20,517 tonnes of welded steel pipe in April 2008, decreased by 11.79% MoM against March 2008. Taiwan export of steel pipe to different countries in April were

(In tonne)

The export price of welded steel pipe in April was increased by 4.5% to TWD 28,380 per tonne averagely.

(Sourced from YEIH.com)

Galena predicts end of tin price rally

According to Galena Asset Management Ltd, the rally in tin, the biggest on the London Metal Exchange this year, is nearing an end because Chinese producers will export more to take advantage of record prices.

Mr Alan Williamson chief economist of Galena's told Bloomberg New that “It is not far off the finale. Chinese exports will increase from now because international prices are higher than in the domestic market.”

Mr Williamson said that “An awful lot of funds have been buying tin since the beginning of the year, but prices at USD 25,000 aren't fundamentally justifiable.”

According to LME data, open interest of tin futures on the LME or the total number of contracts that haven't been closed or settled peaked at 21,556 as of April 23rd 2008, 40% more than at the end of last year and the highest since February 2006. Trading in tin options jumped to 11,051 lots in April, compared with 1,254 lots a year earlier.

(Sourced from ITRI.co.uk)

POSCO may form consortium to acquire Daewoo Shipbuilding

Yonhap reported that POSCO Co will probably form a consortium to buy a controlling stake in Daewoo Shipbuilding & Marine Engineering Co.

According to local media reports, creditors, led by state run Korea Development Bank plan to select a preferred bidder to sell their 50.4% stake in Daewoo Shipbuilding as early as August. The deal, if successful, may be valued at as much as KRW 8 trillion (USD 7.7 billion).

Like other family run business conglomerates such as Hanwha and GS, POSCO has expressed interest in buying the Daewoo Shipbuilding stake. Mr Lee Ku taek Chairman of POSCO said that "Wouldn't it be strange for us not to consider forming a consortium?"

Mr Abdulah calls for probe into worker death at ArcelorMittal Point Lisas

Trinidad Express reported that Mr David Abdulah president of Federation of Independent Trade Unions is calling for an investigation into the death of a worker at the steel plant in Point Lisas industrial Estate earlier this week.

Mr Abdulah said that the Occupational Safety and Health Agency must investigate the incident which led to the death of Mr Anil Bickramdass. He said that if the company found negligent, then the company should be penalized.

Mr Bickramdass a mechanical technician was killed at the Arcelor Mittal Steel Mill while repairing a fault on the equipment which he had shut down.

Mr Lex Lovell president of the Steel Workers Union also called for an audit of the company by the Ministry of Labor and the OSHA, claiming there were other accidents and near misses at the plant before. The company has promised to launch its own investigation into the incident.

Mr Query becomes president of Nucor Europe

Nucor Corporation announced the promotion of Mr Rex Query to the position of president of Nucor Europe, a new senior management position, effective June 1st 2008. Mr Query will be responsible for Nucor's growth initiatives in Europe and will report to the CEO.

Mr Query joined Nucor in 1990 and has been a VP of Nucor since 2002. He has been GM of Nucor's sheet mill in Alabama since July 2003.

Mr Dan DiMicco chairman, president & CEO of Nucor said that "Mr Rex is a proven Nucor leader. With his strong leadership skills and Can Do attitude, I have the highest confidence in his ability to lead the Nucor team to a strong record of profitable growth in Europe. We are looking forward to an extremely bright future for Nucor and our partners in Europe as we grow together. Our two recently announced joint ventures are only the beginning of Nucor's presence in the European market."

POSCO CEO receive Order of Rio Branco award from Brazil

It is reported that embassy of Brazil, Seoul, Republic of Korea and Federative Republic of Brazil named Mr Lee Ku Taek CEO of POSCO to the Order of Rio Branco, one of Brazil’s highest honors for his meritorious contribution to closer relations between Korea and Brazil through commerce and local investment.

The award was presented from Ms Celina Maria Assumpção do Valle Pereira, Brazilian Ambassador to the Republic of Korea on behalf of Brazilian government.

Ms Pereira said that “Mr Lee Ku Taek has maintained close links with the great Brazilian company, VALE, for their mutual benefit and thus contributing to closer ties between the two countries and better understanding between the Korean and the Brazilian people.”

The Order of Rio Branco was named for the Baron de Rio Branco, the founder of the Brazilian diplomatic service in 1963. It has been bestowed to a foreign national who provide meritorious service to Brazil and for valuable contributions the relations between his/her nation and Brazil. It was conferred to Mr Ban Ki Moon the secretary general of the United Nations.

POSCO maintained close links with Brazilian mining company, Vale for more than 30 years since 1976 when their first iron ore supply procurement contract. Iron ore is one of primary raw material used to make steel.

ArcelorMittal US workers lose share of profits

Nwitimes.com reported that hourly workers at ArcelorMittal domestic mills in US will not receive profit sharing form USD 2.37 billion profit in first quarter of 2008.

The report cited Mr Matt Beckman, secretary to the grievance committee of United Steelworkers Local 1010, which represents hourly workers at Arcelor Mittal Indiana Harbor East plant in Burns Harbor as saying that "Profit sharing pool is zero. The pool is based on the company's US results. The steelworkers are very upset by the news.”

As per report, the profit-sharing pool for ArcelorMittal USA is established by multiplying a variable percentage by it’s, not the corporation's EBITDA at various thresholds of profitability. There is no profit sharing if the amount per ton falls under USD 24.99. For the quarter, the unaudited Adjusted EBITDA per ton was USD 19.67

The report cited Mr Michael Rippey CEO of ArcelorMittal USA as saying that the company's first quarter financial results are significantly below expectations due to the continuing escalation in raw material prices, delays in raw material receipts and our inability to achieve planned operating reliability. He advised that "In spite of the issues experienced in the first quarter, we still have an excellent opportunity to achieve future quarterly payouts if we work safely and execute our operations in a timely, efficient, and cost effective manner.”

ArcelorMittal USA employs about 3,000 USW members at its Burns Harbor plant and almost 5,000 at two East Chicago plants.

Effort to derail steel wheel technology fails in Hawai

AP reported that a last ditch effort in the Honolulu City Council to derail steel wheel technology for Oahu's 3.7 billion dollar mass transit system has failed. The Transportation Committee refused to advance a bill to considered alternate rubber tire and magnetic levitation systems.

Technically, the council has until mid July to select a technology or else Mayor Mufi Hannemann's selection of rail will stand. Mr Hannemann said that he would veto any measures that calls for anything other than steel rail.

Meanwhile, a group opposed to Mr Hannemann's choice continues its effort to have voters prevent construction of a rail system. The group Stop Rail Now is working to get the issue on the November ballot.

ArvinMeritor to add steel surcharge as prices increase

Purchasing.com reported that with hot rolled steel sheet prices tracking to costs an average USD 995 per tonne in 2008, auto parts maker ArvinMeritor will add monthly commodity surcharges on all products ordered on or after June 1st 2008 to offset rising costs for steel and other commodities.

ArvinMeritor said that the surcharges will vary on the type of raw materials needed to build a specific part, the Troy, Mich., company announced Tuesday. The company, mostly a maker of shocks and brakes for commercial trucks, will also initiate a monthly review and adjust prices accordingly.

Mr Chip McClure CEO of ArvinMeritor said that “Last year, hot rolled steel sheet, the benchmark grade, cost an average USD 527 per ton. At present, it is tracking to hit USD 995 ton in 2008, but could go higher. As a result of the sudden and extraordinary surges in the price of steel, energy and other commodities, we are implementing a monthly review and adjustment process on all products. We have a portfolio of complex products that require varying levels of commodities. We plan to adjust the surcharge as appropriate for each product line.”

Mabani Steel inks deal with Azzam for Yanbu plant

Saudi Gazette reported that Saudi based Al Mabani Steel Company has signed a contract for the implementation of the civil and structural works of its second plant with Azzam Contracting Company.

With a total cost of SAR 150 million, the plant will be constructed in Yanbu Industrial City over a land area of 70,000 square meters.

Mr Muayyad Al Khudairi president of Al Mabani Steel said that the scheduled production capacity of the plant shall be increased to 72,000 tonnes of pre engineered buildings in addition to 24,000 tonnes of hot rolled steel strips. He added that the project has started in early May 2008 and is expected to be completed within 12 months.

Maghreb Steel awarded order to SMS Demag for electric steel

Maghreb Steel Company has awarded an order to SMS Demag for setting up an electric steel mill X Melt and a 1 strand slab continuous casting machine X Cast.

These equipments are designed for an annual production of 1 million tonnes of steel and they will feed the Steckel rolling mill with the inputs.

The mix of products comprises types of low and medium carbon content steel and types of high strength and low alloy steel. SMS Demag received the order to supply a 2 stand Steckel rolling mill in 2007.

Maghreb Steel Company is one of the largest cold rolled products companies in North Africa. Most of its exported products are hot dip galvanized sheets and plates. The hot strips necessary for these products are still being imported.

Khorasan Razavi to add 4 million tonnes capacity

Mr Ahmad Harati Nik deputy industry & mines minister said that by putting into operation of 3 steel plans, some 4 million will be added to the capacity of Khorasan Razavi steel production.

Mr Harati Nik said that currently Khorasan Razavi has steel mills in the cities of Sabzevar, Neishabour and Torbat Heidariyeh. He added that "The nominal capacity of Sabzevar steel plan is 800,000 tonnes, which will reach 1 million tonne."

He noted that the Neishabour steel mills consisted of two units which produce over 2 million tonnes of steel annually. He also noted that Torbat Heidariyeh steel plant is the third provincial steel mill which produces one million tons of steel per annum.

Afghan economists advise for steel industry development

Afghanistan is still regarded as one of the poor countries despite having huge water resources and mines. Mr Abdol Salam Zafari a geologist and a professor at Kabul Polytechnic University said that privatization and the handover of mines to foreign firms is not beneficial to the Afghanistan. He added that people's demands can be met by establishing steel plants in the country.

Mr Zafari said that some economists and geology lecturers had presented a plan for establishing steel works in the country. He added that once the plan is implemented, jobs will be created for professional cadres and unemployed young men.

He said that "If the plan is carried out, we will be able to create jobs for over 1 million people, our society will stand on its own feet, we will no longer need foreign aid or donations and we can stop importing low quality metals and equipment. This is because we will be able to produce for our needs and even export them to other countries."

Mr Zafari added that the Afghan people still suffer from a shortage of water despite the presence of huge water resources and while our neighbors usually benefit from these resources. The professor also accused other countries of usurping the Afghan mines. He said "We tried to contact the Ministry of Mines and Industries, but the officials declined to express their views on this."

Skills shortage threatens construction boom in Gulf – Report

According to a study by the University of Wollongong in Dubai, a serious shortage of skilled professionals is threatening to stunt growth of the Gulf’s booming real estate market.

The study found developers were struggling to recruit enough qualified professionals despite offering high salaries and attractive benefit packages and more than 90% of employees receive additional peaks, including health insurance, annual travel expenses and flights and performance related bonus.

Mr Lejla Vrazalic chairman of UOWD’s College of Undergraduate Studies said that "Our study showed that most developers find it tough to find trained professionals to take up challenging positions. In such a scenario, there is need for trained and focused professionals who will direct and execute projects to global standards."

According to a study by Colliers International, more than 16.35 million square meters of gross leasable area is expected be added in the GCC by 2010. It added that UAE and Saudi Arabia will see the highest increase, contributing 44% and 30% respectively of the total GLA coming online by the end of the decade. Kuwait will be the third largest provider, making up 10% of the supply, followed by Qatar with 8%, Bahrain with 7% and Oman with 1%.

Celik Halat ve Tel Sanayii AS chairman resigns

Celik Halat ve Tel Sanayii AS has announced the resignation of Ms Imre Barmanbek from her post as chairman effective from May 12th 2008.

Celik Halat ve Tel Sanayii AS has been growing continually since its incorporation, with its special products that meet international standards and customer expectations. Some of its special products are steel Ropes for the construction, marine, fishing, petroleum, mining sectors, spring wires in automobile tires, pre stressed concrete wires, in land and rail transportation and irrigation systems, galvanized wires and strands in cables used in energy and telecommunications.

Hafilat Industries bags major contract to supply buses to Australia

BI-ME reported that UAE based Hafilat Industries, a leading manufacturer of quality aluminum buses licensed by Australia's Volgren, has won an AED 30 million contract to produce and export buses to Australia.

The contract states that Hafilat will build Volgren’s New Generation City Bus’ on a Euro IV Mercedes Benz chassis originating from Spain, all of which will feature multiplexed electrics, sophisticated video surveillance, electronic signage and a full aluminum body.

As per report, the production of these buses would be commenced this month at Hafilat’s 10,000 square meter factory located in ICAD at Mussafah in Abu Dhabi and will take approximately four months.

Mr Obaid Sughair Qubaisi director of Hafilat said “This agreement is a major milestone in the bus manufacturing industry of the UAE. It will also benefit the UAE’s basic industries through the purchase of locally manufactured glass and aluminum and materials from small to medium businesses. We have won this contract because of our commitment to the highest standards of manufacturing, a commitment which will continue to benefit the country as the UAE develops its own intensive public bus network.”

Hafilat Industries is a joint venture between socialized Investment Group, Emirates Link Group and Volgren.

Atkins to design P-17 super slim tower in Dubai

Arabian Business reported that UK based architecture and engineering firm Atkins is designing the P-17, a super slim tower, which will be located on Dubai arterial Sheikh Zayed Road. The client is Tasameem Group and construction on the project is expected to start in November with a completion date set for November 2011.

The 379 meter tower will be mixed use and will include 17 office floors, a five star hotel, 74 serviced apartments and 176 residential apartments. It will span an area of 165,327 meter square and will also include a 14 level car parking block.

The 81 storey tower will have an angled atrium that cuts straight through the tower, filling a void over several storeys. This atrium serves the five star business hotel above, and hosts a group of supporting amenities for the 18 floors of offices underneath. 75 serviced apartments will be operated by the hotel to cater for the varied clientele and the top 19 floors of the tower will be residential apartments.

Mr Joe Tabet, head of architecture for Atkins in Abu Dhabi said that the tower will have the illusion of constantly changing its appearance with the movement of people and the sun. He said that “This design intends to integrate contemporary architectural thought, with innovative engineering solutions.”

Pakistan to set up Federal Coal Authority

Daily Times reported that Pakistan government is likely to set up Federal Coal Authority for utilizing the indigenous coal reserves in order to expedite the process of generating 20,000 MW power from coal based power plants,.

A senior official told Daily Times that under 100 day program, government is likely to take the aforesaid decision in the next federal cabinet meeting.

He said that a summary for setting up FCA was moved in the special meeting of federal committee on energy crisis held last week. He said that “The meeting considered the proposal and decided to have more consultation with the respective ministries and Sindh province in this regard.”

He said that government has decided to establish FCA to handle the issues like tariff, coal ownership and royalties. The authority will work to deal the issues of coal-based power plants that would be set up at Thar in Sindh.

Private Power Infrastructure Board and Sindh Coal Authority are tackling the issues relating to coal but have failed to attract investment for exploiting the coal reserves in Sindh.

(Sourced from Daily Times)

Height of Mile High tower may be reduced – Report

MEED reported that Saudi Arabian Kingdom Holding’s Mile High tower could be up to 500 meters shorter than originally planned, with contractors deciding it would be impractical to build a structure to such an extreme height. Building to such a height presents massive physical and practical challenges, from wind loading to the transporting of materials or elevator passengers.

The report cited a source as saying that "The Mile High tower is now more like 1,100 meters to 1,150 meters. They have found it too difficult. There is a problem with profitability and the transport of materials to such a height, so there are real technical issues. Of course, everything can be built, but maybe this is beyond the cost."

Saudi company Omrania, in collaboration with US group Pickard Chilton, worked on the design of the tower and the US' Bechtel is the construction manager. MEED understands that the UK's Hyder Consulting is working jointly with Arup of UK as engineers on the project.

The tower forms part of a wider real estate project planned by Kingdom Holding. The development covers 5.3 square kilometers and is located in the north of the city near the creek, and has an investment value of SAR 50 billion on completion.

(Sourced from Meed)

Chinese rebar export prices remain firm

It is reported that the rise of Chinese construction steel price has paused since late last week and the correction is expected to maintain for some time.

Export offer for rebar is about USD 950 per tonne FOB to USD 970 per tonne FOB and most are being concluded at about USD 920 per tonne to USD 930 per tonne FOB. Wire rod is being quoted at USD 980 per tonne to USD 1000 per tonne FOB with contract price at USD 950 per tonne to USD 960 per tonne FOB.

According to Steel Daily, Laiwu Steel is offering 10mm rebar at USD 970 per tonne CFR for shipments to South Korea up by USD 50 per tonne MoM. Many importers in South Korea continue to import Chinese cargo despite current high level. Most of them believe it worthwhile to buy Chinese rebar even at KRW 1,000,000 per tonne up because local steel producers are expected to raise ex works price in June.

(Sourced from MYSteel.net)

Chinese steel exports sustained by Asian demand

According to Mr Qi Xiangdong deputy general secretary of the China Iron and Steel Association robust steel exports to Asian markets are making up for declining sales to the US and the EU.

Mr Qi said that while first quarter exports to the US and the EU fell by 28% YoY and 47%YoY respectively, sales to China's top two regional markets, South Korea and Vietnam were up by 20% and 82%.

He said that first quarter steel product output rose 12.2% YoY to 140.9 million tonnes with 11.4% exported.

Mr Qi said over the first three months exports fell nearly 20% YoY and would continue amid stronger macroeconomic controls from the central government, the slowdown in western markets and stronger domestic steel demand.

Chinese CRC export prices witness increase this week

It is reported that export offer for cold rolled steel coil moved up following the increase in the domestic market and in the short term, the strength is expected to continue.

On Shanghai market, 1.0mm CR sheet by Anshan Steel is being quoted at CNY 7130 per tonne to CNY 7150 per tonne, 1.2mm to 2.0mm material at CNY 7050 per tonne to CNY 7080 per tonne up by CNY 550 per tonne to CNY 600 per tonne from April14th 2008. While that for1.0mm CR coil by Maanshan Steel has jumped to CNY 7050 per tonne to CNY 7070 per tonne which compares with CNY 6450 per tonne a month ago.

Export quotations for 1.0mm CRC by tier two steel makers are at USD 1020 per tonne to CNY 1040 per tonne FOB and the contract price is about USD 1000 per tonne to USD 1020 per tonne FOB.

(Sourced from MYSteel.net)

ArcelorMittal still awaiting MOFCOM decision on China Oriental

Interfax China reported that ArcelorMittal is awaiting antitrust clearance from the Ministry of Commerce to proceed with its 45.11% stake purchase in China Oriental Group Company Limited.

The report added that the deal is currently at risk of falling through as by May 9th 2008 ArcelorMittal had failed to obtain antitrust clearance from Chinese authorities which was the deadline for the China Oriental shareholders' agreement.

Mr Zhu Limin a senior analyst with Shanghai Securities Company Limited said "Though the shareholders' agreement is no longer effective, ArcelorMittal still hopes to obtain the antitrust clearance and to increase its stake in China Oriental, as the acquisition is unlikely to create a monopoly. ArcelorMittal has to remain patient as the antitrust review period may be extended."

China Oriental announced recently that the antitrust filing was accepted by the State Administration for Industry and Commerce on December 12th 2007 and by MOFCOM on April 3 this year and usually takes a review period of 30 working days.

ArcelorMittal said it is committed to the transaction and when antitrust clearance is obtained, the steel giant will fully support the transaction and future cooperation, including technology transfers, with China Oriental.

Pangang Chengdu resumes production after earthquake

It is reported that Pangang Group’s Chengdu Iron and Steel is restoring its production after the earthquake. It is introduced that the company has restored its No 2, No 3, No.4 blast furnace iron output if 20 tonnes steel output of No 1 and No 2 blast furnace of 260 tonnes.

At present, the team of Pangang is checking the facilities and the damage caused by earthquake happened in Sichuan and holding the special meeting in order to research the preparation work before restoring production.

Pangang Group Chengdu Iron and Steel, which was hit by earthquake was ready for restoring its production. The company is focused on its major 6 tasks now, personnel arrangement and medical aid, power sources testament and inspection, endangered houses repair, relief materials sending work, rear service protection and propaganda work to settle the mind of its workers.

Chinese steel industry facing 3 major issues- Mr Yinsong

It is reported that Mr Jia Yinsong deputy director general of The Bureau of Economic Operations of National Development and Reform Commission while speaking at the 2008 council meeting of Heibei Metallurgy Industry Association said that China's steel industry is facing 3 tasks namely
1. Energy saving and pollutant reduction
2. Structure adjustment and
3. Swelling production cost this year.

Mr Jia said the structure adjustment in Chinese steel industry should be oriented to the development of domestic market as the government is encouraging industrial innovations, quality improvement, competitiveness increase and obsolete capacities elimination.

He said that “Energy saving and pollutant reduction is pretty a task in China, since energy shortage, resource hunger and environment protection are three bottlenecks that prohibit the development of China's steel industry. The core for energy saving is to restrict the growth of the total energy consumption and lower unit energy consumption while to reduce the emission of CO2 , SO2 , industrial smokes and dust is the key of pollutant reduction.”

He added that “Another major issue for Chinese steel industry is the skyrocketing production cost. Many factors dominate the rising tendency of steel production cost in 2008 including the swelling prices of iron ore, coal, coke, electricity and transportation; more over, tax imposition on mineral resources and wage growth mechanism will also cost enterprises more.

(Sourced from MySteel.net)

WISCO to set up auto grade HDG units

It is reported that South China Metallurgical and Belgium DREVER Company formally signed sub contracts, for setting up three cold rolled hot galvanized units with continuous annealing furnace project of WISCO.

WISCO’s three cold rolled consecutive hot dip galvanized units are with sophisticated technology and very high degree of automation.

After the completion WISCO will mainly produce high grade CR steel for automotive and home appliance segment.

As per report it would be the first domestic independent continuous hot dip galvanized unit in China.

China may introduce more incentives for scrap recycling

It is reported that Mr Tan Heng general director of the State Administration of Taxation Policies and Regulations Secretary recently expressed that China’s scrap steel tax policy will be adjusted and the new preferential policy that to encourage the recycling of scrap steel will be introduced as soon as possible and it will set up a transitional period.

Mr. Tan Heng said that since 2001 that China has taken following tax preferential policy for the recycling of scrap steel
1. Zero value added tax on scrap steel recycling enterprises
2. They can deduct 10% input tax by ordinary invoices
3. Zero tariffs on imported scrap steel

As per report at present the local tax departments make many restriction policies, such as prohibition of small ticket, prohibition the trading from different places etc in order to prevent forging, tax evasion, tax fraud etc. This phenomenon greatly affects the supply of scrap steel resources and the normal production of Chinese steel enterprises.

China Scrap Steel Application Association expressed that this year China’s demand for scrap is about 72.8 million tonnes to 75.6 million tonnes and the supply gap is about 10 million tonnes. However if the resources gap can not be narrowed the scrap prices will continue to remain high.

WISCO Fangchenggang project to start production in 3 years

It is reported that in the general meeting of shareholders of WISCO held on May 15th 2008, Mr Dend Qilin GM of WISCO Group and board chairman of WISCO expressed that the project of Fangchenggang iron and steel base, which is the focus of capital market and investors, has been approved by National Development and Reform Commission last month.

Mr Deng said that the project would mainly manufacturing products with high added value and high technology content and would break though in construction of cyclic economy model.

As per report, at present the preparatory work for the project has been launched but it will take three years to bear fruit in the first stage.

It is said that WISCO has planned to make the project the large modern port style enterprise of world class in Fangchenggang.

Earthquake halts production of Lueyang Steel

It is reported that the strong quake in Sichuan has completely cut off water and electricity supply in Lueyang county disrupted Baoji Chengdu railway on Luoyang section, leaving around 2,000 people stranded at local stations and halted production of Luoyang Steel as a whole.

As per report the quake also caused tailing drainage from the breach of a tailing pool in Hejiayan County operated by Huaao Company.

CISA calls for earthquake relief work by steel makers

It is reported that China Iron & Steel Association has proposed that all its member steel enterprises should immediately engage into the earthquake relief work to help disaster stricken people go through the difficulties.

CISA member steel enterprises should take the lead in donation, well organize relief work by production and provide needed steel and other materials for reconstruction after the quake, but are not allowed to increase steel prices.

The members should also help minimize the losses of the disaster-stricken enterprises by offering manpower or materials support.

Additionally, potential safety accidents, probably to be caused by aftershocks, should be prevented, and any hidden troubles about the factories, equipments and houses should be examined.

(Sourced from MySteel.net)

Shougang new CRM starts commercial operation

It is reported that after two years’ construction, equipments installation and testing, Shougang’s cold rolling sheet production line with an investment of CNY 6.4 billion and a capacity of 1.50 million tonnes per year launched commercial operation on May 10th 2008. This is the first completed project of Shoufang’s relocation project and the only one project of high grade left in Beijing.

Shougang cold rolling sheet production line, located at Shunyi District in Beijing has a design capacity of 1.5 million tonnes per year including 800,000 tonnes of cold rolling annealed sheet coil and 700,000 of hot dipped galvanized sheet coil.

The products of the line are mainly high grade sheets used for auto and home appliance manufacturing and in construction industry. The 2,160 hot continuous rolling line and the supplementary systems in Shougang will support the line with feeds and help in product development.

As per report adopting the most advanced technologies and equipments the sheet mill has installed pickling and rolling machines, continuous annealing machine, two continuous hot dipped galvanizing lines two re rolling inspecting lines, two packing machines and a grinding mill.

Meanwhile another key project, Caofeidian Shougang Jingtang Iron and Steel Project is under way.

Till 2010, the demand in China of cold rolled sheet is estimated at 84 million tonnes per year with a shortage of more than 10 million tonnes.

Chinese industrial output in April surges by 15.7% YoY

National Bureau of Statistics announced that China's industrial output soared 15.7% YoY in April 2008 which include output from all state owned and privately owned enterprises with annual sales revenues that exceed CNY 5 million.

China industrial output increased 16.3% on an annual basis between January and April this year.

China's industrial output by product in April 2008 is under

Source: National Bureau of Statistics

General Steel Holdings announces Q1 results

General Steel Holdings Inc one of China's leading non state owned steel products producer announced its financial results for the first quarter of 2008.

(In USD million)

Mr Henry Yu CEO & chairman of General Steel Holdings Inc said "We are pleased to begin 2008 with our best-ever first quarter revenue in the history of General Steel. Our revenues continue to be robust as we experience strong demand for our products. The pipeline of potential acquisitions remains strong as we see consolidation in the industry gaining traction. He said that we believe we are in a unique and outstanding position to capitalize on the domestic steel industry changes and emerge as one of the largest non government owned steel companies in China."

Performance highlights include
1. In January 2008, it acquired a controlling interest in Hancheng Tongxing Metallurgy Company Ltd.
2. In March 2008, approved for listing on the NYSE Arca
3. In March 2008, initiated Chicago Board of Exchange Option Trading
4. December 2007, completed a private placement with net proceeds of approximately USD 36.4 million

INPROM net profit in Q1 dips by 95% YoY

Interfax reported that OJSC INPROM, one the major players on the Russian metals market, posted RUB 2.556 million in IFRS net profit in the first quarter of 2008. The company's net profit in the same period of 2007 came to RUB 48.03 million. Therefore, INPROM's net profit decreased this quarter 94.69% YoY.

INPROM's pretax profit in the first quarter came to RUB 494.135 million YoY increase of 630% from the same period in 2007. Sales revenue in the period decreased by 10.4% YoY to RUB 3.197 billion.

INPROM said that the decrease in net profit was driven by unfavorable pricing trends on the market. In addition, the company's intensive expansion of its branch network had an influence on its net profit showing.

INPROM controls its own metal service network in 29 major Russian cities. INPROM specializes in small scale wholesaling and retail sales of steel roll and piping, as well as providing steel roll processing services.

Volga-FEST to start fittings production

It is reported that Volga-FEST a Frolovo metallurgical plant is to open the second electric steel making shop and a rolled section shop. This information was placed on the corporate website.

According to ESTAR’s plans, the rolled section shop will specialize in producing construction fittings. The production volume and the shop construction period have not yet been disclosed.

Ukraine to study voestalpine steel mill project proposal

Ukrainian Journal reported that Ukraine’s Industry Ministry will take time until May 28th 2008 to decide on a USD 5 billion proposal submitted by Austria's Voest-Alpine Corporation to build a steel mill in Odessa region.

Mr Serhiy Hryschenko deputy industry minister said the ministry’s special team will be work on feasibility of allocation of land plot, environmental issues and infrastructure.

Ukraine may build two pipeline branches for Caspian crude

Ukrainian Journal Staff reported that Ukraine will suggest using its Odessa Brody oil pipeline for moving Caspian Sea crude to markets in Poland and the Czech Republic, but also in Belarus and Lithuania, a senior official said Thursday.

Ukraine is hosting a regional Energy Summit in Kiev on May 22nd to 23rd and the discussions will apparently focus on building two branches to the pipeline, not one as has been previously thought.

Mechel to float preferred shares

It is reported that Mechel's Board of Directors resolved to float 55 million preferred shares by public offering. The issue's face value amounts to RUB 10 per share.

As reported earlier, Mechel shareholders approved the total of 138,756,915 authorized preferred registered uncertificated shares amounting to RUB 1,387,569,150 that the company could issue.

RusAl continues wage talks in Jamaica

It is reported that United Company RusAl, the world's largest aluminum producer Jamaican bauxite and alumina plant was operating normally and that wage talks with a labor union were ongoing.

Mr Halvor Molland a spokesman for Norsk Hydro said the plant operated by Alumina Partners of Jamaica has two unions, with one already agreeing to renew workers' contracts. He said that "There is no immediate risk of production disturbances. Talks are over the renewal of a three year contract.”

Interros Holding completes asset split

Interfax reported that Vladimir Potanin's Interros Holding has finalized the purchase from Mikhail Prokhorov of a 50% stake in KM Invest which manages the joint investments of the two businessmen.

As per report transactions have been simultaneously completed on Onexim's acquisition of a 27.5% stake in Open Investments a 91% stake in Soglasie Insurance Company, 100% in Rosbank Management Company as well as a number of geological exploratory assets.

Thus, the split of the assets of the two former Interros partners has been completed.

RZD posts net profit of RUB 19.7 billion in Q1

Interfax reported that Russian Railways posted net profit under Russian accounting standards of RUB 19.7 billion in the first quarter of 2008 down slightly from the first three months of 2007.

RZD said the reduction in net profit can be attributed to an increase in spending. Sales revenue grew 14.9% to 269.682 billion rubles in the quarter

Gazprom secures license to sell gas in Belgium

De Tijd reported that Russian gas giant Gazprom has secured a license to sell gas to industrial customers in Belgium, newspaper

As per report, Gazprom is the 25th company to receive such a permit in the country, where gas sales are dominated by Distrigas, the Belgian gas trading arm of French utility Suez and Gaz de France.

The newspaper said Gazprom has not yet approached any potential clients in Belgium.

TAS and Pryvat planning a wagon unit in Ukraine

Serhiy Tihipko co owner of TAS Group recently announced the Group's intention to create a railcar manufacturing holding together with Pryvat Group.

The holding would include Kryukiv Railcar Plant, Dniprodzerzhynsk Railcar Plant and Kremenchuk Steel Casting Plant.

TAS Group intends to make an IPO of the holding by 2011 to attract funds for the modernization of its assets.

At the same time, Pryvat Group seeks another goal in the creation of the holding: participation in the privatization of Luhanskteplovoz which is to take place in 2008.

TAS Group owns about 25% of KVBZ and 98% of DNVM as well as 95% of Kremenchuk Steel Casting Plant together with Pryvat Group. A source inside Pryvat Group said that the creation of the holding became possible after SCM sold its 19.4% stake in Kremenchuk Steel Casting Plant. This plant would be an important asset for the potential holding as it produces the castings needed for railcar manufacturing. A shortage in castings is felt in the CIS countries and is not expected to disappear at least until 2010.

According to Serhiy Tihipko, Kremenchuk Steel Casting Plant will now directly supply castings to DNVM and KVBZ. This will allow KVBZ and DNVM to purchase castings in larger volumes and at lower prices. In this regards the news is positive for the plants. However, more details are needed in order to precisely judge the end results of this move.

(Sourced Millennium capital)

Severstal buyout of WCI welcomed by USW

The Youngstown Vindicator reported that the United Steelworkers has welcomed the last week announcement of Russian steel major buying WCI Steel in US.

Mr Ed Machingo president of United Steelworkers of America Local 1375 said "It is a great announcement.”

He welcomed the reports that Severstal plans to invest millions of dollars in coming years in maintenance and upgrades, including relining of the Mahoning Valley's only remaining blast furnace in 2011 and improvements to the finishing department.

He added that “If they plan on putting money into it, then they plan on running it. They are a sound company.”

Mr Machingo said that he does not expect much change in staffing at WCI, which has 1,100 hourly workers.

Canada starts investigation on stainless steel wire products

Canada Border Services Agency has initiated a re investigation of the normal values and export prices of certain stainless steel wire originating in or exported from the South Korea, Switzerland and US and the amounts of subsidy of certain stainless steel wire originating in or exported from India.

The re investigation is part of the CBSA’s enforcement of the finding made by the Canadian International Trade Tribunal on July 30th 2004.

Normal values and amounts of subsidy established during this re investigation will be effective for the subject goods released from the CBSA on or after the conclusion of the re investigation. Normal values and amounts of subsidy currently in place will expire on that date. In addition, the normal values and amounts of subsidy determined on the basis of the re investigation will be applied to any entries of subject goods under appeal that have yet to be re determined at the time of the conclusion of this re investigation.

Exporters that choose to co operate in the current re investigation are required to provide a complete and accurate response to the CBSA’s Exporter Request for Information by June 23rd 2008. An exporter will be considered co operative if the requested information is submitted on time and the exporter permits verification of the data.

CBSA cautioned importers that new normal values or amounts of subsidy, when issued, may be higher than those currently in effect and that this could result in additional assessments of anti dumping or countervailing duty. Importers are also cautioned that unless an exporter co operates in this re investigation and receives specific normal values or amounts of subsidy at its conclusion, subsequent imports of subject goods from that exporter will be assessed at the rates indicated above.

In addition, in cases where changes occur in domestic prices, market conditions or costs associated with production and sales of the subject goods, the concerned parties are responsible for informing the CBSA of such changes in writing and in a timely manner. If the concerned parties do not or did not properly notify the CBSA of substantial changes, or if they do not provide the information required to make any necessary adjustments to values, retroactive assessments of anti dumping or countervailing duty may be warranted.

It should be noted that stainless steel belting wire used in the production of conveyor belts and stainless steel wire line used in the oil and gas industry are subject to an anti dumping duty remission order. Remission is granted for anti dumping duty paid or payable in excess of 35% of the export price in respect of these two stainless steel wire products.

Benxi orders for two new 20 high cold rolling mills

Benxi Iron & Steel Company Limited China has awarded an order to SMS Demag of Germany for the supply of two new 20 roll cold mills.

As a newcomer to the production of high grade special steel strips, the customer has decided in favor of rolling mill technique in X-roll 20-roll design from SMS Demag. Hot rolled special steel strips from the 300 and 400 series are rolled down further on the new 20 roll cold mills Nos 1 and 2. The two cold mills will enable Benxi Iron & Steel to attain an annual production of 200,000 tonnes of high grade special steel strip.

The SMS Demag supply scope comprises the design and manufacture of the mechanical equipment and the supervision of erection and commissioning.

The products are distinguished by their close thickness and flatness tolerances and by top class surface quality. Both Monoblock stands in the MB 22B-54“ series roll strips of up to 1,350 mm width and they process incoming gages of up to 6 mm which can then be rolled down to final gages of as little as 0.2 mm.

Mr Yoichi Saji appointed as chairman of Nippon Yakin board

Nippon Yakin Kogyo Company Limited recently announced that it has appointed Mr Yoichi Saji as the chairman of the board and Mr Kazuta Sugimori who will replace Mr Yoichi Saji as the new president of the company effective June 26th 2008.

Nippon Yakin Kogyo develops and manufactures an extensive range of high performance alloys by combining its superlative core technologies, developed from many years of experience and tradition, with new and innovative technologies. It is steadily repositioning itself as a maker of new stainless and specialty steels capable of contributing to our advanced information and IT society.

Nippon Yakin Kogyo is moving beyond stainless steels and branching out into new fields, applying the sophisticated production technologies we have acquired through years of stainless steel production.

Universal Stainless announces base price increase

Universal Stainless & Alloy Products Inc has announced base price increases of 3% to 5% on all stainless and high strength low alloy grade products manufactured at its Bridgeville and Dunkirk facilities. The increase will be effective with all new orders entered on June 1st 2008. Current material and energy surcharges will remain in effect.

Mr Chris Zimmer VP of sales & marketing at Universal Stainless said that "The price adjustment is necessary to offset the impact of sharply higher energy and operating supply costs as we focus on responding to continued strong market demand. This action will enable us to continue our reinvestment in equipment and facilities to better serve our customers.''

Universal Stainless & Alloy Products Inc manufactures and markets a broad line of semi finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. Its products are sold to re rollers, forgers, service centers, original equipment manufacturers and wire drawers.

Hired workers sue Latrobe Specialty Steel

The Pittsburgh Tribune Review reported that Latrobe Specialty Steel Co is accused in a federal lawsuit of permitting an entire culture where pornographic e mails were sent and received by many workers and management.

As per report, four former longtime Latrobe Specialty Steel employees alleged in an age discrimination lawsuit they filed last week in US District Court in Pittsburgh that they were fired in November on the grounds that they sent and received offensive e mails.

The suit stated that “The e mails sent and received by the fired workers were far less offensive than what many other employees and members of management, including Mr Hans J. Sack, president of LSS, sent and received without any sanction from the company. There is an entire culture at LSS of sending pornographic e mails.”

The lawsuit alleges that Latrobe Specialty Steel has been discriminating against its older work force, firing them and forcing them to retire, for a long time and the practice has not stopped. They said in the lawsuit that the company violated the Age Discrimination in Employment Act. According to the lawsuit, it stated reason for the firings was only a pretext because three of the four were replaced with younger employees.

The lawsuit seeks back pay plus benefits and damages for the four fired workers, along with an injunction prohibiting Latrobe Specialty Steel from discriminating against workers 40 or older. It seeks a judgment that a class action lawsuit can be filed against the steelmaker, saying its action in firing those workers violates age discrimination law.

As per report, Latrobe Specialty Steel would not comment on the allegations.

Poseidon Nickel may redesign its Mt Windarra project

Bloomberg reported that Poseidon Nickel may redesign the proposed nickel concentrate plant at its Mt Windarra project to enable metal refining.

Mr David Singleton CEO of Poseidon Nickel said that "We see a lot more financial benefit in going through to producing the metal, but you need scale and that's why we're looking at upsizing the project.”

He said that the price of nickel has risen 2.6%in 2008 lagging copper, tin and aluminum as mills cut production and use existing stockpiles.

Mr Singleton said that building a refinery at the site in Western Australia would allow Poseidon to benefit fully from prices on the London Metal Exchange, as concentrate fetches about 35% less than metal. He said that "We believe, and all the economic studies show, that would produce twice the profit than just from producing a concentrate.”

Mr Singleton added that a decision on the revised plant would be made by the end of the year.

Iron ore price negotiations – Chinese importers must consolidate

According to Mr Gen Bingxi vice general secretary of the China Chamber of Commerce for the Metallurgy Industry, China iron ore importers must consolidate to stand a better chance of resisting the price demands of foreign miners.

Mr Bingxi while speaking at an industry conference said that “We need to push for the consolidation of the numerous private traders and importers.” He said that scattered operators and investors' must build a united front against foreign suppliers.

Mr Bingxi reiterated calls by other industry officials to avoid inefficient spot purchases in relatively small quantities.

Chinese steel industry officials have threatened to boycott iron ore spot sales by Rio Tinto Ltd, which it accused of diverting iron ore to more lucrative spot transactions while failing to fully deliver on contracted shipments. Rio Tinto has cited a provision in sale agreements that allow it to sell some of its contracted ore on the spot market.

Making of FMG

Perth Now has published an interesting article about the making of Australian iron ore miner Fortescue Metal Group by Mr Andrew Forrest popularly known as Twiggy, which would alter the face of the Australian iron ore industry.

Mr Paul Lampathakis has written that Mr Graeme Rowley was driving through Cottesloe in April 2003, wondering where his career was heading after leaving mining giant Rio Tinto at age 63, when his mobile phone rang and on the other end of the line was 41 year old entrepreneur Mr Forrest, who told him that I have got an idea.”
Mr Rowley drove to Mr Forrest's nearby John St home and the two sat talking in the kitchen. Mr Forrest spoke enthusiastically to him about studies that had been done at Mt Nicholas, an iron ore deposit north of the Fortescue River in the Pilbara. According to Mr Forrest, the Pilbara was enormously under explored and there was plenty of ore to be exploited. He wanted Mr Rowley's mining rail and port expertise so the resource could be mined, freighted and eventually shipped.

Mr Rowley was so persuaded by Mr Forrest's vision he invested AUD 80,000 for a million shares in FMG and eventually became executive officer of operations for Fortescue. Mr Forrest and Mr Rowley soon recruited a former colleague of Rowley's, Mr Alan Watling as COO, because of his knowledge of rail and shipping operations at mine sites. About 12,000 workers have played a role in the project since 2003.

In 2003, Mr Forrest approached the Allied Mining and Processing company, which soon after became Fortescue, about an ore body in the Pilbara. He set about steering that company towards developing its own rail and port systems and sharing these facilities with BHP and Rio Tinto, rather than developing the ore body and selling the ore to BHP, as had been planned.

Finding investors to finance the dream was more of a struggle. Mr Rowley said that “Living off modest salaries that allowed us to feed ourselves and have the odd beer', borrowing big and investment-gathering trips to Hong Kong, Europe and pivotally, the US, were part of the path to getting the AUD 3.2 billion the company needed by August 2006 to get the mining, rail and port project under way.

Mr Forrest said Fortescue subsequently took a radically different approach to the other companies, looking for wide, flatter plains' of ore, rather than only deep deposits. In this way, Fortescue had found billions of tonnes of new iron ore way beyond our ability to ever consume it as an iron ore producer. He said “That's exploration.”

FMG eventually made AUD 14 million worth 180,000 tonne iron ore shipment from the Cloud Break mine in the Chichester Ranges about 270 kilometer east of Port Hedland this week to China that would break the BHP Billiton and Rio Tinto duopoly on the Australian iron ore market.

Ukraine to import 1 million tonne coal in 2008

Ukrinform reported that Ukraine is planning to import in 2008 at least 1 million tonnes of thermal coal in order to observe schedules for its accumulation at the storages of heat power plants and total energy power stations.

Mr Yuriy Prodan fuel and energy minister of Ukraine said that by the beginning of November, it is necessary to pile up over 4 million tonnes of coal, which will make it possible to reduce the consumption of natural gas and lessen the impact of imported gas price rise on the price of electricity, which is possible in early 2009.

Bolivia may take 50% stake in Colquiri mine

ITRI reported that Bolivian government and Glencore subsidiary Sinchi Wayra are discussing the conversion of lease contracts on two mines into joint ventures with a 50% state participation.

As per report the discussions centre on the Colquiri tin and zinc mine in La Paz department and the Porco zinc, lead and silver mine in Potosí department.

A source said that Bolivian government and company executives have been trying to reach an agreement over the possibility of setting up joint ventures for the mines with state mining company Comibol since the middle of last year.

The Colquiri mine produces some 2,500 tonne per year of tin in concentrate and until last year all of the mine’s production was treated at the Vinto smelter. ITRI understands that there is some potential to expand the mine and to recover tin and zinc from tailings. The 50% state ownership target is in line with Bolivia’s draft new constitution, which requires this level of government participation for all mining operations in the country.

(Sourced from ITRI.co.uk)

Indian government planning new coal mining projects

Mr Santosh Bagrodia union minister of state for coal announced that the ministry of coal is currently preparing plans for new projects, which will be submitted to the cabinet in a month.

Mr Bagrodia told reporters that though several projects are in the pipeline, the ministry is planning to have more projects so as to make the country self sufficient in coal production.

He said that efforts are being made to ensure that import of coal would not exceed 50 million tonnes per year by 2011. Last year, coal imports stood at 42 million tonnes including 22 million tonnes of coking coal.
He informed that the total coal production in the country this year would be 525 million tonnes and there is no shortage of coal supply to the power projects. He said that "We are ready to supply as much coal as they want. However, at the moment, a number of utilities have less than seven days stocks as against the preferred 21 days. They are keeping low stocks for their own reasons."

Mercator secures coal mines in Indonesia and Mozambique

DNA Money reported that Mercator Lines is foraying into coal mining through its subsidiary in Singapore and has secured mining licenses for two coal blocks in Indonesia and one in Mozambique.

Based on the fact that bulk cargo freight rates in the recent past were at a record high, the new venture is set to be an advantage for the shipping major.

Mercator has secured 50% rights in two coal blocks in Indonesia, which have reserves of 15 million tonnes of decent to good quality coal. It would start production of coal there in July 2008 and expects the 2 mines to contribute 1 million tonne of coal in the first year.

However, the coal block in Mozambique where Mercator Lines has 85% rights is still under development. The coal reserves there have been estimated to be around 3 billion tonnes and the company anticipates a wait of another 2 to 3 years before they can start production.

Mercator has spent USD 5 million in Indonesia for developing the mines and expects a similar expenditure in Mozambique. This also includes production tax and 9% royalty that the company needs to pay the Indonesian government. Thermal coal, on the other hand is currently sold at USD 45 to USD 50 per tonne.

Mr Atul Agarwal MD of Mercator said that "The coal venture would help us become a complete energy supply chain company, as it would add to our logistics services. We are looking at mining and selling one million tonnes of coal in FY09, out of the two Indonesian mines."

Mr Agarwal said that "Rather than acquiring existing producing mines, we have looked at green field, projects which need development."
Analysts said that the venture could help get a constant revenue stream for Mercator, which transports coal to power plants of TATA Power, Jindal Steel and Reliance Power, apart from acting as a hedge. But the company prefers to call the move a backward integration.

Mercator is one of the leading carriers of bulk cargo in India. They ferry iron ore, coal and much of their revenues come from bulk cargo unlike Great Eastern Shipping and Shipping Corporation of India.

Kuzbassrazrezugol coal production in 4 months up by 9.5% YoY

Interfax reported that Kuzbassrazrezugol Coal Company in January to April 2008 period raised coal production by 9.5% YoY to 15.918 million tones.

As per report the company mined 4.209 million tonnes of coal at the Taldinsky strip mine and 2.897 million tonnes at the Bachatsky mine. Its coking coal production rose 18.6% year-on-year in the four months to 1.806 million tonnes.

Kuzbassrazrezugol’s coal sales in the four months rose 17.2% YoY to just over 16.603 million tonnes, including 1.809 million tonnes of coking coal and exported 8.058 million tonnes of coal.

Kuzbassrazrezugol is one of Russia's biggest coal producers, operates 11 strip mines in the Kuznetsk Basin. It mined 46.34 million tonnes of coal in 2007 and is targeting 49.3 million tonnes this year.

Low coal supply major factor behind record prices in China

INTERFAX CHINA reported that record high prices for coal in China are largely due to limited supplies on the domestic market.

Mr Li Chaolin an analyst with the China Coal Trade and Development Association told Interfax that "Another reason is the government's previous control in the domestic coal industry.”

Mr Chaolin said that government control in the industry has had several effects, including limiting output by imposing environmental and safety regulations and discouraging production, especially among independent coal producers, through price caps. It is unusual to see the price of coal rise so dramatically during this time of year, when few people are using electricity consuming heaters or air conditioners. With the drought season over and hydropower plants beginning post winter operations, market consensus says that domestic demand should be lower, not higher.

Mr Chaolin said that "Coal price is influenced by supply and demand. When coal supply cannot meet demand, a rise in coal price is inevitable."

According to recent market rumors, some Chinese coal companies have limited their coal output so as to raise coal prices.

Bangladesh should mine coal before gas is depleted – Expert

It is reported that experts from Bangladesh have asked Bangladesh to mine its huge coal reserves before its fast depleting natural gas reserves run out. They however urged the country to tap the resource carefully to avoid human tragedies associated with coal mining.

Bangladesh faces a serious energy crisis, with lack of gas to produce electricity. The crisis is set to worsen by 2011 when its gas reserves could run out and attention is increasingly turning to its vast coal resource.

It has already suffered a setback trying to mine coal in the northern Phulbari area, where Britain’s Global Coal Management Public Limited Company had to halt activities two years ago after violent protests by local residents and environmentalists, saying the project would displace at least 40,000 villagers and severely damage the environment. At least three people were killed and dozens injured in clashes with police at Phulbari in Dinajpur district.

Mr Ajoy Kumar Ghose a former professor of the Indian School of Mines during a Dhaka meeting attended by senior officials and representatives of development partners said that “Phulbari is the crown jewel in coal inventory of Bangladesh and its development will help transform the economy of the nation. But the government should launch advertisement advocacy for assuaging the sentiments of project affected people so that development and execution of the project can be facilitated.”

Eskom to discuss coal pricing with mining industry - ANC

Mining Weekly reported that the ruling African National Congress party suggested that Eskom should pay for its coal on a cost plus basis and that coal pricing should be discussed with the industry.

Mr Gwede Mantashe secretary general of African National Congress said that “Eskom should only source the fuel from the spot market in the most extreme conditions.”

He said that currently, Eskom is in the costly situation where it has to buy increasing amounts of coal on short term contracts, leading to far higher prices. Eskom in February that it needed to procure an extra 45 million tonnes of coal over the next two years to ensure stable supplies to its power stations.

Mr Mantashe said that Eskom sourced 95% of its coal from long term contracts, when the ANC lost contact with its processes. He added that "Coal stock reserves should not be allowed to drop far below the acceptable 20 days level. Hence, the proposal that coal pricing must be negotiated with the coal mining industry."

Mr Andrew Etzinger GM of Eskom said that its average coal stock levels at its power stations was currently 16.2 days. Eskom produces just over 90% of its power from burning coal, the price of which has surged over the past year.

Adriana Resources appoints Mr Petrina as VP operations

Vancouver based Adriana Resources announced that it has appointed Mr Michael Petrina as VP of operations.

Mr Petrina was previously operations GM for Adanac Molybdenum.

Mr Michael Beley CEO of Adriana Resources said that “Mr Petrina would play an integral role in the continued development of Adriana's strategy to acquire and develop iron ore resources in Brazil and to advance the company's iron ore resources in Quebec.”

Uranium ore mining to start at Novokostiantynivske deposit

According to Mr Yuriy Prodan Fuel and Energy Minister the Fuel and Energy Ministry of Ukraine, it is planning to start in 2008 the extraction of uranium ore at the Novokostiantynivske deposit in Kirovohrad region.

The effort will be encouraged by settlement of the question on the purchase of uranium ore by national nuclear energy generation company Energoatom from the Eastern ore dressing plant which in the minister's words will be decided during a month.

The plant has now stopped the export of uranium ore because of unfavorable situation in external markets. Prices on spot contracts reduced, and sometimes do not even cover extraction spending.

Novokostiantynivske deposit is believed to be Europe's biggest. Ukraine's uranium industry is based on big reserves of ores which are mainly located in Kirovohrad region.

Pittsburgh coal mine sells for USD 25 million

Pittsburgh Business Times reported that a bankrupt Uniontown Coal Company sold its assets last week for USD 25.4 million in two deals that could reopen a local mine and restore some jobs.

The report said that Mon View Mining Co laid off 200 miners when it filed Chapter 7 bankruptcy in 2002. The company was nearly sold at sheriff's sale three years ago for USD 800,000 to settle its real estate taxes. Instead, the bulk of the company's assets were acquired last Friday by Consolidated Resources Group Inc, a Delray Beach, Florida based energy reclamation company, for USD 25 million, a purchase that includes more than 1,200 acres at the Mathies Mine at Nottingham in Washington County.

Mr Joseph Bergmann CEO of Consolidated Resources Group said that he is interested in retrieving coal above and below ground but would provide few details.

Mechel sets up mining subsidiary

Interfax reported that the charter capital of Mechel Mining, in which Russia's Mechel coal and steel group is consolidating its upstream assets before the subsidiary holds an initial public offering, will total RUR 122 billion .

Mechel Mining in a statement said that its board of directors approved a decision on the primary issue of shares that will be placed in favor of the founder and the company is issuing 12,217,800,000 shares with par value of RUB 10. The shares will be paid for by Mechel's stakes in Yuzhny Kuzbass, Korshunov GOK as well as RUB 500 million in cash.

Norilsk Nickel bids for the Udokan deposit

MMC Norilsk Nickel announced that it has applied for participation in the bid for the Udokan copper field in Zabaikalsky Territory. In accordance with initial bidding terms, Norilsk Nickel filed its formal application before the deadline fixed on May 14th 2008.

It received a set of necessary geological data and proceeded to the development of technical and economic proposals related to the intended use of mineral reserves in the licensed area.

According to Mr Denis Morozov general director of MMC Norilsk Nickel by participating in the contest for one of the largest copper fields of the world the Company demonstrates its commitment to expanding the raw material base and contributing to the long-term growth of domestic copper production.

Mr Denis Morozov said that “The scale of the Udokan project is commensurate with the corporate scope of MMC Norilsk Nickel. We leave open the possibility of inviting co-investors and partners to the joint deposit development if the Company wins in this contest.”

Udokan copper deposit is the largest in Russia and one of the largest in the world. Complex local ores consist of three ore types: sulphide, mixed and oxide.

FMG wants to stay Australian

AAP reported that Australian iron ore miner Fortescue Metals Group wants to maintain its majority Australian ownership and stay profitable in the long term.

Mr Graeme Rowley ED of FMG told Sky News that "We will definitely maintain ourselves as majority Australian owned. We are very conscious of the need to maintain control of Fortescue. We have major resources in the Pilbara and are keen to ensure we're profitable long in to the future."

However, Mr Rowley acknowledged the company cannot stop investors from gaining a large stake in the company. He said "What we can control is the distribution of any additional equity.”