SAIL recreates stand on Chiria iron ore deposits

The Telegraph reported that Steel Authority of India Limited has retreated its intentions of not giving away any part of the iron ore from its Chiria mines in Jharkhand.

Mr SK Roongta chairman of SAIL told The Telegraph that SAIL has firmed up its investment plans till 2020 that envisage use of the entire ore production from Chiria. Mr Roongta said this is not possible because SAIL would utilize the ore for its expansion plans in the state and IISCO Steel Plants Burnpur facility.

Chiria leases were with IISCO, but got transferred to SAIL after the PSU acquired the ailing company. SAIL holds the mining rights for Ajitaburu, McLellan, Dhobil, Sukri and Tatiburu at Chiria. It also holds the rights for 67 acres at Ankua taking the total to 2,350 hectares of leased mining area. Though the reserves at Ankua have not been mapped out fully, analysts peg them at 600 million tonnes on the basis of preliminary surveys. Both Chiria and Ankua fall within the Saranda forests in Jharkhand.

Chiria deposits are vital to SAILs growth plans. SAIL is planning to take its steel making capacity in Jharkhand to 29 million tonnes by 2020 and ramp up the capacity at Burnpur to 3.2 million tonnes. SAIL plans is to increase the capacity of its steel plant at Bokaro to 17 million tonnes and set up a new 12 million tonnes plant at Manoharpur, both in Jharkhand. In fact, SAIL has prepared a blueprint to upgrade the mining facilities at Chiria to feed these plans. SAILs raw materials division has set a target of producing 19 million tonnes of ore by the end of this fiscal and wants to increase this to 26 million tonnes by 2012.

Although, many private steel companies are eyeing the Chiria reserves but it is pivotal for Jharkhand government for ArcelorMittals investment, who may decide to opt out in absence of iron ore linkage from Chiria. The matter between SAIL and Jharkhand government is sub judice but efforts are on by prime ministers office to bring about an out of court settlement and a meeting is likely to take place soon.

Indian steel makers raise flag over rising iron ore exports

PTI reported that Indian steel makers have again asked for capping iron ore exports as the export volumes and prices have increased recently, threatening expansion plans of the domestic steel industry in India.

The report cites a source in the Indian Steel Alliance telling PTI that "Iron ore is a non replenishing commodity. What do we do if it gets exhausted? All our expansion plans will be put on hold if the country is forced to become the net importer of ore. We need to analyze what economic sense it makes for the nation to allow exporting of the mineral.

The source added that "Iron ore exporters had already increased the prices by USD 21 per tonne between January 2007 and May 2007, which is an increase of 36.20%. Last month, ore exports from ports were 8.01 million tonnes as against 7.37 million tonnes in May 2006 amounting to a growth of 8.7% YoY. This gives them a substantial growth in their top line despite rupee appreciation."

ISA source, citing Indian Port Association data, pointed out that total exports from ports were 7.37 million tonnes in April as against 7.02 million tonnes in April 2006 leading to a growth of 4.8% YoY. He said As per the data provided by Indian Ports Association, iron ore exports have increased and will continue to increase despite rupee appreciation, export duty and increase in freight charges.

Miners, however, claim that exports have dipped by 10 per cent due to rupee appreciation, imposition of export duty and recent increase in freight charges.

Steel makers also said standalone iron ore mining does not require any substantial capital investment as in the case of steel plants and the state and central government exchequers do not get the revenue that is realized from the steel sector. They said One tonne of iron ore export gives the government INR 17 whereas one tonne of steel produced gives INR 4,300 as revenue which includes VAT, excise and the royalty.

On the other hand iron ore miners, claim that exports have dipped 10% due to rupee appreciation, imposition of export duty and recent increase in freight charges.

As per, the China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters, the FOB Indian port price variation during January to June 2007 for 63.5% Indian iron ore is about USD 17 per tonne or 30.3%
January 8th 2007 USD 56 to USD 57
June 12th 2007 USD 73 to USD 74

NINL workers agitation hits production

Statesman News Service reported that tension is prevailing at Kalinga Nagar in Orissas Jajpur district following the agitation by the workers in the Neelanchal Ispat Nigam Limited. As per report around 2000 workers including contract laborers are staging a fast unto death before the office of the managing director the plant demanding release of their salary increment.

Production at the NINL is completely disrupted following the cease work agitation resorted to by the workers. As per report, daily works in the power plant, filter plant, raw material division, handling section, blast furnace and coke oven was snapped and the plant was virtually shut down since Friday night.

According to sources, the agitated workers of the NINL are led by Mr Hari Charan Haiburu working president of the Kalinga Nagar Sramika Sangha and are demanding immediate release of their four years salary increment.

Mr Pratap Kumar Jena, general secretary of the Sangha said that The plant authorities are indifferent attitude towards us. Our increments are pending for the past four years. We wont allow any worker to work unless our demands are fulfilled.

A NINL sources said that The blast furnace also was shut down. It takes at least 60 hours to bring the furnace into working condition.

The report mentions that an agreement was signed between the plant authorities and the Shramik Sangha on payment of salary increment to the workers for last four years but the plant authorities didnt honor the agreement. However, the plant authorities are in negotiations with the Shramik Sangha to resolve the issue.

Jai Balaji to ink MoU with WB government for 5 million tonne plant

The Telegraph reported that Jai Balaji Group would sign a MoU in July 2007 with West Bengal government for setting up a 5 million tonne steel plant at Raghunathpur in Purulia district of West Bengal. Production is likely to start within 18 months after the land is handed over to the company.

The project involves an investment of INR 18,000 crore. The first phase will produce 2 million tonnes of steel and will require INR 3,500 crore. Initially, Jai Balaji is planning to produce hot rolled coil and may later set up a cold rolling facility. It will also have a power plant and a slag based cement unit.

As per report, a 4,500 acre plot has been identified on the outskirts of Raghunathpur for the project. West Bengal government will facilitate in land acquisition and connect the plant to water sources, coalmines and railway tracks. The West Bengal Industrial Development Corporation will buy the land from private owners and lease it out to Jai Balaji.

The report added that the group plans to merge its two listed companies Jai Balaji Sponge Ltd and Shree Ramrupai Balaji Steels Ltd and the new entity will be in charge of the Raghunathpur project.

Anti POSCO villagers will not give up their land to POSCO

It is reported that residents of seven villages in Orissa announced that they are determined to fight till the end against any attempt to displace them from their land for the setting up of a steel plant by POSCO, which will put their livelihoods under threat as they have been cultivating this land for generations.

Mr Nrusingh Behera of POSCO Pratirodh Sangram Samiti said We will never give up our land for a project that will displace us, destroy our livelihoods and the environment.

Villagers fear that the project will destroy a vibrant agrarian and fishing economy where people grow two paddy crops a year and women often earn an income from bamboo cane and livestock rearing.

A 4 day conclave was organized by a social group ActionAid and was attended by villagers. The conclave has demanded an immediate halt to displacement of indigenous communities.

SAIL to strengthen its retail network

FE reported that Steel Authority of India Limited has decided to brand some of its product and sell them through its exclusive retail outlets so that consumers not only have a pleasant buying experience but in the process steel also gets a brand status.

Mr SK Roongta chairman of SAIL said that in the first phase the company will be appointing dealers to stock its products mostly used for construction purposes in 604 districts of the country and in the second phase it will appoint multiple dealers in a district.

Mr Roongta added that such retail outlets would stock TMT bars which are used for house construction galvanized plain and corrugated sheets for roofing, making air coolers, trunks and storage grains.

Mr Roongta said the stores would also stock in small quantities hot rolled and cold rolled coils for general fabrication. However for its stainless steel products, which mainly comprises utensils and cutlery SAIL may look at setting up retail outlets at upscale malls.

AES India to invest USD 2.5 billion in power sector

It is reported that the AES India Private Limited, the Indian unit of US power firm AES, plans to invest INR 10,300 crore (USD 2.5 billion) in the power sector by 2011 and has set sights on having a total generation capacity of more than 5,000MW in the next 5 years to 7 years.

Mr Sanjeev Aggarwal director business development of AES India Private Limited told PTI that " We have signed an MoU with Chattisgarh Government to set up a 1,200MW coal based plant in Raigarh district. Many clearances have been obtained. We are waiting for the coal mines to be allotted."

Mr Aggarwal added that "AES needs about 180 million tonnes of coal to meet the demand for 25 years of operation and has identified coal mines. We have given the application to central coal ministry and hope to get the clearance fast."

AES is also running a 420MW power plant in joint venture with Orissa Power Generation Corporation with 49% equity and management control and is in the process of adding another 1,200MW at an investment of INR 4,800 crore.

Mr Aggarwal said that "For both the plants in Orissa and Chattisgarh, the company is planning to invite tenders for equipment by next month but no decision has been taken on the number of units and their size. There will be international competitive bidding and in all probability, the unit size will be 500MW each in both projects."

New norms for port projects may benefit existing ports also

Exim News Service reported that union governments plan to change the bidding criteria for all upcoming private terminal projects at major ports is also likely to benefit the ports existing projects.

The Anwarul Hoda panel, which was set up by the Prime Ministers committee on infrastructure to refine the port privatization policy, had acknowledged that the existing system was flawed. It has suggested that the government should first fix the tariffs on the basis of normative approach and then invite bids on the basis of revenue share to award contracts for all new cargo handling projects at major ports.

Following the recommendation, the ministry of shipping has asked the National Institute of Port Management to prepare a report that will set out the norms for fixing tariffs under which, tariffs are worked out on the basis of certain criteria and assumptions that have no relation to the actual costs. The new bidding criteria and system of fixing tariffs will be incorporated in the revised model concession agreement for major port projects and the government plans to modernize and upgrade cargo handling terminals at major ports with an investment of INR 50,000 crore through private investments over 5 years.

The report added that while the government is keen on making all new port projects attractive to private investors, it would also find a solution to the problems facing the existing projects. The gray areas in existing projects will also be rectified when tariffs are fixed on the basis of normative method. This will take care of issues such as royalty & revenue share.

The existing port privatization policy requires the terminal operator to share annual gross revenues with the government and the bidder quoting the highest revenue share percentage gets the deal. The tariffs for the services provided at the terminal are fixed subsequently with the approval of the ports regulator. The tariffs are currently fixed by adding 15% to the actual costs. Since the royalty and revenue sharing amounts paid by a private entity to the government, as part of the contract terms, are not included in the cost while fixing the tariff, it has impacted the revenues of private operators.

16 coal blocks identified for tariff based bidding

It is reported that the Indias Central Electricity Authority and the power ministry have jointly identified 16 coal blocks for allocation on the basis of tariff based competitive bid 9 blocks for three ultra mega power projects proposed in Orissa, Jharkhand and Chattisgarh.

As per report out of 4 blocks identified for the Chattisgarh UMPP, two blocks Paras East and Kante Vasan would be transferred to Rajasthan power sector utilities for allocation through government company dispensation route but CEA and the power ministry have observed that the requirement of Chattisgarh UMPP could be met out of the remaining two coal blocks, namely Pindrakhi and Puta Parogia. The remaining seven blocks are to be allocated to distribution companies in various states through tariff based competitive bidding.

The report added that to ensure an equitable distribution of coal blocks, CEA and the power ministry have also considered region wise allocation, whereby 2 blocks each will be allocated for pooled requirements of distribution companies in the northern, western and southern regions and one block for the requirements of the eastern region.

BHEL running at full steam to meet power equipment demand

Bharat Heavy Electrical Limited announced that it is operating critical machines round the clock on 3 shift operations with a view to enhance output to meet the power generation commissioning schedule during the current Plan.

The release added that BHEL is working on plans to raise its manufacturing capacity to 15,000MW per annum in two stages over the next 3 years with a total investment of around INR 3,200 crore. Its current annual capacity stands at 6,000MW, which is already being ramped up to 10,000MW per annum.

During 2006-07, BHEL manufactured and supplied 7,589MW of power plant equipment, higher than its annual capacity of 6,000MW and the enhanced capacity of 10,000MW would be available by the end of 2007.

Ankit Metal plans IPO to fund WB steel project

It is reported that Kolkata based Ankit Metal & Power Limited is planning an initial public offering for its 11.9 million equity shares with net offer to the public Being 8.4 million equity shares to raise a maximum sum of INR 34.56 crore. The price band for the offer is placed between INR 30 and INR 36 per share.

Ankit Metal & Power is raising capital from the public mainly to part finance an integrated steel plant at Bankura in West Bengal. The cost and capacity of the project as appraised by the bank was estimated at INR 121.98 crore. The balance funds are financed by way of term loan from State Bank of India INR 65.15 crore and promoters contribution of INR 38.49 core.

Ankit Metal and Power Limited was promoted by Mr SK Patni in 2002 to set up an integrated steel plant to manufacture sponge iron, ingots & billets and re rolled products with a captive power plant in West Bengal. The sponge iron unit has an installed capacity of 0.105 million tonnes per annum and has been in operation since October 2005. The billet caster has an installed capacity 0.065 million tonnes per annum and started operations in January 2006.

Ankit Metal and Power Limited It is installing a 0.1 million tonne per annum capacity rolling mill to produce TMT bars, wire rods and other rolled products. The rolling mill is expected to go on stream by July 2007. 8MW waste gases based captive power plant is also expected to be commission in July 2007. In the last phase, Ankit Metal and Power Limited intends to set up another captive power plant to generate 4MW of power from the AFBC based power plant by using the charcoal generated from the rotary kiln along with the low grade coal.

DVC asks permission for due diligence on MAMC

It is reported that Damodar Valley Corporation has approached the ministry of heavy industries and public enterprises in order to arrange permission from the official liquidator for conducting due diligence on Durgapur based Mining and Allied Machinery Corporation.

Mr AK Barman chairman of Damodar Valley Corporation told media that that apart from the underground machineries, DVC can get combined heat and power systems as well as other spare components for its power stations.

He pointed out that MAMC was the only PSU that manufactured mining equipment for underground mines and even though 85% of the coal comes from open cast mining, underground mining will always be cheaper than importing coal.

Damodar Valley Corporation had inked a MoU with Coal India Limited on June 1st 2007 to explore the possibility of acquiring the assets of the closed MAMC at Durgapur and revamps its facilities for manufacturing underground mining machineries.

Built with Russian technology, MAMC was originally a part of the Heavy Engineering Corporation in Ranchi. It was shut in January 2002.

NTPC plans a follow on public offer

It is reported that National Thermal Power Corporation is planning to tap the capital market again after about three years of its initial public offer and has sent a proposal in this regard to the Power Ministry.

Mr Anil Razdan power secretary said while announcing the second stage of NTPC's Dadri project said that "NTPC may go for a follow on public offer, I have seen the proposal. It is one of the most trusted companies.

However, the report mentions that Mr T Shankarlingam CMD of NTPC did not confirm the plans and said that "As the CMD of the company, I do not have anything to say."

At the time of its IPO in 2004, NTPC had offered about 10% of its equity along with a dilution of an equivalent stake of the government in it.

Chennai RO RO terminal attracts 15 companies

It is reported that 15 companies including 6 international entities have shown interest in the Chennai Port Trusts roll on roll off car terminal.

The companies are
1. Mahindra & Mahindra
2. Sical Logistics
3. Mitsui OSK Line
4. K Line
5. GBA Group (UK)
6. Parekh Marine Agencies
7. SVEC Constructions
8. JM Baxi
9. Wallenium Wilhelmsen
10. GAC Shipping representing Hoegh Auto Lines
11. International Clearing & Shipping Agency
12. ITD Cementation
13. Unicorn
14. ECL
15. Port of Singapore Authority.

The terminal is estimated to cost INR 80 crore and will be developed on a BOT basis, for a period of 30 years. It will be constructed on the southern end of the container terminal and have a capacity to park around 5,000 cars in an area of 10,000 square meters. A roll on roll off berth will also be constructed in 250 meter length 30 meter width and 12 meter depth.

Bauxite mining in Vizag gathers opposition

BL reported that the proposed bauxite mining in Visakhapatnam district of Andhra Pradesh by through the Andhra Pradesh Mineral Development Corporation to supply raw material to the Jindal refinery planned in Vizianagaram district is being opposed by all opposition saying that the state government should give up the move in deference to the public opinion failing which they would launch an agitation.

Mr G Srinivasa Rao a TDP leader said that concerted efforts would be made by all parties to bring together people to oppose the government move. He added that a public interest petition would be filed soon. He has asked the state government to answer questions raised by experts with regard to environmental pollution likely to be caused by bauxite mining and other related issues.

Mr J Pridhvi Raj of the BJP has accused the government of adopting double standards on the issue by saying that Congress is opposing bauxite mining in Orissa and supporting it in Andhra Pradesh.

IISI releases World Steel in Figures 2007

International Iron and Steel Institute have released the 2007 edition of World Steel in Figures. It contains essential facts about the world steel industry including steel production, consumption, trade, and basic statistics on scrap, iron ore, pig iron and crude steel production till 2006.

The top 20 steel producing countries in 2006 were

In million tonnes
Source IISI

The 20 biggest steel producing companies in 2006 were

In million tonnes
Source IISI

The International Iron and Steel Institute have published World Steel in Figures every year since 1971. 2007 edition contains
1. World crude steel production, 1950 to 2006
2. Top steel-producing companies, 2005 and 2006
3. Major steel-producing countries, 2005 and 2006
4. Crude steel production by process, 2006
5. Continuously-cast steel output, 2004 to 2006
6. Monthly crude steel production by region, 2003 to 2006
7. Steel production and consumption: geographical distribution, 2006
8. World steel exports - analysis by product, 2001 to 2005
9. World trade in steel products, 1975 to 2005
10. Scrap: estimated consumption, trade and apparent domestic supply, 2005
11. Pig iron, 2005 and 2006
12. Direct reduced iron production, 2001 to 2006
13. Apparent steel use, 2000 to 2006

If you are interested to get more details, please send an E mail at research@steelguru.com

Klockner & Co acquires Westok Ltd in UK

Klockner & Co AG's holding company in the UK, Klockner UK Holdings Ltd has signed an agreement to buy Westok Ltd based at Horbury in West Yorkshire. The acquisition of Westok is the eighth acquisition of Klockner & Co AG in fiscal year 2007.

Westok specializes in the manufacture and distribution of special steel sections, known as cellular beams, for floor and roof construction as well as bridges. With this specialist product, Westok serves a broad customer base in the UK's growing construction industry. In 2006, the company generated sales of around EUR 26 million with 90 employees.

Dr Thomas Ludwig CEO of Klockner & Co AG said "Westok has outstanding competency in deploying steel girders in the construction industry and is excellently positioned and extremely successful in this area. With its innovative products and high service levels this acquisition will supplement the broad offering of the UK Company expand its customer base and generate additional synergies."

Klockner UK predominately trades under the name ASD metal services. Together with a handful of niche businesses, this comprises 41 business units operating across 29 sites in the UK, and employs 1100 people.

Sumitomo Corp buys 50% stake in Howco Group

Sumitomo Corporation announced that it has acquired 50% share of HOWCO Group, which is oil well tube metal parts supply chain management service provider in United Kingdom, for more than JPY 10 billion after the agreement for partnership.

Howco was formed by Mr Malcolm Howat and Mr John Ferguson in 1982 and from the beginning, it concentrated on top end nickel based products for use in the Oilfield Services Sector, mainly in Downhole Completions and Subsea Wellhead equipment focused on high performance products requiring a combination of specialist metals knowledge and oilfield product knowledge. It operates in several locations including USA; Canada; Singapore; China; Norway; England and Scotland and has about 650 employees. Its sales have tripled from JPY 13 billion levels to JPY 44 billion levels over the past five years.

Howco Group is a global supplier to the Oilfield Services Sector focusing on supply chain management activities, which include tubular and bar distribution added value processing and manufacturing. As a market leader in high performance metals, HOWCO has SCM contracts with major multi national OEM's, providing supply chain management solutions on a global basis. Howco has a leading market share of more than 30% with its advanced systems, technology and customer-oriented supply services.

Sumitomo plans to expand from its existing trade and supply of OCTG products to the Oilfield Services Sector and combine its existing tubular products business with Howco Group's continued development of Supply Chain Added Value Processes and Technical.

A Sumitomo release said that Howco Group's worldwide positioning allows the Sumitomo Corporation to operate in all major oil centers around the globe. Working closely with Sumitomo Corporation, HOWCO will continue to grow in 2007 through continuing with proven strategies which will support their West to East transition, opening a new manufacturing facility in Dubai in May, and expanding their Singapore operation later in the year.

China to have 600 million tonne coal surplus by 2010

According to latest statistics from the Chinas State Administration of Coal Mine Safety, China's annual coal production capacity is expected to top 3.1 billion tonnes by 2010. It will be 600 million tonnes more than demand requires as, according to a previous prediction by the China National Coal Association China will need about 2.5 billion tonnes of coal in 2010.

Currently, production capacity of the coal mines being built is about 1.1 billion tonnes and 83% of the newly built coal mines are small ones whose annual output is less than 300,000 tonnes each accounting for one third of the Chinas total output.

Mr Zhao Tiechui director of State Administration of Coal Mine Safety said that "The over capacity of coal production will affect the healthy development of the coal industry. He urged local governments to take effective measures to stop illegal coal mining.

Coal makes up nearly 70% of China's nonrenewable resources. To fuel the robust economic growth, coal production more than doubled from 998 million tonnes in 2000 to 2.38 billion tonnes in 2006 and investment in the coal industry have been rising more than 50% in recent years.

BHP Billiton launches revised Climate Change Policy

In its revised Climate Change Policy, BHP Billiton announced that it believed accelerated action was required to stabilize greenhouse gas concentrations in the atmosphere at levels guided by the research of the Intergovernmental Panel on Climate Change. The policy states that BHP Billiton "will take action within our own businesses and work with governments, industry and other stakeholders to address this global challenge and find lasting solutions consistent with our goal of zero harm".

BHP Billiton has outlined its new four pronged approach to climate change. The four action areas identified in the policy are
1. Understanding emissions from the full life cycle of their products
2. Improving the management of energy and greenhouse gas emissions across BHPBs businesses
3. Committing USD 300 million over the next five years to support low emissions technology development, internal energy excellence projects and encourage emissions abatement by BHPBs employees and local communities
4. Using BHPBs technical capacity and experience to assist governments and other stakeholders on the design of effective and equitable climate change policies including market based mechanisms such as emissions trading

The policy includes new targets to reduce the energy and greenhouse intensity of our products by a further 13% and 6% respectively by 2012. It builds on BHPBs previous achievements, which included a 12% improvement in their greenhouse intensity over the period 1996-2000.

Mr Chip Goodyear CEO of BHPB said that BHPB acknowledged that the risks of climate change associated with increasing greenhouse gas concentrations in the atmosphere must be addressed. He said "BHP Billiton has recognized that our company, as well as society generally, must make real behavioral changes and accelerate technological progress if we are to achieve a meaningful reduction in energy use and greenhouse gas emissions. Our policy is about trying to play our part as best we can and encouraging those we work with to do the same.

Mr Goodyear added that "We are on track to exceed our current target of a further 5% improvement by the end of this financial year. We have also contributed significantly to research and development in clean coal technologies, including geosequestration, and have implemented several related programs across the business.

Mr Goodyear concluded that "As a leader in the natural resources industry we have an important role in meeting the worlds growing energy and resources needs. At the same time, we have an equally important role in minimizing the impact of our activities on the global environment and supporting our customers efforts to do the same."

China sets steel exports ceiling at 10% of its annual output - Report

The Economic Observer reported that China has set the ceiling for steel exports at 10% of the country's output. The newspaper said domestic steel producers and the National Development and Reform Commission reached the agreement on the cap last week in Beijing.

The move is part of a campaign to crack down on growth in energy intensive and high polluting industries. China has been trying to check overseas shipments with special taxes and the removal of export tax rebates.

POSCO to expand SBQ plate capacity at Gwangyang

It is reported that POSCO is planning to expand its annual production of thick steel plates used for shipbuilding in the Gwangyang steel mill in South Korea by approximately 1.5 million tonnes to 2 million tonnes at an estimated investment of KWR 700 billion. The plan is aimed to grab higher market share in r prospering shipbuilding business.

Considering POSCOs steel plate production capability of approximately 3.6 million tonnes in 2006, this investment plan would expand POSCOs steel plate production capability by around 50%.

The report cites a POSCO official as saying that "We are considering adding our enhanced production capabilities earned through revamping shaft furnaces 3 and 4 in Gwangyang steel mill to expand steel plate productions. If repairing of shaft furnace 4 is completed, followed by refurbishing of shaft furnace 3 which is to be completed at the end of this year, production capability of liquid steel will increase by roughly 1.5 million tonnes to 2 million tonnes."

Mr Yang Ki-won a researcher with Daewoo Securities said, "POSCO, Hyundai Steel and Dongkuk Steel are all pulling up their steel plate production levels by 1.5 million tonnes respectively, pushing total production amount to 4.5 million tonnes. Even so, when considering this years steel plate import outlook of 4.02 million tonnes, it will just narrowly balance out national revenue and expenditure. POSCOs investment in steel plate manufacture increase could benefit not only POSCO but Dongkuk Steel as well."

US to conduct administrative review on SS wire rod from South Korea

It is recently announced that, in response to a request by Carpenter Technology Corporation, USs Department of Commerce is conducting an administrative review of the antidumping duty order on stainless steel wire rod from the Republic of Korea. This review covers two producers & exporters and the period of review is September 1st 2005 to August 31st 2006.

The department published in the Federal Register the antidumping duty order on stainless steel wire rod from Korea. In September 2006, the department published in the Federal Register a notice of "Opportunity to Request Administrative Review" of the antidumping duty order and on September 29th 2006 Carpenter Technology Corporation requested that the department conduct a review of Changwon Specialty Steel Co Ltd and Dongbang Special Steel Co Ltd and any of their affiliates for the period from September 1st 2005 through August 31st 2006.

In October 2006, the Department initiated an administrative review of the respondent. On November 2nd 2006, the Department issued its antidumping questionnaire to the respondent but the respondent did not respond to the Department's questionnaire. On December 15th 2006, a letter was sent to the respondent requesting that it respond to our questionnaire but the respondent submitted no response to this letter.

Now, the department is conducting this administrative review. The products covered are those stainless steel wire rod SSWR that are hot rolled or hot rolled annealed and or pickled and or descaled rounds, squares, octagons, hexagons or other shapes, in coils, that may also be coated with a lubricant containing copper, lime or oxalate.

Average iron ore price in China gain 27.1% during January to May 2007

A latest report from Chinas National Development & Reform Commission revealed that China's domestic iron ore price averaged CNY 777 per tonne during January to May 2007 up by 27.1% YoY as compared to January to May 2006.

As per report, iron ore price averaged CNY 740 per tonne, CNY 754 per tonne, CMY 765 per tonne, CNY 767 per tonne and CNY 859 per tonne in January, February, March and April respectively up by 3.5%, 1.9%, 1.5%, 0.2% and 12% MoM.

(Sourced from MySteel.net)

Gerdau Ameristeel's Pacific Coast Steel to buy Valley Placers Inc

Tampa Bay Business Journal reported that Pacific Coast Steel has agreed to purchase the assets of Valley Placers Inc. No terms of the deal were disclosed. The transaction is expected to close within 30 days.

Valley Placers is a Las Vegas based reinforcing steel contractor that also operates a steel fabrication facility and retail construction supply business. It employs more than 110 field ironworkers and specializes in smaller commercial, retail and public works projects.

Pacific Coast Steel's participation in the Las Vegas market has increased considerably in the past nine months and the acquisition of Valley Placers gives it the local presence needed to support the growth.

Tampa based Gerdau Ameristeel Corp purchased controlling interest in Pacific Coast Steel last year. Gerdau is the second largest mini mill steel producer in North America with annual manufacturing capacity of more than 9 million tons of mill finished steel products.

North American iron ore output in 2006 stagnant

Platts reported that US, Canadian and Mexican iron ore production, which remained little changed in recent years, has not kept pace with global or even regional demand and that while overall North American output increased by 0.5% YoY in 2006, US output dipped to a three year low.

According to North American government figures, US production in 2006 was about 52.9 million tonne as compared with 54.3 million tonne produced in 2005 and 54.7 million tonne in 2004. US production came from 10 mines, 8 concentration plants and 8 pellet plants with majority of coming from Minnesota. Reported US iron ore and agglomerate consumption meanwhile rose to 62 million tonne in 2006 from 60.1 million tonne in 2005 and filling the gap were imports, estimated at 11 million tonne in 2006 down from 13 million tonne in 2005.

Iron ore output in Canada meanwhile rose to about 33.6 million tonne in 2006 from 30 million tonne in 2005 but the 2006 level is no higher than it was in 2003 and is still below the 2002 level of 35 million tonne.

Mexico approximately doubled its iron ore output between 2001 and 2003 but production levels have changed little since and produced 13 million tonne of iron ore in 2006 up from 12 million tonne in 2005. Most of the country's output is used internally although a small amount is occasionally exported to the US.

All the three North American countries compared unfavorably in terms of production by most major produces elsewhere. North American output rose by an anemic 500,000 million tonne last year while growth in Chinese production alone is estimated to have been about 100 million tonne an amount equal to North America's total current annual production. In addition there are few significant late stage iron ore projects or expansions underway in North America. Those that are on the horizon are mostly small and in the early stages of development.

ArcelorMittal to expand presence in Ukraine

Ukraines Journal reported that ArcelorMittal plans to invest up to USD 10 billion in development of the steel and mining sectors in Ukraine.

Mr Viktor Yushchenko president of Ukraine, who toured ArcelorMittal Kryvy Rih facilities on Thursday, said the company has been considering a number of investment projects but refused to elaborate. Mr Yushchenko also cited his meeting with Mr LN Mittal CEO & President of ArcelorMittal, which owns the largest steel producer in Ukraine ArcelorMittal Kryvy Rih.

ArcelorMittal has long been interested in developing a large deposit of iron ore, known as Kryvy Rih Oxidized Ore Mining Plant and Mr Yushchenko said he discussed the project with Mr Mittal. The Ukrainian government, led by Mr Viktor Yanukovych prime minister, had earlier tentatively selected a business proposal from a consortium of Metalloinvest of Russia and Smart Group of Ukraine for the development of the deposit. But the meeting between Mr Yushchenko and Mr Mittal suggests that the situation may change.

Global steel industry faces important challenges - OECD

Mr Risaburo Nezu chairman of the OECD Steel Committee at the 62nd meeting of the Steel Committee at Istanbul in Turkey during May 2007 said that “Despite the exceptionally favorable market situation the steel industry faces significant challenges that may affect its long term viability.”

Such challenges include

1. Trade issues
Steel making capacity is increasing rapidly in developing economies. If demand slows in these dynamic economies, the risk of heightened trade frictions will increase.

2. Environmental concerns
Steel makers need to address emissions control and other pressures for environmental protection while ensuring their cost competitiveness. Distortions in international competition will remain a concern.

3. Energy and raw material availability
Rising steel making capacity, export restrictions investment barriers and infrastructure problems in some raw material markets may exacerbate the scarcity of raw materials and lead to higher prices.

4. Skills
Large share of the labor force of steel industries will be eligible for retirement over the next several years particularly in more advanced economies. Given rapid population ageing in these economies the available pool of new workers for the industry will be smaller than it is now. Workforce training and development issues will need to be addressed.

China's steel exports to increase when gap in domestic ad global prices widens

China’s efforts to raise the costs of steel exports will lead to lower domestic prices in the second half, but then exports may rebound as the price gap widens.

Mr Luo Bingsheng deputy chairman of the China Iron and Steel Association during a conference organized by Steelhome said that lower prices at home could again push China to export more to international markets, where prices are high, provoking more state measures to curb overseas sales and leading to huge fluctuations in the domestic market.

Mr Luo said that "That's what we don't want to see. The government should step up efforts to eliminate outdated capacity and mills should adjust output based on actual demand to reach a new supply demand balance. It's quite clear now that prices in the second half will fall.”

Chinese government has announced a range of measures, including reducing and removing export tax rebates, imposing and increasing export taxes on some steel products and billets and requiring export licenses for certain products, to rein in China's swelling steel exports which had more than doubled in 2006.

Bell Potter tips a Chinese bid for BHP Billiton

An analyst cited in an Australian Herald Sun Web site said that a Chinese government investment fund might eventually make a bid for mining and drilling company BHP Billiton to address the country's commodities concerns. Chinese demand for commodities has drive prices up recently, as the country's booming economy continues to expand.

The recently formed USD 237 billion Chinese State Investment Co, which aims to invest overseas. The fund is being headed by China's former deputy finance minister Mr Lou Jiwei and has been given a mandate to invest internationally. It has already spent USD 3 billion for a 10% stake in private equity firm Blackstone.

Mr Peter Quinton research chief of Bell Potter said in the article that the stake will give the Chinese group a way to learn how to make private equity takeovers and an upcoming target of any newly acquired expertise could be BHP Billiton.

Mr Quinton said that he believed the Blackstone investment was a forerunner to bigger things, including a possible tilt at BHP, which analysts have valued at more than USD 200 billion. He said "If they get BHP they've got a diversified resource company, they have got oil, they have got iron ore, they have got base metals."

BHPB operates as a single entity and produces crude oil, natural gas, iron ore, coal, steel, aluminum, diamonds and more. About 60% of BHP shares are traded in Australia and the rest on the London Stock Exchange. Australians hold about 20% of the stock.

US raw steel production continues to dip last week

American Iron & Steel Industries reported that in the week ending June 9th 2007 US raw steel production was 2.039 million net tons while the capability utilization rate was 85.2 % as compared to 2.207million tons in the week ending June 9th 2006 when the capability utilization then was 92.1%. The current week production represents 7.6% decrease from the same period in 2006.

Production for the week ending June 9th 2007 is down by 2.4 % from the previous week ending June 2, 2007 when production was 2.090 million tons and the rate of capability utilization was 87.4%.

Adjusted YTD production through June 9th 2007 was 45.959 million tons at a capability utilization rate of 84.6%. That is a 7.1% decrease from the 49.490 million tons during the same period 2006 when the capability utilization rate was 90.5%.

AISI's estimate is based on reports from companies representing about 75% of the US raw steel capability and includes revisions for previous months.

Iron ore mine project in Gabon to start production in 2011

It is reported that an iron ore project located at Belinga in northeastern Gabon in and funded by China is due to start production in 2011 after a timetable for infrastructure work as well as a list of Chinese companies that will do the job has been finalized.

Mr Richard Auguste Onouviet minister for mines of Gabon after his recent visit to Beijing said that We have agreed on the legal framework for the operation, the Chinese have designated the constituent companies and its financial organization. Mr Onouviet added that 'Contrary to what one has heard up to now the project is on the rails. It was difficult to get going but the teething problems common to an operation of such a size are now behind us.

Iron ore was discovered in 1955 at Belinga, which lies in remote forest hills 500 kilometers east of Libreville, the capital and port on Gabon's Atlantic coast. Believed to be one of the last major untapped iron ore reserves on the planet, the Belinga site has never been developed because of the prohibitive cost of the necessary infrastructure.

Gabon gave China sole rights to exploit untapped iron ore reserves in 2006. Chinese interests will control 85% of Comibel, the company named to oversee the project and Gabon 15%. China Eximbank has agreed to lend the Chinese companies the USD 3 billion necessary to carry out the infrastructure work, with the loan reimbursed through sales of the iron ore. Infrastructure work had been expected to get underway in 2006 but had been put off several times, raising doubts over whether the project would ever get off the ground.

Erdemir Q1 profit surges by 401% YoY

Turkish Daily News reported that Turkey's biggest flat steel producer Eregli Iron & Steel Corp has increased its consolidated net profit by 401.94%YoY to YTL 138.176 million in January to March 2007 quarter as compared to YTL 27.5 million in January to March 2006.

The increase is mainly due to Erdemir's growth in operational profits, in addition to a surge in capacity and reconstruction studies. Erdemir sales revenues during January to March 2007 increased by 39.17% YoY while sales costs increased only by 23.29% YoY resulting in a 253.56% YoY increase in the main operational profits.

46.12% of Erdemir shares were sold to the Armed Forces Pension Fund Oyak for USD 2.77 million in a privatization move in 2005. Oyak later transferred its shares in Erdemir to Ataer Holding. Ataer Holding was established in December 2005 as a fully owned subsidiary of OYAK in order to participate in corporations operating in the iron and steel industry.

Wuhan and Kawasaki Steamship ink strategic iron ore agreement

It is reported that Wuhan Iron and Steel Company and Kawasaki Steamship Corporation Limited signed a long term transport COA contract on June 12th 2007. The agreement is aimed to further reduce the imports of iron ore costs for WISCO.

COA is an international contract favored large enterprises one of the modes of transport, help stabilize the consignors and the owners in the cooperative relations, control the cost of transportation, thus achieving goods, the two sides win, joint efforts against market risks.

Kawasaki Steamship Co Ltd is a global logistics company, primarily focused on the marine transport business, marine transport fleet by 337 of the world's most advanced all the different types of ships, comprising a container ships, bulk carriers, car carriers, LNG tank ship and finished loading, routes throughout the world.

Since the second quarter, due to the international climate, market fluctuations and policies on the impact of unfavorable factors, International maritime transport prices doubled, a serious threat to the Wuhan Iron and Steel imports of iron ore transport costs. To this end, the company proactive, positive contact international ship owners, signed a long-term transport cooperation agreement, lock transport prices, lower transportation costs.

Saldanha Steel to increase production of ultra thin HR by end of 2008

South African media reported that Mittal Steel South Africas Saldanha Steel plans to produce about 25,000 tonnes per month of ultra thin hot rolled coil per month on a sustainable basis from the end of 2008.

Saldanha Steel mill, which currently produces 1.2 million tonnes is expected to increase its capacity to over 1.3 million tonnes during 2009 by undertaking two major furnaces relines. Thereafter, nearly 300.000 tonnes per year of the mills HR output will be in thinner size like 1.2mm.

Mr Heinrich Kriel GM of Saldanha Steel said that the reline projects would cost ZAR 250 million, with ZAR 200 million going towards the relining of the Corex furnace, which will start on February 4th 2008 and continue for 68 days. ZAR 50 million will be directed towards a reline of the Midrex furnace during the same period.

The focus on thin and ultra thin material has come on the back of what has been termed as the turnaround of the mill. The ultra thin material is of significantly higher value and is particularly attractive in applications where thinness of material, rather than its chemical properties, is important, such as in furniture manufacture.

China's 6 top steel makers join hands for R&D

Six top steel mills in China, representing 25% of China's total steel output, have formally launched a collective bid to reduce resources consumption and pollution. The six steel makers include Baosteel, Anshan Steel, Wuhan Steel, Tangshan Steel, Shougang Group and Jinan Steel. Four research institutions will also join them.

They have agreed to cooperate in the next 3 years to 5 years to find solutions to the bottleneck problems in resources, energy and pollution that have hindered the development of the Chinese steel industry.

The union, initiated by the Chinas central government and with Beijing's policy and financial support, aims to improve steel product quality and develop more high value added products, which could not be achieved alone by any individual steel mills. China Iron & Steel Association said that Beijing would sponsor the union with funding of CNY 180 million (US 23.6 million) for the research.

(Sourced form MySteel.net)

US buyers and mills of plates & beams in a pricing tussle

Mr Tom Stundza of Purchasing.com in a recent article has highlighted that major steel buyers and mills in US are continuing to battle over prices for steel plate and heavy structurals as both groups are not comfortable as they await static free market trends.

Mills are projecting string demand and bookings for wide flange beams and other heavy steel shapes and plates, reduced imports and somewhat higher scrap price reflecting an imminent price hike. The report cites some of the steel mills as saying the following
1. Chaparral Steel claims that "Robust global demand and strong international prices for structural steel products should allow it to boost domestic wide flange beams prices higher than buyers are accepting.
2. Mills have kept pushing higher sales prices at buyers in an attempt to offset rising costs of scrap and energy. Mr Dan DiMicco CEO of Nucor said Prices will have to rise at some point to offset increased scrap costs. End use demand remains very healthy for long products.

On the other hand steel buyers have reported that business levels are down substantially in housing sector, some plate using sectors as heavy trucks, heavy duty on highway engines, construction machinery & recreational vehicles.

Ms Tricia Brannigan sourcing manager at diversified construction materials company Lafarge North America at Westminster in Colorado said that The new housing market has slowed and caused a slowdown throughout the construction materials marketplace. While the construction in the second half is expected to improve, it is really a wait and see approach.

As a result more buyers rejected a 7% price increase for structural in April than accepted. The consumption of wide flange beams has not increased, supply is in excess and midyear inventories are the highest in six years and price increases have been slower than expected by the mills. Nearly three quarters of the steel buyers at manufacturing companies surveyed in April by the Institute of Supply Management said that inventories are too high and they plan to reduce them over the next six months.

Steel plate prices have not reached the levels sought by mills. Market data shows overall plate demand actually is down just 3% this year off the second strongest end use year in a decade in 2006. Annualized data through spring suggests that full year plate demand will be even with 2006 tonnage because of solid purchasing in a variety of sectors.

ThyssenKrupp starts hiring for CSA in Brazil

Xinhua reported that ThyssenKrupp CSA Companhia Siderurgica has started the process of hiring 2,500 employees for its new plant and port being built in Rio de Janeiro.

Mr Valdir Monteiro manager of CSA human resources said that the first phase of recruitment would start in September this year and finish by the end of 2008. They hope to get 500 staffs by December 2007. He also said that 60% of the positions require a secondary education certificates 25% some kind of technical education and 15% higher education.

ThyssenKrupp CSA is a joint venture company of ThyssenKrupp in Brazil.

Ezz Flat Steel increases slab out put by 20% to 25%

It is reported that Egyptian Ezz Flat Steel has increased its by 20% to 25 % in a single step by achieving a maximum casting speed of 6.1 meters per minute in March 2007 with the help of Danieli. As per report, the production has stabilized with these parameters.

Considering the actual slab thickness of 70 mm cast at EFS, the casting speed of 6.1 meter per minute means that the plant assures huge production levels for narrow and medium width slab too. The production tests at EFS included different steels, ranging among extra low carbon, low carbon and medium carbon grades and in less than two weeks the whole range of widths has been tested obtaining any time steady casting conditions for all the slab widths and the steel grades.

The advantages of the complete mold thermal mapping with Breakout Prevention System installation were demonstrated once more not only in the prevention of the stickers but for on line checking of the mold fluid dynamics, lubrication, and shell growing. This resulted in a production of defect free slabs and prime quality strip. The slab macro etching carried out on both longitudinal and transverse sections confirming the fine internal quality assured by Dynamic Soft Reduction combined with Liquid Pool Control model checked internal slab soundness.

Transnet examining a freight rail ring around Johannesburg

It is reported that South African logistic major Transnet plans, which owns Spoornet, to boost its freight rail capacity, which includes a feasibility study on a rail ring around greater Johannesburg to reduce delays. This proposal still needs to be presented to the Transnet board.

Ms Moira Moses the group executive for Transnet projects in a presentation at the mid year SA Chamber of Business convention said that "We want to build a new hub as we are completing feasibility on a Gauteng freight rail ring. This is important because part of the reason for delays is that freight trains have to cross metro lines. As passenger trains have right of way this can lead to a lot of delays."

Ms Moses said that the idea was to take trains around greater Johannesburg and develop a new inland terminal using a large tract of Transnet land in Springs. She said "Our mission is to take business away from road."

Ms Moses said Transnet's philosophy was that technology and operational efficiency were more effective than new infrastructure. She said "Our network is good we are just not using it properly and acknowledged that there will need to be expansion in some areas."

Based on research by the University of Stellenbosch commissioned by Transnet, the transport parastatal has identified 23 priority commodities. These include coal, iron ore, cement, vehicles and containers. Using 2004 as a base, it is forecast that 50.1 million tons will be transported on the Durban to Gauteng route in 2009, rising to 69.4 million tons in 2019 and 84 million tons in 2025. In 2004 volumes between Durban and Gauteng were 42.2 million tons, of which Spoornet railed 10.3 million tons and road handled 31.9 million tonnes.

Romanian Metalexportimport taken over by Russian investors

Bursa daily newspaper reported that Russian investors now control Romania’s Metalexportimport Bucharest. The real stake of the transaction was Fortus a roll making company in Iasi, the main company of the Metalexportimport group, where the group holds 64.69% of the shares.

Mr Paul Tudor shareholder of the Metalexportimport said that “The investors, physical entities, have negotiated with the shareholders of Metalexportimport and have acquired over 50% of the titles. I don’t know, or I can’t say the total value of the amount paid by the investors.”

Mr Tudor also mentioned that the Russians have already appointed Mr Vladimir Genadevici Banacencov as GD of Fortus and Mr Gheorghe Chisca former GD has become deputy GD.

This is not the first attempt of the Russians to take over Fortus Company. At the end of 2006 the Russian company Rosatomstroi was interested in acquiring the shares held by Metalexportimport at Fortus, offering EUR 5.5 million and promising the pay of the remaining salaries to the employees, paying of the remaining credits of the company, as well as investments worth around EUR 30 million made in three years time.

The investors also estimated a production worth EUR 35 million in the first year, value meant to reach EUR 200 million in the next five years. These intentions were expressed in a formula forwarded to AVAS, but Fortus completed the portfolio of the Russians through the control over Metalexportimport.

Japan’s GDP grows at 3.3% in January to March 2007

According to revised government data released by the Japanese Cabinet Office recently, Japan economy grew at an annualized 3.3% in the January to March quarter of 2007. The figure marks the ninth consecutive quarter of growth that started in the corresponding quarter of 2005.

The cabinet office said that the growth rate for the seasonally adjusted real gross domestic product for the January to March quarter was revised upward from 0.6 % over the previous quarter or an annualized 2.4 % to 0.8% or an annualized 3.3%. The cabinet office said that "This shows that the Japan’s economy has been recovering steadily due to the rise in domestic demand."

The upward revision is attributable to the 0.3% increase in corporate investment that was revised from the preliminary figure of minus 0.9%. Plant and equipment investment was brisk in non manufacturing industries such as transportation and construction during that period, boosting corporate investment into positive territory. Personal consumption, which accounts for more than half of total GDP, raised by 0.8% a downward revision of 0.1% point.

Exports climbed by 3.3%, unchanged from the preliminary figure, while imports increased by 0.4%, a downward revision of 0.5 point.

The nominal GDP, which reflects current price trends, grew by 0.5%, or an annualized 2.1%, in the January to March quarter, revised upward from 0.3% or annualized by 1.2%.

The GDP deflator a measure of comprehensive price changes was revised downward from minus 0.2% from the previous quarter to minus 0.3%. This indicates that a departure from deflation has been delayed.

With the upward revision of the real GDP for the January to March period, the real GDP growth rate for fiscal 2006 ended in March was revised from the preliminary figure of 1.9% to 2.1%

Taigang to have largest SS CR capacity by June end

Taiyuan based Taigang Stainless Steel Co is planning to put 1625mm and 2100mm SS cold rolling mills into operation by end of June 2007.

Taigang Steel currently has stainless cold rolling capacity of 900,000 tonnes per year. With the new capacities added it would boast 1.4 million tonnes per year for SS cold rolling.

(Sourced from MySteel.net)

Centro Inox appoints Dr Ernesto as new president

It is reported that Italian Centro Inox conducted its annual general meeting met on May 30th 2007 to discuss new appointments within the Centro Inox.

Dr Ernesto Amenduni Gresele succeeded Dr Giuseppe Marzorati as president and Mr François Ink was elected as VP. Mr Giancarlo Stringhini was reappointed as Treasurer

Centro Inox is the Italian Stainless Steel Development Association whose members are major stainless steel mills, primary products fabricators and development associations of the alloying element industries.

Czech coal miner OKD’s Q1 earning up by 9.3% YoY

Thomson Financial reported that earnings at Dutch based New World Resources, owner of the largest Czech black coal mining company OKD, rose by 9.3%YoY in the first quarter due to higher global coal prices.

New World Resources, which plans an IPO on the Prague and London bourses in September 2006, said that its EBITDA rose from CZK 2.47 billion to CZK 2.7 billion. NWR added that bulk of its revenues came from production of coking coal, which accounted for CZK 4.49 billion in sales. It gave no overall figure for sales.

Comprehensive report on Indian steel sector

The Indian steel industry is poised for massive expansion. Dramatic consumption growth over the last few years has stimulated enormous expansion plan, facilitated by unexploited iron ore raw material base. India is now being hailed as the new China, where crude steel production soared from less than 100 million tones in 1995 to over 400 million tones in 2006.

Indian crude steel output at just 38million tonnes in 2005 is starting from a much lower base, and the economic steel- consuming structure of China is substantially different from India. Nevertheless, India has recently established a long-term goal of raising crude steel production to 100 million tonnes per annum by 2020.

UK based GFMS Metals Consulting in an innovative way and value for money report on Indian steel industry includes complete statistical coverage of the industry, an unbiased and frank assessment of growth expectations, a base case outlook for each steel product & the industry as a whole with a clear view of potential risks, an assessment of raw material availability and trends and production, trade and consumption forecasts out to 2011.

The report coverage includes historic production, trade & apparent consumption of carbon steel both long and flat products, raw materials, producers, economic environment, political and other risk factors.

If you are interested to know more about it please visit GFMS Indian Steel Report or send a mail at research@steelguru.com