JSW Steel to raise USD 500 million from overseas market

JSW Steel Ltd has announced that it will raise USD 500 million (INR 2,013 crore) from overseas market through the issue of securities. JSW’s shareholders at the annual general meeting have approved the proposal to raise the amount through the issue of foreign currency convertible bonds, global depository receipts or other securities which would be converted into equity shares later.

The meeting also authorized the board of directors to raise another INR 1,000 crore through the issue of equity shares or securities to qualified institutional buyers as permitted under the Securities and Exchange Board of India guidelines however, it did not disclose the reason for raising the funds.

Diring the meeting JSW Steel has also re appointed Mr Sajjan Jindal as VCMD for a 5 year period with effect from July 7th 2007 and Mumbai based chartered accountant Deloitte Haskins & Sells has been re appointed as the auditors of JSW Steel.

Usha Martin eyeing INR 5000 crore turnover by 2010-11

SNS reported that India’s leading speciality steel and wire rope producer Usha Martin Limited is eyeing a turnover of INR 5,000 crore by 2010-11 and has chalked out a capital expenditure plan of INR 1,350 crore over the next 3 years.

Mr BK Jhawar chairman of Usha Martin speaking on the sidelines of the company’s annual general meeting said that “We have already pumped in INR 300 crore in the last 1 year and plan to pump in another INR 1,350 crore to reach the targeted turnover. We are targeting to enhance our production capacity to 1 million tonnes of speciality steel in phases by 2009.”

Mr Jhawar added that “We have already started sourcing 98% of our iron ore requirement from our captive iron ore mine in Jharkhand and furthermore, we are expecting that our captive coal mine in Jharkhand will be operational towards the end of the current fiscal, when we will actually start receiving coal. We expect to save its operating cost by INR 120 crore on an annualized basis when both the mines are fully integrated and will improve the bottom line of the company.”

Usha Martin’s captive iron ore mine is fully operational and it is expected to improve the operating margin of the company by 4% in the 2007-08.

Usha Martin has recorded a profit after tax of INR 37.68 crore for the quarter ended June 30th 2007 up by 38% YoY as compared to the corresponding period of the previous fiscal. During the period its speciality steel production grew up by 5% YoY and global wire ropes production up by 27% YoY.

Steel ministry to monitor SAIL & RINL expansion projects

BL reported that union government is worried about any delays in the expansion of public sector steel units Steel Authority of India Ltd and Rashtriya Ispat Nigam Ltd.

A steel ministry official said that “Last week, the parliamentary consultative committee of the steel ministry met to take stock of the status of the expansion program of RINL. The members cautioned the company that there should be no cost and time overrun in implementing the expansion program.” The official added that the members were not only concerned about RINL’s expansion program but also that of SAIL.

The official added that “Though at the moment there is no delay in the expansion program of both the companies, given the history there have been delays in project executions. So to avoid this, since there is a cost attached to any delay, the ministry would be monitoring both the expansion projects very closely. Generally, at a review meeting only the top bosses are present or at the most the head of the plant. So the complete picture on the problems, which might be faced at the ground level, might not be placed at the meeting, so to address this issue officials would be undertaking visits to the plants of SAIL and RINL.”

Both SAIL and RINL have initiated major expansion plans. RINL’s expansion plan involves a capital outlay of INR 8,692 crore to raise its capacity to 6.3 million tonnes from the current 3.4 million tonnes, which needs to be completed by February 2010. SAIL is implementing an expansion program to raise its capacity to 24 million tonnes from the current 14.6 million tonnes with an investment of over INR 40,000 crore, which is expected to be completed by October 2010.

According to the steel ministry estimates, a 6 month delay in the expansion project of SAIL could see an additional investment of INR 2,500 crore, while in the case of RINL a 1 year delay could see additional investment of over INR 1,000 crore.

DVC plans 4850MW power in Jharkhand by setting up 4 thermal plants

Ranchi Express reported that Damodar Valley Corporation has planned 4850MW capacity addition in Jharkhand by setting up 4 thermal plants and augmenting generation from 2 of its existing plants by the end of 11th plan.

The report added that a 20MW hydropower generation is also on cards in Balpahari. The progress of the 2 x250MW extension project at Chandrapura Thermal Power Station is one of the fast lane.

Damodar Valley Corporation expects to begin commercial operation of the unit 1 by December 2007 and has also placed equipment purchase order for its 2x250MW plant coming up in Koderma and expecting commercial operation of the first unit by May 2010.

Meanwhile, Jharkhand government has assured Damodar Valley Corporation authorities to acquire 950 acre at the earliest out of the total 1850 acre that would be required at Koderma.

Usha Martin Q2 profit up by 38% YoY

India’s leading wire rope and speciality steel producer Usha Martin has posted profit after tax of INR 37.68 crore during April to June 2007 quarter up by 38% YoY as against INR 27.31 crore in the corresponding period last year. While it has posted net sales of INR 503.76 crore for the same quarter up by 8% YoY as against INR 464.40 crore during the corresponding period last year. Profit before tax has rose to INR 55.28 crore up by 57% YoY as against INR 35.18 crore.

During April to June 2007 quarter, it has improved its operational growth by 2.63%. The speciality steel production also registered a growth of 5% and JSW's global wire ropes production has grew up by 27% YoY as compared to last year. The captive consumption of steel for downstream value addition has registered a growth of over 19% at 43,362 million tonnes during April to June 2007 quarter compared with 36,323 million tonnes in the corresponding period last year.

Mr Rajeev Jhawar MD of Usha Martin said that the company's captive coal mine at Daltonganj in Jharkhand is likely to be operational by October or November 2007, resulting in a 4% increase in its operational margin as a result, its operating margin will reach 30%.

Mr Prashant Jhawar VC of Usha Martin said that all its expansion plans were on schedule and would be completed on time. It would have a 1 million tonne speciality steel capacity, to be entirely fed by captive iron and coal.

As part of its expansion process, Usha Martin has plans to launch integrated value added wire rope production services. It has plans to enhance the capacity of speciality steel production to 1 million tonnes per annum.

Usha Martin has manufacturing facilities at Ranchi, Jamshedpur, Hoshiarpur, UK, Thailand, UAE and USA. It has created a worldwide distribution, service and marketing network spread across the US, UK, Europe, Africa, the Middle East, South East Asia and Australia.

Essar shipping added a new capsize vessel to its feather

Project Monitor reported that Essar Shipping & Logistics Ltd’s subsidiary Essar Shipping Ltd has recently added a capsize vessel called MV Govind Prasad to its ever expanding fleet. With this, the fleet size of Essar is now 28.

MV Govind Prasad is the second capsize acquired by Essar in May 2007 after acquiring a capsize vessel of 175,048 DWT called MV Kiran. Built at the Mitsui Engineering & Shipbuilding Co in Japan, the vessel has an overall length of 263 meter and a beam of 42 meter. With 129,237 tonnes of deadweight, Essar plans to use the bulk carrier MV Govind Prasad for carrying iron ore from Visakhapatnam to Hazira. The bulk carrier will be a vital supplement to the fleet earmarked for Essar Steel, particularly in light of the company's plan to boost production.

Essar Global Ltd had consolidated its shipping and logistics business in 2006. In order to provide a sharper focus to its business and increase shareholder value, it formed a fully owned subsidiary called Essar Shipping & Logistics Ltd, which will in turn have 3 operating companies under its umbrella namely Essar Shipping Ltd, Essar Logistics Ltd and Vadinar Oil Terminal Ltd.

Essar Shipping Ltd is a leading sea transportation company with special focus on transportation solutions for the global energy business and Essar Shipping & Logistics Ltd owns around 77% of it. Essar Logistics Ltd is responsible for conducting the business of logistics management, transshipment and port services. The company specializes in handling, storage distribution and movement of cargo by sea, road and rail.

Navratna status for NHPC & PGCIL soon

It is reported that power units National Hydroelectric Power Corporation and Power Grid Corporation of India Limited, who are in the process of hitting the capital market will get the Navratna status soon.

A high ranking government official said that "They will get the Navratna status soon and after that they will come out with their initial public offer."

National Hydro Power Corporation Ltd and Power Grid Corporation of India Ltd have plans to come out with initial public offer and have filed the draft prospectus with capital market regulator Securities and Exchange Board of India for the same.

India's largest hydroelectric power generating company National Hydro Power Corporation Ltd has filed its draft prospectus with the Securities Exchange Board of India on April 2nd 2007.

PGCIL has also filed draft prospectus for its initial public offer.

India & Japan to sign MoU for freight corridor by August 2007

It is reported that India and Japan is likely to sign an agreement for a dedicated rail freight corridor connecting Delhi, Mumbai and Kolkata by August 2007. The freight corridor is being implemented by the Indian Railways at a cost of INR 11,446 crore.

The 1,469 kilometer long freight corridor will have about 200 freight trains plying and the Delhi to Mumbai industrial corridor will run parallel to the dedicated railway freight corridor.

Dr Ashwani Kumar invites mega Japanese investments in India

Dr Ashwani Kumar minister of state for industry who is currently on an official visit to Japan has met with Mr N Ohasi chairman of Mitsui & Co and Co chair of India Japan Business Co operation Committee at Tokyo. Dr Kumar also met with Mr Sakamoto member of the board of Marubeni Corporation and discussed various initiatives to deepen Indo Japanese economic engagement. The visit of Dr Kumar to Japan is significant in view of Mr Abe Prime Minister of Japan’s visit to India next month and in view of the ambitious Delhi to Mumbai industrial corridor and dedicated rail freight corridor between India and Japan.

Dr Kumar has informed leaders of Mitsui that the Delhi to Mumbai industrial corridor and Delhi to Mumbai freight corridors should be the flagship program to cement a comprehensive strategic partnership between India and Japan. He informed the Japanese captains of industry that the India remains focused on becoming a global hub for manufacturing activities given the various competitive advantages and high level human resource capabilities. Dr Kumar stated that the need of the hour was to encourage more Japanese mall and medium enterprises’ to invest in India and also to de mystify the economic potentials of modern India and Japan.

Mr Ohasi chairman of Mitsui said that he would be visiting India with Mr Abe PM of Japan and a high level team from Mitsui will be visiting India between 25th to 28th August for extensive meetings to finalize plans for Mitsui major participation in different projects connected with the Delhi to Mumbai freight corridor and the Delhi to Mumbai industrial corridor. Mitsui is likely to invest in the locomotives space for the freight corridor project and would also seek suitable participation in the development of Indo Japan Business Conclave which is expected to invite an investment over USD 2 billion. Mitsui would focus on the development of logistics and infrastructure at Greater Noida and Rajasthan.

Dr Kumar was informed that Mr Abe’s delegation would consist of 200 business leaders from Japan who are encouraged to explore major business opportunities in India.

Mr Sakamoto of Marubeni informed Dr Kumar that Marubeni Corporation was actively exploring opportunities in Infrastructure including the Power sector apart from expanding significantly its trading operations in India. Marubeni has already constituted an internal study group to identify projects and Indian partners.

Dhamra port to turn itself into SEZ

The Telegraph reported Dhamra port in Orissa is exploring the option of turning itself into a special economic zone. The report added that Dhamra Port Company Ltd, a 50:50 JV between TATA Steel and L&T is planning to develop 2 berths at an investment of INR 2,400 crore to handle bulk cargo such as coal and iron ore. TATA Steel and L&T are contributing INR 250 crore each as equity for the project, while the remaining INR 1,900 crore will be raised as debt from 8 banks led by IDBI.

Mr Santosh K Mohapatra CEO of Dhamra Port said that the contractors had been appointed and orders placed for the project. He added that “We hope to complete the first phase, capable of handling 25 million tonnes of cargo by April 2010. Later we may consider having port based industries there.”

Asked if Dhamra port planned to seek SEZ status, he said that such an idea was being considered. Many upcoming private sector ports across the country are turning themselves into SEZs to take advantage of liberal tax rules. Dhamra port will handle raw materials for steel plants coming up in Kalinganagar and in nearby areas.

Dhamra port will be equipped to handle 85 million tonnes cargo capacity with 13 berths. It will also build a 62 kilometers long rail track from the port to Bhadrak, which will connect with the Howrah to Chennai trunk route and will require 2,200 acres for that, taking the total land requirement of the whole project to 3,100 acres.

Monsoon takes its toll on East Coast Railway freight loading

BL reported that the monsoon has started taking its toll on freight loading of the East Coast Railway as the average daily loading of wagons having dropped to around 9,600 from the targeted 10,500.

An East Coast Railway official said that “We are up by about 10% over the 2006’s daily average loading of 8,800 and yet we are worried. From October, the daily average loading has to be more than 11,000 if we are to achieve the targeted freight traffic of 96 million tonnes in 2007-08.”

Coal is East Coast Railway’s major item of traffic and the coal loading at Talcher mines is about 20 to 21 rakes a day on an average against the targeted 25 to 26 rakes. The rains have flooded mines, the roads having been badly hit, the road bridging and road transportation of coal from the mines to the nearest railheads too has been affected. As a result, the loading of a rake is taking much more time than normal.

The loading of imported coal at 2 ports of Visakhapatnam and Paradip too has been hit and the rakes which carry iron ore for exports through the ports are used for back loading of imported coal. In the rains, iron ore gets sticky with the result its loading and unloading becomes difficult and therefore time-taking. In turn, the rake loading of imported coal too gets affected.

The loading of iron rake on the Daitari to Banspani route has dropped to 1 rake a day as compared to 4 in normal situation. On an average 13 to 14 rakes of iron ore for exports are transported every day to these ports, about 6 to 7 rakes to Visakhapatnam and about 7 rakes to Paradip. Fortunately, the iron ore movement on the 450 kilometer long Kottavalasa to Kirandul line fared better. Against the daily average of 14 to 15 rakes in normal situation, about 11 rakes are currently being loaded and transported on the route. As a cumulative effect of all this, East Coast Railway’s wagon holding too is up by 2,000 to around 38,000.

GSP to finalize EPC contractor for Baroda to Halol pipeline

ProjectsToday reported that Gujarat State Petronet is likely to finalize the engineering, procurement and construction contractor for 40 kilometer long Baroda to Halol natural gas pipeline by end July 2007.

The project envisages construction of high pressure natural gas pipeline from Baroda to Halol in Gujarat on engineering, procurement and construction basis. Bids were invited for the project in April 2007.

US steel import in June 2007 down by 26% YoY

The American Iron and Steel Institute, based on preliminary Census Bureau data, have reported that US imported a total of 2.88 million net tons of steel in June 2007, including 2.29 million net tons of finished steel. While overall imports for the H1 of 2007 have declined against the all time record year of 2006 total and finished steel imports through the January to June 2007 remain up by 10% and 14% respectively.

Key products with large first half increases in 2007 as against the same period in record year 2006 include electrical sheets & strip and sheets & strip all other metallic coated up by 46% and 14%, tin plate and tin free steel up by 15% and 10%, standard rails up by 22% and numerous tubular products, including line pipe, stainless pipe & tubing and pressure tubing up by 75%, 27% and 22% respectively.

The import from various countries is as under:

(Thousand net tons)

Mr Ward J Timken Jr chairman of the board of directors of The Timken Company and chairman of AISI said that “While imports of steel during the first half of 2007 have fallen off last year’s record levels, they still remain high by historic standards. Despite consistent gains in productivity, energy efficiency and competitiveness by domestic steelmakers during the first 6 months of 2007, trade distorting practices and anti competitive behavior on the part of certain foreign producers are giving imports an unfair advantage in the marketplace.”

Mr Andrew G Sharkey III president & CEO of AISI said that “The ongoing surge of steel imports from China is a reminder that the overall US bilateral trade deficit in manufactured goods from China continues to grow, aided by WTO illegal subsidies and other non market behavior. It is time for Congress to enact strong China trade legislation this year.”

Stelco reported net loss CAD 41 million during Q2 of 2007

Hamilton based company Stelco Inc has announced that it reported a net loss of CAD 41 million during April to June 2007 and has warned of continuing uncertainty over both demand and pricing for its steel products.

Stelco said that its sales were CAD 717 million in April to June 2007 quarter up by 2.72% YoY from CAD 698 million in April to June 2006 period and up from 17.73 QoQ from CAD 609 million in January to March 2007.

Mr Rodney Mott CEO of Stelco Inc said that he expects there should be a solid improvement of more than 5% next quarter in earnings before interest, taxes, depreciation and amortization, partly due to savings from job cuts. Hamilton Steel is on its way to becoming a consistently profitable operation. He added that we think our profitability will increase in the third quarter and possibly the fourth quarter.”

Mr Mott said the company's much discussed pension plan liability issue the funding situation has improved somewhat. He added that "We do see good progress in those areas. I think this is overemphasized as a negative on the company."

Stelco stated that "All major customer groups, including automotive, construction and service centers are continuing to adjust their purchasing and inventory levels as a result of the uncertainty over both demand and pricing. It is expected that this will continue until there is increased confidence in the marketplace. Shipments to the pipe and tube markets and shipments of slab to other steel producers are strong and are expected to remain strong for the near future.”

It added that "Pricing is under pressure due to seasonal shutdowns in the automotive sector and the relative strength of the Canadian dollar against US dollar. We expect this pressure to continue in the near term."

Steel import tariffs may go down

VNA reported that the Vietnam finance ministry’s price control department is expected to consider tax cut for imported products and ingots if the local steel prices continue to rise.

The Vietnamese government will carry out a comprehensive inspection of the steel industry if the price monitoring agency finds preliminary evidence that the recent hike in steel prices was unjustified.

The Vietnam Steel Association estimated the local prices of steel products had been VND 2 million a ton higher than in 2006 as a result of an increase in imported steel ingots and fuel prices.

Mr Nguyen Tien Thoa head of the finance ministry’s price management department said that since steel was a key item his agency has the right to demand detailed reports from steel manufacturers on their production costs.

The department was also considering revision of import tariffs on steel billets and finished steel products if domestic prices continued to increase.

Western Canadian Coal operations update

Western Canadian Coal Corp has announced to provide the following operations update:

1. For the fiscal year ending March 31st 2008, Western Canadian Coal Corp is projecting coal shipments of approximately 3.4 million tonnes. This comprises 2.05 million tonnes of hard coking coal and 0.35 million tonnes of mid volatile PCI coal from the Wolverine Mine and 1.1 million tonnes of ultra-low volatile PCI coal from the Brule Mine up from the earlier estimate of 0.8 million tonnes.

2. For the quarter ended June 30th 2007, the Company shipped 540,000 tonnes of metallurgical coal and 88,000 tonnes of ULV-PCI coal, for total sales revenues of CAD 54.2 million. Approximately 117,000 tonnes of metallurgical coal and 20,000 tonnes of PCI coal were deferred from the prior fiscal year to early April 2007.

3. Coal production has been fully committed for coal year 2007 with hard coking coal prices in the mid to high USD 80s and PCI prices in the high USD 60s to mid USD 70s.

4. For the quarter ended June 30th 2007, mining operations at the Wolverine Mine included total waste stripping of approximately 3.6 million bank cubic meters and 884,000 tonnes of run-of-mine coal, resulting in a 4.1 to 1 strip ratio of waste bank cubic meters to ROM tonnes of coal. Approximately 1,004,000 tonnes of run of mine coal were processed through the Wolverine plant, producing 580,000 tonnes of metallurgical coal for a processing yield of 57.8%. As previously reported, the Company identified an area of lesser quality coal in the Perry Creek pit originally thought to be hard coking coal. The area contains approximately 350,000 tonnes of this coal which is anticipated to be completely mined by the end of fiscal 2008 and sold into the mid volatile PCI market.

5. Operations at the Brule Mine have gone well. Mining operations at Brule included total waste stripping of approximately 712,000 bank cubic meters with 193,000 tonnes of ULV-PCI coal mined and 173,000 tonnes railed to port.

S&P assign BB- for Evraz

Thomson Financial reported that Standard & Poor's Ratings Services has revised its outlook on Russia's steelmaker Evraz Group SA and its core subsidiary Mastercroft Ltd to positive from negative, following a review of the group's financial and operating performance.

S&P in a statement also said that it affirmed the 'BB-' long term corporate credit and senior unsecured debt ratings. It also raised the Russia national scale rating on Evraz and Mastercroft to 'ruAA' from 'ruAA-'.

S&P also added that it sees ongoing improvements to the business profile as increased raw materials supply supports the Evraz's cost position and high profitability and as increasing geographic diversity helps to mitigate Russia country risks.

Mr Alex Herbert S&P's credit analyst said that “The outlook revision reflects Evraz's continued strong cash flow generation, which enables the group to reduce leverage considerably over 2007 and 2008, despite a peak in debt levels caused by higher spending on acquisitions, other investments and capital expenditures.”

Universal Stainless Q2 sales up by 29% YoY

Universal Stainless & Alloy Products Inc announced that its April to June 2007 sales rose by 29% YoY to a record USD 62.1 million compared with USD 48.0 million in April to June 2006. Its net income for the April to June 2007 rose by 27% YoY to USD 5.9 million compared to USD 4.6 million in 2006.

The April to June 2007 results also included a net inventory adjustment of USD 1.0 million mainly due to increased reserves related to a sharp decline in nickel prices at the end of the quarter. The annual income tax rate declined to 35.0%YoY from 36.0% YoY recorded in the 2006.

Sales for the second quarter of 2007 exceeded the Company's forecasted range of USD 52 to USD 57 million and for the January to June 2007, its sales rose by 27%YoY to USD 118.3 million and net income increased by 47% YoY to USD 12.6 million compared to January to June 2006.

Mr Mac McAninch chairman & CEO of Universal Stainless said that "The sustained strength of the aerospace market continued to be a main driver of our growth in the second quarter and its outlook is very positive into the next decade. The power generation, petrochemical and heavy equipment markets hold enormous opportunity for us as well. Our optimism and the positive outlook for our end markets are not diminished by the continuing volatility in the market price of nickel and its recent decline, although that decline has affected our forecast for the current third quarter. However, over the longer term, we expect lower nickel prices to encourage our service center customers to rebuild their inventories. Lower nickel prices should also decrease our working capital needs.”

He added that "Our capital investments over the past two years have enabled us to better respond to opportunities in our niche markets to date. We have decided to take another major step to enhance our capabilities by adding high temperature annealing equipment capable of oil, water and air quenching at our Dunkirk facility. Dunkirk's high temperature heat treating operation which is required for most of its product categories, is approaching full utilization. This capital expansion project, which will cost approximately USD 3.5 million and is scheduled for completion in the fourth quarter, has the potential to expand Dunkirk's annual sales by as much as USD 20 million. Our continued reinvestment of capital combined with our focus on further improving our processes and on-time delivery performance reflects our ongoing commitment to better serve the needs of our customers."

Universal Stainless & Alloy Products Inc headquartered at Bridgeville in Pennsylvania manufactures and markets a broad line of semi finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels. Its products are sold to rerollers, forgers, service centers, original equipment manufacturers and wire redrawers.

South Korea GDP grows 1.7% in Q2 of 2007

Yonhap reported that South Korea's economic growth accelerated in April to June 2007 quarter is due to robust exports and facility investment.

According to an advance estimate by the Bank of Korea, Korea's gross domestic product has expanded by 1.7% QoQ during April to June 2007 as compared with a 0.9% gain in January to March 2007 quarter. It was the strongest quarterly growth since a 1.7% rise in the Q4 of 2005.

ThyssenKrupp Fördertechnik awarded to supply RMH by ThyssenKrupp Steel

It is reported that ThyssenKrupp Fördertechnik has been awarded a contract by ThyssenKrupp Steel to supply the Raw Materials Handling technology(RMH) and systems for a new steel plant to be built in the Bay of Sepetiba at the state of Rio de Janeiro in Brazil where ThyssenKrupp CSA Companhia Siderúrgica is building at a cost of EUR 3 billion an integrated metallurgical plant comprising two blast furnaces, an oxygen steel mill, two continuous casting plants, a coking plant, a power plant and a port of its own. Designed for an annual capacity of 5 million tonnes slabs, the complex is scheduled to come on stream at the start of 2009.

The contract comprises the engineering, delivery and installation of the jetty conveyors and all the other 37 conveyor belts and transfer towers, the 5 bucket wheel stackers/reclaimers as well as the entire electrical engineering down to commissioning. Alongside the lead Brazilian company ThyssenKrupp Fördertechnik Latino Americana, others sharing in the project are ThyssenKrupp Fördertechnik at St Ingbert in Germany and ThyssenKrupp Robins in Denver at USA. At peak construction periods up to 1,500 workers will be employed on site on behalf of ThyssenKrupp Fördertechnik.

As per report Iron ore, coal, coke, pellets and additives will be conveyer belted to the storage yards and then by the S/R machines reclaimed and conveyed onward to the blast furnaces. The raw material will be moved along nine different routes many of which to be used concurrently. The raw material storage site including the conveyors from the jetty of the company’s own port covers an area of 750,000 square meters. The ship offloading station is connected to dry land by two 6 kilometer conveyors.

The conveyor belts and transfer towers weighing a total 16,000 tonnes will be built in Brazil for shipment and assembly as work progresses. The five large S/R machines for the storage area are being built in China and fitted with mechanical and electrical components sourced from Europe, US and Brazil. The units will be delivered as major assemblies broken down into several shipments. All the electrical and control systems are being supplied through ThyssenKrupp Robins and largely sourced from the local Brazil market.

ThyssenKrupp Fördertechnik is part of the Technologies Segment of ThyssenKrupp Group one of the world's biggest technology groups with five segments: Steel, Stainless, Technologies, Elevator and Services.

Macquarie foresees lower nickel pig iron output in 2007

According to Macquarie Bank in a report, recent sharp falls in London Metal Exchange nickel prices have forced cuts in Chinese nickel pig iron production which should boost demand for primary nickel in the coming months.

As a result of the 30% slump in nickel prices since the start of June 2007, Macquarie has lowered its 2007 nickel pig iron forecast to possibly less than 85,000 tonnes down from 95,000 tonnes of recoverable metal.

The relatively new development of nickel pig iron output from low grade ore in China was previously viewed as the biggest threat to primary nickel demand in the stainless steel sector, and only started at the end of 2005 in response to rapidly rising LME nickel prices.

According to China customs data, Chinese nickel ore imports stood at 5.49 million tons between January to May 2007, 11 times higher on year. Most of this ore is low grade with a nickel content of less than 2% from the Philippines, Indonesia and New Caledonia, using blast furnaces to replace primary nickel in the production of stainless steel.

Macquarie said that "We hear that nearly half of the small scale blast furnaces in China have already closed since mid June 2007 when there were reportedly more than 100 producers leaving about 3.5 million tonnes of oxide nickel ore stockpiled at Chinese ports. Nickel pig iron producers that started output in 2006 targeted the 200-series stainless steel market, using very low grade nickel ore, which accounts for around 25,000-30,000 tons of nickel a year and is now saturated.

Macquarie said "We heard that producers and traders are now trying to cancel their import contracts for low-grade ore, especially from the Philippines.” However, the sharp fall in nickel prices since early June and the intention to maintain a long-term relationship with major nickel suppliers in the world forced those producers to cut nickel pig iron demand.

Macquarie said China steel producer Baosteel has already stopped using nickel pig iron in its 300 series production and Tisco and South Korea's POSCO have reduced their demand by half to less than 10,000 tonnes each month reflecting a series of closures and a cut in nickel pig iron production in China. However, recent sharp declines in nickel and stainless steel prices have created a huge panic in the domestic stainless steel industry and have led to joint production cuts in July 2007."

Chinese stainless steel output rose 126% during January to May 2007 to 3.13 million tonnes.

15MCC wins bid for Jiangxi Xinyu Steel's sheet production line project

It is reported that China No 15 Metallurgical Construction Company Ltd under China Nonferrous Metal Mining Company Ltd won the bid for Jiangxi Xinyu Steel's sheet production line project valued at CNY 487 million.

The line is expected to have annual capacity of 3 million tonnes.

(Sourced from MySteel.net)

Iran 3 steel projects by year end

Iran Daily cited Mr Ali Palizdar deputy head of mines development and renovation organization as saying that 3 steel projects costing USD 427 million and IRR 3,093 billion will be completed in the year to March 2008.

Mr Ali Palizdar explained that Isfahan Steel Mills third furnace project is to be inaugurated in the H2 of the year to March 2008 increasing the annual production capacity and ceiling of the plant to 1.4 million tonnes and 3.6 million tonnes respectively. He put the investment in the project at USD 113 million and IRR 788 billion.

He added that the official referred to production of steel sheet by Khuzestan Steel Complex with the capacity of 1.5 million tonnes as the other project to come on stream in the current year. Some USD 250 million and IRR 1,790 billion have been invested in the project. In addition, Khuzestan Steels Complex Zamzam II is the third project to be commissioned by March 2008. He explained that the project aims to produce sponge iron with a production capacity of 800,000 tonnes per year at the cost of USD 64 million and IRR 515 billion.

Mr Palizdar predicted that the iron output capacity would reach 1.8 million tonnes and sponge iron production capacity would increase to 4.8 million tonnes in the year to March 2009. He named the total projects to be completed by March 2009 as follows, Hormuzgan Steel Recovery Process, Charmahal Bakhtiari Galvanized Steel Sheet, Ghadir-e-Iranian Steel, 2 units of Khuzestan Steel Recovery Process and increasing the capacity of Mobarakeh Steel Mills. He put the cost of the abovementioned projects at USD 1.058 billion and IRR 7,200 billion.

He added that as per Fourth Development Plan Iran aims to increase steel production capacity to 29 million tonnes adding 47 million tonnes of iron ore will be required for the purpose. He concluded that iron ore production would exceed 22 million tonnes in 2007 5 million tonnes more than the domestic demand.

Precision Castparts continues hot streak

Metal products maker Precision Castparts Corp announced that it’s fiscal first quarter profit nearly doubled, mainly on the strength of the aerospace market and several new acquisitions.

Precision Castparts said that its total sales of USD 1,660.1 million in the Q1 of fiscal 2008 jumped by 49.2% YoY over 2006 Q1 sales of USD 1,112.4 million. Its net income from continuing operations also showed a marked year over year improvement, growing to USD 225.4 million as compared to USD 114.5 million in the Q1 of fiscal 2007.

The results for the Q1 of fiscal 2008 include a full quarter of Special Metals, a full quarter of GSC Foundries and Cherry Aerospace and nearly a full quarter of McWilliams Forge, which was acquired on April 3rd 2007.

Mr Mark Donegan chairman & CEO of Precision Castparts Corp said that “We have positioned the Company extremely well to take full advantage of the upward trends in our major markets. We are seeing extremely strong demand in the commercial aerospace market, with sustained growth in IGT and continued upside opportunities in non aerospace markets served by extruded pipe and Special Metals’ nickel-based alloys. Over the past 12 months, we have added the necessary critical capacity to handle higher volumes, and we will be alert to any new market developments that might require further capital investments. We will continue to focus on our businesses with unswerving, unrelenting attention to value creation and profitable growth. Acquisitions, supported by a strong balance sheet, will also be a key strategic driver for the future.”

Mr Donegan added that “In addition to our constant drive to capitalize on all areas of opportunity, the recent acquisition of Caledonian Alloys will enable us to capture more fully the value stream of metals crucial to our manufacturing operations. Caledonian will essentially create a closed-loop system for the retention and reuse of internally generated revert and will enable us to gain access to additional sources of critical metals outside PCC.”

Precision Castparts Corp is a worldwide, diversified manufacturer of complex metal components and products. It serves the aerospace, power generation, automotive, and general industrial and other markets. PCC is the market leader in manufacturing large, complex structural investment castings, airfoil castings, and forged components used in jet aircraft engines and industrial gas turbines. The Company is also a leading producer of highly engineered, critical fasteners for aerospace, automotive and other markets.

China coal uses during H1 up by 18%YoY

Xinhua reported that coal consumption by China's power companies during the H1 of 2007 soared nearly by 18% YoY despite rising concern about pollution and efforts to promote cleaner energy sources.

Xinhua News Agency cited an official from China Electricity Council as saying that Chinese utilities burned a total of 591 million tonnes of coal in January to June 2007.

China's coal consumption has soared in recent years to meet surging power demand amid an economic boom. China is building dozens of new coal fired power plants every year, despite government warnings about environmental damage from pollution.

The government has been pushing power companies to switch to cleaner power sources such as natural gas. But demand is rising so fast that China is expected to rely on its dirty but abundant coal reserves for most of its power in coming years.

Indonesia government announces first coal bed methane project

South Sea Energy Corp announced that the Indonesian Government plans to sign a contract next month with an undisclosed investor to develop the Indonesia's first Coal Bed Methane project.

The official announcement was made by Dr Purnomo Yusgiantoro Indonesia's energy & mineral resources minister on July 18th 2007. Dr Yusgiantoro further disclosed that the ministry is also reviewing 3 or 4 other companies that are seeking to do similar developments.

Mr Al Charuk president of South Sea Energy said that "The announcement by the Ministry is extremely exciting news for South Sea Energy and its partners. The contract will likely become the framework on which future contracts will be negotiated and awarded." He added that "This announcement shows that the Indonesian Government is committed to adding coal bed methane to its vast natural resource base."

South Sea Energy Corp is an emerging junior energy company specializing in the exploration and development of coal bed methane in Indonesia's vast coal reserves. South Sea is led by industry leading coal bed methane experts that have extensive experience in developing junior oil and gas companies and has identified significant opportunities that position it as a potential front runner in the country's burgeoning unconventional gas sector.

ICG plans to increase debt level

The West Virginia based coal company International Coal Group is planning to take on as much as USD 207 million in new long term debt. The bulk of the new debt will be used to repay USD 90 million in earlier loans and the rest would be available for unspecified purposes.

ICG said in a statement that it hopes to sell USD 180 million worth of convertible notes to institutional investors. The first buyer also gets the option to buy up to USD 27 million in additional notes. All would come due in 2012.

As of June 30th 2007, ICG had nearly USD 250 million in long term debt and capital leases. The company was down to USD 16.5 million in cash at the end of June 2007 and said it chose to get some more financial flexibility by arranging a USD 25 million line of credit with fund affiliated with Chairman Wilbur Ross’ investment company, WL Ross & Co.

ICG controls approximately 1.1 billion tons of coal reserves and operates mining complexes in West Virginia, Kentucky, Maryland and Illinois.

China's shipbuilding plate market tends toward stable in H2-Analyst

It is reported that China domestic shipbuilding plate market appears to be fairly stable these days despite temporary slight price decline affected by falling HRC market. In Shanghai, 14mm to 20mm ship plate is being traded at CNY 5000 to CNY 5050 per tonnes in mid July 2007 down CNY 100 per tonnes from mid June 2007.

The buying interest is described as active in ship plate market in recent days. Many ship builders are purchasing material from mills directly, or even forge strategic relationship with the mills.

According to China Association of the National Shipbuilding Industry, rapidly expanding shipbuilding industry in China over the years has greatly bolstered ship plate demand, nudging up ship plate prices continuously. China has reported the largest tonnage on the order book in the first quarter, the first time surpassing Japan and S Korea.

Meanwhile, a number of leading shipbuilders in Japan and S Korea have set up vessel block assembling plants in China to lower cost. These plants are purchasing ship plate locally. Market analysts expect these plants would take up some 2 million tonnes of ship steel in 2007.

China's ship plate export shows strong growth momentum as a number of ship plate producers like Baosteel, Angang, Wuhan Steel and Magang have been accredited by various foreign classification societies.

It is estimated that China's ship steel demand would reach 7.36 million tons in 2007 and add up to 35.86 million tonnes by 2010. However, the market participants fear that various adverse impacts are looming ahead. Beijing has removed the rebate on tugs and non motor vessels as of July 1st 2007 which has reduced the profit margin for exporters significantly.

Moreover, low priced ship export is set to arouse rising trade frictions with China's major trading partners. China's ship export is reported to be 5% to 8% cheaper than similar ships produced in S Korea or even lower than European producers.

Capacity expansion in HRC materials also spills over to ship plate market. The buoyant outlook in ship plate market has attracted many mills to shift their focus. For example, domestic market has found fresh ship plate supply from Yingkou and Xinyu recently. In particular, mounting supply of HRC has weighed on prices of thin spec ship plate, with 10mm ship plate eased to CNY 4300 per tones in mid July 2007.

Worries about overcapacity in China's ship plate are intensifying. The data shows that domestic ship plate output totals 3.87million tonnes in January to May 2007 up by 57.1%YoY. That would translate into an annualized production of 9 million tonnes in 2007.

(Sourced from MySteel.net)

Port Kembla coal terminal defends water use

It is reported that the Port Kembla Coal Terminal on the New South Wales south coast has defended its need to use large amounts of water. The terminal is the 9th largest water user in the state and its usage has increased by 15% over the past 5 years.

Mr John Brannon GM of Kembla Coal Terminal said that his company is currently working on a water recycling project which will save 350 million liters of water a year by using tertiary treated effluent. He added that the project will save the equivalent of an Olympic sized swimming pool of water per day, but he does not say when this will happen.

Global Steel to hurdle Vietnam challenge

Manila Times reported that the Bureau of Customs in Iligan city said Global Steel Philippines could prove to Vietnamese authorities that it is already commercially operational.

The report cited Mr Samson R Pacasum port collector of Bureau of Customs as saying that inspection of the company’s facility in Iligan City would prove to Vietnam authorities that the steelmaker has begun commercial operations. He added that “Global Steel has always been following all the processes that would lead them to commercial operation.”

The Philippines has sought proof from Vietnam with regard to Hanoi’s allegations that Global Steel had been transshipping raw materials from India.

Mr Thomas G Aquino co chairman of the Committee on Tariffs and Related Matters technical subcommittee said that the interagency body deemed the company as operating commercially with regard to cold rolled coils and hot rolled coils, allowing the firm to qualify for tariff protection under Executive Order 375.

The CTRM technical committee has endorsed the company’s commercial status to Malaca nang in preparation for the Cabinet level TRM’s certification that the BOC should slap 7% duties on imported steel that competes with Global Steel’s products. The import tariff at present stands at 3%.

Mr Pacasum said the Iligan unit is awaiting Customs Commissioner Napoleon Morales’ directive once the Vietnamese officials agree to conduct a joint inspection at the Global Steel plant. He said that “We will just wait for the directives from the BOC Manila, but we are confident as we perceived, Global Steel is now commercially operational.”