Algoma shareholders approve sale to Essar

Reuters reported that shareholders of Canada's Algoma Steel approved the CAD 1.85 billion sale of the company to Essar Steel Holdings Ltd at a special meeting on Monday. The deal received 82.6% approval from shareholders and clears the way for a subsidiary of Essar Global to buy all of Algoma's outstanding shares for CAD 56 each.

Algoma said that it expects the deal to be completed by June 18 and that its shares will be removed from the Toronto Stock Exchange shortly after.

The deal with Essar will allow Algoma to speed up its plans for capital upgrades. Mr Denis Turcotte CEO of Algoma, who has been asked by Essar to remain along with the rest of the management team, said that Essar is enthusiastic about Algoma's plan to expand and begin producing welded pipe for the oil and natural gas industry. He said that Essar will spend CAD 500 million in capital upgrades that Algoma had been considering for the past 18 months. Mr Turcotte said that the capital program will help Algoma's steelmaking capacity grow by about 1 million tonnes to1.6 million tonnes.

Mr Turcotte said that "Essar felt very supportive of them and if anything just felt we should accelerate those plans. So what was to us going to be a 5 year, potentially 7 year, major capital program, they want to accelerate and do within 3 to 5 years."

Mr Turcotte added that Essar's recent acquisition of Minnesota Steel, across Lake Superior, will provide more than enough raw and semi finished materials for Algoma, including iron ore pellets, hot briquette iron and steel slabs.

India's 6 core sectors grow by 7.4% in April 2007

India’s infrastructure index, which comprises of six core industries with a combined weight of 26.7% in the index of industrial production, grew by 7.4% in April 2007 down from 10% in March 2007 but marginally higher as compared to April 2006 when the index grew by 7.3%.

A poor show by coal, cement and finished steel pushed the infrastructure index down during the month of April 2007.

Infrastructure output increased by 8.6% in 2006-07 as compared to 6.2% in 2005-06 but coal, cement and finished steel showed a similar downward trend for 2006-07 as compared to 2005-06.

Economists, however, played down the concerns saying the numbers available for a month did not help establish any trend. Besides, they pointed out that growth during April 2006 was 7.3% but the six basic industries logged 8.6% rise in output during 2006-07.

CCCMC reference prices for Indian iron ore up by USD 1 to USD 2

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week.

USD per tonne
The change is with respect to the prices posted on June 5th 2007.

The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

Orissa’s irrigation officials detained due to POSCO phobia

It is reported that seven officials of Orissa’s irrigation department, mistaken for being engaged in survey work for POSCO, were detained and assaulted at Dhinikia in Jagatsinghpur district of Orissa. It was the third time the protesting villagers took officials hostage.

Believing that the survey was related to the POSCO plan, the activists took them hostage and brought them to Dhinkia village. The agitating villagers detained the irrigation staff for over four hours and released only after leaders of the POSCO Pratirodh Sangram Samiti telephonically got a confirmation of their identity and purpose of visit from highly placed irrigation department officers.

As per report, these 7 officials had gone in connection with survey and strengthening of the saline embankment and soil erosion as a pre monsoon exercise. They were conducting a survey to assess the coastal erosion at Jatadhari river mouth where POSCO is planning a port.

The officials tried to explain this to the agitators who refused to pay any heed and insisted that they were engaged in survey work related to the proposed POSCO plant.

POSCO signed a deal with the Orissa government in June 2005 to set up a steel plant near Paradeep by 2016 with an investment of USD 12 billion. Over 20,000 people from around 15 nearby villages, including Dhinkia, Gada Kujanga and Nuagaon are protesting the project, saying it will not only displace them, but also ruin their betel leaf farming, their source of livelihood. Villagers have erected at least nine wooden gates in the Dhinikia and Gada Kujang panchayats to prevent government and company officials from entering these areas.

Welspun bags international pipe orders worth USD 288 million

Welspun Gujarat Stahl Rohren Ltd announced that it has bagged prestigious pipeline orders worth INR 1166 crores (USD 288 million) for the supply of line pipes overseas.

Mr BK Goenka vice CMD of the Welspun Group said "We strive to the nothing less than be the Best in what we do and with successive new orders received within a span of a mouth, is testimony of the growth that has been evident over the last few years and we could clearly see WGSRL emerging into a much stronger and robust Company, he adds".

The new orders have taken Welspun's pending order book position to approximately INR 5,166 crores.

CIL subsidiary MCL restores coal supplies from Talcher

It is reported that coal dispatches from Coal India Limited subsidiary Mahanadi Coalfield Limited’s Talcher coalfields have resumed. MCL release said that the normalcy has been restored because of a timely intervention by the state administration in maintaining law and order in the area.

The supplies to power plants have been restored and over 54,000 tonnes went to NTPC and another 15,300 tonnes to NALCO. The total coal dispatches of MCL also reached normal levels at 234,000 tonnes per day.

Restoration of normal coal dispatch took place after MCL authorities had recently rung the alarm bells saying that Talcher Coalfields may be closed. It had also asked power plants and others like Nalco to make alternate arrangements. The MCL had blamed the law and order situation for the mess and imminent closure of Talcher Coalfields.

Supplies were hit by agitation by local villagers since May 30th 2007. The agitation was spearheaded by land losers demanding jobs in MCL as per the rehabilitation policy of the state government and commitment of the company. 5 families who have not got all benefits under the state rehabilitation rule are yet to vacate their land demanding jobs for their land they lost to the mining activity. The villagers of Anantaberin accused MCL of highhandedness by trying to evict these helpless families without any suitable alternative home. At news conference at Talcher on Saturday Anantaberini villagers asked MCL to stop work at the Bharatpur mine till their demand of 52 to affected villagers jobs were met.

Anti POSCO agitation spreads to Khandahar

CNBC TV18 reported that agitation against POSCO's steel plant in Orissa has spread from its plant site at Paradeep to the recommended iron ore mining site at Khandadhar as locals are up in arms alleging the mines would seriously impact the area's eco system.

As per report, all of the 29 gram panchayats in this tribal dominated area have come together to spearhead an anti POSCO campaign. They are reported to be saying that iron ore mining at Khandadhar would seriously affect its natural beauty. The report cites a tribal protestor as saying that "If there are mines over here, then we will not be able to come to this side."

The report adds that almost all the opposition parties in the state and even some local leaders of the state's ruling partner BJP are backing the Anti POSCO movement in the area. Mr Bishnu Mohanty state secretary of CPI(M) said that "Tourism and livelihood of the people here will be completely lost. We will not allow POSCO to explore mining here at any cost."

Khandadhar in Orissa's Sundergarh District is a popular tourist spot, famous for its waterfalls and fertile farmland. The state government has already recommended that POSCO be given prospecting license in 6,200 hectares in Khandhadar. State officials admit there could be an impact on the environment, but say there's nothing to worry about.

NTPC to become a major renewable energy player

BL has reported that National Thermal Power Corporation is planning to invest INR 6,000 crore in creating 1,000 MW of renewable energy capacity over the next 10 years to make it one of India's largest green power producers.

As per report, NTPC is planning to invest a bulk of its renewable energy resources besides hydro sector and has already made a foray by entering into wind energy sector by setting up a wind energy capacity of around 250MW, with the first project likely to be a 50MW wind farm. The company is likely to go in for onshore wind power projects in the first phase, with the possibility of offshore wind farms expected to be looked at subsequently.

NTPC is also eyeing opportunities like geo thermal energy and small biomass projects and will add 30MW to 50MW from geothermal power projects and 35MW from small biomass and solar sources. The company's current total capacity of 27,000MW is generated entirely from coal and gas.

Sun Group & HydroOGK join hands to build hydro power plants

PTI reported that Indian company Sun Group has signed a framework agreement with Russia's HydroOGK for the construction of a string of midget and mini hydro electric power plants in India and Nepal.

Mr Vyacheslav Sinyugin CEO of HydroOGK said that the both the companies would set up a managing company on a parity basis before the end of 2007.

Mr German Gref minister for economy and trade of Russia, while announcing the signing of the deal at the St Petersburg International Economic Forum said that the agreement is of key importance for Russian electricity monopoly Unified Energy System, which controls HydroOGK.

Sun Group which initially invested in Russia's beer industry is currently involved in joint projects with Russia's largest independent natural gas producer Itera.

HydroOGK is Russia's largest hydroelectric company and has a rich expertise in building mini and midget power plants.

MMTC, STC & PEC merger move on a slower pace

It is reported that employees of MMTC Ltd, State Trading Corporation and PEC Limited have sought time till June 20th 2007 for giving their opinion on the proposed merger of the 3 companies, which will create a USD 10 billion trading entity. The report cites some officials of the companies as saying that the employee associations and unions sought extension to enable them to consult the employees in outstation offices. The employees were asked to give their feedback by May 20th 2007.

The report cites an official as saying that “Though employee approval is not mandatory for the merger, it is better to get their consent and move in a democratic manner. The employees have no objection to the merger but they are concerned about their career progression issues like seniority, promotion and work responsibilities after the merger.”

As per report, employees are worried that how overlapping roles will be addressed and about promotions in the merged entity. The official said “The employees have no objection to the merger but they are concerned about their career progression issues like seniority, promotion and work responsibilities after the merger.”

The employees' comments and feedback would be compiled into a report, which would be submitted to the government to take a final call.

MMTC, STC and PEC primarily deal with minerals, metals and bullion, coal and hydrocarbons, and fertilizers and agro products. They have over 3,000 employees altogether. The merger idea was floated by management consultancy firm McKinsey a few months ago to enable the companies improve overall profitability.

Gujarat NRE to buy 2 new coal ships from Japanese Shipyard

It is reported that Gujarat NRE Coke has signed a strategic agreement with Scandinavian owners, to jointly acquire two vessels of 60,000 DWT each on a time charter basis. The ships will be delivered from Japanese Yards in 2011 and 2012 for ten year charters, with purchase options.

As per a Gujarat NRE release “The ships incorporating futuristic designs, are expected to substantially aid the company’s cargo movements between India, Australia and other destinations. Considering the unique features of the contract that have been entered into, the company will also benefit against the fluctuations in the freight rates, in the medium term apart from giving the company an option to get all the benefits that accrue to a ship owner moving bulk cargoes on a regular basis.”

Rajasthan plans 1000MW power plant at Jhalawar

It is reported that a 1,000MW power plant at an estimated cost of INR 46 billion will soon come up in Jhalawar district of Rajasthan to augment power generation in the state. Power generation is likely to begin within three years after the start of the construction work. An agreement has been signed between Jaipur, Jodhpur and Ajmer power distribution companies for the sale of the power that would be generated by the project.

Mr NS Choudhary chairman of Rajasthan’s electricity board Rajya Vidyut Utpadan Nigam said that the state government would provide INR 9.2 billion for the Kalisindh power project while rest of the corpus would come from Power Finance Corporation and commercial loans.

Mr Chaudhary said that “To ensure proper supply of coal, the state government has already requested the centre for the allotment of captive coalmines. We expect the union government will soon allot a coal mine to the Rajasthan government in Chhattisgarh state.”

Mr Chaudhary added that government land has already been allotted for the construction of the power plant while the acquisition of private land is in progress. The RVUN has already invited tenders for the construction of a boundary wall at the proposed site.

As per report, the project is expected to ease power shortage in Rajasthan, which suffers from power deficit of over 27%. At present, the installed electricity generation capability in Rajasthan is just over 4,500MW and almost 70% of it is based on thermal energy.

Policy on tariff norms & bidding parameters for port taking shape

Exim News Service has reported that a clear picture of the new tariff norms and bidding parameters for ports is now emerging with the task force, under the chairmanship of Mr Anwarul Hoda a member of Planning Commission, submitting its reports to the ministry of shipping and the department of economic affairs. It has suggested an upfront tariff system and incorporation of productivity and efficiency standards in the bidding process.

At present, the license is granted to the bidder sharing the highest revenue with the port authority. The successful bidder is also assured a 15% return on capital employed while deciding the tariff. The bidders normally quote higher revenue sharing by hiking the cost of the project and tariff, thus making the ports uncompetitive. But now under the new tariff system, the ceiling of the tariff will be fixed first, after which the bidding will be carried out on a revenue share basis.

A Planning Commission official said that "If the tariff set is on the higher side, the bidders can bid for a higher share of revenue with the port authority and vice versa. So, it will be self corrective.”

A finance ministry official explained that the tariff ceiling will be revised every 3 years after taking into account the wholesale price index. Since factors like technological advances also impact productivity, and ultimately the tariff structure, the tariff ceiling would also be revised periodically, taking such parameters into account.”

The new revised tariff norm will be applicable to all new terminals coming under the purview of the tariff authority for all major ports however, whether the norms will apply to the existing terminals remains uncertain.

Gujarat NRE’s investors upbeat due to improved coke scenario

Gujarat NRE Coke Ltd has announced that investors who had subscribed to its foreign currency convertible bonds have started writing to exercise their option to convert their holding into equity shares.

The release added that “The global coking coal and coke market are now witnessing boom times and prices of LAM coke and coking coal are both on a continuous upswing. This coupled with the appreciation of the rupee against the US dollar is adding considerable amounts to the bottom line of the company It means that while on the one hand the prices of the company's product is on the upswing on the other the cost of inputs are going down as a strong rupee buys more and more.”

Gujarat NRE had issued 1% unsecured foreign currency convertible bonds amounting to USD 55 million in March 2005 and on June 1st 2007, it has received letters requesting conversion worth USD 0.55. Such conversion while reducing the liability of the company and also increases the net worth and the market capitalization.

China exports 6.17 million tonnes of steel in May 2007

As per latest report from China’s ministry of commerce China exported 6.17 million tonnes of steel products in May 2007, which is less by 0.99 million tonnes from all time high exports in April 2007. But the exports of billet & slab in May 2007 stood at 0.97 million tonne up by 0.1 million tonnes as compared to April levels. Some expert attributed export decline to 7 days Labor Day Holiday in May.

On the other hand China's imports of finished steel products in May 2007 dropped to 1.38 million tonnes down by 0.25 million tonnes as compared to April 2007. Monthly imports of semis also decreased to 10,000 tonnes down by 10,000 tonnes as compared to April 2007. China's imports of iron ore registered 27.62 million tonnes in May 2007 down by 5.75 million tonnes from April 2007.

China's steel export during January to May 2007 amounted to some 27.44 million tons up by 116.7% YoY. China imported 7.28 million tonnes of steel products in January to May 2007 period down by 6% YoY. Therefore, net steel exports added to some 20.16 million tonnes, valued at some USD 9.44 billion.

Mr Yang Hongbin a ministry of commerce official from the Shanghai office said that the explosive growth was partly due to market expectations of a policy to increase the export tax on steel products, which resulted in vigorous sales by exporters over the five month period.

Mr Luo Bingsheng deputy chairman of the China Iron and Steel Association said that "China's excessive steel export should be curtailed. We should prevent steel exports from too quickly rising and strengthen product structure adjustment. China's steel export should account for 10% of the nation's total outputs. China's steel export will decrease in the second half year when compared with that during January to April and is likely to be parallel with steel exports in 2006 or even lower. Meanwhile, domestic supply will therefore increase.” He foresees two scenario’s in steel exports in the second half of 2007.

One is that steel export will sharply drop owing to rising costs caused by Chinese government's relative macro control policies, resulting in increasing domestic supply but falling market prices. Gap between domestic market price and international price will be further widened, under which steel export will rebound up, arousing more macro control policies. Domestic market prices will show greater fluctuations, which we are reluctant to see.
The other one is that steel export will slide during the second half year on government's policies. Steel makers also organize production according to real demand. Plus effects of obsolete capacity elimination, steel output will maintain modest growth. Supply and demand will be thus in new balance. Domestic market will be stabilized, which is our goal.

Mr Zhao Yushen an analyst commented that the downward trend in steel product exports from April to May gave a dangerous signal to the domestic market. He predicted that exports in the second half of this year will continue to slide, further suppressing domestic prices. He said "We predict annual prices to fall to their lowest point in August, due to slack domestic consumption and a slowdown in exports. Prices will probably rebound in September as consumption recovers but price stability still depends on how much new hot-rolled capacity can be commissioned and how much outdated capacity can be eliminated in the second half this year.”

(Sourced from MySteel.net)

ThyssenKrupp denies talks with Severstal or US Steel

ThyssenKrupp has categorically denied a media report that it is in talks with US Steel and Severstal for a possible transaction.

ThyssenKrupp in a statement said that “This report is incorrect and totally inaccurate. ThyssenKrupp is not conducting talks with Severstal or US Steel about cooperation or a merger.”

The release added that “In May, the Supervisory Board of ThyssenKrupp approved the EUR 3.1 billion investment in a steel mill to be operated jointly by the Steel and Stainless segments in Mount Vernon in the US state of Alabama. The plant is scheduled to start operation in 2010. This project is a central element of the Group’s strategy for the Steel and Stainless segments, aimed at achieving profitable growth in Europe and North America.”

Russian news agency Interfax, citing an unnamed banker, had reported on last weekend that ThyssenKrupp was conducting merger talks with Russian steel producer Severstal or US Steel.

Severstal denies sale talks with ThyssenKrupp

Severstal has also denied a media report that it is in talks with ThyssenKrupp for a possible transaction.

Mr Alexei Mordashov CEO of Severstal on the sidelines of the St Petersburg International Economic Forum on Saturday told Interfax that “No talks have been held, none are being held and we do not intend to hold any.”

Russian news agency Interfax, citing an unnamed banker, had reported on last weekend that ThyssenKrupp was conducting merger talks with Russian steel producer Severstal or US Steel.

Australian coal exporters declare force majeure due to flooding

It is reported that Australian coal exporters BHP Billiton and Rio Tinto have declared force majeure following severe flooding, which halted ship loadings at Newcastle port and rail transport of coal. The report adds that other coal exporters using Newcastle port are expected to declare force majeure imminently if they have not already done so.

The operator of Newcastle port said that around 2 million tonnes of coal exports would be lost.

Newcastle, Australia's largest coal export facility, can handle 91 million tonnes a year. But exports from Newcastle have been plagued by severe delays for many months. Congestion at the port has left vessels queuing for up to five weeks at a time. This has resulted in vast demurrage costs and exacerbated the already tight supply situation in Asia.

ArcelorMittal to improve profitability of US operations

ArcelorMittal said that it is not making enough profit from North American operations and needs to streamline its mills there to be like those at its lower cost European operations.

Mr Aditya Mittal CFO of ArcelorMittal told a JP Morgan industry conference that "Shipments are about 20% of our company's and profits are about 10%, about half of what we believe we can earn.”

Mr Aditya Mittal blamed industry trends in the United States for lower profitability there. He said "We believe our facilities in the US have a lot to learn from our European counterparts, including profitability per ton. There's a lot to do in terms of operational efficiency, reducing the costs. We do believe we can achieve the same levels of profitability per ton, or roughly, in the United States as we do in Europe. Today that is not the case."

Mr Aditya Mittal did not elaborate on the efficiency measures but said that he believed that the North American operations could bridge the gap with Europe over time.

Salvage crew finds a hole in beached MV Pasha Bulker

It is reported that the salvage team working to remove the 40,000 tonne Pasha Bulker off a Newcastle beach have discovered a hole in the external hull of the coal carrier. However the report mentions that the salvage team is confident a second internal hull has not been pierced.

Mr Neil Patchett spokesman of NSW Maritime said that "The inspection on board has reported back that there is a hole in the bottom. It's understandable. It took a punch in the bottom as it was pushed across the reef. As Pasha Bulker is double bottomed so water was not entering the internal skin and at the moment there was no sign of oil leaking outside the ship.”

Mr Patchett said that specialized salvage tug Woona from Sydney arrived at Nobbys Beach and a second salvage tug from Melbourne is scheduled to arrive off the NSW Hunter region coast on Wednesday morning. He said that “"These salvage tugs are coming in to assist in the salvage operation and be on standby to lend assistance and make that tow or whatever is required. The massive' salvage tugs would prove invaluable in eventually dragging the Pasha Bulker off the sandbar where it has been stranded since Friday.”

Four days into the salvage mission, the ship is still moving on the sand where it is wedged. Newcastle Ports Corporation said that no attempt would be made to move the Pasha Bulker until at least Wednesday. Mr Patchett said that ‘It would be wonderful to give a time and date that the effort would be over. But there is no question that is still a long way to go. Even though the weather has calmed down, the swell is still running in at four meters. That's still a heavy ground swell. Even though the ship is on sand, it is still moving.”

China's May 2007 trade surplus surges by 73% YoY

China’s General Administration of Customs announced that China's trade surplus in May 2007 soared to USD 22.45 billion up by 73% YoY as compared to May 2006. This is close to the USD 23.7 billion surplus in February 2007, which is the second highest monthly level on record and all time monthly high of USD 23.8 billion reported last October 2006.

China’s exports in May 2007 grew to USD 94.1 billion up by 28.7% YoY and 1.9 percentage point from April. Its imports rose to USD 71.6 billion up by 19.1%YoY and about 2.2 percentage point higher from April.

China’s aggregate surplus for January to May 2007 jumped by 84% YoY to USD 85.7 billion. The World Bank and other experts say this year's trade surplus could top USD 250 billion to USD 300 billion as compared to USD 177.5 billion in 2006.

The European Union is China's biggest trading partner in the first five months of the year, with total two way commerce rising by 29% YoY to USD 129.9 billion. United States is in second place, with two way trade rising by 18.2% YoY to USD115.2 billion and Japan is No 3 with trade of USD 91.2 billion up by 15.5% YoY. Trade between China and India jumped by 53.7% YoY to USD 14.2 billion, which is the fastest growth rate among China's top 10 trading partners.

Beijing is trying to reduce dependence on exports by encouraging China's consumers to spend more, which would increase imports and narrow the trade gap. But that has had only limited success, with exports still growing much faster than domestic retail sales. The influx of foreign money has strained Beijing's ability to contain pressure for prices to rise. The central bank has been forced to drain billions of dollars a month from the economy by selling bonds, piling up reserves that have topped USD1.2 trillion.

Argentina imposes AD duty on authentic grade SS seamless tubes from China

It is reported that the Argentina trade management department has announced completion of anti dumping investigation on Chinese seamless austenitic grade stainless steel pipes and has imposed duty of 63.02% for 5 years as final judgment.

A source of China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters said that Argentina had been in a long process probing into Chinese pipes and the final arbitration is not to be refuted. He added that Chinese steelmakers were entitled to fight back to the petition during the process of case probing but no one did.

He said that Argentina has a limited intake of pipes and moreover majority of Chinese exporters are small and medium sized making it difficult for them to afford high cost for refuting the charges.

Highveld in talks to sell Transalloys unit

Reuters reported that Highveld Steel and Vanadium Corporation announced that it is in talks with a number of interested parties to sell its Transalloys unit, one of its ferroalloys divisions.

Highveld said in a statement that "A further announcement in this regard will be released if an agreement is reached. Until such time, shareholders are advised to exercise caution when dealing in Highveld shares.”

Macquarie forecasts increase in iron ore benchmark prices

As per Macquarie Bank, despite more suppliers, iron ore is still in tight supply and unbalanced supply and demand relationship in this year will prop up higher prices and that the situation may last until 2010.

Mr Jim Lennon ED of Macquarie Bank Ltd in Shanghai said that “China is now the main impetus for bullish market worldwide, pushing up prices for iron ore, copper, nickel, zinc and aluminum oxide. China's demand for basic metal represented 5% to 8% of the world's total in 1990 and 25% to 30% in 2005/2006. Even the growth slows down the figure is still expected to reach over 30% in 2010 and over 40% in 2020.”

Mr Lennon said that rising iron ore price in recent years reflects the short supply all over the world since 2003. He said “Currently the three iron ore giants all make investment on a large scale. However, Macquarie deems that by 2010 about 100 million tonne capacity will be delayed and can not ease the tight supply in time. Moreover, climbing ocean freight rate also adds impetus to iron ore price hikes, further to raise production costs.”

Mr Lennon advised Chinese steelmakers to cement cooperation with iron ore suppliers to ward off possible profit losses brought by price advances for raw materials.

(Sourced from MySteel.net)

NDRC approves relocation proposal of Northeast Special Steel Group

Interfax China reported that the China Iron and Steel Association announced that Northeast Special Steel Group has received National Development and Reform Commission approval to relocate some of its capacity to 70 kilometers from the city of Dalian in Liaoning Province in order to promote environmental protection of Dalian City.

As per report, an iron making facility, two electric furnaces, two billet continuous casters, two forging lines and a steel alloy rolling line will be built at the new production base in Jinzhou Industrial Park in the suburbs of Dalian. Northeast Special Steel plans to expand operations at the new base, aiming to produce 320,000 tonnes of iron, 1.2 million tonnes of steel and 1.1 million tonnes of steel products per annum.

Some of the old lines will also be relocated to the new base. The relocation will allow Northeast Special Steel to phase out a total of 1.2 million tonnes of outdated steelmaking capacity at its Fushun and Beiman production bases. Another six 10 tonne EAF’s and four 25 tonne EAF’s currently in the Dalian base will also be shut down.

Northeast Special Steel was set up by the restructuring of Dalian Iron and Steel Group, the Fushun Special Steel Group and the Beiman Special Steel Group in September 2004. Its core products include stainless steel wire, bearing steel, mold steel and automobile steel.

Nucor lower guidance for its Q2 earnings

Nucor Corporation announced that earnings for the second quarter ending June 30th 2007 are expected to be in the range of USD 1.05 to USD 1.15 per diluted share as compared to USD1.26 per diluted share in the first quarter of 2007 and USD 1.44 per diluted share in the second quarter of 2006.

Nucor said that second quarter earnings have been significantly impacted by lower shipments from Nucor's bar mill group. It said that “The rapid increase in scrap prices in the first quarter resulted in hedge buying during that quarter by our customers ahead of anticipated increases in steel products pricing. This hedge buying by our customers produced a record for first quarter shipments from our bar mill group.”

Nucor said that “In addition to the first quarter hedge buying driven by volatility in scrap pricing, bar market demand in the second quarter has been marginally reduced by softness in the automotive and residential construction segments. This softness reduced demand for our SBQ bar and rebar products. We expect second quarter bar shipments to decline approximately 17% from the first quarter shipments.”

Nucor added that “Additionally, sheet market conditions have remained challenging in the second quarter. In our first quarter earnings release, we noted that a risk factor for the second quarter outlook was the potential for a decrease in the rate of inventory reductions by our sheet customers. This decrease has occurred as a result of demand softness in the automotive and residential construction markets and as a result of a continued surge of imports from China of galvanized sheet, cold rolled sheet and hot rolled sheet in the form of pipe and tube products. With these over-supplied market conditions, announced flat rolled price increases were not realized. In turn, sheet mill margins were reduced by our inability to recover increased scrap and energy costs.”

Massey Energy completes its strategic review

Massey Energy Company announced that it has completed its strategic review process that was announced in October 2006 and its board of directors, in conjunction with the financial advisory firm of Goldman Sachs & Co and Massey's senior management, has diligently explored and evaluated a comprehensive range of strategic alternatives to enhance shareholder value.

It said that “Based on this review, the board of directors concluded that at this time remaining an independent public company and continuing to execute it is current strategic operating plan is in the best interest of Massey and its shareholders. The board of directors will continue to focus on opportunities for the company to achieve its primary goal of driving shareholder value.”

Mr Don L. Blankenship chairman & CEO of Massey said "Massey Energy has a strong strategic position in Central Appalachia as the largest producer and holder of coal reserves in the region. Our cost advantaged reserves and infrastructure and our synergies of scale will allow us to further grow shareholder value. We will follow the same strategic principles we have in the past. We will focus on expanding our margins while continuing to consolidate the Central Appalachian region via opportunistic acquisitions. This strategy will serve to put Massey and its shareholders in an even greater advantaged position going forward."

Massey Energy Company, headquartered in Richmond, Virginia, with operations in West Virginia, Kentucky and Virginia, is the fourth largest coal producer by revenue in the United States.

Sinosteel hires JPMorgan for exploring opportunities

Xinhua reported that Chinese state owned Sinosteel Corp has signed a strategic cooperation memorandum with JPMorgan Securities (Asia, Pacific) Ltd Corp to help it explore opportunities in the mining and smelting sector.

The report by the online unit of state news agency Xinhua provided few details of the agreement.

A senior Sinosteel executive was quoted as saying that "Through strategic cooperation with JPMorgan Corp, Sinosteel can further enhance its overall combined strength and core competitive ability for a more active leading role in the trade.”

According to the report, Sinosteel would also tap JPMorgan's expertise in international capital markets, acquisitions and fund management.

Metal Management and Herman Strauss sue Wheeling-Pittsburgh

Two scrap metal suppliers are suing Wheeling Pittsburgh Corp and the company that controls the steelmaker, Esmark Inc.

Herman Strauss Inc, a century old, family owned scrap business in Wheeling, sued both Wheeling-Pitt and Esmark in US District Court late last week, claiming it has suffered more than USD 18 million in losses so far because of illegal interference.

Herman Strauss, which was to supply nearly USD 400 million of scrap per year through April 2009, claims Esmark set out in the fall to sabotage, interfere with, destroy and ultimately cause the wrongful termination" of that contract. Herman Strauss said that Mr James Bouchard made his intentions to replace the vendor clear in August 2006, when he said publicly that Esmark had an agreement with another supplier who would start to manage that whole process for us in a more efficient way than it is being managed today.

Metal Management Inc has filed a complaint against Wheeling-Pittsburgh Steel Corporation in the Supreme Court of the State of New York County of New York. The complaint arises from a series of purchase orders issued by Wheeling-Pittsburgh to Metal Management beginning on or about February 20th 2007 for the purchase, shipment and delivery from Metal Management to Wheeling-Pittsburgh of specified quantities and types of scrap metal. The damages being sought include the contractual price of the goods, plus incidental damages, costs and disbursements of the action, prejudgment interest and such other relief as may be just and proper.

In the Complaint, Metal Management is seeking damages for the breach, anticipatory breach, wrongful rejection and repudiation of the purchase orders based on the following Wheeling-Pittsburgh actions
(1) Wheeling-Pittsburgh accepted delivery without objection of approximately USD 31 million worth of scrap metal sold to it by Metal Management but has failed to make payment for those goods when due
(2) By its conduct, Wheeling-Pittsburgh has indicated its intention not to pay for an additional amount of approximately USD 8 million in scrap metal purchased by it but where payment will be coming due shortly
(3) Wheeling-Pittsburgh has blanket rejected scrap metal as nonconforming, in some cases even before the scrap metal was delivered and inspected and without giving Metal Management an opportunity to cure any goods alleged by Wheeling-Pittsburgh to be nonconforming as required by the purchase orders and the Uniform Commercial Code.

Metal Management said that in terms of tonnage, Wheeling-Pittsburgh has rejected and or repudiated agreed purchase orders for approximately 86,400 tons of scrap metal, of which 76,800 tons not yet been shipped or which is en route to Wheeling-Pittsburgh and 9,600 tons of which Metal Management has already delivered to Wheeling-Pittsburgh, in addition to the approximately 16,000 tons of scrap metal previously rejected.

Mr Craig Bouchard president of both Esmark and the Wheeling-Pitt board of directors called the lawsuit a waste of everybody's time. He said "We believe there to be no merit whatsoever to the claim.”

Nucor Steel Tuscaloosa to add a new wide temper mill

Siemens announced that it has been awarded a contract by Nucor Steel Tuscaloosa, to add a new wide temper mill to its existing cut to length line without disclosing the contract amount

The 4 high temper mill will be equipped with hydraulic gap cylinders and an electrical and automation package, consisting of drives, high speed stand controller, laser speed sensors for automatic elongation control and an adaptive temper rolling model. In addition to the temper mill, the contract includes the replacement of the exiting pay off reel, coil car, coil preparation equipment and new entry guiding system.

The engineering, manufacturing, and installation will occur during 2007. Commissioning of the entry end equipment is scheduled to begin in the fourth quarter of 2007. Commissioning of the mill is scheduled to begin in the first quarter of 2008.

Nucor Steel Tuscaloosa produces a wide range of carbon, high strength low alloy, hot rolled coil, cut to length and discrete plate utilizing a steckel mill.

China may cancel export rebate for non powered vessels

According to the sources from ship yards, China is going to remove the 11% export rebate for un powered vessels such as non motored tugs and barges.

It is reported that about 90% of Chinese vessels are for exports, among which 30% are un powered vessels. This policy is anticipated to cast adverse impact on ship plate prices in Chinese domestic market

But opinions on the news are mixed. In a way, this is going to discourage vessel exports and reduce the demand for ship plate accordingly, which we believe would ease the strength of ship plate prices in due course," Answers a plate trader when asked for comment on the news.

While another indicates that this would only reduce the profit of exports, but it is not likely to greatly affect the ship plate market considering the robust export orders of vessels.

In the short term, it would exert psychological influence to market dealers. Steel makers would consider raise the ship plate allocation for exports if they find that they could earn more than domestic sales.

(Sourced from MySteel.net)

Voestalpine's main shareholders take stakes in Boehler - Report

According to a Profil report, Austrian steelmaker Voestalpine AG's principal shareholders are likely to have purchased additional stakes in Boehler-Uddeholm AG, which should help to raise voestalpine's eventual stake in the special steel company well above 60%.

The weekly magazine quoted Mr Klaus Kueng of Raiffeisen Centrobank as saying that he assumes “Austrian shareholders Raiffeisenlandesbank Oberoesterreich, Oberbank, Energie AG and Linz AG have collectively bought a stake of at least a 10% in Boehler-Uddeholm, which they would make available to Voestalpine.”

Last week, voestalpine announced it held 54.6% of Boehler-Uddeholm's share capital.

Skye receives environmental approval for Fenix ferronickel project

Canada’s Skye Resources announced that its Guatemalan subsidiary, Compania Guatemalteca de Niquel has received formal written approvals from the Guatemalan Ministry of Environment and Natural Resources for the four component environmental impact assessments relating to the processing plant and related activities at its Fenix ferronickel project.

Mr Ian Austin President & CEO of Skye said that "This represents an essential milestone for the project and keeps us on track to initiate construction activities later in 2007 with the target of being in production in the second half of 2009."

Basic engineering for the project is 50% complete and site clean up is underway. Negotiation of the EPC contract is nearing completion. Skye expects to approach the credit rating agencies shortly consistent with completing its debt financing in the third quarter. Skye said it is considering fast tracking a second production line at Fenix to increase nickel production in the early years of operation.

At the moment first stage production would be 11,200 tonne per year of nickel in ferronickel with second stage production lifting that figure to 22,300 tonne per year.

Cleveland Cliff’s Q1 earning down by 14% YoY

Cleveland Cliffs Inc announced that its first quarter earnings are down by 14% YoY as compared to Q1 of 2006 due to higher tax rates.

Cleveland said that its net income in January to March 2007 quarter went down to USD 32.5 million as compared to USD 37.9 million in January to March 2006 quarter but revenues in the quarter went up by 6% YoY to USD 325.5 million. Its profits in North America went down by USD 8.3 million to USD 37.3 million.

Tianjin Pipe’s TCICO orders for casting and rolling plant

It is reported that Tianjin Pipe Corp Group’s TCICO Tianjin has placed an order with SMS Meer GmbH for the supply of a complete continuous casting and rolling plant for the production of copper wire rod, Type CONTIROD 25C12. Commissioning of the plant is scheduled for mid 2004.

As per report the scope of supply includes the complete process equipment from the ASARCO shaft furnace for melting the copper cathodes, the Hazelett twin belt caster for casting a 90mm x 60 mm rod cross section right through to the 12 stand continuous rolling mill from SMS Meer as well as the media supply systems, the electrical equipment and a fully automatic packaging system.

The casting and rolling plant is designed for an annual production of 150,000 tonnes with an hourly output of 25 tonnes. It would produce rods in the diameter range from 8 mm to 22 mm. Its main features are the automatic control of the whole liquid copper area and the use of variable frequency individual drives for all twelve stands of the mill. Within the line, all the preparations have been made to also quickly permit production of various flat copper products up to a width of 90 mm following the integration of the necessary equipment.

Vietnam Steel Corporation raise finance to fund steel projects

It is reported that the Vietnam Steel Corporation has completed its first corporate bond issue for 2007, raising VND 400 billion (USD 25 million) to finance 5 major iron and steel projects.

Mai Van Tinh chairman of VSC’s board of directors said that the bond issue was intended to help strengthen the corporation’s financial position as well as finance new projects and increased production.

Mr Trinh Khoi Nguyen head of VSC’s investment department said that the corporation will target bond proceeds to five key projects through 2010.

Taken together these projects would change the face and structure of the nation’s steel industry.
1. Lao Cai Cast Iron Steel Co project is expected to exploit 3 million tonnes of iron ore per year and annually produce 500,000 tonnes of steel. This USD 175 million project would be completed in 2012 with land clearance currently underway.
2. A plant to produce plates steel in the southern province of Ba Ria Vung Tau has received an investment license and is slated to begin construction next month. At a total cost of USD 527 million, the project is expected to be completed in late 2009.
3. Another Steel Corporation subsidiary Thai Nguyen Steel Co would construct a facility yielding 500 to 750,000 tonnes of steel ingot per year. The USD 242.5 million projects are expected to be completed at the end of 2009.
4. A JV would be set up to exploit the Thach Khe iron mine a project. State owned mining giant Vinacomin and the Ha Tinh Mineral and Trade Co were expected to join in the JV Feasibility studies for the projects are presently underway.
5. A major steel mill would be erected in the central province of Ha Tinh at cost of USD 3 billion to USD 3.5 billion. The complex is projected to produce 4.5 million tonnes of steel per year.

VSC has also announced that it would issue additional corporate bonds in the third quarter of this year with a total value of VND1 trillion (USD 62 million).

LebGOK to supply iron ore concentrate to Mittal Steel Temirtau

It is reported that Russia’s Lebedinsky Mining and Processing Works has signed an annual iron ore concentrate contract with Kazakhstan based Mittal Steel Temirtau.

The contract provides for 40,000 tonnes of concentrate to be shipped monthly to the Kazakh plant, which accounts for 10% of LebGOK's sales volumes. Earlier LGOK has been supplying non fluxed pellets to Mittal Steel plant.

A policy of selling on long term contracts has been implemented Metallinvest in the beginning of 2007. The company is going to adopt 3 to 5 year contracts for iron ore products export sales later this year

Lebedinsky Mining and Processing Integrated Works is a leading manufacturer of iron ore products in Russia with a 21% share of the domestic market. Lebedinsky Mining and Processing Integrated Works is a manufacturer of high quality iron ore concentrate, pellets and hot briquettes. Its annual production is 21 million tons of concentrate, over 10 million tons of pellets and 1 million tons of hot briquetted iron.

MMX near signing long term contracts for Corumbá complex

BNamericas recently reported that Brazilian mining and metals company MMX has advanced on negotiations with several potential clients and is close to concluding long term agreements for its Corumbá complex at Mato Grosso do Sul state in Brazil.

MMX in a statement said that MMX has modified the system's future iron ore production schedule and postponed the beginning of operations of the second iron ore processing plant to 2009. MMX added that difficulties in contracting additional barge capacity to ship output also contributed to the decision. MMX's Corumbá complex includes 4.9 million tonnes per year iron ore mine in addition to a 400,000 tonnes per year pig iron plant, where the first blast furnace is expected to kick off production in mid July of 2007 and the second in mid September of 2007. Construction of the complex's semi finished unit is due to start in the third quarter of 2007 and to finish in third quarter of 2009. Total investment at Corumbá is now due to reach USD 86.1 million.

MMX said that “We are analyzing proposals for a potential strategic partner for the Amapá complex, which would result in corporate structure changes.” Meanwhile at MMX's iron complex in Amapá state, construction of a processing plant is progressing according to plan, with operations scheduled to start in fourth quarter of 2007. Iron ore production is forecast to reach 4.8 million tonnes per year as soon as 2008. According to MMX, the USD 357 million Amapá complex is planned to have iron ore capacity of 6.5 million tonnes per year. US iron ore and pellet producer Cleveland Cliffs has a 30% stake in the Amapa complex.

Meanwhile, negotiations with existing and potential customers to supply products from MMX's Minas Rio complex to be installed in Minas Gerais and Rio de Janeiro states have indicated a strong demand for the system's pellet feed. As a result, the company decided to delay the pellet plant kickoff by one year to 2011.

NSW sees many coal mine projects

Australian Northern Daily Leader reported that 5 new coal mines in New South Wales are due to come on line in the Boggabri, Narrabri and Gunnedah areas in the immediate future and will yield millions of tonnes of high grade coal every year. These developments place North Western NSW squarely at the centre of the current coal mining boom.

A recent report in MINFO, the mining and exploration magazine of the Department of Primary Industry, revealed that the already operational Idemitsu Boggabri, an open cut operation coal mine, will yield up to 1.5 million tonnes per annum of semi soft coking and thermal coal and has the potential to increase to 5 million tonnes a year.

The report added that the nearby Tarrawonga Coal Project is expected to yield up to 2 million tonnes of coal per annum, The coal mine is a JV between Whitehaven and Idemitsu and the construction of the mine began midway through 2006 with the first coal being produced late last year.

A third regional project has recently been put forward by Narrabri Coal. This is for a new underground coal mine 20 kilometer south of the town. The report plan was to recover up to 2.5 million tonnes per annum of run of mine coal by continuous miners. The Narrabri Coal project also entails significant infrastructure investment. The company is currently finalizing the environmental assessment plans to construct and operate a rail loop and coal loading facilities to take the coal to Newcastle for transport.

The Belmont Open Cut is the brainchild of Whitehaven Mining. The company lodged a major project application with the Department of Planning in late 2006. The target is to produce up to 1.5 million tonnes of run of mine coal per annum. A second open cut mine has been proposed for a site 15 kilometer to the west of Gunnedah.

The Sunnyside Coal Project is being put forward by Namoi Mining. It has been reported that this is also a Whitehaven project. The MINFO report stated the company planned to mine up to 1.5 million tonnes per annum of run of mine. Hoskisson seam coal using open cut and high wall auger techniques. The development application for this project was lodged last November.

Whitehaven is also in the process of seeking approval for a North Narrabri Mine, to be located west of the Kamilaroi Highway. The mine is expected to be in production by late 2008, will be an underground operation with yield expected to increase over time from 2 million to 6 million tonnes per annum.

Coal is NSW's most valuable export commodity. NSW's total recoverable coal reserves are currently estimated at about 10.290 million tonnes. Almost all the major NSW resources are located in the 500 kilometer long and 150 kilometer wide Sydney-Gunnedah Basin. There are five major coalfields within the basin Hunter, Newcastle, Southern, Western and Gunnedah. They are currently being worked by 58 operating mines and colliery operations. There are also 33 major development proposals in the pipeline. In the 2005-06 89.8 million tonnes of coal with an estimated worth of USD 6.7 billion was shipped overseas.