PMs office reopens SAIL-RINL merger issue

It is reported that the Prime Ministers office has asked steel ministry for a political consensus on the issue of merger of Steel Authority of India Ltd and Rashtriya Ispat Nigam Ltd. The report has cited a government official as saying that There is no business logic for the merger not to go ahead except for sentiments of politicians from Andhra Pradesh, which stalled the process the last time. The benefits for the merger remain strong as RINL will then gain access to captive mines and more resources apart from protection from predators.

The merger proposal was shot down some time ago due to stiff opposition from the Andhra Pradesh government and the company itself which was opposed to the idea of merging RINL for fears of its autonomy.

GSI estimates Orissa coal reserves at 61.999 billion tonnes

Dr. Dasari Narayana Rao minister of state for coal informed the Rajya Sabha that the Geological Survey of India has estimated the total coal resources in the state of Orissa at 61,999 million tonnes as on January 01, 2006. Out of the total coal resources 16,911 million tonnes is in proved category, 30,793 million tonnes is indicated category and 14,295 million tonnes have been inferred.

As per GSI the coal is non coking type and the quality of coal in proved and indicated category has been assessed whereas the estimation of grade in inferred category is not undertaken.

Indian Railway to increase coach production capacity

Indian Railways plans to increase the production capacity of its coach manufacturing units at Rail Coach Factory Kapurthala and Integral Coach Factory Chennai by 500 & 400 numbers of coaches per year respectively at an estimated cost of Rs 55.42 crore and Rs 55.31 crore.

Mr R Velu minister of state for railways informed Lok Sabha that the issue of increase of production capacities of Diesel Locomotive Works Varanasi and Chittaranjan Locomotive Works Chittaranjan is under examination.

Installed capacity Numbers per year

CLW Chittaranjan Locomotive Works, Chittaranjan
DLW Diesel Locomotive Works, Varanasi
ICF Integral Coach Factory, Chennai
RCF Rail Coach Factory, Kapurthala
RWF Rail Wheel Factory, Bangalore
DMW Diesel Modernization Loco Works, Patiala

Essar seeks SEZ status for its power plant

Economic Times has reported that Essar has sought the status of a SEZ for its proposed Rs 40 billion 1,500 MW gas based power plant project in south Gujarat, which is being set up to meet the power requirements of Essar Steel SEZ coming up near Hazira. The status of this power SEZ would be clear only after it is discussed at the meeting of board of approvals of ministry of commerce scheduled on August 8 2006.

The steel SEZ at Hazira would house the Rs 65 billion steel units for long and flat products and Rs 20 billion plate mill project. Both these projects are under the aegis of Essar Global. The power requirement of Essars existing steel plant would also increase on account of the expansion planned to double the capacity to 8 million tonne per annum.

Golden Quadrilateral 92.6% complete by June 30th

Mr KH Muniyappa minister of state for shipping, road transport and highways informed Rajya Sabha that 92.5% of the Golden Quadrilateral has been completed by June, 2006 and only 437 kilometers is to be completed. The expenditure on Golden Quadrilateral up to 30th June 2006 is within the total approved cost allowing for escalation.

Mr Muniyappa said that 96% of Golden Quadrilateral is targeted for completion by December, 2006 and balance of 4% stretches are affected due to non performance of contractor, re award of terminated contracts and also award of Allahabad bypass in 2004 with completion date in 2007. The cost overrun if any will be known only after the completion of project.

State governments to enhance capacity of non major ports

Mr TR Baalu minister for shipping, road transport and highways informed Rajya Sabha that other than major ports in the country, there are 187 non major ports under the overall jurisdiction of the respective state governments and union territory administrations and it is their responsibility to undertake development and augmentation of capacities for these ports.

Mr Balu informed that considering the growth of Indian economy, department of shipping and port authorities in various state governments and UT have set a target of reaching aggregate capacity of 2 billion tonnes by 2016-17 for both major and non major ports.

Punj Lloyd bags Yemen LNG contract

Punj Lloyd Ltd has announced that it has secured its first contract in the Republic of Yemen from Yemgas valued at $ 69.2 million. The contract involves construction of civil, mechanical, piping, electrical & instrument, insulation and painting work for off sites and utilities of the prestigious Yemen LNG project. The project would be completed in 28 months.

Yemgas is a JV of Technip of France, JGC Corporation of Japan and Kellogg Brown & Root Inc of UK. It is executing the project for Yemen LNG Company Ltd a JV of TOTAL, Yemen Gas Company, Hund Oil Exxon, Sunkyong and Hyundai for developing a LNG Liquefaction and 6.8 MMTPA Export Terminal at Behalf in Yemen.

Mr Atul Punj chairman of Punj Lloyd said Construction of cryogenic facilities is the core competence of Punj Lloyd and select few in the world undertake such specialized works. This is an important milestone for Punj Lloyd. We have been looking at expanding our geographies and this order, will help us further strengthen our foothold in Middle East."

ABG Shipyard shutdown of shipyard at Surat due to flood

ABG Shipyard Ltd has informed that in view of the heavy rains and prevailing flood situation of river Tapi, which is adjacent to the ABG's Shipyard at Magadalla near Surat and considering the safety, ABG has shut down the yard till such time the normalcy is restored.

China's iron ore import increases by 21.7% in 7 months

As per the latest custom data China's monthly import of iron ore amounted to 24.73 million tons in July 2006 and 186.08 million tons during January to July 2006 up by 21.7% YOY.

China relies on imports for more than half of its iron ore demand.

ILVA to set up 2 HDG lines at Taranto and Cornigliano

Riva Groups ILVA SpA Italy has decided to set up 2 hot dip galvanizing lines at their works in Taranto and Cornigliano and has placed orders for equipments. Both lines are to become operational in two years time.

The HDG line at the Taranto works will process CR Coils in thickness range of 0.7mm to 2.0 mm as well as HR Coils in thickness range of 1.5mm to 4.0 mm in width range of 670mm to 1,650 mm. The line is designed for an annual production of 650,000 tonnes at a maximum process speed of 140 meters per minute.

The Cornigliano line will process CR Coils in thickness range of 0.25mm to 1.6 mm and width range of 800mm to 1,650 mm. The line will have annual capacity of 470,000 tonnes at a maximum process speed of 180 meters per minute.

The galvanized coils in the grades CQ, DQ, DDQ, EDDQ and DP will be utilized primarily in the construction industry and for the manufacture of household appliances.

Chinas trade surplus hit monthly record of $14.61 billion in July

Chinas General Administration of Customs said in a statement that China's trade surplus hit a record $14.61 billion in July 2006. The exports during July 2006 were up by 22.6% YOY to $80.34 billion and imports rose by 19.7% YOY to $65.72 billion.

The trade surplus during January to July 2006 period is $75.95 billion up by 51.9% as compared with $49.97 billion in January to July 2005. The exports during 7 months rose by 24.8% YOY to $508.9 billion and imports were up by 21.1% to $432.95 billion.

Teck CEO confident of success for its Inco bid

Teck Cominco Ltd said that it is confident for its C$18.7 billion ($16.7 billion) bid for nickel producer Inco Ltd to succeed but warned that the battle was not over.

Mr Don Lindsay CEO of Tech told reporters in Melbourne "If nothing changes between now and Wednesday we think it will be successful. Certainly that is what the market says right now, but anything can happen here"

Mr Lindsay added that "People have speculated that others were coming, but the fact that Inco was willing to have discussions with us gave an indication that maybe that is not the case."

The Teck Cominco offer, competing against a friendly bid from US copper producer Phelps Dodge Corp, is due to close on August 16.

Shougang Hierro Peru mine strike turns violent

It is reported that at least 7 striking workers and 3 of their wives were injured after clashing with police at Peru's Shougang Hierro Peru iron ore mine. Mr Emiliano de la Cruz leader told Reuters in a telephone interview that "Seven of our colleagues are in the hospital with injuries in their heads and legs after the police hit them with tear gas bombs. The spouses of three miners are also seriously injured."

Mr Rony Cueto, secretary general of the subcontracted workers union, who is in Lima for talks with the Labor Ministry said "We're not going to let these Chinese treat us badly in our own country. Now we're going to follow this through to the end."

Mr Raul Vera GM of Shougang Hierro Peru said the altercation occurred after strikers attacked a company water truck, injuring its driver and threw stones at the mine. He said that the company would decide Friday whether to declare force majeure on iron ore exports from the mine, which has not produced or been able to ship any ore since the strike began.

Chinese Central bank to restrict money supply to reduce overheating

China's central bank People's Bank of China has said it will continue the rational restriction of money supply and loans as the main weapon against an overheating economy. In its latest quarterly monetary report the bank said that "Great attention should be paid to risks posed to the Chinese economy by the fast growth of fixed assets investment, excessive money supply and loans.

The report said that 3 factors contributed to the lending surge.
1. The booming economy had buoyed up credit demand, while commercial banks enjoyed abundant capital to lend due to increasing liquidity
2. The widening gap between savings and lending.
3. Commercial banks were paying more attention to returns and earnings, thus having more incentive to lend in a bid to profit, said the central bank.

The report suggested measures to curb the excessive growth of total lending, starting with raising the reserve requirement of commercial banks by a 0.5 of a percentage point from August 15. The measures also included more flexible open market operations, more emphasis on using interest rates as leverage, and more policy guidance. The Commission has ordered domestic banks to upgrade their capital adequacy ratio, which measures bank capital in relation to credit exposure to 8%. The official bottom line for the loan loss coverage ratio, which represents funds set aside to cover potential losses in a bank's loan portfolio, is 70%.

Despite government measures including an interest rate hike in late April and regulations to limit foreign investment in real estate Chinese growth soared to 11.3% in the second quarter, the highest rate in a decade.

BP orders USS & Nippon for pipes to repair Alaskan oil pipeline

BP announced that it has signed two major deals to supply new pipe for approximately 10 of the 16 miles of an Alaskan oil pipeline from Prudhoe Bay oil field which accounts for 8% of domestic crude output. BP is shutting down this pipe line after discovery of leaks and severe corrosion in the pipeline last week.

Mr Scott Dean spokesman of BP said that the company had signed contracts with United States Steel Corp and Nippon Steel Corp. to supply the 10 miles of pipeline and is working to seal contracts for the remaining materials. US Steel will supply 30,000 feet of 24 inch pipe, starting in October, and Nippon will begin delivering 21,000 feet of smaller pipe in December. Another 30,000 feet of 24-inch pipe and 52,000 feet of 18-inch pipe would also be needed.

Mr Chuck Bradford an analyst with Soleil Securities which covers pipe companies said the BP orders while not huge will nevertheless be a boon U.S. Steel and Nippon Steel. Mr Bradford said he also expects the pipeline shutdown to have a longer term effect, because it may prompt others in the industry to rush to replace their decades-old pipeline, in the hopes of averting similar troubles. He said "There's just an awful lot of old pipe out there that needs to be replaced. The problem's going to be that nobody has the capacity to make the pipes. Everybody's full." He added that a burst of new orders could extend an already strong period for the steel pipe industry.

Mr Abramovich completes 41.3% purchase of Evraz

Russia's richest man Mr Roman Abramovich has completed that purchase of 41.3% of Evraz Group SA. The stake is worth about $3.28 billion, based on Evraz's closing share price in London yesterday.

Greenleas International Holdings, in which the Mr Roman Abramovich's holding company Millhouse Capital LLC is the beneficial shareholder, bought half of Lanebrooke, controller of 82.67% of Moscow based Evraz.

Evraz has three steel mills in Siberia that in 2005 accounted for 14 million tons of crude steel production. The company last year bought the Czech Republic's stake in Vitkovice Steel AS and Italian steel-rolling plant Palini & Bertoli SpA.

Nigeria postpones opening of bids for sale of coal assets

Nigeria postponed its decision on bids for sale of coal mining assets by another two weeks due to change of ministers and more time required to complete the technical evaluation of the bids.

The bid opening was originally scheduled to start in early July and completed by July 26th 2006. The new date for the opening of bids is August 22nd 2006 culminating in signing of share agreement on September 4th of 2006

Besides local companies, some of the international companies which had shown interest in purchasing the coal mining assets include BHP, Enel, Aditya Birla Minerals Ltd, Ivanhoe Mines Ltd, Kuzbassrazrezugol and Mvelaphanda Group.

Kuzbassrazrezugol increases coal production by 2.7% in 7 months

Russian Kuzbassrazrezugol Coal Company has increased coal production to 23.554 million tonnes during January to July 2006 up by 2.7% YOY, including 2.287 million tonnes of coking coal. KRU shipped 22.657 million tonnes of coal during 7 months up by 2.2% YOY including 2.289 million tonnes of coking coal. Its exports at 10.496 million tonnes recorded growth of 6.5%.

KRUs coal production of 3.593 million tonnes during July 2006 was up by 0.8% above target and includes 0.360 million tonnes of coking coal. It shipped 3.342 million tonnes of coal in July 2006 including 0.353 million tonnes of coking coal with exports amounting to 1.619 million tonnes.

KRU operates 13 open pit mines and produced 42.8 million tonnes of coal in 2005 including 3.8 million tonnes of coking coal and exported 19 million tonnes of coal. KRU is also an investor in Novosibirskenergo and Biiskenego power utilities in Russia and also owns British coal and electricity company Powerfuel.

Hunan Valins net profit down by 48.52% in H1

Chinese Hunan Valin Steel Tube & Wire Co Ltd announced that its net profit of 302.28 million yuan in the first half of 2006 is down by 48.52% YOY. The company did not provide a full year earnings forecast but it said that the rising price of imported iron ore will have an unfavorable impact on the company in the next half of this year.

Hunan Valin Steel Tube & Wire produced 4.71 million tons of hot meta during H1 of 2006l up by 19.18% YOY and 4.51 million tons of steel products up by 18.55%.It aims to produce 9.6 million tons of hot metal and 9.35 million tonnes of steel products during 2006.

Mittal Steel holds a 29.48% stake in Hunan Valin Steel Tube & Wire.

Usiminas net dips by 13% in Q2

Belo Horizonte based Brazils 2nd largest steel maker Usinas Siderurgicas de Minas Gerais SA posted consolidated profit of BRL 704 million ($325 million) for April to June quarter down by 13% as against BRL 810.5 million in the second quarter of 2005. Usiminas net sales fell by 12% to 3.05 billion reais led by a 19% decline in net sales from exports and 10% dip in domestic sales revenue.

As per reports Usiminas is counting on a rebound in world steel prices, and a pick up in steel demand in Brazil, where the company earns more per ton than from exports, to help finance a planned $3 billion mill expansion and maintain its role as Latin America's largest producer of flat products used by the auto industry.

Steel imports put pressure on North American prices UBS

Analysts at UBS say that imports are exerting pressure on North American steel sheet prices. In a research note published the analysts mention that several sheet importers have indicated that prices have declined over the past three to four weeks in view of significant import offers.

UBS said that imports so far this year have been at a record high and imports through October are unlikely to slow significantly.

Nippon to set up JV for processing special steel wires

Nippon Steel Corporation announced that it will set up a JV with Sanyu Co Ltd, Matsubishi Metal Industry Co Ltd and Miyazaki Seiko Co Ltd in August 2006. The JV NBC will be engaged in the secondary processing of special steel wire.

Sanyu Co Ltd will have 20%, Nippon Steel Corporation will have 40%, Matsubishi Metal Industry Co Ltd will have 20% and Miyazaki Seiko Co Ltd will have 20% stake in the JV.

Falconbridge announces investments in Raglan nickel mine

Canadian Falconbridge plans to invest about C$240 million over six years for its nickel installations in Northern Quebec at the Raglan Mine in Nunavik Territory and has announced the launch of two studies for the Raglan Mine expansion. Mr Ian Pearce COO of Falconbridge said "These studies will enable the Raglan Mine to expand production while maintaining the flow of benefits to local Inuit communities and also respecting the environment."

The first will focus on developing new ore reserves to replace those depleted since the mine's opening in 1997. The second study is to support the expansion of nickel ore production from 1 million tonnes per year to 1.3 million tonnes per year as early as 2009.

This 30% increase would require an additional investment of roughly C$250 million. This amount is in addition to the near C$200 million in equipment and upgrades Falconbridge has invested at the Raglan Mine in the past two years. The initial investment in the construction of Raglan was in excess of $600 million.

Falconbridge also announced the start of major renovations to its Deception Bay loading dock. The C$50 million investment will extend the dock's service life and support the production increases.

WCI Steel reports results for May & June 2006

WCI Steel Inc announced net income of $4.3 million for the two month period ending June 30, 2006. On May 1, WCI Steel purchased all the assets of the former WCI Steel Inc (Old WCI) as part of its plan of reorganization. Revenues for the two months totaled almost $160 million, which is 25% higher than in the same period last year for Old WCI.

For the two month period, the company reported shipments of 232,000 tons in May and June and total revenues of $159.9 million, with revenues from product sales of $156.6 million or $674 per ton.

Mr Patrick G Tatom president and CEO said "We are off to a great start as the new WCI Steel. We are pleased with our performance to date and appreciate the efforts of our employees. Good demand in our key markets, strong shipments and generally robust prices contributed to our solid performance for the first two months of the new company."

WCI Steel Inc, a Delaware corporation, was formed in March, 2006 and had no assets or liabilities until May 1. Under a plan of reorganization for WCI Steel Inc, an Ohio corporation, confirmed by the US Bankruptcy Court on March 30 and effective on May 1, WCI Steel, the newly formed company, acquired substantially all the assets of Old WCI.

Stelco Inc posts $31 million loss for Q2

Stelco Inc has posted a loss of $31 million for April to June 2006 quarter as compared with a profit of $40 million in April to June 2005. Net sales revenue rose to $698 million from $658 million.

Production increased to 1.11 million semi finished tons, with shipments increasing to 971,000 net tons, up from 1.05 million semi finished tons produced and 840,000 net tons shipped in the second quarter of 2005.

Mr Rodney Mott CEO said "We've initiated a lot of changes. The results may not show for the quarter, but you can see that the groundwork has been laid for the future and many of the initiatives are well underway. Many of the things we were hoping to do are moving along much quicker than we had planned or had anticipated, especially in the area of the workforce reduction."

Resita posts marginal profit in H1

Russian pipe major TMKs Romanian Combinatul Siderurgic Resita has posted Euro 50.3 million during H1 of 2006 up by 34.5% YOY as compared to H1 of 2005. CSR's net income in the first half of 2006 was of around 6,000 euros as against profit of 450,000 euros in the H1 of 2005. Sales growth in Q2 allowed CSR to offset the losses it had posted during Q1 and end up with marginal profits.

Mr Adrian Popescu chairman of TMK Artrom which manages CSR said "In the case of CSR, we are further investing in retooling to boost production and cut production costs. The continuous pouring machine to be installed this year will also trigger substantial cost savings. Thus, by the end of this year, we estimate we will be able to derive income standing at around 2 million dollars."

Woodings to supply taphole drill to USS Serbia

It is reported that US Steel Serbia has ordered Woodings Industrial Corp to design, manufacture and deliver a taphole drill for its BF No 1 blast furnace.

According to USS Serbia's plan, one taphole drill will serve both tapholes on the furnace, and Woodings has designed a drill to be effective at each one. The two tapholes are set 90 apart, so the Woodings drill will rotate between them. The Woodings WFP-600 drill will be completely pneumatic, and capable of swinging, feedshell rotating, and drilling and feeding. It also will offer water-mist drilling capability.

Mr Robert T Woodings president of Woodings said "This is our first work for this mill so we are very pleased to be able to effectively answer their needs. Providing innovative solutions to steelmakers around the globe is how we have built our business and we're happy to be able to continue that tradition for US Steel Serbia."

USS Serbia, the former Sartid AD, is an integrated operation producing 2.4 million tonnes per year of sheet products. Only about half the capacity was active when US Steel acquired the operation three years ago and the modernization and restart of the No.1 blast furnace is part of the strategy to restore USS Serbia to its full capability.

Guangzhou Lianzhongs SS HR mill to ramp up production

It is reported that Guangzhou Lianzhongs 600,000 tonnes per year stainless steel HR mill is about to start full scale operation during this month following its trial commission on June 20.

The mill will produce SS HR coils in thickness range of 2mm to 10mm in widths of 800mm to 1600mm in various SS grades including 304, 304L, 316, 316L, 321, 430 and 202.