SAIL posts record results for 2006-07

Strong demand for steel, market driven product mix, higher value added special steel production and improved techno economic parameters helped Steel Authority of India Ltd to achieve a record turnover of INR 11,534 crore during the January to March quarter of 2006-07an increase of 14% YoY. During the quarter, SAIL achieved a profit before tax of INR 2,925 crore up by 133% YoY and profit after tax at INR 1,902 crore has also been up by 72% YoY.

SAIL achieved an all time high annual turnover of INR 39,189 crore and highest ever profit before tax of INR 9,423 crore during 2006-07. The company's audited financial results for 2006-07, showed a net profit of INR 6,202 crore up by 55% YoY. SAIL also achieved the distinction of becoming the first company in the metals sector to cross market capitalization of INR 50,000 crore.

Mr SK Roongta chairman of SAIL said "The results are a reflection of the inner strengths of SAIL and its workforce and we are determined to make optimum use of our resources. Together, SAIL is fully geared up to implement its modernization & expansion plans to meet the growing demand for steel in the country. We have inched closer to becoming a USD 10 billion company. This would be another first by a metals company in the domestic market.

Mr Roongta added that Certainly a good market and healthy steel prices, especially during the second half of year, has helped the company to improve its profitability. But, other parameters like a better product mix, improvement in techno economic parameters like lower energy consumption, higher capacity utilization and other cost cutting measures also helped the company to become more competitive.

SAILs performance highlights during 2006-07 include the following

1. Highest ever saleable steel production of 3.25 million tonnes during January to March 2007.
2. Annual production to a new peak of 12.6 million tonnes during 2006-07
3. Total sales of 11.9 million tonnes 2006-07 recorded a growth of 5% YoY.
4. During the year, about 0.525 million tonnes of additional finished steel were produced by enhancing overall capacity utilization to 114% of rated capacity for saleable steel as compared to 109% during 2005-06 and by improving operational efficiency.
5. The special steels plants of SAIL also recorded highest-ever saleable steel production of o.454 million tonnes, a growth of 6% over 2005-06.
6. This production performance was supported by the captive mines of SAIL meeting nearly 100% iron ore requirement of the company with production of more than 24 million tonnes of iron ore in 2006-07 an increase of 2.6% over 2005-06.
7. Generation by SAIL's captive power plants also increased by 5% during 2006-07.
8. Recorded substantially higher labor productivity of 200 tonnes per man per year
9. SAIL achieved lowest ever coke rate and energy consumption at 541 kilograms per tonne of hot metal and 7.16 GIGA calories per tonne of crude steel.
10. Blast furnace productivity also rose to 1.5 tonnes per cubic meter per day.
11. Annual sales of value added products also went up - pipes by 48% YoY, electrical steel sheets by 16% YoY, LPG sheets & coils by 93% YoY and boiler quality & high tensile plates by 61% YoY.
12. The company expanded its marketing network to cover 527 of the 603 districts in the country during 2006-07. So far SAIL has appointed 650 dealers in these districts. 16 new warehouses and 12 customer contact offices were also opened during the year to extend reach of SAIL's branded products for the benefit of small users.
13. A total of 6,588 employees were separated naturally/voluntarily from the company's service during 2006-07, bringing down SAIL's manpower further to a level of 132,973 as on March 31st 2007.
14. The year 2006-07 has been a landmark year for the company, with modernization & expansion schemes totaling INR 23,500 crore having been approved by the SAIL Board in a single year, mainly for ISP, Bokaro and Salem Steel Plants. The total value of projects already taken up for ordering/implementation has gone up to INR 38,000 crore.

Vietnam approves TATA Steels investment in steel complex

It is reported that Vietnam Steel Corporation has won government permission to work with TATA Steel on an investment of more than USD 3.5 billion in a steel complex in central Vietnam.

A statement on the government's web site, the Vietnamese government granted its approval last Friday for the unlisted Hanoi based VSC to sign a MoU on the investment in Ha Tinh steel complex.

This will be TATA Steels second major foray in Vietnam. TATA Steels subsidiary NatSteel Asia had announced in March agreement to buy two steel bar rolling plants for USD 41 million including assumed debt.

JSPL commissions 1 million tonne capacity plate mill

Jindal Steel & Power Ltd announced that its plate Mill, with an installed capacity of 1 million ton has been successfully commissioned in April 2007.

Mr Ratan Tata to head TATA Corus integration committee

Times News Network reported that TATA Steel has formed a 7 member integration committee to spearhead its union with Corus group and that Mr Ratan Tata chairman of the TATA group will head the committee with 3 members each from TATA Steel and Corus group.

Members of the integration committee from TATA Steel include Mr B Muthuraman MD, Mr T Mukherjee DMD steel and Mr Kaushik Chatterjee CFO. Corus group is represented in the committee by Mr Phillipe Varin CEO, Mr David Lloyd executive director finance and Mr Rauke Henstra division director strip products.

The strategic committees mandate is to determine future strategic priorities of the enlarged group and drive integration where there is a clear business benefit. A combination of top down and bottom up approach has been taken to achieve the objective. TATA Steel in a media presentation recently said that the integration team will report to program office, which in turn, will report to the Strategic & Integration Committee.

The verification and draft implementation plans would be ready between June and October 2007, while detailed synergy targets are to be included in business unit & site plans for second half of 2007 and annual plan for 2008-2010.

JSPLs 2006-07 earnings up by 22.7% YoY

Jindal Steel & Power Ltd has announced the following results for the quarter & year ended March 31st 2007:

Unaudited results for the quarter ended March 31st 2007

Jindal Steel & Power Ltd has posted a net profit of INR 2027.7 million for January to March 2007 period up by 34.58% YoY as compared to INR 1506.6 million for the same period last year while total income has recorded at INR 10740.5 million for January to March 2007 period up by 57.83% YoY as against INR 6804.8 million for the same period last year.

Audited results for the Year ended March 31st 2007

The company has posted a net profit of INR 7029.9 million for year ended March 31st 2007 up by 22.69% YoY as compared to INR 5729.4 million for the same period last year while total income has recorded at INR 35487.8 million for the year ended March 31st 2007 up by 36.97% YoY as against INR 26177.6 for the year ended March 31st 2006.

The Audited consolidated results for the Year ended March 31st 2007

Jindal Steel & Power Ltd has posted a net profit after tax & minority interest of INR 7059.5 million for the year ended March 31st 2007 up by 21.1% YoY as compared to INR 5829.3 million for the same period last year while total income has recorded at INR 35488 million for the year ended March 31st 2007 up by 35.57% YoY as against INR 26176.4 million for the year ended March 31st 2006.

RBCTs coal export to India increasing in 2007

It is reported that thermal coal exports to India at South Africas Richards Bay Coal Terminal have risen sharply this year as coal importers shun congested Australian ports.

RBCTs coal exports to India rose by 14.16% YoY in February 2007 from a year earlier and in March 2007, 26.7% more coal was shipped to India than in March 2006. In April exports to this region were up 12.4% YoY. The monthly increases in exports to India in 2006 ranged from 0.85% to 5.35%.

Mr Kuseni Dlamini the executive chairman of RBCT said last week that "There has been a significant increase in exports to India. Buyers from Japan and South Korea are also looking for a reliable supply."

Earlier this month 70 ships were waiting outside the port of Newcastle, a major Australian coal export terminal. Congestion at this port has been a problem since the end of last year when maintenance on rail tracks began. Newcastle, one of the world's largest coal export ports, shipped 80 million tons of coal between July 2005 and June last year.

RBCT, which has a capacity of 72 million tons a year, exported 66.5 million tonnes in 2006 as compared with a record 69.2 million tonne is 2005.

Bhushan Steel Limited to raise funds for funding expansions

Times News Network reported that Bhushan Steel Limited is raising up to USD 100 million through external commercial borrowings to partly replace its high cost rupee debts and has also tied up funds for its expansion project in Orissa and for setting up plant in West Bengal. The report adds that several financial institutions, including State Bank of India, Barclays and Deutsche Bank are in talks with the company to raise the funds and senior Bhushan Steel Limited officials are conducting road shows in Hong Kong and Singapore to raise the funds.

The report cites Mr Nittin Johari CFO of Bhushan Steel Limited as saying that We want to bring down interest costs. Apart from external commercial borrowings, we are looking at other instruments. But it is too early to give details.

Bhushan Steel Limited is at present building a 2.2 million tonne steel project in Orissa at a cost of INR 5,000 crore. The first phase of the project, with a capacity of 500,000 tonnes, has been completed and the whole project should be completed by 2009. In January 2007, the company announced that it is further expanding its Dhenkanal based facility to 6 million tonnes. Bhushan Steel Limited also recently announced plans to set up a 2 million tonne steel plant and a 1,000 MW power plant in West Bengal besides building a 500,000 tonne auto grade cold rolling and galvanizing plant. The total investment in the two projects is estimated to be about INR 8,800 crore.

NTPC plans wind power plants

It is reported NTPC Ltd is planning a foray into wind power with an investment of more than INR 1,200 crore to diversify into the renewable energy market. Mr T Sankaralingam CMD of NTPC said that "We are looking at wind energy projects with a total capacity of 200MW to 250 MW. This would require an investment of over INR 1,200 crore."

Mr Sankaralingam said the company was scouting for sites and the entire capacity could be set up in a single location and would be working with Asian Development Bank and may also rope in a private partner for the new venture. He added that "We may set up a joint venture. We are in the process of working out details regarding the equity structure."

NTPC, which has an installed capacity of more than 26,000 MW entirely on coal or gas, has been looking to diversify into other energy sources and is already working on hydroelectric projects, besides a few small biomass plants.

India is the world's 4th largest wind energy producer with an installed capacity of more than 7,000 MW, behind only Germany, Spain and the United States.

Update on Trans Asian Railway Network

After Indias decision to join the Trans Asian railway network, which envisages connecting a rail network of 81,000 kilometers across Asia and Eastern Europe, it will have to spend about INR 2,941 crore to construct a 350 kilometer link from Jiribam in Manipur to Tamu in Myanmar to complete the missing segment. The Myanmar government will also share part of the project cost.

Union cabinet has already given its approval for Trans Asian railway network and the work for construction of the rail link is likely to be undertaken by the North East Frontier Railway. It is reported that railway ministry has already sanctioned construction of 97 kilometers new rail link between Jiribam and Tupul at a cost of INR 727.5 crore as a part of the project.

As on date, 18 countries, including Armenia, Azerbaijan, Cambodia, China, Indonesia, Iran, Kazakhstan, Laos, Mongolia, Nepal, South Korea, Russia, Sri Lanka, Tajikistan, Thailand, Turkey, Uzbekistan and Vietnam have already signed the agreement. Trans Asian railway network envisages four major corridors
1. 32,500 kilometers of rail link across China, Mongolia, the Russian Federation and the Korean Peninsula.
2. 12,600 kilometers of lines in Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Singapore, Thailand and Vietnam.
3. 22,600 kilometers in Bangladesh, India, Islamic Republic of Iran, Nepal, Pakistan, Sri Lanka and Turkey.
4. 13,200 kilometers in Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan.

PFC to part und DVCs Raghunathpur power plant

ET reported that Power Finance Corporation will part fund Damodar Valley Corporations INR 4,000 crore Greenfield thermal power project at Raghunathpur in Purulia district of West Bengal. DVC will set up 2x500MW power station as part of its expansion program during the 11th Plan and has recently received in principle approval from the ministry of environment & forests.

Mr AK Burman chairman of DVC told ET that The plant will be funded on a 70:30 debt equity ratio wherein, PFC has decided to extend a INR 2,800 crore loan. The tenure of loan assistance is 19 years and we will start repayment 6 months after the proposed plant is commissioned.

Mr Burman added that A portion of the generation will be supplied to Balaji Steel as its plant is coming next to our unit. We are expediting the project as we have additional commitments to supply power. The balance will be fed into the grid. We have had all the necessary meeting and public hearings for the Raghunathpur plant. This is being built over barren land which will not have many environmental issues. In principle approval has come through and we expect MoEFs formal clearance shortly.

DVC has invited international competitive bids for the power plant and has also urged the centre to extend interest subsidy on loans taken for projects during the 11th Plan under the accelerated generation and supply program which aims to fund projects which yield faster benefits, higher returns with low investment and to the economy of operations of the power sector.

Coal ministry rules out single window system for coal projects

PTI reported that Indian coal ministry has ruled out a single window clearance system for approval of coal projects saying that it is not feasible as various statutory and regulatory approvals are needed to be obtained for the same. A senior coal ministry official told PTI that "Setting up a single window clearance system for approval of coal projects is not feasible as there are various statutory and regulatory approvals that have to be obtained."

He added that to facilitate early clearances of the projects regular interactions at the highest level were on between the state run coal companies and the states concerned.

Earlier, Parliamentary Standing Committee on Coal in its latest report has criticized the Coal Ministry for its inadequate monitoring of implementation of various projects and consequently projects were getting delayed. The parliamentary committee said that "The Committee are convinced that the projects are not being managed on sound professional lines and the ministry of coal has failed miserably in its duty to act as a vigilant facilitator in overcoming the root cause of delays. It, therefore, recommended that the ministry should explore the possibility of a single window clearance system."

Indian Railways to go for bio diesel

It is reported that Indian Railways is all set to up 4 esterification plants for producing bio diesel and has already taken up plantation of jatropha on available spare land. It is also considering a move to float tenders for buying bio diesel in bulk to use blended fuel in locomotives.

Mr R Velu minister of state for railways while replying to a question in the Lok Sabha said that "To assess the availability of bio diesel, an expression of interest was called in February this year and about 25 parties participated in the meeting." He added that the cost effectiveness of blended bio diesel can only be ascertained after the receipt of offers.

Esterification is the process to take out jatropha extracts for blending with diesel.

Global crude steel production in April up by 7.6% YOY

International Iron and Steel Institute reported that the total crude steel production in April 2007 for the 67 countries was 119.3 million tonnes up by 7.6% YoY as compared to April 2006. The global crude steel production in January to April 2007 was 428.225 million tonne up by 9.8% YoY.

The growth in crude steel production during April 2007 among regions was again led by Asia which registered growth of 12.7%, South America, European Union (27) and CIS (6) also registered YoY positive growth of 9.3%, 7.8% and 4.8% respectively in April 2007. Other regions witnessed negative growth.

In million tonnes
Source IISI

Among the top 20 nations, China as usual stood first with 40.318 million tonne production of crude steel registering tremendous growth of 16.5% YoY as compared to April 2006.

In million tonnes
Source IISI

ISSF forecasts SS production growth in 2007 at 5.1%

The International Stainless Steel Forum has forecasts that global stainless crude steel production will reach 29.8 million tonnes in 2007 representing a rise of 5.1 % YoY on 2006 production. Actual global stainless steel production in 2006 increased by 16.7 % YoY to 28.4 million tonnes compared to 2005 which more than compensated for the downturn in production of 1.1% YoY during 2005.

Stainless and heat resisting crude steel production forecast was released during ISSFs Annual Conference at Kyoto in Japan as under

In 000 tonnes
Source International Stainless Steel Forum

The growth rate of 5.1%, almost on the long term average, takes into account the very high level of supply which occurred in many countries during 2006 and caused a significant build up of stainless steel stock at service centers and fabricators.

According to ISSF survey, Asia is by the far largest stainless steel producing area in the world. During 2006 Asia again showed the strongest increased stainless steel production by almost 21% YoY and ISSF expects further high growth of approximately 12% in 2007 to almost 16.9 million tonnes. In 2006, all Asian countries except South Korea contributed to this growth and in 2007, China will be the driving force followed by India. China will continue to expand its stainless steel melting activities with significant new capacities in the start up phase. China became the worlds leading stainless steel producer in 2006.

While, the productions in Western Europe & Africa is expected to decline by 2.7% YoY to 9.7 million tonnes in 2007 caused by stock corrections and stronger material inflow from Asia. The region was hit by voluntary production losses in the second half of 2005. This was more than compensated for in 2006 when production increased by 13.4% YoY to 10 million tonnes.

For the Americas region, ISSF expects a decrease in stainless steel production in 2007 of 3.4% YoY to 2.9 million tonnes. In 2006 the region increased stainless crude steel production by nearly 10% YoY to almost 3 million tonnes. Central and Eastern Europe will see a continued rise in stainless steel production.

At the current time ISSF does not see a risk for a drop in stainless steel demand from the stainless steel fabricating industries. ISSF will continue working for creating better awareness of properties and uses of this material. It is the role of ISSF to promote stainless steel and ISSF itself as a provider of objective information.

BlueScope to recommence Indonesian expansion

BlueScope Steel today announced that it will recommence the expansion of its operations in Indonesia with the investment of AUD 101 million to complete construction of a second metallic coating line with in line painting capability at its Cilegon operation located 100 kilometer west of Jakarta. The original construction of the second line in Indonesia was postponed last year in order to focus resources on projects already under development in Asia. With their completion, and the strong market demand for light gauge coil, BlueScope Steel has now approved the recommencement of the Indonesian expansion project. The new line is expected to be operational by end CY 2009.

The capital cost of the project is approximately AUD 101 million which is in addition to the AUD 12 million spent to date in the initial construction stage. The capital phasing of the project is as follows:

In million AUD

The new coating line will have a maximum bare metal coating capacity of 170,000 tonnes per annum. The investment will allow the existing metallic coating line to consistently process 0.4mm to 1mm coil. The new line will be dedicated to producing BlueScope Steel's thin gauge coil used primarily in residential construction. Overall the new line will provide greater manufacturing efficiencies and economies of scale in the growing Indonesian market.

Mr Kirby Adams BlueScope Steel's Managing Director and CEO said: "We are delighted to recommence this investment given the continued strength of the Indonesian market and the high regard for BlueScope Steel product. Indonesia, the world's fourth most populous country, is a key market in our growing Asian business. This project represents a strong endorsement from our Board of BlueScope Steel's Asian growth strategy."

Based on the expected product mix off the new metal coating line, the total additional metal coated output will be approximately 130,000 tonnes per annum and the additional painted output will be approximately 100,000 tonnes per annum. The summary of the increased output is as follows:

Approximately 80% of the MCL2 output will be in line painted

BlueScope Steel first Indonesian entered the market with a building solutions business near Jakarta 34 years ago. PT BlueScope Steel Indonesia is the Indonesias only local manufacturer of zinc/aluminum metallic coated and pre painted steel. It also has building solutions manufacturing facilities at Cilegon, Cibitung, Medan and Surabaya.

ThyssenKrupp buys stake in Polish Suret and Czech Tesyco

ThyssenKrupp Services AG is re expanding its industrial services business in Central and Eastern Europe as part of its growth strategy.

ThyssenKrupp Industrieservice Holding acquired an 80% stake in Suret Sp zoo, a services provider for the automotive industry and located at Debica in Poland. Suret is founded in 1992 and is chiefly active in the high growth market of in plant logistics where it has established itself as a highly capable partner for businesses intending to outsource. With around 460 employees at the six locations of Debica, Krosno, Gorzyce, Sandomierz, Tychy and Ostr Wielkopolski Suret generates annual sales of EUR 7.5 million. The takeover is still subject to approval by the cartel authorities.

In a parallel move, ThyssenKrupp Services has acquired a 51% interest in the Tesyco Group AS headquartered at Nymburk in Czech Republic. T Tesyco was founded in 1991 and offers its customers such services as the planning installation and maintenance of automation and instrumentation equipment for the production sector. For a number of years now, Tesyco and its staff of 50 have been successfully pushing the maintenance and services side of the business chiefly for the automotive industry. This takeover will enable the existing business operations on behalf of the local auto industry to be further extended. Both parties agreed not to disclose the price paid.

Mr Stefan Klebert ThyssenKrupp Services executive board member said that Both companies represent outstanding additions to our successful in production services lineup. Suret is a strong team member to help enact our growth strategy for Poland. With Tesyco we have had ties since 2003 through our TTI JV and now we intend to expand our existing lineup.

Nickel may rise further by 20% - Credit Suisse

Credit Suisse Group in a recently released report said that the price for nickel may increase by 20% as a shortage of smelters to process ore into metal constrains supply.

Mr Jeremy Gray and Ms Eily Ong Credit Suisse said that nickel may reach USD 65,000 per tonnes in the near term as smelting output may grow at 4.6% in 2007 as compared with demand growth of as high as 5%, should stainless steelmakers rebuild inventories and global economic growth increase.

Mr Gray and Ms Ong wrote in the report said that "Prices will remain strong over the next two years given the lack of supply growth until 2009 at the earliest. The current profile of new smelters is unlikely to be enough to feed ongoing strong demand from the stainless steel industry in the next two years."

As per report, nickel for immediate delivery rose to a record USD 54,050 per tonnes in London on May 15th 2007.

OneSteel signs iron ore agreement with Shanxi Haixin

OneSteel Limited has announced the signing of another 10 year export sales agreement for supply of iron ore to Shanxi Haixin Iron & Steel Group Co Ltd. The contract will cover the supply of more than 6 million tonnes of iron ore over the term of the contract. The contract for supply is with Haixin's iron ore purchasing arm World Sino Internacional Limitada. As per report the agreement will commence on July 1st 2007 and is based on international benchmark pricing.

The sales agreement includes a freight component for mutually agreed forward periods and OneSteel will arrange and provide shipping. Exports will be made utilizing Whyalla's Cape size vessel capability which has now loaded three such vessels since commissioning in April this year.

Mr Geoff Plummer MD & CEO of OneSteel said that "The signing of this long term export iron ore contract consolidates OneSteel's position as a significant Australian exporter of iron ore. We welcome Haixin, a dynamic and well respected Chinese steel maker, as a valued long term customer. I would also like to thank our marketing agent BHP Billiton for its excellent guidance and support, and in particular, for introducing OneSteel to Haixin".

The sales agreement represents the second long term contract to be signed for the iron ore exports that have been made available through Project Magnet. OneSteel's Project Magnet, to commercialize its magnetite iron ore resources in South Australia's South Middleback Ranges, releases approximately 40 million tonnes of hematite lump and fine ore that is planned for sale over a 10 year period.

Mittal Steel Burns Harbor to upgrades continuous heat treating line

Arcelor Mittals Mittal Steel USA announced that it is further improving its position as the recognized market leader in cold rolled advanced high strength steel by upgrading the continuous heat treating line at its Burns Harbor facility.

The upgrade at the Burns Harbor line, combined with the company's #3CAL line at Indiana Harbor, will increase Arcelor Mittal's US production capacity of AHSS to almost 1 million tons per year. These lines will produce a full portfolio of Cold Rolled AHSS to meet growing demand for the company's sophisticated automotive OEM applications.

Mr Michael G Rippey president & CEO of Mittal Steel USA said that "We are excited about this significant investment and believe that it solidifies our position in this strategically important market. Adding capacity to support customer demand for AHSS further reinforces our commitment as the leading steel supplier to the North American auto manufacturers."

Mittal Steel USA is currently the largest North American supplier of AHSS and Ultra High Strength Steels through its #3 CAL line at its Indiana Harbor facility.

EBRD to part fund Chelyabinsk Pipes mini steel mill

Russian Chelyabinsk Pipe Rolling Plant and the European Bank for Reconstruction and Development have signed a EUR 205 million loan agreement. The loan is divided into two trenches of EUR 145 million and USD 80 million. Part of each loan is being syndicated to commercial banks. The tenor will be nine years for the portion of the EBRDs loan and seven years for the remaining portion and the syndicated loan.

The loan is primarily intended to finance construction of a new mini mill at Pervouralsk New Pipe Plant. The new complex will produce round steel billets with capacity of 950,000 tonnes per year. The launch of the mini mill is scheduled for late 2008. The total cost of the mini mill construction project is about EUR 300 million, part of which will be financed by EBRD and another part will be financed with the company's gaining.

The funds will also be used to restructure the Chelyabinsk Pipe Plants balance sheet to help it implement its investment program and to improve energy efficiency at both pipe plants in Chelyabinsk and Pervouralsk.

Mr Varel Freeman VP of EBRD said that "The European Bank for Reconstruction and Development welcomes ChTPZ Group's commitment to invest into new high tech, energy efficient and environmentally friendly technologies.

Mr Vitaly Sadykov General Director of the ChTPZ Group said that "In house tube billets production is part of ChTPZ Group's strategy aimed at increasing the company's competitiveness, primarily in the fuel and energy industry by means of creating a highly effective modern seamless tube production facility, He said "Once the new complex is put into operation our dependence on outside suppliers of raw material will be significantly reduced, and this will allow us to build long-term relationships with the consumers."

ChTPZ Group consists of Chelyabinsk Pipe Plant OJSC, Pervouralsky Novotrubny Zavod OJSC, ChTPZ-Complex Pipe Systems a maintenance company, two metal trading companies MeTriS & TIRUS and ChTPZ-Meta, a company specializing in scrap metal collection and processing. Total turnover of the Group exceeds USD 2 billion. Arkley Capital Sl Luxembourg manages ChTPZ Groups assets.

China to set up national coal trading hub in Taiyuan

China Youth Daily reported that state council of China issued formal approval in mid May to building of China Taiyuan Coal Trade Center. The report added that the state council allows addling China before the name of the new trade center when registering for business license, showing national level identity of the scheduled project.

China Taiyuan Coal Trade Center will be built together with Shanxi International Conference Exhibition Center with CNY 1 billion investments to be plunged for phase one. The construction will be start this September and it will have multiple services for coal commodities trade, including coal and coke trading, settlement of accounts, contract guarantee, financial service, transportation and storage, logistics and delivery, information consultancy, conference and exhibition services etc. This center will have fixed trade market and modern e commerce and Network Bank systems for several of trade types, like spot trade, medium and forward trade and futures. It's planed a limited liability company will be set for operating the trade center, led by Shanxi Coal Transportation and Distribution General Company, and joined by a bundle of other big coal business related companies.

The coal center aims to realize 500 million tonnes coal and coke trade volume annually at the start and go public around 2009.

Mr Ouyang Yexin GM of Taiyuan coal trade market said setting up the new coal trade center will be the first step to unification of China's coal market, and China will have a bigger pricing power on the world key energy resources market by creating Chinese coal price.

Mr Zhang Genhu GM of Shanxi Coal Transportation and Distribution General Company said that "In future, the coal makers, users and trucks will all meet here. Our goal is to become a third or fourth largest market in the world, with CNY 80 million worth of trade every year, comparable to New York or Londons crude oil exchange market."

Chinese coal is made by more than 20,000 producers, but consumed mainly by four sectors, i.e. electric power, steel, construction material and chemical industry. And the new trade center will provide both sides an open platform for fair business. Besides, this it will help the railway department to better allocate transportation force and alleviate tight supply situation resulting from transportation bottleneck, which once was attributed to intentional resource stock building. The new trade center will form a Chinese coal price, hence increasing pricing power on the world market. China exports some 80 million tonnes coal annual, the third largest in the world. Its export volume occupies 57% of the worldwide trading.

(Sourced from Mysteel.net)

TMK announces IFRS results for 2006

Russia's largest steel pipe manufacturer OAO TMK producers announced its International Financial Reporting Standards audited consolidated results for the full year 2006. TMK, which accounts for 42% of Russia's steel pipe output, said its sales in the reporting period grew by 15.2% to USD 3.38 billion, gross profit climbed by 38.5% to USD 1.03 billion and earnings before interest, taxes, depreciation and amortization increased by 49.2% to USD 794 million.

The highlights of 2006 IFRS results are

Financials
1. Revenue grew by 15.2% to USD 3,384 million on robust demand for tubular products both in Russia and internationally.
2. Gross profit came in at USD 1,034 million, an increase of 38.5% compared to 2005
3. EBITDA up by 49.2% to USD 794 million as a result of a strong pricing environment and increasing operating efficiency

Sales Volumes
1. Total pipe sales volumes were nearly 3 million tonnes, including 1.93 million tonnes of seamless pipes
2. Seamless pipe sales volumes climbed by 1.8%, OCTG pipes, the highest margin products, grew by 15.7% to a total of 946 thousand tonnes
3. Welded pipe sales volume increased by 2.2%, boosted by growing demand for industrial welded pipes in Russia driven by the booming construction industry and infrastructure building.

Corporate developments:
1. In 2006, TMK established its presence in the European Union, through the 100% acquisition of Sinara Handel GmbH, which owns controlling stakes in the Romanian plants Artrom and Resita
2. TMK was assigned credit ratings by Standard & Poors and Moodys and successfully placed a USD 300 million Eurobond
3. Following the initial public offering, around 23% of TMK shares were listed on the London Stock Exchange (in the form of GDRs) and the Russian Trading System

Summary 2006 Results

(In million USD)

Al Tuwairqi & Wuxi sign MoU to set up seamless tube mill at Dammam

MESteel reported that Saudi Arabias Al Tuwairqi Group and Chinese Wuxi Seamless Oil Pipe Co have signed a MoU to set up a factory at the Dammam Industrial City II to manufacture seamless oil pipes with an annual production capacity of 500,000 tonnes.

The MoU was signed by Mr Hilal Al Tuwairqi chairman of the Al Tuwairqi group of companies and Mr Piao chairman of Wuxi Seamless Oil Pipe Co.

Mr Khaled Al Tuwairqi a board member of the group while speaking on the occasion said that the event signified the foundation of the upcoming joint projects with Chinese companies. Mr Khaled said that The project will contribute a lot for the growth of the national economy and create employment opportunities for the Saudi youth.

Established in 1999, the Sino foreign JV Wuxi Seamless Oil Pipes Co Ltd is an enterprise manufacturing seamless steel pipes for petroleum industry.

Bulk shipping rates start easing

Bloomberg reported the cost of shipping coal, iron ore and other dry bulk commodities fell from a record after congestion eased at Australia's Newcastle port.

According to the Baltic Exchange, the Baltic Dry Index fell by 0.6% to 6,650, the first decline in 23 days. The index was led lower by rates for Capesize and Panamax vessels, carriers for most of the world's iron ore and coal cargoes.

Mr Alex Harkess director of dry cargo chartering at shipbroker Clarkson Asia Pte Ltd in Singapore said that The market is still very firm there is still a lot of demand behind it. There's a bit of stock taking of positions.

Newcastle Port Corp said that bulk freight rates have risen 49% in 2007 on increasing demand for raw materials from China that contributed to port congestion in Australia as terminals became unable to handle the volume of goods sold for export. The queue of ships at Newcastle eased to 64 in the week ended May 14 from 70 in the week of April 23.

Illyich Steel wins tender to buy 38.14% stake in Komsomolske mine

Ukrainian Journal reported that the tender commission for the sale of a 38.14% stake in Komsomolske mine group has declared Illyich Steel Mill the winner of the tender.

The State Property Fund the stake was purchased for UAH 110.01 million while the starting price was UAH 108.674 million.

As earlier reported Illyich Steel and Balaklava mine group also participated in the tender.

Mechel plans to raise coal output to 25 million tonne by 2010

It is reported that Russian steel maker and coal miner Mechel plans to raise coal output to 25 million tonnes by 2010 from more than 17 million tonnes in 2006.

Mr Alexei Ivanushkin executive director at a conference organized by the Adam Smith Institute said that the increase would be achieved by expanding the companys current mines and building a new mine Yerunakovskaya in Russias main Kuzbass coal mining region. He added that about half of the coal would be coking coal used to make steel and half would be thermal coal.

Of about 17 million tonnes of coal produced by Mechel last year, coking coal accounted for 9.7 million tonnes and thermal coal 7.3 million tonnes.

Mitsui OSK inks 6th ore contract with Baosteel

Mitsui OSK Lines Ltd announced that it has signed a sixth long term transport contract with China's Baoshan Iron and Steel Co Ltd. MOL said in a statement that it would arrange shipment of iron ore from Western Australia to Shanghai for 25 years starting in June 2007. The contract involved a new 225,000 tonne ore carrier to be launched late 2011 or early 2012.

Mitusi OSK also said that it had 5 other long term iron ore contracts with Baosteel. They involved three 200,000 tonne carriers, which began service in January, March and April respectively. The others involved one 230,000 tonne vessel and a 300,000 tonne carrier both to set sail in early 2009.

MOL official said at present iron ore suppliers, including Rio Tinto Ltd and Billiton arranged transport for all Chinese mills but Baosteel and Shougang Iron and Steel Group.

Taigang to add 2100mm wide CR SS mill

Shanxi Province based Taigang Stainless Steel Co announced that it is planning to add a 2100mm wide stainless steel cold rolling line in June 2007.

The 2100mm wide cold rolling machine will produce 2000mm wide products, making Taigang the widest cold rolled stainless producer in China.

Having built a 2250mm hot rolling mill, it is thinking of a wide cold rolling machine to match. Taigang is also arranging to launch another 1625mm CR line.

(Sourced from MySteel.net)

Greif opens steel drum plant at Angarsk in Eastern Siberia

Greif Inc has recently opened its sixth large steel drum plant at Angarsk in Eastern Siberian region of Russia. The new plant is built according to Greif Business System and lean manufacturing principles.

The plant, with 36 employees is projected to produce 300,000 large steel drums in 2008.

Mr Michael J. Gasser chairman CEO and president of Greif said that "This is an important location not only for Greif but for our customers in the region being situated near our customers we can provide steel drums more cost effectively."

Greif is the world leader in industrial packaging products and services. The Company produces steel, plastic, fiber, corrugated and multiwall containers, protective packaging and containerboard, and provides blending and packaging services for a wide range of industries.

WISCO to develop iron ore mine in Henan Province

A WISCO official told Interfax that Wuhan Iron and Steel Corp have entered into a MoU with Xuji Group Corporation and Salim Van Co Ltd. to establish a joint venture for the development of an iron mine in the city of Xuchang in Henan Province.

Baoshans SS margins up due to increased output of low nickel grades

Baoshan Iron & Steel Co announced that it has improved stainless steel profitability this quarter by producing more nickel free products as raw material prices surged to a record.

Mr Wang Chengxue assistant to the president of Baoshan stainless steel unit said that We have significant improvement in profit margins for stainless steel this quarter as we just started to make more nickel free products while keeping existing production of normal grades.''

Baoshan's gross margin, the percentage of sales left after production costs, fell to 16.3% in the first quarter the lowest in a year, as the profitability of stainless steel declined. Producers are switching to stainless steel with higher chromium and manganese contents, or nickel free ferritic stainless steel.

BP and Rio to study clean power plant in Australia

Bloomberg reported that BP plc and Rio Tinto Group will start studying a potential AUD 2 billion (USD 1.65 billion) coal fired power plant in Western Australia that will capture and store carbon to reduce greenhouse gas emissions. The partners expect to make a final investment decision for the Western Australian project to be located in Kwinana in 2011 and start up would be 3 years later.

The 500 MW plant will be the first new project for Hydrogen Energy, a JV started by BP and Rio Tinto. Carbon from the plant, which will be Hydrogen Energys first coal based project, will be buried beneath the seabed.

BP and Rio Tinto on May 17 announced the formation of Weybridge, England based Hydrogen Energy, which will initially focus on converting fuels such as coal and petroleum coke into hydrogen to fuel gas turbines to generate electricity.

Averton to install new drives at Macsteels Jackson facility

Metal Producing & Process reported that the order for new mill drives at Macsteel's Jackson mini mill has gone to Avtron Manufacturing Inc. The new equipment will be installed during a summer shutdown in late June 2007.

Avtron said that it has been contracted to update the drives for the plant's billet caster with new ACCel 500 AC and to installed ADDvantage 32 advanced firing modules for six stands of the bar mill roughing section.

The advanced firing modules will be used to retrofit the mill's DC drives replacing only the electronic controls and one that saves thousand of dollars in capital expenditures. New shaft mounted Smartachs will be supplied too and the mill will enroll in Avtron's seven pillars of support program which includes round the clock phone & remote diagnostics services, and participation in Avtron's internet tier 3 back up service plan.