JSPL seals El Mutun deal in Bolivia

Jindal Steel & Power Limited has announced that along with its subsidiary Jindal Steel Bolivia signed the contract for development of El Mutun iron ore mine with the Bolivian Government. This is the culmination of international bidding process started by the Bolivian government, which JSPL won in May 2006.

The contract has been executed on July 18th 2007 at Santa Cruz in Bolivia between Mr. Vikrant Gujral vice chairman & CEO of JSPL, Mr Walter Chavez of Empresa Sideurgica Del Mutun and Mr Hugo Miranda Rendon president of Comibol, in the presence of Mr Evo Morales president of Bolivia, Mr. Alvaro Garcia Linera VP of Bolivia and other Bolivian ministers.

Jindal Steel Bolivia SA, a subsidiary of JSPL has been created for the purpose of this project. The total investment of USD 2.1 billion would be invested in the debt equity ratio of 60:40

JSPL has committed to invest USD 2.1 Billion over 8 years time to develop an integrated steel plant with the following facilities
1. Pellet plant of 10 million tonnes per annum capacity
2. DRI plant of 6 million tonnes per annum capacity
3. Steel plant of 1.7 million tonnes per annum capacity
4. Power plant of 450 MW capacity

The project would be set up at El Mutun Iron Ore Mine on the eastern side of Bolivia. El Mutun is considered to be the worlds largest iron ore mine with its reserves of 40 billion tonnes of iron ore with 50% Fe content and half of its 20 billion tonnes has been provided to JSPL for development. Government of Bolivia has also committed to supply of natural gas required for the development of other facilities.

Indian Q1 finished steel production up by 12.6% YoY

As per provisional figures released by Indian Government, India’s production of finished carbon steel has reached 12.088 million tonnes during April to June 2007 quarter recording an increase of 12.6% YoY as compared to 10.734 million tonnes in April to June 2006.

The provisional data released for finished carbon steel is as under

In million tonnes

Bombardier Transportation to supply coaches for DMTC Phase II

It is reported that Canadian Bombardier Transportation has bagged a contract worth USD 590 million for supply of 340 coaches for the second phase of Delhi Metro Railway Corporation. The delivery schedule is from the last quarter of 2008 with completion in 2010.

Mr Andre Navarri president of Bombardier Transportation said that “We are very excited to be able to add the city of New Delhi as a new metro customer. We've been an employer in India for over 35 years and we hope that this project will set the standard for other mass transit projects that we intend to pursue in New Delhi, Mumbai, Hyderabad, Bangalore, Kochi and Chandigarh and throughout India.’

Key elements of the complete design will be undertaken at Bombardier's Indian engineering center in Hyderabad in cooperation with Bombardier's site in Sweden. To ensure successful localization, some coaches to be delivered initially will be manufactured by Bombardier sites in Germany and Sweden. Thereafter, Bombardier in India will undertake production.

Bombardier Transportation said that the modern high capacity coaches will transport an impressive 4 million passengers every day, reducing their journey time and ease the road traffic congestion in the capital city. The coaches will have stainless steel car bodies and the reliable propulsion system and control system featuring IP technology.

Delhi Metro currently has 62 trains ferrying over 525,000 commuters every day over its Phase I network of 65 kilometers. Under the second phase, DMRC will add 118 kilometers to its network in Delhi, Gurgaon and Noida.

Mr VR Sharma appointed as joint MD of Bhushan Power & Steel

It is reported that Mr Vidhya Ratan Sharma has been appointed as joint MD of Kolkata based Bhushan Power & Steel Limited.

Mr VR Sharma was with Ispat Industries Limited as executive director handling IIL’s Kalmeshwar works since 2004. Before joining IIL, Mr Sharma was executive director with Bhushan Steel & Strips Limited.

Bhushan Power & Steel Limited, earlier known as Bhushan Limited, has a 0.75 million tonne cold rolling and galvanizing complex at Kolkata in West Bengal and is currently involved in backward integration by setting up a 1.5 million tonnes integrated steel plant at Jharsuguda in Orissa.

Welspun-Gujarat Stahl Q1 profit up by 163% YoY

Welspun-Gujarat Stahl Rohren Ltd has announced the following unaudited results for the quarter ended June 30th 2007

Welspun-Gujarat Stahl Rohren has posted a profit after tax of INR 693 million for the quarter ended June 30th 2007 up by 163% YoY as compared to INR 263 million for the quarter ended June 30th 2006. Total Income net of excise has increased from INR 5363 million for the quarter ended June 30th 2006 to INR 8075 million for the quarter ended June 30th 2007.

UGSL gets clearance for new steel plant and SEZs in Maharashtra

BL reported that Uttam Galva Steel is planning to set up a steel plant along the Mumbai Pune highway and has received clearance for establishing 3 special economic zones in Maharashtra. It has acquired 300 acres along the highway for setting up a steel and auto engineering SEZ on 250 acres and 2 separate special economic zones on 25 acres each for IT and bio technology.

Mr Ankit Miglani director of Uttam Galva said that “Detailed plans of the SEZ project are being crystallized. It may be a combination of our own unit and those invited to set up shop there.”

Uttam Galva has gone in for INR 800 crore expansion cum modernization exercise at its existing plant to double production capabilities to 1 million tonnes of CR steel and 750,000 tonnes of galvanized steel by 2007 end and has commissioned a reversible CR line, which will enable manufacture of import substitute grade cold rolled sheets. It has already invested INR 640 crore in the ongoing expansion program for making cold rolled and galvanized steel and intends to further invest INR 100 crore in the service center.

Mr Miglani said that “We want to bring down galvanized steel exports to 50% or even lower in 5 years. The way the auto sector demand is growing in India, I hope to achieve my target ahead of the deadline. Prices have crashed by USD 100 a tonne in June 2006 while this year it has dropped only USD 15. We expect the market to stabilize at this level and hit a new high by September to October 2007.”

PM Economic Advisory Council projects 9% economy growth

Prime Minister’s Economic Advisory Council has projected that the Indian economy will grow by a strong 9% during 2007-08, but warned that farm and power sectors may make sustaining this level difficult in the years ahead.

Prime Minister’s Economic Advisory Council, in its report presented to Dr Manmohan Singh said that it expected inflation to remain close to 4% and foreign direct investment to swell to USD 15 billion. The council suggested letting the rupee appreciate further, liberalizing capital outflows and putting restrictions on some capital inflows. However, it discouraged limiting equity inflows by calling such a move most unwise.

Economic Advisory Council said that "Equity investment by its very nature is high risk and policy continuity is an essential element to initiate and maintain such flows, they cannot be turned on and off at will. However, on the debt side, there are some areas that can do with some scrutiny. In India, the magnitude of the capital inflows and their potential to induce large changes in relative prices will have serious repercussions for domestic business in both the domestic and export markets."

The report listed rising crude prices and power shortages as the downside risks for the economy. The report said that this requires completion of the reform of the power distribution set up, encouraging the large scale import of power generating plant and equipment to augment domestic production.

Indian steel industry urged to reduce energy consumption

According to a consultant for clean development mechanism, Indian steel industry must reduce the energy consumption, which is one of the highest in the world.

Mr VK Duggal said that the Indian steel industry requires huge improvement in power and energy consumption, which can be achieved by opting for the clean development mechanism. He said that Indian steel companies could earn INR 15,000 crore through carbon credit sale by 2012.

L&T posts 139% YoY surge in Q1 profits

Larsen & Toubro Ltd has announced the following unaudited results for the quarter ended June 30th 2007

L&T has posted a profit after tax of INR 3768.50 million for the quarter ended June 30, 2007 up by 139% YoY as compared to INR 1571.30 million for the quarter ended June 30, 2006. Total Income net of excise has increased from INR 35419.40 million for the quarter ended June 30th 2006 to INR 47166.80 million for the quarter ended June 30th 2007.

Indian Railways unlikely to match steel makers requirements

FE reported that while the railways have planned for adding freight capacity of around 338 million tonnes during the 11th Plan which commenced from April 1st 2007, the steel industry said that it alone would require space for moving 400 million tonnes of raw materials and finished steel on the railways during the period.

Mr Vijay K Raina GM of South Eastern Railway while responding to a presentation made by Mr SK Lahiri, Confederation of Indian Industry Jharkhand chapter’s infrastructure core committee member, described the situation as the crux of the problem.

He added that “If the steel sector alone is demanding 400 million tonnes capacity, that’s both a challenge and an opportunity for us. Unless the political system and economic planners decide to invest this sort of money in the railways as a brand, it would not be possible.”

Mr Raina admitted that railway officials were themselves quite pessimistic about achieving an annual freight capacity addition of around 70 million tonnes, which would lead to addition of 338 million tonnes freight capacity. He said ‘It did not matter whether it was the Indian Railways or the industry or any particular house like the TATAs invested the money.”

L&T and Videocon plans JV for power plant in Gujarat - Report

It is reported that consumer durables maker Videocon Industries and engineering major Larsen & Toubro are in talks to float a new power company in Gujarat.

According to sources close to the development, Videocon and L&T will initially invest INR 4,500 crore to set up a 1,000MW coal based power plant near Pipavav port in Gujarat and will hold equal stakes in the venture. They had chosen Pipavav port for ease in importing coal.

However, Mr Venugopal Dhoot MD of Videocon said that "We are not in talks with L&T for energy projects. We are exploring various options in the power sector. But the specific venture that you mentioned is market speculation."

Orissa government and POSCO to start rehabilitation effort jointly

BS reported that the Orissa government, in a bid to expedite land acquisition for POSCO’s INR 51,000 crore steel project will soon start a joint exercise with POSCO India for rehabilitation of the displaced at a site near Paradip.

Mr AK Tripathy chief secretary of Orissa said that “A joint exercise will be started soon for implementing the rehabilitation package. We will sit with POSCO executives to decide what best can be offered to the displaced, in excess of the entitlements prescribed by the government’s rehabilitation policy and the package prepared by the company.”

As per report, Orissa government is also working on improving the compensation package for the area’s beetle vine workers, who are among the most vocal opponents of the project, as they fear loss of livelihood. The proposals, which are being examined include a pension scheme for the displaced persons and a job card for all the displaced who are less than 60 years in age.

Jessop to focus on wagon segment

BS reported that Jessop has planned to take up its turnover by more than 70% from the wagons segment from INR 24 crore at present to INR 85 crore for fiscal 2007-08 in line with it's target to take its total turnover to INR 1000 crore in the next 5 years.

Mr SC Saxena MD of Jessop said that “We hope to produce and sell 800 wagons in 2007-08, taking the turnover from the segment to INR 85 crore as against INR 24 crore in 2005-06.’

Jessop produced and dispatched 476 wagons in 2006-07 up by 153% YoY as against 188 during 2005-06. The bulk of Jessop's INR 87.37 crore turnover in 2007 is attributed to the enhanced production of wagons.

Jessop's production line also includes all types of cranes used in steel plants, ports & shipyards, road rollers and related equipment.

Dispute over Dzongu hydel power to be resolved soon

It is reported that the dispute between the protesting members of the Affected Citizens of Teesta and the Sikkim government over the proposed hydel power projects in Dzongu in North Sikkim may finally be over.

Mr Pawan Chamling chief minister of Sikkim has authorized the state high level committee headed by chief secretary to meet ACT representatives and resolve the problem at the earliest. He has emphasized that the sanctity of the Dzongu area has to be protected.

Affected Citizens of Teesta wants all hydro electric power projects in Dzongu stopped and the others in the state reviewed.

Meanwhile, Sikkim government has been justifying its plans to harness the hydropower potential of the state by saying that the hydel projects will be a major source of revenue for Sikkim. State government said that there is limited scope to raise revenue and hydel projects are the best source. A survey has been conducted for the 260MW Panang project, which is to come up in the Dzongu heartland.

Bellary Steels asks for debt restructuring from IDBI

It is reported that Karnataka based Bellary Steels and Alloys has applied to IDBI to be considered for corporate debt restructuring. Currently, Bellary Steel has total debt of INR 686 crore and has asked IDBI for waiver of total interest accrued under its CDR proposal. At present, IDBI is the operating agency for Bellary Steels and is the nodal body for any restructuring in the company.

Mr A Mallikarjunappa GM finance of Bellary Steels said that “The Company believes the news of restructuring proposal may have been influencing the scrip activity. Further, it may also be due to the increase in indices of almost all steel and metal industry related companies. The corporate debt restructuring proposal is expected to be in place by end of October 2007. Thereafter, it is expected that resumption in all the project activities would take place.”

Officials at IDBI said that the bank has invited bids for a strategic stake sale in Bellary and 7 companies have submitted bids so far. But differences in valuation are said to have led to an impasse, with the bank eventually abandoning the exercise. JSW Steel and SAIL are known to have shown interest, though this could not be confirmed.

Senegal grants iron ore mining concessions to ArcelorMittal

ArcelorMittal announced that it has been granted concessions to develop mining, transportation and logistics activities by the Republic of Senegal in the Faleme region of South East Senegal. The concessions were officially handed over on July 18th 2007 following the conclusion of agreements between ArcelorMittal and the Republic of Senegal on February 21st 2007.

The USD 2.2 billion project is an integrated mining project and will encompass the development of the mine, the building of a new port in Bargny near Dakar and the development of approximately 750 kilometers of rail infrastructure to link the mine with the port. Once fully completed the project will produce 25 million tonnes per year of high grade iron ore and is expected to provide up to 10,000 jobs to Senegalese citizens. The total estimated reserves are approximately 750 million tonnes in 4 locations in the Faleme region, comprising both hematite and magnetite deposits. The mine is expected to commence production in 2011.

Mr LN Mittal president & CEO of ArcelorMittal said that "We are pleased to have been granted the concessions and are now eager to swiftly move forward with this project. The Faleme project will not only prove to be an important and competitive source of iron ore supplies for our international plants but a notable contribution to the economy of Senegal. This is an important step in our strategy of creating West Africa as a mining hub for iron ore supplies to our steel plants around the world. We are confident Senegal will prove to be a strategic location to extend our existing footprint in West Africa."

Sumitomo Metal inks seamless pipe JV in Brazil with Vallourec

Sumitomo Metal Industries Ltd and Vallourec Group have signed an agreement today to set up a 44:56 JV company in Brazil Vallourec & Sumitomo Tubos do Brasil Ltda to manufacture seamless pipes at Jeceaba in State of Minas Gerais of Brazil. The two companies have agreed to operate the joint venture principally as equal partners. Each parent company has five management committee members.

JV will produce 600,000 tonne of seamless pipe every year, and each parent company to sell 300,000 tonnes. It will make 1 million tonnes of crude steel and the seamless pipe mill will use 700,000 tonnes. Vallourec will buy the rest.

JV’s integrated steel works include upstream facilities such as blast furnaces, steel making plants, seamless pipe mill for producing 168.3mm to 406.4mm and finishing facilities. The scheduled startup is by mid 2010. Investment would be approximately USD 1.6 billion.

The JV will employ charcoal blast furnaces, which will use charcoal made from eucalyptus trees grown in a company managed plantation. This will reduce the environmental impact of the steelworks and help prevent global warming.

The two companies announced in March 2007 that they would build a plant for making premium seamless pipes in the Minas Gerais region of Brazil, with production due to start by mid 2010.

EU asks China to fix quotas to avoid trade actions

It is reported that the Europeans and Chinese authorities meet on July 18th 2007 for a bilateral steel dialogue involving high ranking officials from China's Mofcom, the European Commission and industry and company representatives from both China and Europe. The discussions centered upon surging Chinese steel exports to Europe but turned out to be disappointing to EU negotiators.

According to a senior executive of Eurofer, the European steel producers' association, China's steel industry is out of control. And with EU licenses for Chinese imports in May 2007 alone totaling 1.1million tonnes double the April 2007 figure.

EU representatives also highlight that China's steel shipment to EU has continued to soar up for absence of adequate policy from Chinese side. They also complain that China has broken its promise to reduce its HRC export to EU from 5 million tonnes to 2 million tonnes in 2007.

The executive said that unless China go for quota system to curtail its steel exports to EU, the European producers now plan to use the WTO's threat of injury provision in the preparation of three anti dumping cases against China. These are planned for filing in September or soon after. They will cover wire rod, hot rolled coil and stainless cold rolled.

(Sourced from MySteel.net)

Pallinghurst increase bid for 60% stake in Consolidated Minerals

Pallinghurst Resources Australia Ltd, countering a higher bid by Territory Resources Ltd, has offered AUD 752 million in cash for Consolidated Minerals Ltd. Consolidated, in a statement said that Pallinghurst has agreed to pay AUD 3.30 a share for it. Territory's cash and stock offer values Consolidated at AUD 806 million.

The board Consolidated Minerals, in a statement said that "The directors of Consolidated Minerals consider that the Pallinghurst offer is superior to the offer by Territory Resources Limited announced on July 17th 2007 for a number of reasons. There is certainty of AUD 3.30 cash value, compared to the uncertain value of Territory scrip. The Pallinghurst proposal contains the significantly lower minimum acceptance threshold of 50.1% compared to 90% for the Territory offer. Shareholders have greater flexibility and are able to choose any proportion of their CSM shares to participate in the Pallinghurst offer."

Consolidated Minerals will be required to pay a break fee of AUD 5 million to Pallinghurst if the deal does not proceed and its directors intend to accept the offer for 60% of their own shares, in the absence of a superior offer.

Pallinghurst, in the statement said that it is targeting to own 60% of Consolidated and plans to maintain its listing in Australia. Mr Gilbertson chairman of Pallinghurst Resources Fund LLP said that “The Pallinghurst cash offer allows shareholders, by electing a partial acceptance, to remain Pallinghurst's partner in pursing the vision of transforming Consolidated Minerals into a major diversified resources company.'' He wants to turn Consolidated into a company worth as much as AUD 10 billion with investments in coal and iron ore to add to the company's manganese and nickel production.

Mr David Radclyffe an analyst at Southern Cross Equities Ltd said that “This strengthens the chance of Pallinghurst being successful. The all cash offer removes the uncertainty of a scrip offer which was in the Territory bid.''

Rio Tinto denies CISA charges about cutting supplies ahead of price talks

It is reported that Anglo Australia mining group Rio Tinto denied a charge by China Iron & Steel Association that the three global iron or majors are cutting supplies ahead of the price negotiations to achieve higher benchmark prices for next year.

Mr Nick Cobban a spokesman for Rio Tinto said that "My initial reaction is that we are producing iron ore flat out and at record levels. Our second quarter production figures show that we've increased production 11% YoY and 15%YoY compared to the first quarter. We are producing record amounts and have announced a big increase in our planned capacity.”

China Iron and Steel Association in a statement said that the big ore producers were working together to reduce supplies to China in the third quarter by at least five million tons. This was an attempt to "strengthen their position prior to the 2008 talks. It will alter the natural supply and demand."

China is the world's biggest consumer of iron ore and faces new price negotiations next year with the big three producers Rio Tinto, Brazil's Companhia Vale do Rio Doce and Australia's BHP Billiton.

GFMS forecasts further slippage in zinc prices

According to UK based GFMS Metals Consulting zinc prices will continue to dip with an average price in the fourth quarter of 2007 of USD 3,200 per tonnes compared with July 3rd 2007 price of USD 3,465 per tonnes as it move towards a more realistic base and production ramp ups near.

Mr Neil Buxton MD of GFMS Metals Consulting said that “Part of the decline in prices reflects the incredibly high base. From a fundamental standpoint, there is also the growing belief that the downtrend in London Metal Exchange inventories, from over 100,000 tonnes to around 70,000 tonnes will be reversed in the second half of 2007 as higher mine output begins to have an impact on the market.”

Further, China could revert to its natural standpoint as a net exporter of refined zinc. GFMS expected both China and Peru to significantly grow their output of the blue white metal in the second half of 2007.

Zinc, used mainly in alloys and to galvanize iron, traded at levels over USD 4000 per tonnes in January 2007.

US starts investigating on rectangular pipes from China, Korea, Mexico & Turkey

US Department of Commerce has initiated antidumping and countervailing duty investigations on light walled rectangular pipe and tube from the People’s Republic of China, Korea, Mexico and Turkey.

The merchandise covered by these investigations is certain welded carbon quality light walled steel pipe and tube, of rectangular including square cross section, having a wall thickness of less than 4mm. Carbon quality steel includes both carbon steel and alloy steel which contains only small amounts of alloying elements.

The US International Trade Commission is scheduled to make its preliminary injury determinations on or about August 13th 2007. If the ITC determines that there is a reasonable indication that imports are materially injuring, or threatening material injury to, the domestic industry, the investigations will continue, and Commerce will be scheduled to make its preliminary CVD determination in September 2007 and its preliminary AD determinations in December 2007.

The petitioners for these investigations are Allied Tube & Conduit Corp, Atlas Tube, Bull Moose Tube Company, California Steel and Tube, EXLTUBE, Hannibal Industries, Leavitt Tube Company LLC, Maruichi American Corp, Searing Industries, Southland Tube, Vest, Inc, Welded Tube of Canada and Western Tube and Conduit.

From 2004 to 2006, imports of rectangular pipe from China increased by 839.79% by volume and were valued at an estimated USD 44.11 million in 2006; imports from Korea increased by 13.80% by volume and were valued at an estimated USD 18.11 million in 2006; imports from Mexico increased by 9.48% by volume and were valued at an estimated USD 109.89 million in 2006; and imports from Turkey increased 362.33% by volume and were valued at an estimated USD 33.41 million in 2006.

Volume in million tons
Value in USD

Alleged dumping margin

NLMK releases trading update for Q2 of 2007

Novolipetsk Steel has released the following regular trading update for Q2 2007. The tables below show the production of principal steel products at NLMK's main production site in million tonnes.

Novolipetsk

In million tonnes

NLMK's Danish subsidiary DanSteel A/S

In million tonnes

VIZ-Stal

In million tonnes

Stoilensky GOK

In million tonnes

Altai-koks

In million tonnes

NLMK in its release said that

1. The decrease in pig iron, steel and slabs production volumes during Q2 2007 as compared with the previous quarter was due to temporary underperformance at NLMK’s Blast Furnace #6. Measures were taken to restore production levels by the end of July. The total crude steel production volume in 2007 is expected to reach the previous year’s level of around 9.1 million tonnes. At the same time, production volumes of flat rolled products increased above the levels of both the previous quarter as well as the corresponding period of last year.

2. The increase in HRC and pre painted steel production volumes during Q2 2007 as compared to Q1 2007 was due to the completion of scheduled maintenance activities performed at our rolling facilities earlier this year. An increase of production volumes of pre-painted steel as compared to Q2 2006 was due to productivity growth. The productivity growth resulted from utilizing hot dip galvanizing lines for the optimal product mix.

3. The apparent decrease in heavy plate production volumes at DanSteel A/S (Denmark) during Q2 2007 as compared with Q1 2007 was due to the change of the product mix focused on higher value added heavy plate grades which are in greater demand on the market. The decrease of production is also attributable to the Easter holidays.

4. During Q2 2007 VIZ Stal non grain oriented steel production volumes grew by 69.5% compared with Q1 2007 and by 26.4% compared to Q2 2006 as a result of increased orders for low alloy and intermediate-alloy steels.

5. In Q2 2007, Stoilensky GOK increased production volumes as compared with Q1 2007 volumes. Sinter ore production volumes grew in Q2 2007 against Q1 2007 and Q2 2006 due to favorable mining and geological conditions of the deposit.

6. In Q2 2007 coke production grew by 62.3% compared to Q2 2006 as a new coke battery was put into operation at the end of 2006. The increase in coke production at Altai-koks during Q2 2007 compared to Q1 2007 is due to growing demand for coke on core markets.

The main drivers of increased prices during Q2 2007 as compared with Q1 2007 were the influence of seasonal factors on the domestic market and movement on the export markets.

Taiwanese SS maker continue output cuts in July

Metals Insider reported that Taiwan’s 2 leading stainless steel producers Yieh United Steel Corporation and Tang Eng Iron Works have extended production cutbacks into July 2007.

As per report both companies cut production by 20% in June 2007 in response both to stainless price weakness and lower demand.

Slow demand during the usually quiet summer months has been exacerbated this time around by the recent sharp fall in nickel prices. That has left both companies’ customers with high stocks of high priced metal and a bounce back is unlikely until those have been worked off.

CSC releases update on H1 performance

Taiwanese China Steel Corporation has given a production update for the month of June 2007 and for January to June 2007

Volume in tonnes

Amount in million TWD
June's income includes long term investment income of TWD 1,437million

US Steel Serbia breaks record in H1 by crossing 1 million mark

It is reported that US steel Serbia’s has produced a million tonne of steel in January to June 2007 period.

Mr Douglas Matthews CEO of US Steel Serbia said this record was yet another step in its positioning in the market as the global leader.

US Steel Serbia in a statement said that before the 2003 privatization and US Steel takeover, the Smederevo based steelworks achieved the best result in 1989 when the factory passed the 1 million tonne mark in one year.

Hyundai Steel workers launch strike today

Yonhap reported that 3,300 unionized workers at South Korea 2nd largest steel maker Hyundai Steel Company launched a strike today, demanding a salary hike and improvements in working conditions.

The report added that the unionists at plants in Incheon and Pohang laid down their tools from 9:00 AM. The walkout was decided in a vote conducted last week in which 93.5% were in favor of the move.

SSAB successfully completes acquisition of IPSCO

SSAB Svenskt Stål AB announced that the acquisition of IPSCO Inc. was successfully completed for USD160 per share. The acquisition has been approved by shareholders, Competition Authorities and the Boards of Directors of both companies. Mr John Tulloch executive VP of steel and chief commercial officer for Ipsco Inc has been appointed president of Ipsco Inc, now a subsidiary of SSAB, and executive VP of SSAB. Mr David Sutherland former president and CEO of IPSCO is retiring.

Mr Olof Faxander CEO and president of SSAB said that “I am very pleased to announce the successful closing of the IPSCO acquisition. This is yet another milestone in our SSAB 2010 strategy towards becoming the Global leader in value added steel. Through the acquisition of IPSCO, we will not only acquire a platform for future growth and expansion, we will also extend our market presence in North America. The transaction will give an immediate and significant accretion to SSAB’s earnings and cash flow which will result in an improved strategic and financial position for SSAB.”

Mr John Tulloch said that IPSCO would be organized as a division in the SSAB Group. He said ”This combination of SSAB and IPSCO accelerates the opportunities for customers, employees, suppliers and our communities alike to grow and prosper over the coming years. IPSCO's dynamic growth and success over its history will continue when merged with the global organization of SSAB. We look forward to being a vital part of the new SSAB's future success."

SSAB is a Swedish based publicly traded corporation with a leading European position in Quenched & Tempered heavy plate and EHS/UHS steel sheet. The Group comprises four divisions, Division Sheet and Division Heavy Plate are the steel operations with steel shipments of 3.1 million tonnes in 2006, Plannja is a processing company in building products, and Tibnor is the Group's trading arm supplying a broad product range of steel and metals. The Group has sales revenues of almost USD 4.6 billion. SSAB has 8,800 employees and has operations or offices in over 40 countries and a worldwide sales presence.

Hyundai Heavy unit to buy 1% stake of POSCO

Bloomberg reported that Korea’s Hyundai Samho Heavy Industries Company, a private unit of the world's largest shipbuilder will take a stake worth USD 527 million in POSCO.

Hyundai Samho in a regulatory filing said that the company's board decided on July 9th 2007 to buy 872,000 shares in POSCO or a 1% stake to boost returns on capital.

Mr Lee Ku Taek CEO of POSCO said that the company should boost its value to avoid being a target. No foreign investor has ever succeeded in making a hostile takeover in South Korea. He added that “The planned purchase will help POSCO’s efforts to deter any takeover attempt, and in return Hyundai Samho can secure a stable supply of raw materials from POSCO.”

POSCO has swapped stakes with so called friendly investors, including Hyundai Samho's parent, Hyundai Heavy Industries Co and Japan's Nippon Steel Corp.

Chinese coal output up by 12% YoY in H1 of 2007

It is reported that China's coal output went up steadily during the H1 of 2007 with slightly falling coal price. China became a net coal importer at the same time.

The report added that from January to June 2007, China's fresh coal resource totaled some 1108.97 million tons up by 12.1% YoY. Coal export hit the ceiling in March 2007 and import of coal amounted to some CNY 27.07 million tonnes during H1 of 2007 up by 47.6% YoY.

Insiders analyzed that sharply rising demand from downstream industries spurred coal imports. Besides, Chinese government's new policy on coal export is also another important reason contributing to the rising imports. It is forecasted that coal supply and demand will be in general balance during the following several months. Coal price will also rebound up after it touches the bottom.

(Sourced from MySteel.net)

Corus to cuts 94 jobs at tinplate works in Llanelli

It is reported that more than 90 jobs are to go at the Corus tinplate works in Llanelli at Carmarthenshire as it cuts its output at Trostre as part of a review because of difficult market conditions.

Corus said the latest job losses would help secure the long term future of the works. It said from January 2008 it would reduce its overall manufacturing capacity at Trostre to match expected customer demand.

Mr Stuart Wilkie works manager said that "We have an excellent record of improvement at Trostre however we are experiencing very difficult market conditions. He said to ensure the longer term security of packaging steels manufacture at Trostre we must take action to reduce costs and improve our operational flexibility."

He added that full consultation with employees and trade union representatives would begin immediately and a support program for those made redundant would be provided.

A Corus spokesman said Corus Packaging Plus would continue to monitor steel packaging market developments and review its strategy on an ongoing basis.

Baosteel stops buying nickel pig iron

Metals Insider reported that Shanghai based Baosteel Stainless Steel Company has suspended purchases of low cost nickel pig iron due to fast falling nickel prices.

Baosteel Stainless Steel consumed around 36,000 tonnes of nickel pig iron in January to May 2007 as a way of cutting input costs in the face of spiralling nickel prices. It has long term contracts with local producers of nickel pig iron supplying them with the laterite ore needed to produce it.

However, Baosteel Stainless Steel officials were quoted as saying they have suspended purchases this month and are returning to refined nickel as international prices have collapsed from over USD 50,000 per tonne towards the USD 30,000 per tonnes level.

Baosteel is one of China’s big four stainless producers that has said it is cutting production in the face of falling stainless prices in the domestic market. It is still a little uncertain exactly how and by how much it has reduced output with suggestions that the cuts have been taken at the products rather than the melt shop level.

FMG announces raising of AUD 504 million

Fortescue Metals Group Limited has announced a successful completion of its equity raising in which it will issue 14 million shares at AUD 36 per share to raise AUD 504 million. The issue price is equal to the volume weighted average share price over the last 20 trading days.

Fortescue launched its capital raising program recently managed by JPMorgan as sole book runner and joint lead manager and Southern Cross Equities as joint lead manager. An investor road show has been conducted in Australia, Europe and Asia by the Company with its joint lead managers.

Mr Graeme Rowley ED of Fortescue said that “We have had a very successful road show and are pleased to advise that our share register has been significantly bolstered by the inclusion of a number of key institutional investors drawn from Australia and off shore. It is also very pleasing to have raised such a significant sum of equity with only a small dilution of just over 5% on our original shareholder base.”

Fortescue Metals had set a minimum raising target of AUD 300 million however following strong demand from both domestic and international investors, Fortescue decided to increase the raising to further enhance the financial platform for growth.

Leucadia National Corporation exercised its pre emptive rights to take up 1.398 million shares to maintain its 9.99% shareholding.

Grupo Simec Q2 profit down by 26% YoY

RTTNews reported that Grupo Simec SAB de CV net profit decreased by 26%YoY to MXN 533 million for Q2 of 2007 from MXN 723 million in 2006. Its net sales decreased by 7%YoY from MXN 6,557 million from MXN 6,127 million in Q2 of 2006. The average price of steel products decreased by 5% YoY in real terms in the Q2 of 2007.

Grupo said that the decrease in sales volume, increase in prices, an increase in the average cost of raw materials and the increase in the tax provision.

National Industries to build a wagon building unit in Alabama

National Industries Inc announced that it would build a new USD 350 million freight car manufacturing facility in The Shoals at Alabama. National's already strong presence in the North American freight car market will be further enhanced by the introduction of its new wholly owned subsidiary, National Alabama Corporation. Construction is scheduled to begin in the fall of 2007 with the first cars rolling off the assembly lines by the summer of 2009.

National Alabama will be a state of the art facility, utilizing million square feet for production purposes. At full capacity, approximately 1800 team members will be required to manufacture quality freight cars for which the National brand is known. At full capacity, the new plant will be capable of producing 10,000 cars annually.

Mr Gregory Aziz chairman & CEO of National Industries Inc said that "National Steel Car's success is the result of our strong commitment to our customers and the dedication of our 2800 men and women who build the finest freight cars in the industry. Our new Alabama plant will build on the achievements of our Hamilton plant."

Mr Aziz added that "We recognize the benefits of Colbert County and the great state of Alabama as a place to do business. For each quality job we create, there will be additional jobs created in related industries, bringing growth and prosperity to the region. Our investment confirms our commitment to make a positive contribution to the state, the community and most especially our neighboring citizens."

National Steel Car Limited another wholly owned subsidiary of National Industries was founded in 1912 and is currently the largest single site rail car plant in North America.

Oriel Resources makes first revenue from Tikhvin smelter

UK listed Oriel Resources announced the initial sale of high carbon ferrochrome HC FeCr product from the Tikhvin smelter plant in Russia and the signing of a long term off take contract for the purchase of chrome ore product from the Voskhod chrome project in Kazakhstan.

Oriel in a statement said that Tikhvin's initial batch of saleable HC FeCr product has been sold at approximately USD 1.30 per pound, representing Oriel's first revenue from current working projects.

Oriel has also recently completed a long term off take contract with Swiss trade house Glencore International to market a significant proportion of Voskhod's annual 900,000 tonnes of beneficiated chromite ore product commencing Q3 2008.

Oriel Resources is a London based chrome and nickel mining and processing company. Its primary focus is on the identification, acquisition, exploration and development of advanced chrome, nickel, and other alloying opportunities in the countries of the FSU including The Republic of Kazakhstan and The Russian Federation. The Oriel group currently has 3 projects namely the Tikhvin smelter project, Russia and the Voskhod chrome and Shevchenko nickel projects, both situated in north western Kazakhstan.

SABIC H1 profit up by 45% YoY

Saudi Basic Industries Corporation announced a net profit of SAR 12.8 billion for the H1 of 2007 up by 45%YoY as compared to SAR 8.8 billion in the same period of 2006.

Mr Mohamed Al Mady VC & CEO of SABIC said that "SABIC's consolidated operating profits for the first half of 2007 amounted to SAR 19.2 billion compared to SAR 13.3 billion in the same period in 2006 an increase of 44%. This is due to an improvement in prices of major products in parallel with an increase in production and sales by 14% over the same period in 2006. The first half of 2007 saw SABIC affiliates, United’s ethylene glycol, Haddeed’s long steel products plants alongside SAFCO’s 4th Expansion Project in Jubail industrial city going on stream.

He added that “SABIC reported a record Q2 net profits in 2007 of SAR 6.5 billion compared to a record net profit of SAR 6.3 reported for Q1 2007. The SABIC Board of Directors, under the chairmanship of Prince Saud bin Abdullah bin Thenayan Al Saud, has approved the distribution of cash dividends amounting to SAR 2.5 billion at SAR 1 per share to SABIC shareholders for the first half of 2007. The date of profit eligibility for the shareholders will be the end of trading on July 23rd 2007. The company will start payments on August 6th 2007.”

Iranian coal output to hit 3 million tonnes by 2011

Iran Daily cited Mr Ardeshir Saadmohammadi MD of Iran Minerals Production and Procurement Company as saying that Iran's coal output will reach 3 million tonnes in the next four years once Phase I of Parvardeh IV Coal Mining Project at Tabas in South Khorasan province is inaugurated and its second phase is commissioned.

Mr Saadmohammadi while speaking at a ceremony for signing an agreement with a Chinese firm to explore the second phase said that Phase I with a production capacity of over 750,000 tonnes will become operational in late August 2007 while Phase II is to come on stream within three years. He added that once the projects are implemented, coal concentrate output would reach 1.3 million tonnes in Tabas in the year to March 2009. Production capacity of Phase II is expected to be 450,000 tonnes.

Mr Ardeshir predicted that calculating coal concentrate production in Kerman and Shahroud with the capacities of 1.3 million tonnes and 400,000 tonnes respectively, the total output will exceed 3 million tonnes within the next four years.

Russia's industrial output in June up by 10.9%YoY

Russia top statistics body said that industrial output in Russia in June 2007 grew by a record 10.9% YoY and increased by 7.7%YoY in January to June 2007 period. The statistics body added that last time monthly industrial production growth exceeded 10%YoY was in May 2006.

Industrial output in April to June 2007 grew by 6.7%YoY as compared with 8.4%YoY in the same period of 2006. The statistics service said the largest growth in the Q2 of 2007 was seen in manufacturing industries, where output expanded 7% and registered a 4.5% expansion in the H1 of 2007. The production and distribution of electricity gas and water increased by 4.9% in the Q2 and 5.7% in the H1 of 2007.

The service added that output in the mining industries expanded 3.0% in the Q2 and 2.3%YoY in the H1 of 2007. In January to June 2007 coal production fell by 0.7%YoY to 152 million tonnes.

Gulf steel makers to get iron ore from Mauritania in 2010

It is reported that steel makers in the Gulf and neighboring region will start receiving iron ore for their plants from Mauritania in 2010. As per report an Australian listed company Sphere Investments, 18.4% owned by Saudi steel firm Hadeed and Qatar Steel, aims to export 7 million tonnes a year of high grade direct reduction iron ore pellets from 2010 to the Middle East and North Africa to produce steel.

Mr Alexander Burns MD of Sphere said that "We have proven reserves of 472 million tonnes to mine over a period of 33 years. Mauritania will help steel producers in the region in diversifying their sources of iron ore."

Mr Burns added that iron ore prices have been steadily rising since 2003 and are expected to rise 25 % by 2008. In 2005, iron ore prices soared by 71.5% due to high demand in China, which has seen its imports rising to 450 million tonnes a year from just 50 million a few years ago.

To establish a long term presence and tap vast liquidity in the region, Sphere has listed on the Dubai International Financial Exchange. Sphere is an equal partner with Mauritania's iron ore producer Societe Nation ale Industrielle et Miniere in the iron ore pellet project. Both companies signed a pact with Saudi Basic Industries Corporation Hadeed's parent, and Qatar Steel Company in March 2007 to develop the Guelb Al Aouj project as part of a new iron and steel consortium.

Sabic and Qatar Steel will acquire 34.9% and 15% stakes respectively in the company being set up for the USD 1.5 billion iron ore mining project.

TMK wins "The trends in the high social efficiency" award

Russian pipe major TMK’s Volzhsky Tube Plant has won the first prize annual industry competition "The trends in the high social efficiency" for 2006. Volzhsky Tube Plant considered being the best in economic efficiency collective agreement.


The competition was attended by 42 organizations from 25 regions of the country. Companies were evaluated on the basis of its development staff and work with youth, health and safety, social program for the socio economic efficiency of collective agreements, environmental protection and resource conservation.

Organizers of the "The trends in the high social efficiency" are the Association of Industrialists of Russia and Metallurgy union Gorno metallurgichesky Russia.

Court clears McArthur River Mine development

The Darwin Supreme Court has upheld McArthur River Mining’s appeal against the decision of April 30th 2007 which had found the Northern Territory Government approval of the mine’s open pit development was invalid.

After a hearing in the Court of Appeal Chief Justice Martin and Justices Riley and Southwood found that legislation passed by the Northern Territory Government on May 4th 2007 had effectively overturned the previous decision by Justice Angel.

Mr Brian Hearne GM of McArthur River Mining said that he is pleased with the result as it provides legal validation to the McArthur River Project Amendment Act 2007 which enabled the mine’s AUD 110 million open pit development to proceed. He added that “It remains business as usual at McArthur River Mining and the open pit development is continuing to proceed on schedule.”

VMZ develops new pipes volumetric thermal processing

FIS reported that Vyksa Metallurgical Plant made experimental industrial batches of pipes on the new volumetric thermal processing unit of small and medium size pipes welding complex.

Vyksa said the unit is intended for the production of pipes of the diameter 114mm to 530mm and length from 6 meter to 13.72 meter.

The unit can also be used to make high strength oil and gas pipes of the strength group up to 5 from different steel grades by temper quenching. The pipes are characterized by enhanced corrosion and cold resistance.