It is reported that Essar Steel Holdings Ltd and Essar Energy Holdings Ltd, the parent companies and largest shareholders of Essar Steel and Essar Oil are set to delist from stock exchanges by their parent company Essar.

The two companies said in separate statements "The delisting of equity shares will offer more flexibility in operations and management of the company, greater efficiencies and provide an exit opportunity for shareholders."

Essar Steel and Essar Oil will seek their approval from their board of directors for delisting on January 29th and 30th respectively.

Essar Steel Holdings and Essar Energy Holdings are Mauritius based subsidiaries of Essar Global Ltd and largest shareholders as well as promoters of these. The promoter stake currently stands at 87% and 88 % in Essar Steel and Essar Oil respectively.

Indias Supreme Court has rejected a petition of Kalinga Power Corporation Limited against the Orissa governments decision to allot land for TATA Steels 6 million tonne steel project at Kalinga Nagar in the state saying that the allotment was provisional and has allowed TATA Steel to begin the project pending a final order.

Orissa government had allotted 1,000 acres, comprising of 129.36 acres of government land and 870.62 acres of private land, to KPCL for setting up a 500MW power project at Kalinga Nagar Industrial Complex in Dubri in 1994 but the allotment was cancelled in December 2004.

The cancellation was challenged by KPCL in the Orissa high court, saying the state governments reason that it was unable to free the land from villagers was false. But Orissa Industrial Infrastructure Development Corporation argued that KPCL failed to pay the cost of land and TATA Steel was given the land after it paid the entire cost.

Russia's state run Vnesheconombank signed a 3 party agreement with Russian company Tekhnokhim Holding and India's Saraf Agencies Private Ltd for establishing a chemical and technological complex in the state of Orissa. Russia's share in the joint venture is expected to be 55%.

The release said that "This will be a science intensive integrated chemical and metallurgical complex to produce titanium dioxide and other titanium products on the territory of India as a core enterprise within a special economic zone.

As per reports for the needs of Russian consumers, the JV plans to supply 30,000 tons of titanium dioxide and up to 45,000 tons of titanium slag a year.

Bloomberg, citing two people with direct knowledge of the plan, reported that global steelmaker and miners including Arcelor Mittal, BHP Billiton Ltd and Rio Tinto Group are competing to buy Mitsui & Cos 51% stake valued at about USD 850 million. Some of the steel makers and miners are also reported to be in the race for buying stake in Sesa Goa.

As per report all the three companies declined to comment. Ms Emma Meade a spokeswoman for BHPB said We don't comment on rumors and speculation.'' Mr Malay Mukherjee member of group management board at Arcelor Mittal also said the company won't comment. Mr Ian Head a spokesman for Rio Tinto also declined to comment. Mr PK Mukherjee MD of Sesa Goa and a spokesman for Mitsui also did not comment.

Shares of Sesa Goa gained 56% since the Hindustan Times reported on December 22nd 2006 Mitsui plans to sell its entire stake in the company. Shares of Sesa Goa reached a record INR 1,965 in Mumbai valuing the company at USD 1.7 billion, on speculation the winner will offer to buy more shares at a higher rate than the prevailing market price.

Founded in 1954, Sesa Goa has iron ore mines in the states of Goa, Karnataka and Orissa and sold 9.6 million tons of the commodity in the year ended 2005-06. Mitsui invested in Sesa in October 1996.

It is reported that the board of Bharat Earth Movers Ltd has approved formation of a 45:55 JV with a combine of Midwest Granite Ltd in Hyderabad and SMJ in Indonesia for contract mining. The company will have an authorized capital of INR 100 crore and an initial paid up capital of INR 30 crore.

BEML said that with the opening up of coal, non coal and metal sectors for private sector and MNCs, contract mining is set to grow substantially and offer a big opportunity to equipment makers like BEML in the sale of equipment, spares and services.

Power Grid Corporation of India Ltd announced that it has initiated talks with American Electric Power to explore the possibility of forming a strategic alliance for executing transmission projects in US.

A PGCIL statement said that senior officials of AEP recently met Mr RP Singh chairman of the PGCIL to start talks for identifying areas of cooperation and finalize the modalities for a strategic alliance to set up transmission system in the US. It has added that "As a result of on going initiatives being undertaken by PGCIL to make its presence felt globally, a dialogue has been initiated with AEP delivering electricity to more than 5 million customers in 11 states to enter into a strategic alliance."

The US grid has suffered from under investment for a long time but with the enactment of the Energy Policy Act 2005, the Federal Energy Regulatory Commission has finalized rules to boost investment in the ageing transmission infrastructure.

AEP owns nearly 36,000 MW of generation capacity and 39,000 mile of transmission network in the US.

It is reported that the prime minister's office has decided to monitor and support all TATA Steel's projects in Jharkhand, Chhattisgarh and Orissa despite the controversy at Singur over the acquisition of land for TATA's low cost car project. PMO has not only directed the three state governments concerned to ensure regular monitoring of the TATA projects in their respective regions but also to report on its status from time to time to the centre.

Mr KK Khandelwal industries secretary of Jharkhand told HT that "The PMO convened the meeting after receiving a letter from the TATA Steel requesting its intervention. The three States have been directed to monitor the TATA Steel's projects and keep reporting to the PMO. The three states were asked to review other investment proposals as well and address the pending issues of investors."

It is reported that TATA Steel, which has plans for producing around 28 million tonnes steel in the three states at a proposed investment of about INR 80,000 crore, has sought the PMO's assistance in ensuring its projects were on the right track."

A cooperation agreement was signed during an official visit by Russian President Mr Vladimir Putin to India, between Vnesheconombank, the Russian GAZ Group and Ural India Ltd for setting up a JV to assembly Ural trucks in the state of West Bengal.

The release said "For the implementation stage there is a contract for a total cost of USD4 million to assemble 150 trucks. The first trucks are undergoing certification for transport resources.

Bharat Heavy Electricals Ltd has announced the unaudited results for the quarter ended December 31st 2006.

BHEL has posted a net profit of INR 6676.5 million for October to December 2006 as compared to INR 4231.9 million for October to December 2005. BHELs total income net of excise has increased from INR 34131.5 million for October to December 2005 to INR 45251.6 million for October to December 2006

West Bengal state governments cabinet has approved the bifurcation of the West Bengal State Electricity Board for restructuring of the power sector. The two new government companies will be in place by April 1st 2007 and the final transfer scheme will be formulated within one year after closure of accounts of the WBSEB for 2006-07.

The West Bengal State Electricity Transmission Co will look after transmission and state load dispatch functions and West Bengal State Electricity Distribution Co will look after the distribution and hydro business.

West Bengal became the 16th state to implement restructuring in line with the requirement of the Electricity Act 2003 aimed to improve commercial efficiency and enhance levels of customer service on a sustained basis.

During Mr V Putin president of Russias visit to India, Russia has sealed a deal to build 4 more nuclear power plants in India. Some of the reactors will be at the Kudankulan nuclear power station in the southern state of Tamil Nadu and others at additional sites.

Mr Manmohan Singh prime minters of India at the signing ceremony said Energy security is the most important of the emerging dimensions of our strategic partnership. Russias position as a global leader on energy issues is widely recognized.

The two countries said in a joint statement said that the reactor deal would depend on the Nuclear Suppliers Group, a 45 member coalition of countries that regulate the world's atomic trade, lifting its restrictions on India's access to nuclear technology,

Russia is currently building two 1,000MW nuclear reactors in the town of Kudankulam in Tamil nadu.

Companhia Siderurgica Nacional has rejected media reports that a dispute with fallow mining giant CVRD over supplies of iron ore from its Casa de Pedra mine in Brazil to Corus, post acquisition, may not be possible.

CSN refuting the media report said in a statement that Should CSN acquire Corus, it will exercise its rights to supply iron ore from its Casa De Pedra mine to all its operations, including those in Europe. There is no basis for this story. There is no change to our position or to our commitment to acquire Corus.

Earlier, Mr Jose Martins director for ferrous operations of CVRD had told the FT that CVRD would question CSN's ability to ship iron ore under the terms of a contract signed between the two companies in 2001. He told that If CSN buys Corus we will look very closely at how the deal is done to see if our right to the iron ore remains in force or not. The report said that one interpretation of this accord is that CVRD has the first rights to take any extra iron ore that becomes available from Casa de Pedra and would be reluctant to relinquish this right to CSN even if the steelmaker needed the ore to supply Corus.

CSN's ability to supply cheap iron ore from its Casa de Pedra mine in Brazil to Corus' European plants is a considered a cornerstone of its offer for Corus.

The European Union's Court of Justice on Thursday upheld a multimillion euro fine imposed by EU antitrust regulators in 1999 against four Japanese and European steel tube producers for price fixing and rejected an appeal by four of eight original defending companies which faced fines worth EUR 99 million in the original court ruling over seven years ago.

The court said the EU's lower Court of First Instance did not err in law in concluding that there was a cartel designed to share domestic markets.

Salzgitter Mannesmann will still have to pay EUR 12.6 million, Nippon Steel EUR 10.9 million, Sumitomo Metal EUR 10.9 million and Dalmine EUR 10 million.

The case involved the use of steel tubes in the exploration and transport of oil and gas. EU regulators found eight companies including Germany's Salzgitter Mannesmann GmbH, Japan's Nippon Steel Corp and Sumitomo Metal Industries Ltd had restricted competition by requiring they all respect each other's domestic market. The violations of competition rules had begun in 1990 and ceased five years later.

Nucor Corporation announced its consolidated net earnings and sales for 2006. Nucor's consolidated net earnings for 2006 were USD 1.76 billion an increase of 34% YoY over net earnings of USD 1.31 billion in 2005. Nucor's consolidated net sales for 2006 increased by 16% YoY to USD 14.75 billion as compared USD 12.7 billion in 2005. Average sales price per ton increased by 7% YoY.

Nucor established company records in 2006 in its steel mills segment for steel production, total steel shipments and steel sales to outside customers. Steel production was 22.382 million tons as compared with 20.332 million tons produced in 2005 an increase of 10%. Total steel shipments increased by 8% YoY to 22.346 million tons in 2006, compared with 20.669 million tons in 2005. Steel shipments to outside customers increased 9% YoY to 20.649 million tons in 2006 as compared with 19.020 million tons in 2005.

In the steel products segment, steel joist production during 2006 increased to 570,000 tons as compared with 554,000 tons in 2005. Steel deck sales increased to a record 398,000 tons in 2006 as compared with 380,000 tons in 2005. Cold finished steel sales decreased to 327,000 tons as compared with 342,000 tons in 2005.

USs largest recycler, Nucor and affiliates are manufacturers of steel products, with operating facilities in nineteen states.

According to preliminary numbers from the Chinas National Bureau of Statistics China's gross domestic product grew by 10.7% in 2006 as compared to the previous year.

Mr Xie Fuzhan commissioner of NBS during a news conference said that the GDP grew at 10.4% in the first quarter, 11.5% in the second quarter, 10.6% in the third quarter and 10.4% percent in the fourth quarter of 2006.

The country's GDP for 2006, which totaled CNY 20.94 trillion (USD 2.7 trillion), was 0.3 percentage points higher than the previous year's 10.4% growth rate.

IPSCO Inc announced that it is proceeding with a CAD 52.5 million expansion of its existing Regina large diameter pipe making facility. Together with its previously announced capacity increase currently under construction, IPSCO's large diameter spiral pipe capacity will be increased by two thirds to 0.5 million tons by early 2008.

This expansion will include an additional pipe forming mill and related finishing equipment which will increase the capacity, productivity and flexibility of the existing facility.

Mr David Sutherland said IPSCO will continue to invest in the pipe and steel technology and appropriate capacity to keep the Company at the forefront of the large diameter line pipe industry on a globally competitive basis.

IPSCO previously announced a 25% increase in spiral mill capacity through the installation of a coil preparation line, to come on stream in the second half of 2007. This expansion adds an additional 33% capacity by early 2008, for a combined increase of 67%.

IPSCO is a leading low cost producer of energy tubulars and steel plate in North America with an annual liquid steel making capacity of 4.3 million tons. The Company operates four steel mills, eleven pipe mills, nine product finishing facilities and nine scrap processing centers in 25 geographic locations across the United States and Canada.

Reuter reported that world's largest steelmaker Arcelor Mittal sees a rise in steel prices in offing as higher input costs get passed on to customers.

Mr LN Mittal president & CEO of Arcelor Mittal on the sidelines of the World Economic Forum told Reuters that "Costs are going up, which means steel prices should go up, because steel companies have to pass on the cost increase to the customers.

Mr LN Mittal, while replying to a question that if end users would bear higher prices, said "There is enough balance in supply and demand that I think customers should pay."

Nr Aditya Mittal CFO of Arcelor Mittal in another interview with AFX declined to make detailed steel market forecasts but said that The market is good. Chinese prices are improving. There has been weakness in the US, which is improving. Europe is strong. 'Globally we are in good shape. I expect a good year in 2007. There is a lot of strength in Asia. The US won't be as strong as in 2006, but GDP is positive.

St Louis based Peabody Energy announced that its net income in 2006 rose by 42% YoY. For fiscal 2006, the coal company said its net income rose to USD 600.7 million from USD 422.7 million in fiscal 2005. The company said it saw an income tax benefit of USD 81.5 million for 2006 resulting from increased valuation of tax assets.

Peabody said its 2006 revenue rose by 13.2% to USD 5.26 billion from USD 4.64 billion the previous year. The company said in a release that the increase was driven by higher prices and increased volumes in all regions.

Mr Gregory Boyce president & CEO said "In 2007, we are targeting increased results as we benefit from greater access to high margin global coal markets, along with higher realized US prices from sales contracts signed in recent years. The international coal markets are very strong, and we expect US markets to strengthen in 2007 with the announced industry production cutbacks and a return to normal electricity generation. In the near term, we are managing our US production and capital to match demand."

AFX reported that Arcelor Mittal sees a strong push to merge steel companies in the Chinese market with national players taking over from regional operators.

Mr Aditya Mittal CFO of Arcelor Mittal during an interview with AFX News at the World Economic Forum said that We are very bullish on China. We want to be a bigger player in China. We had a good year in 2006 and we hope we will grow in 2007. We are focused on the Laiwu deal.

Mr Aditya Mittal said that he sees China's steel sector moving away from provincially based companies to players with a national profile. He said This consolidation process has been impeded in the past by companies not wanting to merge with those in other Chinese regions, and regional authorities not wanting to lose tax revenues. Now we see changes. There is a strong national push to merge companies, and to remove regional disparities.

Arcelor and Laiwu Steel Group parent of Laiwu Steel reached an agreement in February 2006 for Arcelor to acquire a 38.41% stake in listed Laiwu Steel CNY for 2.09 billion but the approval by the Chinese government has not been granted and recently the deadline for the agreement has been extended till June 2007.

Arcelor Mittal already holds a 29.48% stake in China's Hunan Valin Steel Tube & Wire Co Ltd.

Interfax reported that the Magnitogorsk Iron & Steel Works has reopened the No 1 pickling line, which was shut down due to last November's fire and roof caving in the pickling department of its No 5 sheet rolling division.

Ms Yelena Azovtseva spokeswoman of MMK told Interfax "The pickling process has begun. The line is expected to reach its technological parameters in the near future.

It was reported earlier that the No 2 pickling line with annual capacity of 1.28 million tonnes, which was also damaged in the fire and caving was re launched in early December 2006.

The fire occurred on November 28th 2006 causing the roof to collapse, killing eight people and injuring another ten.

South Korea's 2nd largest steelmaker Hyundai Steel Co said that its 2006 earnings plunged 54.1% YoY over 2005 to KRW 473.5 billion (USD 505.9 million) although sales increased by 8.5% YoY to KRW 5.5 trillion and operating profit rose by 16.7% YoY to KRW 591.7 billion.

Hyundai Steel attributed the improved sales and operating profit to a rise in its exports of steel products.

Standard & Poors Ratings Services announced that it had raised its long term corporate credit and senior unsecured debt ratings on ThyssenKrupp to BBB from BBB-.

S&P said in a statement this reflects the ThyssenKrupps recent announcement that the chances of acquiring Dofasco from Arcelor Mittal are now very remote and that t will no longer factor in the acquisition of Dofasco into ThyssenKrupps ratings.

Mr Alex Herbert credit analyst with S&P said The acquisition of Dofasco would have cost EUR 4.5 billion, including debt. Compared with this there is now more clarity about how ThyssenKrupp will execute its growth strategy. The group will now more gradually spend on investments and will have greater flexibility.

As per the provisional statistics available, the growth in production of steel products during 2006 was 24.3% YoY with flats taking the lead wit 31.6% YoY growth.

In million tonnes
Source Mysteel.net

The breakup of various long products is as under

In million tonnes
Source Mysteel.net

The breakup of various flat products is as under

In million tonnes
Source Mysteel.net

The breakup of various tubular products is as under

In million tonnes
Source Mysteel.net

(Sourced from Mysteel.net)

The Ford motor company in the United States has reported loss of USD 16 billion for 2006, its biggest in its 103 year history. But Ford's big loss is not the worst in the American car industry as General Motors lost more than USD 25 billion in 1992.

Ford is the second largest car company in the US but has been struggling with competition from Japanese manufacturers. A slump in sales and major restructuring costs are being blamed for this loss.

Ford plans to close 16 factories and cut 45,000 jobs and is confident it will return to profit by 2009.

FIS reported that Metalloinvess Oskol Electrometallurgical Combine and Ural Steel have maintained the levels of production of all basic products on a par with 2005.

The enterprises produced 6.28 million tonnes of steel in 2006 as compared to 6.17 million tons in 2005 and 4.8 million tonnes of commodity roll as compared to 4.9 million tonnes in 2005.

The Fort Worth based railroad operator Burlington Northern Santa Fe Corp announced that its 4th quarter profit rose by 21 % YoY de to higher freight revenue and fuel surcharges. BNSF reported earnings of USD 519 million for Q4 of 2006 as compared with USD 430 million in Q4 of 2005. BNSFs revenue also rose by 9% YoY to USD3.88 billion from USD 3.55 billion in Q4 of 2005.

BNSF's earnings for 2006 to USD 1.89 billion from USD1.53 billion in 2005 and its revenue for 2006 rose to USD 14.99 billion from USD 12.99 billion in 2005.

BNSF said that revenue from coal shipments, driven by freight out of the Powder River Basin in Wyoming, grew by 22% to $775 million.

BNSF also informed that it will invest USD 2.75 billion in its capital program in 2007, including USD 750 million on track and facilities expansion. A portion of that will go to Tennessee Yard, BNSF's inter modal facility located in Memphis and operated by BNSF's subsidiary BNSF Railway Co.

China's State Environmental Protection Administration at a press conference held on January 10th had announced a list of 82 new projects that have breached China's environmental safety rules, out of which more than 10 companies are related to steelmaking.

SEPA said that these companies started new iron or steel projects without environment impact assessments and must stop construction or halt production immediately and will not be allowed to resume until an EIA is approved. SEPA says local environmental protection bureau will not issue any approvals for new projects in cities including Tangshan, Luliang, Liupanshui and Laiwu, until the blacklisted companies sort out their problems.

However, some of the companies mentioned in the list have a different story to tell but SEPA is unwilling to relent indicating a stronger resolve to improve standards than in the past. A SEPA official said that you can either believe the mills or the government.

AS per reports, Laiwu's Steel's 400,000 tonnes per year CRC line in Shandong province commissioned in June 2006, halted production for three months because of EIA and restarted recently is included in the list although Laiwu official maintain that it restarted only after obtaining EIA. Another company in the list, Qinghuangdao Shouqin Material said that its new project with a 1.8 million tonne per year integrated plate mill has already won approval from the local environmental protection office.

Bulgaria's biggest steel maker Kremikovtzi plans to increase the capacity of its on site power station and spins it off into a subsidiary company. The aim of the steel maker is to upgrade the thermal power plant to a high efficiency go generation facility that meets company needs and sell excess energy output to national power grid operator NEK.

Mr Pravin Banker from Balkan Capital Management, hired to package the project financially, said that GE Energy has been invited to send a team to inspect the mill's power production facilities.

Kremikovtzis 112MW power station currently produces 40MW of power which is insufficient for the needs of the mill and the shortfall is covered by electricity bought from NEK.

Indiana based Steel Dynamics Incorporated has purchased 3,000 acres of land from Cleveland Cliffs, which abandoned the Mesabi Nugget project in November, to revives its proposed USD 215 million project. SDI now expect to get the construction go ahead from the Minnesota Pollution Control Agency.

The plant would be located at the site of the former LTV Mining Company at Hoyt Lakes in Minnesota. The project would use advanced technology to produce iron nuggets.

Mr Larry Lehtinen president and founder of Mesabi Nugget said that Steel Dynamics has to take the new plan to their board, which may be several weeks down the road and until that's settled there's no firm construction schedule and no projected date when the Mesabi Nugget plant will actually begin production.
Iron nuggets are produced from the same taconite concentrate used to make taconite pellets. The difference is, taconite pellets are about 65% iron, while the nuggets are almost pure iron of about 97% purity, which could be used in newer electric arc furnaces for making steel.

It is reported that the Oaklands town council has granted a scrap yard permit to Smorgan, which will enable it to move forward with the acquisition of Industrial Metal Recycling facilities in Oakland. The permit will become active on the closing date of the acquisition.

Mr Peter McAvoy owner of IMR, who will continue managing the four Maine operations under the authority of Smorgon, said that the Oakland facility will see little change beyond the installation of a camera security system and that the operation does not store mercury on site and requires all automobiles to be stripped of toxic fluids before it will accept them.

Industrial Metal Recycling facilities in Oakland, Bangor, Augusta and Arundel are being sold to Smorgon, pending decisions in respective municipalities and final approval from the Maine Department of Environmental Protection.

Smorgon Steel Recycling operates about 40 locations spread throughout Australia, New Zealand, China and India. The company is using recent acquisitions in Virginia and Florida to increase the company's presence in the United States.