Reuters has reported that India's zinc export volumes are likely to cross 100,000 tonnes in 2006-07 as against 14,000 tonnes in 2005-06. The increase in export is attributed to higher output due to capacity addition in last few years as well as high international price levels.

According to the India Lead Zinc Development Association, Indias zinc consumption is set to rise to 460,000 tonnes in 2006-07 from 420,000 in 2005-06. Indias largest producer, Hindustan Zinc Limited, which currently has an annual production capacity of about 400,000 tonnes, has expansion plans on way for additional capacity of 258,000 tonnes by mid 2008.

India annually imports about 50,000 tonnes of zinc, mainly grades which are not produced domestically, but these are expected to fall sharply in the next two years. India is likely to become a net exporter of zinc by 2008, when additional capacities come on stream.

Mr L Pugazhenthy ED of ILZDA said "In recent times, India has become a low cost zinc producer because of volume expansion and de bottlenecking. For global trade, India is strategically placed near to China and also to other countries in Southeast Asia. So tremendous opportunities for exports are there and we should capitalize on it.

Business Standard has reported that the Welspun group and Lone Star Technologies of the US have decided to form 60:40 JV Welspun Lone Star Tubulars LLC for manufacturing of 30,000 tonne of spiral pipes a year to cater to the oil and gas markets in North America. The company will be located in the south west of the US and is expected to be operational by March 2008.

The JV will enable Welspun to strengthen presence in the fast growing pipe markets in the US and provide Lone Star an entry into spiral weld line pipe.

Welspun Gujarat Stahl Rohrens wholly owned subsidiary Welspun Pipe Inc will be the investment vehicle for the Welspun group in this new entity.

Mr BK Goenka vice CMD told Business Standard The partnership will leverage our high quality line pipe manufacturing capacities with Lone Stars strong brand name and marketing expertise.

Austrian refractory maker RHI Refractories, one of the largest importers of refractories into India without any local production capacities, is now expanding its production capacity in India by buying a 51% stake in Clasil Refractories for an undisclosed sum.

As per company release, the local sales and service experts of Clasil and RHI will work this important emerging market even more intensively with optimal customer solutions and Clasil management and RHI are looking forward to mutually develop RHI-Clasil as a prime refractory player in India.

RHI said The sustained significant economic growth in India and the continuous development of the infrastructure will lead to a substantial extension of production capacity, especially of steel and cement, with the demand for high grade refractory solutions growing correspondingly. To ensure optimal service for customers in India, it is indispensable for RHI Refractories to further increase its presence in this important emerging market and offer complete package solutions from local production.

Clasil Refractories Ltd is currently commissioning a refractorie plant in Venkatapuram in Andhra Pradesh. An extension of the plant to include the production of bricks and mixes, the production of prefab parts and a manufacturing line for slide gate plates is scheduled for mid 2007. The share capital increase will be used to fund this expansion.

Statesman News Service has reported that stoppage of work by the contractual laborers of Kalinga Nagar Mazdoor Sangh at the Maithan Ispat Limited in the Kalinga Nagar, has forced the plant to shut down its kiln.

As per reports, about 160 contractual workers set in front of the main gate of the factory and stopped the entry of the officers and employees of the plant demanding permanent employees status.

Mr Sanjib Kothari GM of MIL told SNS that We are facing cease work, strike, agitation, dharanas and extortion since inception of our steel plant in the industrial complex. Every day, almost every self styled labor union leader knocks at our door with some demands which are no connected with industry. If we refuse to oblige them they even assault us and threaten us with dire consequence. The local police are scared of even responding to our distress calls, let alone taking action ever since the firing incident. Many times, we are being told that they were insecure and they could not provide security.

This incident has again exposed the unrest in Kalinga Nagar, which is infamous for police firing on January2nd 2006 in which 13 tribal were killed.

KEC International Ltd announced that it has bagged four new orders aggregating to INR 151 crores, out of which 3 orders worth INR 106 crores are from UAE and 1 order worth Rs 45 crores is from Ghana.

Details of the orders are as follows

1. Sharjah Electricity and Water Authority of Sharjah government in United Arab Emirates have awarded a contract for supply and construction of 220 KV DC over head lines of 39.5 kilometer from Hamriya to Al-Tay.

2. Abu Dhabi Water and Electricity Authority of government of Abu Dhabi in United Arab Emirates have awarded a contract for supply and construction of 400 KV DC over head lines of 7 kilometers near Abu Dhabi.

3. Abu Dhabi Water and Electricity Authority of government of Abu Dhabi in United Arab Emirates have also awarded a variation order for replacement of OPGW for 278 kilometers.

4. Volta River Authority of Ghana has awarded a contract for constructing a 330 KV SC transmission line spanning over 215 kilometers from Aboadze Thermal power plant to Volta switching station.

Mahatma Gandhi Institute of Technology has organized a 3 day national convention on Metallurgy and Materials Technology at Hyderabad to generate awareness about latest discoveries and new explorations in material sciences among industry, students and people related with the field.

The convention would be inaugurated by Prof P M Prasad emeritus scientist with non ferrous materials technology development centre and eminent scientist from different parts of the country will deliver lectures on extractive metallurgy, structure property relations, new materials, surface engineering and emerging trends in process techniques.

H&K Rolling Mill Engineers Pvt Ltd has signed Ms MC Mary Kom, the first Indian women boxer to win the World Women's Boxing Championship three years in a row, as its brand ambassador. The 2 year sponsorship contract takes effect from December 1st 2006 and the H&K and THERMEX logo will soon feature prominently on the Ms Koms sports wear and gear.

Mr Raj Kumar Markan CMD of H&K India said "Three time world title holder Marykom is at the pinnacle of sport where success is determined by vision, grit, determination and hard work, all of which resonate with H&K's own practices to stay at the top of our industry."

Ms Kom said "This is a proud moment for me as it is indicative of my achievements going beyond the boxing ring and into hi tech corporate world. With support of a company like H&K, we are off to a good start."

H&K India is the exclusive provider of the German Thermex quenching technology in the India since 1985.

Steel Authority of India Limited and National Thermal Power Corporations 50:50 JV NTPC SAIL Power Company Private Ltd and Chhattisgarh State Electricity Board have reached a long term power purchase agreement, under which the state of Chattisgarh would get 50MW of power.

Under the agreement, the NSPCL would give 50 MW power to the state from its under construction 500 MW thermal power plant that would come up in Bhilai with Bhilai Steel Plant getting 280MW. The plant is scheduled to start generation from April 2007.

NTPC and SAIL formed NSPCL in March 2001 with 50% equity each to take over captive power plants at Durgapur Steel Plant and Rourkela Steel Plant. NTPC and SAIL later formed another 50:50 JV called Bhilai Electric Supply Company Private Limited in March 2002 to own, operate and manage the captive power plantII at the SAILs Bhilai Steel Plant. BESCL was subsequently merged with NSPCL on September 11th 2006.

The Jharkhand State Electricity Board has decided to enter into a JV for power management in Ranchi, Jamshedpur and Dhanbad and would soon publish an advertisement, seeking EoIs from private parties for the overall power management.
JSEB has also approved the proposal to appoint franchisees in the supply division for the maintenance of power substations and supply lines, raising bills and revenue collection. Initially, the JSEB will handover the jobs to the franchisees at 2 to 3 power substations in each of the 13 circles.

PSL Ltd announced that that its board has approved raising funds up to INR 200 crore through issue of securities including on private placement basis.

Arcelor Mittal has announced the acquisition of Mexican integrated steel producer Sicartsa from Grupo Villacero for an enterprise value of $1.439 billion. The closing of this transaction is expected during Q1 2007, subject to regulatory and competition approvals.

Sicartsa is a fully integrated producer of long steel, with an annual production capacity of approximately 2.7 million tonnes from its facilities in Mexico and Texas in US. Sicartsa also has wholly owned iron ore mines, linked to plant via a slurry pipeline, having estimated reserves of 160 million tonnes. For 2004, Sicartsa's revenue was $956 million, with an EBITDA of $ 248 million.

In addition to the integrated steel making facility at Laro Cdenas, the acquisition also includes Metaver, a mini mill, Sibasa and Camsa, two rolling mills in Celaya, Guanajuato (Sibasa) and Tultitl, State of Mexico as well as Border Steel, a mini mill in Texas.

Sicartsa is sharing its production site with Mittal Steel Laro Cdenas. Prior to the privatization in 1991 which led to its separation in two entities, the Laro Cdenas steelworks operated as one single integrated site producing both flat and long carbon products. Mittal Steel Laro Cdenas is Mexico's largest steel producer and slab exporter. The plant has a capacity of 4 million tons per year.

This is Arcelor Mittal's first acquisition since the creation of the company earlier this year. Arcelor Mittal expects this acquisition to generate $80 million of industrial synergies in addition to a further $50 million from commercial, procurement and selling, general & administrative synergies.

Mr Aditya Mittal CFO of Arcelor Mittal said "This acquisition creates a strong and well balanced long carbon player in the Americas. With the Mexican market expected to grow by up to 6% per year over the next ten years this is the ideal time to expand our presence in this country. Through the implementation of rapid technological and best practice transfer, we see significant potential for improving the profitability of Sicartsa. Combining these two facilities creates Mexico's largest and one of its lowest cost steel producers and further accelerates our growth plans in this exciting region."

Arcelor Mittal has also today entered into a 50:50 commercial JV with Grupo Villacero for the distribution and trading of Arcelor Mittal long products in Mexico and in the southwest of the US.

Mr Luo Bingsheng vice president of the China Iron and Steel Association while addressing an industry conference in Bejing predicted that China's annual production of crude steel is expected to hit 462 million tonnes in 2007 up by 10% YoY,

Mr Luo estimated Chinas crude steel production figure for 2006 at about 420 million tonnes.

Mr. Luo also forecast that China's steel product exports will drop by 17.5% to 33 million tonnes in 2007 and imports would go down by 5% to 17.6 million tonnes.

(Sourced from Mysteel.net)

Further to the announcement on November 27th 2006, Novolipetsk Steel has completed the acquisition of a 50% interest in a JV with Duferco Group that owns and operates a number of steel production and distribution facilities in Europe and the USA. The purchase price of $805.5 million was financed in full from NLMKs existing cash funds.

The purchase price is subject to a post closing adjustment based on the results of the audited financial statements of the joint venture companies for the fiscal year ended 30th September 2006. The purchase price adjustment is expected to be completed in the second quarter of 2007.

Although, China's steel industry has seen capital investment finally slow down in 2006 after a 4 year run, industry experts are divided over the significance of the cooling off with some hailing it as an important signal and others insisting that it is only temporary.

According to the Chinese National Bureau of Statistics, fixed assets investment in the steel sector began to slow down in June, with a growth of only 2.3% and by October investment was actually 1.2% down on the same period of the previous year. It also reported that in the first three quarters, consumption of crude steel rose only by 10.5% nationwide, against a 17.2% growth a year earlier. China exported 32.8 million tonnes of rolled steel in January to October 2006 up by 91% YOY and that the exports were 17.3 million tonnes more than imports for the 10 month period as compared with a net import of 4.77 million tonnes a year ago.

Mr Xu Lejiang GM of BaoSteel said "The reverse reflects the central government's efforts to cool down the overheated steel sector, which began in 2004 and are finally beginning to pay off.

Mr Wu Xichun former head of the Steel Industry Association of China added that "Another important development is the slowdown in consumption growth even though the national economy has maintained its forward drive.

Another expert said "The cool-down in both capital investment and consumption implies that a policy of halting overproduction and balancing supply and demand has begun to take shape."

Experts speaking at a recent symposium staged by My Steel highlighted the steel sector's susceptibility to macro economic change and argued that if the amount of fixed asset investment was raised by local governments, investment in local steel companies would follow.
They pointed to the actions of some small steel plants that flaunted industrial policy and resumed production only months after being ordered to suspend operations at the beginning of the year. It is believed local governments have not enforced the regulations regarding their closure. The consultants also said that oversupply had been masked by a sharp rise in steel exports, resulting in distorted statistics.

Texas based Commercial Metals Company has revealed plans to build and operate a micro mill in the Phoenix area at an investment of about $130 million to produce 280,000 tonnes of finished products per year. According to Commercial Metals, regulatory, environmental and permitting issues for the project are not yet complete. It is likely to come into production in early 2009.

The plant in Phoenix is conceived as a "continuous continuous design where metal flows uninterrupted from melting to casting to rolling. The company states that the compact operation will have advantages in terms of lower installation costs, and operating efficiencies by limiting its product range, mainly rebar products. Danieli and C SpA is the technology supplier for the project.

Mr Murray McClean of CMC said that a Greenfield development was more in line with the organization's growth strategies than acquiring existing capacity. He said "The current market conditions for acquisitions have convinced us that building this first Micro Mill is the most economic method to achieve our objectives.

MEPS predicted that the recent surge in Chinese exports of steel is bound to create tensions and if voluntary restraint cannot be made to work, dumping actions against China are likely in the short term as all the worlds steel markets are being affected by the upsurge in Chinese exports that has taken place over the last two years.

MEPS estimated that Chinas exports of steel, excluding stainless, alloy steels and semi finished products, have surged from 10.5 million tonnes in 2004 to a likely total of more than 30 million this year and imports dropped from around 25.5 million to a probable 16 million tonnes in 2006. In fact all regions except America were net exporters to China in 2004 and now in 2006, all except Eastern Europe will be net importers from China.

MEPS said that Asia has seen the biggest impact from this export flood. The rest of Asia had a 9.7 million tonne positive steel trade balance with China in 2004 but this year Asian countries will be net importers of around 4.6 million tonnes of Chinese steel. EU is expected to have a negative trade balance projected at 4.8 million tonnes while the US will see its small steel trade deficit of less than 0.5 million tonnes in 2004 balloon out to over 4.4 million tonnes this year.

According to MEPS, Chinas trade with Asia for both flat and long products has contributed to the turnaround in the export import balance. For hot rolled coil, shipments to Asia have almost doubled since 2004. There has been a similar increase in bars and wire rods, while exports of hot rolled plate have more than tripled. Chinas imports from Asia have seen a declining trend since 2004.

Russian Vedomosti newspaper quoted a source close to the owners of MMK as saying that Arcelor Mittal has offered to buy a controlling stake in Russian steelmaker MMK.

Vedomosti reported that Arcelor Mittal representatives visited MMK a month ago and the firm had made an offer to its main owner Mr Viktor Rashnikov but the paper did not say how much Arcelor Mittal had offered to pay.

The paper said a co owner of MMK had confirmed the talks had taken place, but it said one source said the talks had not advanced further.

CVRD has signed MoU with Shougang Group to develop a fleet of at least 10 super sized dry bulk carriers, each capable of carrying more than 300,000 tonnes for use on dedicated routes between Brazil and China to transport iron ore.

CVRD also announced that it is considering an offer to build the dry bulk carriers at a proposed shipyard at Caofeidian on the Gulf of Bohai in Chinas Hebei province. The carriers may eventually be owned by CVRD or other parties but would be backed by long term contracts to help ease financing and leasing contracts.

These super sized vessels named Chinamax, could be handled at 5 ports in China and 1 in Brazil and would help reduce shipping costs by between $3 to $5 per tonne helping CVRD to compete with iron ore suppliers from Australia.

Mr Jose Carlos Martin ED of CVRDs ferrous division in an interview with Reuters in Beijing after signing the agreement said ""Its like being closer to companies in Asia, The idea is to have a more stable situation in the freight market, not like the situation now when the price was $15 per tonne three months ago and now its $35 per tonne.

Sims Group Ltd announced that it has acquired Cymru Metals Recycling Ltd, a metal recycling business in South Wales, handling in excess of 150,000 tonnes per annum. It said that the acquisition would help grow its metal recycling activities internationally and that compliments its UK's network of collection, processing and export facilities across England and Wales.

Mr Tom Bird MD of Sims said "The acquisition of Cymru Metals Recycling expands Sims presence into West Wales and strengthens our position as a leading UK metal recycler. Cymru Metals Recycling will make a significant contribution to the ongoing development of our UK business."

Weeding out outdated capacity is likely to bring about a host of tough problems for domestic steel producers, especially for small and medium ones. The unchanged performance evaluation system explains why local officials are holding back cross region merger and acquisition, a critical approach for improving the fragmented industry status.

Speeding up elimination of inefficient capacity & steel consolidations have been under the spotlight this year, for which the central government has unveiled a string of tightening policies targeting at heavy energy consuming steelmaking sector. Ms Xie Qihua chairwoman of BaoSteel and China Iron & Steel Association said that it is yet to see any tangible progress as expected for lack of proper system.

Mr Wu Xichun senior consultant with CISA, referring to the critical role of the government in nurturing the industry, said "Without some leadership or guidance, it will be difficult." Mr Wu believes three outstanding problems are clouding the prospect of China's steel industry.
1. Domestic steelmakers still have a long way to go for optimizing their product mix as foreign imports continue to dominate the high end steel market.
2. The degree of industrial concentration is declining. The top 17 steelmakers with capacity of over 5 million tonne pr year only account for 45.6% of the nation's total steel output this year as compared with 48.2% the year before.
3. Vast amount of backward capacity would stay in the market for some time and some smaller ones even secretly expand the scale under the umbrella of phasing out obsolete capacity.

Mr Wu also suggests the authority should give more gravity to product innovation, industrial merger, eliminating inefficient steelmakers, and creating fair market climate.

(Sourced from Mysteel.net)

Brazilian steel industry announced plans to ask the government to increase the tariffs on Chinese steel fearing a flood of cheap imports. Mr Marco Polo Mello Lopes executive VP of the Brazilian Steel Institute said that his organization would approach the government sometime next year.

Mr Lopes said "In 2006, China became the world's biggest steel exporter and our biggest concern. We can't wait for the door to be knocked down to put a lock on it."

Mr Lopes said that although Brazil imports relatively little Chinese steel, he is afraid that tariff barriers being erected in countries such as Japan, Mexico and the United States will make Brazil a target market for China.

However, Mr Lopes added that the government may not be inclined to raise the tariffs because China is currently buying huge amounts of Brazilian iron ore boosting Brazil's trade balance.

Vietnam Steel Association said that Vietnams demand for steel scraps has gone up many folds this year and that this trend is expected to continue next year with more steel mills becoming operational.

As per VSA, Vietnam is estimated to import 700,000 tonnes to 800,000 tonnes of steel scraps for steel production in 2006 up from 200,000 tonnes in 2005 last year and the expected figures for the next two years are 1.3 million tonnes to 1.5 million tonnes and 2 million tonnes to 2.2 million tonnes.

It is reported that the product mix by Chinese steelmakers has improved during 2006 on several yardsticks

1. Homemade steel product takes up larger domestic market share

China's homemade steel product took up a higher market share of 95.78% during this January to October 2006 YoY as compared to 92.98% in January to October 2005. For flat product, the market coverage climbed notably to 91.27% up from 85.49% and for long product the percentage was 99.32% up from 99.03%.

2. Value added & special steel products see big output increase

During the first ten months, China made 5.323 million tonnes of shipbuilding steel up by 34.9% YoY, output of pressure vessel steel was 1.099 million tonnes up by 31.1% YoY; container steel was 1.742 million tonnes up by 50.6% YoY, bridge steel plate was 0.641 million tonnes up by 58.2% YoY, silicon steel was 2.68 million tonnes up by 25.3% YOY. Stainless steel output made by CISA members rose by 49.62% YoY to 2.529 million tonnes and production of alloy steel reached 9.723 million tonnes up by 15.66% YoY.

BaoSteel and Anshan supplied much more of auto grade steel to car makers than before. Anshan Steel developed ADB 610B steel to be used in Water-turbine engine for the three gorges project, replacing import. Wuyang Steel rolled out 110mm-thick Q460E-Z35 steel plate for Beijing Olympic project's main stadium birds nest. Tianjin Steel Pipe Co and BaoSteel made oil and gas casing pipes.

3. Branded steel products on the rise

Following steel products have been awarded the title of China Brand
BaoSteel - Automotive steel sheet
Anshan, Panzhihua and BaoSteel - Railway steel
Wuhan Steel - Silicon steel
Tianjin Steel Pipe- OCTG casing pipes
Maanshan Steel and Laiwu Steel H beams
Taigang - SS sheets & coils
Anshan, Chongqing, Wuhan and Xinyu SBQ plates
Jinan and Chongqing- BQ plates
Baoji, North China Petroleum and Panyu Chu Kong Oil & gas pipes

Market share covered by homemade flat products by variety

Output increase of high value added special steel products

(In 10,000 tonnes)

(Sourced from Mysteel.net)

The European Commission has re-imposed a 3.16 million fine on ThyssenKrupp Stainless AG for taking part in a steel cartel from 1993 to 1994.

The EU's executive arm said it had originally fined Duisburg based ThyssenKrupp Stainless because it had made a statement accepting liability for Thyssen Stahl GmbH and had formally asked the company for its views in April to correct the error. Both companies are part of ThyssenKrupp AG's steel unit.

EU Competition Commissioner Ms Neelie Kroes said that she would correct any similar mistake and companies can rest assured that they will not escape cartel fines for procedural reasons.

In 1998, the EU's executive arm found eight stainless steel producers guilty of fixing a price increase known as the alloy surcharge, added to the basic price for stainless. An EU court last year annulled the fine on technical grounds because regulators had not explicitly asked the company to give its views on illegal behavior carried out by Thyssen Stahl GmbH.

Euro OnLine referring to two independent sources reported that Czech governments Ostrava tax office has imposed a fine of CZK 2.4 billion ($114.6 million) for an abuse of a monopoly position. The report cites as the tax office saying that the steelworks violated the law on prices when negotiating prices of coking coal supplies.

Czech newspapers reported that Vitkovice blamed the high price of coke supplied by Mittal Steel Ostava for boosting the costs at Mittal Steel's blast furnace unit Vysoke Pece Ostrava, which elevated the price of pig iron the subsidiary sells to Vitkovice.

Arcelor Mittal slammed the decision saying the decision was intentionally fabricated. It said that it has appealed the fine and was considering further steps. A company statement said "The Companys management considers the decision as intentionally fabricated, based on intentionally distorted facts, and in a sharp contradiction with the coke market rules and basic economic principles. Our coke prices reflected and keep reflecting, the market situation in both the Czech Republic and the European Union. They have never exceeded the prices of other coke suppliers."

It is reported that the Financial Services Authority, the regulator of all financial services in Britain, is investigating four recent major takeovers in which the practice of insider trading led to some people making huge profits on the market. All four deals involved leaks of confidential information.

Research by FSA revealed that insider trading could have taken place before as many as a third of takeover announcements in 2004. The FSA did not name the companies involved in the four deals. The investigation has been launched in consultation with the Panel on Takeovers and Mergers, which regulates and supervises takeovers.

On the four takeover deals under investigation, the FSA said in its latest Market Watch report 'We are holding detailed discussions with all the key parties to those deals the advisers, lawyers, PR firms, printers, issuers, debt and equity providers. We will compare these deals with deals that did not have a leak of information.

FSA said In this review we will meet specific deal teams to go through the chronology of deals, undertaking a high level study of IT systems and security and reviewing hard copy filing systems together with a sample review of documents. We are particularly interested in understanding how conflicts are managed and what use is made of information barriers such as Chinese walls and, related to this, wall crossing procedures.

Vietnams state owned shipbuilder Vinashin and South Korean Songsan have decide to form a JV Songsan-Vinashin to setup a factory in the northern Hai Duong Province of Vietnam for producing steel structures for shipbuilding at an investment of $35. The facility is scheduled to come on stream in the second quarter of 2008.

The facility would produce steel structures for shipbuilding yards and replacing imported products in Vietnams shipbuilding sector.