SAIL RSP Q1 crude steel production up by 5% YoY

It is reported that Steel Authority of India Limited’s Rourkela Steel Plant has produced 0.504 million tonne of hot metal and 0.461 million tonne of crude steel representing fulfillment of 101% and 98% of annual performance plan respectively for this period.

During the month of June, hot metal production from blast furnaces reached 187,561 tonne up by 6% YoY, crude steel output stood at 173,174 tonne up by 5% YoY and total saleable steel output touched 183,324 tonne up by 16% YoY with capacity utilization reaching 114%, 111% and 133% of the rated capacity respectively.

Dispatch of steel stood at 180,966 tonne registering a growth of 9% compared with June 2006. The figure was also the highest compared with any month of June since the inception of the plant.

The best June figures were also recorded in several finishing units of RSP with hot rolled coils at 145,143 tonne, hot rolled plates at 27,216 tonne, plate mill plates at 41,441 tonne, galvanized steel at 14,479 tonne and CRNO at 6,906 tonne. All these figures were higher than the plan for the month.

ASSOCHAM study points to sever dip in metals & mining sector in India

As per the findings in a recently released report on India’s metal & mining sector jointly conducted by ASSOCHAM and Ernst and Young, strong opposition by tribals against foreign and domestic investments in metals and mining industry is likely to rapidly decelerate the sector's growth from over 20% in 2001-2006 to 2.2% in the next three years.

Apart from tribal opposition, other reasons, which can put pressure on the sectors growth include depleting natural resources, which are putting pressure on prices and limited knowledge of metals and minerals other than steel.

Mr Venugopal Dhoot president of ASSOCHAM said “The industry is expected to decelerate from its current value growth position, growing at an anticipated CAGR of 2.2% between 2007 to 2010 period. By then, the sector is expected to reach a value of USD 47 billion.”

Mr Dhoot said that due to increased awareness on environmental issues such as global warming, the pressure on mining might have grown as it tends to affect the environment to a large extent. The report said unless the central and state governments reduce bureaucratic delays, lift regulatory barriers and improve infrastructure, the growth projections of the sector might remain only on papers.

As per the report, the size of metals and mining sector in India more than doubled to USD 43 billion in 2006 from USD 20.3 billion in 2001.

The report added that the compounded annual growth rate in the domestic industry was slower than China and Japan where metals and mining sector grew at 23.2% and 35.3% respectively. But CAGR of the sector in Japan is likely to fall to 6.4% while in China the growth rate will slow down considerably 1.3%.

Vizag Port plans 110 million tonnes capacity by 2011-12

BL reported that Vishakhapatnam Port is trying to increase its capacity to 110 million tonnes by 2011-12 under National Maritime Development Program by improving the draft, adding to berth capacity, stepping up logistics and acquiring more equipment at a cost of INR 3,000 crore.

The planned investments include INR 259 crore for deepening of channels, INR 1350 crore for construction of 16 new berths, INR 750 crore for acquisition of equipment, INR 380 crore for connectivity and another INR 290 crore or so on other aspects.

Mr K Ratna Kishore chairman of VPT told BL that for the past several years Vishakhapatnam port has been India's largest cargo handling port but not the fastest growing. He said “In 2006-07, the growth in the port's traffic throughput over 2005-06 was a little more than 1% as achieving high growth on a large base is not so easy.”

He added that the port is trying to achieve a target of 61.3 million tonnes of cargo in 2007-08 as against 56.38 million tonnes in 2006-07. He said that the port hope to handle an additional 8 million tonnes of cargo with additional 3 million tonnes each of iron ore pellets and petroleum products and another 2 million tonnes of coking coal and lam coke.

Other major projects in the pipeline include outer harbor expansion to handle 200,000 DWT capacity vessels, mechanized coal handling facility at general cargo berth on BOT basis, SBM facility at anchorage to facilitate operation of Hindustan Petroleum Corporation, mechanized fertilizer handling facility on BOT basis, development of railway facilities and other logistics improvement.

Other Indian steel makers cut flat product prices

It is reported that several other Indian steel makers have cut domestic prices of flat rolled products on strengthening rupee and downward international market conditions.

Unconfirmed reports mentioned that JSW Steel has reduced domestic prices of HR coil by INR 600 per tonne to INR 800 per tonne effective July 1st 2007 and that Essar Steel has cut HR coil domestic prices by INR 700 per tonne to INR 800 tonne.

Steel Authority of India Limited had announced a price cut on flat products by INR 500 per tonne to INR 1,000 per tonne effective July 1st 2007 in the beginning of July 2007.

Welspun drops US pipe JV with Lone Star

Times News Network reported that India’s leading pipe maker Welspun Gujarat Stahl Rohren has opted out of its JV with Lone Star Technologies of the US after Lone Star was acquired recently by US Steel.

ET report cited Mr Akhil Jindal president of Welspun Group as saying that “It will be wrong to say that the JV with Lone Star was called off due to problems. After we signed the agreement, Lone Star was acquired by US Steel for about USD 2 billion in April 2007. So there was a change in the control provision with new shareholders coming in. The new owners didn’t have the kind of rapport that Welspun shared with the earlier management.”

Welspun group and Lone Star Technologies had decided to form 60:40 JV Welspun Lone Star Tubulars LLC for manufacturing of 30,000 tonne of spiral pipes a year to cater to the oil and gas markets in North America in December 2006. The company was to be located in the south west of the US and was expected to be operational by March 2008.

Earlier, in the month of February 2007, Welspun opted out of a 40:60 JV with Russian pipe major TMK as they could not reach mutually agreeable terms and conditions. The proposed JV with TMK’s Volzhsky Pipe Plant was signed in October 2006 for setting a large diameter spiral welded pipe capacity of approximately 0.5 million tonnes and installation of a hi tech LSAW pipe welding line, bending facility and external and internal coating lines on the site of Volzhsky Pipe Plant in Volzhsky town of Volgograd region in Russia.

But subsequent to these moves, Welspun has announced plans to build a manufacturing facility on a 740 acres site adjacent to the Little Rock Port Authority at Little Rock in Arkansas State of US on June 30th 2007. The USD 100 million facility, once completed, will be capable of producing 300,000 net tons of tubular steel pipes annually for use in the oil and gas industry and is scheduled to begin production by spring 2008.

Indian power sector may opt for alternate fuels on stricter pollution norms– Report

TATA Strategic Management Group, in a recent report said that the preference of the Indian power sector for coal based plants may change as stricter norms for carbon emissions emerge making alternative sources of generation like solar and nuclear power becoming more cost competitive. Mr Raju Bhinge CEO of TATA Strategic Management Group said that "Coal is the preferred choice of fuel for India's power sector. But impending changes in the energy mix could change fuel preferences in the next decade."

According to report, the fuel mix is based on current capital and power generation costs and coal is a clear winner at this point in time, even after factoring in costs of transmission and distribution and other technical costs. Almost 70% of the 78,000MW of generation capacity proposed to be added in the 11th plan is coal based.

The report also pointed out that if natural gas is made available in sufficient volumes and supplied at prices close to USD 3.5 per million British thermal unit, it could lead to a major swing in generation capacity in favor of gas. The report said that "Gas becomes viable for Brownfield projects with prices below USD 5 per million British thermal unit. For Greenfield generation projects, natural gas becomes competitive with non pithead coal at USD 3.5 per million British thermal unit." Gas prices in India is vary from over USD 1 to USD 11 per million British thermal unit depending on whether it falls within controlled pricing category or is bought off the spot market.

The TSMG report added that if the cost of carbon emission exceeds USD 15 per tonne of carbon dioxide and is factored in, the delivery cost of power from gas based generation becomes preferable to non pithead coal.

TATA Strategic Management Group said that the other factor that could loosen the dependence on coal could be solar power. So far, high capital investment has kept this form of energy away from mass application. However, CAPEX required has been steadily declining in the sector, and could touch USD 2 per watt by 2010 and further down to USD 1.5 per watt by 2012.

All power firms in queue for coal blocks in Chattisgarh

BS reported that major power companies are rushing for allocation of coalmines in the state of Chhattisgarh and that central government has received about 750 applications for coal blocks from more than 150 companies showing their interest.

The report cites a Chhattisgarh government official as saying that “The center has sought the recommendation of the state before the screening committee of the coal ministry takes a final decision on the allocation of the blocks.”

The majority of the coal blocks are in Korba and Raigarh districts of Chhattisgarh. The state has reserves of 39.975 billion tonnes of coal, which is about 16.13% of the total reserves in India.

As of now, the state government has inked pacts for a total investment of INR 80,000 crore in the power sector alone. After the execution of the pacts, Chhattisgarh will produce 20,000MW by 2011. State authorities feel the state has the potential to produce up to 50,000MW, and has expressed confidence in its ability to become the power hub of India.

L&T to float 5 new companies under major restructuring move

BS reported that India’s largest engineering conglomerate, Larsen & Toubro under a major restructuring exercise is setting up at least five new companies aiming at ensuring better corporate governance as well as attracting talent. The companies will operate in L&T’s new business areas of power projects, boilers, turbines, water & shipbuilding and an exercise is on to identify other areas.

Each of these companies will have a CEO, a board, and finance and human resource management teams. These CEOs will be a part of the group corporate management committee but would not get a berth on the L&T board.

Mr AM Naik chairman of L&T told BS that the verticalisation effort is aimed at ensuring better corporate governance as well as attracting talent to the 70 year old company.

Mr Naik said that L&T has a complex structure having 62 different areas of operation and the move to create operating companies within the overall L&T umbrella is aimed at simplifying the structure. He said “No one chairman or CEO can manage the complexities as existing businesses are growing fast and there is a need to get into new ones.”

The existing businesses will continue under the main company.

PTC to invest in Indonesian coal firm to secure stable supplies – Report

FE reported that PTC India proposes to invest over INR 1,500 crore for acquisition of equity in an Indonesian coal mining company with a strategic partner and that its board of directors would soon take up the matter for its approval.

Sources involved in this process told FE that “PTC has already identified certain firms as strategic partner and it will select one of them. It wishes to complete the equity acquisition procedure by September to October.”

The report added that “The acquisition of stakes will lead to a guaranteed coal supply to the power projects with 5,000MW. PTC is not at all keen to fully acquire coal mining company from Indonesia but is pursuing proposal for an acquisition of equity.”

The acquisition would help procure 15 million tonnes of coal annually to fulfill the coal requirement of its planned power generation projects with the generation capacity of 5,000MW.

As per reports, PTC enjoys more than 70% share in India’s power trading market.

Ispat Industries re appoints Mr VK Mittal as its MD

Ispat Industries Ltd has announced that its board of directors at the meeting held on June 6th 2007, has decided to re appoint Mr VK Mittal as MD of the company for a period of 5 years with effect from June 28th 2007 up to June 27th 2012 subject to approval of the members of the company, IFCI Ltd, the Lead Financial Institutions and other authorities, including central government as may be required on remuneration terms & conditions.

Delhi sanctions 1,600MW gas based power plant at Bawana

It is reported that Delhi government is taking all possible measures to bridge the gap between demand and supply of power in the capital city, which as per the report of the 17th Power Survey conducted by the Central Electricity Authority, may go up to 1,587MW by 2009-2010.

To overcome this situation, Delhi government has sanctioned an amount of INR 5,196 crore for commissioning of 1,600MW gas based combined cycle Pragati III power station at Bawana. The proposals were cleared in an EFC meeting presided over by Mr AK Walia finance minister of Delhi.

Mr Walia said that the Delhi government had earlier decided to install a 1,000MW project at Bawana and another 350MW project near ITO, but later on decided to enhance the capacity of Bawana power project to 1,600MW maximum keeping in view observations of the ministry of environment & forests due to very high NOX concentrated in the vicinity of ITO.

The new project at Bawana would be treated as a mega status project and the Delhi government would provide equity cost amounting to INR 1,558.743 crore at 70:30 debt equity ratio. The work would be executed on turnkey basis through international competitive bidding.

Mr AK Singh to takeover as CMD CMPDI

Ranchi Express reported that Mr Ashok Kumar Singh presently director technical operation of Coal India Limited’s Central Coalfields Limited will be the new CMD of Coal India Limited’s Central Mine Planning & Design Institute and that a notification in this regard will be issued soon.

A 1974 batch B Tech student of the prestigious Indian School of Mines, Dhanbad, Mr Singh joined Coal India Limited in 1975 as management trainee at BCCL's Sudamdih colliery. In 1976, he achieved the first class mine management certificate of competency in coal.

Besides working with NCL, IISCO and CMPDI, Mr Singh has worked in large underground mechanized and conventional mines of different companies. He was actively involved in underground project planning of the reconstruction projects in Jharia coalfields and also monitored the successful implementation.

Shenhua to raise USD 6.3 billion on Shanghai listing

China's top coal producer Shenhua Energy Co Ltd is planning to sell up to 1.8 billion shares in a Shanghai listing for raising capital to help it acquire assets in China and overseas. The A shares could be worth CNY 47.8 billion (USD 6.3 billion), based on the company's Hong Kong share price of HKD 27.30.

All of Shenhua Energy shares will become tradable once the share is completed. At present 81.2% of the 18.08 billion issued shares are non tradable state shares.

Shenhua said in a statement the net proceeds would also be used to invest in the firm's coal, power and transportation sectors as well as strengthen its working capital base.

It will buy a 100% stake in Shendong Coal and Shendong Power from its parent Shenhua Group in a cash deal. A Hong Kong newspaper reported that Shenhua Energy will spend CNY 3.32 billion to purchase assets from its parent, including a CNY 2.02 billion coal mine in Inner Mongolia in a bid to boost its marketable reserves by 6.19% and a range of power plants and coal production facilities.

Jury order Massey to pay USD 220 million to Wheeling Pittsburgh

It is reported that a Brooke County jury has ordered Massey Energy Co and its subsidiary to pay more than USD 219 million in damages to Wheeling Pittsburgh Corp in a contract dispute. The court ordered Massey and Central West Virginia Energy to pay Wheeling Pittsburg USD 119.8 million in compensatory damages and punitive damages of USD 50 million each.

Central West Virginia Energy has supplied Wheeling Pitt with metallurgical coal since 1993. In 2002, while Wheeling Pittburg was in bankruptcy, a new agreement was signed and approved by a federal bankruptcy judge. It extended the contract through 2010. The lawsuit involved a breach of contract claim in which Wheeling Pitt accused Massey of failing to supply Wheeling Pittsburg Corp with coal needed for its Follansbee coke plant.

The contract dispute originated in 2005 when Massey subsidiary Central West Virginia Energy stopped living up to its 104,000 tons of metallurgical grade coal per month obligations citing conditions beyond its control. Wheeling Pittsburgh said that Central West Virginia Energy started diverting coal from its contract to the spot market to take advantage of higher prices. Wheeling Pitt sued Massey and its subsidiary, seeking damages related to its cost of replacement coal and coke and repairs to its coke ovens.

Massey already has issued a news release promising to appeal the decision. According to a new release, Massey will review the verdict, evaluate the likelihood of a successful appeal and reassess its accrued liability for the lawsuit. As of March 31st 2007, Massey had recognized a liability of USD 16 million associated with the lawsuit. An increase in this liability will impact the Massey’s earnings for the second quarter of 2007.

Mr Don Blankenship chairman & CEO of Massey said that "We firmly believe we operated within the terms of our coal supply contract. We recognized that a trial in Wheeling Pitt's backyard would be challenging, but we were still surprised at the outcome. ... We believe we can win a more appropriate and favorable decision on appeal in the higher court."

PSMC Privatization - Government to start review again

Pakistan’s Dawn reported that the Pakistan’s government has decided once again to privatize Pakistan Steel Mills Corporation.

Dawn cited Mr Zahid Hamid privatization and investment ministry of Pakistan as saying that “We are putting up for sale the country’s steel mills again and the process will begin with the issuance of Initial Public Offering to be followed by its strategic sale to a potential investor. The whole process will be started within the next few months. Steel Mills’ transaction has started afresh as directed by the Supreme Court of Pakistan.”

Mr Hamid said that the IPO of the Mills will be conducted first as advised by the Supreme Court and that the whole process is expected to be finalized as early as possible.

Pakistan’s Supreme Court had declared as invalid PSM sale transactions on March 26th 2006 by saying that its privatization was conducted in haste and in a non transparent manner.

After the court’s decision, the minister said, the government took the matter to the Council of Common Interests, which after having been reconstituted reaffirmed the privatization of the Mills on August 2nd 2006. The Council had originally allowed the Steel Mills’ privatization on May 29th 1997.

Meanwhile, the management of Pakistan Steel Mills is understood to have sought the cooperation of friendly countries to help revamp and expand the production capacity of the organization.

Northwest Pipe acquires Continental Pipe

Northwest Pipe Company announced the acquisition of substantially all the operating assets of Continental Pipe Manufacturing Company of Pleasant Grove at Utah in US. Details of the cash transaction were not disclosed.

Continental Pipe Manufacturing Company produces spiral welded steel pressure pipe for use in water transmission pipelines. It has historically marketed its products primarily in Utah and the surrounding mountain states. The company began operation in the 1940s and has operated under multiple owners. In 1995, the Barnard Companies Inc of Bozeman in Montana acquired the company and has operated it since that time.

Mr Brian W Dunham CEO of Northwest Pipe Company said that "The Continental acquisition is a great fit for our Water Transmission business. It continues our strategy of geographic expansion by acquisition and adds manufacturing capacity to an area that we expect will see significant growth in the years ahead."

North American steel price forecast from MEPS

MEPS reported that the flat products category, the inventory build from the substantial import tonnage in US will take several months to be discharged into the market and that real demand continues to be sluggish in the strip mill sector. MEPS said that “As a consequence it expects a degree of steel price erosion for these products over the summer months. However, plate selling values should hold up quite well and North American average flat products price is forecast to decrease to USD 702 per tonne 2.5% below the June value at the end of the third quarter.”

MEPS said that “Demand is expected to increase in the final trimester of 2007 as activity recovers after the summer vacations and the stock levels start to be replenished. Moreover, offers from foreign suppliers are likely to be priced a little higher as the new export levy bites on the profitability of the main exporting mills in China. Prices are then forecast to move upwards through the latter months of this year and during the first half of 2008.”

MEPS added that the outlook for prices in the long products sector is now more bullish and import penetration is light for most product forms. It said “The uncertainties of higher duties on material from China has unsettled prospective buyers from this location. They are reverting to domestic supply thus pushing up local demand. The previously anticipated price decline resulting from a reduction in scrap costs appears now to be less likely and predict reasonably stable figures for the MEPS North American average long products price over the next few months.”

MEPS concluded that “A reduction in selling values is forecast in the final quarter of 2007 for seasonal reasons as real demand slips. This should be followed in early 2008 by an upward price movement as construction picks up once again.”

Shanxi to keep July 2007 coke price unchanged

It is reported that Shanxi coke producer association, in a meeting held in Taiyun on June 29th 2007 to discuss current conditions of coke market, has agreed to keep the coke price unchanged in July 2007 in anticipation for clearer market direction.

The move has been made after considering the impact from both upstream and downstream sectors. Coke companies' profit ratios are under pressure now due to rising input costs for coal and power.

Currently, coke price for second grade coke prevails at CNY 1050 to CNY 1100 per tonne inclusive of 17% VAT and free on vehicle price reaches CNY 1220 per tonne inclusive of 17% VAT.

Price for prime coking coal gains some CNY 40 per tonne to CNY 50 per tonne since May 2007, pushing up coke production costs and squeezing coke producers' profit margins. Currently coke producers report profit margin of CNY 40 per tonne to CNY 50 per tonne.

However, coal price is expected to continue upward path in near future as government step up efforts in shutting down mini coal deposits. However, steel market is still capped with downtrend and steel makers witness increasing inventories, hence the association decides to keep price firm temporarily.

(Sourced from MySteel.net)

Territory to withdraw bid for Consolidated Mineral

Bloomberg reported that Australian iron ore producer Territory Resources Ltd would withdraw a revised AUD 695 million (USD 596 million) takeover proposal for Consolidated Minerals Ltd unless it can study the company’s finances.

Mr Michael Kiernan chairman of Territory said that “If we are unable to get access to do due diligence we will have to withdraw. If this board maintains its position, I can’t go forward.” He added that there are no legal options available to Territory to force Consolidated to allow it access to the company’s finances.

Consolidated Minerals Ltd, which favors a rival bid from Pallinghurst Resources Fund LP, said that it is studying Territory’s new proposal and whether to open up its books.

SA Chamber of Mines increase offer for coal miners to 7%

Thomson Financial reported that the mining companies represented by the Chamber of Mines of South Africa have revised their offer for coal mining workers to 7% at the round of coal wage negotiations for all categories of employees.

Chamber of Mines of South Africa have also made offers to address the total package of demands made by the three unions. These include a minimum of ZAR 3,000.00 per month for underground workers in most companies; additional two days paid family responsibility leave for all categories of employees, bringing the total number of paid family responsibility leave to five; sick leave to be standardized at 84 paid days over a two year cycle; and, a minimum medical incapacity benefit of ZAR 10,000.00.

The report added that the next round of negotiations for the coal mining sector would take place on July 12th 2007.

China country wise steel export in January to May 2007

China has exported 27.221 million tonnes valued at USD 17.838 billion of various steel products in January to May 2007 period to 199 countries across the globe.

But more than 80% of the export volume was to only 20 countries and balance 179 countries accounting for less than 20% of China’s export volumes. The top destinations having imported more than 1 million tonne of Chinese steel during January to may 2007 include South Korea, US, Iran, Italy, Vietnam, India and Singapore

The list of countries having imported more than 10,000 tonnes during January to May 2007 is as under

In million tonnes
Value in million USD

Brazil pig iron producers deny illegal practices

Reuters reported that a group of merchant pig iron producers located in the Maraba area of Brazil's northern state of Para has denied allegations that they may be breaking local forestry or labor laws.

Mr Afonso Albuquerque president of Sindiferpa the Para state pig iron producers' association said that "There are ten pig iron works in the Maraba industrial district, which together account for a quarter of Brazil's total pig iron exports and none of these operates illegally."

Mr Albuquerque said that "But nobody has yet received the letter from CVRD. No company associated to Sindiferpa has received any notification that CVRD intends to suspend iron ore supplies."

Their statement follows the mid June announcement from mining company Companhia Vale do Rio Doce that it could suspend raw materials supplies of up to 6 million tonnes a year of iron ore to the Carajas pig iron producers. CVRD wants producers to prove they do not practice slave labor and cut down native forest in their productive activities. A CVRD press official said that "In this notice it will announce it will not renew supply contracts expiring in 2008 with those pig iron producers who cannot prove they are operating within the law.”

Brazil is one of the world's biggest exporters of pig iron and exports some 7 million tonnes a year, around half its output, out of which about 1.8 million tonnes is exported by producers in Para state and this could grow following this month's coming on stream of a new producer Maragusa in the region.

Chinas Taigang Stainless slashes prices for July sales

Interfax-China quoted a Taigang official as saying that China's largest stainless steel mill Taiyuan Iron and Steel Group Co Ltd’s subsidiary Taigang Stainless Steel Co Ltd has reduced the ex works prices of series 304 CR stainless steel sheet and series 304 HR stainless steel sheet of any thickness by CNY 8,000 (USD 1,051.59) per tonne from July 2007 and also decreased the price of series 430 CR stainless steel sheet of any thickness by CNY 3,000 (USD 394.35) per tonne.

He said that the price reductions are designed to boost sales and stabilize market prices and there will be further price adjustments for other types later in the week. He added that "At present, the ex works price is on average CNY 10,000 (USD 1,314.49) per tonne higher than the price our sales agents sell for in the domestic market and we have seen slack demand for our products in the domestic market. Moreover, the falling nickel price is overweighing market expectation that stainless steel prices will drop."

The official predicted that other stainless steel mills would follow the lead of Taigang Stainless and cut prices by the same amount for this month, as major stainless steel mills normally announce the same prices for the most prevalent products at the beginning of each month.

It may be noted that China’s major domestic stainless steel mills including Taigang Stainless, Baosteel Stainless, Baoxin Stainless and Zhangjiagang POSCO release new product prices each month.

Power cuts affecting Acindar output

BNamericas reported that production figures at Argentine long steel producer Acindar have been affected by gas and power cuts applied by the Argentina's government.

BNamericas citing a Acindar spokesperson as saying that "The gas issue has forced us to stop running the direct reduction facilities and from a power perspective, we had to stop using the electric furnaces from 4PM to midnight. We have a contingency plan to smooth over everything that is happening, but by no means is it a solution to these issues."

The spokesperson said that the impact on output would depend on what parts of the plant are affected. However, the spokesperson said "The company will move ahead with investments launched in 2005 that will wrap up in November 2007." The plan involves a USD 150 million investment.

Mr Arturo Acevedo CEO of Acindar was quoted as telling newspaper El Clarín that he is worried, as "The cuts affect us. We lost 27,000 tonnes last year and 34,000 tonnes so far this year."

In the first quarter of 2007, Acindar reported net profit of ARS 128 million (USD 41.4 million) down by 42.6% YoY as against ARS 223 million in 2006. In volume, Acindar sold 339,900 tonnes in first quarter of 2007 with 83% tagged for the domestic market as compared to 333,500 tonnes produced in first quarter of 2006 where 86% stayed on the Argentine market.

Acindar is Argentina's largest long steel producer and is controlled by Brazilian steel maker Belgo Mineira, which forms part of Arcelor Brazil, a subsidiary of ArcelorMittal.

Algoma Steelworkers vote to strike if no deal reached

It is reported that the members of the United Steel Workers' Local 2251 have voted 95% in favor of strike action if it failed to reach a new collective agreement with Algoma Steel. As per report, members were presented with a snapshot of the company's proposals at special general membership meetings over the long weekend.

The members of Local 2251 and their negotiating committee are looking for a collective agreement that recognizes the value of working people who have given so much and contributed to Algoma's current prosperity.

Later this week, salaried employees in USW Local 2724 will also hold a strike vote. Both union contracts expire at July 31st 2007.

There are 2,714 union members in Local 2251 and 586 in Local 2724.

Bangladeshi re rollers threaten price increase

Bangladesh daily The New Nation reported that local steel and re rolling millers has threatened to raise rod prices by BDT 5,000 to BDT 7,000 per tonne if their demand for withdrawal of 10% duty on import of melting scrap and other chemical materials used in producing MS rod are not met. At present, MS rod is selling at BDT 39,000 to BDT 41,000 per tonne at mill gates.

The threat was unveiled during a press conference jointly organized by Bangladesh Steel Mill Owners Association and Bangladesh Re rolling Mills Association.

Mr Sheikh Masudul Alam Masud general secretary of re rolling mills association said that the import duty on melting scrap was raised by 10% in the new budget from 5%. Mr Sheikh said that “With this new fiscal measure, the government has created a clear discrepancy between the import duty on the melting scrap and that of the scrap vessel. Both melting scrap and scrap vessel are used in producing MS rod. He added that the existing import duty on scrap vessel was kept unchanged, which has been enjoying a fixed import duty of only BDT 1,000 per tonne while the melting scrap importers will have to pay about BDT 3,500 per tonne from now on.”

He further added that "This will definitely raise the price of MS rod at the local market because most of the millers use melting scrap and re rollable scrap in their mills.” He claimed that the business of scrap vessel is confined in the hands of a few people who manipulate the market at whim.

He was also critical of the increase of import duty on chemicals used in the steel and re rolling mills.

Japan May steel export up by 7.1% YoY

According to a release by the Japan Iron and Steel Federation Japan's steel exports in May 2007 up by 7.1% YoY to 3.21 million tonnes for the second straight month.

The release added that exports to China climbed by 12.5% YoY and those to South Korea rose 9.2% YoY. Exports to both countries rose on year for the second straight month. Exports to Thailand rose by 22.2% YoY, while those to Taiwan decreased by 9.7% YoY. But exports to the US shrank for the third straight month decreasing by 21.4% YoY.

(Volume is in tonnes)

Penn Virginia acquire 2 coal reserves in Illinois Basin in US

Penn Virginia Resource Partners LP announced that it acquired the fee or lease rights to about 51 million tons of coal reserves along with a preparation plant and coal handling facilities in western Kentucky for about USD 42 million in cash from a private seller. The western Kentucky reserves are located on approximately 17,000 acres on the Green River in Webster and Hopkins Counties reserves are currently being deep mined and produced at the rate of approximately 3.1 million tons per year.

It also acquired approximately 9 million tons of coal reserves in southern Illinois from a private seller in a separate transaction for USD 9.9 million in cash. The southern Illinois reserves are located on approximately 1,700 acres in Jackson County. PVR expects production of these reserves to commence in the fourth quarter of 2007 and reach a production rate of 1.1 million tons per year during 2008.

Penn Virginia Resource funded both the acquisitions using its credit facility.

Mr A James Dearlove CEO of Penn Virginia Resource said "We are pleased to have expanded our base of reserves and facilities in the Illinois Basin a region which is becoming an increasingly important source of coal supply. With these acquisitions our coal reserves in the Illinois Basin have increased to in excess of 170 million tons. In addition the production rate in the Illinois Basin which was approximately 0.6 million tons in the first quarter of 2007 has more than doubled with these acquisitions."

Penn Virginia Resource Partners LP is headquartered in Radnor at Pennsylvania and is a publicly traded limited partnership formed by Penn Virginia Corporation. It manages coal properties and related assets and operates a midstream natural gas gathering and processing business.

Rio Tinto Pilbara blend iron ore reaches Japan

It is reported that Rio Tinto Ltd has shipped the first of its Pilbara blend iron ore, a product comprising a mix of existing Brockman and Marra Mamba iron ores mined from 9 of its 11 operating Australian mines, on 22nd June 2007 to Japan.

The first shipment of 30,000 tonnes of Pilbara bland Fines was loaded on MV Shin-Zui, which is expected to anchor off Nippon Steel's plant at Yowata and be unloaded on July 4th 2007.

Mr Sam Walsh CEO of Rio Tinto iron ore said "This is a significant milestone in our drive to optimize the business and add value. The introduction of Pilbara Blend has allowed us to respond to the continued strong demand for iron ore products internationally and improve our product offerings. It is also a launching pad towards 320 million tonnes annual production and a key factor in our plans to extend the life of our Pilbara operations."

It said the Pilbara Blend would allow it to continue to deliver high quality low variability iron ore products to customers and ensure reliable long-term supply.

Growing demand for steel frame buildings in South Africa

The newly formed Southern African Light Steel Frame Building Association, a division of the Southern African Institute of Steel Construction, reported that there has been an encouraging response from the market to this burgeoning construction technique.

Mr Hennie de Clercq ED of Southern African Institute of Steel Construction said that “The potential for light weight steel frame construction technology is huge in South Africa and the market is beginning to realize it. We are creating a professional milieu within this industry and we look forward to acting as its custodian. We have done this successfully for the general steel construction industry and will use all our experience and expertise to do the same for the light weight steel frame industry.”

He said that it is no coincidence that the surge in interest from the market and the formation of Southern African Light Steel Frame Building Association are concurrent. He added that “I believe that SASFA is already playing its part in the promotion of what is undoubtedly one of the most exciting construction techniques available.”

Mr De Clercq adds that in the short term the lightweight steel frame construction offers significant benefits because of the speed of erection but that in the long term the benefits are incomparable. He added that “A long term view of overall energy expenditure, whether this is the embodied energy of the materials on the one hand or heating and maintenance costs on the other, is more commonplace in places like the United States, and Europe. There, investors, especially in housing, have learnt that trying to cut corners on the initial investment is sometimes the most expensive option in the long term. When the market here finally realizes the overall advantages of this technique and also make the long term calculations, the technology will take off like wild fire.”

It is reported that there are several advantages of light steel frame building compared with conventional building in terms of quality, cost, durability and speed. These include compliance with the rational design requirements of the National Building Regulations, use of only quality certified materials, assembly of frames under controlled factory conditions, no cracking even if foundations are poor, time saving of up to 30% when compared with conventional building, a mass saving of up to 90% compared with a double skin brick wall and an extra 4% floor space due to reduced thickness of external walls. All these advantages combine to reduce wastage, lower logistical costs and reduce time of construction. So while the materials in themselves may not be less expensive than brick and mortar, there are savings to be made in the construction process and, of course, the quality of the entire structure ends up significantly better than a conventional one.

MEA states considering importing coal to fuel power plants – Report

Reuters reported that at least 4 Gulf Arab states are considering importing coal for power generation as they struggle to meet domestic demand despite holding over 30 % of global oil and nearly 8 % of gas reserves. The report cites some analysts and coal industry sources as saying that Saudi Arabia, UAE, Oman and Bahrain are all looking at the possibility of building coal fired power plants. The region's electricity needs are soaring as petrodollars feed rapid economic expansion.

Mr Mark Lewis MD of energy market consultants said that "It's absurd in a way but there is not enough gas. They have a serious problem in power generation and are having difficulties balancing their systems. Coal is a well known technology and could be built fairly quickly. It's probably quicker than the lead times for importing gas."

Analysts said that coal is unlikely ever to make up a large part of power generation capacity in the Gulf but it may help meet some of the rocketing demand. They said that it would also make commercial sense if producers can export the oil they might otherwise burn for power and import coal more cheaply. They added that "This merely reflects the existing commercial realities. Oil is more expensive than coal. It is a kind of carbon arbitrage."

Industry sources said that the high cost of bringing shipping into the Gulf, due to the war risk premium for insurance in the volatile region, would make coal plants outside the Gulf more economic than any inside it. Oman is the most likely of the four countries to actually build a coal fired plant and that it is mulling a plant at Raysut on the Gulf of Oman and outside of the Strait of Hormuz. In addition, The emirate of Fujairah would be the top site for a UAE coal fired power plant, as it too lies outside the Strait.

Middle East's coal reserves are negligible and coal traders and producers said that South Africa is the most economic source of coal for the Gulf.

The Gulf States' move to coal fired generation echoes a process already underway in Russia. Russia is a major exporter of oil, gas and coal to the Atlantic and Pacific markets. Russia has for many years relied on gas for the bulk of its power generation but this year the government announced that it would shift to predominantly coal fired generation over the next several years. This will enable Russia to increase its generation capacity substantially and maximize exports of gas, which is more expensive than coal.

Mr Wayne becomes MD of Yilgarn

Perth based Yilgarn Mining Limited announced that it plans to significantly expand its exploration and development focus in the iron ore business in Western Australia following the appointment of a highly accomplished senior executive from BHP Billiton Iron Ore Division Mr Wayne Richards as MD of the company.

Mr Richards who since 2004 has held the key position of Project Integration & Commissioning Leader for BHP Billiton Iron Ore Division, with responsibility for integrating projects across BHP Billiton's three Iron Ore Business Sectors will now spearhead Yilgarn's plans to advance its 100% owned Marillana Iron Ore Project in WA's Pilbara region.

Mr Ross Norgard chairman of Yilgarn's said the appointment of Mr Richards represented a significant vote of confidence in the quality and growth potential of the Company's strategically located iron ore assets in the Pilbara region by one of Australia's most experienced and accomplished iron ore executives. He said "We are delighted to announce that Mr Wayne has agreed to join us as MD to advance the development of our assets to the next level and his appointment is the culmination of a planned management handover after Mr David Burt indicated his wish to step back from front-line executive duties after five years with the Company and its predecessor Yilgarn Mining Pty Ltd."

The release added that Mr David Burt founding MD of Yilgarn's has stepped down from the position with effect from 2nd July 2007 after five years at the helm.

Mr Norgard said that "David has played a key role in the establishment listing and subsequent development of Yilgarn to the point where we now have two excellent assets in Marillana and the Carr Boyd nickel project with the potential to underpin a significant increase in value for our shareholders and would like to take this opportunity to thank Mr David for his enormous contribution to the Company."

Schulz America Latina to start welded pipe mill in October 2007

YIEH reported that Schulz America Latina would start its welded pipes mill in Brazil in October 2007.

The report added that the capacity of the plant is around 5,000 to 6,000 tons per year and the total cost for this project will be around USD 18.6 millions. It will produce 8 inches to 36 inches diameter stainless welded pipes.

Schulz America Latina will also commission a new seamless pipe mill in 2008, which capacity is expected to be 10,000 tons per year.

Hengyue Mining start Zinc smelter construction in Chongqing

It is reported that China's Hengyue Mining Products Development Co has begun building a zinc smelter with annual production capacity of 100,000 tonnes in Chongqing city.

China Chongqing government said that the first phase, costing CNY 60 million (USD 7.88 million) and creating annual production capacity of 20,000 tonnes is expected to be completed by the end of this year.

MCC Huatian to build bar & rod mill in Mozambique for ArcelorMittal

Interfax –China quoted a China Metallurgical Group Corp subsidiary MCC Huatian official as saying that it will construct a 400,000 ton high speed steel bar and rod mill in Mozambique for Arcelor Mittal.

Mechel appoints Mr Ploschenko as its acting CFO

Russian leading mining and metal company Mechel OAO has announced the appointment of Mr Stanislav Ploschenko as its acting CFO replacing Mr Anton Vishanenko effective immediately.

Mr Ploschenko as acting CFO will be responsible for Mechel’s finance department, financial planning, US GAAP reporting, implementation of internal controls, integration and unification of Mechel subsidiaries’ operations, financial policies, and operational management of the financial division.

Prior to his appointment as acting CFO, Mr Ploschenko served as Mechel’s deputy CFO and deputy treasurer for corporate lending from June 2006 to June 2007. He previously held a number of senior positions at Commerzbank AG and Commerzbank (Eurasija) SAO.

Mr Igor Zyuzin CEO of Mechel said that “Since joining the company, Mr Stanislav has been a key member of the finance team and has been deeply involved in setting and executing on our financial strategy. We look forward to his continued contributions to our growth and progress as we work to improve reporting, to successfully implement our strategy of financial development, and further strengthen our market position.”

Yakutia proposing to exempt tin mining from taxes

Interfax reported that Yakutia's parliament has proposed that Russia's State Duma consider introducing tax breaks for tin mining companies.

As per report, Yakutia legislators are proposing to set a zero tax rate for tin mining and value added tax on sales of tin concentrate. They argued that federal tax laws do not take into account the high cost of producing this metal in Arctic conditions.

The official said tin miners work in Arctic regions of the Far North Russia in harsh climatic conditions and produce tin concentrate in the short summer period, selling their product once a year during the period of Arctic navigation.

High production costs push up the price of the products. Some 250 RUB million 300 million are spent annually just on shipping in diesel fuel and explosives for tin mining. The legislators reckon that the tax breaks will help Russia maintain independence in tin mining and support domestic tin miners amid constantly growing demand for tin in the world and in Russia.

Yakutia mines 86% of the Russia's tin, which amounts to over 2,000 tonnes of tin concentrate per year.