Indian steel majors slash INR 4000 per tonne on flat products

The CEOs of major steel producing companies in India, namely, Steel Authority of India Limited, TATA Steel, Rashtriya Ispat Nigam Limited, JSW Steel, Essar Steel, Ispat Industries Ltd and representative of Jindal Steel & Power Limited, which account for almost 60% of Indian steel production, met the Prime Minister, Dr Manmohan Singh to share the government's concern regarding the inflationary situation in the country.

In accordance with the Prime Minister's advice to contain prices, the steel majors have decided to take the following measures, with immediate effect

1. Prices of flat products are reduced by INR 4000 per tonne by producers who effected price increase in April 2008.

2. Prices of rebars and structurals where no increase was effected in April and May 2008 are also reduced by INR 2000 per tonne.

3. These reductions will be applicable for all steel that gets consumed in India either directly or after further processing.

4. Further, the steel producers will hold these prices for the next three months.

Indian steel majors propose relief measures to PM

The CEOs of major steel producing companies in India, namely, Steel Authority of India Limited, TATA Steel, Rashtriya Ispat Nigam Limited, JSW Steel, Essar Steel, Ispat Industries Ltd and representative of Jindal Steel & Power Limited, which account for almost 60% of Indian steel production, met the Prime Minister, Dr Manmohan Singh to share the government's concern regarding the inflationary situation in the country.

In accordance with the Prime Minister's advice to contain prices, the steel majors have put forward the following proposals for favorable consideration by the government

1. In view of the roll back in prices and self restraint by producers on steel exports, government should not impose duty on export of steel products.

2. In order to facilitate investment in steel sector and to augment capacities in the country, which is the long term solution, the allocation and renewal of iron ore and coal mines, should be ensured on priority. Allotted natural gas should be made available and the legal environmental and forestry clearance issues be resolved by setting up an Empowered Committee, if required.

3. An ad valorem duty of 15% to 25% FOB be imposed on export of iron ore in order to conserve the mineral as China is doing in respect of coke in which case 25% ad valorem export duty has been levied.

4. Appropriate reduction in excise duty on steel be considered which will be passed on to the consumer.

5. NMDC, MOIL and Coal India Limited should reduce prices of their products, which are inputs for the steel industry and the PSUs should give priority to domestic steel producers for supply of inputs before undertaking exports and should, charge long term international prices

6. Auction of manganese ore and iron ore by MOIL and NMDC, is attracting speculative prices in the domestic market, should be stopped.

7. Railway freight on steel making raw materials and on steel products should be maintained at current levels/classification.

The Prime Minister appreciated the gesture of the steel industry in reducing the prices and assured them of expeditious examination of their proposals. Special Correspondent

SAIL mines receives 5 National Safety Awards

Steel Authority of India Limited announced that its two iron ore mines and one limestone mine have received National Safety Awards for their commendable performance in maintaining the safety standard in the mines.

SAIL's Kiriburu Iron Ore Mine, Kalta Iron Mine and Kuteshwar Limestone Mines, which are operating under the Raw Materials Division of SAIL, have received the awards.

Kiriburu Iron Ore Mine bagged 2 awards for the Longest Accident Free Period consecutively for 2004 and 2005. For Lowest Injury Frequency Rate Kalta Iron Mine received 2 awards consecutively for 2005 and 2006, and in the same category Kuteshwar Limestone Mine bagged 1 award for the year 2005.

Ms Pratibha Devisingh Patil President of India gave away the awards in a function held for giving the National Safety Award (Mines) 2004, 2005 and 2006, at Vigyan Bhavan recently.

Mr G Ojha personnel director of SAIL has congratulated and felicitated the team for winning the awards.

To promote the competitive spirit amongst mine operators for the betterment of safety standards in mines and give due recognition to outstanding performance at the national level, the ministry of labor & employment instituted the National Safety Award (Mines). This time more than 600 units from coal, metal and oil sectors were in the fray for this award.

Baldota Group to set up steel plant at Koppal

Baldota Group has announced the launch of Aaress Iron & Steel Limited, which is to establish an integrated steel plant with an annual capacity of 1 million tonne per annum in Koppal district.

Mr Narendra Kumar A Baldota CMD of Baldota Group laid the foundation stone for the Greenfield plants coming up in an area of 1,000 acres.

The facility will include a pellet plant with a capacity of 1.2 million tonne per annum in Halavarty and Basapura villages. The INR 4,469 crore integrated steel plant is to produce alloys and special steels and is scheduled to commence production by the end of 2009.

Mr Baldota said that the capacity will be further expanded to 5 million tonnes per annum soon. He added that it is also establishing a captive power plant with a capacity of 70 MW.

Progress review for steel projects in Orissa

Orissa government, after a review of the progress of mega steel projects in the state, has admitted that that protests against land acquisition and environmental issues in some cases are delaying steel projects with a combined capacity of 36 million tonne a year in Orissa.

Mr Ajit Kumar Tripathy chief secretary of Orissa recently reviewed the progress made by the companies that have signed MoUs with the state in steel sector. In the first phase, Mr Tripathy has reviewed the progress made by the 43 small and medium steel projects out of which 25 of them have started production some way or the other. In the second phase, he took up 6 mega projects for the review. He would also take up 4 aluminum projects for review on May 9th 2008.

The projects reviewed were of TATA Steel, ArcelorMittal, Jindal Steel and Power, Vedanta’s Sterlite Iron & Steel and Bhushan Steel, apart from that of POSCO.

Mr Tripathy said that "All the mega projects are facing problems in acquiring land, getting water required for their projects and on top of it forest diversion proposal clearance. They are also facing problems relating to their mining lease."

The largest project affected is that of POSCO India, which is setting up a USD 12 billion steel plant in Orissa. Law and order problems sparked by POSCO India’s plans to acquire land have hit this project, which is the single largest foreign direct investment in India.

TATA Steel’s 6 million tonnes per annum steel project at Kalinga Nagar in Jajpur district has also been delayed by a law and order problem at the site.

The projects of ArcelorMittal, Sterlite Iron & Steel Company, Jindal Steel & Power Limited and Bhushan Steel Limited are also facing law and order problem at the sites.

ArcelorMittal signed a MoU with the state government on December 21st 2006 to set up a 12 million tonne steel project with an investment of INR 40,000 crore in Patna tehsil of Keonjhar district.

Sterlite Iron & Steel signed a MoU on October 15th 2004 for a 5 million tonne steel project with an investment of INR 15,000 crore at Palaspanga in Keonjhar district.

Jindal Steel & Power singed a MoU on November 3rd 2005 for setting up a 9 million tonne steel plant with an investment of INR 13135 crore in Angul district

Bhushan Steel Limited has signed a MoU on November 3rd 2005 to set up a 6 million tonne steel plant at Meramundali in Dhenkanal district with an investment of INR 5,828 crore.

SAIL CET working on projects worth INR 17,000 crore

BS reported that Ranchi based Steel Authority of India Limited’s Centre for Engineering & Technology is currently handling SAIL projects worth more than INR 17,000 crore including those under active consideration and formulation.

The projects in hand now were components of SAIL's ongoing expansion plan aimed at improving the performance of SAIL plants both quantitatively and qualitatively. In 2007-08, 15 projects at SAIL plants were commissioned, backed by services provided by CET.

CET is at present handling projects in SAIL plants, either under implementation or under tendering process, like modernization of one blast furnace each Bhilai and Bokaro, a new 7 meters tall battery at Rourkela, a slab caster at Bhilai, 1 bloom caster at Bhadravati, the coal dust injection units at Rourkela, Durgapur, Bhilai and Bokaro plants, the augmentation of steel melting shop at Rourkela, 1 oxygen plant at Rourkela as well as the wire rod mill and merchant mill at Durgapur steel plant.

According to Mr AS Mathur ED of CET, it is fully focused on SAIL's growth projects and gearing itself up for providing engineering and consultancy services for all SAIL expansion projects in future.

CET is the in house design, engineering and consultancy organization of Steel Authority of India Limited.

TATA Steel and SAIL to divest 10% stake in mjunction

BS reported that TATA Steel and Steel Authority of India Limited’s 50:50 JV mjunction Services is in talks with private equity firms to dilute 10% stake to raise funds.

Mr Viresh Oberoi MD & CEO of mjunction Services said that "The idea is to go for a public offer in about 3 years. Before that, the right step will be to go for private equity investment. We are looking at a potential investment for 10% stake from private equity companies." He added that both partners are likely to divest equal stake to facilitate the funding.

Mr Oberoi said that "We are in talks with several private equity firms and matters are likely to be finalized in 3 to 4 months. It is for the private equity companies to make an offer which will also help us in a fair evaluation of the company. Several of them have approached us but we cannot give more details."

He said that mjunction is also looking at acquisitions to fuel inorganic growth and is building resources of INR 200 crore for the purpose. He added that "We are building up a war chest of 200 crore over the next 5years to go for inorganic growth in India as well as abroad."

mjunction is India's largest e commerce company and runs one of the world's largest e marketplace s for steel. It also has e commerce platforms for coal and automobiles. In 2007-08, the value of total transactions on the company's portals was around INR 10,400 crore and is eyeing revenues worth INR 50,000 crore by 2012.

Rural Electrification Corporation gets Navratna status

It is reported that centre has granted Navratna status to Rural Electrification Corporation Limited, giving it financial and administrative autonomy.

As per report, department of public enterprises has issued the order for giving the coveted status to REC, which will now be able to expand its electricity business in the rural areas.

Mr R Bandopadhyay secretary at department of public enterprises said that "REC is working throughout India with a big network. It is a pioneer in the area of rural electrification."

REC is the 16th PSU to have been named as the Navratna firm. It can now take decisions of investing up to INR 1,000 crore or 15% of its net worth independently.

IIFCL likely to grant USD 5 billion loans to PFC

It is reported that Power Finance Corporation may be allowed to access up to USD 5 billion foreign exchange reserves through India Infrastructure Finance Company Limited to fund power projects.

Although the arrangement is yet to be finalized, a committee under the Group of Ministers on financial issues has proposed that IIFCL should be directed to lend to PFC at nominal interest rates.

Originally, PFC had suggested that it should be allowed to incorporate a special purpose vehicle which can borrow FOREX reserves from RBI. It can then be used to provide loans at competitive rates to power companies for importing raw materials or machinery. However, the proposal did not seem feasible considering it will have required changes to existing legal and policy framework.

IIFCL can, however, borrow FOREX reserves up to USD 5 billion from RBI and India's FOREX reserves are more than USD 300 billion.

Shree Precoated name change application is approved

Shree Precoated Steels Ltd has informed BSE that the application for Change of name of the Company has been approved by the office of the Registrar of Companies, Maharashtra, Mumbai and a New Certificate of Incorporation has been issued dated May 5th 2008.

NTPC Bongaigaon to emit less sulphur dioxide

It is reported that National Thermal Power Corporation’s 750 MW Bongaigaon Power project will be the first one to use flue gas desulphurization technology to control sulphur dioxide emission in India.

The technology is developed by Bharat Heavy Electricals Limited. The additional investment on account of this technology is about INR 5 million per MW, while the total investment in the Bongaigaon project is around INR 4,400 crore and the tariff is around INR 2.98 per kwh.

According to the ministry, the first 250 MW is expected to be commissioned in February 2011, the second 250 MW in April or May 2011 and the third in 250 MW in June or July 2011.

According to union power ministry, the Bongaigaon project will use a mix of coal from Eastern Coalfields Limited and from the Margherita fields in Assam. The project has been accorded mega power project status and the transmission system will be developed by Power Grid Corporation.

Mr Jairam Ramesh union minister of state for commerce & power said that NTPC would adopt the Industrial Training Institute at Bongaigaon and Kokrajhar and impart skill training to local youth. He also stressed on the need to protect local biodiversity resources as well since the region in which the power project located is very rich in these resources.

Operation starts at NTPC Sipat project phase I

It is reported that power generation from the first 500 MW Unit of NTPC Sipat has been started with its re synchronization with the Western Grid.

This followed restoration of supply of 20 million cubic meter of water from Hasdeo Reservoir by the Chhattisgarh government as an interim arrangement. This unit was shutdown from March 2008 due to non supply of water.

With this development, the pre commissioning activities of the second 500 MW unit have also resumed. On completion, the NTPC Sipat shall have a total installed capacity of 2980 MW with 2 units of 500 MW in stage II and 3 units of 660 MW in stage I.

Vesuvius India starts tap hole clay production also

With reference to the earlier announcement dated January 10th 2008 regarding commercial production of pre case shaped products at its new plant at Visakhapatnam had commenced from December 22nd 2007, Vesuvius India Limited has informed BSE that the commercial production of tap hole clay has also commenced at its new manufacturing unit from December 22nd 2007.

NTPC Farakka posts record power generation in 2007-08

NTPC’s Farakka super thermal power station has made a record generation of 11,739.39 million units during 2007-08. It has also achieved an all time high plant load factor of 83.53% during the year. The previous highest generation of 11,463.86 million units and a plant load factor of 81.79% were achieved in 2005-06.

The year also witnessed the highest ever generation of 39.58 million units with a plant load factor of 103.09% in a single day on June 3rd 2007. The availability factor of the power facility during 2007-08 was 89.80% which was also the best since inception.

The approved capacity of the Farakka installation is 2100 MW. At present, three units of 200 MW each and two units of 500 MW each are in operation. Work on construction and erection of another 500 MW unit is under progress.

JSW Steel board recommends dividend

JSW Steel Limited has informed BSE that its board of directors at its meeting held on May 5th 2008 has recommended transacted the following

1) Dividend at the stipulated rate of 10% on the 27,90,34,907, 10% cumulative redeemable preference shares of INR 10 each and 11% on the 99,00,000, 11% cumulative redeemable preference shares of INR 10 each along with arrears for the period March 10th 2007 to March 31st 2007 on the said 11% cumulative redeemable preference shares of the company has been recommended for the year ended March 31st 2008.

2) Dividend at the rate of 140% amounting to INR 14 per equity share on the 18,70,48,635 equity shares of INR 10 each of the company has been recommended for the year ended March 31st 2008.

Further JSW Steel has informed that, the register of members & share transfer books will remain closed from May 23rd 2008 to May 27th 2008 for the purpose of payment of dividend & annual general meeting.

GMR JV starts work on airport in Turkey

GMR Infrastructure Limited has informed BSE that Istanbul Sabiha Gokcen International Airport Investment Development & Operations Inc, its 40:40:20 JV with Limak Holdings and Malaysia Airports Holdings Berhad, has started its operations and investments for the construction and management of a 10 million capacity terminal.

MEPS latest forecast on Asian carbon steel prices

UK based MEPS said that its all flat products forecasts have been revised upwards as a result of the staggering 200% price rise in coking coal contracts.

MEPS added that “Scrap figures also rocketed during April. Growing imports for most products will not be sufficient to relieve the tight supply situation in the market in the short term. Consequently, transaction values are expected to climb until the middle of the year. However, ordering is likely to be kept to a minimum as credit constraints restrict the volume of material customers are able to purchase. Buyers are also currently unwilling to speculate at such high prices. This could limit the size of the increases achieved by the mills over the coming months.”

MEPS said that “Lower levels of buying activity over the Summer holiday period are likely to bring price rises to a halt. The economic outlook for the second half of 2008 is uncertain, with the threat of a US led recession remaining high. This is predicted to lead to a drop in steel consumption. Fewer new projects, as a result of the credit crunch, are also expected to reduce order intake on the mills as the year progresses. Consequently, transaction values are forecast to fall in the fourth quarter. Due to strong demand from plate consuming sectors, prices for this product should decline less than for other categories. Most selling figures should recover by a small amount in the New Year as distributors look to re-fill depleted inventories.”

MEPS Added that “Due to recent hikes in scrap costs, it average transaction values for all the long product categories are expected to increase further over the next few months. However, poor demand from both end-users and distributors, who are reluctant to build stock, should limit these rises somewhat. As such, prices should stabilize by the end of the second quarter. Transaction values are then predicted to be between USD 237 and USD 293 per tonne above the lows recorded in December 2007.”

Tenaris Q1 sales up by 8% YoY

Luxembourg based steel pipe producer Tenaris said that its first quarter net profit fell by 1.8% YoY to USD 500 million from USD 509.4 million in Q1 of 2007. The net profit was lower than market expectations. Revenue in the first quarter up by 8% YoY to USD 2.626 billion as compared to USD 2.425 billion in Q1 of 2007.

(In USD million)

Tenaris said that its net sales of tubular products and services rose 1% YoY to USD 2,170.7 million in the first quarter of 2008 as compared to USD 2,144.7 million in the first quarter of 2007, as an increase in our average selling price for tubular products and services and an increase in sales volume of welded pipe products offset a 7% decline in sales volume of seamless pipe products. Sales rose in North America, where there was a recovery in demand in USA following a period of inventory destocking but demand in Canada continued to be affected by lower drilling activity. Sales in South America declined due primarily to lower sales in Ecuador. Sales in the Middle East and Africa declined as sales of OCTG products were lower throughout the region.

Its net sales of pipes for pipeline projects rose 118% YoY to USD 271.7 million in the first quarter of 2008 as compared to USD 124.4 million in the first quarter of 2007, reflecting a relatively high level of deliveries to gas and other pipeline projects in Brazil and deliveries to the loops expansion project in Argentina.

It added that net sales of other products and services rose 18% YoY to USD 183.8 million in the first quarter of 2008 as compared to USD 156.2 million in the first quarter of 2007, led by higher sales of electric conduit pipes.

Court appoints trustees to run Kremikovtzi

Dnevnik Daily reported that Kremikovtzi steel mill will shortly be run by court appointed trustees and that the court is due to issue a final verdict on the proceedings on June 17th 2008.

The court ruling can be appealed by May 14th 2008.

A senior manager of the mill told Dnevnik that a court pronounced to this effect on April 30th 2008 in which Judge Ms Daniela Marcheva said that “Kremikovtzi's current liquidity ratio was 1.2, whereas the industry average was 2. The quick liquidity ratio was 0.24, whereas its cash ratio was 0.00062.”

Liquidity ratios are used to determine a company's ability to pay off short-term debt, meaning that higher higher ratios offered a better margin of safety.

As per report, insolvency proceedings against the mill were started at the request of Peshtoremont AD and several smaller companies, to whom Kremikovtzi owes a cumulative total of 3 million leva. The class lawsuit had more companies as plaintiffs, but several companies dropped out after the mill paid its debts.

The economy ministry, which has a 25% stake in the plant, said state creditors gas supplier Bulgargaz, power utility NEK and the state railways were not involved in the legal action.

Now, any deal for the sale of Kremikovtzi's majority stake would need the trustees' approval to go through.

Taiwan government to ask CSC to serve domestic demand

It is reported that Taiwan’s ministry of economic affairs will request that China Steel Corp to give priority to local customers to keep soaring domestic steel prices under control.

Mr Shih Yen-shiang deputy minister of economic affairs at a legislative hearing said that “The MOEA will deal with the issue with measures that include reducing China Steel’s exports and have it prioritize the local market instead of foreign markets.”

Mr Shih said that the ministry would urge the company to shift production destined for export to meet local demand, half of which is still satisfied by imports.

He added that “Local builders have complained to the ministry over surging steel prices, citing rebar prices that have risen by 50% to TWD 24,000 per tonne since last year. Prices have jumped due to rising global demand for steel resulting from booming construction around the world.”

Mr Shih said exports of rebar had been prohibited in order to increase supply in the domestic market, but steel plate exports would still be allowed.

Taiwan’s largest steel company CSC was privatized in 1995 but the MOEA still holds 22.45% shares and seats on its board of directors to retain a degree of control over the company.

CSC exports about 20% of its annual production volume.

Japan carbon steel export in 2007-08 up by 6.8% YoY

According to Japan Iron and Steel Federation, Japanese carbon steel export increased by 6.8% YoY to 26.372 million tonnes in fiscal 2007 ended March 2008 from fiscal 2006.

The federation said that special steel export increased by 5.8% YoY to record 5.936 million tonnes exceeding former record of 5.611 million tonnes in fiscal 2006. The export increased by 9.8% YoY to 5.027 million tonnes for semi finished steel and by 11.5% YoY to 715,000 tonnes for processed steel.

ArcelorMittal announces completion of sale of Sparrows Point

ArcelorMittal announced that the Court appointed trustee has completed the previously announced sale of ArcelorMittal’s Sparrows Point steel mill to OAO Severstal for USD 810 million, net of debt.

Mr Joseph G Krauss the divestiture trustee was required to seek the sale of the mill by a consent decree entered on May 23rd 2007 in the United States District Court for the District of Columbia in order to comply with an anti trust ruling concerning the approval of the merger between Mittal Steel and Arcelor SA in 2006.

Mr Michael Rippey president & CEO of ArcelorMittal USA said that “ArcelorMittal would like to extend its sincere appreciation to the Sparrows Point employees for their hard work and dedication to their jobs throughout this process.”

Esmark receives financing package from Essar Steel

Esmark Incorporated announced that Essar Steel Holdings Limited has completed a new USD 31 million term loan facility to its wholly owned subsidiary Esmark Steel Services Group, Inc and refinancing of the existing USD 79 million Government guaranteed Wheeling Pittsburgh Steel Corporation term loan.

Esmark said that the new maturity date of these term loans is the earlier of 15 days following the consummation of the proposed merger with Essar or June 1st 2009. The loans carry an interest rate of LIBOR plus 0.50% and mature on June 1st 2009, except in the event of a change of control not involving Essar in which case the interest rate retroactively increases to LIBOR plus 6.5%.

As a result of the refinancing of the WPSC term loan, the maturity date of the Company's revolving credit facilities have been extended to the earlier of 15 days following the consummation of the proposed merger with Essar or September 30th 2008.

Mr James P Bouchard chairman & CEO of Esmark said that "With the funding of the new term loan and refinancing of the existing WPSC term loan, we not only increase overall Company liquidity but now have released the guarantees from the federal government and the State of West Virginia. As many remember, that USD 250 million loan in 2003 came at a critical time in Wheeling Pittsburgh's history and was made possible through the support of the Loan Board and Senators Byrd and Rockefeller. We also extend our thanks to Governors Manchin and Strickland as well as Leo Gerard and the United Steelworkers for their active support in enabling this Company to expand and compete more effectively in the marketplace. Finally, we want to thank Essar for becoming a significant and valued stakeholder in our Company and its future."

Essar to get USD 20 million if Esmark deal fails

AP reported that steel maker and distributor Esmark Inc has agreed to pay India's Essar Steel Holdings a USD 20.5 million fee if Essar's proposed USD 670 million buyout offer fails.

The fee, which was not mentioned in last week's announcement of the deal is contained in a filing with the Securities and Exchange Commission.

The United Steelworkers, which must approve any change in ownership along with regulators, has yet to weigh in on the deal. But union leaders have said they have too little information to either endorse or oppose the buyout, valued at USD 1.1 billion when Esmark's debt is included.

Japanese steelmakers to raise prices by 10% in June

Due to the soaring price of raw materials, Japan’s Nippon Steel announced to raise its heavy plate for shipping building and mechanical industry by 10% in June 2008.

Meanwhile, JFE Steel plans to raise its sheet price of June by 10% as well. It is said that Japan’s sheet price has increased by 25% in April 2008 already on cost increase of coal.

The report added that Nippon Steel is also seeking to raise steel price by 38%. However, vehicle producers were afraid that it is hard to pass the increase cost of steel to customers while America's economy is slowing

Soaring iron ore prices along with higher costs for other raw materials, is also boosting ArcelorMittal to consider raising its prices by USD 250 per tonne.

Metalico completes Snyder Group purchase

Scrap metal recycler and lead fabricator Metalico Inc announced it has completed its previously announced private placement of USD 100 million in convertible notes and has used a portion of the proceeds to acquire the assets of the Snyder Group, a multi yard fully integrated scrap metal recycling operation in Western Pennsylvania and West Virginia.

The acquisition includes the business operations of Grand Avenue Incorporated, Assad Iron & Metals, Inc, Heidelberg Metals Inc, Neville Recycling LLC and Platt Properties LLC, a group of affiliated companies. The assets are located principally in the greater Pittsburgh, Pennsylvania area where collectively the selling companies comprise a leading recycler of ferrous and non ferrous scrap metals.

Among the assets acquired is a Texas Shredder model 80/104 operating on the Grand Avenue site on Neville Island, Pennsylvania, and Harris shears, Harris balers and a fleet of transportation equipment for the pick up and delivery of scrap. Metalico's purchase also includes four feeder yards that source scrap for the shredder and are located in Pennsylvania and West Virginia. The two principal operating sites in Brownsville and Neville Island are served by rail and the Neville Island location also has river barge shipping and receiving capabilities. The total purchase price was approximately USD 76 million, plus USD 3.8 million for excess inventory. Accounts receivable and payable were retained by the sellers. A USD 7 million portion of consideration was paid in Metalico common stock.

The company will continue to be operated and managed as Metalico Neville Inc. by Mr James R Snyder, Mr Charles B Snyder and Mr Daniel R Snyder, the former owners and by their team of dedicated employees, which also includes other Snyder family members.

Mr Carlos E Agüero president & CEO of Metalico said that "We are very pleased to add the Snyder group of companies to Metalico and thrilled with the opportunity to work with such a distinguished group of seasoned industry veterans. This purchase provides Metalico with an exceptional platform to expand the volume and profitability of the ferrous component of our business. Given the favorable markets trends and the high scrap steel prices that we are experiencing, it is a timely period to increase our exposure to the ferrous commodities."

He added that “The acquired operations generated sales of USD 120 million in 2007 and shipped approximately 300,000 gross tons of ferrous and non ferrous metals.”

EU initiates new punitive procedure against 9 EU countries

Sofia News Agency reported that the European Commission is starting a new punitive procedure against Bulgaria and eight other EU member states over the failure to issue on time permits for a number of industrial installations already in operations.

As per report the nine EU countries lgium, Bulgaria, Estonia, Greece, Italy, the Netherlands, Portugal, Slovenia and Spain that have failed to issue industrial permits in line with the Directive on Integrated Pollution Prevention and Control have been sent a first written warning by the Commission. The Directive aims to control industrial emissions to air, water and soil.

The commission said that “Over 9 000 industrial installations in the nine states are remaining without new or updated out of a total of some 52 000 targeted industrial objects in all of the EU.”

It said that the names of Bulgaria's factories that are in operation without the complex permits have not been released but according to unofficial information the country's biggest steel making plant Kremikovtzi is one of them.

Meanwhile, another punitive procedure against Bulgaria that started several months ago is entering its second stage a second and final written warning before the filing of suit at the EU Court. The reasons is that the Bulgarian government still has not submitted to Brussels its project carbon dioxide emissions for 2010, 2015 and 2020.

Japanese crude steel output up as demand zooms

Due to strong demand from automakers, Japanese steelmaker is set to raise crude steel production in 2008 - 09.

As per report Nippon Steel’s crude steel production in 2007-08 made a record of 33.11 million tonnes. As most blast furnaces will have maintenance, the production of this financial year is estimated to be around 33 million tons, remaining at the same level with that of last year.

JFE Steel is anticipated to produce some 30.8 million tonnes of crude steel production in 2008 increased from 30.05 million tonnes in 2007. Sumitomo Metal Industry predicts that the production in 2008-09 will reach 14 million tonnes up by 2.8% YoY.

Kobo Steel plans to raise its production of crude steel by 4% to 840,000 tonnes in year 2008-09. And Nisshin Steel Co will try to raise its production of crude steel by 1.9% to 420,000 tons in this financial year as well.

(Sourced from YEIH.com)

Bollore Q1 sales up by 21% YoY

Thomson Financial reported that French investment holding company Bollore sales in Q1 up by 21% YoY to EUR 1.785 billion due to gains from its transport and energy distribution operations.

Bollore also said that it has bought shares in French steel tube manufacturer Vallourec for EUR 111 million since the start of 2008 increasing its stake in the company to 2.02%

Greif buys steel drum plant in Vietnam

The Delaware based industrial packager Greif said that it has acquired Petro Summit Mechanical Co Ltd of Vietnam a subsidiary of Singapore's Asian Steel Co Ltd. The company didn't disclose terms of the deal.

The purchase brings Greif its first plant in Vietnam. The facility, which employs about 40, manufactures 50 gallon steel drums for customers in the country's main commercial area.

It said the plant will be managed through Greif South East Asia, a subsidiary that includes six other plants in Singapore, Malaysia, the Philipines and New Zealand.

Greif produces plastic and steel drums, bulk containers and water bottles, employing more than 10,000 workers worldwide.

European flat rolled prices up amid week demand

It is reported hat although the demand of flat steel products was weak in Europe, price is still moving up along with the price increase of scrap.

In Italy, Riva Group’s quoted prices of hot rolled coils, cold rolled coils, and hot dip galvanized steel coils are at EUR 720 per tonne, EUR 750 per tonne and EUR 740 per tonne respectively. But the market is calm.

According to related statistics, the current prices of hot rolled coils, cold rolled coils and pre painted steel coils in Europe are prevailing at EUR 699 per tonne FOB, EUR 711 per tonne FOB and EUR 833 per tonne FOB respectively.

In Russia, hot rolled coil price is at EUR 700 to EUR 760 per tonne CFR for 90 days deferred payment. Besides, ArcelorMittal has announced new base price of flat steel in Spain at EUR 650 per tonne.

(Sourced from YEIH.com)

Steinert form JV to expands metal recycling network in Japan

The Steinert Group has established a joint venture in Japan to market its products. The new JV will be called Steinert Japan and Steinert GmbH has a majority holding in the new operation.

The JV agreements were signed by Mr Franz Heiringhoff and Mr Klaus Buchholz MD of Steinert GmbH and the JV partners Mr Robert Jun Marwinski and Mr Bernd Lowigus.

It said that Mr Robert Marwinski will assume the position of MD & sales director, Mr Bernd Lowigus will assume the technical director in the joint venture.

The founding of Steinert Japan follows the growth and development of Steinert’s products in Japan, including the operation of nine of Steinert’s ISS induction sorting systems, the company’s first XSS X ray sorting system and the company’s first KSS combined sorting systems, which employ a combination of induction and color-recognition technology.

Vina Halla invests in heavy equipment plant in Vietnam

VNA reported that Vina Halla Heavy Industrial Ltd Co, a member of the Republic of Korea’s Halla Energy&Environment Corp has built a heavy industry factory at My Xuan 1 Industrial Zone in the southern province of Ba Ria Vung Tau.

As per report the factory will produce a wide variety of equipment including wind towers, pressure vessels and material handling equipment, covering a site of 20 hectare and possessing a total capital of USD 428 million.

Mr Fisher bags AISI Market Development Industry Leadership award

The American Iron and Steel Institute announced that Mr James M Fisher vice president at Computerized Structural Design at Milwaukee in Wisconsin is a recipient of its 2008 AISI Market Development Industry Leadership Award. The award presentation was made by Mr Keith E Busse chairman of AISI during a ceremony held at AISI’s 116th General Meeting.

The AISI Market Development Industry Leadership Award recognizes individuals who have made significant contributions in advancing the competitive use of steel in the marketplace as a direct result of AISI Market Development initiatives in the automotive, construction and container markets.

Mr James M Fisher joined Computerized Structural Design in 1973 and became a Principal of the firm one year later. He has specialized in structural steel research and development and has spent much of his career investigating building systems and studying economical structural framing systems. He is recognized as an authority on the performance of structures and on the design of heavy industrial structures, metal building systems and light gauge steel structures.

Mr David C Jeanes senior vice president of market development of AISI said that “In the diversified construction market, Mr Jim Fisher is recognized industry wide for lending his considerable expertise to advancing the design of cold-formed steel structures in the marketplace. His contributions, which include the co authoring of several AISI design guides and leading industry research projects, have advanced the competitive use of sustainable steel framing and design practices nationwide.”

Hyundai Steel to raise HR prices

South Korean Hyundai Steel is adding KRW 90,000 per tonne to the domestic prices of its hot rolled coil effective May 2nd 2008.

The increase takes the company’s price for HRC to touch around USD 920 per tonne reaching an all time high.

Hyundai Steel has already raised its price for four times in 2008. The major reason is because of the raising slab and scrap prices in the global steel market. Current slab quoted prices have smashed through USD 1,000 per tonne.

(Sourced from YEIH.com)

ThyssenKrupp French auto unit Sofedit to cut 500 jobs

Thomson Financial reported that French auto parts supplier ThyssenKrupp Sofedit a unit of German steel group ThyssenKrupp AG, will cut 500 jobs as part of a restructuring plan announced.

ThyssenKrupp Sofedit employs 2,700 people in France.

EU to start AD probe for wire rods from China, Turkey and Moldova

Bloomberg reported tat European Union has threatened to tax wire rod from China, Turkey and Moldova to help EU producers compete against cheaper imports, opening the fourth probe that targets Chinese steel in five months. The probe covers EUR 1.2 billion of imports of wire rods.

EC said that the investigation will determine whether wire rod is being dumped and whether this dumping has caused injury.

The commission has nine months to decide whether to impose provisional anti dumping duties for half a year and EU governments have 15 months to choose whether to apply definitive levies for five years.

The probe stems from a March 25th 2008 complaint by the EUROFER, which represents wire rod manufacturers in EU including Corus, ArcelorMittal, Badische Stahlwerke GmbH, Lucchini SpA and Celsa Group.

Scrap prices pushing long product prices in Turkey

It is reported that with a surge in scrap prices worldwide, Turkish steel mills are paying more than USD 700 per tonne on CFR basis for imports. It has resulted in a big jump in prices of billets and other long products.

As per market reports, billets have been sold to re rollers at price levels of USD 1,100 per tonne and now moving towards USD 1150 per tonne,

As a result, Turkish mills are now offering sections at around USD 1,200 per tonne on FOB basis. Turkish producers are aiming now to achieve USD 1,200 per tonne on CFR UAE ports for rebars on theoretical weight invoicing.

Isdemir coke oven by product plant commissioned

It is reported that a project comprising the expansion and modernization of a coke oven by product plant, which Siemens Metals Technologies implemented for the Turkish steel producer Isdemir, was completed in February 2008.

Two semi separate gas treatment lines are now in operation, increasing the processing capacity from 70,000 to 140,000 normal cubic meter of coke oven gas per hour.

This allows Isdemir to extract and sell approximately 40,000 tonnes per annum of ammonium sulfate, 75,000 tonnes per annum of tar and 30,000 tonnes per annum of benzol. At the same time, environmental emissions are significantly reduced.

The project scope included the engineering and supply of mechanical equipment, instrumentation, electrics and automation as well as the supervision of construction and commissioning. A central part of the project is the new automation and process control technology.

Level 1 automation is comprised of the fully redundant Simatic PCS7 DCS system to ensure that the plant has near-zero downtime. Level 2 automation is equipped with a historian analysis system to support process performance investigations and also statistical process control analyses, providing the operator with a basis for continuous optimization of the process. All plant and process data are now readily available in a central control room, facilitating plant operations and monitoring. Precise knowledge of all the relevant information supports the personnel at achieving highest efficiency with respect to the removal of ammonia, benzene, toluene and xylene or tar from the coke oven gas. The operation software was designed and developed to enable early detection of process or equipment problems.

The ammonium sulfate production and drying section was completely demolished and reconstructed as 2 production lines comprising three new ammonia absorbers and 2 independent crystallizing lines. The three serial crude benzene scrubbers in each of the 2 independent production lines were upgraded to increase their capacity. Furthermore, the crude benzene recovery line was completely rebuilt. Two new high efficiency flushing-liquor and tar decanters were installed to handle higher outputs. The ammonia liquor distillation section was reconstructed to enhance the settling and stripping of ammonia to boost ammonium sulfate production as well as to satisfy strict.

The process automation supplied by Siemens enables plant monitoring and operating functions to be carried out from a central control pulpit. Precise monitoring and process control ensures that the plant achieves highest efficiency at a high level of quality control and operational safety.

As part of a campaign to expand the production of steel to approximately 6.25 million tonnes by the end of 2009, Isdemir is modernizing and expanding its production facilities. In order to meet the increased coke demands for a new blast furnace currently under construction, two additional coke oven batteries were built to increase the coke production from 1.2 to 2.4 million tonnes per year. This necessitated an expansion and modernization of the existing coke oven by product plant to treat the increased quantities of generated coke oven gas.

El Fouladh to boost billets production capacity

It is reported that Tunisian steel manufacturing company El Fouladh 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 65,000 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 January to March 2008 quarter, it produced 20,000 tonnes of billets up by 25% YoY as against 16,000 tonnes in January to March 2007 quarter. Its production of reinforcing steel amounted to a little bit more than 26,000 tonnes.

UAE and Saudi Arab key driver of construction boom in MEA

According to a new research by database company Proleads, with projects worth USD 931 billion currently under way, UAE is a key driver, along with Saudi Arabia, of the USD 2.8 trillion Middle East construction boom.

The report shows that there are now 3,339 projects estimated to be worth in excess of USD 2.8 trillion under way in the region, the bulk of development taking place in the UAE and Saudi Arabia.

There are currently 1,248 projects worth USD 931 billion under way in the Emirate, which is home to more than 35% of the heavy equipment available worldwide, while 25% of the world’s tower cranes are in use in Dubai.

The report added that "A massive wave of projects in the GCC, Egypt, Iraq and Libya has turned the region into the world’s biggest market for plant, construction machinery, vehicles and equipment, demand for which is expected to grow by up to 20% over the next 4 years."

Construction sector hit by rising input costs in Bahrain

Gulf Daily News reported that rising costs and shortages of construction materials have put Bahrain's construction industry in crisis.

Mr Samir Nass contractors' committee chairman of Bahrain Chamber of Commerce & Industry said that prices of all building materials including sand, cement, aggregates and steel have gone up and there is an acute shortage in supply.

He added that "The price of steel has doubled in one year from BHD 300 per tonne to almost BHD 600 and that of sand from BHD 3 to BHD 6 or BHD 7 per tonne. Bahrain imports all these materials mainly from other Gulf States. We get the aggregates and from the UAE, cement from the UAE and Saudi Arabia and steel from Saudi Arabia and Qatar. The dredged marine sand from Bahrain is blended with the limited quantity we get from Saudi Arabia to meet the specifications."

Mr Nass said that however, there is an acute shortage of all these materials because of the heavy demand. He attributed the shortage to the unprecedented boom in construction activities across the Gulf. He added that "The increase in oil prices has led to a boom in developmental activities and the production of building materials has not been able to cope with this demand. It is estimated that projects worth USD 2 trillion will be executed in the Gulf over the coming 5 years. Besides the shortage in building materials, there will also be an acute shortage of trained workers, engineers and project managers."

He said that some Gulf countries could even stop exporting building materials because they would need cement and steel for their own projects. He added that "Bahrain may then look for other markets, which will add to the costs further. Prices of electrical items are also going up. Bahrain's decision to increase the price of diesel will also adds to the burden of the contractors in terms of transportation costs."

Mr Nass also warned that new labor fees and other regulations imposed by the government could also add fuel to the fire. He added that companies are due to start paying a BHD 200 levy every 2 years for foreign work permits for expats from July 1st 2008. A BHD 10 monthly payment for each expat worker will also be introduced.

India behind Pakistan in gas pipeline network

According to Associated Chambers of Commerce & Industry of India, Pakistan is nearly 6 times ahead of India in terms of gas pipeline network as its pipeline network stands around 56,400 kilometers as against 10,500 kilometers that of India and with its current pipeline density measuring at 1044 kilometer per million standard cubic meters day compared to 116 kilometer per million standard cubic meters day of India.

It has been highlighted that as a result of intensive pipeline network while Pakistan has connected its 1050 towns and villages through gas connectivity. In case of India, its connectivity is only restricted to 20 cities.

Mr Venugopal N Dhoot president of ASSOCHAM said that the gas availability in Pakistan is undoubtedly quite large as compared to India but given the imports of gas and even its domestic availability in India, its pipeline network is extremely poorer and the main reason attributed for the low and limited pipeline network in India is because this sector has been thoroughly regulated which has now been opened for competition. He added that "Thus the unmet gas demand in India is probably much higher than what is reported. India currently has only 1 major cross country pipeline in the form of HBJ pipeline and there is estimated to be considerable unmet demand even in the states serviced by this pipeline."

Pakistan has created a 31,000 kilometers of distribution network to serve its domestic and commercial consumers in large locations as against 11,000 kilometers of distribution network that have so far been created in India to serve the requirement of its consumers in limited pockets.

Interestingly, while Pakistan has its possession nearly 1600 CNG stations, in India their number is just at 380 and the gas throughput in Pakistan is 38 million standard cubic meters day as against 8.5 million standard cubic meters day gas throughput in India. The number of gas customers in Pakistan is estimated at 1.9 million which in case of India is just 550,000 and Pakistan runs vehicles on CNG whose number is estimated at 1.56 million while in India, the number is just 460,000.

Armenian firm to produce compressed gas cylinders in Egypt

Al Hayat reported an Armenian company is considering to implement a USD 20 million project in Suez to produce compressed gas cylinders for vehicles based on its advanced technological experience in that field.

A company official indicated that the company has already submitted a relevant application to General Authority for Investment for a relevant license requiring one year for completion.

Egypt invites prequalification applications for Airport project

Akhbar El Yom reported that Egyptian Airports Company is inviting contractors & firms to submit their prequalification applications for the construction of the new terminal building, related apron & landside works at Hurghada International Airport.

The new terminal building of the airport is of a total approximate built up area of 91,500 square meters & accommodates both international & domestic passengers. It is located east of the existing runway system & will be independent from existing terminal building facilities with a capacity of handing 7.5 million passengers per annum.

Applicants shall have strong & proven records in construction and be capable of demonstrating sufficient technical, financial & managerial capabilities to undertake the execution of the contract. Applicants shall also have an average annual turnover of construction work over the last five years not less than USD 120 million and shall have completed two or more projects of value not less than USD 120 million & shall have completed two or more projects of less than USD 120 million per project over the last 6 years.

Applicants should have completed at least 1 project of similar nature & complexity over the last 5 years of value not less than USD 100 million. It is expected that invitations to bid will be issued in September 2008. The document shall be available in printed from, electronic softcopy or through the E mail upon request.

MERIS assigns 'BBB-' credit rating to El Ezz Steel

Arab Finance reported that Middle East Rating & Investors Service has granted a ''BBB-' national scale credit rating to El Ezz Steel entity with a stable future outlook for the entity and the bonds to be issued.

The credit rating reflects a low expectation of credit risk and that the capacity for timely payment of financial commitments is considered adequate. However it implies that adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to meet its financial commitment

Stable outlook implies that El Ezz Steel will be sustaining the current business and financial level on the medium term.

EU eyeing gas pipelines from Egypt and Iraq – Report

Daily Star Egypt reported that European Union is progressing with efforts to secure gas supplies from Egypt and Iraq as part of its efforts to reduce its heavy dependence on Russian oil and gas.

However, European Commission ruled out the possibility of linking Russia up to the Nabucco gas pipeline, stressing that Europe would stick to its aim of diversifying EU supplies. Nabucco, which is supposed to supply the bloc with gas from the Caspian Sea region by 2012-2013 while bypassing Russia, lies at the heart of the European Union's diversification strategy.

Mr Andris Pielbalgs EU energy commissioner said that "Russia is working with its own project South Stream. They have never expressed any wish to join Nabucco." He added that there were currently no discussions between Russia's Gazprom and the Nabucco consortium.

Ms Benita Ferrero Waldner EU external relations commissioner also excluded the possibility of linking Russia up to the Nabucco network. She said that "It is of high strategic interest and importance that we keep to our strategic goal of diversification, not just other resources but also other pipelines. Russia will always be an important supplier but we also have big countries around that have potentially very big reserves and they need to develop their reserves."

The consortium behind Nabucco has struggled to get construction underway in the absence of enough investors amid fears that the EU will not find the 30 billion cubic meters of gas per year necessary for it to be viable.

UAE and Oman turn to coal for its energy needs

Emirates Business reported that UAE and Oman have embarked on coal powered plant projects to boost electricity capacity, aware that demand for gas would soon outstrip supply.

In the UAE, Abu Dhabi National Energy Company is now studying a AED 3.67 billion coal fired power plant in the capital. The study, according to project information specialist Proleads, is slated to be completed in the second quarter of next year.

Mr Saeed Mohammed Al Tayer MD & CEO of Dubai Electricity & Water Authority said that construction of an AED 6 billion power station to generate electricity using hydrogen extracted from coal may begin in August 2008.

Meanwhile, Oman is earmarking AED 7.34 billion for two coal powered plants. Out of the two, one is owned by Petroleum Development Oman and the other by Oman Power & Water Procurement Company. Studies on both are expected to be completed in the second quarter of next year.

Despite sitting on top of some of the world's largest gas reserves, sources said that some Gulf states face blackouts and lowered crude production due to a growing shortage of gas and insufficient power generation capacity.

Seamless pipe price in China may face correction

Chinese domestic seamless pipe prices have witnessed a jump since the start of May 2008. Seamless pipe prices started to rebound in late April 2008.

On Shanghai market, price for 25mm 2.5mm seamless pipe has advanced to CNY 7650 per tonne, that for 102mm 4.5mm and 108mm 4.5mm are being quoted at CNY 6750 per tonne. While 377mm 10mm seamless pipe by Baotou steel is being tagged at CNY 7600 per tonne.

Most traders believe that prices are expected to maintain at a high level. However, some just keep cautious and are not ready to stock up lots of cargoes.

The recent increase is believed to be bolstered by the whole bull steel market and the release of downstream demand. The robust demand is the most important driver of the price jump. The fast development of real estate industry, machinery and chemical industry plus the construction of Olympic Games sites lead to great demand for seamless pipe.

At the same time, the rising production cost is also pushing up the market price. The short supply in coal and coke, higher price of pig iron, steel scrap and ferroalloy ensure that pipe blank price keep moving up. Now price for 20 pipe blank is prevailing at CNY 5950 per tonne

Another important factor is that seamless pipe exports are fairly good since export rebate rate for seamless pipe is not reduced. Seamless export tonnages reached 326,600 tonnes in March, accounting for 61.74% of total steel pipe exports and 19.53% of total seamless pipe output.

Mr Liu rui sales manager of Baotou steel Group said that the following 3 factors are noticeable for judging the price development

1) Whether prices for such commodity as energy, iron ore, coal continue to move up, this is mainly aroused by the weakening of the US dollar. The US dollar denominated commodity price probably would see evident drop if the greenback rebound in second half.

2) Production cost remain at a high level since price of tube blank is still hovering around CNY 5600 to CNY 5700 per tonne and there is no signal of weakening in the short term.

3) The recession of US economy is going to depress the demand for steel pipe and thus cast adverse effect on seamless pipe price

To sum up, if the cost increase caused by the US dollar depreciation exceeds the extent of decrease in demand, Chinese steel pipe would still run at a high level. However, we have to keep alert that the drop in world demand would drag down prices in the end.

(Sourced from MySteel.net)

WISCO gets zero tax status for HR export to Indonesia

WISCO recently have received the final judgment from Indonesian anti dumping Committee, under which WISCO gets the zero tax rate for hot rolled coil exporting to Indonesian.

On June 28th 2006, Indonesian Anti dumping Committee initiated anti dumping investigations on hot rolled coil whose width is longer than 600mm from China, Taiwan, Russia and Thailand.

WISCO is included in one of that export enterprises, WISCO organized nearly 60 people to work in Indonesian’s anti dumping investigations and verification.

As per reports, WISCO is the only one enterprise that gained the zero tax rate.

Baosteel Yanti seamless pipe mill project on track

It is reported that Baoshan Iron & Steel’s Yantai Baosteel Pipe Company in Shandong was formally established with the total investment of CNY 5 billion and registered capital of CNY 2 billion.

The new company will produced seamless steel tubes and the annual operating revenue is expected to be more than CNY 7 billion after the completion of the project. The whole project is divided into two phases, the first phase will be completed and put into production in November 2009 and the second phase will be completed in July 2010.

As per reports, Yantai Baosteel Pipe Company covers an area of 1.143 million square meters and the construction area is 480,300 square meters. It will adopt the world’s most advanced and the highest grade of products three rolling units and produce large caliber, high alloy corrosion resistance, high pressure oil and natural gas resistance pipe and ultra supercritical power plant boiler tubes.

Mr Xu Lejiang board chairman of Baosteel and the responsible person of Yantai City expressed that in the construction process of Yantai Baosteel Pipe Company, they will pay full attention to environmental protection work, fully promote clean production and green manufacturing, dedicate to build a world class clean pipe enterprise.

Shagang to increase steel prices in May

China’s Jiangsu Shagang Group has announced to increase its new ex work price on May 1st 2008.

Compared to the price of last week, steel rebar price increased by CNY 450 per tonne and the current price of HRB335 steel rebar in diameter of 14mm to 25mm is quoted at CNY 5,500 per tonne.

Wire rod price raised by about CNY 440 per tonne and the current price of steel wire as grade Q235 in diameter of 6.5mm was CNY 5,720 per tonne.

Besides, the steel coil price rose by CNY 200 per tonne and the heavy plate price increased by CNY 600 per tonne.

The new price will take effective on May 1st 2008 for all of its products.

Basteel new JV starts in Bachu

It is reported that Xinjiang Yeerqiang Mines Company mill run plant which is invested by Bachu county and Baosteel Group and Xinjiang Baiyi Iron & Steel Company held the ribbon cutting ceremony.

The Vanadium and titanium magnetite locates in Bachu County, the geological ore reserves is 100 million tonnes, titanium dioxide is 6 million tonnes, V2O5 is 130,000 tonnes, with thick, large reserves, widely distributed, easy exploitation such advantages.

This project has been ranked into the2007-2008 fixed asset investment key projects of Baosteel Group Bayi Steel Company, is expected to be completed by the end of this year, and the annual sales revenue is estimated to reach CNY 200 million.

China Oriental sets up H beam JV

China Oriental Group announced recently that Jinxi Steel Co and Guanlian Steel Co under the group founded H beam JV. The registration capital is CNY 350 million and total investment is CNY1.2 billion.

China Oriental Group indicated that the JV would build two new H steel lines with a total capacity of 1.2 million tonnes per annum, so total H steel capacity should be as much as 2.5 million tonnes per annum. It is expected that the sales income of H steel may take over 50% in total sales income in 2009.

Anshan ThyssenKrupp JV to commission new line in September

After one year of construction, the second phase of the project in Anshan Steel ThyssenKrupp Steel Sheet Co is coming to the end and starts the phase of equipment debugging now. The project should be commissioned in this September.

Total annual output of galvanized steel sheet of two phases would reach 800,000 tonnes by then.

Anshan Steel ThyssenKrupp galvanized steel sheet company will become the largest overseas venture metallurgical plant, it will add a heavyweight weights for Ansteel to further enter into automobile and home appliances galvanized sheet market at home and abroad.

Shougang Shouqin SBQ plates used in new type bulk vessel

It is reported that ship building quality plates made by Shouqin Steel Company of Shougang Group will be used in the first 180,000 tonnes new type bulk vessel in China.

90% of the vessel body utilized SBQ plates from Shouqin Steel Co.

As per reports, the first 180,000-ton new type bulk vessel is the new type bulk vessel which is designed and developed by China, in line with international and domestic ship class norms.

It is reported that there are 7 grades of ship building quality plates by Shouqin Steel Co in maximum thickness of 50mm. Its SBQ plates have already been approved by class societies in nine countries in the world.

Minmetal takes over micro cutting tools producer HPTec

Xinhua reported that China Minmetals Non ferrous Metals Company Limited, a subsidiary of China Minmetals Corporation, has bought Germany's leading manufacturer of drills and cutters HPTec for an unspecified price. The move is to update its tungsten sector and it will have a 100% control of HPTec.

The acquisition is part of CMC's strategy since 2002 to transform its business focus from metal trading to production.

State owned CMC is one of China's major importers and exporters of metals and minerals. As a Fortune 500 member, the corporation's operating revenue was USD 21.8 billion in 2007, with profits topping CNY 7.1 billion.

Founded in 1977, HPTec has branches in Singapore, the Republic of Korea and China.

Wuhan Steel's output to go up by 20% in 2008

It is reported that Wuhan Steel's output will gain at least 20% in 2008 on account of the Beijing Olympics. The growth is expected to top domestic steel industry.

Statistics show that total output of the three major steelmakers, Baosteel, Wuhan Steel and Anshan Steel, is likely to increase 11.79% in 2008. Wuhan Steel takes the lead by a possible growth of 21.87% with Anshan Steel following by 14.1%.

Analysts believe that steel industry will growth minimum 30% in 2008 against the backdrop of increased outputs and climbed prices. Wuhan Steel's growth is expected to exceed the average figure.

(Sourced from MySteel.net)

Golden Dragon Precise Copper to set up plant in Mexico

Xinhua reported that China's largest precise copper tube producer Golden Dragon Precise Copper Tube Group Inc is to set up a plant in Mexico.

The plant is to cost up to USD 80 million, which will be funded by Standard Chartered, Goldman Sachs and Lehman Brothers.

Mr Li Changjie president of Golden Dragon said that the Mexican plant, in the copper rich Coahuila with a designed capacity of 70,000 tonnes of precise copper tube, will start test production by the end of 2008.

Mr Li said that the group plans to list in Shanghai in 2009 and raised CNY 1.6 billion to CNY 2 billion.

SeverStal NA orders Parsytec surface inspection system for HSM

The world’s leading supplier of surface and web inspection systems for strip products Parsytec AG has received an order for a hot mill surface inspection system from SeverStal for their site at Dearborn in Michigan USA.

SeverStal North America Inc division decided to install their second Parsytec surface inspection system at their HSM for carbon steel. The all digital espresso SI system will be installed at the hot mill with a bottom side compact sensor. The inspection system will ensure best quality for direct customer shipments as well as advanced feed-forward information for all downstream processes.

SeverStal in Dearborn produces mainly automotive exposed steel for leading car manufacturers. This industry requires optimum quality control to achieve best output and high customer satisfaction and consequently increases inspection demands. In that respect, Parsytec’s expert classification environment CBE has been a decisive factor due to its multi-staged classifier architecture. The CBE is intuitively operable and enables monitoring the classification performance to indicate optimal results over time.

Parsytec AG is the world's largest vendor of surface inspection systems today, all of the top 10 steel producers and 15 of the top 20 paper producers apply Parsytec products. With more than 510 installations worldwide, espresso by Parsytec is the most advanced surface inspection system providing Parsytec customers in the steel, aluminum and paper industry with reliable and comprehensive information about the relevant surface defects at all production steps.

SeverStal relies worldwide in Russia as well as in the USA on Parsytec for high quality inspection, demonstrating its unsurpassed leadership in demanding applications.

Russian and Brazilian HRC export prices to rise 60% - Nomura

According to Nomura International Plc, export prices for Russian and Brazilian hot rolled steel will increase as much as 60% in 2008 as rising spot prices offset higher raw material costs.

Mr Paul Cliff an analyst at Nomura in London said that “The global steel industry is enjoying a renaissance of improving returns and growth. We continue to view steel producers from Russia and Brazil as ongoing out performers.''

He said that “Russian and Brazilian producers offer higher prices, lower costs and faster growth than in other regions.”

Mechel inks SMS contract for Southern Urals Nickel Plant

Mechel announced that its subsidiary, Southern Urals Nickel Plant OAO and Bateman Engineering have signed a contract on the construction of a new melting complex for Mechel’s nickel plant.

The contract, which is signed in accordance with the investment program of Southern Urals Nickel Plant, provides fundamental re equipment of the plant and includes the design and supply of a 12 MW DC furnace. The furnace will be erected at Southern Urals Nickel’s existing facility. The total project value is USD 31 million.

The fixed price contract will be performed against a defined scope of work for small scale industrial furnace complex equipment for the production of ferronickel. The contract will also include a basic engineering package for the entire process plant and detailed design and supply of the core technology equipment for the 12 MW DC furnaces. Work is expected to commence in the nearest months and the project is due to be completed by the end of 2009.

The 12 MW plant will be designed to include the latest proven technology in the field of ferro smelting and environmental protection. The technology has been designed by employing a holistic process approach to achieve low operating costs and high recoveries along with high levels of reliability.

Mr Vladimir Polin CEO of Mechel Management OOO said that “The Southern Urals Nickel Plant has embarked on a modernization and expansion program for its nickel operations in order to boost production and operate efficiently. The 12 MW furnace is the first phase in this program whereby in addition to producing a quality saleable product, it will be used to assess the commercial viability of a significantly larger project.”

OMK VMZ pipe production 4 months dips by 21% YoY

Vyksa Metallurgical Plant summarized the production activity for April and the first four months of 2008.

Vyksa Metallurgical in a statement said that in April 2008 it produces 137,716 tonnes of pipes down by 13% YoY as compared to 158,924 in April 2007. Production of large diameter pipes in April 2008 was 73,858 tonnes, down by 16% YoY as compared with 88,002 tonnes in April 2007.

Since the beginning of the year VMZ produced 499,277 tonnes of pipes of various grades down by 21% YoY.

The decline in production of pipes at VMZ is attributed to reduced demand in the Russian market.

TMK to become a member of DIN

OAO Trubnaya Metallurgical Company announced the entry into the membership of German Institute for Standardization DIN.

TMK is the first Russian company, which granted the right to become a member of DIN Membership in the institute greatly enhance the possibility of the Company as part of the acquisition of regulatory and technical documentation and replication DIN standards for internal purposes Company, both on paper and in electronic media, including to accumulate in their data bank and use an electronic network.

The release said that “Operative access to the electronic system enables users to search DIN and a compilation of necessary documentation to purchase in the mode of on line, provide timely technical personnel of relevant documentation and consequently produce high quality and appropriate modern production enterprises TMK, which provides additional guarantees of quality products to consumers.”

TMK, with a view to forming an effective investment projects and promote the development of national standardization is actively involved in the standardization work, both at the national level and at regional and international.

DIN is a member of major international organizations in the field of standardization, such as ISO, CEN etc. Its members are companies from Germany, Austria, Switzerland, England, Italy, France, America.

Fitch assigns final BB rating to Evraz Group

Fitch Ratings said that it has assigned final BB ratings to Evraz Group SA's USD 1.05 billion and USD 550 million notes due in 2013 and 2018 respectively in line with the Russian steel maker's BB long term issuer default rating. The ratings agency also affirmed Evraz's long term IDR and senior unsecured ratings at BB and short term IDR at B with a stable outlook.

The ratings of Mastercroft Ltd, Evraz's core subsidiary, holding most of its key operating assets within Russia are also affirmed at long term IDR BB and short term IDR B as is the senior unsecured BB rating of Evraz Securities SA.

Fitch said that proceeds from the notes will be used for general corporate purposes, including the funding of CAPEX and potential acquisitions. It said that the proceeds will also be used in part to refinance the debt from the recent acquisition of IPSCO's Canadian operations.

OMK Chusovskoy increase pipe production in 4months

It is reported that OMK’s Chusovskom Metallurgical Plant pipe production in January to April 2008 totaled 159,500 tonnes up by 16,800 tonnes as compared to January to April 2007.

Chusovskim Metallurgical Plant also smelted 176,600 tonnes of steel during January to April 2008, which is 6,700 tonnes more than in January to April 2007.

EU rules out linking Russia to Nabucco pipeline

It is reported that European Commission ruled out on the possibility of linking Russia up to the Nabucco gas pipeline, stressing that Europe would stick to its aim of diversifying EU supplies.

Mr Andris Pielbalgs EU Energy Commissioner after meeting Mr Viktor Khristenko Russian energy minister told reporters that "Russia is working with its own project, South Stream. They have never expressed any wish to join Nabucco. We should not ask Russia to join a project which they have never shown interest to join."

He said there were currently no discussions between Russia's Gazprom and the Nabucco consortium and we should not speculate on issues that are not on the agenda. He added that "Safety and security in energy is in diversity.”

Ms Benita Ferrero Waldner external relations commissioner of EU also excluded the possibility of linking Russia up to the Nabucco network. She said that "It's of high strategic interest and importance that we keep to our strategic goal of diversification, not just other resources but also other pipelines announcing that Egypt would contribute some two billion cubic metres of gas per year to the pipeline from 2010.”

Nabucco which is supposed to supply the bloc with gas from the Caspian Sea region by 2012-2013 while bypassing Russia lies at the heart of the European Union's diversification strategy. The consortium behind Nabucco has struggled to get construction underway in the absence of enough investors amid fears that the EU will not find the 30 billion cubic meters of gas per year necessary for it to be viable.

Tatneft oil reserves in 2007 up by 3.9% YoY

RIA Novosti reported that Russia sixth largest oil company Tatneft proven oil and condensate reserves grew by 228 million barrels or 3.9% YoY in 2007 to 6.14 billion barrels.

Tatneft, which handles upstream and downstream operations and accounts for over 80% of oil output in the Russian Republic of Tatarstan in the Volga area said that the growth in oil reserves was attributable to the development of high viscosity oil deposits in the republic and the expansion of the geography of its operations.

Tatneft produced about 183.35 million barrels of oil in 2007.

AvtoVAZ wants car parts duty dropped - Report

Vedomosti citing unidentified officials at the Economic Development and Trade Ministry reported that AvtoVAZ and partner Renault are lobbying the Russian government to eliminate tariffs on imported car parts.

Vedomosti reported that the Russian government lowered tariffs three years ago to 3% or eliminated them entirely on some parts imported for car assembly plants.

The paper said that other components, including tires and auto body sheet metal, did not receive the lower duties. It said that the duty on tires is 20%, while the tariff on sheet metal is 5%.

The newspaper citing unidentified people with knowledge of the matter said that the Economic Development and Trade Ministry does not think AvtoVAZ's proposal is warranted.

A ministry spokesperson declined to comment to Vedomosti.

Altai Koks Q1 tax payment rose 3.6 fold.

Altai Koks said that its Q1 tax payments gained by RUB 248 million or 3.6 fold higher prior year figures.

Altai Koks said that the growth of taxes is explained by the increase in the sales profitability and wages. Its tax payments to the regional budgets rose 6 fold to RUB 766 million.

Altai koks was included into NLMK in April 2006. It is a modern industrial complex for the production of coke and petrochemicals and covers 56% in the total exports on the native market. Its 2007 net profit rose to reach RUB 2.477 billion which is 3.9 fold higher then 2006.

OGK 5 posts 2007 net profit of RUB 2 billion

Reuters reported that Russian power generator OGK 5 net profit amounted to RUB 1.995 billion (USD 83.96 million) in 2007, an increase of RUB 2.05 billion over 2006. The net profit figure excludes the one off effect of the recognition of a deferred tax asset totaling RUB 3.3 billion in 2006.

Italy's largest utility Enel has a majority stake in OGK 5.

Renault to expand Moscow plant in 2009

RIA Novosti reported that a joint Russian and French company producing Renault Logan cars in Russia is to expand its Moscow based factory by late 2009.

A spokesperson for Moscow's department for science and industrial policy said that the supervisory board of Avtoframos, in which the Moscow city government holds just under 6%, has approved the program to build and commission in the second half of 2009 the second part of the plant, which is expected to eventually double the plant's capacity.

The spokesman added that the design work has been completed and the new project will create 1,000 job.

The Moscow city government and Renaults set up Avtoframos in 1998. The joint venture rolled out around 80,000 cars in 2007 up by 41% YoY.

Russian Koks group mulls USD 450 to USD 600 million IPO

Reuters reported that Russian industrial group Koks, which controls various coal mines and major pig iron producer Tulachermet is planning for an initial public offering of its shares.

A market source told Reuters that "The group is considering raising some USD 450 to USD 600 million for its business development through placing its shares.”

Gazprom Neft planning USD 1 billion syndicated loan – Report

Interfax reported that Russia's Gazprom Neft is holding negotiations with banks on a syndicated loan for USD 1 billion.

A source in banking circles told Interfax that "A mid term loan of three to five years is being discussed.”

Another source said the syndication could begin in a month.

Gazprom Neft raised a USD 2.2 billion syndicated loan for three years at Libor + 0.75% in November 2007. The loan was arranged by ABN AMRO Bank N.V, Calyon, Citigroup Global Markets Ltd and Commerzbank Aktiengesellschaft.

SS growth trend remains positive in South Africa

According to Southern Africa Stainless Steel Development Association, South African stainless steel industry grew by just over 1% in 2007 to a total apparent consumption of 197,070 tonnes as against 194 916 tonnes in 2006. SASSDA said that after a strong first half of 2007, growth in apparent consumption has slowed as a result of higher stock and material price levels and nickel price volatility.

The total apparent consumption of 197,070 tons comprised 136,300 tonnes of local supply, plus 40,900 tonnes of primary product imports, taking local material for conversion to 177,200 tonnes, added to which is imports of finished products of 19,870 tonnes.

Total imports, which accounted for 31% of total apparent consumption, slowed during the year with consumer product imports down substantially, suggesting slowing consumer spending. Flat rolled imports decreased by 20% and consumer ware by 23%. Consistently 79% of finished goods imports come from China, India and Taiwan.

Overall exports were flat with primary product at 506,410 tonnes and finished product at 76,870 tonnes. In particular, flat rolled grew by only 1%, automotive products by a remarkable 19% and tubular products by 81%.

Local supply was up by 4.4% from 130,510 tons and essentially represents Columbus Stainless material sold into the domestic market. This increase reflects a shift from primary imports towards local supply in a year of consolidation and flat consumption growth, driven mostly by nickel price volatility.

There has been strong growth in both the transport and capital equipment and general engineering sectors during 2007. The latter was positively influenced by buoyant capital projects activity across a range of sectors including petrochemical, mining and materials handling, food and beverage. The transport sector, especially automotive, was driven by Motor Industry Development Program and strong consumer demand locally and abroad.

Indications are that the overall growth outlook for the local industry remains positive as a result of lower stainless steel price levels and continuing strong demand for stainless steel from capital projects in Southern Africa.

South Africa’s apparent consumption growth of 8.1% between 1991 and 2007 still comfortably outperforms average world growth.

China SS mills cut May 2008 production on weak demand

It is reported that China's stainless steel makers are cutting output and building stocks in May 2008 as weak demand squeezes profits and many big producers are chopping spot sales for May in half as compared with April 2008.

As per report, Shanxi Taigang Stainless Steel and Baoshan Iron & Steel Company are among those that have halved their spot sales volumes for this month, along with the China units of POSCO.

Chinese stainless steel makers had already been trimming output and accumulating stocks since mid 2007 as they grappled with sagging product prices and volatile raw material costs. But weakening demand, as tighter credit bites to the business of domestic users, has forced more drastic measures.

The price of 304 series stainless steel is trading at about CNY 31,000 a tonne in the spot market, well below production costs. Nickel accounts for more than 60% of the cost of making the most popular 300 series of stainless steel, which contains about 9% nickel.

Nickel was quoted in a range between CNY 235,599 and CNY 239,000 in Shanghai's spot market, indicating a production cost for 300 series stainless steel of at least CNY 35,000 a tonne.

Baosteel posted a surprise drop in 2007 net profit after its stainless steel operations fell into the red.

MEPS increase forecast for SS prices

UK based MEPS said that “Our forecasts have been revised upwards slightly as ferrochrome and scrap prices continue to soar.”

MEPS added that “Further rises in transaction values are likely over the next two months as mills recover these escalating costs. Declining nickel prices will not be enough to offset the increases from the other alloying elements. Austenitic alloy surcharges gains in North America and Europe of between USD 200 and USD 535 per tonne over the next two months are predicted with no significant drops anticipated until after the summer holiday period. Stainless selling figures for cold rolled coil type 304 are expected to top USD 4900 per tonne by the end of the second quarter, with type 316 values moving above USD 7500 per tonne. The market outlook is uncertain from July onwards. Although prices should remain high through the majority of the third quarter due to the increased raw material costs.”

MEPS said that “The April average nickel cash price on the LME will decrease by approximately USD 2400 per tonne compared to March. Values moved between USD 28000 and USD 29000 for the majority of the month.”

MEPS added that “Inventories in LME warehouses remain above 50000 tonnes. However, this appears to be having little impact on prices at present. Nickel values are expected to remain relatively stable next month. A downward trend is forecast from the end of the second quarter as economic worries have a negative impact on stainless demand and, therefore, production. This should lead to weakening nickel values as stockpiles begin to grow. The possibility of a strengthening dollar could also lead to profit taking and result in declining prices. Chromium and scrap costs are set to climb further in the short term, with prices remaining high throughout the course of 2008. Molybdenum figures are also expected to remain strong. Consequently, the fall in nickel is expected to be partially offset by rises in other raw material costs. Next year is likely to start positively as stainless activity increases.”

MEPS further added that “Uncertainty in the financial markets has not, so far, affected stainless steel demand. However, as the economic outlook for the second half of 2008 grows more bleak, with the threat of a US led recession remaining high, consumption is likely to decline. Consequently, downward price pressure is expected to intensify as the year progresses. This, coupled with a decrease in nickel costs, is forecast to drive transaction figures lower. A revival in prices is then anticipated early in 2009 as distributors restock after the Winter drawdown.”

Prices for 304 series SS in US to surge this month

Purchasing.com reported that despite sluggish buying, cold rolled stainless steel in 304 grades in US could rise by 10% this month to USD 4270 per ton, 18% higher than it was in December.

It said that “The current stainless steel market is being described as confused with tight domestic supply and flat imports supporting stronger than expected transaction prices even though purchasing by end users and service centers is down 14% from year ago tonnage.”

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

It said that ferrochrome is rising again and now is 25% higher than at the end of December, while nickel is 10% more expensive and stainless steel scrap supply is tight.

Latrobe Specialty Steel withdraws offer to union

It is reported that Latrobe Specialty Steel Co has withdrawn the contract offer that the United Steelworkers Local 1537 overwhelmingly rejected in a vote April 30th 2008, the day before the strike by about 360 employees began.

Latrobe Specialty, on a web site for employees, published on May 3rd 2008 notified United Steelworkers staff representative David Wolfe that the offer is withdrawn.

When the steel company contacts the union in the near future, it will likely propose a different economic structure that meets the company's needs to remain competitive over the long term.

First Nickel issues plan to guard shareholders in buyout bids

Platts reported that, with metals sector mergers occurring at an ever faster pace, Canadian miner First Nickel unveiled a shareholder rights plan aimed at ensuring equal treatment to its shareholders, while not scaring off attractive takeover bids from suitors.

Set for shareholder vote at the company's annual and special meeting June 19th 2008, the plan is designed to maximize shareholder value by giving shareholders the right to weigh in on any buyout offers First Nickel receives that could change control of the company.

Mr William Anderson president & CEO of First Nickel said that "The plan would also allow First Nickel's board of directors' sufficient time to explore and develop alternatives for maximizing shareholder value, including, if considered appropriate, identifying and holding discussions with other potential bidders."

Late in April 2008, First Nickel released its first quarter earnings, noting that its Q1 production levels logged at the company's Lockerby mine totaling roughly 930,000 pounds of payable nickel and 10,000 pounds of payable copper, were the second highest in the firm's history.

Stoody introduces new 300 series SS flux cored wire

Stoody Company has introduced the new Stoody 300 series flux cored wire.

For over 85 years, Stoody Company has been the world's leader in the production of cored welding wires. In the 1970's, Stoody pioneered the first self shielded open arc stainless steel wire commonly referred to as SOS. Today, the Flux cored Arc Welding Gas Shielded Wire offers a lower cost, high quality flux cored stainless steel wire with all the great welder appeal and appearance of Stoody's premium brilliant stainless steel wire.

Mr Joe Hirscher sales director of Stoody said that "The new line of flux cored wires incorporates bold technologies in formulation and manufacturing. Stoody has once again raised the standard for performance in both all position and flat and horizontal welding."

The new Stoody 300 Series Flux Cored Wire offers superior weld deposit, an environmentally friendly wire basket and outstanding feed ability to reduce downtime and operator cost. Furthermore, the new random wound wire provides a higher deposition rate with reduced labor, overhead and material cost over solid wire and electrodes. The product is stocked in popular sizes, including 308L, 309L and 316L; and both flat or horizontal and all position welding grades.

Stoody is a global leader in the design and manufacture of hard facing and joining welding electrodes used to combat various types of wear and corrosion. Its extensive family of products includes iron, nickel, cobalt, tungsten and vanadium based alloys. Some of the major industries Stoody serves are power generation, mining, construction, railroad, steel, foundry, oil and gas production and exploration as well as the pulp and paper industry.

Nippon, Vale, JFE and POSCO to boost Carborough Downs coal mine output

Asia's three largest steelmakers, Nippon Steel Corp, JFE Holdings Inc and POSCO will join Brazil's Cia Vale do Rio Doce for the expansion of its underground operation at the Carborough Downs coal mine in Australia. The total capital investment is estimated to be approximately AUD 400 million.

The commencement of construction is scheduled for May 2008 and commissioning of the large scale and new mining equipment which will be one of the largest in Australia is expected by mid 2009.

Carborough Downs Coal Mine, where Nippon Steel holds a 5% interest, started its production in August 2006 as one of the new coking coal projects in the State of Queensland, Australia. Since commencement of the production, while continuing its underground operation at small scale, Carborough Downs JV has studied the development option by Longwall method toward larger scale operation.

After completion of the development plan, which is based on the study such as coal quality and geotechnical condition acquired through exploration and operation, Carborough Downs JV has decided the expansion of its underground production by Longwall method. This investment shall ensure on average 3.7 million tonnes of the annual production for the mine beyond 2009.

ArcelorMittal to supply iron ore and coking coal to China Oriental

China Oriental Group announced that ArcelorMittal has agreed to supply a Chinese producer with iron ore and coking coal under a multi billion dollar pact lasting through 2010.

China Oriental in a statement to the Hong Kong Stock Exchange said that the supplies will be at prevailing market prices and are estimated to be worth more than CNY 14.6 billion (USD 2.1 billion).

The statement added that China Oriental’s directors have proposed that the value of iron ore to be purchased by the group from ArcelorMittal be capped at CNY 1.1 billion in 2008, CNY 3.3 billion in 2009 and CNY 4.2 billion in 2010 and the value of coking coal that is to be purchased from ArcelorMittal is to be capped at CNY 800 million in 2008, CNY 2.2 billion in 2009 and CNY 3 billion in 2010.

China Oriental uses iron ore and coking coal as major raw materials for production of iron and steel products. It noted that global demand for raw materials has been on an uptrend, due mainly to a surge in demand in China.

China Oriental said that "With the assistance of ArcelorMittal, the group can ensure a steady supply of raw materials which is crucial for the group's existing production and business expansion needs.”

Rio Tinto suffers setback over Pilbara rail network

ABC reported that Rio Tinto has failed to stop the competition watchdog from considering a push by Fortescue Metals Group to have rail lines in the Pilbara opened up to third parties.

The Fortescue Metals Group said that other miners should be able to use Rio's Hammersley rail line to transport their ore to port. The National Competition Commission will now consider the application and make a recommendation to the Federal Government.

Rio, which has the backing of the Minerals Council of Australia, believes allowing third parties to use the Pilbara iron ore rail lines is against the national interest because it would cause bottlenecks and reduce the industry's efficiency. But the Federal court has now rejected that argument.

Australian iron ore exports in Q1 up by 27% YoY

According to the latest trade data, Australian iron ore exports set a new quarterly record of 77.7 million tonne in the Q1 of 2008. This marks a gain of 1.4 million tonne as compared to Q4 of 2007 and is up a massive 16.5 million tonnes as compared to Q1 of 2007.

Meanwhile, Australian trade data quoted by McCloskey show that coal exports from Queensland rebounded from a weather affected 8.9 million tonne in February to 12.3 million tonne in March 2008. This brings the Q1 of 2008 total to 34.7 million tonne still some 2.4 million tonne short of the Q1 of 2007 export total.

CVI facing procedural delay for coal blocks in Mozambique

BL reported that delay in decision making has cost Coal Ventures International the opportunity to acquire a coal block in Mozambique.

In January 2008, a high level CVI delegation visited Mozambique for due diligence of two coal assets on offer and the due diligence was over in February. As per reports, one of the blocks offered were found having commercially exploitable coal reserves and further technical evaluation of the identified asset was carried out in February 2008 for due decision making by the joint venture. According to a source close to CVI, though the quality of the asset identified was not of the highest order, it was the only opportunity available to the joint venture so far.

It said that "However, before the JV could even firm up its plans on the available opportunity, the asset was taken over by a Mozambique based company."

According to sources, to make up for the lost opportunity, CIL is planning to send a team comprising representatives from its subsidiary Central Mine Planning & Design Institute Limited to explore further opportunities in Mozambique.

Meanwhile, senior officials of cost Coal Ventures International has met a number of investment bankers in Kolkata recently for creating a panel of such bankers for helping it acquire coal assets in Australia, Canada, the US, Indonesia, Mozambique, Zimbabwe, South Africa and others.

CVI is a special purpose vehicle of Coal India Limited, Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, National Thermal Power Corporation and National Mineral Development Corporation and has already created USD 2.7 billion funds to acquire thermal and metallurgical coal assets abroad.

BHPB bid for Rio –China to eventually buy stake in BHPB

According to Mr Marius Kloppers CEO of BHP Billiton, Chinese investors are certain eventually to buy a stake in mining group BHP Billiton.

Mr Kloppers told an investor briefing that "Various parts of China that have got surplus funds, capital to deploy are deploying that across a wide range of things in the world. I have no doubt that one day we will see them show up on our register. I just hope that the market takes that for what it is at that point in time, a genuine investor."

But he declined to comment on rumors that Chinese investors were ready to buy a stake in the firm.

In February, Chinese state owned mining group Chinalco shook up the mining sector by making a surprise raid on Rio Tinto buying a 9% stake for USD 14 billion. The purchase at GBP 60 a share, a stiff premium at the time, was widely seen as an effort to complicate BHP's all share takeover bid for Rio.

A report in the Australian newspaper last month said that China was in the early stages of formulating a plan to buy a chunk of BHP larger than Chinalco's Rio stake.

TATA Steel eying London Mining iron ore assets in Brazil - Report

BS reported that TATA Steel is looking to acquire Brazilian iron ore assets of the UK based London Mining, which will help ensure raw material supply for its subsidiary Corus.

London Mining, which owns assets in Sierra Leone, Saudi Arabia, Greenland and Mexico, is currently undertaking studies to verify the level of resources contained in its Brazilian mine, in the Serra Azul region, in the southeastern state of Minas Gerais.

The valuation of the asset is yet to be completed, but analysts said that it would be in the range of USD 2 billion.

The report however cited a TATA Steel spokesperson as saying that "While TATA Steel is scanning all opportunities to ensure raw material security for its global operations, we are not in any position to communicate any details on any of them. But specifically about London Mining, we have no specific interest and therefore cannot comment on details."

Xstrata coal output in Q1 dips due to floods in Australian

The world's largest exporter of coal Xstrata Plc said that its first quarter output fell after floods cut supplies from Australian mines. Its total consolidated production in first quarter was 18.5 million tonnes 4% YoY as compared to first quarter of 2007.

(Production in million tonnes)

Xstrata said that in Queensland, thermal coal production from open pit operations was impacted by flooding and heavy rains from February. Force majeure was declared on a number of contracts from the Newlands Collinsville Abbots Point complex and Rolleston operations in mid February. It said that by March 8th 2008, Rolleston had lifted force majeure on all contracts and production has now returned to normal levels. The situation remains under review at the NCA complex. Production was switched from thermal to higher value semi soft coking coal production in New South Wales to take advantage of strong prices, resulting in an increase of over 40% in semi-soft production and a slight decline in thermal production compared to the first quarter last year.

Xstrata said that lower production of thermal coal at the South African operations due to heavy rains in January was more than offset by increased production at the Cerrejón mine in Colombia as this operation ramps up to reach an annual rate of 32 million tonnes per annum by mid 2008. Australian coking production was 0.2 million tonnes lower than in the previous year, predominantly due to the timing of longwall moves at the Oaky Creek complex

(Price in USD per tonne)

Jinchuan accepts Zinifex offer for its 10.4% stake in Allegiance

Zinifex Australia Limited announced that and Jinchuan Group Limited had accepted Zinifex's offer for its 10.4% interest in Allegiance Mining NL. With Jinchuan's acceptance, Zinifex will own more than 90% of Allegiance and will move to compulsorily acquire the outstanding shares and de list the company.

Mr Andrew Michelmore CEO of Zinifex said that Zinifex is very pleased to have gained Jinchuan's support. He added that "We view Jinchuan as a strategic partner particularly given Jinchuan's leading position in China's commodity markets which are growing rapidly. We are excited by the potential for expanding the relationship between the companies in relation to other base metal projects."

Mr Michelmore said that the recently announced merger between Zinifex and Oxiana opens up a whole new suite of possibilities to extend the relationship with Jinchuan. He added that "The merged company will be a substantial producer of copper, nickel, and zinc which are all metals that are part of Jinchuan's business. These markets present multiple opportunities to grow together."

Zinifex assumes a number of the commitments with Jinchuan through its acquisition of Allegiance, including

1) Zinifex will implement Allegiance's commitments under the agreement for the purchase and sale of nickel concentrate' between Allegiance and Jinchuan, dated April 13th 2006, despite any changes which have occurred in respect of Allegiance, including but not limited to delisting, shareholders' changing, capital reorganization, company's merger and acquisition etc. The first delivery of concentrate from the Avebury nickel mine to Jinchuan is expected in June or July 2008.

2) Zinifex will also implement Allegiance's commitments under the agreement for purchase and sale of all mineral products Tasmania Projects (other than Avebury)' between Allegiance and Jinchuan, dated April 30th 2006. Zinifex undertakes that all the nickel resources discovered in Tasmania within the agreement area will be produced and delivered to Jinchuan in accordance with the agreement. Mineral products that are produced from Zinifex's Rosebery mine and any discoveries arising on Zinifex's existing Tasmanian exploration tenements are excluded from the above agreement.

3) Plans to expand nickel production at Avebury and increase exploration with the aim of extending the mine life. All of the increased output would be delivered to Jinchuan under the existing supply contract.

4) Enhancing the performance of Avebury and our joint expertise in nickel mining and processing, through technical collaboration, sharing of operating information and bilateral site visits.

Monnet to acquire mining rights in Indonesian mine - Report

ET recently reported that Monnet Global is all set to acquire the mining rights for a 250 million tonne coal reserve in Indonesia from PT Anzawara, enabling it to start coal trading and look at lucrative markets in China, South East Asia and India.

Mr Sandeep Jajodia vice CMD of Monnet Ispat & Energy said that "We have reached an understanding with PT Anzawara to sign a 25 year pact to exploit coal resources of the Indonesian company for sales both in local and overseas markets. The agreement would be initially for only one fourth of the total reserve nearly 80 million tonne, before reserves of the remaining mining area is assessed and exploited."

Mr Jajodia said that the deal would involve a royalty payment to the original mining lease holders. It is expected that the mine would yield a production of 1 million tonne by July 2008. This would progressively increase to 3 million tonnes in next couple of years.

While it would trade this