Kobe Steel & Chowgule JV to set up steel plant in Goa Report

Japanese Nikkei, without citing sources, reported that Kobe Steel Ltd plans to launch production of steel in India by 2009 via a JV.

Nikkei said that Kobe Steel is in talks with India's Chowgule Group to build a steel mill, which can make high grade steel from low-grade iron ore and cheap coal, in the southwestern state of Goa and that they are expected to reach a final agreement by this fall and begin construction by year end.

According to Nikkei, Kobe Steel is likely to invest some JPY 20 billion on the mill which will be able to produce 500,000 tonnes per year.

Bhushan Steel Limited inks MoU with Bowen Energy

Bowen Energy Limited announced that it has signed a MOU with Bhushan Steel Limited. The successful completion of the MOU will provide BWN with opportunities to capitalize on Bhushan Steels
1. Raw material needs
2. Commercial experience including its proposed participation on the BWN Board of Directors
3. Capacity to contribute to the Companys ongoing working capital and future development funding requirements

BWNs projects include several coking coal, thermal coal and uranium exploration licenses. The MOU aims to create a strategic partnership whereby Bhushan Steel is seeking long term supply of quality Australian coal for their expanding steel making operations across Asia. The parties are seeking to further develop BWNs and other identified projects to potentially ultimately develop these into commercial operating coal mines. Funds raised by the successful completion of the MOU will provide working capital for BWN to pursue its uranium deposit projects in Queensland and Western Australia and fund potential future business acquisitions seen as strategic to the stated objectives of the Company.

The key commercial terms associated with the proposed transaction are as follows

1. BSL and BWN have agreed to enter into a Security Subscription Agreement whereby BSL will subscribe for 10 million new ordinary shares in BWN at an issue price of AUD 0.32 for total proceeds of AUD 3.2 million

2. 75% of the Proceeds are to be directed towards exploration expenditure for agreed projects, with the balance of 25% being allocated to general working capital

3. BWN will issue to BSL at nil cost the following options to acquire shares in BWN
A. 2.5 million options. Options A have an exercise price of AUD 0.20 and a expire on 27th November 2009 and are of the same class currently traded on ASX
B. 14 million unlisted options. Options B will have an exercise price of AUD 0.20 and an expiry date of two years from the date of issue;

4. BSL to be granted the first refusal for the development of BWNs existing and future Coal Projects. If BSL exercises its first right of refusal it will be required to fund all development costs through to commercial feasibility and all subsequent costs of the required design, construction and commissioning of that project

5. BWN will retain a 10% free carry interest in any Coal Projects that BSL exercises its first right of refusal over up until the completion of commissioning

6. BSL will be offered the opportunity for the appointment of 1 Non Executive Director to the Board of BWN. In addition a further Board seat will be offered to BSL should any existing BWN Director retire or resign from office

7. The proposed transaction is subject to the following key conditions precedent
A. Completion of satisfactory due diligence by both parties
B. The parties entering into the Share Purchase Agreement
C. BWN obtaining any necessary shareholder approval at a meeting of shareholders to be convened
D. BWN Board approval of the proposed transaction

BWN and BSL expect to be able to move towards completing the requisite due diligence and entering into the Security Subscription Agreement within a four to six week time period.

AP inks MoU with Bramhani Industries for steel plant in Kadapa

Andhra Pradesh government has signed a MoU with Bramhani Industries Limited, a company promoted by Obulapuram Mining Company in Bellary, to set up an INR 4,500 crore integrated steel plant in Kadapa district of Andhra Pradesh after Andhra Pradeshs State Investment Promotion Board cleared the project. As per reports, the plant will produce 2 million tonnes of steel in the first phase and may later expand it to 10 million tonne at an investment of INR 20,000 crore by the year 2017.

Dr YS Rajasekhara Reddy chief minister of AP while speaking on the occasion said that it was an important day in the history of the states industrial progress as a steel project of this scale was coming to the state after Vizag Steel. Mr Reddy said that the steel project will be given necessary incentives and subsidies under the state's industrial policy

According to Mr G Janardhana Reddy chairman of Obulapuram Mining Company Private Limited, the foundation stone laying ceremony for the project is scheduled to be held on June 10th 2007. He said that "The first phase will be operational in the next 16 months to 18 months and by 2009 it will be 4 million tonne capacity plant.

AP government has already identified 8000 acres to 10,000 acres government barren land besides allocating 2 thousand million cubic feet of water which is considered to be sufficient for a 4 million tonne capacity in Jammalamadugu mandal for the proposed project. AP government is currently exploring various options for securing the remaining 3 thousand million cubic feet water required for the entire 10 million tonne capacity.

Indian power utilities to need 549 million tonne coal in 2011-12

It is reported that the India's Central Electricity Authority has pegged coal requirements of power utilities at 549 million tonnes by the end of the 11th Plan period and has estimated 32.3 million tonnes of coal import for the same period.

According to the CEA, the installed capacity of coal fired stations will go up from 75,870MW in 2007-08 to 79,685MW in 2008-09, 89,435MW in 2009-10, 102,797MW in 2010-11 and finally reach 119,016MW in 2011-12.

As per CEA estimate, following is the requirement and availability scenario for 5 years.

In million tonnes

Indian steel ministry calls for reducing chrome ore export

Mint reported that Indian steel ministry has asked the commerce ministry to reduce the cap on export of chrome ore and has also recommended a complete ban on the minerals export from 2009, as concerns of a large scale shortfall of the minerals supply hit the domestic stainless steel and ferrochrome industries. The steel ministry has also recommended that the chrome feed grade during making concentrates be reduced from the current 42% to 38% to curb misuse of exporting chrome ore as chrome concentrate.

Mr Ram Vilas Paswan union steel minister amid dwindling reserves, recommends that the current export ceiling of 0.4 million tonnes should be brought down to 0.3 million tonnes this year and further trimmed to 0.15 million tonnes next year before introducing a total ban.

The shortage is being attributed to a decision of TATA Steel to stop supply of the mineral to domestic users as it has started utilizing the material for its own expanding ferrochrome and chrome concentrate production since April 1st 2007. Orissa Mining Corporation and TATA Steel have monopoly control over the mineral found in Orissas Sukinda valley.

Total export of chrome ore and concentrates, mainly channeled through the Mines and Mineral Development Corp stood at 1.5 million tonnes, of which chrome ore exports made up roughly 0.35 million tonnes. India produced about 0.7 million tonnes of ferrochrome last year out of which nearly half was exported. Indian reserve accounts for less than 2% of the world reserve and by another estimate only about 0.84%, but India exports about 40% of mined chrome ore.

TATA Power hires Calyon to raise funds for Indonesian coal mines Report

Mint reported that Indian steel ministry has asked the commerce ministry to reduce the cap on export of chrome ore and has also recommended a complete ban on the minerals export from 2009, as concerns of a large scale shortfall of the minerals supply hit the domestic stainless steel and ferrochrome industries. The steel ministry has also recommended that the chrome feed grade during making concentrates be reduced from the current 42% to 38% to curb misuse of exporting chrome ore as chrome concentrate.

Mr Ram Vilas Paswan union steel minister amid dwindling reserves, recommends that the current export ceiling of 0.4 million tonnes should be brought down to 0.3 million tonnes this year and further trimmed to 0.15 million tonnes next year before introducing a total ban.

The shortage is being attributed to a decision of TATA Steel to stop supply of the mineral to domestic users as it has started utilizing the material for its own expanding ferrochrome and chrome concentrate production since April 1st 2007. Orissa Mining Corporation and TATA Steel have monopoly control over the mineral found in Orissas Sukinda valley.

Total export of chrome ore and concentrates, mainly channeled through the Mines and Mineral Development Corp stood at 1.5 million tonnes, of which chrome ore exports made up roughly 0.35 million tonnes. India produced about 0.7 million tonnes of ferrochrome last year out of which nearly half was exported. Indian reserve accounts for less than 2% of the world reserve and by another estimate only about 0.84%, but India exports about 40% of mined chrome ore.

Jharkhand calls for geological survey to asses mineral wealth

Jharkhand is stressing for more geological survey to detect deposits and commercial viability of minerals available in the state of Jharkhand and is even ready to provide funds for these surveys.

Mr Madhu Koda chief minister of Jharkhand while speaking at the 7th meeting of the Jharkhand state geological programming board at Administrative Training Institute in Ranchi said that surveys conducted by different agencies in the past did not match and was a major hindrance for the State in chalking out exploration plans. He said that "The government is unaware about the quality and quantity of different minerals deposits."

Formation of state owned dredging firm on cards

It is reported that 3 port trusts and 2 public sector companies namely Mumbai Port Trust, Jawaharlal Nehru Port Trust, Kolkata Port Trust, Mazagon Dock and the Shipping Corporation of India are planning to form a consortium to set up an INR 6,000 crore mega dredging company to meet the increasing demand created by the modernization and deepening of ports. The company will also look at dredging opportunities in neighboring countries.

The dredging company, which will be fully owned by public sector undertakings, will be financed through equity participation in proportion to the share of the partners. The company will appoint a consultant to prepare a feasibility study after all the partners signed an agreement.

The proposed dredging company is expected to be 3 to 4 times bigger than the Dredging Corporation of India because the demand for dredging is on the rise with 12 major ports and 187 minor ports along the 7,517 kilometer long Indian coastline on an expansion mode. At present, the Dredging Corporation of India is the only domestic company that carries out dredging and it has been able to meet only 10% of the demand.

PM lays foundation stone for 1,200 MW power plant in Hissar

Dr Manmohan Singh Prime Minister of India has laid the foundation stone for Haryana Power Generation Corporation's 1,200 MW coal based power project at Khedar in Hisar district on May 19th 2007. The first unit of the project is scheduled for commissioning in December 2009 and the second unit by March 2010.

The new INR 4,297 crore power plants will be spread over 990 acres of land and will have 2 power generation units of 600 MW each.

Haryana Power Generation Corporation has also facilitated loan arrangements from various government agencies in order to ensure timely construction and commissioning of the project. The agencies that offered financial assistance include Rural Electrification Corporation of India, Power Finance Corporation and the National Capital Region Planning Board.

Haryana will get 28.8 million units of electricity per day after commissioning of these units.

Sandvik Asias Pune facility commissioned

Swedish Sandvik Groups unit Sandvik Asia has announced completion of the expansion of its design and development centre at Pune in Maharashtra in India at a total investment of INR 10 crore.

With the expansion Sandvik Asia is now an independent engineering, procurement and construction company in materials handling. A company release said that the centre will cater to increased engineering demand from group companies in Europe and other parts of the world. The expanded facility is fully equipped to undertake diverse activities including concept design, basic design, detail engineering, structural calculations and design, 3 D modeling and electrical engineering.

Mr Hakan Kingstedt MD and president of Sandvik Asia said that "The expansion is in line with our strategy to strengthen our Asian platform while riding the rapid growth in the country."

Mr Shib Bhowmik vice president of Sandvik mining and construction and in charge of project business and design centre said that "The expanded centre, with 130 people, is geared to design various machines and projects handling coal and iron ore in significantly large quantities."

TATA Power hires Calyon to raise funds for Indonesian coal mines - Report

Bloomberg reported that TATA Power Company will borrow USD 950 million to fund its purchase of stakes in 2 Indonesian coal mines and has hired Calyon to arrange a USD 600 million loan secured by the coal mines and a USD 350 million loan guaranteed by TATA Power. As per report, Calyon is marketing the loans to other banks.

The report mentions that TATA Power's USD 600 million loans will have a USD 400 million 5 year portion and a USD 200 million 7 year portion.

Calyon, the investment banking unit of Credit Agricole SA, was the No 3 arranger of syndicated loans in Asia last year.

TATA Power agreed in March 2007 to pay USD 1.3 billion for a 30% stake in PT Kaltim Prima Coal and PT Arutmin from PT Bumi Resources in Indonesia.

New export tax policy likely to depress Chinas domestic market

It is reported that the Chinese government's recent policy to levy a 5% to 10% export tax on 83 types of finished steel products from June 1st 2007 is causing concern in the domestic market that steel product prices will fall as the market floods with products that would previously have been exported.

According to information provided by Mysteel, the policy is already having an effect on the domestic market. The prices of HRC between the thicknesses of 2.75mm and 9.75mm in Shanghai fell between CNY 20 (USD 2.61) and CNY 60 (USD 7.84) from to between CNY 4,060 (USD 530.37) and CNY 4,380 (USD 572.17) per tonne after the announcement.

Mr Wang a senior official from Shanghai Baowang Industry Co Ltd expressed his concerns over the effect the policy would have on future export prices. He told Intefax that "Despite reaching an agreement with foreign clients to split the increased cost from the new export tax policy for contracts to be implemented in the next few months, there is also the possibility that foreign clients will cancel their contracts or refuse to accept the price increase."

Mr Wang Jianhua a senior analyst with Mysteel said that "As supply pressure eases in the domestic market, steel product prices will start to fall, with the export tax narrowing the gap between domestic and international steel product prices. This will result in a fall in domestic steel industry profits in the second half of the year."

Mr Mao Zuhong, analyst with United Securities in Shanghai, forecasts that steel product prices on the international market will increase following the new policy, further extending the price gap between domestic and international markets. He said that "Despite the export restraining policy, China's steel product exports are actually set to increase in the second half of the year.

Shanghai Baosteel Co Ltd, a subsidiary under Baosteel Group, China's largest steel mill, announced that its prices would remain unchanged in the third quarter for most core products, including pickled and un pickled HRC, cold rolled sheet and color coated plate. Baosteel's third quarter price policy reflects cautious behavior and lack of confidence in the domestic market for the second half of the year.

ThyssenKrupp to increase low nickel SS volumes

Bloomberg reported that the world's biggest stainless steelmaker ThyssenKrupp AG may reduce nickel purchases to cut costs as prices of the raw material rise to record highs.

Mr Jurgen H Fechter CEO of ThyssenKrupp's stainless steel division in an interview at Kyoto in Japan said that it may increase output of nickel free stainless steel to 35% of total production from current 30%. He said clearly if the ratio of ferritic rises significantly, we will require less nickel but it also depends on our total volume. I don't believe it's a right strategy to invest in nickel because we need to maintain flexibility. It is a trend that will take a long time. So if you would grow from 30% to 35% in the next two years, you would do a very good job.

The nickel price has risen many folds since 2007 as China's economic growth fueled demand. The price is driving companies to make nickel free, or ferritic, stainless steel and to increase chromium or manganese content. London Metal Exchange nickel for delivery in three months rose to a record USD 51,800 a metric ton on May 9th 2007.

Global stainless steel output is forecast to rise 5% to 29.8 million tons in 2007, after rising 17% in 2006. Standard grade stainless-steel, which contains a typical 8% nickel, makes up 45% of global output of SS as compared with 50% to 60% in past years. Duplex grades, a mixture of ferritic and standard stainless steel, represent 1.5%.

Baosteel keeps Q3 prices unchanged except for plates

Chinese steel major and price trend setter in SEA, Baosteel announced that its price change details for Q3 2007 productions, in which prices of most steel varieties kept in line with those for Q2 2007.

The detail of Q3 price changes are as under
1. HRC in line with Q2 2007 level
2. HR PO in line with Q2 2007 level
3. CRC in line with Q2 2007 level
4. CRFH in line with June 2007 level
5. HDG in line with Q2 2007 level except that DC51D+Z down by RMB 300 per tonnes from Q2 2007 level
6. Galvalume, in line with Q2 2007 level
7. EG in line with Q2 2007 level except that fingerprint proof EG is subject to additional increase of RMB 600 per tonnes
8. Color Coated Steel, in line with June 2007 level
9. Wide and Thick Steel Plate up by RMB 300 per tonnes from Q2 level
10. Silicon steel up by RMB 100 to 150 per tonnes from Q2 level
11. Electro Tin Plate down by RMB 100 per tonnes

All price changes listed are exclusive of 17% VAT except specified otherwise and will come into force as of the date of issuance.

(Sourced from MySteel.net)

OMK to break ground for plate mill on May 30th 2007

Reuter reported that United Metallurgical Company announced that it will start construction on a new 1.2 million tonne plate mill at its Vyksa Metallurgical Plant on May 30th 2007 as a part of USD 2 billion investments to boost pipe supplies to the booming oil and gas sector. Production is scheduled to begin in 2010.

The report cites Mr Vladimir Markin president of OMK as saying that the investment program would run until 2010 and that the company would spend RUB 45 billion (USD 1.74 billion) on the Mill 5000 project alone. He said that "We plan to be a company producing the full cycle of products."

OMK sells bout 90% of its steel pipes in the domestic market and counted Gazprom and oil pipeline firm Transneft among its customers and competes in the Russian market with TMK, the ChTPZ Group and Severstal's Izhorsky Pipe Mill.

Mr Markin earlier said that Russian steel pipe makers should work together closely in order to avoid overinvestment and duplicating investment projects. He said that "That could lead to a crisis of overproduction in the future and a sharp rise in competition and, as a consequence, an increase in the payback period for investments."

Broad list of steel products subjected to latest export tax in China

Chinas Ministry of Finance announced on Monday that China will impose extra export tariffs while cutting import duties as of June 1st 2007 to narrow its widening trade surplus. The ministry said a total 142 low end and resource products will be hit with additional export tariffs.

The ministry announced that it will impose 5 to 10% export tariffs on more than 80 steel products, including common carbon wire rod, flat steel, sections and other steel varieties.

Product Old tax Announced

The Finance Ministry of France said the move will help rein in the growth of the high polluting energy guzzlers and the export of resource intensive products.

According to the ministry to encourage import, China will lower import tariffs on 209 products on a provisional basis, including resources products and key component parts. To boost consumption, China will also lower import duties on construction materials, electronic appliances, kitchen ware, and infant food to between 6% and 17%.

The General Administration of Customs said on May 11th 2007 that China's trade surplus in April more than doubled the figure of March to USD 16.88 billion. To curb its fast growing trade surplus, China also scrapped or lowered exports tax rebates on a large number of low end products.

(Sourced from MySteel.net)

Gazmetall and IUD to wrap up merger talks soon

Interfax reported that Russian Gazmetall and Ukrainian steel producer Industrial Union of Donbass will round up merger talks soon. Mr Maxim Basov GD of Gazmetall while addressing at the Fifth Moscow Metals Summit said that "The talks will result either in a merger announcement or the postponement of consultations until later." Mr Basov added that the assets involved should be valued by the end of the month.

Mr Basov also said that Gazmetall was interested in merging with metals companies that are short on raw materials. He said talks with such companies were in progress but he declined to name them.

Mr Alisher Usmanov earlier told the Financial Times that he would like to see the company created as the result of a possible merger with IUD list its shares in London within a year. He also said that Mr Serhiy Taruta could be the new company's president and that Gazmetall would appoint the non executive board chairman. Mr Usmanov has said the merger could produce a synergetic effect of USD 1 billion annually and that the merged company could have a market cap of between USD 15 billion and USD 19 billion.

Eliminating obsolete capacity in China is a tough task

China has targeted elimination of outdated iron making capacity and steel making capacity of 30 million tonnes and 35 million tonnes respectively by the end of 2007 and eventually 100 million tonnes and 55 million tonnes respectively to be phased out by the end of 2010. Chinese authority have outlined the targets at the high level television conference discussing energy saving and pollution control in late April 2007.

National Development & Reform Commission, the country's top planning authority, has signed written commitment with local authorities in 10 provinces and municipalities to shut down and eliminate outdated iron making capacity and obsolete steelmaking capacity of 39.86 million tonnes and 41.67 million tonnes respectively in the next five year with 22.55 million tonnes and 24.23 million tonnes to be closed down by the end of this year. NDRC has unveiled a closure list of outdated iron and steel making facilities from ten of China's regions in late April, which accounts for only half of the closure targeted to achieve by 2010.

MySteel said that it's a tough task to eliminate 45 million tonnes of inefficient iron making capacity, more than steelmaking capacity, by 2010 due to imbalanced growth. A Mysteel survey showed that iron making capacity has expanded much slower than that of steelmaking capacity for last three years. Last year, 33.31% of the investment has been spent in steelmaking projects, while only 5.4% being spent in iron making projects.

MySteel believes that China's scrap demand would poster notable growth by 2010, which would also hinder efforts to eliminate obsolete iron making capacity. The survey also shows that most of the fresh steelmaking capacities are contributed by converters in recent years therefore EAF would play a bigger role in next couple of years in expanding steelmaking capacity.

About 70% of the blacklisted sites are producing long products, in particular rebar. Mysteel believe the price of long products would held steady in future as quite few fresh capacity are slated to come on stream. By contrary, the competition in flats market is set to intensify with new capacity come into fruition.

In fact, some leading mills are expanding the capacity under the umbrella of relocation or environmental protection. MySteel estimates that at least 15 million tonne of additional capacity are coming online in this way. On the other hand, the smaller producers are striving to survive through capacity replacement, which has led to an addition of at least over 5 million tonne of capacity.

Under these circumstances, MySteel has suggested the authority to set up a supervision mechanism, revealing the real progress of the elimination and closure regularly and involving more media exposure. Moreover, an evaluation system should be put in place to review the impact of various measures, which would enable the authority to adjust the policy accordingly.

(Sourced from MySteel.net)

Ferrexpo plans to float IPO in June

Ukraine based Ferrexpo announced its intention to proceed with an initial public offering of ordinary shares of Ferrexpo PLC to institutional investors in the United Kingdom and certain other jurisdictions. The Global Offer and for the Ordinary Shares to be admitted to the Official List of the Financial Services Authority and to trading on the London Stock Exchange's main market for listed securities.

The Global Offer will comprise an institutional only offering of new and existing Ordinary Shares into the United Kingdom and certain other jurisdictions. There will be an over allotment option over new and existing shares representing up to a maximum of 15% of the total number of Ordinary Shares comprised in the Global Offer.

The Group intends to use the proceeds from the Global Offer to optimize the extraction of iron ore and maximize production of existing operations; for a number of new projects and developments to provide organic growth; to repay existing debt; and to exploit acquisition opportunities that may arise within the natural resources sector.

JPMorgan Cazenove Limited is Sole Sponsor and Sole Global Coordinator for the proposed Global Offer and Joint Book runner together with Deutsche Bank AG, London Branch. JPMorgan Cazenove Limited is also acting as Sole Financial Adviser to the Group.

Mr Mike Oppenheimer CEO of the Group commenting on the Company's proposed listing on the London Stock Exchange said that "We have one of the world's largest producing iron ore resources with a strong project pipeline and plan to maximize the potential of our existing operations. By listing on the London Stock Exchange, we seek to finance the Group's growth strategy for the Poltava mine and realize the potential of this important asset. We already have a well defined management and governance structure but will continue to develop this in line with a full London listing."

Ferrexpo's Poltava mine has one of the world's largest producing iron ore resources. Ferrexpo's primary focus is the mining, processing and sale of iron ore in the form of pellets for use in the production of steel. In 2006, Ferrexpo produced 8.6 million tonnes of iron ore pellets as compared with 7.8 million tonnes and 7.4 million tonnes in 2005 and 2004 respectively.

Alcan board rejects Alcoa offer

CNNMoney.com reported that Alcan's board of directors have advised its shareholders that they should reject an unsolicited USD 27.6 billion bid from Alcoa, saying the offer is too low and that the Canadian company was in talks with third parties. Mr Yves Fortier Chairman of Alcan in a statement said that "It does not adequately reflect the value of Alcan's extremely attractive assets, strategic capabilities and growth prospects, does not offer an appropriate premium for control of Alcan, and is highly conditional and uncertain."

Mr Dick Evans CEO of Alcan earlier told Reuter that his company was in discussions with other parties but would not say which ones. He said that "Our board has asked us to evaluate all alternatives, both internal and external." Mr Evans said that Alcan will not be pressed into making a hasty next move. He said that It is essential that we get it right and not rush to a decision. At this point, we do not consider the current Alcoa offer to be a meaningful alternative for us."

Mr Charles McLane CFO of Alcoa while in the Reuters Global Mining and Steel Summit in New York shortly after Alcan said it had rejected the bid said that "Our offer is full, fair and balanced." But he declined to comment on specifics of the rejection until he could review it with fellow Alcoa executives.

Alcoa made the hostile bid for Canadian Alcan on May 7th 2007 offering USD 58.60 per share of Alcan plus 0.4108 share of Alcoa. Alcan's shares are up about 30% since Alcoa's takeover bid was announced earlier this month as shareholders have anticipated other large players may step in with rival offers.

CMC announces organizational realignment

Commercial Metals Company has announced realignment in operational and management structure, which will become effective September 1st 2007. Under the new structure, Mr Russell Rinn and Mr Hanns Zoellner Executive VP of CMC will assume expanded management responsibilities for two newly formed operational units CMC Americas and CMC International. Mr Rinn will serve as President of CMC Americas and Mr Zoellner as President of CMC International.

CMC Americas' operations will include all of CMC's domestic mills and fabrication units, CMC Recycling and the CMC Dallas Trading division of the existing Marketing and Distribution segment.

CMC International will include all mill, recycling, fabrication and marketing and distribution operations located outside the Americas as well as the CMC Cometals and CMC Commonwealth Metals divisions of the existing Marketing and Distribution segment due to their strong involvement with international sourcing and sales.

Mr Murray R McClean President & CEO of CMC while announcing the realignment said that "The new structure couples the strength of our integrated operations with our global coverage and will sharpen our focus on maximizing the inherent operational efficiencies. These changes will enable CMC to better capture growth opportunities whenever and wherever presented. A significant advantage for us as we implement this initiative is our ability to leverage strong talent within CMC. We have a proven management team with a deep knowledge of their customers and markets, and a shared commitment to CMC's strategic vision."

ISSF elects new office bearers for 2007-08

The International Stainless Steel Forum has elected its office bearers for 2007 to 2008 during its 11th Annual Conference at Kyoto in Japan.

The office bearers for 2007-08 are
1. Chairman
Mr Jean-Yves Gilet CEO of Arcelor Mittal Stainless

2. Vice Chairmen
Mr Youn Lee president of POSCO
Dr Victoriano Muz Cava chairman & CEO of Acerinox SA
Mr Oshihiko Ono chairman of Nisshin Steel Co Ltd

3. Treasurer
Mr Jrgen Fechter CEO of ThyssenKrupp Stainless AG

4. Secretary General
Mr Staffan Malm of ISSF

The officers will serve a one year term which expires in May 2008. The Chairman is normally elected for two consecutive terms which is Mr Gilets first term as Chairman.

The meeting also elected the ISSF Board of Directors. The following Board members were elected and will serve a one year term which expires in May 2008:

1. Mr Chuanping Chen chairman of Taiyuan Iron and Steel (Group)
2. Mr Pekka Erkkilexecutive VP production & operations of Outokumpu
3. Mr Jrgen Fechter CEO of ThyssenKrupp Stainless AG
4. Mr Jean Yves Gilet CEO of Arcelor Mittal Stainless
5. Mr Jeffrey Hsu VP of Yieh United Steel Corp
6. Mr Ratan Jindal VC & MD of Jindal Stainless Ltd
7. Mr Youn Lee president of POSCO
8. Mr An Liu president of Baosteels Stainless Steel Branch
9. Dr Staffan Malm Secretary General of ISSF
10. Mr David P Martin CE0 of Columbus Stainless
11. Mr Takashi Mizuno director of Nippon Steel & Sumikin Stainless
12. Dr Victoriano Muz Cava chairman & CEO of ACERINOX SA
13. Mr Rafael Naranjo board member of North American Stainless
14. Mr Naofumi Ohde VP of JFE Steel Corporation
15. Mr Toshihiko Ono President & CEO of Nisshin Steel
16. Mr Ian Christmas secretary general of IISI

Gazprom eying stake in German RAG - Report

Focus news magazine reported that Russia's energy giant Gazprom is interested in a strategic investment in Germany's biggest coal mining company RAG AG. According to the report, Ms Angela Merkel German chancellor has received details about secret talks between the Russian government and RAG officials.

The report cited a strategy document as saying that Gazprom is willing to become a major RAG stakeholder. There are reportedly plans for a meeting between Mr Dmitri Medvedev deputy prime minister of Russia and Mr Werner Mueller chairman of RAG due to be held on June 29th 2007.

Focus said that German political leaders are alarmed over a possible deal since the Russian side has also mentioned its interest in RAG's utility and chemical subsidiaries Steag and Degussa.

Mr Christian Kullmann spokesman of RAG called the Focus article utter nonsense saying that "There were and are no talks whatsoever between RAG and Gazprom also not between RAG and the Russian government." Mr Kullmann also denied a planned meeting between Mr Medvedev and Mr Mueller.

RAG, which has annual sales of about EUR 20 billion and employs more than 100,000 people, bought in 2002 half of the world's biggest specialty chemical maker Degussa AG. Gazprom is already part of joint venture with German chemical company BASF with whom it has founded Wingas which is the second largest gas company in Germany. Gazprom is also involved in building USD 8 billion Nord Stream gas pipeline in the north European in JV with BASF. The project is headed by former German chancellor Mr Gerhard Schroeder who has reportedly played a crucial role in opening Germany's energy market for Gazprom.

Gazprom eying stake in German RAG Report

Mint reported that Indian steel ministry has asked the commerce ministry to reduce the cap on export of chrome ore and has also recommended a complete ban on the minerals export from 2009, as concerns of a large scale shortfall of the minerals supply hit the domestic stainless steel and ferrochrome industries. The steel ministry has also recommended that the chrome feed grade during making concentrates be reduced from the current 42% to 38% to curb misuse of exporting chrome ore as chrome concentrate.

Mr Ram Vilas Paswan union steel minister amid dwindling reserves, recommends that the current export ceiling of 0.4 million tonnes should be brought down to 0.3 million tonnes this year and further trimmed to 0.15 million tonnes next year before introducing a total ban.

The shortage is being attributed to a decision of TATA Steel to stop supply of the mineral to domestic users as it has started utilizing the material for its own expanding ferrochrome and chrome concentrate production since April 1st 2007. Orissa Mining Corporation and TATA Steel have monopoly control over the mineral found in Orissas Sukinda valley.

Total export of chrome ore and concentrates, mainly channeled through the Mines and Mineral Development Corp stood at 1.5 million tonnes, of which chrome ore exports made up roughly 0.35 million tonnes. India produced about 0.7 million tonnes of ferrochrome last year out of which nearly half was exported. Indian reserve accounts for less than 2% of the world reserve and by another estimate only about 0.84%, but India exports about 40% of mined chrome ore.

SA Competition Tribunal lifts penalty ob Mittal Steel SA

SAPA reported recently that the South Africas Competition Tribunal has agreed to a request by the Competition Commission to withdraw its recommendation that a fine be imposed on Mittal Steel SA. The commission had referred the complaint to the tribunal on January 15th 2007.

The report cites Ms Jane Sussens communications adviser to the Competition Tribunal as saying that the Competition Commission applied to the tribunal to amend its complaint referral after Mittal Steel SA objected to the administrative penalty sought by the commission.

Under the Competition Act an administrative penalty for breach of Section 9 (1) could only be imposed if the respondents had repeated conduct previously found by the tribunal to be a prohibited practice and Mittal Steel SA contended that this had neither been alleged nor established.

Therefore the commission concluded that it would be appropriate to amend the complaint referral by removing the recommendation that the tribunal impose an administrative penalty.

The referral followed a complaint lodged with the commission by Barnes Fencing Industries on December 19th 2003. After having investigated the complaint, the commission found that Mittal Steel SA was in contravention of the act. The commission alleged that Mittal Steel SA discriminated against Barnes by charging higher prices and providing shorter credit payment terms than it did to other customers for low carbon wire rod.

Russia approves Baltic Pipeline System -2

Interfax reported that Russian government has approved the construction of the Baltic Pipeline System-2 and that Mr Mikhail Fradkov prime minister of Russia has signed the corresponding resolution. The project has been estimated at USD 2 billion.

The report mentions that Mr Fradkov has directed Russian Industry and Energy Ministry and Transneft to carry out a state review of documentation for the construction for the pipeline, along with interested federal bodies for the construction of the Baltic Pipeline System-2.

The Unecha to Primorsk pipeline project appeared during the oil dispute between Russia and Belarus at the beginning of January 2007 and has won political support from the Russian leadership. If the project is implemented, the annual throughput capacity of the Primorsk port may increase to 150 million from 75 million tonnes.

Walsin Lihwa acquires Yantai Huanghai Iron and Steel

YIEH reported that Taiwan's Walsin Lihwa has spent about TWD 8 billion to acquire China's Yantai Huanghai Iron and Steel Co Ltd. This is its second steel mill in China

According to Walsin Lihwa, after purchase of Yantai Huanghai Iron and Steel, it will start the machinery improvement and after the reconstruction the stainless steel output of this mill will reach 400,000 tons per year.

Thereafter, the total stainless steel output of Walsin Lihwa will be over than 1 million tons per year.

Global boom leading to new scrap shredder installations in US

Platts reported that US scrap processors are in the forefront of an international rush to add more capacity, more locations and faster throughput systems, which is an indication of the increasingly intense competition for ferrous units. The trend is being driven by a global steel boom.

The latest US installation was announced by PSC Metals which said it will install a mega shredder later this year at Knoxville in Tennessee. Earlier in the week, Metalico announced that it would install a mega shredder at its subsidiary at Chili in New York. Such announcements in close succession are unusual considering that there are only about 40 of the giant machines operating in the US market today.

Installations of these machines cost in excess of USD 10 million if all down stream systems and footings are included. The downside of very large shredders is that they have high power consumption rates and need to be fed continuously to operate at peak efficiency. But many processors seem willing to accept these challenges in hopes of vacuuming up more scrap in a given region than their competitors.

Some are said to view shredder installations as a defensive play, because the presence of a shredder in a given region often discourages competitors from entering the market.

Golden West launches scoping study at Wiluna West hematite project

It is reported that Golden West Resources Ltd has launched a scoping study into the potential development of its flagship Wiluna West hematite project in Western Australia. The project is about 35 kilometers south west of Wiluna and 450 kilometers north of Kalgoorlie.

Mr Gary Hutchinson MD of Golden West Resources said that the scoping study would provide an initial overview of likely mining, engineering and port costs for the operation. He said that Golden West is examining the potential to start up an iron ore mine near Wiluna next year, at an initial rate of 1 million tonnes a year before ramping up to 10 million tonnes annually.

MEPS forecast of prices of HDG and EG in EU

UK based steel analysts MEPS reported that EU average hot dipped galvanized and electro galvanized prices remained stable in May 2007, in line with their expectations and forecast made a month ago.

MEPS said that in 2006 escalating zinc costs pushed up coated sheet values but caused a divergence between HDG and EG prices from historically similar amounts. This resulted in an unsustainable price differential of almost EUR 120 per tonne. The current variance is now half of that figure as zinc costs declined during the first quarter of 2007. Although LME prices recently picked up, a return to the highs of 2006 does not look likely. Reports suggest supplies are now in surplus. However, values are not expected to fall back to 2004-05 levels.

MEPS said that HDG prices are likely to stay stronger than EG as the market for the latter is weaker. Much of the growth in demand for HDG in the EU is from the construction sector, which is predicted to stay firm in the medium term. This should result in the gap between the two products continuing over the forecast period. Prices are expected to show modest strengthening over the coming months as demand continues to improve. Price weakening is expected to set in towards the end of the third quarter in both products due to seasonally lower demand and the threat from imports. Values are then forecast to stabilize in early 2008.

EC proposes to keep coal subsidies intact

It is reported that European Commission said that no change should be made to the current rules of providing state aid to the European Union's outdated coal industry. It said that In view of the fact that the global coal market appears to function efficiently, it is not necessary to propose amendments to the Coal Regulation governing subsidies to the industry.

The EU coal industry has been subject to special state aid rules since the European Coal and Steel treaty, which established the EU's predecessor the European Coal and Steel Community in 1952 but expired in 2002. The rules provide an exception to the general prohibition of state aid in order to allow for the continued restructuring of the coal industry, which has been unprofitable for many years in most member states. But the special arrangement will end by 2010.

The commission's report described the changes to state aid policies which took place in the member states since the Coal Regulation came into force. It focused particularly on types of aid which were introduced by the member states and the results of the restructuring processes conducted in the coal sector with the use of subsidies. The report also provided an overview of the impact of state aid to the coal industry on the internal market, namely on the production of coal, electricity, coke and steel.

Mr Andris Piebalgs Commissioner of EU said that "Currently, nine Member States are mining coal, mainly for the purpose of electricity production, steel production and heat production. Domestic coal production reduces the energy dependency of the Union and contributes to a diversification of our sources of energy supply."

There are important differences in the competitive situation of coal mines in Europe. Mines in Germany, Spain, and Hungary have production costs of more than twice the world market price for coal, and are therefore dependent on operating aid, while mines in the Czech Republic, Poland, Britain and Slovakia are more or less competitive on the world market, which receive either no subsidies at all or limited subsidies.

As the Coal Regulation expires at the end of 2010, the report offered the commission the opportunity to give first indications as to its view on state aid to the coal industry after the date.

China removes import tariff on some coal products

Interfax reported that China's ministry of finance has recently released detailed plans to cancel import tariffs on some coal products. According to Chinese ministry of finance, import tariffs on pulverized but not agglomerated anthracite, bituminous coal, other coals that are not agglomerated and briquettes, ovoid and similar solid fuels manufactured from coal have been lowered from 1% to 0% with effect from June 1st 2007.

Mr Li Chaolin a coal expert with the Henan Provincial Coal Sales Corporation told Interfax that the policies were designed to encourage greater coal import and limit coal export as domestic coal demand in China has skyrocketed and also the government had previously advocated the use of domestic coal resources.

Earlier in November 2006, China lowered coal import tariffs from between 3% and 6% to between 0% and 1% while imposing a 5% tax on the export of coking coal. In addition, China also cancelled its coal export tax rebate last year.

China imported 14.39 million tonnes of coal up by 60% YoY in the first quarter of 2007 while coal exports declined by 32% YoY to 11.39 million tonnes, making China a net importer of coal for the first time.

Chinese steel major plans investments in Philippines

Tribune reported that a major steel company in China is eyeing to invest over USD 1 billion in Philippines for setting up an integrated steel plant that would include a blast furnace facility and an agreement may be signed June or July 2007.

The report cites Mr Francis Chua, who was former president of Federation of Filipino Chinese Chamber of Commerce and Industry Inc and now Special Envoy on Trade and Investments to China, as saying that the Chinese steel firm operates one of the largest manufacturing facilities in Beijing and concentrates on the manufacture of industrial equipment.

Mr Chua said that the Chinese government may not be able to reveal the name of the company pending the signing of the business contract. The group will also be joined by other big Chinese groups visiting the country this year. However, the company wants the government to guarantee the availability of iron ore supply as condition for the project.

Mr Chua added that the group is already talking to 2 local groups engaged in iron ore production for a possible JV and among the sites where iron ore is available in the country are Samar and Bulacan where they could mine as much as 70% iron ore content. To assure the entry of investors these types, the government should offer fiscal incentives.

Russia's GDP grows at 7.7% in January to April 2007

RIA Novosti reported that Russian GDP increased by 7.1% YoY in April 2007 and went up 7.7% YoY during January to April 2007.

Mr German Gref economics minister of Russia during a presidential conference with the Cabinet told that industrial growth was 4.6% in April 2007 and 7.5% in the first four months of 2007, almost double the rate for the same period last year.

The capital inflow into Russia hit USD 17 billion in April and USD 30 billion in the first four months of 2007, as Russian companies continued to hold initial public offerings to raise capital and compete successfully with western companies. Mr Gref said that "This is a record sum and that capital inflow was USD 41 billion in 2006.

He added that "Fixed capital investment grew 19.4% in April and 19.9% in the first four months of 2007 as compared with 6.9% in the same period last year.

Evrazs Vysokogorskiys Q1 net up by 79.6% YoY

It is reported that the proceeds of Evraz Groups Vysokogorskiy Ore Mining and Processing Enterprise during January to March 2007 increased to RUB 1,676 million up by 79.6% YoY as compared to January to March 2006 and up by 13% QoQ as compared to October to December 2006 quarter.

Vysokogorskiys net profit in January to March 2007 quarter came to RUB 366 million which is 25.8% better than in October to December 2006. Its gross profit in Q1 of 2007 came to RUB 708 million which is 204.6% better than Q1 of 2006. It sales revenues went up by 502.1% YoY to RUB 597 million.

RMDAS US steel scrap price index shows sharp downturn

For the second consecutive month US buyers of ferrous scrap paid considerably less for all grades of the commodity as national average per ton pricing fell by as much as USD 61 for prompt industrial grades and USD 57 for shredded scrap.

According to figures compiled by the Raw Material Data Aggregation Service operated by Management Science Associates, average per ton pricing has fallen to between rough USD 230 and USD 290 per ton depending on the grade of ferrous scrap and the region to which it is being delivered.

Between November 2006 and March 2007, ferrous scrap dealers enjoyed a series of price hikes that saw them reach a peak in March of USD 356 per ton for No 2 shredded scrap. Using the No 2 shredded scrap grade as a benchmark the USD 262 per ton paid by mills in May of 2007 marks the lowest price received by shippers since January of this year. But the past two months have seen recyclers lose most of those gains as shredded scrap fell by USD 37 per ton in April followed by the USD 57 per ton drop in May.

The RMDAS figures indicate that, nationally, prompt industrial composite grades took the biggest drop with its USD 61 per ton decrease. Regionally, the grade fell by USD 63 in the North Central and East market but by just USD 47 per ton in the South. Heading into the June pricing period recyclers will be anxious to see whether per-ton pricing falls further yet which if so could push it below the prices that were being received in January of this year.

RMDASs Ferrous Scrap Price Index is based on data gathered from a statistically significant compilation of verified ferrous scrap purchase transactions.