Gerdau & Kalyani form JV for SJK Steel Plant assets

Brazilian Gerdau Group and the India’s Kalyani Group have signed a contract to form the Kalyani Gerdau JV with current steel making assets of USD 170 million. Both of the partners own the same stake of about 45% and have the same rights in the JV and other investors own the balance 10%. The Gerdau Group’s investment to acquire the stake in the joint venture will be of approximately USD 71 million. The final amount will be determined at the time of closing the deal.

The partnership includes the SJK Steel Plant Limited, which is located at Tadipatri in Anantapur district of Andhra Pradesh. Kalyani recently acquired it. It is an integrated Alloy Steel Plant with an annual capacity of 275,000 tonnes per annum. The equipment involved in the JV includes a blast furnace, a melt shop with two converters, a ladle furnace, a continuous caster and a pig iron production facility.

The Kalyani Gerdau JV plans to enhance its capacity to 1.6 million tonnes of finished steel in the next few years, which will call for USD 250 million to USD 300 million in investments according to preliminary studies. One of the highlights of this investment program is the installation of rolling mills, which will allow the production of steel with higher added value and supply both the automotive and civil construction industry, covering a broad range of special bar quality and construction products.

Mr André Gerdau Johannpeter CEO of Gerdau said "This is Gerdau Group's first step into Asia and reinforces our strategy of being one of the agents in the consolidation process of the world steel business. The partnership with the Kalyani Group is essential for the success of the business because it brings new knowledge about the local market and culture.”

Mr BN Kalyani chairman of Kalyani Steels Ltd said that “We are very happy to be associated with the Gerdau Group and partner them in their first steel venture in Asia. Together, Kalyani Steels and Gerdau will forge a powerful partnership to grow their individual companies which will capitalize on the strengths of the two organizations in steel business.”

The Gerdau Group is a Brazilian steel company that is currently the 14th largest international steel producer. In 2006 it reported production of 15.6 million tonnes and gross revenue of BRL 27.5 billion. It has approximately 32,000 employees and is present in twelve countries Argentina, Brazil, Canada, Chile, Colombia, the United States, Spain, Mexico, Peru, Dominican Republic, Uruguay and Venezuela.

The Kalyani Group has operations in the segments of common and specialty long steel, forged parts, auto parts, energy, and chemical products. It has annual net sales revenue greater than USD 2.1 billion and JV with global leaders such as ArvinMeritor of USA, Carpenter Technology Corporation of USA, Hayes Lemmerz of USA and FAW Corporation of China. The Kalyani Group is a world leader in the segment of forged products and has a production capacity greater than 600,000 tonnes.

National Research Mission for steel to be set up in India

BL reported that it has been proposed to set up a National Research Mission on public private partnership model aimed at promoting research and development in the Indian steel sector. The proposed National Research Mission will have a corpus of INR 50 crore to INR 60 crore and is expected to start within the next three months.

Mr RS Pandey secretary steel in an interview with BL said that the decision to set up the National Research Mission was taken earlier this month at a meeting that was attended by all major public and private sector steel producers in the country, including Steel Authority of India Limited, TATA Steel, Jindals and Rashtriya Ispat Nigam Limited.

Mr Pandey said that “It was felt that, keeping in view the huge capacity expansion plans for the domestic steel sector and the investments that would be made towards this end, it would be naïve to neglect R&D. We need R&D with regard to technology requirements, raw materials, processes, product diversification, improvement in productivity, energy efficiency.”

Mr Pandey added that the government would only provide a facilitative framework for setting up the proposed National Research Mission, even as the steel producers had agreed to contribute towards the corpus of the mission. The proposed NRM would be set up in virtual mode under which no new institution will be set up and facilities in existing institutions will be leveraged to promote R&D in the steel sector.

Mr Pandey said steel producers who contribute to the corpus of the National Research Mission would be members of its Governing Council. He said "Such a unique PPP model to promote R&D in the steel sector is very much needed, especially in the context of the growing production and demand for steel in the country. It will also go a long way in providing a fillip to India's efforts to become the second largest steel producer in the world by 2015-16, from seventh largest at present.”

Bangladesh to ban Indian high sulpur coal import

The Telegraph reported that Bangladesh government has decided to enforce a ban on import of coal from across its border with south Assam’s Karimganj district from June 29th 2007. As per report, Bangladesh is firm on banning the import of such coal, bearing low ash but with high sulphur content, as it leads to pollution hazards. The government has directed Bangladesh Importers and Exporters Federation to instead import shipments of low sulphur coal in bulk from Indonesia or China.

The primary objection of the army run Bangladesh government to imports of Meghalaya coal is over the inherent pollution hazard. The high sulphur mixture in it at the rate of 7% to 9% is the culprit. Such coal tends to emit excessive amounts of smoke mixed with sulphur, causing a significant threat to human health. But it enjoys high demand in the adjoining country as it is used in the 2,500 odd brick kilns in Bangladesh.

The ban will hit India’s coal traders hard as in the last fiscal itself as exports worth INR 33 crore was made to Bangladesh. Mr Krishnendu Paul general secretary of Assam Exporters & Importers Association said that this embargo would spell doom for the coal trade. In the last fiscal, coal valued at some INR 33 crore and weighing about 0.2 million tonnes was exported through the Suterkandi trade center.

This coal is extracted manually, without the aid of sophisticated mechanical devices from the low depth coal pits in Meghalaya’s Khleriat and Bapung areas. Meanwhile efforts are now made to install some devices, built with new technology, for each cluster of coal pits in Assam. This would ensure proper cleansing of sulphur in the exportable coals to a substantial extent however implementation of this scheme would take time.

The report added that a delegation of the Sylhet Chamber of Commerce and Industries led by its president Mr Dilwar Hussain is pressing government agencies for retaining this import system for coal.

India’s plans for power sector could get derailed limit on emissions

The 9th annual PricewaterhouseCoopers report “Energy and Efficiency: Utilities Global Survey 2007” has outlined the challenges related to emissions, being faced by India where power generation is booming and that a binding agreement could derail India’s energy policy.

Mr Kameswara Rao ED and India utilities leader of PricewaterhouseCoopers said that “The electricity sector in India, the 5th largest in the world, needs significant investments to overcome current shortages. It must also invest to improve efficiency of invested capital and modernize processes. The government of India has taken steps to bring in investment in thermal, hydro, nuclear energy, renewable energy and in transmission. But to achieve desired results, further regulatory reforms and more sincere efforts in restructuring are necessary. Utilities in India have a strong incentive to invest in energy efficiency as it goes some way to bridge the shortages. More so as end user inefficiency is the highest among consumer groups that are charged subsidized tariffs. Our studies show that proper targeting of energy efficiency interventions, along with local participation such as through distribution franchisees, a good return on investment can be achieved.”

According to statistics published by the International Energy Agency, the average annual per capita consumption of electricity in India for 2004-05 was 612.5 KW per hour compared to Australia’s 11,126 KW per hour, the US’s 13,338 KW per hour and Brazil’s 1,955 KW per hour. In such a situation when India is working at raising its standards to that of an acceptable world average to at least 1,000 KW per hour.

India, has so far maintained that it will not sign any global agreement on limiting emissions, rather that it will take voluntary steps in the area of energy efficiency and reduction of emissions.

Indian Railways & Nagarajuna ink coal transport agreement

It is reported that Indian Railways has recently signed a coal transportation agreement with Nagarajuna Power Corporation Limited for transporting thermal coal for Nagarajuna Power’s proposed 1015 MW thermal power plant near Padubidri near Udipi in Karnataka. Southern Railway, Konkan Railway Corporation Limited and Nagarajuna Power Corporation Limited signed the Agreement.

Under the agreement, the coal required for the plant will be transported by rail from new Mangalore Port to the plant covering a distance of about 36 Kilometers. Coal required for the power plant will be imported at the port while loading of coal and a small lead of 5 kilometers is in Southern Railway, unloading siding will be in Konkan Railway jurisdiction. Transportation of 2.8 million tonnes per annum of coal will be required for the power plant.

Since about 5 kilometers of the tracks are in Southern Railway, and the rest in Konkan Railway, Indian Railways needs to sign an agreement with Konkan Railway, for distributing responsibilities and penalties.

BEML chooses to be called as BML Limited

It is reported that Bharat Earth Movers Limited has received approval from the union government for changing its name to BML Limited.

Mr VRS Natarajan CMD of BEML said that "The change of name was necessitated to give a fuller view of our entire portfolio. The present name gives picture of a mining company only. We wanted to change that."

He added that the company had received the government's approval almost a month back and in the forthcoming AGM of the company, the proposal to re christening would be discussed for shareholders' approval.

Incorporated in 1964 as a PSU of the union government, BEML upgraded its portfolio over the years from just a mining company. It manufactures heavy earth moving equipment, railway rolling stock and metro coaches in its Kolar gold field manufacturing complex, defense equipments at its Bangalore facility while dumpers, motor grades, engines of different sizes & defense equipment are manufactured at its Mysore facility.

NTPC to form wind power JV with ABB

It is reported that National Thermal Power Corporation is planning a JV with ABB for its foray into power generation from renewables particularly the wind energy sector.

It has lined up plans to invest INR 6,000 crore for setting up 1,000MW of renewable energy capacity over the next 10 years. It is noted that NTPC has planned to set up wind energy capacity of around 250MW with the first project likely to be a 50 MW wind farm. Western and southern coastlines are considered as suitable locations for setting up wind farms and NTPC is currently evaluating possible locations for the first project.

Russian VSMPO Avisma eying titanium ventures in India

FIS reported that Russian VSMPO-Avisma Corporation and Indian government are conducting negotiations on the development of two JVs on the production of titanium and titanium sponge in Kerala and Andhra Pradesh.

The Russian party proposed India to build up under offset arrangements two plants for making titanium sponge and making titanium. The plants will be constructed on the base of a low capacity state owned enterprise KMML. The projected capacity of the plants is 10,000 tonnes per annum.

Hyundai Heavy to set up construction equipment plant near Pune

It is reported that Hyundai Heavy Industries Co has signed an INR 260 crore MoU with the Maharashtra government for setting up a construction equipment plant at Chakan in Pune for producing hydraulic excavators and has plans to add up the production lines such as fabrication shop, assembly lines and a paint shop for other construction equipment later. The production will begin within 2 years with initial production capacity of 3,500 units per year.

Mr VK Jairath principal secretary industries of Maharashtra at the signing ceremony of the MoU between Hyundai and the Maharashtra government said that "It is an important day for us as a Korean player is setting up a plant in Maharashtra."

Mr KH Park COO and senior executive VP of construction equipment of Hyundai said “We hope to increase our corporate value through the operation in India and expect it to be a sustainable growth in the future. The manufacturing unit will also export to West Asia, south east Asia and Africa.”

The new plant will serve the core global business of Hyundai Construction Equipment division. According to Hyundai’s estimates, the demand for construction equipment in India mirrored the demand in China, where Hyundai Heavy Industries controls nearly 18% of the market.

East-North Tala transmission line dedicated to the nation

Indian prime minister has dedicated East-North Tala transmission system to the country. The Tala Transmission System is the first high capacity link built jointly by Powerlinks, a JV of TATA Power Company & Power Grid Corporation of India Ltd at a cost of INR 2,800 crore through public private partnership.

Dr Manmohan Singh PM of India said that “The Tala transmission system will evacuate power from Bhutan and supply it to the eastern and northern regions of India. This will augment the capacity of the national power grid and make it easier for us to balance the supply and demand equation in power.”

However, Dr Singh described the lack of availability of quality power at affordable cost as the single biggest constraint in the country's development and called for the need to step up the reform agenda.

Dr Singh said that the government's plans to set up a National Power Project Management Board to speed up execution of all projects on time and to restructure the ongoing Accelerated Power Development Reforms Development Program. Dr Singh said that "As I had announced, the APDRP scheme is being revised and a National Power Project Management Board will be set up to assist State and Central utilities to ensure timely completion of all power projects."

Dr Singh also stressed that states should set up special courts to try cases of power theft. He said “We had agreed that as losses come down to agreed levels, we will reward performing states appropriately. The time has come for us to address the challenge on the energy front on a war footing. The complacency of the past, be it with respect to conventional or non conventional sources of power or indeed nuclear power, must end. The people of our country are not going to wait endlessly for us to sort out our administrative, political and theological problems."

Indian ports to see INR 93,385 crore investment in XI Plan

It is reported that the India’s Planning Commission has projected an investment of INR 93,385 crore in various ports to handle an estimated 1.002 billion tonne per annum of cargo during the XI Plan Period.

As per report the existing capacity of the 12 major ports is 456 million tonne per annum and the traffic handled during 2005-06 was 423 million tonne per annum therefore the capacity addition of 546 million tonne per annum would be required to handle the projected 1,002 million tonne per annum in the XI Plan Period.

According to the Planning Commission a total spending of INR 57,452 crore will be required to construct containers, POL and other cargo terminals including capital dredging, equipment and connectivity projects on the major ports in the next five years. In addition to the investment in major ports the maritime states have projected a capacity addition of 346 million tonne per annum entailing an investment of INR.35, 933 crore.

In the terminal year of the 11th Plan, 2011-12, the commission has projected that the major ports like Haldia, Tuticorin, Paradip and Cochin will handle over 709 million tonne per annum of containers, POL and other cargos.

Ashapura Minechem unveils growth plans

Times News Network reported that Ashapura Minechem will invest over INR 150 crore this year in various projects, including its mining plant in Nigeria and white clay processing unit in Kerala. Ashapura had also bid for gold, barytes and kaolin mines in Nigeria and is partnering with Nigerian company Nuel Ojei Holdings for the purpose.

The report added that Ashapura Minechem has also tied up with the US based Amcol to set up a 100,000 tonnes kaolin processing plant in Belgium. The equal JV, formed by both the companies, will produce value added products from bentonite. Kaolin, also known as white clay, is used to make ceramics, medicine and paper. Amcol has a 20% stake in Ashapura Minechem, which it acquired in 1999.

Mr Chetan Shah MD of Ashapura Minechem told ET that “We have control over 3,800 square kilometers of area in the country. The reserves are still to be estimated. There is also the possibility of discovering deposits of non ferrous metals. We expect to begin production by December 2007.”

Ashapura will initially invest about INR 35 crore for the project in the first year and for its Kerala project, where it will produce 200,000 tonnes of processed white clay, the company will invest INR 80 crore this year.

BSEB’s Sinafdar hydel power project at Bhabhua district gets eco clearance

Project Today reported that the Indian ministry of environment & forests has accorded clearance to the Bihar State Electricity Board's 345MW Sinafdar pumped storage hydel power project in Bhabhua district. The project had received the Central government's clearance last January and was awaiting environmental clearance.

As per report, the detailed project report for the INR 1,030 crore projects was prepared by National Hydroelectric Power Corporation. Bihar State Electricity Board is confident of starting civil work by early 2008. Of the total power generated 12% would be supplied to the Bihar State Electricity Board.

Foundation stone for DVC's two thermal power projects laid

Mr Sushil Kumar Shinde union power minister has laid the foundation stone for Damodar Valley Corporation's 2x500MW Unit 7 & 8 Mejia II expansion project in Bankura district of West Bengal recently.

The plant will entail an investment of INR 4,500 crore and is scheduled for completion by 2010.

Bharat Heavy Electricals is the EPC contractor for the project.

Mr Shinde also laid the foundation stone for DVC's 1,000MW thermal power plant Stage I at Raghunathpur in Purulia district of West Bengal. The ministry of environment & forests has recently given in principle approval for the proposed INR 4,000 crore project.

ADB grants USD 1.5 billion to Bihar for infrastructure development

It is reported that Asian Development Bank has agreed in principle to grant of USD 1.5 billion loans to Bihar government. Bihar government is likely to soon sign a MoU with the central government to realize the loan amount.

As per report, Bihar government has prioritized its plan for infrastructure development, which include state roads, master plan for urban development of all districts, holistic development of 10 identified big cities in the state, hydro electric projects and river water interlinking to combat annual floods in the state.

ArcelorMittal to maintain EU flat products prices in Q3

ArcelorMittal announced that it would maintain its current pricing structure for flat products in Europe for the third quarter.

Mr Christophe Cornier CEO of ArcelorMittal’s Flat Carbon Europe division said “Despite robust economic growth in Western Europe, a continuously buoyant steel market in Eastern Europe and increasing tension on the iron ore and scrap markets, we do not intend to increase our prices in Q3 in order to maintain a sustainable market environment for our customers and a healthy inventory level.”

ArcelorMittal remains confident about the demand for carbon steel products in Europe for the second half of the year. Mr Cornier said “Our forecast for Auto, Construction, Mechanical Equipment, Power Generation, Oil and Gas and the Tube industry in Europe is very robust. We expect that this year will continue as strongly as it has started.”

ArcelorMittal also announced that its output to the European market would be 3% to 4% lower in volume in Q3 than in Q2 as a result of mill outages related to necessary repair and inspection work. This will contribute to reduce the level of inventory of the market, which is slightly inflated due to a recent surge of imports.

Steel policy changes disrupt market sentiments in China

China's steel export volume has shown strong growth so far this year easing the steel glut of low end products at China’s domestic market to great extent. However, the government has tightened its grip on steel export through a string of restrictive policies. Market analysts are concerned that the market sentiment could be badly hurt by the frequent tax changes.

Domestic steel price has reduced across the board from mid June following steady gains in the first five months of 2007. Steel price lost 5% to 7% in North China and East China markets but still well above level in previous four months. However, rebar price has plummeted continuously in South China amid chaotic market offers. And the price of long products is set to weaken further in days to come.

In 10,000 tonnes

(Sourced from MySteel.net)

Global steel industry sees minimal effect of steel futures

Platts reported that, an audience interactive poll for steel futures was conducted at the 22nd Steel Success Strategies conference at New York.

As per the survey results
1. 40% of steel industry participants think that steel futures will have a moderate industry use, meaning coverage volume of 25 million tonnes per year
2. 25% of respondents said there would be significant industry use meaning volume of 400 million tonnes per year
3. 5% said there would be a huge industry use, meaning volume of more than 1 billion tonnes per year
4. 30% said there would be minimal industry use with no traction in global steel markets.

The subjects of steel futures and China has drawn considerable attention from the 1,200 attendees at the opening session of the conference sponsored jointly by World Steel Dynamics and American Metal Market. Mr LN Mittal president & CEO of ArcelorMittal dismissed the idea of steel futures by saying that “Steel futures are essentially a mechanism for financial companies mainly dealing with hedging and futures. It is not a solution for curbing price volatility."

Smorgon Steel to get shareholders approval for merger with OneSteel and BlueScope

Smorgon announced that the Supreme Court of Victoria made orders to convene meetings of its shareholders to consider the merger and that the shareholder meeting will be held on July 31. The Australian Competition and Consumer Commission gave the green light to the merger earlier this month.

Smorgon also announced that an independent expert's report, conducted by Grant Samuel and Associates Pty Ltd, has deemed the merger was in the best interests of its shareholders. Grant Samuel concluded the BlueScope acquisition was fair and reasonable and the overall proposal was in the best interest of Smorgon shareholders. It said "Grant Samuel has valued the Smorgon Steel Distribution business in the range AUD 675 to AUD775 million. The price of AUD 700 million to be paid by BlueScope Steel under the BlueScope Steel acquisition falls within this range. Accordingly, the BlueScope Steel acquisition is fair and reasonable."

The merger involves the break up of Smorgon, with BlueScope acquiring Smorgon's distribution business for about AUD 700 million and OneSteel picking up the rest of Smorgon's assets for AUD 1.1 billion. OneSteel first raised the deal about 12 months ago as an AUD 1.6 billion friendly offer for Smorgon. However, in late August, BlueScope positioned itself as Smorgon's largest shareholder to block the merger.

Mr Peter Smedley chairman of OneSteel said the merger was the next step in the restructuring of the Australian steel industry. He said "Furthermore, consolidation in the industry will allow for a lower cost and more efficient steel industry providing a platform from which to effectively compete in the world steel market for years to come."

CISA denies reports of 10% cap on China’ steel export

YIEH reported that China’s Iron & Steel Association has denied reports in the Chinese Media that China will restrict steel export to fewer than 10% of steel output.

Deputy secretary general of CISA said that it was just a suggestion from the association instead of requirements and government also has not released any such policy.

This report about restriction has ever emerged on China’s Economic Observer newspaper under the background of a meeting held in Beijing last week.

BHP lifts force majeure on coal exports from Newcastle

It is reported that BHP Billiton Ltd has lifted its force majeure on coal exports from Australia's Newcastle port as rail shipments to the port are seeing normalcy. This is likely to ease supply fears among Asian electricity producers.

Hunter Valley Coal Chain Logistics Team, which coordinates coal movements on the railway, said that rail operations should reach full capacity by Monday after being restricted since June 8th 2007. It added that “Shipments are expected to run between 85% and 95% of capacity over the weekend.”

However, Rio Tinto Ltd’s subsidiary Coal & Allied Industries Ltd. left its declaration in place. A Rio Tinto Coal spokeswoman said that force majeure remained in place because of continuing concerns about the weather and ongoing repairs to the rail link.

BHP and other coal producers had declared force majeure last week after a powerful storm shut the port and damaged rail links from collieries. An estimated 2.5 million tonnes of coal exports were lost because of the port shutdown and rail damage.

BHP ships around 10 million tonnes of thermal coal a year through Newcastle port from its Hunter Valley mine. Coal & Allied produced almost 26 million tonnes of Hunter Valley coal in 2006. Thermal coal exports from Newcastle port supply Asian power stations, mainly in Japan, South Korea and Taiwan.

Norilsk Nickel arranges USD 6 billion to buy LionOre Mining

Norilsk Nickel has signed an agreement with BNP Paribas and Societe Generale on opening USD 6 billion in credit lines to it to finance the purchase of Canadian nickel producer LionOre Mining.

Norilsk Nickel in a press release said "The acquisition financing package is structured in the form of a USD2 billion 5 year pre export finance facility, a USD1.5 billion 3 year dual tranche unsecured term loan and revolving facility as well as a USD 2.5 billion 1 year unsecured facility.”

Norilsk Nickel offered LionOre shareholders CAD 27.5 per share for a total of CAD 6.8 billion Canadian dollars or USD 6.3 billion for 100% of shares. Norilsk Nickel's offer is valid until June 28.

Ukraine’s’ steel export quote for 2007 up by 31% YoY

Ukraine’s economy ministry announced that Ukraine and the European Union have signed a new steel agreement allowing Ukrainian companies to increase exports of steel to EU in 2007

The agreement increases quota for Ukrainian steel exports to the E.U to 1.32 million tonnes in 2007 from 1.005 million tonnes in 2006.

MEPS forecasts decline in long product prices in EU

MEPS said that the average merchant bar and rebar price in EU have peaked, with rebar values increasing by EUR 80 per tonne above its previous high in September 2006 and that with recent decline in scrap values it is expected to see in a decline in transaction figures for both merchant bars and rebars through to the turn of 2007.

As per MEPS release, import prices from China will increase now that the new export levy is in place. This should reduce the downward pressure on selling values in the medium term as such, EU domestic prices are forecast to stay above the previous peak in this forecast period.

MEPS said that rebar demand in the Middle East is predicted to remain firm however consumption in the EU construction industry over the winter months is expected to slow for seasonal reasons. As a consequence there will be a sharp decline towards the end of 2007 before picking up in the beginning of 2008.

MEPS added that “The building and engineering sectors are likely to stay strong through 2007 and this will have a positive impact on the merchant bar market. Demand is expected to hold up quite well. Therefore, anticipate the price decline resulting from lower scrap costs being smaller than for rebar.”

Konecranes takes stake in SA Dynamic Crane Systems

Konecranes announced that it signed an agreement to acquire 19% of the share capital in the crane manufacturing company Dynamic Crane Systems Ltd in South Africa. The agreement includes an option to acquire the remaining shares in the company at a later stage.

Dynamic Crane Systems Ltd is a leading crane manufacturing company with headquarters in Johannesburg and specializing in the manufacture servicing and assembly of industrial and process cranes. DCS has annual net sales of approximately EUR 4 million and 60 employees. The main industrial customer segments for DCS are automotive, petrochemical, power, steel, paper and ports.

Mr Kari Utriainen director of Konecranes Standard Lifting said that "Business is growing strongly in South Africa and this strategic acquisition will enable Konecranes to deepen its cooperation with existing customers and continue to expand the customer base in southern Africa. The sub Saharan market has been untapped by Konecranes and this acquisition will also support our expansion efforts in this vast region."

Mr Trevor Atkinson co founder of Dynamic Crane Systems said that "Closer cooperation with Konecranes gives us more leverage within the industry and supports our aim of becoming the largest crane company in South Africa in the coming years. The overall market is expected to grow and infrastructure will improve during the next three years because of the FIFA Football World Cup that will be held in the country in 2010."

Dynamic Crane Systems Ltd and Konecranes have worked together since the early 1990s as DCS has been a licensee of Konecranes products for the South African market.

Argentinean AcerBrag expanding its product line

BNamericas reported that Argentine integrated steel maker AcerBrag is working to expand its range of products mainly those bound for agriculture and industry. Mr Alejandro Luca commercial manager of AcerBrag said that "We are focused on producing wire and mesh to diversify our range of products."

According to Mr Luca the only setback is Argentina's current energy troubles but I think there will be a quick resolution. It's something that limits us sometimes but I think it will be fixed. Mr Luca added that so far the AcerBrag's production levels have not felt the effects of power shortages.

Last year AcerBrag finalized a USD 100 million investment to increase the plant's capacity and is currently producing 20,000 to 22,000 tonnes per month of metal products. AcerBrag in 2005 also launched a new electric steel mill ladle furnace and a state of the art continuous casting machine to increase output.

AcerBrag, located in the Pilar industrial zone north of Buenos Aires produces billets steel bars and coils, plain bars and rods of varying quality. It has a capacity of nearly 200,000 tonnes per year and holds a 25% share of Argentina's construction market. The company exports products to Chile, Paraguay, Uruguay, Bolivia and Brazil.

Interpipe’s Nikopol plants to merge into Interpipe NIKO TUBE Ltd

Ukrainian Journal reported that Interpipe Nikopol Seamless Pipe Plant Niko Tube and Interpipe Nikopol Pipe Company, both based at Nikopol in Dnipropetrovsk region of Ukraine and part of the Interpipe Group will merge into Interpipe NIKO TUBE Ltd., stockholders in these companies decided at a meeting last week.

The share of Interpipe Niko Tube will be 83.85% of the united company, the statutory fund of which will equal to the united statutory funds of the two companies or UAH 256.829 million.

NLMK transfers DanSteel ownership to NLMK International BV

Novolipetsk Steel has announced the transfer of ownership of its 100% interest in DanSteel AS to its 100% owned Netherlands registered subsidiary NLMK International BV.

NLMK release said that “NLMK International BV was established in 2006 within the framework of the “Sustainable growth strategy 2007 – 2011”. A key element of the strategy is the acquisition of high quality rolling assets in core markets. NLMK International BV will play the role of the investment vehicle for future acquisitions of foreign assets by NLMK Group. The ownership of the 50% interest in NLMK – Duferco Group JV will also be transferred to NLMK International BV in the near future.”

The release added that “The establishment of NLMK International BV advances several important objectives of the company’s M&A policy. In particular, it enables to NLMK to optimize the ownership and management structure of foreign assets. An additional factor in favor of establishing NLMK International BV is the necessity of consolidating financial flows for future international acquisitions.”

DanSteel A/S was established in 2002 in continuation of Danish Steel Works Ltd, which was founded in 1940. DanSteel produces around 0.5 million tonnes of hot rolled steel heavy plates. DanSteel's production facilities consist of a rolling mill and services in the form of shot blasting and priming, marking, tests, burn and plasma cutting. The product range includes structural steel, shipbuilding steel and steel for boilers and pressure vessels. The company has its own harbor from where approximately 70% of its production is loaded on coasters and transported directly to the customers. In January 2006 NLMK acquired a 100% stake of DanSteel A/S.

Severstal’s Izhorsky to supply pipes for the Novatek’s Yurkharovskoe field

Severstal announced that its subsidiary Izhorsky pipe plant has won Novatek’s tender to supply large diameter pipes for the construction of the second part of Novatek’s Yurkharovskoe oil gas condensate field.

The planned volume of supply is about 60 000 tonnes or 70 kilometers of large diameter pipes. Under the conditions of the tender, Izhorsky pipe plant will deliver pipes of 1420mm in diameter with wall thickness of 18.7mm to 23.2 mm and length of 16.5 meters to 18.5 meters. The majority of supply will consist of pipes with trilaminar waterproofing.

Mr Oleg Urnev CEO of Izhorsky pipe plant said that “This win confirms the high quality of our products and the growing demand for them from large diameter pipes consumers. Our products enable us to reduce the number of welds and construction time. This is hugely beneficial in this project, which will be carried on in the inclement climate of the Russian north, where the terms of construction are limited by the weather.”

Living Steel shortlists 18 firms to compete for final building designs

Living Steel has released today a list of the 18 short listed firms who have been selected to submit final designs for housing in Brazil, China and the United Kingdom for the 2nd International Architecture Competition for Sustainable Housing. Over 1100 entrants from 88 countries entered the competition launched last October on World Architecture Day.

The list of short listed firms is as under
Brazil
1. Andrade Morettin Arquitetos Associados Ltda of Brazil
2. Brasil Arquitetura of Brazil
3. Collins And Turner Architects of Australia
4. Dubosc And Landowski of France
5.Perkins + Will of USA
6. Sebastian Irarrazaval Architects of Chile
China
1. Anderson of USA
2. Atenastudio+cityfoerster of Italy and The Netherlands
3. China Southwest Architectural Design & Research Institute of China
4. David Knafo Tagit Klimor, Architects & Town Planners of Israel
5. nArchitects of USA
6. IAUS School Of Architecture Tsinghua University of China
UK
1. Cartwright Pickard Architects of UK
2. Feilden Clegg Bradley Architects LLP of UK
3. Hideto Horike And Urtopia Inc of Japan
4. Icesa SA of Costa Rica
5. Mei Architecten En Stedenbouwers BV of The Netherlands
6. Roccatelier Associati of Italy

These short listed firms are charged with the development of innovative approaches to sustainable building design that use steel solutions to address the economic, environmental and social aspirations of a growing world population. One winner will be selected for each location, and the winning design will be developed for construction. The winning submission for each location will receive a EUR 50,000 prize and a contract to complete their designs for construction of a demonstration building in the target location. The remaining fifteen short listed finalists will each receive a EUR 10,000 honorarium.

The Living Steel International Competition for Sustainable Housing was launched to develop innovative approaches to meet sustainable housing needs. Underlying the competition was a desire to address the economic, environmental and social aspirations of a growing world population. The Competition was developed with the guidance of the International Union of Architects and consequently follows the provisions of the International Recommendations for Competitions in Architecture and Urban Planning adopted by the General Conference of UNESCO on November 27th 1978.

The 1st International Competition of Sustainable Housing, launched in 2005, invited architects to design sustainable environment-friendly housing at Kolkata in India and Warsaw in Poland. The winning architect for Kolkata, Piercy Conner Architects and Designers of United Kingdom and for Warsaw, architenbureau cepezed of Netherlands were chosen from the 259 Expressions of Interest received from architects in 38 countries. Construction in India and Poland is currently under planning and preparation.

Living Steel, a worldwide program to stimulate innovation in the design and construction of housing, was launched in February 2005. The International Iron and Steel Institute provide project management of the 5 year Living Steel program. The program comprises three key initiatives including market research, knowledge management and the competition and demonstration building to promote steel based solutions for sustainable housing. Members of Living Steel include Arcelor Mittal, Baosteel, BlueScope Steel, CELSA Group, Corus, Erdemir, IMIDRO, POSCO, Ruukki and TATA Steel.

Shagang starts production of API X80 grade

China's biggest private steel maker Shagang has successfully rolled out API 5L Grade X80 steel grade for manufacturing pipes joining other select Chinese steel makers like Baosteel and Shougang.

This development would enable Shagang to meet steel requirements for the second stage of China's west to east gas transportation project. The second stage this project is reported to be 4131 kilometers long requiring huge volumes of X80 grade of steel.

X80 is a high end pipeline steel with extremely high combination property.

(Sourced from MYSteel.net)

Coal Fe takes 60% stake in Indonesian PT Nusantara coal project

Victoria Park based Coal Fe Resources Ltd will acquire a 60% stake in Indonesia based PT Bungo Raya Nusantara subsidiary PT Nusantara Thermal Coal of for AUD 60 million in cash and scrip. Coal Fe will pay AUD 42 million for the acquisition in cash, and issue either 36 million shares in it or 273 million shares in subsidiary PT Techventure Indocoal to a value of AUD 18 million.

Coal Fe said in an announcement that it was considering different structuring alternatives for funding the cash and shares consideration, including the alternative of PT Techventure completing the acquisition and listing on the Jakarta Stock Exchange in its own right. Such a scenario would involve Coal Fe retaining an approximate 75% stake in PT Techventure.

PT Nusantara Thermal Coal has a third generation coal contract of work concession carrying the right to mine an area covering 2,832 hectares for 30 years in Indonesia's Jambi Province.

Coal Fe Resources Limited was incorporated in September 2006 to acquire rights to coal, iron and other mineral projects, explore those projects and, based on successful exploration results and economic conditions develop those projects to produce and sell those minerals.

Mycron steel starts expansion project at Shah Alam plant

Malaysia’s Mycron steel announced that it plan to proceed expansion project at its Shah Alam plant which is located in Selangor state.

Mycrson will spend around USD 35 million to establish new facilities and is planning to target its annual production growth of cold rolling products to 260,000 tons by the end of 2007.

Mycrson steel is setting a tension leveller, a skinpass mill and more equipments will arrive for further progress.

National Coal to buy coal miner Mann Steel Products

National Coal Corp announced that it has entered into a stock purchase agreement with the stockholders of Mann Steel Products, Inc to acquire 100% of the stock of the company for USD 55 million.

The transaction is subject to a number of conditions, including, but not limited to, completion by National Coal of its due diligence of the assets and properties to be acquired, National Coal obtaining financing to consummate the acquisition, approval of the transaction by National Coal Corp's Board of Directors and receipt of required third party consents and approvals, including consents of National Coal's senior secured lender and bond holders. National Coal's acquisition of Mann Steel Products is anticipated to close by the end of the third quarter.

Mann Steel Products, which is based in Birmingham, Alabama, produces steam and industrial coal for the domestic market. These newly acquired operations will add more than 1 million tonnes of capacity to National Coal's existing annual production capacity of approximately 2 million tonnes.

Mr Daniel Roling president & CEO of National Coal said "Mann Steel Products operates three surface mining facilities that are very well managed and have high quality coal reserves. This is precisely the kind of mining operation we have been seeking to enhance our future growth prospects. Mann's management has maintained excellent relationships with its work force and customer base, and the facilities incur low production costs. If consummated, we look forward to these properties making a meaningful contribution to our operations."

Headquartered at Knoxville in Tennessee in US, National Coal Corp, through its wholly owned subsidiary, National Coal Corporation, is engaged in coal mining in East Tennessee and Southeastern Kentucky. Currently, National Coal employs about 230 people and produces coal from mines in Tennessee and in Kentucky. National Coal sells steam coal to electric utilities in the Southeastern United States.

POSCO raises surcharges for tinplate and reduces for SS

In order to offset the increased material cost, South Korea POSCO announced to lift the surcharge for tinplates with thickness under 3mm on June 15th 2007. The new surcharge soared to between KRW 21,000 per tonne and KRW 61,000 per tonne due to the cost difference by tinplate thickness.

On the other hand, POSCO has announced to cut prices of 300 series stainless steel products by KRW 400,000 per tonne effective with 11 June shipments. It's prices for 304 hot rolled and cold rolled will be KWR 4.64 million per tonne and KWR 4.92 million per tonne respectively.

This was the first time that the company to reduce its SS price since December 2005 due to recent steep drop in nickel prices. POSCO has increased the stainless price for four times during the period of nickel soaring but the current slipped nickel doesn’t become a reason for them to lower its stainless price.

China’s demand for tin plates to increase by 7% to 10%

YIEH reported that International Iron and Steel Institute has predicted that the tinplate demand in China will increase by 7% to 10 %.

As per report the demand in China a decade ago was 370,000 tonnes but by 2006 it had reached 6 million tonnes.

Transnet Projects plans desalination plant at Saldanha iron ore terminal

Cramer Media reported that Transnet is considering building a 1200 kilo liters per day reverse osmosis desalination plant, which will use seawater to produce fresh water at the port of Saldanha’s iron ore terminal. The fresh water produced from the proposed reverse osmosis plant would be sufficient to fulfill the water needs of the approved expansion at the iron ore terminal, which is predominantly used for dust control.

Mr Christo Minnaar project manager from Transnet Projects said that an environmental impact assessment was under way through the Department of Environmental Affairs and Tourism. He said “If everything goes according to plan the plant could be operational in the second quarter of 2009.”

Mr Minnaar added that water for future expansions could be supplied by installing additional 1200 kiloliters per day reverse osmosis modules in the plant.

Mr Minnaar explained that alternative water resources around the towns of Saldanha, Vredenburg and Langebaan were inadequate to fulfill the water requirements of the iron ore terminal and that with reverse osmosis desalination there was an opportunity to reduce the burden on the West Coast District Municipality by offsetting the port's current water allocation.

Domestic steel prices in Vietnam moving up

It is reported that Steel producers in the South Vietnam last week decided to raise the selling prices by VND 150,000 to VND 200,000 per tonne whereas the price in the North Vietnam was up by VND 200,000 to VND 300,000 per tonne. Analysts said that these were the biggest price increases over the last year. Currently, bar steel is selling at VND 9.5million per tonne and rolled steel at VND 9 million per tonne, but not including VAT.

As per report the price increases have been attributed to the ingot steel price hike. China sourced ingot steel Q235 is selling at USD 525 to USD 530 per tonne while 20MnSi product sells at USD 530 to USD 535 per tonne. The price of scrap steel which is used for laminating ingot steel is staying firm at higher levels at USD 350 USD 360 per ton.

According to the Vietnam Steel Association the situation is now quite different. In May 2007 the sales by local steel mills unexpectedly increased sharply its member companies could sell 324,000 tonnes in May an increase of 36.3% over April 2007. As the consumption level was high, local producers have been trying to raise the selling prices. According to VSA though local steel mills previously could not raise the selling prices and had to compete with China’s products and no mill has reported losses and predicted that steel prices would go up further as the ingot steel imported from China keeps rising in prices.

Many importers said that they have stopped importing steel from China as Vietnamese customers prefer domestically made products, which have better quality and the same prices with China’s steel. Analysts said that once China’s steel could not rival with local product any more local steel mills would think of raising prices.

Hebei to restructure steel sector under a detailed plan

It is reported that in order to accelerate steel consolidation in Hebei Province, the largest steel producer in China, the provincial strategy making committee has drafted a detailed plan on backward capacity elimination and restructuring the sector subject to the provincial government's approval.

Under the consolidation plan, the province also pushed ahead closing and forcing out of backward capacities. It's reported that the local planning body has signed written commitment with the local authorities of Shijiazhuang Chengde, Zhangjiakou Tangshan, Xingtai and Handan. It's required that by this year end the six municipalities should wash out 3.98 million tonne iron smelting capacities and 5.19 million tonne steel making capacities involving 33 enterprises by 2010 1.71 million tonne iron smelting and 2.94 million tonne steel making will be further eliminated, entangling two other mills.

The plan lately submitted by the committee gives a specific description of the consolidation project along with supported measures some well known sources tell the newspaper. The province is thinking to carry out this plan in second half year.

Earlier Hebei Province had a framework how to promote its local steel sector's consolidation, mainly in three steps:
1. To form two groups in South and North part of the province, led by Handan Steel and Tangshan Steel respectively.
2. To accelerate regrouping of the mills in each part.
3. Direct and encourage other independent smelter steel-maker and roller to combine by technical co-op or through the industrial chain.

It is hoped the province will cut the number of steel mills to 40 by 2010 from 202 of the present, with the top ten taking up 75% of the total output. Though a group has formed in the North part to date by end of last year the province's steel output still grew up to 20.7% to reach 90.092 million tonne the sixth consecutive year posting as largest steel maker in China. Over this January to April its output sustained a 25.49% growth rate.

China top planning body NDRC had issued a notice to neaten fresh capacities and promote restructuring of Hebei Province's steel sector last November criticizing blind expansion and repeated construction in its region.

(Sourced from MySteel.net)

Number of large BF in Japan reaches 11 in May 2007

JMB reported that large blast furnaces with more than 5,000 cubic meters of capacity increased from 3 at the end 2000-01 to 11 furnaces out of 28 of operating blast furnaces in Japan at end of May 2007 after Nippon Steel, Sumitomo Metal Industries and Kobe Steel launched the large furnaces in April and May 2007.

Japanese major 4 integrated steel makers including JFE Steel expanded the blast furnace, when they relined the furnace to increase the high grade steel output and to improve the cost competitiveness under higher raw materials cost.

In addition, Nippon Steel will expand the BF No 1 at Oita works to 5,775 cubic meters in spring of 2009.

Rio Tinto rejects quit coal mining calls

It is reported that Mining giant Rio Tinto said that it is irrational for environmental groups to suggest coal mining can be phased out in areas like the New South Wales Hunter Valley of Australia any time soon.

Ms Fiona Nicholls spokeswoman for Rio Tinto said that coal has a long term future, despite the global warming threat. She said "Any rational study shows that coal is going to be fundamental for the future, but it does have to change and we have to change the way we use it in the future, but coal will continue to underpin the energy mix for Australia and right across the world for at least the next 50 years."

Rio Tinto’s subsidiary Coal and Allied operates three coal mines in the Hunter Valley and in a bid to address climate change each mine has a greenhouse gas emission reduction target.

Yayi Steel starts building a new CR complex

YIEH reported that China’s Yayi Steel has started setting up a new cold rolling line with a capacity at 900,000 tonnes per year at the mill located in Tianjing city. The total investment for this construction is about USD 184 million.

According to the China Iron & Steel Association the annual production capacity for this new line will be 300,000 tonnes each for pickling sheet, CR sheet and galvanized steel sheet.

Yayi Steel owns about 3 million tonnes output every year for crude steel to produce hot rolled sheet, strip and pipes products.

Russian NTC's net profit in IQ up 5.6 folds

AK&M reported that net profit of Russian New Transportation Company OJSC rose by 5.6 fold to RUB 0.2 billion in the first quarter of 2007 as compared to January March 2006. Its revenues however decreased by 5.6% YoY to RUB 3.4 billion but EBITDA rose by 3 times to ROB 0.34 billion.

New Transportation Company’s carriage volume rose by 14.3% YoY to 9.8 million tonne in January to March 2007 quarter.

New Transporting Company is a Russian independent company, dealing with oil and metallurgical products conveyance. Its freight movement in 2006 is as under

Volume in million tonnes
Change is with respect to 2005

Massey Energy’s 2 director resign from board

Massey Energy Company announced that Mr Daniel S Loeb and Mr Todd Q Swanson of Third Point, LLC resigned from its board of directors effective as of June 13th 2007.

Mr Loeb and Mr Swanson announced their resignation in a letter dated June 13th 2007 addressed to Mr Don L Blankenship chairman & CEO of Massey.

Transneft & Transnefteproduct to merge in September 2007

Interfax reported that Oil pipeline operator Transneft and petroleum product pipeline operator Transnefteproduct will merge in the middle of September 2007.

Mr Semyon Vainshtok chief of Transneft at a recent meeting with Mr Vladimir Putin president of Russia said that "We can expect the merger, which will bring a very big advantages to the oil industry and the country in general, to take place in the middle of September.”

Mr Vainshtok while updating on the process of the merger said "We are fulfilling the schedule we received from Rosimushchestvo to the hour.”