Jaiprakash Associates emerges as winner for Malvika Steel

Jaiprakash Associates Ltd has informed that the sale committee of Debt Recovery Tribunal of Delhi vide its Order dated June 26th 2007 has declared Jaiprakash Associates Ltd as the highest bidder for auction sale of the mortgaged property including land, buildings, plant and equipment and other fixed assets of Malvika Steel Limited situated at Jagdishpur in Sultanpur district of UP.

The Debt Recovery Tribunal had put the Malvika Steel under the hammer to clear off the over INR 1,200 crore outstanding due to institutions led by IFCI. The tribunal could receive nearly INR 600 crore from the unit.

Mr Vinay Rai promoted Malvika Steel, sprawling over 740 acres was initially planned with an investment of INR 3,000 crore project. But it as left unfinished in 1998, within just 10 months of getting off the ground. Malvika Steel’s plant was initially planned to have a capacity of 0.8 million tonne of sponge iron and 1.2 million tonne of iron pellets, but it was converted into a 0.635 million tonne integrated steel plant for manufacture of long products.

Indian iron ore import prices remain flat last week

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released on June 25th 2007 the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week.

USD per tonne
The change is with respect to prices posted on June 18th 2007

The change is with respect to the prices posted on June 18th 2007. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters is the largest trading association in China.

TATA Power completes Indonesian coal mine purchase

TATA Power Company has announced the completion of its acquisition of 30% equity stake in Indonesian thermal coal producers PT Kaltim Prima Coal and PT Arutmin Indonesia as well as related trading companies owned by PT Bumi Resources Tbk. The acquisition was made through two special purpose vehicles TATA Power (Mauritius) and TATA Power (Cyprus).

According to a release issued by TATA Power, a bridge loan facility has been provided by a group of banks led by Barclays Bank PLC for USD 950 million to complete the acquisition. The release said "The bridge loan has a tenure of one year, and the company intends to refinance the bridge loan facility immediately after completion of the acquisition.”

Mr Prasad R Menon MD of TATA Power said "We are happy to complete the acquisition. It is our endeavor to maximize shareholder value and securitise our fuel requirement in light of the aggressive growth plans chartered out by the company."

The definitive agreements to purchase 30% equity stakes were signed on March 30th 2007 for a consideration of USD 1.1 billion prior to working capital and other adjustments. As part of the deal, TATA Power has signed an off take agreement with KPC, which entitles it to purchase about 10.1 million tonne of coal per annum for an initial period up to 2021.

Orissa government hopeful on POSCO progress

PTI reported that in a meeting held at the Indian Prime Minister’s Office to review the progress made in POSCO’s project in Orissa, PMO officials have asked both the Orissa government and the mining ministry to work out a formula to fasten the pace of the project and break the impasse on allocation of mining lease to POSCO.

During the meeting, Orissa officials informed that substantial progress has been made on land issue and demarcation and boundary should be completed within this year. They said that the forest diversion proposal has also been sent to the ministry of environment and forests and their nod is awaited.

The grant of an iron ore mining lease to feed POSCO’s steel major's project is the second largest problem after land acquisition, the project is facing, and as a result has not made any progress in last 24 months, as state owned Kudremukh Iron Ore Company Limited has put its claim to the mines which POSCO wants.

Orissa state officials said they were confident of resolving the problem in a way that was acceptable to both parties. Mr Ajit Kumar Tripathi chief secretary of Orissa' said "We are working out a formula for a prospecting license for POSCO. We will surely come out with a solution shortly.”

BEML to acquire residual stake Brazilian JV CCC

BS last week reported that Bharat Earth Movers Limited is looking for 100% buyout of Brazilian Companhia Comercio E Construcoes for a total consideration in excess of INR 100 crore and that the acquisition is expected to be complete by 2008.

The report cites Mr M Poonavaranam director mining and construction of BEML as saying that “We are in the process of acquiring the residual stake in our JV partner CCC. The transaction would be complete within a year.”

BEML will acquire all the asset of CCC, which includes an assembly unit and would cater to companies like CVRD and has already registered itself in the state of Vitoria as a legal entity.

BEML has a JV agreement with CCC for manufacturing and supply of rail wagons & bogies, mining & construction equipment and spares for the Brazilian market.

The mining and construction industry in the Latin American region is growing rapidly due to the heavy concentration of firms like CVRD, which is engaged in iron ore mining. The region has seen faster growth in that sector due to the country’s surging industrial growth.

Chhattisgarh Captive Coal Mining JV dispute resolved

BL reported that the differences among the consortium partners of JV company Chhattisgarh Captive Coal Mining Ltd have been resolved with each member agreeing for revised quantities of coal allocation and that union coal ministry has also given its approval. The actual work on the ground is expected to begin soon.

As per report, the new coal allocation chart is as under

(In million tonnes)

The report cites a coal ministry official as saying that “During the meeting with the consortium members we told them that since the allocation for the development of coal blocks was already done, the government will not be able to revise the quantity of coal that could be obtained but rework the allocation. This was acceptable to all the members. The government was also very keen that the consortium did not terminate its joint venture as this was the first consortium that was allocated to develop a coal block. And if this project failed then it could have set a bad precedent for the things to follow."

The joint venture, which was incorporated as a special purpose company for development and operation of coal blocks Nakai I and II and Madanpur North & South blocks in Chhattisgarh, had run into trouble and there was also a threat that it could be terminated.

PSL posts 26% YoY jump in net profit for 2006-07

India’s leading pipe manufacturer PSL Ltd has posted a net profit of INR 12.96 crore for the January to March 2007 period down by 17.76% YoY as against INR 15.76 crore during January to March 2006. Its total income in January to March 2007 has also come down to INR 411.5 crore as against INR 474.8 crore in January to March 2006 while net sale has dipped by 14.31% YoY to INR 401 crore as against INR 468 crore.

But for the year 2006-07, PSL has reported a 26% YoY jump in net profit to INR 62.16 crore as against INR 49.16 crore during 2005-06 while its net sales were up by 3.34% YoY at INR 1,608 crore as against INR 1,556 crore a year ago. The total income has also marginally up by 3.3% YoY at INR 1,608 crore as compare to INR 1,556 crore a year ago.

PSL's total installed capacity is about 1.175 million tonnes of pipe manufacturing per year. With the inclusion of recently secured order from IOC, its order book will exceed INR 2,400 crore.

Tamil Nadu to add 2,500MW capacity in 5 years

The Tamil Nadu Electricity Board has decided to add a capacity of 2,500MW by augmenting the installed capacity at its existing power stations over the next five years on an investment of INR 10,000 crore. Mr Arcot Veerasamy electricity minister of Tamil Nadu said that Mr M Karunanidhi chief minister of Tamil Nadu would unveil the plaques for 2,500MW power projects of Tamil Nadu Electricity Board, on July 2nd 2007.

The projects, expected to be completed in 30 months are as under
1. 500MW North Chennai Thermal Power Station - a JV with NTPC
2. 500MW Mettur Thermal Power Station
3. 500 MW Kundah Pumped Storage Hydroelectric Project
4. 2x500MW Tuticorin Thermal Power Project – a JV with NLC

In addition, Tamil Nadu would get 806MW from the 2,000MW Koodankulam atomic power project, being built with Russian collaboration and expected to be operational in 2008. Tamil Nadu Government has suggested to the Railways Ministry that it set up a 1,000 MW power project in Tamil Nadu to buy cheaper power in the state.

Since inception in 1957, the Tamil Nadu Electricity Board has grown from 256 MW of installed capacity to 10,098 MW now. Starting with a consumer base of 0.43 million, it now serves over 18.58 million. The maximum peak demand so far reached in the state is 8,800MW and the surplus power is sold to Maharashtra and Punjab at INR 5.2 per unit.

CIL invites BEML to join plans for MAMC revival

It is reported that Coal India Limited has again asked Bharat Earth Movers Limited to join hands with it and supply underground mining equipment for its Mining and Allied Machinery Corporation revival project at West Bengal's Durgapur.

Mr Partha S Bhattacharya chairman of CIL while speaking at the launch of BEML Oil said that "We would look at a contract with BEML, in case it agrees to join hands with CIL and DVC in the MAMC revival project. BEML, with its expertise in heavy machinery building, could also get into underground mining equipment manufacturing. We would like BEML to provide us with the kind of mining equipment we would need as we grow."

Earlier, CIL and Damodar Valley Corporation had jointly proposed to acquire and revive MAMC and approached the West Bengal government with a revival proposal for the closed unit.

CIL is pursuing the revival of MAMC to get equipment required for underground mining, which is declared as a thrust area in the 11th plan. CIL would focus on the development of underground mines, coal beneficiation and generation of power for meeting a few of its subsidiaries' power requirement in the 11th Plan. It is also looking at a 520 million tonne of coal production in 2011-12, from 360 million tonne in 2006-07, for which is would again need a continuous supply of equipment and its maintenance contract.

PGCIL planning a mega transmission project

It is reported that Power Grid Corporation of India is planning a mega transmission project that will be able to evacuate about 7,000 MW at one go up from 3,500 MW now.

Mr RP Singh CMF of PGCIL while delivering the Silver Jubilee lecture on Integrated Development of Power Sector for Long term Sustainability at the Engineering Staff College of India based at Hyderabad said that such a project would help transmit from energy surplus regions of the country to energy starved regions

Mr Singh added that this project envisages up gradation of 400 kV stations to 765 kV stations. Mr Singh said that 13 engineering consultants have been engaged, as a consortium for the project. He said that "We are in the process of preparing technology specifications and tender documents."

Mr Singh explained that "The transmission arm of the power sector in the country is the most neglected area and we expect to witness significant investments over the next few years aimed at further strengthening the system and also helping evacuate power to under served areas of the country."

Mr Singh suggested the need to create a redundancy in power distribution network and also favored operation and maintenance of transmission lines by a separate wire company. This would bring higher efficiencies and also help create smaller companies at the local level.

India Nepal hydro power cooperation

In a recent report in ET, the issue of Indian interest in developing hydro power in Nepal is raised on the grounds that India has untapped huge hydro potential, power generation costs are higher in Nepal and the future electricity requirements of Nepal are likely to exceed its generation capacity.

India’s hydropower potential, with a 60% load factor, is found to be 301,117MW with a viable potential of 150,000MW. But only around 35,000 mw could be tapped so far. Nepal’s viable hydropower potential is just 43,000MW.

The cost of production of electricity in Nepal is INR 4.97 per KWH as compared to India’s INR 3.5 per KWH.

Nepali experts contend that optimum exploitation of Nepal’s industrial potential would require more power than the country has the potential to produce over next 10 years.

Mr Sushilkumar Shinde union power minister had recently announced that “To take up ambitious hydro projects in Nepal, detailed project reports, techno economic viability reports and mutual agreements between the two countries are being worked out. India is interested in exploring the hydropower potential of neighboring countries such as Nepal.”

India and Nepal are jointly working on 5 major hydroelectric projects
1. Karnali multi-purpose project
2. Pancheshwar multi-purpose project
3. Sapta Kosi high dam multi purpose project & Sun Kosi storage cum diversion scheme
4. Burhi Gandaki hydroelectric projects
5. Upper Karnali hydroelectric project.

Renewed interest in Indo-Nepal joint hydropower projects in Nepal has revived the debate on their feasibility. Nepali experts feel instead of targeting Nepal, India could well manage by properly tapping own hydropower potential.

Government plans to award 6,273 kilometer highways in 2007-08

It is reported that union ministry of road, transport & highways is planning to award contracts for 6273 kilometer of national highways on a build operate transfer basis in 2007-08 to be build at an investment of INR 40,955 crore. In 2006-07, 1734 kilometer highways were awarded, compared to 4740 kilometer in 2005-06.

The national highways targeted to be awarded by March 2008 includes 2,995 kilometer of six laning of Golden Quadrilateral under the National Highways Development Program Phase V, 2,224 kilometer of NHDP III A and 1,054 kilometer of NHDP III B.

Work has already started for the detailed project report preparation for these projects targeted for award in the second quarter by September 2007 and third quarter by December 2007.

The ministry has already sent the proposals to public private partnership appraisal committee for clearing 817 kilometer of national highways, which are pending approval and will then move projects for another 646 kilometer of national highways to public private partnership appraisal committee.

Nippon still to decide about expanding tie up with ArcelorMittal

Nikkei, without citing sources, reported that Nippon Steel Corp is expected to reach a new partnership agreement with ArcelorMittal in mid July 2007 that will include mutual technology transfers and expanding automotive steel joint ventures in China and North America. The report added that Mr Akio Mimura president of Nippon Steel would meet Mr LN Mittal president & CEO of ArcelorMittal in New York to sign the MoU.

Nippon Steel Corp however clarified that no concrete decision has been made about expanding cooperation with ArcelorMittal. Mr Masato Suzuki a spokesman of Nippon Steel said that "Nothing concrete has been decided by Nippon Steel with ArcelorMittal."

The two firms have been talking about the pact since July 2006 after Mittal Steel bought Arcelor, Nippon's strategic partner in Europe, in an unfriendly bid to create the world's biggest steel maker. ArcelorMittal asked to use the technology globally but appears to have eventually agreed to utilize the know how only in Europe. Now ArcelorMittal is pushing into the high end, automotive sheet steel market in Brazil, where Nippon's affiliate Usiminas is expanding.

Nippon Steel in July 2004 formed a venture with Arcelor and Baosteel Group Corp to make sheet metal for autos in Shanghai.

Nippon Steel produced 34 million tonnes of crude steel in 2006 as compared with 118 million tonnes by ArcelorMittal.

BlueScope sells its North American Vistawall Business

BlueScope Steel Limited announced the USD 190 million sale of The Vistawall Group, its North American aluminum architectural products business, to an affiliate of Oldcastle Glass® Inc a US subsidiary of CRH plc, an international building materials company. The sale will close on June 29th 2007.

The Vistawall Group is based at Terrell in Texas and includes Moduline Windows Inc based in Wisconsin. The Vistawall Group designs, manufactures and markets architectural aluminum storefront and engineered curtain wall systems, skylights, translucent roof and wall systems and operable window systems.

BlueScope Steel has owned Vistawall since April 2004 when it acquired Butler Manufacturing Company for USD 206 million, which included Butler Buildings in North America & China and The Vistawall Group in North America & China. BlueScope Steel will continue to own and operate the Butler Buildings and Vistawall China businesses.

Mr Kirby Adams MD & CEO of BlueScope Steel said "The time is right for BlueScope Steel to divest Vistawall North America in order to realize the outstanding value created in this non steel business which was included in the strategic acquisition of Butler Manufacturing Company in 2004. The sale price represents a strong financial return for our shareholders and reflects the excellent work by BlueScope Steel and Vistawall's management and employees in creating a successful and strong business."

Hot band prices continuing on downward trend

SteelBenchmarker reported that the US hot rolled band spot price for June 11th 2007 has dropped by 1.8% to USD 597 per, FOB the mill for the fourth consecutive drop and the world export HRB price has dropped by 1.6% to USD 571 per ton, FOB the port of export for the fifth consecutive time. The Chinese HRB ex works price plummeted 4.3% to USD 422 per ton for the second consecutive drop while the Western European HRB price rose by 1.2% to USD 696 per ton, ex works, for the second consecutive rise.

The 4 benchmark prices for HRB included in the June 11th 2007 report are

1. US
USD 597 per ton
Down by USD 11 per ton from USD 608 two weeks ago
Up by USD 26 per ton from the low of USD 571 on January 22nd 2007
Down by USD 101 per ton from the previous high of USD 698 on July 24th 2006

2. World Export Price
USD 571 per ton
Down by USD 9 per ton from USD 580 two weeks ago
Up by USD 72 per ton from the previous low of USD 499 on December 11th 2006
Down by USD 39 per ton from the peak of USD 610 on June 12th 2006

3. Western Europe
USD 696 per ton
Up by USD 8 per ton from USD 688 two weeks ago
Up by USD 140 per ton from the low of USD 556 on November 27th 2006
Up by USD 65 per ton from the previous peak of USD 631 reached on July 24th 2006.

4. China
USD 422 per ton
Down by USD 19 per ton from USD 441 two weeks ago
Up by USD 49 per ton from the low of USD 373 on July 24th 2006
Down by USD 42 per ton below the high of USD 464 on June 12th 2006

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar, and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

Chinese turns into net exporter for pig iron

China’s latest statistics show that its pig iron exports in May 2007 totaling 95,003 tonnes is up by 51% MoM as compared with 62,638 tonnes in April 2007. As per report, export mainly took place flowed into Japan, South Korea, Hong Kong, Vietnam, India, Indonesia, Bahrain and the US via Jiangsu, Shandong, Jilin, Shanxi, Guangdong, Yunnan, Liaoning, Sha'anxi, Zhejiang and Fujian province. But Jiangsu Province contributed to 81,800 tonnes of exports accounting for 86% share.

In the meanwhile pig iron imports in May 2007 decreased to 11,240 tonnes from the 147,941 tonnes recorded in April 2007 but up by 140% YoY as compared to 4,682.34 tonnes in May 2006. Pig iron imports mainly came from North Korea, Australia, South Africa and Kazakhstan with North Korea accounting for 87% of the total imports.

The statistics showed that during January to May 2007 pig iron exports amounted to 392,000 tonnes up by 465.55% YoY and imports totaled 422,794 tonnes up by 3076.46% YoY.

The statistics reveal that China has turned into a net pig iron exporter.

(Sourced from MySteel.net)

Venezuela and Sidor still to reach agreement on domestic pricing – Report

Venezuelan media reported that a meeting between Mr José Khan Venezuela’s minister of basic industries & mining and Mr Julián Eguren CEO of Sidor ended recently with no agreement on the prices Sidor is setting for steel in the domestic market.

As per report, the pact expected to be initialed last June 22nd 2007, after some seven weeks of negotiations was suspended because of disagreements regarding the form of the instruments to be initialed by government representatives and Grupo Techint officials.

This pact is expected to get delayed until Mr Khan comes back from Russia, Belarus and Iran, where he is accompanying Mr Hugo Chávez president of Venezuela in an official tour.

Mr Khan had told Mr Chávez on June 17th 2007 that an understanding was reached with Ternium Sidor.

ArcelorMittal delays EUR 1.5 billion bond sale – Report

Platts recently reported that ArcelorMittal indefinitely postponed a planned EUR 1.5 billion bond sale due to market volatility in global debt markets.

As per earlier reports, ArcelorMittal had planned to issue 5 and 10 year bonds through Arcelor Finance, its primary debt issuer and main financing vehicle, to raise funds for its ongoing consolidation and new capital projects.

The report also added that Merrill Lynch cut its recommendation on ArcelorMittal to neutral from buy following the ArcelorMittal announcement that prices of flat steel products would remain unchanged in Q3 and shipments would be 3% to 4% lower as a result of mill outages intended to reduce the inflated level of inventories.

The Arcelor Finance is currently rated by Standars & Poor's at BBB, the second lowest investment grade credit rating. The finance unit currently has EUR 1.9 billion in bonds outstanding.

Moody forecasts continued overall stability in steel industry

Moody's Investors Service announced that the outlook for the steel industry in 2007 and 2008 is largely stable as it continues to experience the positive business environment it has enjoyed over the past three to four years driven by positive economic developments in a large number of the major markets.

Mr Matthias Hellstern VP of Moody's said “Demand for steel globally is set to remain solid throughout 2007 and into 2008 given forecasts for GDP growth. This is also true for Europe and in particular, Eastern Europe where countries such as Poland and Russia need to catch up in areas such as infrastructure construction and should also sees private steel consumption even rising at higher rates than GDP growth.”

Moody's said integrated producers such as ArcelorMittal or Severstal would benefit from increased iron ore or coal prices, whilst those dependent on third party supply would find it difficult to pass on increased costs to their customers.

Moody's also pointed to two recent transactions the acquisition of Canada's IPSCO by Swedish producer SSAB and that of British Dutch producer Corus by India's TATA Steel as proof of the consolidation trend continuing in some parts of the industry along with an increase in partnering activity.

Steel industry in China & India driving global refractory market

According to a recent released report published by Global Industry Analysts Inc, the global refractory market is projected to cross 41 million tonnes in terms of volume and by USD 26 billion in value by 2010. The global refractories market is being mainly driven by the rapid industrialization of regions such as Asia Pacific, Latin America, and Eastern Europe. The steel industry forms a major end use segment for refractories.

Rapidly industrializing economies of Asia Pacific, particularly China and India is fuelling a major proportion of growth. According to research "Asia Pacific the largest refractories market in the world, is projected to reach 25.5 million tonnes in volume terms and USD 14.7 billion by 2009."

Refractory materials play an important role in the manufacture of steel, cement, glass and ceramics, and in petrochemical processes. But performance of the refractory industry hinges upon the dynamics in the iron & steel industry. Steel industry consumption of refractories varies from 50% to 80% of total annual consumption depending upon the country. The increasing severity in operating conditions such as high temperature, chemical attacks, and lengthy exposure time has catapulted the ladles market in the steel industry. Approximately 90% of the steel manufacturers prefer ladle metallurgy.

With development of high quality and durable refractories, a strong market orientation is seen towards value based growth as against production based growth. Significant growth potential is witnessed in Zircon, silicon carbide, extra high alumina and other more specialized refractory materials that offer strong performance in specific applications. By form type, bricks & shapes market represent the leading segment in the global refractories market.

The report titled “Refractories: A Global Strategic Business Report” provides a comprehensive review of the factors influencing the market, trends & issues, end use markets, recent technological developments, product introductions, and M&A activity. The study also provides market data and analytics in value and volume sales for regions such as United States, Canada, Japan, Europe, Asia Pacific, Middle East and Latin America by the following types by forms, by material type and by end use segment.

TMK denies reports of conclusion of Interpipe merger talks

Interfax reported that Russia's Pipe Metallurgical Company TMK has refuted a statement by Troika Dialog that talks with Ukraine's Interpipe on a possible merger might be concluded soon.

Mr Vladimir Shmatovich senior VP for Strategy and Business Development of TMK told Interfax that there are inaccuracies in a report distributed by Troika Dialog on Wednesday, which mentioned his meeting with representatives from the investment company on the previous day.

Mr Shmatovich said that “Concerning the timeframe for concluding talks with Interpipe, the negotiations are continuing, but the timeframe for their completion is not known. Negotiations are a thing where there may be a breakthrough in two weeks or by the end of the year."

Sideruna launches new pig iron plant at Mato Grosso do Sul

Business News Americas reported that Brazilian pig iron producer Sideruna has kicked off production at its new plant at Campo Grande in Mato Grosso do Sul state of brazil and expects it to become fully operational by early July.

Mr Reinaldo Torres president of Sideruna told Bnamericas “ It has plans to install additional pig iron projects in Brazil. However, it is too early to comment. We could start thinking about another plant in about six months.”

The facility is starting up at 10,000 tonnes per month and will increase output to 40,000 tonnes per month once Sideruna closes one long term supply deal. Sideruna previously inked a deal with São Paulo state based steel maker Cosipa to sell 10,000 tonnes per month till 2011.

Sideruna recently decided to shut down its operations in the southeastern state of Minas Gerais and will only produce pig iron from its Mato Grosso do Sul plant.

Steel inventories in US & Canada drop in May 2007

The latest Metals Activity Report from US based Metals Service Center Institute indicated that with demand for industrial metals softening, inventories of steel and aluminum products at metals service centers in the United States and Canada fell during May 2007 in a range of 2% to 5% from April’s levels.

Steel shipments fell from May 2006 levels in both countries, with the US shipment decline of 11.3% reflecting, in part, difficult comparisons with unseasonably high growth in steel shipments a year ago. Steel shipments from Canadian service centers continued to be adversely affected by the strong Canadian dollar. Rebalancing of inventories to match soft demand continued in both countries.

May steel shipments from US metals service centers totaled nearly 4.7 million tons down by 11.3% YoY. Year to date shipments of 22.9 million tons are down 6.6% from the same period last year. US steel product inventories at the end of May 2007 were nearly 14.1 million tons, down 1.6% from inventories at the end of May 2006. At current shipping rates, steel supplies were sufficient for 3.0 months, the lowest months on hand figure since June 2006.

Steel shipments from Canadian service centers totaled 338,800 tons, 10.9% YoY lower than May 2006 shipments. Steel shipments for the year to date are down by 6.9% YoY to 1.6 million tons. Canadian inventories of steel products totaled almost 1.3 million tons at the end of May, or 4.8% higher than a year ago, the lowest level of inventories in a year. At current shipping rates, Canadian steel stocks were sufficient to last 3.7 months.

The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and McCoy Scott & Co.

Severstal regrets Komsomolskaya coal mine accident

Severstal vide a release has deeply regrets the tragic accident at its Komsomolskaya mine in Russia. The release said “Our thoughts and prayers are with the families of those killed and missing.”

The release said that “At 18:50 local time on June 25th 2007 the controller of the Komsomolskaya mine received a signal about an accident at one of the outputs. An emergency response plan has been launched. A working group was formed with mine representatives, mine rescue units and Rostekhnadzor representatives. A total of 277 miners were underground at the time of the accident. 250 miners had been safely evacuated to the surface, with a number of others remaining inside to help with the rescue operation. Eight people died in the accident, with one currently in hospital. Two are still missing.”

Komsomolskaya mine is a part of Vorkutaugol, a mining company owned by Severstal. The production capacity of Komsomolskaya in 2006 totaled 2.452 million tonnes. The mine produces 2G coal. Vorkutaugol and consists of five underground coalmines and one open cast.

Tenaris & Xtreme Coil set new record in drilling with coiled tubes

Seamless tube major Tenaris, announced that it is working with Xtreme Coil Drilling to set a new record in drilling with coiled tubing. It said that “Tenaris and Xtreme Coil are working together on a project that is pushing the limits of coiled tubing drilling technology while introducing deep coil drilling to the US Rocky Mountain area.”

As part of the project, Xtreme Coil has asked Tenaris to produce the first strings of coiled tubing. The request required Tenaris to develop new 3 inch outside diameter tubing capable of drilling a 10,000 feet well. Coiled tubing experts at Tenaris worked with Xtreme Coil's engineers to develop coiled tubing string designs that could withstand the load, operating and external pressures, and fatigue that the coiled tubes experience when drilling deep wells.

To date, Tenaris has produced 12 strings of the newly developed coiled tubes for Xtreme Coil to use on the project, and it anticipates that demand for 10,000 feet well strings will increase as more experience is gained drilling the deeper wells. The coiled tubing strings that Xtreme Coil required to drill 10,000 feet wells had to be light enough to transport on trailers, yet robust enough in terms of wall thickness and yield strength to withstand the rigorous exposure they would receive in drilling.

Mr Bruce Reichert Tenaris Coiled Tubes Technical and R&D Manager “We examined different diameters, wall thickness and grades in order to produce pipe that would best fit their needs. The final product is the result of a team effort by both companies.”

Xtreme Coil, a specialized Canadian coiled tubing drilling services company, is pioneering the use of coiled tubing in downhole drilling applications to 10,000 feet, beyond 3 inch coiled tubing's historical technical drilling limits.

Tenaris runs two coiled tubes facilities at Houston in Texas.

China's coal output crosses 200 million tonne mark in May

According to statistics released by the China Coal Trade & Development Association China produced 200.60 million tonnes of raw coal in May 2007 up by 6.7%YoY.

China’s coal exports volume in May 2007 reached 3.91 million tonne down by 24.1% YoY. In May 2007, coal consumption by Chinese domestic power plants expanded by 1.47 million tonnes from April 2007 to 49.92 million tonnes, while coal stockpiles in power plants shrank by 0.13 million tonnes from the previous month to 26.83 million tonnes. Stockpiles have shrunk as temperatures have increased and industrial production has continued to grow. During the period, stockpiles at major Chinese ports also decreased, falling by 0.27 million tonnes when compared to the previous month to 14.91 million tonnes.

As per the data from China Coal Trade & Development Association, the performance has been as under

1. Raw coal output in May 2007

In million tonnes

2. Coal export volume by companies in May 2007

In million tonnes

3. Coal consumption of key power plants in May 2007

In million tonnes

4. Coal stockpile of key power plants in the end of May 2007

In million tonnes

5. Coal stockpile of main ports in the end of May 2007

In million tonnes
7 ports in North China include Qinghuangdao, Tangshan, Tianjin, Huanghua, Qingdao, Rizhao, Lianyungang

At the end of May 2007, China and Japan signed a contract over the export of Chinese steam coal during the 2007 fiscal year. The price of the exported steam coal has been set USD 14.97 a ton higher than the price the two countries agreed upon for trade during the 2006 fiscal year. The contract is expected to result in a growth in China's coal exports. At the same time, China and Korea have also begun discussing the possibility of an annual coal export contract.

Xstrata declares force majeure in Newlands coal mine

Reuters quoted a spokesman for Xstrata as saying that Xstrata has declared force majeure to all buyers of coal from its Australian Newlands mine due to a combination of operational difficulties. The report cites the spokesman as saying that the Newlands 10 million tonnes a year thermal coal mine had been experiencing difficulties for several days.

He said that "It has been a start stop impact due to operational difficulties including a rock fall but there has been an ongoing problem due to exceptionally heavy rain which has impacted the transport of coal to the processing plant."

Newlands, in Queensland, produces a high-quality, low sulphur thermal coal, which is exported via Gladstone port.

Australian coal exporters including BHP Billiton, Xstrata and Coal and Allied had declared force majeure on Newcastle exports earlier this month due to heavy flooding in the Hunter Valley region. Xstrata had lifted a previous force majeure on shipments via Newcastle port in New South Wales on June 18th 2007.

EU clears Salzgitter acquisition of Vallourec’s French unit

It is reported that the European Commission has cleared German based steel company Salzgitter AG's proposed acquisition of French Vallourec SA's steel tube unit Precision Etirage. The transaction also includes the transfer of Vallourec's Zeithain steel plant.

The EU said that the transaction would not significantly impede effective competition in the European Economic Area. EU said “Its examination of the proposed deal showed that, for all round precision steel tubes for automotive, engineering and energy applications, the combined firm would continue to face several strong, effective competitors with significant market shares.”

EU has also studied the impact of the transaction on the upstream market for seamless hollow tubes and concluded that there would be no risk of this market being closed off. EU said “The proposed transaction would not affect the market for the distribution of precision steel tubes.”

Greif Inc opens fourth steel drum plant in China

It is reported that Greif Inc recently opened its fourth large steel drum manufacturing plant at Huizhou in Guangdong Province of China for producing lined and unlined large steel drums.

Mr Michael J Gasser chairman, president & CEO of Greif Inc said "We see a bright future for our company in Huizhou and hope to add to the success of this region. As the largest industrial packaging company in the world, we continue our promise to provide the best quality products and services to our customers here and everywhere."

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

Corus has no plans for service center at St Petersburg

Platts reported that Corus has distanced itself from speculation that it is to set up a steel service center at St Petersburg in Russia, alongside a planned facility by British automotive steel manufacturer Stadco.

A Corus spokeswoman told Platts that while the company was constantly looking at new opportunities in a variety of countries, no firm plans had been drawn up for a new facility in Russia's northern capital.

The spokesman however added that "Stadco are a big customer of ours. We will always look to see what we can do to help but at the moment nothing has been decided on this particular issue."

Mr Dermot Sterne sales and marketing director at Stadco told Platts that plans were underway for their facility, which will principally supply the nearby Ford motor company assembly plant, to be operational by January 2009. Stadco manufactures body in white services and facilities to the automotive industry, and has selected a site close to Ford motor company's existing plant.

Mr Sterne said that "The site is strategically placed for access to Ford's facilities but is also close to a number of other major car manufacturers with whom we hope to do business in the future. The facility will employ 200 people, said a company statement, and with company bosses optimistic it will attract additional supply contracts from other carmakers before the site goes live. He added that initial investment at the site in the region of EUR 25 million to EUR 30 million.

Reuters had earlier reported that Corus will launch steel plate output in Russia in 2009 in partnership with British auto product supplier Stadco. The report cited Mr Andrew Morris CEO of Stadco as saying that his company would process steel produced by Corus from the first quarter of 2009 and supply products to Ford Motor Co's plant near St Petersburg. He added that Stadco is investing over EUR 100 million in its own processing plant, which will start around the same time. Mr Morris said that "It will suit them very well to come with us."

China’s iron ore imports up by 13% YoY

According to a statistic released by the China’s General Administration of Customs China imported 27.62 million tonnes of iron ore in May 2007 up by 13% YoY.

The release added that Australia was China's largest single ore supplier in May 2007 exporting 10.70 million tonnes.

TMK board re elected

It is reported that Russian pipe major TMK’s shareholders in the annual general meeting elected the new board of directors & the auditing committee, as well as approved the annual report and financial statements for the 2006.

The AGM agreed that the board of directors of TMK should be comprised of ten members including four independent directors. The re elected board members include
1. Mr Piotr Galitzine
2. Mr Andrey Kaplunov
3. Mr Adrian Cobb
4. Mr Josef Marous
5. Mr Sergey Papin
6. Mr Dmitriy Pumpyanskiy
7. Mr Geoffrey Townsend
8. Mr Igor Khmelevsky
9. Mr Alexander Shiryaev
10. Mr Mukhadin Eskindarov

At the bard meeting held following the AGM, Mr Dmitriy Pumpyanskiy was re elected as chairman of the board.

OOO Ernst & Young was approved to be OAO TMK auditor.

Mindoro Resources to fast track its Agata nickel project in Philippines

Canadian junior Mindoro Resources announced that it plans to fast track development of its Agata nickel ore project in the Philippines on the back of strong exploration results.

Mindoro Resources said that the most recent study work has shown that grades exceed current requirements for direct shipping grade ore for nickel pig iron production in China. Its current resource would allow shipments of 500,000-700,000 tonne per year of nickel ore over a period of 3 years to 5 years.

Mindoro Resources added that it has been approached by many interested consumers with whom discussions are ongoing.

SS imports into EU increase 8 fold in January to February

As per the figures are provided by the Iron & Steel Statistics Bureau, the amount of European Union imports of stainless steel flat products during January to February 2007 was eight times bigger than the same period in 2006. Whereas, exports from EU27 to Asia declined by 41% YoY to 20,620 tonnes.


The imports from Asia in the first two months were amounted to 135,006 tonnes as compared to 17,172 tonnes in January to February 2006. China did play a major role in the changes as China's exports to EU 27 up to 65,356 tonnes in 2007. Imports from Taiwan were some 36,419 tonnes.

Gulfside Minerals to acquire Monster coal property in Mongolia

Gulfside Minerals Ltd recently announced that it has signed a LoI with a private Mongolian company leading to the acquisition of the Monster coal property located in SW Mongolia.

Gulfside Minerals Ltd has an agreement to acquire a 50% interest a private company set up to hold the Lease with an Option to acquire an additional 16% interest within one year for a total of 66%. A sliding scale royalty of 3% to 5% is payable on production and will be the operator of the project. The Company also reports that the Private Placement financing announced May 24th 2007 has been completed and raised USD 405,000 for ongoing work.

The history of the property dates back to 1963 with the first surveys conducted by Russian geologists. More work was done in 1986-87 by the Russians, when a large amount of coal was discovered. In 2006, new drilling at the site estimated reserves of up to 550 million tons of coal in the Mongolian "C" category and a much larger potential reserve of 2.5 billion tonnes in the possible and probable categories. The area of the 'C' category reserves is about 6.5 million square meters and 29 million square meters cover the possible or probable area of the deposit. The coal deposit is ideal for the planning of a very high capacity open Pit mine with coal quality and production capacity suitable for shipping to China by truck and train in very large amounts.

Gulfside Minerals will be conducting additional drilling over the summer to determine the extent of reserves for a qualifying report to be submitted as early as this fall.

US Steel announces senior appointments to its tubular operations

US Steel Corporation announced some initial appointments to the operations organization of its tubular business unit following the completion of its acquisition of Lone Star Technologies Inc and its related companies. Mr Nikhil J Amin has been named GM planning & supply chain, Mr Sudhakar Kanthamneni has been named GM manufacturing technology & engineering and Mr David S Mitch has been named GM plant operations. All three positions report to Mr Joseph Alvarado VP tubular of US Steel. The changes are effective immediately.

Mr Amin will oversee the business planning and supply chain management functions at all of US Steel's tubular operations. He joined Lone Star Steel in 2004 as VP supply chain management. Prior to that, Mr Amin spent 11 years at Steelcase Inc working in finance and supply chain management roles and also worked for five years in finance at Grand Metropolitan PLC.

Mr Kanthamneni will direct manufacturing technology improvement and innovation, strategic planning and engineering activities for tubular operations. He arrived at Lone Star Steel in 2005 to serve as senior VP of manufacturing and GM. Mr Kanthamneni is a 30 year veteran of the tubular products manufacturing industry and has progressed through increasingly responsible roles in engineering, maintenance, operations and quality assurance at Central Steel Tube, a subsidiary of Donavan Steel & Wire and Maverick Tube Corporation before joining Lone Star Steel.

Mr Mitch will be responsible for the day to day operations at all of US Steel's tubular production facilities. He has worked for Lone Star Steel for three years, most recently serving as VP & GM specialty tubing product group. During his 32 year career in steel and tubular products manufacturing, Mr Mitch has held increasingly responsible positions in a variety of disciplines at companies that include Armco Steel, Copperweld and US Steel.

Mr Alvarado said "Nikhil, Sudhakar and Dave have strong backgrounds in their respective areas of responsibility and are leaders who know how to build on the individual successes US Steel and Lone Star have achieved to this point. Their experience will help ensure a smooth transition of Lone Star's operations into US Steel while maintaining the world-class quality our customers have come to expect from our companies."

Ukraine to increase coal output by 30% in few years

Interfax reported that Ukraine plans to increase annual production of regular grades of coal from 80 million tonnes at the moment to 105 million tonnes in the next few years.

Mr Viktor Yanukovych prime minister of Ukraine said "Starting in 2007 coal production will increase, and we will double it to a planned level of about 105 million tonnes. We should reach this level in the next few years. He said as a result a 30% increase in coal production is expected.”

Earlier the Ukrainian Coal Ministry forecast an increase in regular grade coal production by 2 million tonnes in 2007 but later reduced this forecast to 1.5 million tonnes.

Ukrainian coal companies cut production of regular grade coal by 3.7% YoY in January to May 2007 to 32.165 million tonnes, with coking coal production down by 7.2% YoY to 12.136 million tonnes and power generating coal 1.4% YoY to 20.03 million tonnes.

However, its coal production increased by 2.8% to 80.257 million tonnes in 2006. Coal companies cut production of coking coal 8.2% last year to 30.145 million tonnes while increasing power generating coal output 10.9% to 50.112 million tonnes.

Noble to sell VSMPO-AVISMA’s ferrotitanium

It is reported that Noble Group through its subsidiary Noble Resources Ltd has obtained exclusive rights to sell ferrotitanium produced by Russia based VSMPO-AVISMA Corporation.

VSMPO-AVISMA is the largest titanium and titanium alloyed semi finished products manufacturer in the world. Ferrotitanium and titanium alloys are widely used in aerospace and other branches of industry.

Mr Harry Banga vice chairman of Noble Group said that "Complementing the global leadership position of VSMPO-AVISMA with Noble's expertise to market ferrotitanium and other similar products allows us to create a very strong partnership and synergy. Ferrotitanium is a natural complementary to the ores and ferroalloys we have already been marketing globally within our steel complex."

Earlier this year, Noble's steel, ferroalloys and iron ore businesses were merged to form the Noble Steel Complex, which is part of the Group's metals, minerals and ores division.

France steel import & export in April 2007 increases

According to the latest data released by the French Steel Federation, France's steel imports in April 2007 increased to 1.303 million tonnes up by 11.7% YoY. The release added that French imports of long products increased by 14.8% YoY to 350,000 tonnes while flats imports climbed by 10.7% YoY to 953,000 tonnes.

Belgium was the main supplier of steel to France in April 2007 with 419,000 tonnes down by 3.7% YoY followed by Germany with 274,000 tonnes down by 0.7% YoY and Italy which climbs to third place with 150,000 up by 10.3% YoY. Imports from non European Union countries almost doubled rising by 95.7% YoY to 92,000 tonnes.

Meanwhile French steel exports also climbed up in April 2007, reaching 1.45 million tonnes, which is 102,000 tonnes higher than the same month in 2006. Longs exports in April 2007 increased by 27.2% YoY to 384,000 tonnes while the flats figure rose just by 1.9% YoY to 1,066 million tonnes. Exports from France to non EU countries in April 2007 saw a rise of 12.7% YoY to 133,000 tonnes.

The release further added that Spain was the biggest buyer of French steel in April 2007 with 321,000 tonnes up by 17.6% YoY followed by Belgium with 288,000 tonnes down by 16.3% YoY, Germany with 244,000 tonnes up by 17.9% YoY and Italy with 209,000 tonnes unchanged from April 2006.

Zinc recycling plant announced for Lamar County

US based Steel Dust Recycling, a company that recycles steel mill dust, announced that it is planning to build a USD 35 million plant at Millport in Lamar County in west Alabama of US. Construction on the plant will begin immediately completed in early 2008.

Steel Dust Recycling said that the recycling process called Waelz Kiln involves the recovering of zinc, which is later sold to zinc smelters worldwide.

Steel mill dust is a byproduct of electric arc furnaces and the Millport facility will purchase the dust from steel making plants in Alabama, Mississippi and other Southern states.