Dr Manmohan Singh prime minister of India will inaugurate the INR 9,600 crore Greenfield expansions and modernization program of Steel Authority of India Limiteds IISCO Steel Plant in the state of West Bengal on December 24th 2006. As per reports, Mr Ram Bilas Paswan union minister of steel, Mr Buddhadeb Bhattacharjee chief minister of West Bengal, Mr Priya Ranjan Das Munshi union minister for Information & broadcasting and Mr SK Roongta chairman of SAIL will also be present in the function. The expansion of ISP is an integral part of SAILs growth plan to produce 23 million tonnes of hot metal by 2010.

Installation of state-of-the-art environment-friendly and energy-efficient steel making technology, as envisaged in the expansion program, will help ISP multiply its crude steel production capacity from the present 0.5 million tonnes to 2.5 million tonnes by the year 2010. Among the new facilities that will be installed as part of ISPs expansion are a large-volume blast furnace, coke oven battery, two sinter plants, three converters with continuous billet and beam blank/bloom casters, heavy section mill of 0.6 million tonne capacity and wire rod & bar mill of 1.2 million tonne capacity. Besides increase in steel production, the new facilities will provide the plant with a competitive edge in terms of manpower productivity and other techno-economic parameters like blast furnace productivity, coke rate, energy consumption etc.

The origin of ISP can be traced to 1874 when Mr James Erskine founded the Bengal Iron Works and set up a plant at Kulti in West Bengal to produce pig iron. In 1918, the erstwhile IISCO, promoted by Burn and Company, came into being after changing hands several times. The manufacture of steel at Burnpur started in 1939. By the middle of the 1960s, the plant, under the chairmanship of industrialist Sir Biren Mookerjee, was producing one million tonne a year. Indian government took over the management of IISCO in 1972, which subsequently became a wholly owned subsidiary of SAIL in 1978-79. ISP was born in February 2006 following the amalgamation of IISCO with SAIL. ISP currently has the capacity to produce 0.426 million tonnes of long products mainly structural and bars and roads and 0.254 million tonnes of pig iron annually.

The European Commission has, under the EU Merger Regulation, cleared the proposed acquisition of Corus by TATA Steel as it found that the proposed transaction would not impede effective competition in the European Economic Area or any substantial part of it, as the parties activities only overlap to a limited extent.

An executive of EC said "The Commission's investigation has found that the proposed transaction would not impede effective competition in the European Economic Area as the parties' activities only overlap to a limited extent."

TATA Steel is an integrated steel company active in steel production, including the extraction of iron ore from mines in India and the manufacture of semi finished and finished carbon steel products at plants in India and South East Asia. Whereas Corus Group is a manufacturer of mainly semi finished and finished carbon steel products at plants in Europe.

Orissa government has signed 3 more MoU with Crackers India (Alloys) Ltd, MGM Steels Ltd and Surendra Mining Industries Ltd for establishment of steel plants of 0.25 million tonne per annum capacity each with captive power plants of 16 MW each with a combined investment of INR 666.11 crore.

The details of MoUs are as under

1. Crackers India (Alloys) Ltd
At Gobardhanpur in Keonjhar district
Investment of INR 236.39 crore

2. MGM Steels Ltd
At Nimidiha in Dhenkanal district
Investment of INR 208.10 crore

3. Surendra Mining Industries Pvt Ltd
At Barahamusa in Sundargarh district
Investment of INR 221.62 crore

As per reports the companies would have to fulfill their iron ore requirement without any Government assistance and there would not be any obligation on the part of the Government to make arrangement for iron ore linkages.

With the signing of three more MoUs, the total number of MoU steel project has once again gone up to 45 as the number of MoUs had came down to 40 following the cancellation of 5 MoUs. The 45 projects will entail an investment of INR 195,540 crore and total steel making capacity will be 75 million tonnes per annum.

Japans Mitsui & Co Ltd has declined to comment on newspaper reports of its plans to sell its entire 51% stake in Sesa Goa Ltd. In addition
Mr PK Mukherjee MD of Sesa Goa said that he was not aware of any plan by Mitsui to sell.

Dr TK Mukherjee deputy MD of TATA Steel said the TATA Steel was not considering and the investment banks had not approached bidding for the stake. Mr Seshaghri Rao director finance of JSW also denied being in race for Sesa Goa.

Hindustan Times has reported that Mitsui & Company has put on block its entire stake of 51% in Sesa Goa Ltd and has appointed JM Morgan Stanley as advisor to complete the transaction. The report cites some investment banking sources as saying that TATA Steel, Jindal, Essar, Arcelor Mittal and MSPL are in discussions with the merchant banker for buying the stake.

Vikram Ispat a unit of Grasim Industries Ltd., of the Indian Aditya Birla Group, has successfully commissioned a new 550,000 tonnes per year Energiron direct reduction module at their plant site at Salav in Maharashtra. The plant uses HYL ZR Process technology without external gas reforming to produce high carbon DRI.

A key point in the startup of the new module is the fact that the iron ore charge consists of 100% lump ore rather than commercial pellet feedstock typically used by most DR plants. The process characteristics allow the efficient use of high percentages of lump ore with excellent results, thus lowering the overall cost of the metallic charge to the reactor. This DR plant and the HYL plant at Usiba in Brazil are the worlds only DR facilities currently operating with 100% lump ore.

Vikram Ispat has been operating a 900,000 tonnes per year HYL plant since 1993 and is the worlds only producer of both HBI and DRI from the same reactor, using the process scheme with a natural gas reformer and generating its own electric power requirements. Restrictions in natural gas supply over the past several years had forced the plant to operate at less than 50% capacity, decreasing the overall cost efficiency of the plant. Vikram Ispat expects full gas availability by early 2008 when natural gas will be more readily available in the industrial area of Maharashtra, at which time the original module will be restarted for HBI production. At that time, total operating capacity will reach 1.5 million tons annually, with 900,000 tonnes per year of HBI from the large plant and 550,000 tonnes per year from the new ZR DRI module.

The original design was for HBI production; however Vikram and HYL undertook modifications over the past few years to incorporate a DRI Cooler vessel offline cooling for the production of DRI as well as the production of hot briquetted iron. Technical work developed jointly by HYL and VI took advantage of the plant flexibility, increasing production capacity by using Liquid Propane Gas in the reformed gas stream and Naphtha in the burners of the natural gas reformer. The new project, commissioned at the end of November, converted the offline cooling reactor to a ZR process direct reduction module with a capacity of 550,000 tonnes per year operating this new module at full capacity, optimum efficiency is obtained using the existing available natural gas supply to the plant.

Work on the TATA Steel project at Kalinga Nagar in Orissa will commence in four months and the financial closure for the Dhamra Port will be achieved by January end.

Mr B Muthuraman MD of TATA Steel while talking to reporters after meeting Orissa chief minister Mr Naveen Patnaik said that CM had been apprised of the progress in both the projects. He said The progress is good and we have already placed orders for the blast furnace and other machinery.

Work on the steel project site in Kalinga Nagar came to a halt on 2nd January 2006 following clash between tribal and police in which 14 tribal and a policeman had died.

National Thermal Power Corporation Ltd has announced that the Company has formed a 50:25:25 JV under the name and style of Aravali Power Company Pvt Ltd on December 21st 2006 with Haryana governments Haryana Power Generation Corporation Ltd and Delhi governments IPGCL mainly to establish a 1500MW coal based power plant in the State of Haryana.

Mr RP Ritolia CMD of Coal India Limiteds Central Coalfields Limited while attending a seminar on new technology for surface and underground mining said that The Indian mining industry has to enhance the level of mechanization in order to achieve the coal production target of 2,000 million tonnes by 2030-31. Industry is trying to upgrade its technology to launch innovative technological initiatives for improved competitiveness in both coal and non coal sectors.

Mr. Ritolia said that CCL planning to double the outfit's capacity from the current level of 40 million ton to 80 million tonnes over the next five years and is adopting new technologies like surface miners and other state of the art technologies in its mines with more than five million tonnes.

ABG Shipyard Ltd has announced that it has secured repeat order for construction of 1 unit 78M LOA Diving Support Vessel at a price of EUR 16.540 million from Vroon Offshore BV of The Netherlands. ABG is already building 2 vessels for Vroon.

General information of the order is under
1. Order for Construction of 1 unit 78M LOA Diving Support Vessel
2. Value of the Vessel Euro 16,540,000 for the option
3. Length of the Vessel 78 Meter

Vroon BV is an international shipping Company, active in a number of specialized and commodity type shipping segments. Vroon operates and manages a diverse fleet of about 80 vessels.

With the above order in terms of INR approximately INR 100 Crores for one confirmed vessel, the aggregate of the orders in hand with the ABG Shipyard will amount to about INR 24,000 million.

Mahindra & Mahindra Ltd announced that it has agreed to acquire 90.47% stake in Schoneweiss & Co GmbH of Germany.

Schoneweiss is one of the top five axle beam manufacturers in the world and specializes in suspension, power train and engine parts.

Rio Tintos Hamersley Iron has reached agreement with BaoSteel on the price for Hamersley iron ore deliveries for the contract year commencing 1 April 2007.

Under this agreement, the price of Hamersley lump and fine ores will increase by 9.5% and the new prices will be
1. Hamersley Fines $ 0.8042 per dry metric tonne unit
2. Hamersley Lump $ 1.0264 per dry metric tonne unit

Mr Sam Walsh CEO of Rio Tinto's Iron Ore Group said "As a major supplier to China for over thirty years, Hamersley Iron is pleased to reach this agreement today with BaoSteel, China's largest steelmaker. The agreement reflects the continuing strong demand in the market for Hamersley's products."

MEPS estimate that the world's stainless steel sector will record an unprecedented jump in crude production in 2006 to 27.8 million tonnes increase of 3.4 million tonnes or 14% as compared to 2005.

A substantial rise in output will be recorded in the EU this year. The gain will be almost 12%. A significant increase was expected after the decline in 2005 but not a double digit percentage gain. A noteworthy production rise will also be reported for the United States this year expanding to an estimated 2.55 million tonnes from 2.2 million tonnes twelve months earlier. New capacity pushed the growth to above 15%.

MEPS see a biggest jump in Asia due to momentous expansion in crude steel output has occurred this year in China. It is now expected that the full 2006 outturn will top 5 million tonnes making it the largest producing country in the world. Moreover, the steelmakers are running below their rated capacity. Furthermore, additional plants are due to come on stream over the next few months. The massive rise in Chinese stainless steelmaking has stifled any serious output rises in the other main Asian producing nations. No significant gains are anticipated in South Korea and Taiwan this year. Japan will record a modest improvement of around 2.7% in strong market conditions.

MEPS concluded that with production of stainless steel rising at such a pace the demand for nickel has been at extraordinary levels. Nickel prices have jumped to record highs. In the US and EU, alloy surcharges apply. Customers can forecast the level of extra cost to be imposed on future sales and have often bought steel in advance.

Xinhua has reported that after an agreement with Companhia Vale do Rio Doce on Thursday, BaoSteel Group has now agreed for iron ore prices with the world's other two main producers BHP Billiton and Rio Tinto on Friday evening. The price of the iron ore provided BHPB and Rio will also rise 9.5% for the next financial year.

BaoSteel has completed price negotiations on behalf of all China's steel mills with the world's three leading iron ore providers and is the first steel company in the world to settle contracts with the three giants for the financial year beginning on April 1st 2007.

Market analysts said the 9.5% growth rate basically reflected the supply and demand situation in today's world iron ore market, though China which still had a growing demand for iron ore, the growth rate had slowed.

POSCO announced that it has agreed to buy a 40% stake in a unit of Malaysian steel firm Prestar Resources for 31.2 million ringgit. deal will increase the stake held by POSCO, through its marketing unit POSTEEL, in Posmmit Steel Centre Sdn Bhd. to 70%, with Prestar owning the rest.

Mr Toh Yew Peng MD of Prestar said that "This cooperation will further strengthen Posmmit's position in the steel market not only in Malaysia but also within ASEAN countries. We are confident that with this share sale agreement we will be able to upgrade the overseas network in order to increase the sales volume of POSCO products in the individual market."

POSCO had bought 30% of Posmmit in 2002.

As per the latest MEPS forecast for flat products for the next twelve months the situation remains as predicted in November. MEPS said We continue to believe that the impact of low strip mill prices in the South of the region will percolate northwards over the coming months. Plate values continue to be firm for the superior grades but are likely to slip in the first half of 2007 due to competition from foreign sources. The current price reductions in the strip mill sector are likely to extend well into the middle of next year as customers re-evaluate their inventory levels and import volumes rise due to the strengthening Euro currency versus the US dollar.

MEPS added In the second half of 2007, we expect the inventory depletion phase to have run its course. Lower prices should make the EU market less attractive to importers. Furthermore, the domestic mills will have implemented output cuts in an effort to bring supply and demand nearer into equilibrium. A price pick up is anticipated towards the end of the third quarter, after the summer break. Selling values should rise to the end of the year with an improved supply demand balance.

For long products MEPS said Bar and rod product prices in Euros are heading downwards for seasonal reasons. However, raw material costs are moving in the opposite direction. As a consequence, the rate of decline in the MEPS - EU Average Long Products Carbon Steel Price over the next few months is forecast to slow down and bottom out in the second quarter of next year. However, the price decrease outlined above is unlikely to affect the medium sections category. Demand continues to be firm. Supply remains tight. Far East competition is quite modest at the moment but could intensify as next year progresses. As the weather improves in the springtime, we expect our average long products price to increase in line with better demand. This is likely to continue to near to the end of 2007.

Most financial institutions had been forecasting an uptrend for 2007 benchmark ore price and taking the clue, BaoSteel and CVRD has agreed to an increase in the range of 5 to 10% after concluding the first round of negotiations.

CVRD, negotiating 2007 prices last month, hasn't reached a price agreement this quickly in more than a decade. It is first time a Chinese steelmaker has set a benchmark for the main steel ingredient, reinforcing China's influence as the world's largest steel-making nation.

BaoSteel was leading the negotiations for all of China's steelmakers, which total about 260. Mr Liu Yongshun chief negotiator of BaoSteel in an interview December 12th that focus of recent iron ore price has already shifted to which steel producer would become the final price setter this year.

The battle among various top steelmakers over that role is intensifying along with the recent emergence of Nippon-POSCO alliance. Strategic alliance partners Nippon Steel and POSCO were trying to form a united front against iron ore suppliers in the upcoming fiscal 2007 benchmark negotiations.

(Sourced from Mysteel.net)

Yonhan has reported that South Korean shipbuilders are planning to increase their imports of Chinese steel plates in 2007 as the prices of locally produced plates have risen. South Koreans top 3 shipbuilders Hyundai Heavy Industries Co, Samsung Heavy Industries Co and Daewoo Shipbuilding and Marine Engineering Co plan to increase steel plate imports from China to 900,000 tons next year from this year's 570,000 tons.

Dongkuk Steel recently raised the price of steel plates to 635,000 won per ton (US$685) from 585,000 won per ton, which will additionally cost the local shipbuilders 75 billion won annually. According to the sources POSCO is also considering increasing the price of steel plates as well.

As per report the demand for steel plates by nine local shipbuilders is expected to reach 5.6 million tonnes in 2006, with about 2 million tonnes supplied by POSCO, 1.5 million tons by Dongkuk Steel Mill Co and 600,000 tons by Japanese steelmakers.

An official at the Korea Shipbuilders' Association said "But shipbuilders cannot increase the use of Chinese steel plates indefinitely because the quality of those products is still low."

Brazil Steel Institute IBS has announced that the country's steel output was expected to increase by 12.8% in 2007 to reach 34.9 million tonnes.

According to the IBS, Brazil's steel output for the 2006 is expected to stand at 30.9 million tonnes, a 2.2% drop compared with 2005.

The IBS also predicted that if the international steel market remained stable in 2007, Brazil's steel exports would hit 13.6 million tonnes, a 12.9% increase.

To meet growing demand on the international market, the IBS has decided to plough $11.2 billion into expanding the country's steel production by 2010 in a bid to achieve the target of producing 50 million tonnes annually. However, the IBS also voiced concerns about the dwindling domestic demand and increasingly fierce competition from other major steel producing countries in the world.

Mr Wang Shouwen director of the foreign trade department under Chinas Ministry of Commerce while admitting that Chinese steel export is irrational, said that the foreign countries may put up more remedy measures against China's steel export next year.

Mr Wang said that Next year will witness strengthened regulatory force to discourage low value added steel export and give priority to meeting domestic demand. The nation will also beef up economic measures and enhance legislation and implementation to control over the export.

He also expressed his desire to adjust steel export structure next year and try to solve trade disputes with other nations through dialogues.

(Sourced from Mysteel.net)

TMKs Sinarsky pipe plant has announced that its hot trial of the primary mill has been successfully completed in Tube mill workshop No 3 and that the new plant will allow the enterprise to use in its tube production uninterruptedly cast billets made at the Seversky Tube Works.

The primary mill, the capacity of which completely covers the Tube mill workshop No.3 demand for strained billets, was manufactured at the Electrostalmash factory to SinTZs special order.

Installation of the primary mill at the Sinarsky Pipe Plant was carried within the framework of TMKs Strategic investment program. The new equipment will allow SinTZ to increase production of uninterruptedly cast tube billets up to 70% as early as 2007.

It is reported that Egyptian Suez Steel Company would sell off between 30% and 35% of its shares to an Arab investor to raise the necessary capital increase funds. Mr Gamal Al-Garhy Chirman of Suez Steel said that it would sell off between 30% and 35% of its shares to an Arab investor to raise the necessary capital increase funds from current capital amounts to LE 136.4 million.

Mr Al-Garhy said that the interested investor has extensive experience in operating production lines of steel companies.

The companys GM approved the boards proposal to increase capital to LE 600 million. Shareholders also agreed to postpone the merger of Suez Steel with Misr National Steel Company (Ataqa) which is a family business owned by Al-Garhy. Ataqa had last September taken over the government stake in Suez Steel estimated at 82.3% for LE 1.1 billion, beating two Saudi competitors for the deal.

Suez Steel was first launched in 1997 with an authorized capital of LE 600 million and a paid in capital of LE 136.4 million. The companys annual capacity amounts to 600,000 tonnes of iron and its sales hit LE 991 million in 2005.

OMZs UralmashSpecStal announced that it has signed a contract to supply working and back up rolls for hot and cold rolling mills to Magnitogorsk Metallurgical Plant. UralmashSpecStal expects to supply rolls valued at more than RUR226 million during 2007

The rolls will be used to equip all MMK sheet rolling mills. The contract provides for rolls with high 3% to 5% chromium content. The high chromium content contributes high levels of durability.

UralmashSpecStal is a traditional supplier of rolls to MMK having been the source for 20% to 45% of rolls of varying type installed at MMK rolling mills.

Evraz Groups Metallurgical Industrial Complex of Nizhniy Tagil has tested a new 1.5 million tonnes per year SMS Mevacs degasser in its converter shop.

The degasser is meant for removing some harmful gases entrapped in molten steel while blowing steel to improve the quality of the finsiehd steel.

Companhia Vale do Rio Doce announced that after the execution of three transactions, in an estimated value of $ 12.3 billion, successfully completed 84% of the take out of the bridge loan of $ 14.6 billion, with two year maturity, taken to finance the Inco Limited (Inco) acquisition.

In the first of these three transactions, on November 16th 2006, CVRD issued a U$ 3.75 billion 10 year and 30 year notes. The $ 1.25 billion notes due in January 2017 bear a coupon rate of 6.25% per year, payable semi annually and were priced with a yield to maturity of 6.346% per year resulting in a spread of 168 basis points over US Treasuries. The $ 2.5 billion notes due in November 2036 bear a coupon rate of 6.875% per year, payable semi annually and were priced with a yield to maturity of 6.997% per year resulting in a spread of 225 basis points over the US Treasuries. The offering was oversubscribed by 3.4 times.

The second transaction involved the issue on December 20th 2006 in the Brazilian market of non convertible debentures in the amount of R$ 5.5 billion, in two series, with four and seven-year maturity. The first series, due on November 20, 2010, R$ 1.5 billion, will be remunerated by 101.75% of the accumulated variation of the Brazilian CDI interest rate, payable semi annually. The second series, due on November 20th 2013, R$ 4.0 billion, will be remunerated by the Brazilian CDI interest rate plus 0.25% per year, also payable semi annually.

On December 21st 2006, CVRD closed the books for a pre-export finance transaction of $ 6.0 billion, defining the final allocation among the members of a bank syndicate. The transaction includes a $ 5.0 billion tranche, 5 year maturity, at Libor plus 0.625% per year, and a $ 1.0 billion tranche, 7 year maturity, at Libor plus 0.75% per year.

A great change is occurring in Chinese iron & steel industry due to the relocation of Shougang Group and recombination of other steel enterprises.

In October 2004, Shougang Group's steel project with annual capacity of 2 million tonnes was finished in Qian'an City. On February 18th, Shougang Group obtained official approval from NDRC on its relocation. By the end of 2010, Shougang will completely stop its operation in Beijing and move to Tangshan.

The adequate iron ore in Tangshan will help Shougang Group to reduce transportation costs. Besides, two 250,000-ton iron ore docks in Tangshan's Caofeidian will also bring facilities to Shougang Group. Some 100 Yuan/ton will be cut from the steel makers transportation charge. Shougang Group made many high-end steel products that can be used as substitutions of imported ones.

Recently, Shougang and Tangshan Steel jointly set up Shougang Jing Tang Iron & Steel Co Ltd to process Caofeidian steel base with annual capacity of 15 million tonnes. Anyang Steel and Baotou Steel also connect with both domestic and international large-size steel enterprises.

(Sourced from Mysteel.net)

Wheeling Pittsburgh Corp has officially filled the top posts in its steel company. Mr John Goodwin has been named CEO and Mr Thomas A Modrowski has been named president and COO.

Mr David A Luptak is the new executive VP, general counsel and secretary and former president and COO, Mr Harry Page is now VP of engineering and former VP Mr Donald Keaton has been relived.

Mr Goodwin was COO of International Steel Group Inc from 2003 until its sale to Mittal Steel last year. He also has been an executive with Beta Steel Corp., National Steel Corp. and US Steel.

The union, the International Association of Machinists, presented AK Steel Corp with a counterproposal toward a new contract.

Mr McCoy spokesman of AK Steel said that upon initial review, the union's proposal has widened the differences between the parties however the company will review the counterproposal.

The International Association of Machinists represents about 1,800 locked out hourly workers at AK Steel, who were locked out when their labor contract expired on March 1st 2006 without a new deal in place.

A threatened strike at Peruvian zinc lead miner Volcan has been averted after unions accepted a revised offer on a new labor contract.

The last-minute settlement was not entirely unexpected since Peru often sees strike threats issued as part of the usual to and fro of talks on new labor contracts.

Metals insider reported that Vietnam has launched its first refined zinc plant in the northern region of Thai Nguyen.

As per report the plant with an annual capacity of 10,000 tonnes per year is operated by Thai Nguyen Non ferrous Metals Co, a subsidiary of the Vietnam National Coal Mineral Industries Group.

Bulgaria's zinc and lead smelter OTZK has forecasting production of both metals to rise next year thanks to better concentrates availability following its acquisition of local mines this year and equipment upgrades.

As per report Lead output is expected to jump to 30,000 tonnes from an expected 13,500 tonnes in 2006, while zinc output is expected to rise to 27,500 tonnes from 26,000 tonnes.