SAIL & RINL to grow within India

At a time when private steel producers are acquiring companies overseas, Indian governments owned steel makers Steel Authority of India Limited and Rashtriya Ispat Nigam Limited have lined up whopping investments of over INR 50,000 crore to expand within the country to cater domestic demand.

Mr RS Pandey union steel secretary said that "By 2010 these 2 companies will be investing over INR 50,000 crore. The focus of these 2 PSUs is to grow within the country to meet the demand here." Mr Pandey added that SAIL is producing about 13 million tonnes today and by 2010 it should be producing 23 million tones for which the process has already begun and RINL would almost double its capacity from 4 million tones currently in the same period.

Mr RS Pandey added that "Others are going abroad to expand while SAIL and RINL will take care of the domestic market."

Mr Pandey had earlier said India would emerge as the second largest steel producer in the world by 2015-16 with an estimated production capacity of 120 million tonnes by then and 180 million tonnes by 2019-20. Mr Pandey said the consumption level in India is still very low at about 38 kilograms and there is lot of scope for further increase in the demand. He said the government had made an assessment of the demand supply scenario to avoid a glut situation in the medium to long term.

Orissa asks POSCO to talk to land owners

It is reported that POSCO India has ruled out any possibility of either change of site for the proposed 12 million tonne capacity steel plant in Orissa or withdrawal of the company from the mega project. It is also firm on other provisions of the MoU including those related to the port and iron ore.

Mr Soung Sik Cho CMD of POSCO India while responding to questions after a meeting with Mr Naveen Patnaik chief minister of Orissa ruled out shifting of the proposed site. Mr Cho informed that both the central and the state government are highly supportive of the project and retreated that there is no question of withdrawal. Mr Cho however admitted that there were problems in land acquisition but hoped that those would be overcome soon to facilitate construction activity. Mr Cho also retreated that there will be no change in the conditions agreed by the state government and POSCO in the MoU and POSCO would go ahead with other conditions which included among others swapping of the iron ore.

As per reports, Mr Naveen Patnaik chief minister of Orissa during the meeting suggested to POSCO negotiating directly with the people for acquiring private land for the project. He said We are keen that the POSCO steel plant be set up here and want to resolve the land acquisition problem peacefully.

Mr Cho did not spell out whether the company would negotiate with the land losers directly. He said We would do our best to overcome all difficulties relating to land acquisition. Sooner or later, all problems can be overcome and we can start construction soon.

POSCO had earlier announced that the construction work would commence in April so that the first phase of the steel plant would be ready for commissioning by 2010. But so far it has not been able to acquire land and is facing severe protests from landowners. Anti POSCO agitators have put up several barricades preventing the entry of the government and POSCO officials to the project area. POSCO will have to acquire nearly 500 acres of private land from three panchayats, Dhinkia, Gada Kujang and Nuagaon for the plant.

Chhattisgarh discovers 71 million tonne iron ore deposits

IANS reported that 4 new iron ore deposits with an estimated 71 million tonnes of finest quality reserves have been located in Chhattisgarh.

An official release said that Chattisgarhs mineral department has conducted a widespread survey for a year and located iron ore reserves as under.
1. Iklama and Sindhari areas in Kawardha district - 40 million tonnes
2. Rowghat area in hilly Bastar district 15 million tonne
3. Aridongri region in Kanker district - 11 million tonnes
4. Dantewada district's Bailadila pockets - 5 million tonnes

IANS quoted officials as saying that Chattisgarhs hilly chain, beginning from Dalli Rajhara in Durg district to Bailadila has two billion tonnes of iron ore stocks. Chhattisgarh, ranked second in India in mineral production, has 20% of India's iron ore deposits. Chattisgarhs Bailadila hilly region divided into 14 deposits is one of the world's largest and finest quality iron ore stocks where public sector National Mineral Development Corporation Ltd has major iron ore facilities since 1967 for large domestic supply and exports to China and Japan.

UGSLs 2006-7 net profit up by 36% YoY

Uttam Galva Steels Limited has reported a net profit of INR 100.84 crores for 2006-07up by 36% YoY as compared to INR 74.34 crores during 2005-06. UGSL posted an increase of 44% YoY in its net sales at INR 2567.38 crores for 2006-7 as compared to INR 1788.20 crores during 2005-06.

UGSLs exports during 2006-07 amounted to INR 1455.83 crores up by 38% YoY as against INR 1053.94 crores in 2005-06.

Mr. Ankit Miglani director commercial of UGSL said "The improvement in both the top line and bottom line is a result of our three prong strategy of focusing on value added steel including auto grade, diversification of export markets along with cost and productivity efficiencies. We have had a good year due to the success of our three prong strategy coupled with volume growth due to a part of the enhanced capacities of the cold rolled mill and service centre kicking in. We hope to further build on this performance going forward. With the completion of our domestic and international expansion plans, we will be better equipped not only to fulfill diverse customer needs in the domestic market but also further consolidate our presence in the global markets.

UGSL has also undertaken major capacity expansion and modernization at its Khopoli plant in Maharashtra. UGSL will enhance production capacity to 1 million tonnes of cold rolled steel and 750,000 tonnes of galvanized steel by the end of 2007.

Bharati Shipyard enters Latin American market

Bharati Shipyard has bagged an INR 180 crore order from UP Offshore Bahamas Ltd in a development that would mark its entry into South America. Bharati Shipyard announced that it has signed a contract with UP Offshore for construction and supply of 2 platform supply vessels.

Mr PC Kapoor MD of Bharati Shipyard said that We are extremely proud to announce that Bharati Shipyard is the first Indian shipbuilding company to have bagged this order.

UP Offshore is a subsidiary of Ultrapetrol Bahamas Ltd engaged in construction and operation of platform supply vessels that provide services to offshore petroleum exploration and production companies primarily in the North Sea and Brazil.

Platform supply vessel is specially designed to supply drilling mud, pulverized cement, diesel fuel, portable and non portable water and chemicals used in the drilling process.

BSSL changed name to Bhushan Steel Ltd

Bhushan Steel & Strips Ltd has informed BSE that the Registrar of Companies of National Capital Territory of Delhi & Haryana has granted its change of name of the company from "Bhushan Steel & Strips Ltd" to "Bhushan Steel Ltd" by issuing a fresh certificate of incorporation dated April 12th 2007.

CIL to shift head office to Rajarhat

BS reported that Coal India Ltd is planning to shift its headquarters from the Coal Bhawan in the central business district of Kolkata to New Town in Rajarhat after completion of an intelligent building complex in 15 acres of land it owns, so that all the departments marketing, HR, administration can be under one roof within the complex area.

Mr PS Bhattacharya chairman of CIL said that the land had been acquired recently and the plans were in nascent stage and they would invite bids for appointing an architect for the project besides organizing a design competition to choose the design for the complex. Mr Bhattacharya added that the architect would draw up the details of the intelligent building when appointed.

According to report, the total project cost could range between INR 90 crore to INR 100 crore based on the design approved by the architects and the company and CIL had already obtained an in principle approval from the board. The building would include 0.24 million square feet of area including around 87,000 square feet of residential apartments and there would also be provisions for clubs, guest houses, gymnasiums, healthcare centers and swimming pools.

CIL is facing a space crunch in its office premises currently and it had to shift some of the departments in other parts of the city to enable smooth functioning of the company.

PFC non committal on Sasan UMPP award

It is reported that Power Finance Corporation, the nodal agency to conduct bidding for ultra mega power projects, remained non committal over the fate of the controversial Sasan project. Mr VK Garg chairman of PFC told reporters "There are some legal and contractual issues, which are being examined by different agencies. As soon as these issues are resolved, the project would be transferred.

Mr Garg also declined to give any timeframe when asked by when a final decision would be taken. He told that "There is no timeframe. I cannot say by when and to whom the project would be awarded. There is no one specific issue. We are not putting a question mark on anybody.

The Letter of Intent for Sasan Project, which is valid for six months, was given to the successful consortium in December 28. This means the nodal agency would have to take a decision by June 2007 on whether to transfer the project to Lanco-Jindal consortium award or take other steps.

The 4,000 MW Sasan project in Madhya Pradesh was awarded to consortium of Lanco and Globeleq Singapore after they quoted the lowest tariff of INR 1.196 per unit. However, trouble arose after the change in Globeleq Singapore's shareholder composition in February 2007, when its parent company Globeleq UK sold its stake to Jindal Steel and Power Ltd and Lanco Infratech. The consortium was also accused of misrepresenting its financial information in the bidding document.

Mundra UMPP transferred to TATA Power

Power Finance Corporation Ltd has transferred Coastal Gujarat Power Ltd, the Special Purpose Vehicle established to develop Mundra Ultra Mega Power Project to the selected bidder namely Tata Power Company Ltd. With this, Mundra Ultra Mega Power Project has become the first project under the UMPP initiative to be transferred to the bidder. The signing of the share purchase agreement, Escrow agreement, Hypothecation agreement and port service agreements by PFC, bankers, procurers and Tata Power, now allows the company to go ahead with the various project development activities. A performance bank guarantee of INR 3 billion was provided by the company, in favor of PFC.

Earlier Tata Power Company Ltd, emerged as the successful bidder through tariff based competitive bidding process by submitting the lowest tariff bid of INR 2.26 per unit levelized tariff for 25 years with first year tariff at the rate of INR 1.91 per unit.

The Mundra Ultra Mega Power Project of 5x800 MW capacity is to be based on imported coal. The project would use Super Critical Technology with a view to achieve higher levels of fuel efficiency, which results in saving of fuel and lower green-house gas emissions. The identified beneficiary states in terms of allocation of power from the proposed project are Gujarat 1900 MW, Maharashtra 800 MW, Punjab 500 MW, Haryana 400 MW and Rajasthan 400 MW.

Indian government has taken an initiative for facilitating the development of a few Ultra Mega power Projects of about 4000 MW capacity each under tariff based competitive bidding route using super critical technology. These projects are to be awarded to developers on Build, Own & Operate basis. The size of these projects being large, they will meet the power needs of a number of states through transmission of power on regional and national basis. For the implementation of this initiative, PFC has been identified as nodal agency. Under this prestigious initiative, nine projects with an estimated investment of about INR 150,000 crores have been identified. Bidding in respect of 2 projects has been completed and bidding process in respect of another 2 projects is currently on.

Punj Lloyd bags Reliance Gas Transportations pipeline contract

Punj Lloyd Ltd has informed BSE that it has been awarded an INR 180.16 crores contract by Reliance Gas Transportation Infrastructure Ltd to execute a contract for construction of 48" x 122 kilometer of East West Gas Pipeline and associated facilities.

Era Constructions to start civil work NTPC Dadri expansion

Era Constructions India has mobilized the INR 1,889.40 million worth National Thermal Power Corporations Dadri project, which involves construction of civil works for thermal power project for generating 2 x 490MW power generating units. The duration of this project is 43 months from date of award. The project is to be completed well before Common Wealth Games in Delhi in 2010.

The scope of the project includes civil works for main power house housing turbo generator, boiler, CW, mill and bunker including off site works and other ancillary works necessary for making the power house functional.

ECI has already completed 3 super thermal power stations for NTPC at Talchar I 2 x 500 MW, Talchars II 2 x 500 MW and Ramagundam 1 x 500 MW projects. It is also executing 3 major super power stations for NTPC in Vindhya Nagar in Madhya Pradesh, Kahal Gaon in Bihar and Sipat in Chattisgarh which will generate 3,980 MW power to the national grid soon.

Arcelor Mittal finalizes acquisition of Sicartsa

Arcelor Mittal announced that it has finalized on April 20th the acquisition of Sicartsa a Mexican integrated steel producer from Grupo Villacero for an enterprise value of USD 1,439 million, following approvals of the transaction including from US and Mexican competition authorities. Arcelor Mittal had initially announced this transaction on December 20th 2006.

Sicartsa is a fully integrated producer of long steel with an annual production capacity of approximately 2.7 million tonnes. Sicartsa has estimated iron ore reserves of 160 million tonnes, providing 30 years of reserves at current production rates. In addition to the full integrated steel making facility at Laro Cdenas next to Arcelor Mittal's Laro Cdenas works, the acquisition includes a mini mill Metaver, two rolling mills Sibasa and Camsa in Mexico as well as a mini mill Border Steel at Texas in USA.

As announced in December 2006 Arcelor Mittal has also entered into a 50:50 commercial JV with Grupo Villacero active in the distribution and trading of Arcelor Mittal long products in Mexico and in the southwest of the US, capitalizing on Villacero's commercial network.

Anglo American takes 49% stake in MMX's Minas Rio iron complex

UK based mining giant Anglo American has struck a deal to acquire a 49% interest in Brazilian mining and metals company MMX's Minas Rio iron complex in Brazil for USD 1.15 billion.

Anglo American will pay USD 704 million for the 30% stake in Minas Rio held by MMX affiliate Centennial Asset Mining Fund LLC. In addition, Anglo American will subscribe to a shares offer MMX will make for the Minas Rio unit.

Minas Rio is the MMX's most ambitious mining project with total investments of more than USD 2.4 billion including development of the Minas mine in Brazil's Minas Gerais state as well as a slurry pipeline port facilities and pellet plant. MMX's Minas Rio project under development in Minas Gerais and Rio de Janeiro states is due to start up with iron ore capacity of 26.5 million tonnes per year in the Q4 of 2009 and it also includes a pipeline, pellet plant and port facility.

An expansion is planned to double the project's capacity, subject to the confirmation of sufficient reserves and securing relevant permits and once it is confirmed, Anglo American would contribute a further USD 600 million and increase its stake to 50%.

MMX is developing 2 other iron ore complexes in the South American country one in Amapa state and another in Mato Grosso do Sul. In September 2006, Cleveland-Cliffs Inc, which makes iron ore pellets, acquired a 30% stake in MMX's Sistema Amapa for USD 133 million. Cleveland-Cliffs also agreed to contribute 30% of the estimated USD 275 million still needed to develop the mine and associated facilities.

BHPB announces production record for 9 months

BHP Billiton has released its production report for the nine months ended March 31st 2007.

The highlights include
1. Record year to date production of natural gas, alumina, aluminum, copper, nickel, iron ore and manganese ore underpinned by strong customer demand.
2. Record year to date production achieved at Mad Dog in USA, Zamzama in Pakistan, Paranam in Suriname, Alumar in Brazil, Hillside, Bayside & Samancor in South Africa, Mozal in Mozambique, Worsley, Western Australia Iron Ore, BMA, Hunter Valley Coal and GEMCO all in Australia and Cerrejon Coal in Colombia.
3. Record year to date production of natural gas from North West Shelf in Australia in response to strong demand.
4. Strong ramp up of the Spence project in Chile contributed to quarterly production records for copper.
5. Quarterly production records for the Zamzama and Escondida in Chile operations.
6. Petroleum and iron ore operations located in Western Australia were disrupted by cyclone activity.

Record production and sales were achieved for the nine months ended March 2007 for iron ore. This reflects increased production from the recently expanded Western Australia Iron Ore operations in response to continuing strong customer demand. Cyclone activity and tie-in activity for Rapid Growth Project 3 in Australia impacted the Western Australia Iron Ore operations during the current quarter.

Production was higher for the nine months and quarter ending March 2007 for metallurgical coal due to the start up of Poitrel in Australia and the impact of planned maintenance in prior periods.

In 000 tonnes

Production of nickel for the nine months ended March 2007 was an all time record, reflecting strong operational performances from all operations. In comparison to the December 2006 quarter, production was lower due to scheduled statutory maintenance at the Kwinana Nickel Refinery in Australia. This has been completed successfully and production ramp up commenced during the quarter.

In 000 tonnes

The current quarters production of zinc was higher than the December and March 2006 quarters. Higher grade and an increased proportion of zinc contained ore were processed at Antamina in Peru.

In tonnes

Production of energy coal was in line with the nine months to March 2006. Production for the March 2007 quarter was slightly below the December 2006 quarter mainly due to a planned 45 day longwall move at San Juan in USA. Operational improvement initiatives at Hunter Valley Coal, a shorter longwall move at San Juan and reduced weather impacts in South Africa led to higher production versus the March 2006 quarter. Long vessel queues off the Newcastle Port in Australia delayed export sales from Hunter Valley Coal in the quarter.

In 000 tonnes

MMKs Q1 net income up by 56.3% YoY

Magnitogorsk Iron and Steel Works have announced its financial statements for the Q1 of 2007 in accordance with Russian Standards of Accounting Reporting only for OAO MMK only and not its subsidiaries.

MMKs net revenues for the Q1 of 2007 totaled RUB 43127.4 million up by 28% YoY as against RUB 33606.9 million for Q1 of 2006 while its income before income tax totaled RUB 13208.2 million up by 51% YoY as against RUB 8725.8 million for Q1 2006. In the first quarter of 2007 MMKs net income is recorded at RUB 10311.7 million up by 56.3% YoY as against RUB 6598.0 million for Q1 2006.

Mr Viktor Rashnikov chairman of MMKs board of directors while commenting on the Q1 of 2007 financial results said that We are pleased with the financial results the Company has demonstrated in the first quarter of 2007. These results indicate the continued stable development of the Company and support the effectiveness of our strategy.

OJSC Magnitogorsk Iron & Steel Works which rank 20th among the worlds largest steel producers and is one of the largest steel producers in Russia. It accounts for 17% of total Russian output of steel products. It is a major steel mill with a fully integrated production cycle, from the preparation of iron ore through to downstream processing of steel.

OAO MMK produced 12.5 million tonnes of crude steel and shipped 11.3 million tonnes of commercial steel products in 2006. Its revenue and consolidated subsidiaries in 2006 in accordance with US GAAP totaled USD 6.4 billion and net income was USD 1.4 billion. It accounts for 17% of total Russian output of steel products and ranks 20th among the worlds largest steel producers

US steel service center reduce inventories in March as shipments dip

USs Metals Service Institute in a statement said that inventories of steel products at US metals service centers fell again in March as shipments of steel products in March fell by almost 10% YoY as compared with the March 2006 shipment.

US inventories of steel products fell to about 14.8 million tons by the end of March down from about 15.8 million tons in February and 9.9% above inventory levels at the end of March 2006. At current shipping rates, steel on hand represents a 3.1 month supply, down from 3.7 months in February.

Steel product shipments, when compared to year earlier volume, fell for the seventh consecutive month, to nearly 4.8 million tons. For the year to date, shipments of 13.7 million tons are down 6.6% from the end of the Q1 in 2006.

Inventories of steel products at Canadian metals service centers rose slightly to 1.24 million tons or 18% more than at the end of March 2006. At current shipping rates, this represented a 3.6 month supply, the lowest level since June 2006. Shipments of 341,900 tons were 7.5% lower than shipments in March 2006, and year to date shipments of 985,600 tons are down 5.8% from the same period last year.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the U.S., Canada, Mexico, and elsewhere in the world. Its Metals Activity Report is based on data from metals service centers in the US and Canada and is produced by the Metals Service Center Institute and a third party econometrics and strategy firm, McCoy, Scott & Co. MSCI tracks the relationships between many external economic variables and MAR shipment levels on a regular basis.

IOC and USW reach tentative deal to end strike

CBC News reported that a tentative deal has been reached to resolve a strike that idled the Iron Ore Company of Canada mine in Labrador City. As per report, IOC and the United Steelworkers hammered out the deal over the weekend.

IOC in a statement said "The 5 year pact includes base wage increases in each year, increases in pensions, medical and travel benefits and a substantial signing bonus. The IOC statement said the Steelworkers union is organizing a ratification vote.

Mr Terence F. Bowles president of IOC said "We are hopeful that our employees will consider this package very seriously and ratify it so that we all can get back to work. Mr Bowles hopes that the agreement will provide labor stability over the next 5 years.

The union had sought a deal for better benefits and also wanted to improve seniority rights for its members. The union had also said it is concerned about the company's desire to contract out services.

A 2004 strike over wages and benefits lasted 10 weeks.

Chinese coke producers form association for pricing power

It is reported that 212 Chinese coke producers from major producing regions like Shanxi, Hebei, Shandong and Shaanxi have set up an association recently with an attempt to balance supply and demand and gain bigger pricing power. The price hike is on top of the agenda for the association as environmental management fee has pushed up production cost significantly.

Mr Zhang Gangfeng secretary general of Shanxi Coke Industry Association said that "The association would hammer out a detailed scheme for price rise in the range of CNY 100 per tonne to CNY 150 per tonne." He said that China is considering raising the duty on its coke exports from current 5% to 20%. However, higher duty may fail to deter China's booming coke export."

Mr Huang Jingan GD of semi governmental advisory organization China Coking Industry Association told Interfax "The current situation is abnormal, with one third of enterprises in the coking industry losing money. Production costs within the industry are being pushed up by price hikes in coal, power and transportation, while profits are being squeezed due to overcapacity and low sale prices. In my opinion, coke prices should be raised until the average profit rate for domestic coke companies reaches at least 5%.

Mr Hua Zugui chairman of China Coal & Coke Holdings Limited is upbeat about coke price increase of 5 to 10% this year despite the export tax. He noted that global demand for Chinese coke would remain healthy at a price below USD 250 per ton. Mr Gangfeng said that "Our first priority is to rein in overcapacity, to persuade the producers to make concerted efforts in curbing coke output and adjusting the price. Shanxi has produced 100 million tons of coke last year, compared with a staggering capacity of 150 million tons."

China's coke production jumped up by 17.1% YoY to 297.68 million tonnes in 2006. Five provinces, which include Shanxi, Hebei, Shandong, Henan and Liaoning yielded 171.88 million tonnes accounting for 61.1% of the country's total. China's own coke consumption hit 276 million tonnes in 2006 up by 17%. However, investment in fixed assets in the coking industry was down by 13.2% to CNY 30.91 billion (USD 3.999 billion) in 2006 due to the implementation of China government policies designed to curb overcapacity.

The CCIA predicts that China's coke consumption will climb by at least 15 million to 20 million tonne in 2007. Approximately 48 new coke furnaces will be commissioned in 2007 bringing an additional capacity of 25 million tonne to the country up from 2006's 313.37 million tonnes. By the end of 2008, 25 million tons of additional coking capacity is expected to be added. China eliminated 15 million tonnes of out of date coke production capacity in 2006.

(Sourced from MySteel.net)

Zinifex and Umicore to combine zinc business as Nyrstar

Australia's Zinifex announced that it has signed a 60:40 binding business combination and shareholders' agreement with Belgium's Umicore to merge their respective zinc smelting and alloying businesses. According to the statement, the combined business is to be called Nyrstar and would be one of the world's leading producers of zinc metal with operations on 4 continents producing about 1.2 million tonnes per year of zinc and zinc alloys and employing 4,500 people. Nyrstar would come into existence in September 2007 subject to Zinifex shareholder approval which will be sought in July 2007 and the satisfaction of certain other conditions precedent.

Zinifex said that Umicore and Zinifex intend for Nyrstar to operate as an independent entity from its inception with its own board of directors and executive committee. The jointly owned company would be incorporated in Belgium and have its head office in London.

Due to Thailand's regulations with regard to foreign ownership, Umicore has elected to limit the contribution to Nyrstar of its stake in Padaeng Industry to 24.9% and the parties will seek to transfer Umicore's remaining interest of 22% in Padaeng Industry to Nyrstar prior to its formation, in line with the regulatory processes in Thailand. Padaeng Industry's core products are special high grade zinc metal and value added zinc alloys.

Mr Peter Mansell chairman of Zinifex also announced that with the decision to combine Zinifex's smelting assets with those of Umicore, Mr Greig Gailey would step down as Zinifex's CEO at a date to be agreed later in 2007. Mr Mansell said that "Greig leaves Zinifex well placed for the next stage of its journey, with a strong balance sheet, an imminent infusion of cash from the planned Nyrstar IPO and a rapidly expanding pipeline of exploration and development opportunities on which to build."

Hyundai Steel's Q1 earnings surge by 36% YoY

South Korea's 2nd largest steelmaker Hyundai Steel Co announced that its Q1 earnings surged on increased exports of steel products to overseas markets. Hyundai Steel said that its net income amounted to KRW 102 billion (USD 110 million) in the January to March 2007 up by 36.4% YoY from a year earlier while its sales climbed up by 38.5% YoY KRW 1.66 trillion and operating income shot up by 59.1% YoY to KRW 155 billion.

Hyundai Steel in a statement said that "Despite sluggish demand for steel products in the local market, exports of steel products to Europe and other overseas market remained bullish."

Hyundai Steel is the steelmaking arm of Hyundai Motor Group, which owns the country's 2 largest carmakers Hyundai Motor Co and KIA Motors Corp. It now only equipped with electric furnaces, produces 3.8 million tonnes of hot coils with iron scrap and took over the facility from now defunct Hanbo Iron & Steel Co in 2004. Hyundai Steel plans to spend a total of KRW 5.24 trillion won in building an integrated steel mill in Dangjin about 123 kilometers southwest of Seoul and once its construction is completed by 2011, Hyundai Steel will have an annual output capacity of 8 million tons.

The company said that its sales, which climbed up by 8.5% to KRW 5.48 trillion in 2006, is expected to reach KRW 9.4 trillion when the steel mill goes into full operation in 2012.

Estar buys Czech steel dealer Femax

Russian steel company Estar announced that it has bought 100% in Czech steel products dealer Femax without disclosing the price of the transaction.

As per report the entry of the strategic investor is to help expand the company's offer and strengthen its position in the Czech Republic as well as abroad.

Femax was set up by entrepreneurs Mr Ivo Lesak, Mr Jan Halla and Mr Petr Bachorec in the 1990 and now its annual sales is around CZK 2 billion. It had 132 employees in 2006.

Earlier Swedish firm Broederna Edstrand Group had tried to gain the company and antitrust office UOHS has approved the deal at the end of last year but in the end the transaction did not materialize.

Imsa confirms merger talks with Ternium

BNamericas reported that Mexican steelmaker Grupo Imsa has informed the Mexico City bourse that it is discussing a possible merger with Latin American steel group Ternium. Imsa in a statement to the bourse said that "The talks with Ternium have progressed considerably, but it is impossible to be certain that they will lead to a definitive agreement. But no timeframe for a possible deal was disclosed

Imsa also said that other companies in the industry, without specifying which ones, have shown interest in possible strategic alliances or the acquisition or sale of assets.

Grupo Imsa is made up of the company's steel division, Grupo Acero, that produces hot and cold rolled steel plus galvanized flat steel, and Verzatec, that groups the company's aluminum and plastics businesses.

Ternium, part of Argentine-Italian group Techint, is comprised of Mexican Hylsa, Argentine Siderar and Venezuelan Sidor.

Chinas construction steel market expected with healthy prospect

Chinas construction steel market has presented to be relatively stable after the spring festival break amid seasonally weak consumption and much drifting with export rebate cut prospect. Mysteel analyst forecast that the market is projected to go lucid as weather clears up.

Judging from fixed asset investment, demand for construction steel will have big potential. There is still strong momentum for FAI of the whole society shown by latest statistics of major cities, despite the central bank's repeated efforts to raise deposit reserve ratio and interest rate; the reality is, for benefit, demand reasons and lingered surplus in fluidity, the FAI is likely to rebound in days to come, thus driving up demand for construction steel. For instance, growth in real estate investment is almost to afford a steady trend for the construction steel market.

As for supply, construction steels growth proves relatively low this year, mainly, as investment in steel sector has focused on sheet & plate and the deep processing segments rather than long products and blast furnace construction in recent years, small BFs and converters are gradually forced out, tight billet & slab supply curbs release of construction steel capacity while sound export eats a fraction of domestic resources. In January to February 2007, China exported 980,000 tonnes of rebar, a higher percentage of 7.14% of output than last year's 4.5%. Export of rebar is projected to strengthen despite the rebate cut and the Middle East seems to be first choice for shipment.

From above analysis, Mysteel analyst believes rebar supply is not to affect the market at present; suppose investment revives in days ahead, especially when the projects start up in the Northeast, Chinese supply of construction steel may pose a big shortage. The present price is said at a mid position level looking back to years ago. As the domestic and global economy runs in a best year and all resource intensive goods see rising prices construction steel is believed not to swerve its upward trend in a period.

For the price gap with sheet & plate, it's trusted the market itself will revise this, elevate construction steel price and press down the other given huge investment poured. In general, construction steel will excel sheet/plate in future operation and keep healthy posture.

(Sourced from MySteel.net)

Arch Coals Q1 profit falls by 47% YoY

Arch Coal Inc posted a better than expected Q1 profit despite a drop in coal prices that squeezed the mining company's margins. Arch earned USD 28.7 million after the payment of preferred dividends in the period ending March 31st as compared to earnings of USD 60.6 million for the Q1 of 2006. Its coal sales fell by 10% to USD 571.3 million from USD 634.6 million a year earlier.

Arch Coal cited price declines and increases in operating costs for the earnings slide. Average price realization of coal fell by 68 cents per ton, reflecting weaker conditions in US coal markets from the year ago period, while operating cost rose by 86 cents per ton. Arch said the increase in operating cost per ton was a result of its decision to reduce production volume targets, weather-related shipment challenges during the quarter, and higher depreciation, depletion and amortization expense.

Mr Steven F Leer chairman & CEO of Arch said that "Market conditions were considerably less favorable in the first quarter of 2007 than in the year ago period, prompting Arch to reduce production volume targets at the end of last year. Despite these conditions, we are pleased with our operating results. Moreover, we believe Arch is particularly well positioned to capitalize on improving market fundamentals."

Arch stressed that the market is rebounding and the company is poised to benefit from production cuts that have helped manage coal supplies. The company said it believes market fundaments for U.S. coal are improving as the peak summer demand period nears.

Arch Coal operates the Black Thunder and Coal Creek mines in northeast Wyoming. It is one of the nation's largest coal producers, supplying fuel for about 6% of the electricity generated in the US. Arch projects total sales volume of 130 million to 135 million tons in 2007.

Outokumpu Technology changes its name to Outotec

Finnish metals technology specialist Outokumpu Technology Oyj announced that it will change its name to Outotec Oyj on April 24th 2007.

Mr Tapani Jvinen President & CEO of Outokumpu Technology said that "Outotec will be the name continuing our decades-long history as a provider of leading-edge technologies for the mining and metals industries and uniting all our global businesses. It also provides us a platform for further growth. Outotec will be representing innovativeness, reliability, and collaborative spirit with customers, which are our current brand values. We will further strengthen our image as a supplier of clean and sustainable technologies."

Chongqing Iron & Steels 2006 net up by 10% YoY

Hong Kong listed Chinese steelmaker Chongqing Iron & Steel announced that its annual net profit has increased by 10% last year as cost controls and new products helped offset a weakening steel products market.

According to Hong Kong accounting standards, Chongqing has posted net income of CNY 254 million (HKD 257.17 million) for the year to December 31st 2006 up by 10.1% YoY and its turnover was increased by 8.65% to CNY 9.62 billion while gross profit leapt 19.4% to CNY 869.4 million. Chongqings profit was dragged down by some costs such as selling and marketing expenditure, which jumped up by 30.2% YoY to CNY 195.8 million while finance costs surged 39.3% YoY to CNY 184 million.

Chongqing produced 3.04 million tonnes of steel and 2.84 million tonnes of steel products last year representing increase of 19.8% YoY and 19.6% YoY respectively. Chongqing said that the average price of all its steel products fell by 9.97% last year following a reduction in steel price in the second half of 2005.

Mr Luo Fuqing chairman of Chongqing Iron & Steel said that profitability was hit by a 19% rise in the price of imported iron ore which pushed up costs of steel products, as well as a continuing lingering downturn in the market. Mr Luo added that "However, due to the lingering domestic steel oversupply and high prices of iron ore, coal, electricity and natural gas, the company is still facing the challenge of shrinking profitability."

Chongqing plans to produce 3.2 million tonnes of steel and 3.02 million tonnes of steel products at an increase of 5.25% and 6.49% respectively in 2007 as compared with 2006. It also plans to increase production of coking coal and pig iron by 4.7% YoY to a combined total of 4.26 million tonnes.

South African Palabora Mining studying steel JV in Mozambique

South Africa Palabora Mining announced that it could build a new plant at Maputo in a JV with the Mozambican government.

Mr Charles Asubonten financial director of Palabora said that a feasibility viability study on the Maputo steelworks includes enlargement of the capitals port and the building of a pipe to carry magnetite a type of iron ore from South Africa to the Mozambican capital.

Palabora is owned by Anglo American and Rio Tinto and its seeking to boost its magnetite production further after a 27% jump in output in 2006. Palabora produces magnetite as a byproduct of its copper mining activities. Palaboras magnetite exports increased by 30% in 2006 and are expected to show similar growth during 2007. The companys mine has estimated magnetite reserves of between 240 million and 270 million tonnes.

In the late 1990s, Enron of the United States, in association with South Africas IDC, planned a similar steelmaking venture to produce 4 million tons of steel per year using Palaboras magnetite and gas from the Pande fields operated by Sasol of South Africa. But this project collapsed after the bankruptcy of Enron.

Spoornet to match coal movement for RBCT expansion

Mining Weekly reported that South African state owned Transnet defended its rail freight subsidiary, Spoornet, after media reports last week potentially cast doubt on its ability to fulfill its critical role in South Africas economy. Spoornet said on April 18th 2007 that it would not likely be able to rail enough coal to fill the Richards Bay Coal Terminals expanded capacity of 91 million tons a year, when its 19 million tons a year growth project comes on stream in 2009.

Mr John Dludlu GM communication of Transnet in an emailed statement said that Spoornet had been in talks with the coal mine industry since 2006 on its capital expansion program at RBCT and the rail utility anticipated matching its rail capacity expansion to coal export demand. Mr John Dludlu said Expenditure of this magnitude requires binding commitments from our customers, which are still keenly awaited, and will probably be finalized after June 2007, when RBCT announces the additional mining companies that will have an uptake of coal to be railed to the port. All studies related to capacity up to 92 million tons a year have been completed by us.

He also said that Spoornet was not the only one to blame for the RBCT not having exported its nameplate capacity in 2006. Mr Dludlu detailed that the coal mining industry had provided Spoornet a shortage of coal to rail, owing to weather related challenges, which led to the rail utility having to cancel some train services because of a non availability of product. He also said that adverse weather conditions impacted on the coal terminals ability to load vessels and discharge rail wagons and that the terminal also suffered from equipment breakdown.

Spoornet plans to spend ZAR 4.9 billion on the coal corridor, including locomotives, wagons and infrastructure, and had already ordered 110 electric locomotives for the coal line, which would be delivered next year.

Teck Cominco Q1 earnings fall by 19% YoY due to pricing adjustments

Canadian Teck Cominco reported that its Q1 net profits fell to USD 360 million down by 19% YoY as compared to USD 448 million in the first quarter of 2006. Teck Cominco said that it is due primarily to pricing adjustments and a one time non cash charge.

Teck Comincos revenue rose slightly to USD 1.3 billion from USD 1.27 billion but it took a variety of charges that affected the bottom line.

The company took a non cash mark to market loss of USD 30 million related to the sale of the Cajamarquilla zinc refinery in Lima in Peru in 2004 and without that charge, Teck Cominco's net earnings from continuing operations were USD 390 million after taking USD 53 million in pricing adjustments on prior quarter sales.

Kuzbassrazrezugol to spend RUB 6 billion in investments

Russian coal major Kuzbassrazrezugol announced that it intends to increase investments in 2007 by 30.4% YoY to RUB 6 billion from RUB 4.6 billion in 2006 to increase production.

As per report Kuzbassrazrezugol is planning to invest RUB 3.2 billion in the modernization and purchase of new equipment. Into the railway development 2.2 billion are to be invested. Then, the building of the new enrichment plant Koksovaya at Bachatsky coal pit will be launched. The project to build the new terminal at the western coast of Kolsky Bay near Murmansk together with Siberian Business Union will be prolonged.

Kuzbassrazrezugol is one of the largest coal miners in Kemerov Region of Russia. Its output in 2006 increased by 2.6% YoY to 41.36 million tonnes from 40.3 million tonnes in 2005. It came under the control of UGMK Holding in September 2006.

AACI to invest in its third coal mine in Shanxi

INTERFAX-CHINA reported that Asian American Coal Inc, an America funded coal operator, is in negotiations to invest in its third coal mine project in Shanxi Province since its entry to China.

Mr Michael C Cosgrove CEO of AACI at Coaltrans China 2007 in Beijing said that So far AACI has invested USD 180 million in the coal sector since it tapped on Chinese market and that a large portion of which was exchanged for a 56% and a 45% share respectively held by Daning Coal Mine and Gaohe Coal Mine in Shanxi Province.

Daning Coal Mine was put into production in August 2006 with a total output of 2 million tonnes. The expected quantity during 2007 and 2008 year will rise to 3.2 million tonnes and 4 million tonnes respectively. AACI plans to achieve a future objective of 6 million tonnes annually gradually growing to 8 million tonnes. Gaohe Mine Coal, jointly developed with Shanxi Luan Coal Co Ltd, is to be completed during the second half of year 2009 with an estimated output of 6 million tonnes.

Evan Energy Co, Resource Capital Fund II LP and Banpu Co Ltd are its main shareholders.

Tsingshan Group to install SS rod outlet at Qiangtian

It is reported that Tsingshan Holding Group Shanghai International Trading Company Ltd of Shanghai has awarded Morgan Construction Company a contract for a rod outlet to be added to an existing bar mill to add stainless steel rods to its expanding product list for new markets. Engineering is now underway, with the equipment scheduled to be supplied in the fourth quarter of 2007.

The new outlet will be installed at Tsingshans Zhejing Ruipu Machinery Co Ltds facility at Qiangtian City in Zhejiang Province. The rod outlet will produce 5.5mm to 16mm diameter stainless steel rod at a 100% mill rolling rate of 65 tonnes per hour. Guarantee speed will be 75 meters per second. Design speed will be 85 meters per second.

Morgans operations in both Worcester and Shanghai will manufacture the components, which will include a 10 stand Vee No Twist Mill, pinch roll, laying head, nozzle, trough assemblies and guides. The company is also responsible for the engineering design for all equipment within the rod outlet from the exit of the last main mill train stand to the reform station.