Indian steel prices down by 18% as compared to March

Mr SK Roongta chairman of Steel Authority of India Limited told CNBC –TV 18 that the government measures have resulted in steel prices coming down by 17% to 18% since March.

While answering to a question that have the government measures to control steel prices been effective, he said that “They have been effective; the open market prices of some of the steel categories have come down and there is a general sentiment towards softening of the steel prices.”

He said that “For reinforcement of steel, which is used for general construction as well as for builders, across the country. The peak levels prices have softened by about 15% to 20% and that’s good for the consumers. Going by the international price trends, there may not be any major corrections downwards but this itself is a big relief.”

Indian steel ministry clarifies stand on proposed export tax on steel

Indian steel ministry, in response to media reports that Indian government is considering a partial rollback on the proposals announced recently regarding export duty on certain steel products, has clarified that there is no proposal from Ministry of Steel regarding roll back of the duties announced by the Ministry of Finance.

The release added that “Some of the steel producers engaged in the manufacturing of value added steel products have represented that export duty on cold rolled, galvanized and coated sheets as well as pipes and tubes, the input material of which is procured through import of hot rolled coils under the Advance Licensing Scheme, should be exempted from the purview of the proposed export duty. This matter has been taken up with Department of Revenue for consideration.”

Indian Steel Alliance dissolved

PTI reported that the association of major Indian steelmakers Indian Steel Alliance has been dissolved as members pulled out of it within seven years of its formation. The report cited Mr Sajjan Jindal vice CMD of JSW Steel as saying that "As of now, ISA stands dissolved.”

Incorporated in October 2001, the objective of ISA was to promote steel usage as well as development of the steel industry in the country among others. It was also entrusted with the task of examining the issues faced by domestic steel producers and conveys its views and concerns to the government.

ISA faced its first causality when TATA Steel withdrew from the alliance in 2004. Very recently, SAIL also pulled out of the alliance stating that ISA was required to do more on promoting steel use and sharing of data between the utilities, a function which is being now performed efficiently by Institute for Steel Development and Growth.

The ISA has been spearheading the campaign against government's move to set up a regulator in the steel sector to monitor prices and imposing export duty on steel. It ahs also been demanding export levy on iron ore.

RSP creates new production records in April

PTI reported that Steel Authority of India Limited’s Rourkela Steel Plant has set a new benchmark for itself by posting very impressive and all time best results in all areas of products during April 2008.

Volume in tonnes
Change is YoY

During April 2008, RSP continued to operate its major facilities much above the rated capacity achieving capacity utilization of 110% in the production of sinter, 109% in hot metal, 108% in crude steel and nearly 114% of rated capacity in total saleable steel production.

JSW Steel announces Q4 & FY 08 results

JSW Steel Ltd has announced the following results for the January to march 2008 quarter & 2007-08.

The unaudited results for the Quarter ended March 31st 2008
JSW has posted a net profit after tax of INR 4610.0 million for January to March 2008 quarter as against INR 4132.5 million for January to March 2007. Its total Income is INR 42259.7 million for January to March 2008 as compared to INR 25792.7 million for January to March 2007.

The audited results for the financial year ended on March 31st 2008
JSW has posted a net profit after tax of INR 17281.9 million for 2007-08 as compared to INR 12920.0 million for 2006-07. Its total Income is INR 116771.4 million for 2007-08 as against INR 86995.9 million 2006-07.

SAIL was never part of any cartel-Mr Roongta

Steel Authority of India Limited affirmed that it has never been a part of any cartelization.

Mr SK Roongta chairman of SAIL on the sidelines of a CII national seminar on corporate social responsibility said that "We have never been part of cartelization and we shall not be a part of it. Our company does not increase the prices in cartelization.”

JSW Steel to setup PEB unit

JSW Steel Limited announced that its board of directors at its meeting held on May 5th 2008 has approved the proposal to set up a subsidiary to manufacture and sell Pre Engineered building structures.

JSW release said that “PEBs are gaining momentum in India. The Indian Corporate implementing large projects are increasingly using the Pre Engineered steel buildings due to the distinct advantage of saving in construction time of about 30% to 50% in total project schedule, better look and durability.

The release added that “PEB unit will consume steel plates, galvanized, color coated and galvalume products thus giving a captive buyer for JSW Steel. In addition, this will be an opportunity for JSW Steel to enter into high end solutions using Steel products as the base.”

Steel ministry wants finance minister to fast track steps to check prices

It is reported that union steel ministry has asked its finance counterpart to expedite the implementation of the measures that have been decided but not implemented yet to contain steel prices.

The proposed measures include bringing steel back under the Essential Commodities Act, 1955, suspension of futures trading in iron and steel on commodity exchanges and reclassifying the railway freight rate for iron ore.

Other steps that have not been announced yet include ensuring uninterrupted supply of electricity and railway rakes to small and medium steel producers to improve their capacity utilization and productivity. The proposal to reduce excise duty from 14% to 8% on various forms of iron as well as semi-finished products, bars, rods, angles and wires has also not been announced.

Another proposal was to improve availability of hot rolled coils by permitting its imports under the advanced licensing scheme against the export of cold rolled coils, galvanized and coated products, tubes, and pipes.

ArcelorMittal to spend USD 300 million on R&R in Orissa project

BS reported that ArcelorMittal, who is proposing to set up a 12 million tonne Greenfield steel plant at Patna tehsil in Keonjhar district of Orissa, plans to spend about USD 300 million on rehabilitation & resettlement. Mr Sanak Misra CEO of ArcelorMittal India said that "We plan to spend about USD 300 million for the R&R plan over a period of more than 5 years. The R&R plan has already been submitted to the Orissa government."

After meeting Mr Naveen Patnaik chief minister of Orissa along with Mr Sudhir Maheshwari and Mr Vijay Bhattanagar senior officials of ArcelorMittal, Mr Misra said that their steel plant will come up in two phases of 6 million tonne each. He said the R&R plan of the company was in conformity with the R&R policy of the Orissa government. The plan envisages dwelling units for each of the displaced family with common facilities. The rehabilitation colonies will have water supply, educational institutions and primary health centers.

Mr Misra said that as per the R&R plan, ArcelorMittal will set up a state of the art industrial training institute beside the steel plant. It is in discussion with 3 leading institutes of India having previous experience in handling ITIs. The model, including student strength and the cost of setting up of the ITI, is being worked out. He however, made it clear that the ITI would come up before the commissioning of the plant.

Official sources said that ArcelorMittal planned to apply the highest standards of corporate social responsibility for the Orissa project and intended to make the R&R policy the backbone of the CSR strategy.

Rites to invest INR 200 crore in rolling stock business

Rites Limited has announced that it would invest close to INR 200 crore over the next 12 to 18 months to expand its rolling stock business. Mr VK Agarwal MD of Rites said that "We propose to invest INR 195 crore to procure rolling stock for the purpose of leasing in the next 12 to 18 months."

Mr Agarwal said that the INR 195 crore investments is a part of company's overall INR 350 crore investment plans over the next 3 years. A big chunk of the remaining would be used to build road projects in the public private partnership model within the country.

Rites Limited procures locomotive engines, passenger coaches and wagons domestically and leases them out internationally to help creating the infrastructure in the developing nations, particularly in Africa and Latin America. Its subsidiary in Tanzania is now engaged into developing and maintaining rolling stock and rail infrastructure. Another subsidiary is engaged in Mozambique as well with a similar kind of project for transport of coal.

PGCIL ready to foray into Myanmar

It is reported that Power Grid Corporation India Limited is planning to foray into neighboring countries, beginning with Myanmar.

After receiving the Navratna status, it can now take investment decisions without seeking government approval to form JVs up to INR 1,000 crore or 15% of its net worth.

Mr RP Singh CMD of PGCIL said that "PGCIL is planning to go in a big way to the neighboring countries. We are setting up transmission lines in Myanmar. Earlier the JVs took time as we had to follow the Public Investment Board route, but now they take less time." He added that it may also bid to set up electricity distribution networks in Turkey.

Power Grid is also planning an investment of INR 75,000 crore during the 11th plan period. It has set a target of INR 250 crore from the consultancy projects for the current fiscal.

India to import cement from Thailand and Pakistan

FE reported that, concerned over the rise in cement prices contributing to overall inflation, the government will shortly hold a meeting with representatives from the sector and ask them not to increase the price line. The centre will also facilitate more cement imports from countries such as Thailand and Pakistan to cater to the rising domestic demand.

Mr Kamal Nath union commerce & industry minister said that "I propose to have a meeting with the cement companies in the second week of May 2008. Cement prices have gone up by 4.4% over the whole year. This is a matter of concern. The cement industry has been citing the increase in prices of coal, transportation and fuel as the reason for the price increase. As a pre emptive step, we have made cement import duty free and we are looking at more imports from Thailand and Pakistan." He added that the government has already taken several measures to cool down inflation and it would ease in the next 3 to 4 weeks.

Official sources said that in order to meet the cement shortage, railway authorities of India and Pakistan are working on modalities to immediately increase the number of daily trains plying between both the countries from 1 to 5 to carry more cement from Pakistan to India. Cement coming by train from across the border into India is estimated to be cheaper by around INR 50 per bag.

The source added that India plans to import at least 7 million tonnes of cement in 2008-09 from Pakistan after having already brought in over 2 million tonnes already. The quantity of daily import would be close to 4,000 tonne.

Tube Investments 2007-08 revenue up by 9.1% YoY

Bicycle and engineering products company Tube Investments of India Limited has posted revenue of INR 17.62 billion in 207-08 fiscal up by 9.1% YoY as against INR 16.15 billion in 2006-07 fiscal. It posted a net profit of INR 565 million down by 635% YoY as against INR 1.55 billion.

During 2007-08 fiscal, the bicycles business consolidated its position and improved its market share. The turnover increased to INR 5.77 billion, logging a growth of 13% YoY. The off take of bicycles by the trade segment was up by 16% YoY.

The metal formed products business grew up by 14% YoY fetching INR 3.70 billion for the period under review.

Last fiscal, Tube Investments’ engineering business grew to INR 8.16 billion, registering a growth of 5% YoY due to higher sales of cold rolled steel strips.

Sale of precision steel tubes was lower by 2% YoY due to the decline of the two wheeler segment, competition and lower realization.

Mr L Ramkumar MD of Tube Investments said that "While the profitability was affected by slow down in segments of the auto industry and steep input cost increases, cost reduction efforts and growth in new segments mitigated the drop to some extent."

Ennore Port to raise INR 800 crore through IPO

BL reported that Ennore Port Limited is mulling an initial public offering to raise about INR 800 crore for improving its facilities. The proposal is recently discussed by Ennore port authorities with the union shipping ministry officials. If the IPO goes through, it will be the first major government owned port where general public could have a stake.

A shipping ministry source said that "Since Ennore port needs to raise INR 800 crore or so, it is considering the appointment of a consultant to study the possibility of raising funds through a public issue. However, it is yet to take a board approval."

Ennore Port had cash reserves of INR 14.84 crore as on March 31st 2007, with an authorized share capital of INR 500 crore and issued capital of INR 300. It had a debt of INR 418.7 crore. According to a business plan developed by HPC Hamburg Consulting and Consulting Engineering Services for the port, it should have 43 million tonnes throughput by 2013 based on a conservative growth estimates.

To provide world class services, Ennore Port has to undertake a capital expenditure of INR 3,324.3 crore, of which INR 748 crore has to be company’s own investment while the rest could be raised through public private partnerships.

In 2007-08, Ennore Port handled 11.6 million tonnes of cargo, 9.05 million tonnes thermal coal and 2.19 million tonnes of iron ore. Ennore port is now constructing a new facility costing INR 480 crore that can handle 12 million tonnes of iron ore per annum. It has recently invited qualifying bids for setting up a container terminal. Besides, it is also in the process of setting up a common user coal terminal with 8 million tonnes a year capacity at a cost of INR 400 crore and a liquid cargo terminal with 3 million tonnes a year capacity costing INR 200 crore.

The new iron ore and coal terminals are expected to be ready by August 2010, and the containers berth by April 2011. It also plans to set up an exclusive cargo berth for export of cars at a cost of INR 140 crore. It is understood to be in talks with Nissan and Renault for export of 200,000 cars a year to the European market by 2010.

Rathi Udyog Q4 2007-08 net profit up by 35.83% YoY

Rathi Udyog has posted net profit of INR 15.77 million in January to March 2008 quarter up by 35.83% YoY as against to from INR 11.61 million in January to March 2007 quarter.

Net sales for the quarter surged by 72.89% YoY to INR 1,759.39 million, while total income for the quarter jumped by 72.68% YoY to INR 1,760.41 million.

INR in million

Coastal Energen to import equipment for Tuticorin power plant

IANS reported that Coastal Energen Private Limited is in discussions with power equipment makers in China, South Korea and the US for importing boilers and turbine generators for its 1080 MW thermal power project in Tuticorin in Tamil Nadu.

The power project is promoted under the Tamil Nadu government’s merchant power project policy whereby Coastal Energen can sell the power to any party.

Mr SM Zafrulla MD of Coastal Energen said that "We are in discussions with different equipment suppliers for sourcing the boilers and turbine generators for the project that is expected to go on stream in 2011." He added that it has decided to go in for a 3×360 MW power generation plant based on circulating fluidized bed boilers in the first phase of the Tuticorin project.

According to Mr Zafrulla, Coastal Energen will shortly float a tender for the equipment. He said that "We will finalize the vendor for boiler, turbine generator and the balance of plant by June 2008."

Mr Moosa Raza chairman of Coastal Energen’s executive committee said that although the circulating fluidized bed combustion technology is costlier than the traditional thermal boilers, Coastal Energen has opted for it since it can be fired with multiple fuels and is environmental friendly.

Mr Ahmed AR Buhari founder president & CEO of Coastal Energen said that the INR 45 billion project will be funded through a debt and equity mix of 70:30. He added that "A consortium of financial institutions led by the State Bank of India have given in principle nod for the project. We expect the interest to be around 11.5%."

Coastal Energen has acquired 1,000 acres of land for the project, which would include the setting up of another 1,000 MW power plant once the first phase is completed.

Cement realizations hit in January to March quarter

It is reported that the government’s measures to keep cement prices under check seem to have had a cascading effect on companies’ price realizations. Industry majors like ACC, Ambuja Cement and UltraTech have reported a drop or flat net realization per tonne.

Raw material cost was up by 11% YoY to INR 2,730 crore as against INR 2,465 crore in January to March 2008 quarter. Freight cost jumped by 9% YoY to INR 2,435 crore as against INR 2,236 crore.


Ambuja Cement’s realization dipped 3.4% to INR 3,448 a tonne as against INR 3,571 on sequential basis. Raw material cost zoomed 62% YoY to INR 255 crore as against INR 157 crore, while freight cost was up by 24% YoY to INR 274 crore as against INR 221 crore.

UltraTech Cement’s realization was down by 1% YoY on sequential basis at INR 3,796 a tonne as against INR 3,838.

INR in realization per tonne

Adani plans INR 5,000 crore power IPO

It is reported that Adani group has begun the spadework to come up with a mega initial public offering aiming to raise about INR 5,000 crore for setting up a power generation capacity of close to 10,000 MW in next 5 years.

As per report, it is chalking out investments plans for generating 1,320 MW power in Rajasthan and 2,000 MW at Dahej in Gujarat by 2012.

A senior official said that Adani will file the IPO papers with the market regulator Securities & Exchange Board of India in a week or two's time. SBI Capital has been roped in as one of the merchant bankers.

Adani's 4,620 MW power project at Mundra is being set up in the vicinity of TATA Power's ultra mega power project of 4000 MW. It is already implementing the project through internal fund generation, debt and private placement of equity with London based 3i Group Plc.

Adani also owns and operates India's one of the largest and highly mechanized state of art ports at Mundra in Gujarat, which is likely to handle close to 30 million tonnes of cargo during 2007-08.

Mitsubishi JV to expand presence in India

It is reported that Mitsubishi Corporation, which recently formed a JV with Coimbatore based Craftsman Automation to market and service its wide range of industrial machines in India, is looking at the northern and Western parts of India for expansion.

The new 70:30 JV called MC Craftsman Machinery has opened branches in Delhi, Mumbai and Pune. It is looking at a turnover in excess of INR 20 crore from the sale of 40 electric discharge machines in the first year and double the sales in the second year of operations.

In addition to this, it is also aiming to sell around 10 laser cutting machines. During the last two years, Mitsubishi has sold 55 machines in south India. Its major clients in India include NTTF, Mastercraft and GTTC. The first batch of fully built machines is expected to arrive later in May 2008 from Nagoya in Japan.

Mr Ashwani K Datta VP of MC Craftsman Machinery said that "We have just commenced our JV operations in India. We will continue to expand our service network here and depending on the market response, we will be setting up a manufacturing facility in India."

The new JV will offer industrial machinery Mitsubishi's range like electrical discharge machine, CNC wire cut machine, and laser cutting machine, made by Mitsubishi Electric Corporation along with machinery used in the field of die & mould and sheet metal industry.

GMR consortium receives license for Turkish airport

It is reported that Hyderabad based GMR group, in association with two others, received a 20 year license to operate the airport in the Turkish capital and agreed to reduce the duration for building the terminal from the agree time of 30 months to 18 months.

The license given to the consortium called Sabiha Gokcen, comprising GMR Infrastructure Ltd, a Turkish firm and a Malaysian company, includes building an international terminal at a cost of INR 1,575 crore and operating it within that airport, called Istanbul Sabiha Gokcen International Airport.

The terminal will have a three storey car park with a capacity for about 4,750 vehicles. A hotel with 60 rooms will also be built next to the terminal for flight crews, transit passengers and other guests.

Mr Recep Tayyip Erdogan Turkish Prime Minister, at a groundbreaking ceremony for international terminal, however, asked the consortium to reduce the duration for building the terminal from 30 to 18 months. He said that "We cannot wait that long and wanted the terminal to be ready by October 29th 2009, which is Turkey’s Republic Day."

Mr GM Rao chairman of GMR Group said that "Rather, we will be able to reap revenues much faster since the airport will start functioning in a shorter period. We are ready to build it in 18 months." He added that the new terminal will add an annual capacity of 10 million passengers to the existing 3 million passengers after it comes up, eventually rising to 45 million.

BG India plans to invest INR 4,000 crore in next 3 years

PTI reported that British Gas India is planning to invest USD 1 billion in the exploration business in the next 2 to 3 years.

Mr Kapil Garg MD of BG India said that "We have firm plans to invest USD 1 billion in exploration in India. We are into the full gas chain, both upstream and downstream and our intent would be to expand in India. We have a presence in the west and east coast in oil exploration activities."

India is one of the BG Group's 6 core geographic areas of operation. BG India is responsible for managing and developing the upstream and downstream interests of the BG Group in India. It is the largest investing foreign company in the Indian oil and gas sector, having invested approximately USD 900 million to date.

India needs an investment of nearly USD 300 billion for exploration of hydrocarbon.

L&T taking anti takeover measures – Report

ET reported that Larsen & Toubro is finally instituting a structure that will be a buttress against hostile bids. It is set to revamp its corporate structure to create a dozen operating companies under the direction of a separate board of directors. Effective July 1st 2008, the move will lead to L&T becoming the umbrella organization with a board to administer the performance of all businesses and ownership of the brand, pegged at around USD 2 billion. It will also help L&T, for long a vulnerable takeover target due to the absence of a dominant promoter group, to preserve its identity. Indian institutions hold a combined 30% stake in L&T while L&T Employees Welfare Foundation holds 13%.

Mr YM Deosthalee CFO of L&T said that the creation of operating companies will help L&T have more focused operations in the marketplace. He added that "It will help the operating companies to concentrate more on their business and their customers. The board of the operating companies will help them to take expeditious decisions. Their own HR policy will help them retain talent."

But he said that the operating companies will not be separate legal entities. He added that "Therefore, it is imperative that we gear up our organization structure and processes to meet the enhanced expectations of all stakeholders. To ensure greater empowerment, each operating company will have independent support functions. However, some processes will be driven from the operating divisions to ensure synergy across the operating companies."

L&T plans to have operating companies in these businesses, building & factories, infrastructure, metallurgical, material handling & water, electrical projects & Gulf operations, hydrocarbon upstream, hydrocarbon mid-downstream, power, heavy equipment & systems, shipbuilding, electrical & automation, machinery and industrial products. All these companies will have independent support functions like finance & accounts, HR, supply chain management and corporate centre. They will look after the businesses of nearly 60 special business units of the diversified conglomerate. CEOs of these operating companies will report to L&T board member.

PTC India Q4 2007-08 net profit up by 231% YoY

PTC India Limited has posted over 3 fold increase in profit after tax to INR 19.22 crore for January to March 2008 quarter as compared with INR 5.8 crore in January to March 2007 quarter. Total income dipped by 6.52% YoY to INR 565.95 crore as against INR 605.40 crore.

Mr TN Thakur CMD of PTC India said that "Initiatives taken by us in the past 2 years towards building long term sustainability of PTC’s business model have started showing tangible results. PTC’s present business mix, therefore, is less skewed towards short term market operations, and we are moving closer to our aspirational business portfolio."

PTC’s income for 2007-08 stood at INR 3,949.02 crore up by 4.31% YoY and the profit after tax increased by 39% YoY to INR 48.70 crore as against INR 35.09 crore.

Large scale barges to be encouraged at Kolkata

BS reported that for sometime, Kolkata port including Haldia dock, whose operation would often be hit by the poor navigability of the Hooghly River, making movement of large vessels with large average parcel load almost impossible along the river, has been planning to encourage large scale barge movement of traffic to and from the port.

A beginning has already been made. Last fiscal, Steel Authority of India Limited brought coking coal to Haldia by barges totaling about 20,000 tonnes. The consignments were first unloaded from big ships at Visakhapatnam port for onward movement by barges. The throughput, it is hoped, will rise in the current fiscal.

While Inland Waterways Authority of India is supposed to construct two barge jetties, one each at Kolkata Dock System and Haldia dock, the port authorities on their part are planning several other measures. Thus the owners of big size barges have been sounded if they should be interested in undertaking topping up operations for bulk cargoes at the Sagar Island, which being closer to the sea provides deeper draft suitable for large vessels.

US Steel breaks ground at its Granite City Works

United States Steel Corporation in partnership with SunCoke Energy, Inc broke ground on a USD 570 million joint capital investment program to support the US Steel Granite City Works. US Steel will provide USD 280 million in this joint capital investment program.

As part of the program, Gateway Energy and Coke Company, an indirect wholly owned subsidiary and affiliate of SunCoke Energy, will construct, own and operate heat recovery coke ovens. The ovens will have an annual coke making capability of 650,000 tons and utilize state of the art technology to produce coke in an environmentally responsible way. The program also includes the construction of a cogeneration facility to be owned and operated by U. S. Steel.

The release said that “Construction of these facilities is expected to take 18 months and will generate approximately 900 temporary construction jobs at its peak. When completed, these facilities are expected to create 88 full time jobs while enhancing the long-term viability of the US Steel Granite City Works.”

The new coke facility will use SunCoke Energy's proven low emission technology to process coal into coke, a key ingredient in steelmaking. The technology has been recognized by the US Environmental Protection Agency as setting the standard for coal processing ovens. The energy generated in the coke making process will be used in a cogeneration plant that will provide electricity to Granite City Works.

Mr John H Goodish executive vice president & COO of US Steel said that "Our more than 2,000 dedicated employees and their predecessors have made this facility a key contributor to the local economy for more than 100 years, while supplying high-quality flat-rolled carbon sheet steel to the construction, container, pipe and tube, service center, and electrical industries. This significant new investment demonstrates US Steel's commitment to environmental stewardship, highlights our commitment to Granite City and the surrounding communities, and helps to ensure that our entire company remains well positioned in an increasingly competitive global industry.”

Vallourec gets nod for acquiring 3 tubular business from Grat Prideco

Global seamless tube leader Vallourec announced that all regulatory approvals required for the acquisition from Grant Prideco of Atlas Bradford® Premium Threading, TCA®, and Tube-Alloy(TM), including approval by the U.S Department of Justice, have been granted.

The tubular business units to be acquired from Grant Prideco include

1. Atlas Bradford® - recognized in North America as a leading supplier of premium OCTG connection technology.

2. TCA® - specializes in heat treatment operations and markets high grade tubular products with a strong focus on short lead time orders.

3. Tube-Alloy(TM) - produces and repairs down-hole tubular accessories for the oil & gas industry, and specializes in complex threading and machining for custom-made orders.

Mr Pierre Verluca chairman of Vallourec said that “We are looking forward to welcoming the teams of Atlas Bradford®, TCA® and Tube-Alloy(TM) within our North American operations. We are confident that, with their leading premium technology as well as their excellent customer service, they will bring a strong contribution to further enhance Vallourec's positions in high value-added products."

As stated at the time the agreement with Grant Prideco was originally entered into, these three business units had combined sales of USD229 million and acquired EBITDA of USD 74 million for the 12 month period ended 30 September 2007.

Sandfire to place shares with POSCO

Sandfire Resources NL has finalized agreements with POSCO Australia Limited, under which POSCO Australia will acquire a 19.99% stake in Sandfire through a proposed share placement. The placement is comprised of 16.5 million fully paid shares at 40 cents each and 2.5 million partly paid ordinary shares at 25 cents a piece.
The companies have also agreed to a commercial agreement through which POSCO Australia or its nominated affiliates would have the right to purchase up to 30% of Sandfire’s future mineral production on commercial terms. In addition to the commercial arrangements, a provision has been made for POSCO Australia to nominate its representative to be appointed to the Sandfire board.

Sandifre said deal would provide it with an immediate AUD 7.2 million cash injection as well as the financial backing and strategic marketing, technical and corporate support. It said “This will enable Sandfire to accelerate the exploration of its high quality diversified portfolio of manganese, lead zinc silver, iron ore and gold projects in Australia, as well as position the Company to take advantage of additional resource opportunities, both in Australia and overseas.”

More specifically, Sandfire said the funds would allow continued exploration at the Borroloola Lead-Zinc Project in the Northern Territory, further drilling to establish a JORC Code compliant resource estimate at the Doolgunna Iron Ore Project, and ongoing exploration at the Doolgunna Gold Project.

The transaction still needs approval from Australia's Foreign Investment Review Board government agency, which has been inundated with applications by Asian firms looking to invest in Australian mining.

Delivery of pipes for Nord Stream begins this week

DPA reported that the delivery of pipes for Nord Stream gas pipeline under the Baltic Sea begins this week,

A train is soon to arrive in Sassnitz, a small German port, with the first load of about 100 steel pipes for the 1,220 kilometer pipeline. Construction is to begin soon of a plant in Sassnitz to coat the 60,000 sections with up to 11 centimeters of concrete. Later, ships will carry the coated sections out to sea and lower them into place on the seabed.

The Nord Stream line, the biggest pipeline project ever in the Baltic, is to carry Russian gas to a distribution point in Germany. Poland, Sweden and other nations have voiced opposition to it. When completed, the pipeline is to supply Western Europe with 27.5 billion cubic meters of Russian gas per year. The German end will emerge from the water at Lubmin, a small town near Greifswald.

Mr Jens D Mueller spokesman of Nord Stream said that "We aim to deliver the first gas in 2011. The building timetable had been optimized to allow more time for impact studies and negotiations with the authorities, but we aim to complete the permissions in 2009.”

Manufacturing the coated pipes, which will have a total weight of 860,000 tonnes, will cost Nord Stream more than EUR 1 billion but getting them to the seabed will cost more. The total cost of the pipeline is now being estimated at EUR 7.4 billion.

Nord Stream is a consortium of Gazprom of Russia with 51% stake, Wintershall and E.ON Ruhrgas of Germany with 20% each and Gasunie of the Netherlands with 9%.

In order to start laying pipes next year, more than one third of the sections, or 400 kilometers of piping, will have to be ready and waiting at the various storage points.

Corus highlights role of steel in lightweight vehicles

At the IMechE Lightweighting for carbon free vehicles conference, which took place on April 23rd at the Jaguar Assembly Plant in Birmingham in UK, Professor Jon King Director of Corus Automotive Engineering, explained that steel continues to remain the preferred body structure material for vehicle construction, used in 99% of all new cars in 2007.

Delegates heard that, although the average vehicle is now 50% heavier compared to 40 years ago, the use of Advanced High Strength Steels has provided solutions for cost effective light weighting on vehicles over the last 10 years or so, making them up to 60 kilogram lighter, despite the huge improvements in structural safety. Further weight savings due to AHSS deployment are now being realized on many recently launched vehicles, which can equate to a saving of more than one tonne of CO2 over the vehicle’s lifespan.

The forthcoming EU legislation is proposing a 20% reduction in today’s CO2 levels, down to 130 g/km in 2012, with penalties for non compliance by the vehicle manufacturer determined by a weight based sliding scale. This switches the focus firmly towards cost effective light weighting measures to complement the efforts being made on power train efficiency and aerodynamic improvements. Professor King described the range of AHSS technologies and their attributes that makes steel the most cost-effective material for achieving weight savings in mass production applications.

As a natural consequence, material selection is assuming a greater priority in the vehicle development process. Choices need to be made early as they have a fundamental effect on vehicle architecture and manufacturing assumptions. At a detailed level, the development and use of advanced simulation tools is crucial, as the need for optimization instead of compromise assumes greater and greater importance.

In his conclusions, Professor King explained that “These results are significant, with steel continuing to be the benchmark material in vehicle body construction. Looking forward to further technological developments and improved collaboration between vehicle manufacturers and their supply chains, huge possibilities exist for additional weight reduction and innovation, as the automotive industry faces increasing pressure and legislative measures to reduce emissions beyond 2012.”

POSCO to constructs the Global R&D Center

It is reported that POSCO is constructing the Global R&D Center in Songdo Free Economic Zone in order to grow as a sustainable global corporation leading the steel industry. POSCO on April 23rd 2088 held its ground breaking ceremony for the Global R&D Center. The construction will begin from next month and is expected to be completed by June 2010.

The Center will have a total floor area of 98,564 square meters on 82,560 square meter site and will consist of a research block, experiment block, multipurpose hall, accommodation facilities etc.

Once the Global R&D Center is established, about 530 research personnel from the POSCO Technology Research Center & funded companies, POSTECH and Research Institute of Industrial Science & Technology will be stationed permanently there for researching 8 categories including product usage, steel product usage in steel construction, steel fusion, intelligent automation, ubiquitous, non ferrous materials, environment and new & regenerative energy, and advanced fusion of nano & biotechnology.

Through the Global R&D Center, POSCO will actively provide support with the steel products usage technology to client companies concentrated in the greater Seoul areas, and will also further strengthen joint industry-university R&D networks and cooperative systems. Furthermore, by being at the forefront of next generation steel usage technology and advanced fusion technology development, which will be the new growth base for the future, it will be developed into a research center in charge of R&D for overseas investment businesses in China, India, Vietnam, etc.

Mr Ku Taek Lee CEO of POSCO said that “Expanding on the R&D activities in the areas around the Pohang & Gwangyang Works, POSCO is establishing the Global R&D Center in the Songdo area and this place will be developed into the Mecca of future technology competitiveness as an advanced global corporation.”

Japanese steel products import declines in 2007

Japanese steel imports totaled about 8.1 million tonnes in 2007 down by 6.8% YoY.

Among them, imports the common steel products were around 3.66 million tonnes in 2007 down by 3.5% YoY as compared to 2006.

South Korea ranked the biggest exporter to Japan with 2,185,455 tonnes up by 3.5% YoY and Taiwan was the second with 786,276 tonnes down by 15.2% YoY. China shipped around 580,346 tonnes to Japan down by 13.3% YoY

(Sourced from YEIH.com)

High scrap prices clean Minnesota landscape

Minnesota Public Radio reported that high prices for scrap steel, up by more than 40%, have helped push a widespread cleanup of the Minnesota landscape this spring. As per report, farmers, business owners and other have dug out iron that's been ignored for years, maybe decades.

The report said that much of the scrap steel is coming from what might be called eyesores like car bodies and other automotive items parked behind garages and old farm machinery abandoned in tree groves.

Mr Walt Luneburg president of New Ulm Steel and Recycling said that at times he has had up to a half mile long line of vehicles waiting to unload. He said "Very busy to say the least, markets are exceptionally high and so there's a lot of material moving.”

Mr Luneburg said that as world demand for steel is increasing, pushing prices up, making it possible for people to make a profit on virtually anything they can find. He said that "You can tell people are actually digging deeper for it. I think a lot of this is actually coming out of the ravines and stuff like that. A lot of the groves have been cleaned up. But a lot of this scrap is actually coming out of places that people probably would have never went after it before."

Firm ferrous scrap prices in Tokyo

JMB reported that ferrous scrap market price is firm at around JPY 54,000 per tonne for H2 grade at dealers' purchase price including freight around Tokyo.

As per report local electric furnace steel makers pay JPY 59,500 to JPY 62,500 for H2. The price could increase more when the shipping FAS price from Tokyo bay also increases and integrated steel makers increase the purchase volume.

EU approves STX control of Aker Shipyard in Norway

Reuters reported that South Korea's STX Shipbuilding won permission from the European Commission on Monday to take a controlling interest in Norway's Aker Yards in an USD 800 million acquisition.

EC said that "After an in depth investigation, launched in December 2007, the Commission concluded that effective competition on the shipbuilding markets would not be significantly impeded as a result of the proposed transaction.”

The Commission said its in depth investigation had focused on concerns that the proposed merger might, in particular, remove STX as a potential new market entrant into a concentrated cruise ship manufacturing market.

But "the Commission found that by itself STX was still far from close to becoming an effective competitive constraint on the existing cruise ship construction market. The in depth investigation also showed that STX was not the only possible market entrant and that post-merger a number of other far east shipbuilders would be as equally well placed as STX to enter the market.”
STX bought a 39.2% stake in Aker Yards in October, making it the biggest shareholder. Aker Yards builds cruise ships, ferries, merchant vessels and offshore vessels. It is one of the three main players on the global market for the construction of cruise ships, together with Fincantieri of Italy and Meyer Werft of Germany.

STX builds various types of cargo vessels, such as container ships and gas tankers, the Commission said. Until now, it has not built cruise ships or ferries.

Mr Roland Busch is new head of strategy at Siemens

Mr Roland Busch has been appointed the new head of strategy at Siemens, effective May 1st 2008. He succeeds Mr Horst J. Kayser who on May 1st 2008 became CEO of Siemens plc, Siemens’ Regional Company in the United Kingdom, as well as the CEO of Siemens’ North West Europe cluster.

Mr Busch in his new function as head of the Corporate Strategy Department, he will be responsible for the development of strategy at Siemens and will report directly to Mr Peter Löscher president and CEO of Siemen.

Mr Busch began his career at Siemens as a project manager in the Corporate Technology Department in Erlangen. He holds a doctorate in physics, excelled in a number of different strategic and operational assignments in Germany and abroad. Among other things, he was responsible for consulting and strategy in the 2001 integration of VDO into Siemens VDO Automotive AG. Busch headed the business unit Infotainment Solutions in the Siemens VDO Automotive Group prior to taking over as the President and CEO of Siemens VDO Automotive Asia Pacific Co Ltd in Shanghai. In the last half year, Busch has been responsible for the business unit Mass Transit in the former Siemens Group Transportation Systems.

Second tender for RTB Bor unsuccessful – Report

The Serbian Privatization Agency stated that the second tender for the sale of the assets of the mining and metallurgical complex RTB Bor Group was unsuccessful, because the second ranked bidder at the tender did not present evidence of having extended the bid guarantee.

According to a statement issued by the Privatization Agency, the second ranked bidder at the tender was the company Strikeforce Mining and Resources Ltd and the bid guarantee expired on April 29 at 3 pm, Belgrade time. Bearing in mind that without a valid bid guarantee there are no legal grounds for continuing negotiations, the Privatization Agency declared the second tender unsuccessful.

On April 11, the Privatization Agency informed the top ranked bidder at the tender, the consortium consisting of A Tec Minerals & Metals Holding GmbH, A Tec Industries AG and Montanwerke Brixlegg AG from Austria that the sale contract with the consortium had been terminated due to the failure of the consortium to pay the purchase price. On the same day, the second ranked bidder at the tender, Strikeforce Mining and Resources Ltd, was invited to enter into negotiations in order to close the sale contract.

The condition for beginning any kind of negotiations and further activities in the tender procedure, of which the second ranked bidder was clearly informed, is a bid guarantee valid for 180 working days from the date of submitting the offer. The Privatization Agency and the Ministry of Economy and Regional Development will make a decision as soon as possible about further steps to be taken in the privatization of RTB Bor Group.

Daewoo Shipbuilding to invest KRW 163 billion in production facilities

Daewoo Shipbuilding & Marine Engineering Co said that it plans to spend KRW 163.2 billion (USD 164 million) to expand its facility for the production of vessel parts.

The investment will be made by March 2010 at its shipyard in Okpo, about 420 kilometers south of Seoul.

The shipbuilder also said it plans to spend KRW 44.5 billion to buy a 50% stake in DK Maritime SA, a shipping company to be set up in Panama along with Korea Line Corp, a South Korean shipping company.

New Website for NanoSteel Company

The NanoSteel Company, a leader in nanostructured steel alloy surface technologies for industrial applications, announced the re launch of its web site, http://www.nanosteelco.com/, which features a new design, easier navigation and several new content enhancements.

Mr Dave Paratore president and CEO of NanoSteel said that "NanoSteel is an evolving company that is currently expanding its application engineering and customer services. The web site reflects this with a new design that's easier to navigate and provides quicker access to information. It will continue to be updated with new information as we introduce new products services."

The NanoSteel Company Inc develops and markets a range of patented Super Hard Steel nano structured alloy coating solutions that effectively solve or alleviate many operational challenges faced in critical industries today, including wear, corrosion and erosion in a wide range of complex service environments.

New Zealand buys back rail network from Toll

Reuters reported that New Zealand government is buying back the rail network from Australia's Toll Holdings Ltd. As per report New Zealand government would pay NZD 665 million (USD 520 million) for the operation, including inter island passenger and freight ferries and take control on June 30.

Mr Michael Cullen finance minister of New Zealand said that the privatization of the rail network in the early 1990s had been painful and seen the asset run down. He said that "During the negotiations with Toll it transpired that buying the rail operating business including the ferries was the best way to increase investment in the industry and enable it to be more responsive to the needs of New Zealand customers.”

Toll, Australia's biggest transport group acquired control of the rail operation after a protracted takeover bid for TranzRail Holdings Ltd in 2003. At that stage the New Zealand government bought the rail track network for NZD 200 million and gave Toll exclusive use for an annual fee based on performance along with promises to invest in new rolling stock.

CS Aluminum cuts prices for June shipments

Taiwan’s CS Aluminum Corp has announced to drop its prices for June. Consequently, the base price for 5,000 series will be about TWD 145,000 per tonne. For other series such as 1085, 1080, 2014, 3003, 6061, 7075, the price is about TWD 132,000 per tonne.

Affected by the severest snowstorm early of this year in China and electricity shortage in South Africa, aluminum ingot price has boosted to USD 3,000 to USD 3,300 per tonne. These days, aluminum ingot price decline to USD 2,800 per tonne due to the US dollars appreciation.

CS Aluminum hopes the price decrease will be a positive help to their downstream customers during the peak season.

(Sourced from YEIH.com)

Schnitzer Steel board declares quarterly dividend

The Board of Directors of Schnitzer Steel Industries, Inc declared a cash dividend of USD 0.017 per common share, payable on June 2, 2008, to shareholders of record on May 19th 2008. Schnitzer has paid a dividend every quarter since going public in November 1993.

Schnitzer Steel Industries Inc is one of the largest manufacturers and exporters of recycled ferrous metal products in the United States with 36 operating facilities located in 11 states throughout the country, including six export facilities located on both the East and West Coasts and in Hawaii.

Rebar prices in UAE hit AED 4,500 per tonne levels

Emirates Business 24/7 reported that steel prices in the UAE increased by 12.5% since March to record high AED 4,500 per tonne.

The And an increase in regional steel production will have no impact on the soaring steel prices in the country, as the construction boom and cost of raw materials will only result in further rise, said traders.

The report cited Mr Rizwan Sajan chairman of Danube Building Materials as telling Emirates Business that the increased supply will not be enough to bring down the soaring price. He said that "Firstly the price of scrap is going up. Raw materials, such as billets, have become more expensive and in the UAE there is a massive demand for steel. It would be wrong to assume that the price rise is due to non-availability or shortage of steel.”

Mr Shyam Bhatia chairman of Alam Steel said that "Gone are the days when raw materials used to determine the cost of the finished product. Today, because steel is high in demand, suppliers of scrap, especially from Turkey, CIS and Europe, are increasing the prices."

Qatar Steel doubles production of rebars in Q1 of 2008

Qatar Steel has doubled its reinforcing steel production during the first quarter of 2008 against the same period in 2007. The figure of production of bars and wires reached 399,000 tonnes during the January to March 2008 quarter as against 204,000 tonnes in January to March 2007 quarter, up by 95% YoY.

Qatar Steel's sales during January to March 2008 quarter reached 479,000 tonnes of reinforcing steel and wires up by 29.8% YoY as against 369,000 tonnes in January to March 2007. Most of the company's sales of reinforcing steel were directed to the domestic market. The volume of its sales of reinforcing steel amounted to 347,000 tonnes as against 194,000 tonnes, up by 92% YoY, while the volume of exports declined from 150,000 tonnes in the first three months of 2007 down to 83,000 tonnes during the same period in 2008.

The prices of reinforcing steel saw a significant rise in the domestic market. The prices of the sales rose in March 2008 up to USD 815 per tonne FOB as against USD 602 per tonne FOB at the same month of 2007. The price of the export sales rose up to USD 1000 per tonne FOB during March 2008 as against USD 570 per tonne FOB during March 2007.

It is worth mentioning that Qatar Steel now exports hot briquetted iron direct reduction iron. During the first quarter of 2008 it exported 92,000 tonnes out of the total production of 484,000 tonnes during the first quarter of 2008.

Tunisian Steel expansion project to be ready by September

Tunisian Steel Manufacturing Company expects the expansion project concentrating on adding another EAF furnace with a capacity of 100,000 tonnes per year to come on stream at the beginning of September 2008.

The work of setting up this furnace started during December 2007. This project was preceded by boosting the production capacity of the present furnace from 65000 tonnes up to 100,000 tonnes per year. This expansion came on stream during July 2007. These expansions will result in boosting the steel billets production capacity up to 100,000 tonnes per year.

During the first quarter of this year it produced 20,000 tonnes of billets against 16,000 tonnes in the first quarter of 2007. Its production of reinforcing steel amounted to a little bit more than 26,000 tonnes. It rose its prices of the reinforcing steel up to USD 850 per tonne in the first quarter of 2008 as against USD 700 per tonne in the same period in 2007.

UAE cement producers cut prices by 6%

Reuters reported that cement producers in UAE have agreed with the Ministry of Economy to cut their prices by almost 6% with immediate effect as part of a federal drive to control inflation.

The ministry said in that the producers agreed to lower their prices for a 50 kilogram bag to AED 16 from AED 17 and to increase their production by two thirds to 250,000 bags per day. The ministry did not immediately give details about UAE cement production and the planned increase.

Mr Ahmed Saif Belhasa chairman of the UAE contractors association said in the statement that "The signing of the agreement is very timely since, besides controlling the price of cement, it also positively influences different market trends.’

Cement prices have been rising, in part because of higher fuel costs. UAE demand for cement could rise to 26.2 million tonnes by 2011. Between 2003 and 2006, cement consumption in the UAE grew at a compound annual growth rate of 24.7% and this is expected to be sustained in the future as the smaller emirates join.

Arab steel industry facing high cost challenges – Report

Mr Ahmad Ezz chairman of Ezz Steel, while addressing at the General Assembly of the Arab Iron & Steel Union, said that demand for the steel products in Arab during 2007 amounted to 5.5 million tonnes, with a growth rate of 15% YoY as compared to 2006. Consumption of reinforcing steel reached 4.1 million tonnes in 2007, with a growth rate coming up to 20% YoY as compared to 2006.

Mr Ahmad Ezz added that "What interprets this boom in consumption in Egypt is the fast development in a number of economic activities at the top of which comes the construction sector which has achieved a growth rate of 16% which resulted in more demand for the steel products."

Mr Ahmad Ezz also talked in his speech on the challenges faced by the steel industry saying that the consecutive price increases caused by the cost increases constitute the greatest challenge faced by this industry as this challenge has put the steel industry in a difficult position before the society which began to accuse it with exaggeration of prices and monopoly in spite of the fact that most inputs of this industry, whose prices see a price boom which is the highest one in its history, are imported from abroad.

He stressed the importance of forming a united negotiating front before the world suppliers of the raw materials to get the best possible prices and conditions indicating the importance of strengthening the Arab co operation among the producers to enhance the negotiating power with the world suppliers and get the best conditions for supply. He also said that the Arab steel industry is still outside the negotiating circle which forces it to accept what is agreed upon between producers and the major iron ore suppliers.

Saudi and Egypt to build power grid link

MEED reported that Saudi Electricity Company and Egyptian Electricity Holding Company are seeking government approval to connect their countries' power grids. The scheme will allow Egypt and Saudi Arabia to share their generating reserves and exchange power.

As per report, a team from Belgium's Tractebel Engineering and Centro Elettrotecnico Sperimentale Italiano submitted a feasibility study to the two electricity companies in late March 2008.

The potential project could provide a link between the Gulf Arab region's networks and Europe. The tender for the year long consultancy contracts will be issued within a month of the governments' approval and an award could be made as early as September 2008.

Iran’s inflation hits 19.1% in 2007-08

Mehr News Agency reported that inflation in the first Iranian month of March 20th 2008 to April 19th 2008 rose by 3.1% MoM and 24.2% YoY. Inflation in the previous 12 months compared to the 12 months before this period in 2007 showed a 19.1% rise. Tehran’s inflation in this period was 19.5%.

The inflation number announced by Iran’s central bank in March 20th 2006 to March 21st 2007 was 18.4% and 12.8% in the year before that.

7 cement production plants under construction in Semnan

IRNA reported that seven cement production plants are under construction in Semnan Province in Iran. These plants will annually add 4 million tonnes of cement to Iran’s cement production capacity.

Mr Abbas Rostami MD of Semnan Industries & Mines Organization said that "From these seven factories, three will be built in Semnan, two in Shahroud, one in Damghan, and one in Garmsar."

Mr Rostami added that "We have also obtained the required permits for constructing another 6 plants in the near future."

International Shipbuilding Technology Exhibition opens in Qatar

Gulf Times reported that the third edition of the International Shipbuilding, Port & Marine Technology Exhibition is to be opened by minister of state Mr Sheikh Hamad bin Suhaim al Thani at the Qatar Exhibition Centre.

The 3 day Ship & Port + Europort Maritime 2008 will feature more than 70 participants from the region and elsewhere, making it one of the largest maritime industry events of the region. Participants from 19 countries will feature in this year's exhibition. They include Qatar Petroleum, RasLaffan Port, Bahrain Port Authority, Qatar Navigation, Nakilat, Qatar Port, DENA BMS, Thuraya, Sumiromo Corporation, Goltens, Hygrapha, Ruboned Services, Magoteaux, IHC Merwede, Elcome, International Maritime College, Transas, Italdraghe, Libra and Vosta LMG.

Ship & Port + Europort Maritime is a joint initiative of Al Fajer Information and Services, Dubai, Al Fajer Alulla, Doha, Ahoy Rotterdam and Central Dredging Association.

Mr Ebrahim al Neama chairman of Al Fajer Al Lulla said that "We have received overwhelming response to Ship & Port + Europort Maritime 2008. The event will occupy 25% more floor area than the previous event. The same is with the number of participants too, with whose who of the maritime industry from the region and outside being part of the event."

Meanwhile, Central Dredging Association is organizing an international conference in Doha on dredging in conjunction with the Ship & Port + Europort Maritime. Over 100 international experts and professionals involved in dredging related activities are expected to participate in the conference.

Iran to resume tractor production in Tajikistan

It is reported that head of the Iran Tractor Manufacturing Company and Mr Shirai Gulov Tajik minister of industry & energy agree to resume tractor production in Tajikistan.

Two board members of the Iran Tractor Manufacturing Company were part of the Iranian delegation to Tajikistan to discuss issues of mutual interest, especially resumption of tractor assembly plant production in Tajikistan. Iran's ambassador to Tajikistan, Mr Ali Asghar She'rdoust, was attending the meeting of the Iranian delegate with Mr Shirai Gulov. The tractor company officials discussed problems they are facing in Tajikistan and the Tajik minister promised to help in removing the obstacles to provide the appropriate ground for continuation of tractor production in Tajikistan.

Based on the report to resume production, the necessary parts valued at USD 1 million have already been sent from Iran to Tajikistan. The Iranian delegate also asked the Tajik Minister's help in the establishment of a leasing system to facilitate sales of their plant products.

Mr Gulov expressed hope that the company's production of tractors in Tajikistan increases to satisfy the needs of Tajik farmers. He noted that Tajikistan needs 31,000 tractors annually, which are imported from other countries and given the high quality of Iranian tractors his country intends to use more of the Iranian assembled tractors instead of importing them.

The Iran Tractor Assemble Plant, named as Tajiran, was established in 2006 with a USD 10 million investment in Tajikistan, but because of some problems leading to high prices of final products stopped its activities. The current capacity of the plant is at 500 tractors per year.

Topaz acquires Doha Marine for QAR 450 million

Khaleej Times reported that Topaz Energy & Marine Limited has made an entry into the hydrocarbon market in Qatar. With the acquisition of the Doha Marine Services’ fleet of 14 owned and managed vessels, Topaz has added 4 of its own vessels into Qatar to corner 18% of the offshore marine services sector in Qatar. The entire transaction is valued at just over QAR 450 million and will be concluded in phases in compliance with the regulatory processes prevalent in Qatar.

According to a statement released by Topaz, the acquisition increases the total size of the Topaz marine fleet to 91 vessels which includes 16 vessels under construction as part of its fleet acquisition and renewal strategy. DMS is recognized as a leading marine services company and will be the 6th operating company in the Topaz offshore vessel fleet, joining NICO Middle East, NICO Far East, BUE Caspian, BUE Kazakh and BUE Turkmen, with a 7th marine enterprise already under formation in Saudi Arabia.

The acquisition financing was syndicated by Calyon Corporate and Investment Bank of Dubai, acting as the mandated lead arranger and Barclays Bank Plc, First Gulf Bank, Standard Chartered Bank and HSBC Bank Middle East acting as joint lead arrangers.

Mr Fazel Fazelbhoy CEO of Topaz said that "Our intention is now to add value with our international experience and well established HSEQ systems to ensure that this fleet operates at the highest levels of operational integrity."

Mr Samir J Fancy chairman of Renaissance said that "The DMS acquisition is a major event in our stated strategic intent to increase the size and geographical spread of our offshore support vessel fleet. The cornerstone of Qatar’s booming economy is its hydrocarbon resources. The world’s largest known non associated offshore gas field is in Qatari territory; placing the country third in terms of world natural gas reserves. Qatar offers great opportunity to a quality service provider like Topaz and we shall certainly consider further investment in Qatar in both our onshore and offshore services. The board is absolutely delighted with this outcome."

Mr He Wenbo takes over as president of Baosteel Group

Baosteel Group has named Mr He Wenbo as its new group president, replacing Mr Ai Baojunm who left to become vice mayor of Shanghai late last year.

Mr He, an engineer, has been VP of Baosteel since 1998.

Tiantie CRM project to commission in May

It is reported that the cold rolling mill project of Tianjin Tiantie Metallurgical Group will be completed and put into production in May 2008. As per report, the trial run of pickling line has been successfully completed.

The project is one of the 20 major industrial projects in Tianjin. It was approved on May 23rd 2005 by the National Development and Reform Commission and started on October 28th 2006.

It would have annual output of 1.5 million tonnes of cold rolled products and 600,000 tonnes of galvanized steel. Its products would be suitable for use in automobiles and home appliances segments.

When the first stage is finished and put into production, the second stage of the project will continue, including the construction of a continuous annealing line and a continuous electro galvanizing production line. It will also have galvanizing line, color coating line and cold rolled silicon line.

Ansteel 1780 HSM produces high quality carbon structural steel

It is reported that on April 28th 2008, Ansteel’s 1780 hot strip mill successfully produced high quality carbon steel grade and that its performance reached the national standards thus meeting the needs of users.

Ansteel 1780 HSM combined with the production experience from the same type of units, through strict control of the process parameters, at last successfully produced 45, 50 high quality carbon structural steel.

45, 50 steel belonging to high quality carbon structural steel, are widely used in tools etc and has great market potential.

Shigang increases high grade steel production in Q1 of 2008

It is reported that Chinese steel maker Shijiazhuang Iron and Steel Company Ltd produced 484,000 tonnes of hot metal, 495,000 tonnes of crude steel and 480,500 tonnes of finished steel during January to March 2008.

Its sale income of CNY2.27 billion went up by 43.5% YoY and revenue in creased by 36.4% YoY to CNY 286 million.

It is reported that Shigang improved the product mix during this period and increased the ratio of high value added products by focusing on production and research of high grade steel fetching price of more than CNY 6,000 per tonne or even CNY 10,000 per tonne.

During the first three months, the company had a ratio of high grade steel up to 99.05% and the ratio of alloy steel to 57.42%. Its newly developed grades including 40Cr, 20CrMn, 20G, 20CrMnTi steel won high appraises from the nation metallurgic industry and also won contracts with customers in high grade market, like automakers as Toyota of Japan and machine manufacturers as Caterpillar of USA and so on.

Five Chinese steel majors announce Q1 results

According to the report for the first quarter issued by Baosteel Company Limited, it had a net profit of CNY 4.259 billion up by 15.88% YoY and the profit per share came to CNY 0.24. At the same time, Baogang Company, Valin Tube and Wire, Pangang Vanadium Steel and Tanggang issued the reports for Q1 of 2008, among which, Baogang and Tanggang had a hike of more than 50% in revenue, while those for Valin Tube and Wire and Pangang Vanadium Steel declined.

1. BaoSteel
Baosteel managed to realize a consolidated profit of CNY 180 million up by 3.1% YoY and CNY 2.41 billion up by 71% YoY. Since the profitability of stainless steel products recovered, the loss of stock value decreased, and therefore the loss in assets in first quarter decreased by CNY 370 million.

2. Baogang
During the January to March 2008 period, Baogang realized net profit CNY 514,609,538.99 up by 159.89% YoY and profit per share came to CNY 0.08. Baogang attributed the increase in revenue to rising sale volume of steel products and sale prices, and the improved profitability.

3. Tanggang
Tanggang had a net profit of CNY 729,827,579.37 in Q1 of 2008 up by 57.05% YoY. The new projects that launch operation and adjust in income tax helped to push up the revenue.

4. Valin
Valin Tube & Wire had a loss of CNY 263,494,897.98 in Q1 of 2008 down by 196.60% YoY. And the reason for that was the heavy snow in early 2008. It is calculated that the company lost CNY 900 million during the snow disaster. Till the later half of February 2008, Valin Tube and Wire got back to normal production and maintained a good trend in March 2008, with steel output of 900,000 tonnes and steel sale volume of 926,000 tons and profit of CNY 339 million. But the performance in Q1 had a shock decline from that of the corresponding period in 2007 and turned into red.

5. Pangang
Pangang Vanadium Steel had a net profit of CNY 171,057,461.86 for Q1 of 2008 down by 11.69% YoY.

29 listed companies in China to register 16% YoY growth in 2008

According to statistics by April 30th 2008, total steel output in 29 listed steel companies in China in 2007 was about 183.85 million tonnes, while the output is expected to be 213.285 million tons in 2008, up by 16% YoY.

Among 29 steel companies, output growth rate in 13 steel companies is over 10%, while in 15 steel companies is lower than 10%.

Total output in three largest steel producers in China including Baosteel, Wisco and Anshan Steel may increase by 11.79% in 2008.

Moreover, there should be as many as 8 listed steel companies with a capacity of 10 million tonnes per year by 2008.

Analysts believed that annals reported by listed steel companies reflected the increase of profit in the whole year. Thanks to output increase, steel price rise and the adjustment of income tax, Chinese iron and steel industry may remain the growth rate of 20%-30% in 2008.

Jiuquan to build largest wind power base in the world

Jiuqian Development and Reform Commission said on May 4th 2008 that Jiuquan, in China’s Northwest Gansu province, has started the first step to build the world’s largest wind power station.

The latest results offered by Meteorological departments showed that the total reservation of wind energy resources is 150 million kilowatts, of which more than 40 million kilowatts can be developed, and the land area can be used is nearly 10,000 square kilometers.

Jiuquan wind power development stared in 1996, after 10 years of construction, it has built five large scale wind farms with the wind power capacity reaching 410,000 kilowatts. The future installed capacity of Jiuquan base will be 35.65 million kilowatts, and the preliminary plan is to build an installed capacity of 10.65 million kilowatts.

As per report, the construction needs investment of CNY 110 billion to CNY 120 billion, all of which are offered by developers. In order to ensure the stable operation of the transmission of electricity grids, large-scale wind power development requires a equivalent scale thermal power to balance. So Jiuquan is implementing step by step to build a coal base power station, which plans to reach an installed capacity of 13.6 kilowatts in 2020. On April 17th, matching with the 10 million kilowatts of wind power-base, an industrial park of wind power generators opened in Jiuquan. By now a few large enterprises have resided in the park and continuously invested in the wind power generators.

Shaogang’s plans for Zhanjiang Steel Project

Mr Yu Ziquan, the board chairman and general manager of Shaoshan Iron & Steel Group indicated recently that Shaogang would actively collect capital for structure optimization and industrial upgrade, in order to fulfill the aim of producing 5.1million tons of steel and earning CNY24.7billion distribution income and CNY600million profit in this year.

Total profit in Shaogang in Q1 in 2008 was CNY 260million. Shaogang will continue to strengthen structure optimization, industrial upgrade, outdated equipment elimination in the coming few years according to the program for “11th five-year” plan.

It is forecasted that steel demand in province Guangdong could be over 50million tons in 2010. The supply is still not able to satisfy the demand when Zhanjiang Steel Project commissions, the capacity in the first phase is 10 million tonnes of steel per year. As a result, Shaogang is still an important supplier in the market in Guangdong.

Meanwhile, Shaogang plans to exploit abundant raw materials resources such as iron ore in the north and east of Guangdong and other regions in the province as well. There are no new projects in Shaogang in recent years and the capacity keeps at 5 million tonnes per year.

China’s domestic calcium silicon price hike in a confused way

It is reported that currently, China’s calcium silicon price up continuously, especially price in Shaanxi, Shanxi and Inner Mongolia increase to a larger extent. Calcium silicon price with tax inclusive (Ca28Si55) in Shaanxi is CNY 140,000 to CNY 148,000 per tonne, CNY 145,000 to CNY 160,000 per tonne for Ca30Si55, Ca28Si55 in Shanxi is CNY 147,000 per tonne and CNY 15,000 per tonne for Ca30Si55.

Traders offer various price just because of the relatively tight supply now. It is rumored that factories surrounding Beijing may have been suspend or restrict production for several days during Olympics Games. Therefore, more and more enterprises stock spot goods, which result in less transaction in Shaanxi, Shan and Inner Mongolia. Furthermore, some steel mills purchase in a large quantity, either.

(Sourced from Ferro-alloys.com)

Chongzuo manganese enterprises perform best in industry admittance qualification

National Development & Reform Commission of China is reported to have praised Chongzuo for their positive performance in industry admittance work.

As mainstay industries in Chongzuo, ferroalloy and manganese metal are among the focuses of the local government. Several treatments and examinations have been brought out to help with related producers to reach the standard of quality and environmental protection.

Up to the end of 2007, there were 13 ferroalloy producers that applied for industry admittance and 10 were qualified. The qualification rate of Chongzuo is the highest in Guangxi province. In addition, 5 electrolytic manganese producers applied for the industry admittance and 2 were qualified. There were totally 28 submerged arc furnaces got the industry admittance of the government.

China Railway Group to increase CAPEX in 2008

China Railway Group Limited will raise spending on tunnel making machines, factories and other capital projects by 47% in 2008 amid a construction boom in the world's fastest growing major economy.

Mr Li Jiansheng VP of China Railway Group said that investments will climb to CNY 18.1 billion from CNY 12.3 billion in 2007.

The company's capital expenditure for 2008 is about CNY 18 billion, of which CNY 6 billion will be used to purchase equipment for the railway construction business. In addition, the company will pour about CNY 3 billion into its mining business.

Owning about 50 ore mines, Mr Shi Dahua chairman of China Railway Group said that the mining business would become the company's new growth engine. Some of the mines have been under development and they will gradually step up investment in the area.

Its new contracts increased by 26% to CNY 248 billion in 2007, while the order backlog rose by 36% to CNY 216 billion. Affected by a 25% rise in raw material prices, China Railway Group's overall gross profit margin dipped by 0.5 percentage points to 7.3% in 2007.

China Railway Group posted an 18.4% YoY gain in its net profit to CNY 2.42 billion in 2007, while its revenue grew up by 13.1% YoY to CNY 173.7 billion. The gross profit margins of the four core segments namely infrastructure construction, survey consulting services, engineering equipment manufacturing and property development recorded drops last year as a result of price hikes.

Mr Shi Dahua chairman of China Railway Group said that he believed the decline could ease this year. He added that "Gross profit margin is widening on new contracts and we are confident it will increase in 2008. We have already been working on contract price adjustments and we will continue to do so."

Japan to increase heavy plate prices to Russia

Japan is seeking to increase export prices on heavy plate to Russia for the second half year of 2008. The main reasons of that are weak US dollar, reasonable export price and strong demand from the building industry.

As a result, price of heavy plate for UO steel tube standard is anticipated to hit USD 2,000 per tonne FOB. Besides, local market analyst forecasted that ship plate export price will also smash through USD 1,300 per tonne FOB triggered by higher heavy plat prices.
(Sourced from YEIH.com)

US DOC announces preliminary results of AD on Russian magnesium metal

US Department of Commerce is conducting an administrative review of the antidumping duty order on magnesium metal from the Russian Federation for the period of review April 1st 2006, through March 31, 2007. The review covers two respondents, PSC VSMPO AVISMA Corporation and Solikamsk Magnesium Works.

The Department preliminarily determined that AVISMA and SMW made sales to the United States at less than normal value. If these preliminary results are adopted in the final results of this administrative review, we will instruct US Customs and Border Protection to assess antidumping duties on entries of AVISMA's and SMW's merchandise during the POR. The preliminary results are listed below in the section titled Preliminary Results of Review.

The merchandise covered by the order is magnesium metal which includes primary and secondary pure and alloy magnesium metal, regardless of chemistry, raw material source, form, shape, or size. Magnesium is a metal or alloy containing by weight primarily the element magnesium. Primary magnesium is produced by decomposing raw materials into magnesium metal. Secondary magnesium is produced by recycling magnesium-based scrap into magnesium metal. The magnesium covered by the order includes blends of primary and secondary magnesium.

TMK VTZ starts construction of coating line

It is reported that Russian pipe major TMK’s Volga pipe factory has started the construction on a new 200,000 tonnes per year pipe coating line.

German equipment supplier Venjakob, who is one of the world leaders in designing and manufacturing machines for coating, is supplying the equipments.

Salary increase at Gurievsk metallurgical plant

It is reported that a collective agreement for 2008-2009 was executed between JSC Gurievsk metallurgical plant and its employees. The agreement provides for additional rights, benefits and guarantees for JSC GMP workers concerning labor and salary issues, vocational training, safety and health protection, social safety net.

As the collective agreement stipulates, the employer shall guarantee gradual increase in average salary in 2008 for engineers, officers and workers, including salary indexation against growing prices for consumer goods and services by at least 21% as compared to 2007. It also gives a list of professions, which are granted additional paid holiday at the expense of the plant’s revenues.
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New product line at Gurievsk metallurgical plant

According to a news release of ESTAR Group, to which Gurievsk metallurgical is a member, Gurievsk metallurgical plant expanded its product line and produced first 650 tonnes of channels.

OGK-1 increases output in Q1

AK&M reported that in the first quarter energy output at OGK-1 rose by 15.5% to reach 13.497 billon kWh. Its sales increased 15.8% to 12.88 billion kWh; the heat transfer being up 1.5% to 545ths Gcal.

OGK-1 was registered in 2005 to involve Permskaya, Verkhnetagilskaya, Kashirskaya, Nizhnevartovskaya, Urengoiskaya and Iriklinskaya GRESs. It is the largest heat generating company in Russia due to 9531 MW in total capacity.

Avtovaz car sales in April up by 30% YoY

Reuters reported that Russia's largest car maker, in which Renault is acquiring a 25% stake, saw sales grow by 30% YoY in April 2008 to 67,000 cars.

AvtoVAZ exported 37,400 Lada brand cars in January to April 2008 up by 15% YoY.

France's Renault, which is to pay USD 1.17 billion for its blocking stake, plans almost to double car production at AvtoVAZ to 1.5 million units by 2014, including Lada and Renault models.

Mechel announces decisions of extraordinary shareholders’ meeting

Russian Mechel OAO announces that its Extraordinary Shareholders’ Meeting was held on April 30th 2008. At the meeting, the shareholders adopted a resolution on the declared preferred registered book entry shares of Mechel OAO, which are 138,756,915 shares with the nominal value of RUB 10.00 each share for a total of RUB 1,387,569,150.00, which the Company may potentially issue.

The shareholders also approved modifications and additions into the Charter of Mechel OAO connected with introducing provisions into the Charter concerning declared preferred shares and rights these shares entitle their owners.

The preferred registered book entry shares entitle their owners to the rights provided for in Article 11 of the Company’s Charter with respect to all modifications into the Charter approved at the meeting.

Yusco to cut austenitic prices by in May

It is reported that Taiwan’s largest stainless steel producer Yieh United Steel Corporation will cut 300 series export prices of hot rolled and cold rolled products by USD 50 to USD 80 per tonne in May 2008.

Export prices of grade 430 hot rolled and cold rolled products will be cut by USD 60 to USD 100 per tonne. The domestic prices of austenitic HR and CR products will be cut by USD 286 per tonne, taking the delivered domestic list prices for 304 HR coil and 304 CR coil 2B 2mm to TWD 136,000 per tonne and TWD 142,500 per ton respectively.

Export prices are unavailable. These price cuts are due to the lower nickel prices and the decreased stainless steel demand but have still taken the market by surprise due to the increasing ferrochrome price.

(Sourced from ICDA)

Chinese refined nickel and ore imports slows down in Q1

It is reported that imports of nickel ore and concentrate from China were up by 58.5% YoY to 3.56 million tonnes in January to March 2008 quarter, in spite of slow demand from the stainless steel industry.

Although the demand has been slow in the stainless steel sector, nickel imports have not fallen as a lot of the ore is booked on long term contracts.

(Sourced from ICDA)

Ferrotitanium business stable as traders stay away

It is reported that the majority of ferrotitanium business is now being conducted directly between consumers and producers after traders pulled out of ferrotitanium earlier in 2008 to finance the more volatile and profitable commodities like ferrovanadium and ferrochrome.

(Sourced from ICDA)

US ferrochrome prices up despite seasonal chill

It is reported that ferrochrome prices in the USA have crept higher with demand remaining firm and supply disruptions remaining. The frantic buying and major supply disruptions have caused high increases in the ferrochrome prices, the prices have risen more than 60% since the start of 2008.

Consumers are working off second quarter inventories but traders report that there is smaller spot business at higher levels. Spot high carbon ferrochrome is at USD 2.46 to USD 2.52 per pound, up from USD 2.46 to USD 2.50 per pound. Low carbon 0.05% material has increased to USD 5.05 to USD 5.15 per pound, 0.10% ferrochrome is up at USD 5 to USD 5.10 per pound and 0.15% grade has gained 20 cents to USD 4.93 to USD 5.03 per pound.

(Sourced from ICDA)

Chinese high carbon ferrochrome market cools down a bit

It is reported that high carbon ferrochrome prices in China began to slow this week and there is talk of a downturn as steel mills decrease purchasing.

High carbon ferrochrome was selling at CNY 16,000 to CNY 16,600 per tonne, up 1.2% from a week ago. Recent transaction volumes have been low and the rapidly increasing prices may have forced steel mills to control their ferrochrome buying and only purchase what they urgently require.

Zhangjiagang Pohang and Jiuquan to cut stainless output in May

In an attempt to cope with a quiet stainless steel market, both China’s Zhangjiagang Pohang Stainless and Jiuquan Iron and Steel will cut stainless output in May 2008.

Zhangjiagang Pohang will cut 304 grade stainless output by another 50% as compared with April 2008. Although major Chinese stainless mills have indicated that they will cut supplies by 50% in May 2008, market participants are suspicious that this is just a ruse to prop up prices. Zhangjiagang Pohang has cut normal output levels by 40% in recent months, producing about 30 000 tons cold rolled material in April 2008.

(Sourced from ICDA)

Import price of chrome ore at Tianjin port

Price in CNY per tonne
(Sourced from Mysteel.net)

Balasore Alloys net profit surges by 436% YoY

Indian ferroalloy major Balasore Alloys Limited has reported a 436% YoY growth in its net profit for the 15 month period to March 31st 2008. Net profit was INR 33.29 crore for the 15 month period as compared to INR 6.22 crore in the corresponding period to December 31st 2006.

Turnover for the latest period was up by 56% YoY to INR 530.86 crore as against INR 341.33 crore during the corresponding 15 month period to December 31st 2006.

Balasore Alloys said that it has been able to sustain the momentum of its accelerated growth chiefly on account of judicious product mix, improved capacity use, better realizations and improved cost efficiencies, despite rising input costs and the appreciation of the rupee.

It cited the International Stainless Steel Forum to note that stainless steel is one of the fastest growing basic materials with a growth in consumption of 9% in 2008 followed by further 11% in 2009.

Market price of imported ferronickel in China

Price in CNY per tonne
(Sourced from Mysteel.net)

Sinosteel Jilin aims to start manganese alloy plant by October

It is reported that Sinosteel Jilin Ferroalloys Corporation is planning to commission its new 150 000 tonnes per year manganese alloys plant in October 2008.

Sinosteel Jilin produced 52,265 tonnes of manganese alloys and 27,899 tonnes ferrochrome in 2007. It expects to complete takeover of two Chinese ferroalloy producers by the end of 2008 as part of its goal to have 1 million tonnes per year ferroalloy capacity in the next two years.

(Sourced from ICDA)

Vale acquires mining rights of Mineração Apolo

Companhia Vale do Rio Doce announced that it has entered into a sale and purchase agreement for the acquisition of mining and surface rights owned by Mineração Apolo, located at Rio Acima and Caeté districts in the Brazilian state of Minas Gerais.

Vale signed an agreement, in which Vale has the right to research and acquire the assets of Sociedade Mineração Apolo SA in February 2005, when there was a payment of USD 9.3 million. On April 30th 2008, Vale entered into a sale and purchase agreement, amounting to USD 145 million.

This acquisition encompasses resources of 1.1 billion tonnes of iron ore.

This initiative will allow us to expand our exposure to the iron ore business and obtain potential operational synergies in the Iron Quadrangle region.

Chinese WMC to take 10% placement in FerrAus

Western Mining Co, China's second largest producer of lead concentrate, has signed an agreement under which it would buy a 10% stake in Australian minerals explorer Ferraus. As per ASX announcement, Western Mining may buy as many as 15.9 million shares at AUD 1.15 a share.

The subscription agreement is subject to Australian and Chinese regulatory approvals and FerrAus shareholder approval.

Mr John Nyvlt chairman of Ferrous said "FerrAus welcomes WMC's first investment in ferrous raw materials resource projects in Australia. Members of FerrAus and WMC management teams have known each other for a long time and share common visions on business development. The support of a major mining house is a big plus to FerrAus's project development plans."

Mr Mr Mao Xiaobing chairman of WMC said "FerrAus represents a great opportunity for WMC as I am comfortable with the company's management team and excited about the exploration and development potential of their iron, manganese and nickel projects."

Ferraus, a Pilbara iron and manganese hopeful, was floated by Mr Taylor Collison at 20 cents in 2003 and is yet to ship a tonne of ore. Ferraus' projects include the Robertson Range and Davidson Creek iron ore projects in Western Australia's east Pilbara region.

CITIC may increase stake in Macarthur Coal

It is reported that Chinese CITIC Group has turned down initial approaches by global mining companies which interested in bidding for its stake in Australian miner Macarthur Coal and is considering expanding its stake through buying into company founder's holding worth about USD 830 million.

Under Australian law, a buyer needs to launch a general offer when its stake rises above 20%.

CITIC, firstly launched its investment in Macarthur in 1997, now owns 19.9% stakes in the coal miner and Founder Mr Ken Talbot takes up 24%, which 2 weeks ago was reported in talks to sell. Meanwhile, Australian mining magnate Mr Nathan Tinkler who holds 10% in Macarthur also said he would consider selling his as well if Talbot did.

BHP Billiton, Rio Tinto and Brazil's Vale were not only interested in Talbot's stake in Macarthur but also in CITIC's.

Coke price in Shanxi in May up by 10%

It is reported that Shanxi’s coke enterprises are increasing the products prices in May.

It is learned from coke plants in Shanxi Linfen and other region, at present, the mainstream quotation of first grade metallurgical coke is CNY 2300 per tonne to CNY 2450 tonne and the second grade metallurgical coke is about CNY 2000 per tonne up by 10% compared with last month’s.

Ma Xiaoguang, the analyst from Umetal.com indicated that the rapid increase of coke price in province Shanxi is because of tight supply of coking coal. He said that “Some coking enterprises could not arrange the production at full capacity, so coke output decreases and the inventory is lower. As a result, the supply falls short of the demand in the market. Boosted by both upward and downward market, coke price surges substantially.”

Mr Liu Zhenjiang, the vice chairman of China Steel Industry Association expressed that the contradiction between supply and demand of domestic coal resources has been prominent and the supply of coking coal resources is tenser.

Linfen coke enterprises experts said that if the shortage of coking coal resources can not be alleviated, the prices of first grade metallurgical coke will further rise in the future.

Citigroup sees mining and metals in a cooling period

MineWeb.com reported that in a recently published analysis, Citigroup has suggested that mining and metals are entering a critical period and are likely to be subdued for some time.

Mr John H Hill, Mr Graham Wark and Mr Paul Cheng analyst with Citi have warned that "Given hyper compressed events in 1Q08, mining/metals are likely to be subdued for some time, given: Exhaustion of the commodity momentum trade, after heady runs in copper, gold, steel and coal; The floor in the dollar driving profit-taking, which is hitting the equities harder than the commodities; Likely further demand-side deceleration, particularly in Europe; and Scant production growth or cash-distribution catalysts from earnings."

Citigroup asserts that “Mining and metals equities remain more skittish than underlying commodities, as the market sorts out the level of sustainable earnings and appropriate cyclical multiples and mounting cost pressures. Coming weeks will highlight the price points at which physical demand re-enters to support prices. It will also be important to scrutinize futures curves and shortening speculative positions on the COMEX and the physical back ETFs.

They said that "Our sense is that distributors and end users metal holdings are extremely thin, as they have been since US demand began tumbling in 3Q/06, and that physical buyers will be quick to re enter the market.”

RBCT coal exports in April drop by 4.6% after rain

Bloomberg reported that the world's biggest coal export facility South Africa's Richards Bay Coal Terminal shipped 4.6% less of the coal in April after heavy rain cut output from BHP Billiton Ltd, Anglo American Plc and other producers.

RBCT in a statement said that the terminal shipped 5.97 million tonnes of coal in the month. It had exported 6.26 million tonnes in April 2007 and 4.62 million tonnes in March 2008.

The port received 4.64 million tonnes of coal by rail in the month, the lowest level in at least 17 months, as 572 trains arrived. That compares with deliveries of 5.53 million tonnes in March. Sixty eight ships were loaded in April.

At the current average monthly rate, Richards Bay will ship 57.74 million tonnes of coal this year compared with export capacity of 76 million tonnes. Smaller volumes of South African coal are exported from Durban as well as from Maputo in neighboring Mozambique.

Richards Bay Coal is owned by South Africa's biggest coal exporters, including Anglo, BHP and Xstrata Plc. While it is the world's biggest coal export terminal, Australia's Newcastle port ships more of the fuel from two terminals.

Coal mine explosion in Brazil injures 25

According to Civil Defence authorities in the southern Brazilian state of Santa Catarina, an explosion in a Brazilian coal mine injured at least 25 people Monday, while two miners remained missing.

As per report the accident in the mine in the town of Lauro Mueller happened around 4 AM and was apparently caused by the explosion of the oxygen tank in a welding machine.

The blast caused the mine to collapse and initially buried 27 workmen, although civil defense and fire department rescuers managed to pull out 25 of them. One of the injured reportedly suffered severe head wounds and was taken to hospital, where he was in serious condition.

Centennial Coal mine stays open

Responding to soaring coal prices, coal miner Centennial Coal has decided to keep open its Mannering underground coal mine on the NSW central coast, reversing a decision to close it by June.

The decision comes as Australia's coal miners are set to extract big price gains in contract semi soft and pulverized coal prices in the wake of a trebling in hard coking coal prices to USD 300 a tonne.

With no sign of the market tightness easing in the wake of the severe Queensland floods in January and February, along with continued strong demand from steel makers, investors bid up the sector.

Macarthur gains on takeover speculations

Takeover target Macarthur Coal gained 5% buoyed also by continued speculation that Swiss giant Xstrata was planning to launch a takeover bid.

Macarthur last month said it was in talks with a third party on a possible transaction. Most speculation has focused on Xstrata or Anglo being the third party, but coal assets are attracting a host of suitors in the face of tight supplies and rising development costs.

Mr Shane Stephen Macarthur's chief development officer declined to comment, but noted that he had no material update to make on the talks.

On the share price strength in the sector he said that "I think the market is still consuming the information with regard to coal pricing."

While annual 2008-09 hard coking coal prices have been settled, prices are still being negotiated for other grades that feed the steel industry. There have been reports that the contract price of Macarthur's PCI type coals could reach USD 235 a tonne well up on last year's settlement of just USD 66 to USD 68 a tonne.

Port Bonython plans to back iron ore exports

ABC Online reported that Port Bonython is to be developed into a deep water port for mining companies planning to export iron ore. As per report Expressions of interest to develop the port are about to be sought.

Without a deep water port, ore would need to be transported to Darwin for export.

Mr Bob Duffin of the Port Bonython bulk users group said that a deep port will have long term benefits for areas including Whyalla. He said that "We are confident that the project can be banked, we're confident it can be developed in a way which has minimal impact on other stakeholders.”

He further added that "We are also confident it can be developed in a way which minimizes disruption to the visual amenities."

KIOCL pellet prices surge

It is reported that Indian iron ore pallet major Kudremukh Iron Ore Co’s last tender for sale of 65% Fe iron ore pallet has received highest bid at USD 221 per tonne on FOB New Mangalore Port.

Import spot price of manganese ore at Chinese ports

Grade Price Origin Remark

Price in CNY per tonne
(Sourced fromMySteel.net)

Eastern Iron to step up exploration at Cobar and Lake Cargelligo

It is reported that Australian iron ore junior Eastern Iron, probing iron ore deposits in Cobar and Lake Cargelligo is to spend AUD 2 million stepping up its exploration.

Mr Peter Buckley exploration manager of Eastern Iron said that it has just raised AUD 5 million through a public offering on the stock exchange and about half the money will be used to accelerate its drilling program, to help determine the quality of the iron ore.

He said "This money now means that we can press ahead. We are meeting this week with the drilling contractor about negotiating a start time, which hopefully will be in the middle part of this month and that means we'll be able to hit the ground running. The process going forward will be an accelerated program of drilling, air core drilling to assess these paleo-channel areas to determine how much iron ore is there and what sort of market.”

SAIL to ink coking coal pact with BHPB soon

Reuters reported that Steel Authority of India Limited will import 12 million tonnes to 13 million tonnes of coking coal this year.

Mr SK Roongta chairman of SAIL on the sidelines of a conference on Monday told reporters that he expects to finalize a coking coal contract with BHP Billiton this month.

Alpha Natural Q1 revenue up by 17% YoY

Alpha Natural Resources Inc a leading supplier of high quality Appalachian coal, reported a 17% YoY improvement in revenues from coal sales in the first quarter of 2008 over the first quarter of 2007 as the company achieved the highest quarterly price realization in its history due to rising metallurgical coal exports and price levels.

Alpha recorded coal sales revenues of USD 445.7 million as compared with USD 380.2 million in the same period of 2007. Net income for the most recent quarter was USD 25.5 million as compared with net income of USD 8.3 million in the first quarter of 2007. EBITDA reached a new quarterly record of USD 87.1 million in the most recent quarter, representing an improvement of USD 31 million or 55% YoY over last year.

Alpha, the largest exporter of metallurgical coal out of the US experienced a surge of 430,000 tons in its first quarter exports, year over year, which boosted metallurgical coal sales to 42% of the company's total sales volumes for the quarter.

Mr Michael Quillen chairman & CEO of Alpha said that "Coal has joined the energy commodity boom and tight supplies are having a meaningful impact on prices, for both prompt deliveries and forward commitments. After the close of the first quarter, the company secured commitments for 2008 delivery on three-quarters of a million tons of planned metallurgical production, at price levels consistent with recently announced settlements with Japanese steelmakers.”

BHPB Olympic Dam to become world's largest mine

AFP reported that BHP Billiton’s Olympic Dam expansion is on track to become the world's largest mine.

The report quoted Mr Richard Yeeles Australian spokesman for mining giant BHP Billiton as saying that the company's Olympic Dam expansion is on track to become the world's largest mine. He said that the expansion will take Olympic Dam from four mining operations to more than 40 by 2010.

Mr Yeeles said that copper production will triple and uranium production will increase from 4,000 tonnes a year to up to 19,000. he added that after the company's pre feasibility study of the site at the end of the year, a 12 month feasibility study will follow, before the staged expansion of the mine can begin.

He said that "What we can say is that we have invested considerable money in simply this phase of the work the study because this is a very large project by world standards. It is a magnificent ore body and we have to do the ore body justice for the company, for the shareholders, for South Australians because ultimately they are the owners."

Rio Tinto Alcan inaugurates aluminum research facility in Quebec

Rio Tinto Alcan, along with local partners, officially inaugurated the CURAL an integrated research and development laboratory dedicated to aluminum products and processes. The Centre is located on the campus of the Université du Québec à Chicoutimi at Saguenay in Quebec.

The inauguration ceremony was attended by the Honourable Mr Jean Pierre Blackburn federal minister of labour and minister of the Economic Development Agency of Canada for the region of Quebec, and Mr Claude Béchard minister of Natural Resources and Wildlife for the Quebec government and Minister in charge of the Saguenay Lac Saint Jean region.

CURAL aims at intensifying research in the treatment of bauxite and metal fabrication processes, particularly forging and assembling. Working in conjunction with the nearby National Research Council's Aluminium Technology Centre, the new universit