SAIL posts best ever results for April to June quarter

Steel Authority of India Limited has achieved best ever April to June quarter financial performance during April to June 2007. SAIL's un audited financial results for the first quarter of 2007-08, taken on record by SAIL’s board of directors are as under

SAIL has posted a net profit after tax of INR 15251.20 million for April to June 2007 quarter up by 10% YoY as compared to INR 13864.10 million for April to June 2006 quarter. Its total Income net of excise has increased from INR 77135.30 million for April to June 2006 quarter by 8.2% YoY to INR 83464.00 million for April to June 2007 quarter. SAIL achieved a turnover of INR 8898.45 crore up by 5.8% YoY.

Mr SK Roongta chairman of SAIL said "The company is ensuring full exploitation of its existing potential for a sustained growth and thrust will continue on implementation of modernization & expansion plans."

Performance highlights for April to June 2007 quarter are as under
1. SAIL achieved record production of 3.8 million tonnes of hot metal and 3.4 million tonnes of crude steel with capacity utilization of blast furnaces going up to 110%.
2. In regard to techno economic parameters, improved blast furnace productivity, higher production through continuous casting route, reduction in coke rate etc were achieved.
3. Major capital repairs were undertaken in the hot strip mills at Bokaro Steel Plant and Rourkela Steel Plants along with annual maintenance shutdowns of other critical finishing mills. In spite of this, the SAIL plants could operate facilities at 108% of capacity to produce 3 million tonnes of saleable steel.
4. Thrust was continued to reorient the company's product mix for more value added products and increasing the share of special steels. SAIL plants produced more than 0.8 million tonnes of value added products recording a YoY growth of 20%. Substantial growth was achieved in production of railway wheels & axles up by 53% YoY, CRNO up by 14 and wires & rods up by 16% YoY.
5. SAIL achieved best ever Q1 sales of 2.5 million tonnes with substantial growth in sales of products like TMT bars up by 60% YoY, medium structurals up by 47% YoY and electrical sheets up by 15% YoY.
6. Exports were also higher by 11% YoY.
7. SAIL could reduce its overall borrowings by INR 833 crore during the quarter, bringing down its total debt exposure to INR 3347 crore. This improved the company's debt to equity ratio to 0.18:1 as on 30.6.07 as compared to 0.24:1 on 31.3.07. There was a saving of 15% in the company's interest outgo as well.

During the quarter some major production units were commissioned
1. Blast furnace No 7 at Bhilai Steel Plant
2. Coke oven battery at Rourkela Steel Plant
3. Bloom caster at Durgapur Steel Plant

In principle approval was given for modernization & expansion of BSP and RSP involving an estimated outlay of over INR 19,000 crore. A proposal for modernization of DSP is also receiving in principle approval from the SAIL’s board of directors.

ArcelorMittal to build 20 million tonne steel plants in India

ArcelorMittal is looking to double its planned investment in India and build two large plants one each in the eastern Indian states of Orissa and Jharkhand, which have vast deposits of iron

Mr LN Mittal president & CEO of ArcelorMittal after meeting with Indian government officials told reporters that each plant would have a capacity to produce about 10 million tons of steel annually. He told "The projects are on course. I am confident of getting coal, iron ore and land. There is definitely an assurance from the government. We are depending on that to make progress."

He said that consultants have been appointed to draft reports for two projects. He said “The two steel plants would each need 600 million tons of iron ore over 30 years and the company is preparing a feasibility report on the ventures.” However, he gave no timeframe for starting or completing the work.

He, however, could not say when construction on the two steel plants, that hinges on Arcelor Mittal getting rights to mine iron ore in Orissa and Jharkhand as well as allocation of coal mines for producing feedstock to be used in the power plants needed for the steel plants, would start.

Mr LN Mittal said he and Mr Aditya Mittal CFO of ArcelorMittal would meet Mr Naveen Patnaik chief minister of Orissa and Mr Madhu Koda chief minister of Jharkhand to reaffirm our commitment to setting up the steel plants in both the states.

Mittal Steel had initially announced plans to set up one mega steel plant in the state of Jharkhand in October 2005, but later announced another steel plant in the state of Orissa in December 2006 due to delays encountered in Jharkhand.

TATA Steel to modernize HSM at Jamshedpur works

TATA Steel has awarded SMS Demag a contract for the modernization of its hot strip mill in Jamshedpur. The SMS Demag designed and built compact hot strip mill went in operation in 1993, producing around 3.1 million tonne of hot strip per year. Production after the revamp can be raised to more than 3.5 million tonnes per year.

A detailed concept was developed by SMS Demag together with TATA Steel in order to minimize the times of production stoppages that are needed for the revamping job. The roughing stand area will be modernized in the autumn of 2008 as part of an 18 day shutdown. Work in the area of the finishing mill has been scheduled such that it can be performed in the summer of 2009 during the regular short time and continuous shutdown periods.

For the roughing mill the contract includes the replacement of the drive trains, the installation of new hydraulic adjusting systems, as well as a new Level 1 automation system with gage and width control. For the finishing mill SMS Demag will supply new drive trains for mill stands F1 to F5.

This rise in production will be accomplished by increasing the drive power in the roughing stand and finishing mill. An important factor here is the 25% rise of power level in the roughing stand, which allows the number of passes to be reduced and makes the design of pass schedules easier. To be able to transmit the higher torques, new drive spindles, larger work rolls and Morgoil® bearings with higher load bearing capacity as well as modified roll chocks will be installed. In the finishing mill the power of the motors will be increased by around 10 %. For this reason SMS Demag will replace the main gear units of F1 to F4 and the pinion gear units of F1 to F5 or their gearwheel sets. On F1 and F2, new Sieflex® gear spindles will be installed whose optimized design makes maintenance easier.

Indian steel minister assures level playing filed to ArcelorMittal

Indian steel minister, while citing India’s target to become number 2 in the world in steel sector by developing 200 million tonne capacity, outlined that need for participation by both public sector as well as private sector steel makers and assured a level playing filed.

Mr Ram Vilas Paswan union minister of steel, fertilizers & chemicals during a meeting with Mr LN Mittal president & CEO of ArcelorMittal said that “India should be the second largest producer of steel in the world by 2015–16 and the government has fixed a target of 200 million tonnes capacity by 2020. That is why we would like both private and public sector players to set up additional capacities.”

On the question of allotment of iron ore mines, he said, the Group of Ministers has approved the mining policy and now it will go to the cabinet and then to parliament. Mr Paswan suggested that the ArcelorMittal should put in its applications as first as possible.

Mr Paswan while talking to reporters later said that “It is his belief that the Jharkhand government can provide six hundred million tonnes of iron ore from Chiria mines outside the disputed part which SAIL has been asking for.”

Mr LN Mittal during the meeting sought the support of Indian government for implementation of their mega steel projects in Jharkhand and Orissa. Mr LN Mittal said that he would discuss with the Jharkhand Government issues like allotment of coal, iron ore mines and land. Mr Mittal said they would need the 600 million tonnes of iron ore in Jharkhand over 30 years and a similar amount in Orissa.

Ispat Industries Q1 net witnesses positive swing

Ispat Industries Limited has announced the following un audited results for the April to June 2007 quarter

IIL has posted a net profit of INR 83.7 million for April to June 2007 quarter as compared to a net loss of INT 1114.9 million for April to June 2006 quarter. Its total income net of excise has increased from INR 16804.1 million for April to June 2006 quarter to INR 18592.6 million for April to June 2007 quarter.

Mr Pramod Mittal MD of IIL told reporters that "Our productivity has gone up and we gained from reduced costs, high value added products and saving in foreign exchange as rupee became stronger.”

IIL's interest and finance charges included a foreign exchange gain of INR 781 million on term loans.

JSW Steel posts positive outlook for steel scenario

JSW Steel Ltd in has announced the following outlook

JSW release said “The global crude steel production has grown up by at 8.4% during H1 of 2007 mainly led by 17.8% growth in China. Chinese exports are higher in January to June 2007 at 35 million tonnes. US had a marginal positive GDP growth in Q1 of 2007 due to slowing economy, lower auto production and decelerating construction. However, rising demand for pipes & plates is noticed in the US driven by booming Oil & Gas Industry. Monsoon in Asia has slowed down construction activities.”

It added that “The international prices of steel products as a consequence of above factors, has come down by around 7% to 10%. The appreciating rupee against the dollar and the lower international steel prices led to an adjustment of the prices in the domestic market by around INR 600 to INR 800 per tonne from July 1st 2007.”

JSW said that “It is reported that the inventories at various service centers are coming down and the demand continues to be buoyant. Indian economy has shown robust growth in the current financial year backed by a growth of 11.7% in the industrial production in April & May 2007.”

It added that “The recent policy announcements by Chinese government to restrict steel exports by introducing licensing procedures, reducing export rebates and introducing taxes on exports are expected to slow down the export of steel products from China.”

JSW concluded that “Lower inflation reported recently is expected to result in lower interest rate regime, which will spur growth in automobile and retail sector. In this scenario, the steel prices are expected to remain stable and may pick up from Q3 of 2007.”

Bharat Forge to expand capacity of its Chinese operations

BS reported that forgings and auto components manufacturer Bharat Forge is expanding the manufacturing capacity in China from 100,000 tonne per year to 135,000 tonne.

Mr Baba Kalyani CMD of Bharat Forge told BS that its Chinese JV FAW Bharat Forge would invest about USD 20 million to add capacity by setting up a second plant. He added that "The Chinese JV is progressing as projected and is expected to turn in a reasonable profit this year."

Mr Kalyani added that Bharat Forge would have internal capacities and scales to be an important forgings player in the Chinese market, especially in high end products by the end of 2008-09.

FAW Bharat Forge, set up 2 years ago, supplies forged components to players in light, medium and heavy commercial vehicles.

Lanco bid for Sasan UMPP declared invalid from the start

It is reported that Lanco Globeleq consortium’s winning bid for the 4,000MW Sasan ultra mega power project has been declared as invalid and a decision on whether fresh bids are to be called for the project or hand it over to the second lowest bidder Reliance Energy Limited after price negotiations is expected soon.

Mr Sushilkumar Shinde union power minister said that the empowered group of ministers, set up to resolve the imbroglio over the Sasan project, on July 24th 2007 has declared Lanco’s bid as “void ab initio” (invalid from the start) at the request for qualification stage.

He said the empowered group of ministers has directed Sasan Power Ltd, a special purpose vehicle set up for kick starting the project, to examine the future course of action. Mr Shinde said that he expected the report to be submitted by Sasan Power soon based on which the empowered group of ministers would consider the future course of action on the issue. A statement released by union power ministry said that “The empowered group of ministers has directed, that keeping in view the overall public interest and the terms and conditions of the bid documents, Sasan Power Ltd shall examine the further course and submit its recommendations to the empowered group of ministers expeditiously.”

The panel included Mr P Chidambaram finance minister, Mr HR Bhardwaj law minister, Mr Kapil Sibal minister of science & technology and Mr Montek Singh Ahluwalia deputy chairman of planning commission.

The Lanco Globeleq Singapore combine had quoted the lowest tariff bid of INR 1.196 per unit for the project, outbidding Reliance Energy Limited’s tariff bid of INR 1.29 per unit. The INR 20,000 crore coal based project’s handover to the winning consortium, however, got derailed following the sale of 100% of Globeleq Singapore by its parent Bermuda based Globeleq Ltd in February 2007. Jindal Steel & Power Limited and Lanco Infratech’s Mauritius based holding company jointly acquired the 100% stake in Globeleq Singapore, a move that was challenged by rival bidders. Subsequently, PFC and bid consultant Ernst & Young raised the issue of Lanco-Globeleq having misrepresented information pertaining to technical and financial capability claims furnished by the combine at the bidding stage.

OMC turnover in Q1 up by 68% YoY

Orissa Mining Corporation has posted turnover of INR 332.04 crore during April to June 2007 up by 68% YoY as compared to INR 197.62 crore during April to June 2006. The turnovers during April to June 2005 and April to June 2004 were INR 124.47 crore and INR 117.61 crore respectively.

Orissa Mining Corporation has the “Capexil Exports Award” in a row from 1997 to 2004 to its credit. It has also been accorded the 3 star Export House Status in 2006 by the director general of foreign trade. The ‘Golden Peacock Award for Innovation’ is yet another feather in its cap. London based World Council for Corporate Governance has also commended Orissa Mining Corporation for “Corporate Governance Initiatives.”

OMC had posted INR 1,080 crore turnover with a profit of INR 540 crore for 2006-07.

ABG Shipyard bags 12 vessel orders from Thailand

ABG Shipyard Ltd announced that it has secured an order worth INR 1,460 crore for construction of 12 vessels of approximately 32,000 DWT from Thailand’s Precious Shipping Public Co Ltd as a part of its ship acquisition program taking its order book position as on date to INR 5,560 crore.

As per the notice given to the stock exchange, Precious Shipping Public Company Ltd is a pure dry cargo ship owner operating in the handy size sector of the Tramp freight market. It is a global player and operates a fleet of 44 ships.

HP shortlists highest bidders for 4 hydel projects

It is reported that 4 companies have been short listed by the Himachal Pradesh government’s expert committee of HP State Electricity Board for four hydel projects with a total capacity of 628 MW. The proposal for allotment of these projects to the highest bidders is expected to be given its final nod by the state cabinet shortly.

As per report, the shot listed companies include
1. GMR Energy is said to have emerged as the highest bidder for the 180 MW Bijoli Holi hydel project to be built on the Ravi River in the Chamba valley.

2. LNJ Bhilwara Group’s the Malana Power Company is the highest bidder for the 200 MW Bara Bhangal project to be built on the Ravi River in Kangra valley.

3. Malana Power Company is also reported to have quoted the highest for the Chango Yangthang hydel project on the Spiti River in the tribal district of Lahual and Spiti.

4. DCM Sriram Infrastructure is said to be the highest bidder for the 108 MW Chhatru hydel project also in the Lahual and Spiti.

Once work is formally awarded to these companies they will have to deposit half the upfront money at the time of signing of the MoU and a quarter of the money at the time of signing the implementation agreement. These power companies will need to provide 12% free power as royalty for the first twelve years, 18% for the next eighteen years and 30% after that.

At least 18 companies including Reliance Energy, Essar, Larsen & Tubro, Jaypee Associates had bid for these hydel projects.

RIL to set up 4,000MW gas based power plants

BS reported that Reliance Industries Limited, to leverage gas availability from its Krishna Godavari basin, is planning to set up 4,000MW of gas based power generation capacity at multiple locations at an investment of INR 10,000 crore.

As per reports, around 1,000MW capacity will come up at Jamnagar in Gujarat where RIL is building a 27 million tonne per annum refinery alongside its existing 33 million tonne per annum refinery. For firing the power plants RIL is assured of 25 million cubic meters per day of gas for captive consumption from the Krishna Godawari basin block.

The report cites a Reliance Industries Limited official as saying that “Besides Jamnagar around 3,000MW capacity will come up at the 2 special economic zones in Maharashtra and Haryana. The Haryana project is in advanced stages.” He added that the capacities might vary slightly as RIL still has to study the kind and number of industries that will come up at the SEZs.

RIL has come under attack from both the fertilizer and power industry after it set a well head price of USD 4.33 per million British thermal unit for its Krishna Godavari gas which leads to a landed price of about USD 6 in north India. The fertilizer and power companies say that the cost of gas would be too high, making operating on gas economically unviable. Moreover, RIL’s gas is locked up with power utility National Thermal Power Corporation and Mr Anil Ambani promoted Reliance Natural Resources with the Bombay High Court saying RIL cannot sell the gas to any other company. The court, however, has allocated RIL 25 million cubic meters per day of gas for its captive use.

MEPS reports a quiet market scenario due to high inventories

MEPS recently reported that the EU strip market is relatively quiet ahead of the conclusion of price negotiations for third quarter business as service centers are well stocked until September and are in no rush to settle. MEPS said that traders are waiting for new offers from Chinese mills following the recent changes in export taxes as EU steel makers appear to be controlling production in line with demand quite well.

MEPS said that “German buyers are in discussions over period three deliveries but nothing has been fixed yet. They expect to finalize during the second half of June. A number of market players do not expect to pay any more than in the second quarter. They believe that the large quantities of third country material sitting at the ports, together with the lower prices being offered by Italian producers, will influence the outcome. Moreover, demand will cool ahead of the holidays.”

MEPS said that “French prices for late second quarter deliveries of strip mill products are showing signs of weakness and there is an air of uncertainty in the market place. Negotiations for period three have not started yet. Producers confirm they are now looking for a smaller increase of EUR 10 per tonne to EUR 15 per tonne, compared to the EUR 20 per tonne to EUR 30 per tonne initially proposed. Stocks are higher than is customary and demand only average. The expected improvement in the auto industry has not materialized.”

MMEPS added that “Although real consumption is just about normal, the Italian market is quiet as many customers are fully covered until September. Reports suggest that Riva and Marcegaglia are still trying to book orders for July production. This has resulted in lower domestic prices for all flat products. A great deal of foreign material is in the ports and warehouses and more is due to arrive. Some traders still have Chinese material contracted to be delivered at prices settled before the new tax reforms were established. They are unsure of what will happen to these orders now.”

MEPS said that “A decrease in new offers from Chinese suppliers appears to have encouraged Corus to look for higher basis prices in the third quarter. A number of buyers have been informed that they will have to pay substantially more. Period three values will also see some adjustments to extras when the company implements its new price list from July 1. There are no real negative signs in the market but uncertainty abounds. Therefore, customers are reluctant to place forward orders. Stock levels are reasonable. Most of the third country material at the quayside is believed to be sold and companies have taken those tonnages into account when assessing their inventories. Availability from Continental Europe is somewhat restricted.”

It also said that “Belgian stocks are on a good level. Huge quantities of flat products are standing at Antwerp with insufficient de-coiling capacity to move the material on. A lot of this steel has arrived late, having been bought at quite low prices. Demand is down due to the approaching holidays. Customers, concerned about the current high prices, are proceeding cautiously. The mills are talking about third quarter increases of €20 per tonne but many buyers do not think the plan is achievable. Large quantities of third country imports, already at the docks and also due to arrive shortly, are threatening to cause oversupply in the Spanish market.”

Hot band prices continuing on downward trend

SteelBenchmarker reported that the US hot rolled band spot price for July 9th 2007 has dropped by 1.9% to USD 575 per ton, FOB the mill for the 4th consecutive time. The World export HRB price dropped 1.6% to USD 571 per tonne, FOB the port of export for the 7th consecutive time. The Chinese HRB ex works price plummeted 4.3% to USD 422 per tonne for the 4th consecutive time while the Western European HRB price dropped by 1.2% to USD 696 per tonne, ex works for the 2nd consecutive time.

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

1. US
USD 575 per ton
Down by USD 11 per tonne from USD 586 two weeks ago
Down by USD 55 per ton from the high of USD 630 on April 9th 2007
Up by USD 4 per tonne from the low of USD 571 on January 22nd 2007

2. World Export Price
USD 559 per ton
Down by USD 8 per tonne versus USD 567 two weeks ago
Down by USD 37 per tonne from the recent high of USD 596 on March 26th 2007
Up by USD 60 per tonne from the previous low of USD 499 on December 11th 2006

3. Western Europe
USD 673 per ton
Down by USD 11 per tonne from USD 684 two weeks ago
Down by USD 23 per tonne from the recent high of USD 696 on June 11th 2007
Up by USD 117 per tonne from the low of USD 556 on November 27th 2006

4. China
USD 402 per ton
Down by USD 10 per ton from USD 412 two weeks ago
Down by USD 55 per ton from the recent high of USD 457 on May 14th 2007
Up by USD 29 per tonne from the low of USD 373 on July 24th 2006

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

Outokumpu Q2 operating profit up by 172.48%YoY

Outokumpu Oyj announced a jump in April to June 2007 earnings year on year but warned that nickel related inventory losses could push it substantially into the red during the third quarter.

Outokumpu in a statement said that its operating profit for the April to June 2007 came in at EUR 406 million up by 172.48% YoY from EUR 149 million in April to June 2006 inflated by nickel related inventory gains of EUR 100 million and a EUR 25 million gain from the sale of the Hitura mine. It’s April to June 2007 pretax profit came in at EUR 652 million against EUR 141 million in 2006.

Highlights of the Q2 result are
1. Operating profit totaled EUR 406 million including nickel related inventory gains in the order of EUR 100 million and a EUR 25 million gain on the sale of the Hitura mine.
2. Underlying end user demand for stainless steel continued strong. The distribution sector kept on de-stocking and the order intake by mills for standard grades slowed markedly.
3. According to CRU, average stainless steel base prices declined by 21%QoQ.
4. Production of standard volume products was cut as planned due to weak order intake.
5. Substantial non recurring gains in financial income, EUR 142 million from the sale of Outotec Oyj shares and EUR 110 million from the participation in the Talvivaara project.

In EUR million

Mr Juha Rantanen CEO of Outokumpu said that "While the significant drop in nickel price will create short term, one time financial losses, this is a positive development in the longer term as these price reductions support the competitiveness of nickel containing stainless material and releases working capital for both us and our customers. The latest market developments also highlight how important it is for Outokumpu to develop a more stable business model by strengthening our ferritic and specialty product ranges and by increasing sales to end-users. Some investment decisions that will drive this development have already been taken and several new ones are being prepared. The latest development in this respect is our decision to build a service center in India.”

Indonesia to produce 215 million tonnes coal in 2007

Indonesia’s leading economic daily Bisnis Indonesia reported that coal production in Indonesia is estimated to hit 215 million tonnes in 2007 or above the initial target of 205 million tons, due to demands from new markets of China and India.

The newspaper quoted Mr Jeffrey Mulyono chairman of Indonesian Coal Mining Association APBI as saying that “China and India are new buyers for Indonesia. The largest coal export goes to Japan and South Korea. These new markets offer an opportunity for Indonesian coal producers. If they can't meet the demand, buyers will find other suppliers, such as Australia and South Africa."

Indonesia sells 76.7% of total coal output to the export market, equivalent to about 165 million tonnes.

CMC Zawiercie in Poland to setup medium section rolling mill

Commercial Metals Company announced today that CMC Zawiercie SA, CMC's steel mini mill located at Zawiercie in Poland, would install a new rolling mill at an estimated cost of USD 170 million. The new mill is expected to be commissioned during the summer of 2009.

The new mill, designed to allow efficient and flexible production of an increased medium section product range, will complement the facility's existing rolling mill dedicated primarily to rebar production. The mill will have a rolling capacity of approximately 650,000 tonnes of rebar, merchant bar and wire rod. It is in addition to CMCZ's second existing rolling mill dedicated to wire rod production and the previously announced wire rod block currently under installation.

Mr Murray McClean CEO of CMC said "This is a major strategic expansion to capture the full advantage of the significant and underutilized melting capacity of CMCZ's two existing electric arc furnaces. The new mill will expand production volume and extend the product range and size of our long products."

Mr Hanns Zoellner executive VP of CMC added that "Apart from additional rebar capacity to supply the growing demand for reinforcing steel in Poland, the merchant bar will expand CMCZ's current product offerings to include larger sizes of rounds, squares, angles and flats. New products such as channels, unequal angles and tees can also be produced. The mill addition will also be capable of providing product to the new wire rod block presently being installed at CMCZ, which is on schedule to be operational by summer 2008. The combination of these projects will provide wire rod of higher quality with availability in bigger coils for CMCZ's customers."

US June steel imports dip by 10% MoM

According to preliminary data released by US based SIMA, the overall steel imports in June 2007 has decreased by 10% MoM from May 2007 due primarily to a decrease in most carbon categories excluding blooms, billet and slabs, and standard pipe. June 2007 imports of steel mill products were also down by 22% YoY compared to June 2006.

In tons
Source: SIMA

Tangshan Steel H1 profits up by 79.71% YoY

China’s Hebei Province based Tangshan Steel has posted sales revenue of CNY 40.294 billion up by 42.01% YoY, pretax profits of CNY 5.077 billion up by 44.06% YoY, profits of CNY 2.719 billion up by 79.71% YoY, production/sales ratio of 101.39% up by 1.3% YoY, energy consumption per ton steel at 609.59 kilograms of standard coal down by 41.99 kilograms of standard coal during January to June 2007 period.

Tangshan Steel has strengthened the research and development of new products and further optimized product mix. Its holding company Caida Securities has reported revenue of CNY 998 million, pretax profits of CNY 518 million and profits of CNY 470 million in January to June 2007 period.

(Sourced from MySteel.net)

Goldman Sach forecasts nickel prices fall to USD 25,000

Goldman Sachs Group Inc said that nickel may fall to as low as USD 25,000 per tonne as inventories continue to rise in the coming weeks.

Mr James Gutman an analysts with Goldman Sachs London said "In the near term, we believe the risk of overshoot to the downside remains significant.'' He predicted on April 2nd 2007 that nickel would fall to USD 30,000 a tonne by 2008.

Goldman Sachs said that stainless steel producers, who use about two thirds of the world's nickel, may cut demand by about 100,000 tonnes a year.

As per recent reports, stockpiles of nickel tracked by the LME soared 76 % in the past two months to 12,642 tonnes, the highest since June 22nd 2006. Nickel for delivery in three months has lost 35% since trading at a record USD 51,800 a tonne on May 9th 2007.

Wuyang to add roughing stand to its plate mill

Chinese Wuyang Iron and Steel Co Ltd inked an agreement for supply of a new roughing mill stand and cooling bed required for the Phase 2 expansion of their 4,100 mm wide plate mill with Siemens Metals Technologies. It is planned that the Phase 2 expansion project will be complete by January 2009.

Wuyang Iron and Steel Co Ltd, located at Wugang in Henan province of China is a leading producer of heavy plate in China. Its plate mill, also supplied by Siemens, commenced rolling plates in February 2007 and the plant is now in the final stages of hot commissioning. The addition of the above equipment will enable an increase in production from 1 million tonnes per annum to 1.8 million tonnes per annum. Production will focus on plate for the shipbuilding, pipeline grades, boiler and high strength construction industries in China.

The new roughing mill will have a rolling load of 8,600 tonnes and will incorporate hydraulic gauge control cylinders and a Mae West work roll balance system. The design of the new roughing mill will be very similar to the existing finishing mill stand enabling rationalization of many parts between them. As well as the new roughing mill stand, a new walking beam cooling bed will be installed in parallel with the existing cooling bed.

The Siemens scope of supply includes the design of the mechanical equipment, the supply of key mechanical components and the quality supervision of Chinese manufactured equipment. In addition, Siemens will also supply the Level 1 and Level 2 automation for the new roughing mill stand and will be responsible for supervision of equipment installation and commissioning. All the new equipment will be integrated into the mechanical and automation systems, which Siemens supplied in Phase 1.

Panpan’s HDG and color coating line commences production

It is reported that China’s Yingkou Panpan Chaoshuo High Tech Color Coating Company’s galvanizing and color coating line has launched production.

The line has a galvanizing capacity of 200,000 tonnes per year and color coating capacity of 50,000 tonnes per year, which will have a production value of CNY 1.6 billion per year.

Panpan will focuses on development and production of galvanized and color coated sheet with a thickness ranging from 0.14 mm to 0.3 mm, which will fill the blanket of such products in Northeast and North China. Panpan also said that it has signed supply contracts with 5 downstream companies in Northeast China.

Mechel appoints Mr Rozenberg as deputy CEO for foreign trade

One of the leading Russian mining and metals companies Mechel OAO announced the appointment of Mr Oleg Rozenberg to the position of the deputy CEO for Foreign Trade at Mechel Management OOO, the management subsidiary of Mechel OAO.

Mr Rozenberg has longstanding experience in coal and coke chemical export trade and now will be in charge of overseeing sales of Mechel mining and steel subsidiaries’ products to key global markets. His responsibilities include management of export sales, logistics, and distribution development and he will focus on driving sales of Mechel’s products outside of Russia.

Mr Vladimir Polin CEO of Mechel Management OOO said “Oleg has been a valuable member of our team, most recently heading coal export sales. Under his leadership Mechel increased sales by intensifying work with end customers, optimizing logistics and supply chains and enhancing product mix. We look forward to his continued contributions in this new capacity, applying a similar approach to enhancing export sales in our mining and steel segment to key markets outside of Russia.”

South Korean metalworkers end partial strike

Yonhap reported that tens of thousands of unionized metalworkers ended a weeklong partial strike on Wednesday after they reached a provisional agreement with the management on next year's minimum monthly wage.

Tens of thousands of workers affiliated with the Korean Metal Workers' Union went on partial strike on July 18th 2007 demanding collective bargaining power as the nation's largest metal industrial union, fair trade with subcontractors, labor security and a minimum wage of KWR 936,320 won (USD1018).

Scrap laden vessel runs aground in Kerch Strait

Ukrainian Journal reported that a dry cargo ship loaded with about 7,000 tonnes of ferrous metal scrap has run aground in Ukrainian territorial waters of the Kerch Strait.

The Panama flagged MV Queen Hadji with Romanian crew on board was supposed to deliver the scrap metal to Egypt from the port of Berdiansk on the Sea of Azov but got stranded three miles away from the Ukrainian seaport of Kerch.

Explosion sparks blaze in rolling mill at Corus Scunthrope works

It is reported that a blast happened at Corus rolling mill at Scunthorpe in UK and more than 70 firefighters spent the night tackling a major blaze after an explosion. The building was evacuated and none of the 60 workers was injured.

Firefighters described it as a pressure explosion, which caused oil to burst out and ignite an area about 100 meters by 50meter.

An investigation has been launched into the cause of the blast in a huge hydraulic roller used to roll steel in the plant's medium section mill.

New EAF to begin operation at Jose Marti Steel Mill in Cuba

It is reported Jose Marti Steel Mill, formerly also known as the Antillana de Acero, will begin soon begin operating a new electric steel smelter once the required final tests are conducted. The new electric oven will cut in half the estimated time for each steel melting cycle.

Mr Boris Tamayo Ferrer in charge of the Integrated Projects Directorate told Granma that the replacement of the old smelter by this high-technology unit will make it possible to increase productivity by cutting in half the estimated time for each operation to produce a batch of liquid steel. At the same time, the melting capacity of 70 tonnes per load will be retained.

This will conclude the first stage of the modernizing process of this industrial installation that belongs to the Acinox group of the Ministry of the Steel and Mechanical Industries. The investment process begun in mid June with the replacement of a transformer with a new one of 72 MVA capacity. Other investments made include the rebuilding of the electricity substation & its associated equipment and maintenance done on water wells & water supply equipment.

With these investments, the Antillana de Acero production complex, together with the smaller Acinox Tunas plant, are aiming at reaching an annual steel production level of 0.5 million tonnes.

Environmental groups file suit against Navajo’s coal mine permits

It is reported that 2 environmental groups San Juan Citizens Alliance and Dine Citizens are suing the federal agency that regulates coal mining over its approval of two permits for a mine in northwestern New Mexico.

The Two environmental groups claim that the agency violated federal laws when renewing the mine's permit in September 2004 and approving a revised permit in October 2005. The lawsuit, filed on July 13th 2007 in federal court in Denver, claims the US Office of Surface Mining, Reclamation and Enforcement did not provide adequate public notice and failed to fully analyze potential environmental consequences as required by the National Environmental Policy Act.

The plaintiffs claim current operations at the Navajo Mine produce significant dust and ground tremors that affect Navajos who live in the area and future operations will force some Navajos from the land. The groups want a federal judge to declare the OSM's approval of both permits unlawful and stop the implementation of the proposed expansion until the agency complies with NEPA regulations.

Mr Mike Eisenfeld of the San Juan Citizens Alliance said the mine operated by BHP Billiton to supply two coal fired power plants in the Four Corners region dumps more than 1.5 million tons per year of coal combustion waste from the plants back into the mine to be covered up with topsoil. He contends the pits aren't covered up in a timely manner, resulting in fly ash being carried throughout the area by wind. He also said the waste contains significant levels of pollutants, such as mercury, cadmium and selenium.

Mr Lori Goodman a member of Dine CARE in a statement said that ''The agency and BHP treat this area as if it is uninhabited. OSM must understand that community members live or graze livestock in these areas. OSM fails to recognize that this is our homeland.''

Navajo Mine covers more than 13,400 acres on tribal land and produces coal for both the Four Corners Power Plant and the San Juan Power Plant, which provide electricity for customers in New Mexico, Arizona and other parts of the Southwest.

China issues clean production evaluation standards

Xinhua reported that China has issued its clean production evaluation systems for 6 industries amid efforts to curb air and water pollution. China’s State Development and Reform Commission last week published on its official Website the systems for sectors including cement, fermentation, soda ash, machinery, sulphuric acid and leather.

The commission said that the 6 sets of standards became effective on the day of issuance on a trial basis in a bid to help better use of natural resources and cut pollutant emissions. The standards will be revised with the economic development and improvement of technology.

Mr Wen Jiabao Chinese Premier said that “China must improve energy efficiency and upgrade its capacity to deal with climate changes, Cutting energy consumption and pollutant emissions and dealing with climate change are urgent, critically important tasks."

China has committed itself to improving energy efficiency its goal is to cut energy consumption per unit of gross domestic product by 20% and major pollutant emissions by 10% by 2010. But the Chinese official figures show that energy consumption per unit of GDP fell by 1.33% YoY in 2006 only one third of its 4% target.

Tonkolili project has major iron ore potential - Sierra Diamond

Mineral exploration company Sierra Leone Diamond Co Ltd said that its Tonkolili Iron Ore Project might contain in excess of 2 billion tonnes of contained iron ore with a grading of 68% to 70%.

Sierra Leone Diamond said that it has now scheduled a work program of up to 200,000 meters of drilling to define the extent of the Tonkolili mineralization under the project, which is about 150 kilometers from the Pepel deep water port. It will take up metallurgical test work, flow sheet development and preliminary engineering to complete a scoping study by the second quarter of 2008.

Alongside the news from the Tonkolili project, Sierra Leone Diamond is starting a drilling campaign to define the extent of iron mineralization along with initial metallurgical test work, flow sheet development and preliminary engineering at its Marampa project. Interpretation of aeromagnetic and ground gravity surveys has defined 20 kilometer of prospective strike extending out from the historical Marampa mine.

Sierra Leone Diamond also announced that it has found a kimberlite in the south west of Sierra Leone, West Africa in the Lake Popei project area after 800 meters of core drilling. In its base metals and gold exploration activities, it has identified potential drilling in 14 high priority, 11 priority targets and 40 carbonatite targets.

Sierra Leone said that it is very pleased with the initial results from its exploration projects and that it is the beginning of its strategy to be a diversified minerals producer.

Maranhao state not clear of Baosteel’s plans for steel plant

Bnamericas reported that Baosteel has not yet officially told Brazil's Maranhão state government that it has abandoned plans to build a steel plant in the state. The report cited Mr Sérgio Guimarães civil construction and mining metals superintendent at Maranhão's commerce and industry ministry as saying that "Baosteel has not made any official announcement saying it has given up Maranhão.”

Maranhao state had hired São Paulo state university USP to measure the impacts of a steel mill in both locations. Mr Guimarães said "We have already received a proposal for the study and some changes were made to the document. We expect to receive a new proposal next week.’

Mr Guimarães said that “However, the USP study is not tied to Baosteel, but to the potential and conditions of installing a mill in São Luís or Bacabeira.” He added that other steel makers are interested in building a steel unit in the northeastern state.

Brazilian mining and metals group CVRD and Baosteel have been in talks to build a steel plant in Maranhão capital São Luís, but the state wants the mill installed 50 kilometers away at Bacabeira. Guimarães. But CVRD and Baosteel signed this month a letter of intent for a steel project in Brazil's Espírito Santo state.

Bombardier bags major order for rail coaches in Poland

It is reported that Bombardier's Transportation unit has received a EUR 55 million order to supply 37 new generation double deck rail coaches for the suburban rail network operated by Koleje Mazowieckie in the Mazovia region of Poland. Delivery of the coaches is scheduled to be completed in 2008.

Mr Stephane Rambaud-Measson president Mainline & Metros of Bombardier Transportation said “We see a very strong future for our spacious, high capacity double deck coaches in Poland and are confident they will create the same positive impact that they have in other European countries.”

Bombardier Inc is a global corporation headquartered in Canada. Its revenues for the fiscal year ended January 31st 2007 were USD 14.8 billion. Bombardier Transportation has its global headquarters at Berlin Germany with a presence in over 60 countries. It has an installed base of over 100,000 vehicles worldwide. The Group offers the broadest product portfolio and is recognized as the leader in the global rail sector. Bombardier Transportation Polska, formerly Pafawag, has played a major role in equipping the Polish railways with rolling stock ever since the foundation of the company in 1838.

Oriel secures loan to develop Kazakhstan chrome project

Platts reported that UK based chrome and nickel miner Oriel Resources announced that it has draw down funds from a USD 120 million loan facility for the development of Oriel's Voskhod chrome project in Kazakhstan. The facility, signed with Eurasian Development Bank, UniCredit Markets & Investment Banking acting through Bayerische Hypo und Vereinsbank and WestLB, was closed on December 15th 2006.

According to Oriel, the facility comprises a USD 60 million loans provided by Eurasian Development Bank, a USD 40 million 7 year loan and a USD 20 million cost overrun facility provided by WestLB and HVB/UniCredit. The first draw down of USD 40 million from Eurasian Development Bank's USD 60 million share in the facility will be used for the further development of the Voskhod chrome project. In addition to this being the first chrome mine in the world to be project financed, Voskhod was the first mine to be project financed by Eurasian Development Bank.

Oriel said that significant progress has been made in the development of the Voskhod mine, its plant and general infrastructure. The mining contractor has commenced decline development, while other contractors have been commissioned for the construction of roads and offices, temporary power, a local fuel storage facility, batching plant and tailing facilities.

Dr Sergey V Kurzin executive chairman of Oriel said that "The Oriel board is extremely pleased to have the support of EDB, HVB and WestLB. With mine development at Voskhod progressing well, this drawdown further bolsters the effort to begin production in Q3 2008 and develop what will soon be a world class chrome mine."

Oriel Resources' primary focus is 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 Russian Federation. It currently has 3 projects namely the Tikhvin smelter project, Russia, and the Voskhod chrome and Shevchenko nickel projects both situated in northwestern Kazakhstan.