CCCMC reference prices for Indian iron ore down by USD 1

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released on June 5th 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 the prices posted on May 28th 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.

Iron ore movement on Kirandul to Kottavalasa rail line badly hit

It is reported that the rail movement of iron ore on the 450 kilometer long Kirandul to Kottavalasa line under the East Coast Railway is unlikely to be normal for another 10 to 15 days.

The movement has remained suspended for the past few days due to power supply disruption caused by the blowing out of transmission towers by the Maoists, plunging large areas in Chhattisgarh and Andhra Pradesh into darkness.

The damaged transmission towers were located in far flung areas, some not easily accessible as reinstalling them is proving to be very challenging. In many places, Chhattisgarh State Electricity Board workers, with armed escorts, are being required to carry material as head loads, covering long distances on foot.

In a normal situation, 15 rakes of iron ore are transported every day on the Kirandul Kottavalasaline, 10 rakes for exports through Visakhapatnam port and another 5 rakes to Visakhapatnam steel plant of Rashtriya Ispat Nigam Ltd.

CIL subsidiary MCL’s Talcher coalfield facing closure

Statesman News Service reported that Coal India Limited’s Mahanadi Coalfields Ltd’s Talcher coalfield is facing imminent closure due to protests by locals and worsening law and order situation.

As per reports, the law and order situation has worsened to such an extent that forest land acquired by MCL is not under its possession as villagers have obstructed tree felling process and prevented entry. MCL has said that there has been a virtual standstill in the mining activities in Talcher Coalfields beginning from the month of April 2007 when the Dragline at Bharatpur opencast mines was not allowed to operate by the local people.

As per report, the daily production from Talcher Coalfields has dropped down from the targeted production of 0.14 million tonnes to 0.106 million tonnes. MCL added that the coal production will drop further as the overburden removal from the mines has been hampered leading to exposed coal not being available for extraction. The situation has become so grim that most power plants like those of Nalco, TTPS, NTPC Kaniha and those in South India have reached super critical levels of stock which is less than 4 days of coal left with them.

As per reports, MCL has already approved their employment as per the R&R policy of Orissa, but due to an internal family dispute which is sub judice, they have been stopping the mining activities. In spite of providing over 7,000 jobs to the land losers, MCL still faces the flak. In fact, from an average of around 150 jobs provided annually to land losers since inception, MCL provided 488 jobs in 2006.

SAIL to partially fund iron ore feed rail link in Chhattisgarh

The Telegraph reported that Steel Authority of India Limited is setting up a rail link from the Dalli Rajhara iron ore complex to the Rowghat mines in Chhattisgarh and will spend INR 450 crore for the proposed 95 kilometer rail link.

As per report, SAIL has paid INR 25 crore to the South Eastern Central Railways for the broad gauge rail project. Mr R Ramaraju MD of Bhilai Steel Plant has handed over the cheque to Mr Pradeep Kumar GM of South Eastern Central Railways. SAIL has also given INR 5 crore early this year.

Meanwhile SAIL, Chhattisgarh government and the Indian Railways have signed an agreement to complete the rail link in time. And according to the agreement, SAIL will bear the entire cost of the construction of the rail line between Dalli Rajhara to Rowghat and a partial cost of the Rowghat Jagdalpur section.

The I rail link project will prove to be a lifeline for the Bhilai Steel Plant since its iron ore reserves at the Dalli Rajhara complex is depleting and will connect it to the Bastar region. BSP is yet to receive approval from the union ministry of environment & forests for the mining lease in Rowghat.

Sterlite to sell US share to fund its power plant in Orissa

Bloomberg reported that Vedanta Resources plc’s Sterlite Industries India Ltd has said that it will sell shares in the US valued at about USD 1.96 billion to help fund a captive power plant for its aluminum project in Orissa which is likely be ready by 2010. Sterlite hopes to tap US investor demand for emerging market shares to finance a 2,400 MW coal fired power plant in eastern Orissa state that will cost about USD 1.9 billion.

Sterlite said that as many as 143.75 million American depository shares will be listed on the New York Stock Exchange including an option for 18.75 million if demand is strong enough. The price of the US shares will be determined by Sterlite’s stock in India which was about USD 13.64 on June 1st 2007.

Sterlite said that "We believe that with India’s large coal resources, ongoing government deregulation and high demand for power relative to supply, this business represents an attractive growth opportunity."

Ispat Industries posts INR 82.12 crore profit for Q4

PTI reported that Ispat Industries Ltd has reported a net profit of INR 82.12 crore for January to March 2007 quarter as compared to a net loss of INR 153.41 crore during January to March 2006 quarter. Its total income during the quarter surged by 64% YoY to INR 2,141.58 crore as compared to INT 1,301.01 crore in January to March 2006.

Ispat Industries reported a net loss of INR 9.53 crore for 2006-07 as against INR 812.67 crore in 2005-06. Its total income during 2006-07 increased to INR 7,595.49 crore as against INR 5,010.73 crore in 2005-06.

Suzlon Energy’s USA unit bags 630MW turbine order

Suzlon Energy Ltd announced that its USA based step down subsidiary Suzlon Wind Energy Corporation has signed a contract for a total of 300 units of S88-2.1 MW turbines totaling 630 MW of wind turbine capacity with Edison Mission Group of Irvine of California in USA.

The two phase contract calls for delivery of 315 MW of turbine capacity in 2008 and another 315 MW of capacity in 2009.

Visa to set up 1000MW power plant in Orissa and start power trading

PTI reported that Visa group will invest INR 4,500 crore in setting up a 4x250 1000 MW mega thermal power plant in Orissa to be operational in phases from 2010. Its first 250 MW power unit will be operational by September 2010 and every six months thereafter a unit of 250 MW will be added. 1000 MW capacity would be reached by March 2012.

Visa intended to fund the equity component of the project from its parent companies, Visa Minmetal AG, Switzerland and Visa International Limited. Mr Vikas Agarwal MD of Visa Power Limited told media that "The debt equity ratio for funding will be at 70:30. The equity for the initial plants of 250 MW each will be funded by Visa Minmetal as FDI.”

The report added that Visa also plans to get into third party power trading by the next quarter and later it will sell the power generated on its own. Visa will participate in tenders for surplus power from the eastern region and will sell its produce in north and western parts of the country.

Mr Vikas Agarwal said that "We hope to get trading license from the Central Electricity Regulatory Commission by this month. The first transaction of trading of power is expected to be executed by August.”

RINL celebrates World Environment Day

Rashtriya Ispat Nigam Limited celebrated “World Environment Day” on June 5th 2007 at a function held at its Training & Development Center.

Mr PK Bishnoi CMD of RINL said that VSP is always in forefront in implementing several eco friendly projects to protect the environment in and around VSP. He said “Today, VSP stood first among all integrated steel plants in preserving the environment and greenery and considered as a ‘GREEN’S PARADISE’ in the country.”

Mr Bishnoi added that the need of the hour is to focus on new technologies to sustain the present trend in VSP. He added that “There is every need to intensify the campaign to further protect the environment.”

RINL is currently implementing 11 more environmental projects a cost of INR.260 crores and already implemented 8 projects at a cost of around INR 9 crores during 2006-07. The environmental projects that were implemented are dry fog dust suppression in RMHP, 3 nos. continuous ambient air quality monitoring stations, dry fly ash delivery system, and electronic controllers in TPP etc.

VPT plan to improve rail infrastructure in port premises

Exim News Service reported that the Visakhapatnam Port Trust has drawn up an INR 35 crore plan to augment rail facilities within the port area to meet the projected rise in rail borne traffic to and from the Port, from 30 million tonnes in 2006-07 to more than 51 million tonnes in 2013-14. VPT, which currently handles about 30 rakes a day, will be required to handle more than 50 rakes daily by 2013-14, it is estimated.

Mr K Rathna Kishore chairman of VPT said that the problems facing railway operations related to capacity constraints. He said “This meant detentions at the Waltair marshalling yard. And full wiring is available to nine lines; there are four cabins with inter slotting. There is one line for engine escape and one for loading, leaving just 17 for train operations. There were also shunting operations in the yard.”

He informed that “VPT proposed to take several steps, such as full electrification of all lines, one central panel in place of the existing four cabins, construction of additional lines, extension of lines to full length, adjustments in grids to improve flexibility, providing modern signals and telecommunication facilities and conversion of the iron ore manual unloading sidings to a mini interchange yard.”

The construction of an over bridge alone would cost INR 17.5 crore; connectivity to Jaggyyapalem would cost INR 12.5 crore and connectivity to Vadlapudi INR 2.37 crore. VPT also proposed to provide additional connectivity between the R&D yard and the western sector through a direct line.

India Pak Iran pipe line - Each countries to decide construction mode

It is reported that Iran, Pakistan and India seem to have firmed up their views on the proposed project structure of the tri nation pipeline which will transport gas from Iran to India via Pakistan.

As per reports, a consensus seems to be emerging that the 3 countries would individually lay the pipeline in their own territories, instead of adopting a consortium approach. This would mean that the portion of pipeline falling in Iran would be built by Iran, while Pakistan will build the section falling in its territory. India would build the portion from its border onwards.

According to experts, this would also help ward off the reported US pressure on India and Pakistan, because although the two would be purchasing gas from Iran, they would not invest in Iran technically. Further, it would be up to the individual countries to decide how they want to construct the pipeline by either giving it to one company or through a consortium approach.

As per reports, at the recent trilateral meeting Iran, India and Pakistan have narrowed down their differences over the proposed USD 7 billion natural gas pipeline. The report added that the 3 countries discussed the gas sales and purchase agreement clauses. Tehran wants to sell natural gas to India and Pakistan at USD 4.93 per million British thermal unit (USD 60 per barrel crude oil price).

A bilateral meeting between India and Pakistan is expected to take place soon on the issue of transit fee between India and Pakistan.

India had earlier said that the project has been found technically feasible but its economic viability will depend on the price at which Tehran sells the fuel. The Indian side had appointed Ernst and Young as the financial consultant and ILF of UK as the technical consultant for preparation of the pre feasibility report.

Saurashtra’s option to increase stake in Pike River lapses

New Zealand daily The Press reported that India’s leading coke manufacturer Saurashtra Fuels Pvt. Ltd has not used its option to lift its stake in Pike River Coal Company to 25%.

The report cites Mr John Draper a spokesman of Pike River as saying that Saurashtra had let an option in a 2005 equity subscription agreement and a shareholders agreement lapse. He said that Saurashtra had options to buy more shares and overseas investment office documents show Saurashtra had the option to lift its stake to 25%. Now Saurashtra will instead hold 9.5 % of Pike River after the completion of a USD 65 million offer of shares at 100 cents a share.

During September 2005 the board of Pike River made the formal decision to proceed with the mine development. New Zealand Oil & Gas joined forces with Saurashtra Fuels Private Limited to fund development of the Pike River coking coal mine. Saurashtra and NZOG contributed NZD 40 million in equity funding. In June 2006 Gujarat NRE Coke Limited extended its Australasian presence with the purchase of a NZD 20 million shareholding in Pike River.

Greymouth based Pike is a large underground coal mine project with projections to produce 17.6 million tonnes of high grade coking coal over an 18 year mine life. Production is scheduled to start in the first quarter of 2008.

Voestalpine posts record results for 2006-07

Austrian steel conglomerate voestalpine AG posted record results for the 2006-2007 financial year on the back of strong market demand, which saw solid earnings growth in all of its four divisions.

The key figures of voestalpine Group for the 2006-07 business year
1. Revenue increased by 13.1%, from EUR 6,230.6 million to EUR 7,049.8 million, thus passing the EUR 7 billion mark for the first time.
2. EBITDA improved by 26.5% from EUR 1,079.0 million to EUR 1,365.0 million. In the 2006-07 business year, the EBITDA margin increased from 17.3% to 19.4%.
3. With EUR 1,012.7 million, the EBIT exceeded the previous year’s figure of EUR 724.1 million by 39.9%. This results in a significant increase of the EBIT margin for 2006- 07 from 11.6% to 14.4%.
4. Due to the significantly improved operating result, both profit before tax with an increase by 44.9% from EUR 674.3 million to EUR 977.2 million
5. The profit for the period, result after taxes, increased by 45.4% from EUR 525.9 million to EUR 764.9 million as compared to the previous year

In the 2006-07 business year, the revenue not only increased on the Group level, but in all of the four divisions as well
Profilform Division - 23.2%
Railway Systems Division - 13.1%)
Steel divisions - 11%
Automotive Division came to - 4%

Particularly noteworthy in this regard are the business areas flat steel and heavy plate (Steel Division), rails and turnout technology, quality wire and seamless tubes (Railway Systems Division), special sections and storage technology (Profilform Division) as well as laser-welded blanks and precision parts (Automotive Division). In these segments, above average increases in sales revenue could be achieved as compared to the previous business year.

China increase the use of nickel pig iron

INTERFAX-CHINA reported that China's stainless steel makers have been increasing the use of nickel pig iron as an alternative to refined nickel as nickel prices have soared to all time high levels but increased nickel pig iron production is expected to cause nickel prices to fall in the second half of this year.

According to statistics released by the General Administration of Customs increased investment in nickel pig iron production resulted in the import of 3.78 million tonnes of laterite ore in 2006 and a 6.8 fold increase from the previous year.

According to Beijing Antaike Information Co Ltd China is set to produce nickel pig iron containing a total of between 80,000 and 90,000 tonnes of nickel metal this year increased between 167% and 200% from 2006. Nickel production is due to reach 210,000 tonnes with apparent consumption reaching 315,000 tonnes this year up by 22.2% from 2006.

Mr Jim Lennon executive director of commodities and mining research with Macquarie Bank forecasted last week forecasted that China's laterite ore imports would increase to 10 million tonnes this year and contain 80,000 tonnes of nickel metal content while Beijing Antaike predicted laterite ore imports would be between 8 million tonnes and 9 million tonnes this year.

Ms Chen from Antaike said that emerging nickel pig iron production would not impact China's refined nickel market in the long run but the application of nickel pig iron will help to increase China's low nickel content stainless steel product output and expand their market shares. She suggested that the central government should issue regulations to the nickel pig iron sector in order to aid sustainable development.

Privately owned Zhejiang Huaguang Smelting Group is China's largest nickel pig iron producer capable of producing 1 million tonnes of nickel pig iron per annum with nickel grades varying from 1% to 14%. Its major clients include Shanghai Baosteel, TISCO and Zhangjiagang POSCO. Mr Yang a senior Huaguang official told Interfax that in order to secure nickel ore supplies the company has developed a nickel mine in Indonesia with total reserves of 120 million tonnes of grade 1.8% nickel. Huaguang holds an 80% stake in the nickel mine project.

MEPS forecast carbon steel prices for NA, Asia and EU

UK based steel consulting group MEPS said that global price moved higher in May 2007 as anticipated. MEPS said “The figure for long products was marginally above our expectations. Construction demand stayed firm in all regions. In contrast, flat product prices in North America fell by 2% in difficult market conditions. EU values eased downwards with few deals concluded. Asian numbers rose.”

MEPS said that “We retain our forecast of slow but steady improvement in the world average price over the next three months. Higher export prices from China, for a number of products, have prompted us to extend this period of growth into the final quarter of the year. The Chinese price rises should reduce competition somewhat in most domestic markets around the world. Consequently, our forecast for late 2007 and early 2008 has been upgraded. However, we still believe that selling values will slowly decline in the final six months of the forecast period as oversupply develops, particularly in China.”

MEPS said that for EU all products price increased in May 2007 by EUR 2 per tonne marginally below our expectations. It said “This was the result of a slightly lower gain in the flat products segment because virtually all deals for the second quarter were completed in the previous month. MEPS added that our twelve month forecast is little changed from the April 2007 prediction. We anticipate flat product prices moving up slowly over the next few months as agreements are made for deliveries in the third quarter. Supply and demand should remain in reasonable balance since third country import offers are still quite uncompetitive. However, long product prices are likely to reduce somewhat now that scrap costs have started to decline. Oversupply is likely to develop in the Chinese market later in the second half of this year. The introduction of the export levy has prompted us to upgrade our forecast from September onwards. However, a decline is still anticipated in 2008 as market supply becomes excessive and the construction boom eases.”

For North America MEPS said that all products price in May 2007 was marginally below the figure in the previous month. It said “The flat products average declined but the long products value increased. Market conditions in the former classification are weak with poor domestic demand and high inventories relative to consumption. In the latter category, activity is brisk and mill order books are firm. Import volumes are reasonably steady for most products due to weakness in the US dollar relative to most other currencies. We forecast a slow but steady erosion of the MEPS all product price over the next few months. Scrap costs are in decline and should have a negative impact up to mid year. With weakening domestic prices for most products, the North American market is becoming less attractive to foreign producers. The premium over Asian supplies is eroding. Moreover, EU domestic values are substantially above North American figures and are likely to remain that way for several months forward. With a much reduced import threat North American prices could start to expand in the second half of 2007 and into 2008.”

MEPS forecasts for Asia all products figure climbed again in May 2007 in line with our predictions. It said that “The introduction of an export levy by the Chinese government should lift the price of supplies to Japan, South Korea and Taiwan in the coming months. Domestic values in China are likely to weaken as export volumes decline and oversupply develops from new capacity coming on stream. The net result of this new situation is likely to be positive for Asian average prices. Consequently our forecast has been up rated. We still believe that excess supply will develop within the forecast period but price erosion is not likely to occur until the turn of the year. Moreover, it will probably be quite modest because we should still see improvements in demand for steel products across most of the region.”

Qatar Steel commissions new bar mill

Qatar's daily The Peninsula reported that Qatar Steel has celebrated the commencement of the operation of a new 700,000 tonnes bar mill. The contract was signed in 2005 on the basis of project in favor of Siemens VIA Technology and implementation was made in cooperation with the European partner and local subcontractors.

Mr Sheikh Nasser bin Hamad A Thani DGM of Qatar Steel as well as other officials like Mr Giuseppe Buccino Grimaldi Italian ambassador to Qatar and Mr Giuseppe Ferrario MD of Siemens VIA Technology had attended the ceremony.

Mr Sheikh Nasser bin Hamad A Thani his welcome speech on the occasion appreciated the efforts of Siemens VIA Technology in completing the project. He said that “Qatar Steel started, several years ago, implementing its ambitious plans for thorough expansion to meet the increased demand. The new Bar Mill Unit which we celebrate its operation commencement today will increase the production of bars to around 1.5 million tons per year.”

Mr Giuseppe Ferrario MD of Siemens VIA Technology said that production was commenced successfully in the new bar mill. He pointed out that all the state of the art rolling technology was employed in the new Bar Mill and that the new plant is the first of the new advanced generation of plants in the Gulf region.

Indonesia may seize unmined properties

It is reported that Indonesia, the world's biggest exporter of thermal coal and second largest tin producer, may rescind parts of mining concessions to secure national reserves' for future generations. A plan made public by the Indonesian government to take back untapped mineral deposits held by many foreign companies could affect their operations severely. The plan is being debated in the country's parliament.

Mr Simon Sembiring director of coal and minerals of ministry said that seizing the mineral deposits is in the interest of the state. He said "We have to conserve our reserves. It makes no sense to just produce as much as we can.”

The move would harm many of the global mining majors.

CSI to add a reheating furnace to increase its production capacity

California Steel Industries Inc has announced that it plans to increase total annual production capacity by 1 million tons through addition of a 2nd reheating furnace with state of the art environmental technology. Technical specifications are being finalized in discussions with equipment suppliers, and production from the new facility could come on line in approximately 24 months.

It has already received a conditional use permit from San Bernardino County for reheating furnace and is working with the South Coast Air Quality Management District and other regulatory agencies to complete the permitting process to build and operate the new facility.

The new furnace will employ selective catalytic reduction emission control technology and highly efficient burners thereby significantly reducing emissions from current levels against the current reheating furnace which is already rated among the nation's cleanest operating reheat furnaces per ton of steel produced. It has invested also approximately USD 60 million for the clean burning natural gas fired walking beam reheat furnace and additional improvements in cooling water treatment and in slab handling facilities.

Mr Masakazu Kurushima president and CEO of CSI said that its expansion had been contemplated for several years but was just recently approved by the company's owners Companhia Vale do Rio Doce of Brazil and JFE Steel Corp of Japan. He said that CSI has been producing at or near its production limits in recent years and the foreseeable growth of the Western US market justifies the additional capacity.

Mr Kurushima added that "We are pleased that our shareholders have the confidence in us to approve this major expansion. The second reheating furnace will allow us greater flexibility to serve our customers. It also provides greater security for our operations and it will allow us to explore growth opportunities and new products which we did not choose to pursue when we were already at full capacity with one furnace. Of course, we are also pleased to be able to incorporate the best environmental technology available today. We are proud of our safety and environmental record at CSI and this only enhances our performance in these areas."

CSI employs about 1,000 at its facilities located approximately 40 miles east of Los Angeles. The company has been operating continuously since 1984, when it purchased the rolling mill facilities of the former Kaiser Steel Corp. CSI produce hot rolled, pickled and oiled, cold rolled and galvanized steel. CSI now ships an average of approximately 2 million tons per year of carbon steel flat rolled sheet and pipe and it will have the capability and flexibility to produce up to 3 million tons per year with the proposed changes.

Outokumpu joins Fennovoima to build a new nuclear power plant in Finland

A consortium of industrial and energy companies including Outokumpu, Boliden, Rauman Energia, Katternö and EON announced to construct a new nuclear power plant in Finland. The operation of the plant is aimed to start between 2016 and 2018.

As per report, to implement the project, a new Finnish power company Fennovoima Oy will be established. Fennovoima aims to construct a new 1000MW to 1800 MW nuclear power plant for the increasing need for electricity in Finland.

Fennovoima will produce electricity for its owners needs at production cost. Each owner will get the share of capacity proportional to its ownership in the company. One third of the capacity is reserved for Finnish enterprises of industry, merchandise and services, one third for regional and local energy companies and one third for E.ON Suomi. Approximately half of the capacity will be offered to companies other than the existing Fennovoima partners.

Energy is a major cost factor in producing stainless steel. In Outokumpu's case this is even more so as the Group has its own ferrochrome smelter as part of the integrated stainless steel production operation at Tornio in Finland. Although having ferrochrome production integrated into stainless steel production is already a cost advantage that coupled with reliable stable priced electricity supply in the future will be an additional competitive advantage. Outokumpu's Tornio Works currently consumes some 2.1TWh of electricity per annum.

Mr Juha Rantanen CEO of Outokumpu said that "By participating in Fennovoima Outokumpu aims to secure a significant portion of its electricity needs in the years to come. In investing in our own energy production we can have a reliable electricity supply at production cost. Our aim is to have up to 150MW of the new nuclear power plant's capacity. This translates into some 1.2TWh of electrical energy per annum which is more than half of what the Tornio Works currently requires."

Valin Steel to invest CNY 1.67 billion in 2 new projects

Oriental Morning Post reported that Hunan Valin Steel Tube & Wire Co will invest CNY 1.67 billion to add 2 projects in its unit Hengyang Valin Steel Tube Co for product mix upgrading.

The first project is to build a 2nd time process line and a finishing line as well as the supported facilities for seamless pipe mill with a view of upgrading the product and meet high end demand. The CNY 800 million projects will take 24 months to finish. This will generate CNY 200 million annual profits after come on stream or after tax profit of CNY 140 million.

While the second project is to construct an iron smelting system, transport facilities and wastes treatment system for more advanced tube production. The CNY 870 million projects will take 18 month to be completed. Its annual profit is estimated at CNY 240 million or after tax profit of CNY 160 million, once start operation.

Hengyang Valin Steel Tube Co was set up in December 2003, 68.52% of its shares taken by Hunan Valin and by end of 2006, Hengyang Valin has total assets of CNY 3.7 billion.

(Sourced from MySteel.net)

US’s OCTG demand still strong

Platts reported that down hole demand for steel pipe remains strong in the US where the number of new oil and gas drilling rigs is running ahead of last year at this time but the rig count remains unusually low in Canada so far this year.

According to figures released by exploration services supplier Baker Hughes, the US drilling rig count in the week ended June 1st 2007 climbed by 14 over the previous week to a level of 1,774 rigs. That activity level represents a 7% increase from the same week last year. However in Canada the rig count in the week ended June 1st 2007 was 136. This was up from a mere 114 rigs in the previous week but less than half the total for last year at this time when the count was 293.

Canadian drilling activity normally experiences a sharp seasonally related decline in the spring and summer months, but in 2007 decline has been steeper than 2006. Drilling in the peak season in 2006 also did not attain the levels seen in the previous year. The decline had been attributed to lower oil and gas prices in recent months, which have made some exploration projects less economically viable. Prices have begun to rise again, however, and could bring about a resurgence in drilling and thus in pipe demand.

Mechel commissions new wire facility at Beloretsk Metallurgical Plant

Mechel announced that a modern equipment complex has been commissioned at its subsidiary Beloretsk Metallurgical Plant OAO to produce high tensile stabilized reinforcing wire, which meets the world standards of quality. The new equipment was manufactured by Ernst Koch of Germany and GCR of Italy. The cost of the new project is estimated to be about USD 4.6 million (RUB 120.0 million).

Mechel said that the project was implemented in line with Mechel's investment program for technical development of BMP's production aimed at improving product quality, increasing output, reducing production costs and increasing profitability.

The new equipment will allow BMP to manufacture a brand new product low relaxation stabilized reinforcing wire of 4mm to 8mm diameter, with annual output of about 20,000 tonnes. It is supplied to construction companies for manufacturing of pre stressed concrete structures, used in the most important construction elements such as reinforced concrete ties, reinforced concrete pressure pipes, towers, and bridging panels for high rise buildings.

Mr Konstantin Nikolin GD of Mechel Hardware OOO said that "The management of Mechel and BMP made the decision to acquire the new equipment based on the significant market demand for high tensile stabilized reinforcing wire. Its commissioning will enable BMP to expand its product line and increase its output and sales."

Mechel plans to ship the new product to Russian consumers, with the view to replace imported analogs, as well as to international markets.

RBCT to start phase VI expansion study in Q3

Reuters reported that South Africa’s Richards Bay Coal Terminal will start a study in the third quarter whether a further capacity expansion to around 95 million tonnes a year is justified. RBCT has said that any expansion beyond the 91 million tonnes of Phase V would depend on feasibility and demand.

Mr Kuseni Dlamini chairman of RBCT told Reuters that "We have a strategic responsibility to adjust our size to the industry's needs and market demand. The study will take the information received under Phase V applications for its basis but we will be investigating to see if there is a compelling business case to consider for another expansion or not."

Since the Phase V awards last month, pressure to give export access to disappointed applicants has become more vociferous than ever. Some industry sources said that existing RBCT shareholders with more export allocation than they need ought to be pressured into making this available to junior miners who were unsuccessful with Phase V Industry

Another doubt is that whether South Africa's coal industry as a whole will be able to produce over 90 million tonnes of export coal a year for the next few decades. An insider said "Everybody knows that the 91 million tonnes agreed under Phase V is very doubtful, but nobody will admit that publicly.”

RBCT is expected to export around 67 million tonnes this year. The Phase V expansion will take export capacity up to 91 million tonnes in 2009.

Germany’s crude steel production in May up by 0.8% YoY

Germany's Federal Statistics Office said Crude steel production in Germany in May up by 0.8% YoY to 4.05 million tonnes while pig iron output up by 0.9% to 2.56 million tonnes. The office said on MoM basis crude steel production was down by 0.8% in May while pig iron production down by1.5%. It added that adjusted for seasonal and calendar effects crude steel production up by 1.4% in May from April.

In the first five months of the yearly 2007, 12.89 million tonnes of pig irons and 20.45 million tonnes raw steel were produced up by 3.8% and 5.8% YoY respectively as compared with last year.

In the earlier federal territory the production of raw steel lay in May 2007 with 3.43 million tonnes and thus around 1.6% over that of the previous year month. In relation to April 2007 it removed more around 0.6% calendar and season settled was 1.6%. In the months January until May 2007 rose raw steel production in relation to the same period last year around 6,0% to 17.43 million tonnes.

In the new countries and Berlin east the Rohstahlerzeugung was lower in May 2007 with 0.62 million tonnes around 3.5% than in the same previous year month. In relation to April 2007 2.1% less raw steel were manufactured calendar and season settled arose a decrease around 3.3%. In the first five months of the yearly 2007 in the comparison to the appropriate period last year with 3.02 million tonnes of 4.7% more raw steel were produced.

In million tonnes

CORUS Colors to increase prices by 3% to 5% across EU

Coated steel specialist CORUS Colors has announced that it will increase prices across Europe by 3% to 5% from July 1st 2007 as a reflection of current favorable market conditions.

CORUS Colors is also reviewing its supply chain principles. It is also working to make available shorter lead times and smaller order quantities, especially through its Myriaplus offering, in order to help customers improve their own supply chain and inventories.

CORUS is Europe's 2nd largest steel producer with revenues of EUR 9.7 billion and an annual crude steel production of 18.3 million tonnes in 2006, primarily in the UK and the Netherlands. CORUS is a subsidiary of TATA Steel.

ArcelorMittal announces its first Pan European individual shareholder event

ArcelorMittal announced its first Pan European Individual Shareholder event On June 19th 2007, in which individual shareholders of the Netherlands Luxembourg Spain and France will have the possibility to meet members of ArcelorMittal’s Group Management Board and discuss the Group’s strategy, business outlook and integration progress.

Meetings will take place simultaneously in Amsterdam Luxembourg Madrid and Paris and will represent a unique opportunity for individual shareholders to have a direct exchange with management.

Mr LN Mittal president & CEO of Arcelor Mittal said that “I am very pleased to meet and discuss our outlook with our individual shareholders during this event, the first of its kind in Europe. Individual shareholders are very stable and dedicated investors and I believe we have a real opportunity to develop this investor base thanks to our listing on 6 different stock exchanges, our high level of liquidity and our inclusion in major indexes.”

China’s coal export in April dip by 41% YoY

According to a report released by National Development and Reform Commission, major ports in China have handled 31.87 million tonnes of coal in April 2007 up by 7% YoY and 3.42 million tonnes for foreign trade down by 41% YoY.

In April 2007 ports in China handled 432 million tonnes of cargo up by 15.2% YoY including 147 million tonnes of merchandise for foreign trade, 9.14 TEUs of container and 6.85 million passengers up by 14.3% YoY.

Meanwhile China's railway has posted a cargo delivery of 250 million tonnes up by 8.5% YoY, freight turnover of 192.1 billion tonne per kilometers up by 6%, passenger delivery of 100 million persons up by 3.2% YoY and passenger miles of 54.8 billion person kilometers up by 7.2% YoY respectively. Chinese civil aviation finished traffic mileage up by 19.4% YoY, volume of passenger traffic and volume of cargo and mail of 3.02 billion tonne per kilometers up by 15.1% YoY, 15.629 million persons and 345,000 tonnes up by 16.4% YoY respectively. Highway and waterway fulfilled passenger traffic volume of 1.624 billion persons up by 11.5% YoY and 19 million persons up by 16.2%, 90.36 billion persons per kilometers up by 14.9% YoY and 591 million persons per kilometers up by 4.8% YoY, freight traffic of 1.288 billion tonnes up by up 10.4% YoY and 215 million tonnes up by 11.5% YoY, freight turnover of 88.955 billion tonnes per kilometers up by up 13.2% YoY and 500.647 billion tonnes per kilometers up by 16.2% YoY.

(Sourced from MySteel.net)

Highveld minorities plan to stop Evraz bid - Report

South African media reported that a group of minority shareholders in Highveld Steel and Vanadium are planning to block an offer by Evraz for the 21% of Highveld that it does not already own.

As per report, informal discussions took place this week between Rand Merchant Bank Asset Management, Stanlib Asset Management and Peregrine Capital about a joint plan of action over Evraz’s bid. Their combined shareholding amounts to more than 25% of Highveld's free float. For the deal to proceed, minorities holding more than 90% of the free float must accept the offer.

The report cites Mr Ryan Hill portfolio manager with Stanlib as saying that the offer to minorities was not fair value. He said "We will hold out for a higher offer.” Stanlib bought its 2% stake in Highveld, which translates into about 10% of the minority shareholding, at prices around ZAR 75 last year.

Evraz, which bought 79% of Highveld from Anglo American, announced on that it would offer minorities USD 11.40 (ZAR 81) a share, causing the stock to drop more than 10% on the JSE. The offer nevertheless came in higher than the average price of about ZAR 65 a share that Anglo received for its stake.

Alabama approves steel mill incentives

It is reported that Alabama voters decided overwhelmingly to keep the state's multimillion dollar economic promises for luring German steelmaker ThyssenKrupp and other foreign manufacturers to the state.

A constitutional amendment, allowing the state to sell USD 400 million in bonds to pay industrial incentives, won by a nearly 4 to 1 margin. As per report with 99% of the precincts reporting on Amendment One, 188,227 voters or 80% supported the constitutional amendment and 48,302 voters or 20% opposed it.

Under Amendment One Alabama will use about half of the USD 400 million in bond sales to help provide USD811 million in financial incentives and tax breaks the state promised to ThyssenKrupp when it picked a site 25 miles north of Mobile for its first steel mill in the United States. The USD 3.7 billion project which Alabama won in a showdown with Louisiana will employ 2,700 workers

Mr Bob Riley Governor of Alabama said the remainder of the bond sales will provide economic incentives for several other industrial projects. They include plans by Korean auto manufacturer Hyundai to build a second engine plant in Montgomery that will employ 520 and tentative plans by a Canadian company to build a railroad car plant in Barton in northwest Alabama that would hire 1,500. Mr Riley said the bonds will not require new taxes. Instead, they will be paid off with revenue from natural gas wells drilled in state owned waters along the Alabama coast.

WA blames Midwest & Murchison for delaying infrastructure development

It is reported that the Western Australian Government has criticized two key mid west mining companies for delaying infrastructure developments in the region.

Ms Alannah MacTiernan planning and infrastructure minister said that the government would have called for expressions of interest more than six months ago but the two major companies assured her they could work together.

She said "The incapacity for the various mining companies to come to an agreement is creating a great deal of difficulty. We were originally proposing to go out with an expression of interest proposal that would be available to all comers."

Midwest Corporation had been working with Murchison Metals to develop a port at Oakajee and rail line to service the mining industry and has now walked away from that agreement and joined forces with its competitor Yilgarn Infrastructure which is also developing similar projects.

Chinese firms to build oil pipeline in UAE

China National Petroleum Corp announced that its two engineering and construction units China Petroleum Pipeline Bureau and China Petroleum Engineering & Construction Corp have won a contract to build a crude oil pipeline in the United Arab Emirates. The planned pipeline will be around 300 kilometers in length.

China Petroleum Pipeline Bureau specializes in the engineering, prospecting, designing, procuring, constructing consulting and managing of long-transport pipelines and has CNY 1.3 billion (USD 170.1 million) worth of pipeline construction assets and 79 pipeline construction teams giving it an annual construction capacity of 3,500 kilometers. CPP has constructed long transport pipelines in various countries, including Kuwait, Tunis, Sudan, Libya, Kazakstan and Mozambique.

China Petroleum Engineering & Construction Corp’s business focus is on international petroleum and petrochemical project contracts with the company heavily involved in overseas oil and gas engineering and construction.

Bilateral relations between the UAE and China in the energy and oil sectors have strengthened since 2005 when high level delegations visited each of the two countries. Last year, China's imported 3.04 million tonnes of crude oil from the UAE up by 18.3% YoY.

Mr Richard T O’Brien becomes CEO and president of Newmont

Newmont Mining Corporation announced the retirement of Mr Wayne W Murdy as CEO from July 1st 2007 and the appointment of Mr Richard T O'Brien as CEO and president of Newmont Mining Corporation effective from July 1st 2007. However, Mr. Murdy will continue to serve as Chairman of the Board until the end of 2007 representing Newmont with international and industry organizations and in specific international initiatives. Mr O'Brien was also elected on its board of directors.

Mr O'Brien joined Newmont in 2005 as CFO and was most recently president & CFO. Prior to joining Newmont, he served as a senior executive of AGL Resources and Pacificorp.

Mr Glen A Barton lead director for Newmont said "Mr Wayne has led Newmont through a remarkable transformation during his tenure as CEO and guided the company through its acquisitions of Normandy and Franco Nevada and the integration of those companies to create one of the world's leading natural resources companies. We look forward to his continued leadership service and counsel to Newmont as Chairman of the Board."

Mr O'Brien said that "I am honored to be asked to lead a company with a storied history and the industry's most committed and talented employees and look forward to continuing to work with Mr Wayne to drive improvement on operational execution and to ensure a stable predictable and profitable production and reserve base for the future."

Newmont's also announced the election of Mr Joseph A Carrabba to the board. Mr Carrabba is chairman, president, and CEO of Cleveland Cliffs Inc.

CVRD in talks with Mozambique over plants

Bloomberg reported that Brazilian Cia Vale do Rio Doce is in talks with Mozambique’s government over the possible development of aluminum and steel plants in Mozambique.

Ms Esperanca Bias mineral resources minister of Mozambique in an interview during a mining conference at Windhoek in Namibia said that the projects, which also include a cement plant and power station are linked to Rio de Janiero based CVRD’s planned Moatize coal mine in the north of the country. She added that Mozambique’s government is also talking to other companies about the new plants.

Gerdau Ameristeel appoints Mr Sutter a new VP & COO

Gerdau Ameristeel Corporation has announced the appointment of Mr Terry Sutter as vice president and COO of the company with effect from June 11th 2007. Mr Sutter will be responsible for all the company's steel manufacturing and commercial operations as well as procurement and logistics and will report to Mr Mario Longhi president and CEO of Gerdau Ameristeel Corporation.

Mr Sutter joins Gerdau Ameristeel with more than 20 years of experience in international and North American manufacturing operations with such companies as Honeywell & Allied Signal, Cytec Industries and Tyco International. Prior to joining Gerdau Ameristeel, he was president of Plastics and Adhesives for Tyco International and was subsequently named president and CEO of Covalence Specialty Materials Corporation.

Mr Mario Longhi president and CEO of Gerdau Ameristeel said that "Terry's exceptional operational experience will enhance Gerdau Ameristeel's operations and will help the company drive productivity growth.”

Gerdau Ameristeel is the 2nd largest mini mill steel producers in North America with annual manufacturing capacity of more than 9 million tons of mill finished steel products through its vertically integrated network of 17 mini mills, 17 scrap recycling facilities and 51 downstream operations.

CSN workers agree for salary hike and call off strike

BNamericas reported that workers of Brazilian steelmaker CSN have accepted a company pay offer and ended a strike.

It quoted Mr Edmilson Jose Alvarenga leader of Volta Redonda and southern Rio de Janeiro state's metalworkers union as saying that "There will be a 5% salary increase. CSN has agreed to adjust salaries according to the consumer price index of 3.44% and to provide a 1.5% real wage expansion. CSN will also pay one off bonuses of BRR 2,000 (USD 1,019) to be disbursed 72 hours after the contract is signed due to occur Wednesday.”

Mr Alvarenga also added that the union was also able to secure an agreement for extended meal breaks to 1 hour from the previous 30 minutes which could create between 300 and 400 new jobs.

It is noted that CSN employees voted for a strike on June 1st 2007 to demand a 6% real wage increase in addition to 33% restitution on salary losses alleging that the wage raises have not matched inflation since 1995.

CSN has crude steel capacity of 5.6 million tonnes per year through a steel mill at Volta Redonda and its Casa de Pedra iron ore mine in Minas Gerais state.

Russia in talks to build gas pipeline to China

Reuters reported that Russia is in talks to build a gas pipeline to China which should be partially completed in the next 5 to 6 years and is interested in investing further in the China's energy sector. Mr Viktor Khristenko minister of industry & energy of Russia during an interview told Reuters that "We will go about developing infrastructure for supplies of natural gas and crude oil to China."

Mr Khristenko said that decisions would be made based on the development of the Chinese gas market and restructuring of its energy markets as a whole. He said that talks were underway and that progress on at least one pipeline was expected in the next 5 to 6 years. He said that "Volumes, capacities and timeframe for such gas transport distribution systems are being discussed."

Mr Khristenko said that "To a certain extent, there's uncertainty related to the fact that the natural gas market in China is in the making. I think it may also be linked potentially with the discussion on the greenhouse gas emission problems and the respective restructuring of the Chinese energy sector. That's midterm. We're not talking about 20 years from now. Rather five to six years. Work which is going on with our European partners on new contracts will definitely be balanced with the development, respectively, of the Eastern direction."

He said pipelines could come from an eastern route, fed by resources in eastern Siberia and the far eastern sea shelves and a western route, from fields in that area of Siberia.

Mr Ponko step down from Worthington Industries

Worthington Industries Inc recently reported that Mr Edmund L Ponko Jr president of Dietrich Metal Framing has resigned. Mr George P Stoe executive VP & COO of Worthington Industries has been named interim president of Dietrich.

Mr Ponko had been with Dietrich Metal Framing for more than 25 years and had been an instrumental part of the growth of the business. He had a remarkable career as he began as a salesman and worked his way to being named president in 2001.

Mr John P McConnell chairman & CEO of Worthington Industries said “We wish Ed well and thank him for his positive contributions over the years”

Mr McConnell added “While market conditions in the steel framing sector are soft, we believe that Dietrich has the best market position and the best people and products in the industry. We are committed to the continuing growth of Dietrich and positioning it to provide the best value to our shareholders.”

Dietrich Metal Framing, founded in 1959, is a Worthington Industries company. Dietrich Metal Framing is one of the largest manufacturers of steel framing products in the United States with 2,000 employees in 26 facilities.

Fosun Group to do restructuring project for Hainan Steel fort

INTERFAX-CHINA reported that Fosun Group, a privately owned biotechnology company based in Shanghai, has entered into a framework agreement with Hainan Iron and Steel Co Ltd to carry out a Hainan steel restructuring project.