SAIL to re open Kulti Works

The Telegraph reported that Steel Authority of India Limited has decided to reopen the Kulti Works, which had shut downed on April 1st 2003, after all the employees of the plant availed themselves of the voluntary retirement scheme. SAIL is likely to revive the foundry at Kulti that makes cast iron products and spun pipes.

Mr SK Roongta chairman of SAIL, following a meeting with Mr Buddhadeb Bhattacharjee chief minister of Bengal said that SAIL has decided in principle to revive the plant. He said that “We are planning to reopen the Kulti works. We will see how the idle assets can be utilized. It will not require much of an investment though.” Mr Roongta, however, made no commitments as to when SAIL will reopen the unit.

Kulti Works, set up in 1870 as Bengal Iron Works Company, became part of Indian Iron & Steel Company in 1936. When IISCO became sick and got referred to the board for industrial and finance reconstruction, it closed the Kulti plant. The Kulti facility is over 850 acres and has a sprawling colony of 2,300 residential units, 9 hole golf course and club. The factory is over 228 acres.

Initially, SAIL had taken a decision to sell the Kulti unit and private companies including TATA Steel subsidiary TATA Metaliks and the Pawan Ruia group had shown interest in the plant. But than SAIL changed its plans due to its massive expansion plan in Bengal.

NMDC to challenge Bailadila allotment to TATA Steel and Essar

PTI reported that the steel ministry has given the go ahead to National Mineral Development Corporation to approach the court for challenging the allocation of two iron ore deposits at Bailadila in Chhattisgarh to TATA Steel and Essar. The report cited an official as saying that "We have given the go-ahead to NMDC to approach the court to contest allocation of Deposit 1 and Deposit 3 to TATA Steel and Essar as the interest of the PSU was overlooked."

The committee on disputes, which aims to reduce litigation between two arms of the government, has given its nod to NMDC for legal action. With the steel ministry giving its approval, NMDC can now approach the Delhi High Court.

The report also cited Mr Murli Manohar director commercial of NMDC as saying that "We have approached the Mining Tribunal contesting the allocation of the deposits to TATA Steel and Essar as we consider ourselves rightful claimants of these deposits. We are also planning to approach the court in this connection.”

As per report, NMDC was the first applicant for a prospecting license for deposit 1 and a lease holder for deposit 3 and should have been allowed to prospect for iron ore on these deposits. The indicative reserves for deposit 1 are around 138 million tonnes and 72 million tonnes to 75 million tonnes for deposit 3. But the union ministry of mines had earlier allotted prospecting licenses to TATA Steel and Essar for Bailadila deposits 1 and 3, respectively, on recommendations from the Chhattisgarh government. Deposit 1 was promised to TATA Steel on the grounds that it would add value to the ore within the state and deposit 3 was recommended for Essar under the lease lapse category.

The license allows the companies to study the deposits and the prospecting licenses can subsequently be converted into development licenses.

In 2005, TATA Steel had signed a MoU with the Chhattisgarh government to set up a 5 million tonne integrated steel plant in the Bastar region. Essar too had signed a MoU for a 3.2 million tonne integrated steel project.

Tribals start protest against ArcelorMittal plant in Orissa

Statesman News Service reported that tribals, mostly women from Keonjhar district, thronged Bhuwneshwar staging a demonstration against the establishment of the ArcelorMittal steel plant at the expense of their agricultural land.

The protesters under the banner of the All India Krusak Kheta Mazdoor Sangathan and the Joint Pratirodh Manch, held a meeting in front of the state secretariat and resoled to carry on their fight against the proposed project.

They alleged that their valuable multi crop land is being handed over to ArcelorMittal and said "We will lose our only means of livelihood and will be evicted from our villages." They also pointed out that most of them did not have land records over the area, which they have been cultivating since decades and only those with land records will be compensated whereas the rest will suffer.

As per report, about 13,000 people will be displaced under the Patana block of Keonjhar district where the ArcelorMittal plant is to come up.

SAIL and RINL merger proposal still under consideration

Steel Authority of India Limited has again mooted the idea of merger with Rashtriya Ispat Nigam Limited.

Mr SK Roongta chairman of SAIL while speaking at an interactive session organized by the Merchants’ Chamber of Commerce Kolkata said that the merger, which is pending with the centre, would be a win win situation for both companies. He said that “The proposal is still under consideration of the government but we feel that it will be a win win situation.”

Mr Roongta added that RINL is a port based plant while SAIL is not, so there would be synergies in the use of raw material, in house technology and market access. He said that "There are a lot of synergies between the two plants. Both are port based plants and also there is common technology employed in steel making."

Mr Roongta said that would always welcome the move but acknowledged that there has not been any development in this regard. He said that “The central government would have to take a final call in the matter since both RINL and SAIL are owned by the government and the owner has to decide in the matter.”

However, Mr YS Rajasekhara Reddy chief minister of Andhra Pradesh had last year opposed this move and urged Dr Manmohan Singh not to merge the RINL with SAIL saying that such a move would do great injustice to the region.

Man Industries starts new H SAW pipe mill

Man Industries India Limited announced commissioning of a new production line for H SAW Pipes. The newly commissioned mill has capacity of 200000 tonnes per annum.

The new mill has started producing pipes for executing USD 225 million orders from a US client and Man Industries has started shipment of 18 meter long H SAW pipes to the client.

Man industries, which commissioned a pipe mill and coating complex at Anjar in Gujarat in 2005, which is it’s second facility in India, has emerged out as a prominent manufacturer of line pipes and coating system on a global level with a total installed capacity to manufacture over 2500 kilometer of line pipe every year.

BHPB suggest long term contracts for thermal coal imports

Reuters reported that global mining major BHP Billiton has outlined a shift by Asian coal consumers, especially in the Indian subcontinent, to long term contracts, to ensure assured supplies of thermal coal amid increasing concerns of shortages.

The report cited Mr Matt Ferguson global VP for energy coal at BHPB as telling McCloskey coal conference in New Delhi that "Increasing concern over security of supply will lead to more long term contract sales based on indices or a basket of indices. Consumers will be looking in future for whole packages from producers involving freight, quality, carbon etc and not just coal supply.”

Mr Ferguson said that India will continue to be a growth market for imported coal because its projected power demand growth is strong and domestic coal output cannot keep pace with demand and is a strategically important consuming sector of the global coal market.

He added that BHP Billiton has an appetite to develop a long term position in India. He said that “BHP is well suited to grow as a supplier because most of its steam coal production is in Australia and South Africa, it has a strong balance sheet and a large freight book.” He also said that BHP is able to tailor make coal to its customers' boiler or cement plant specifications.

PMO turns down CIL request for hike in coal price

Mint reported that Prime Minister’s Office, avoiding potentially big trickle down price hikes for consumers, has turned down a move to increase coal prices by Coal India Limited. The last price revision by CIL took place in June 2004.

The report cited a senior coal ministry official as saying that “Coal India Limited had proposed a hike of 10% in the coal prices and even the NTPC Ltd had agreed to the hike. However, the move was stalled at the behest of the Prime Minister’s Office. The PMO has rejected CIL’s demand and directed that there will be no price hike for the time being.”

Coal prices globally have been rising since 2004, when CIL last hiked its price. Global thermal coal prices, which ranged between USD 30 and USD 35 per tonne between 1986 and 2003, are now trading in the range of SD 60 to USD 65 per tonne. A comparable quality of coal in India would cost about USD 45 per tonne.

Meanwhile, the increase in the demand for coal required for power projects has been putting upward pressure not only on domestic coal prices but also on coal imports.

Supreme Court bans entry of toxic ships into Indian waters

Exim News Service reported that Supreme Court of India has prohibited the entry of contaminated and toxic ships into Indian waters. Supreme Court bench of Justices comprising Mr Arijit Pasayat and Mr SH Kapadia has also ordered a ban on burning of any hazardous or non hazardous materials on the beaches.

The judges ruled that "Until the concerned statutes are amended, these recommendations have to be operative."

The apex court ruled that the ship owners must first decontaminate ships before bringing them for breaking. They must be classified as hazardous and non-hazardous and the degree of hazard specified. The ship’s contents, such as oil, must be disposed of in a scientific manner and ships should make an inventory of the hazardous wastes they carry.

The Supreme Court also directed the officials of the Gujarat Maritime Board, state pollution control board, the customs, national institute of occupational health and atomic energy board to oversee the arrangements for ship breaking. It also directed these officials to authorize ship breaking.

The Supreme Court ruling is in response to a petition filed by Research Foundation for Science Technology & Natural Resource Policy, seeking to avert the breaking of the toxic Norwegian ship Blue Lady at Alang shipyard in Gujarat, which has been given go ahead few days back by the Supreme Court.

Russian thermal coal exporters eying Indian market

Reuters reported that Russian thermal coal exporters expect India to be a new market for their high quality steam coal within the next few years.

The report cited a major coal exporter at the sidelines of McCloskey coal conference in New Delhi telling that "We will not be exporting anything to India during 2008 but within a few years if they are ready to pay market prices and we can overcome credit and risk issues then India will be a market for us. We are here because we want to be prepared. We did the same thing with China several years ago.”

At present and for the next year at least, Russia's major coal exporters said they expect to get higher prices from customers in Japan, South Korea and Taiwan than in India or Pakistan.

Indian consumers and traders importing coal from Australia, Indonesia and South Africa said there has been a rush recently to buy coal with the highest calorific value because record freight rates make it uneconomic to take mostly lower CV coal from Indonesia.

Tuticorin Port plans to double capacity

BS reported that Tuticorin Port is planning a major expansion involving investments of around INR 5,310 crore to create additional capacity and infrastructure on the back of growing industrial activity and meeting capacity demands from the trade.

Mr A Subbiah deputy chairman of Tuticorin Port said that “It is planning to augment its capacity from the existing 20.55 million tonnes to 40.60 million tonnes through an inner harbor development program. This envisages construction of a coal berth, development of a container terminal, construction of new berths and development activities like dock basin dredging to cater to 12.8 meter draft vessels at a cost of INR 961.75 crore.”

He added that the port, through a futuristic outer harbor development program, is also planning to create additional capacity of 37.5 million tonnes by 2012 end and would aim for 43.7 million tonnes by 2017 with an investment of INR 4,350 crore.

A Tuticorin Port statement said that, with the expected completion of the Sethusamudram project in 2008, ports on the east coast and west coast of the country are expected to use Tuticorin Port as a transshipment hub, resulting in its emergence as a hub container port in near future.

Tuticorin Port handled 18.7 million tonnes of cargo during 2006-07 up by 9% YoY as against 17.14 million tonnes in 2005-06. Container traffic stood at 377,000 TEUs as compared to 321,000 TEUs in the previous fiscal, registering growth of 17% YoY. For the current fiscal, it has set a target of 20.05 million tonnes of cargo traffic and 400,000 TEUs. The operating income of the port was INR 183.05 crore for 2006-07 as compared to INR 159.04 crore in 2005-06, while profit after tax was INR 88.76 crore up by 39% YoY as against INR 63.76 crore in the previous fiscal.

Experts warn against sea erosion at Paradip

SNS reported that a warning from experts of Institute of Oceanography Management of Chennai based Anna University regarding sea erosion in Paradip in Orissa has become a matter of serious concern for residents and environmentalists.

They have identified the seacoast in Paradip as one that faces a serious threat of sea erosion due to the changing pattern of tidal waves and highlighted that sea erosion is related to tsunami.

Experts stressed also on a coastal highway bridge from Baleswar to Gopalpur to function as concrete barrier that will check the erosion but nothing has been taken by state government yet

Due to the high tides, waves have frequently flooded many villages and local residents have faced lots of difficulties. This has also caused extensive loss of crops as well as property in Kujang and Erasama area in Orissa. It has posed a major threat to Oil Refinery project of IOC and the proposed POSCO steel project. Experts suggest constructing a surge protection wall for the safety of refinery projects as well as proposed POSCO steel projects.

Kolkata Port to completed second berth at Haldia in October

Kolkata Port Trust has announced that it would complete the construction of its second berth at Haldia in October 2007.

Dr AK Chanda chairman of Kolkata Port Trust said that "The construction of the second berth at Haldia is set to be completed in October this year, much ahead of its scheduled date of completion in May 2008. The commissioning of the second berth at Haldia would significantly add to the port's cargo volume."

Dr Chanda has expressed confidence that the second berth at Haldia would offset revenue loss to be incurred by Kolkata Port Trust following a drop in liquid cargo with the Haldia to Paradip crude pipeline of the Indian Oil Corporation in place. He said that "We have drawn up an action plan to raise the cargo handling capacity at Haldia to 20,000 tonne per day, up from the current 8,000 tonne per day. Our objective is to enhance efficiency at Haldia."

Kolkata Port Trust has also planned to expand its stack area in the Kolkata Dock System by another 40,000 square meter by March 2008 from total stack area of 90,000 square meters in the present. It has also decided to undertake a feasibility study to set up more berths and jetties. The construction of all these additional berths and jetties would lead to an overall cargo growth of about 33 million tonne per annum for Kolkata Port Trust.

Kolkata Port Trust, which handled 55.05 million tonne of cargo in 2006-07, has targeted to scale up its cargo volume to 60 million tonne in 2007-08.

Power ministry asks for relaxation of new ECB norms

ET has recently reported that union power ministry has sought waiver of new external commercial borrowings norms for the power sector to allow it to use funds raised abroad for rupee expenditure. The demand has been made in view of huge funding requirements of the sector that expects investments worth INR 100,000 crore during the 11th Plan, primarily in rupee expenditure.

As per report, Mr Anil Razdan, union power secretary in a letter to Mr YV Reddy governor of RBI and Mr D Subba Rao union finance secretary has said that “Recent changes in the external commercial borrowings guidelines would make it difficult for the power sector to achieve the targeted capacity addition of 68,000 MW as it would restrict the borrowing options. Moreover, the changes in end use norms in external commercial borrowings guidelines would be meaningless for the power sector that largely sources equipment from highly competitive domestic suppliers, especially for sub critical units.”

Mr Razdan wrote that “The working group on power for 11th Plan has estimated the debt available to fund the power sector capital expenditure is INR 371,600 crore against requirement of INR 722,100 crore. In view of the huge gap in meeting the required debt, the working group has also recommended relaxation of ECB guidelines. The revised policy of RBI, restricting the use of ECB proceeds, would further aggravate the situation and squeeze the flow of funds required for growth of the power sector.”

Mr Razdan’s strong argument for revisiting ECB norms follows a letter from Mr T Shankaralingam CMD of NTPC to the power ministry explaining how the public sector company would suffer due to the changes in the ECB policy. Mr Sankaralingam said that “NTPC is in advanced stage of negotiations for loans amounting to USD 1.2 billion with various multilateral and bilateral funding agencies such as JBIC, ADB and NIB and the revised ECB guidelines are likely to impact not only these arrangements but NTPC’s future borrowing program as well.”

It is noted that RBI, on August 7th 2007, had revised the ECB policy restricting the use of proceeds from such instruments to foreign currency expenditure in a bid to rein in liquidity and curb inflationary pressure. It also restricted ECB amount to a maximum of USD 20 million to meet rupee expenditure with prior approval of the apex bank. Earlier, a single company was allowed to raise ECB up to USD 500 million in a year for meeting both rupee and foreign currency expenditure.

Chinese steel exports cross 50 million tonne in 8 months

According to the latest customs data released, China's exports of finished steel products registered 5.38 million tonnes in Aug 2007, down by 560,000 tons or 9.4% MoM from 5.94 million tonnes in July 2007. China exported some 45.08 million tonnes of finished steel products in the January to August 2007 up by 83.9% YoY.

China’s import of iron ore also surged by 14.5% YoY during this period.

Exports

In million tonnes

Imports

In million tonnes

China's overall total trade surplus was USD 24.97 billion in August 2007 up from USD 24.36 billion in July 2007. Exports in August rose by 22.7% YoY to USD 111.36 billion while imports were up by 20.1% at USD 86.38 billion. The trade surplus is USD 161.76 billion for January to august 2007 with exports increasing by 27.7% YoY to USD 765.74 billion and imports increasing by 19.6% to USD 603.98 billion.

ArcelorMittal completes the acquisition of Arcelor Brazil

ArcelorMittal announced that the acquisition of all outstanding shares in Arcelor Brazil has been completed. As a result hereof, ArcelorMittal now owns 100% of Arcelor Brazil.

The redemption of the remaining 4,918,822 of shares outstanding 0.76% of total shares issued was approved at a general meeting of Arcelor Brazil shareholders held on August 8th 2007. This redemption was the final step of a mandatory tender offer process. The redemption price was BRR 53.89 per share, the same as that of the mandatory tender offer adjusted by the variation of the Taxa Referential in cash.

As of September 1st 2007 Arcelor Brazil has changed its name to ArcelorMittal Brazil.

Hot band spot prices on upswing

SteelBenchmarker reported that the US hot rolled band spot price for September 10th 2007 up by 1.2% to USD 572 per ton on FOB mill basis for the second consecutive time. The World export HRB price rose by 1.4% to USD 563 per ton FOB port of export after falling last time. The Chinese HRB ex works price surged by 5.9% to USD 487 per ton, for the fourth consecutive rise. And the Western European HRB price stayed flat at USD 670 per ton ex works after rising two weeks ago.

1. US
USD 572 per metric ton FOB mill
Up by USD 7 per ton from USD 565 two weeks ago
Down by USD58 per ton from the peak of USD 630 on April 9th 2007
Up by USD 1 per ton below the recent low of USD 571 on January 22nd 2007

2. World Export Price
USD 563 per tonne FOB the port of export
Up by USD 8 per ton from USD 555 two weeks ago
Down by USD 33 per tonne from the recent high of USD 596 on March 26th 2007
Up by USD 64 per ton from the previous low of USD 499 on December 11th 2006

3. Western Europe
USD 670 per metric ton EXW
Flat with USD 670 per ton from two weeks ago
Down by USD 26 per ton from the peak of USD 696 on June 11th 2007
Up by USD 114 per ton from the low of USD 556 on November 27th 2006

4. China
USD 487 per metric ton EXW
Up by USD 27 per ton from USD 460 two weeks ago
Up by USD 30 per ton from the peak of USD 457 on May 14th 2007
Up by USD 114 per ton from the low of USD 373 on July 24th 2006

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

Chinese SS output in H1 cross 3.5 million tonnes

China Iron and Steel Association statistics shows that China produced 3.5 million tonnes of stainless steel in the H1 of 2007 up by 54% YoY. Meanwhile stainless steel imports and exports registered 956,500 tonnes and 833,800 tonnes respectively down by 25.45% YoY and up 224.44% YoY as compared to H1 of 2006.

China now boasts of a self sufficiency ratio of 70% and mainly bases on domestic products rather than imported ones as done during previous period. Its stainless steel consumption per capita reached 4.6 kilograms in 2006 and the figure increased further in the H1 of 2007, approaching the world's average.

(Sourced from MySteel.net)

Chaparral shareholders approve merger with Gerdau Ameristeel

Chaparral Steel Company has announced that its stockholders at a special meeting held at Dallas in Texas recently adopted the merger agreement under which Chaparral is to be acquired by Gerdau Ameristeel Corporation.

Approximately 99.7% of the shares voted were cast in favor of the merger. The number of shares voted in favor of the merger represented approximately 75% of the total shares outstanding and entitled to vote at the meeting.

Mr Tommy Valenta president & CEO of Chaparral Steel commented that "We are pleased to announce that our stockholders have approved the proposed merger with Gerdau Ameristeel. I am excited because this was a decision made by our stockholders and they voted overwhelmingly in favor of the transaction. Our stockholders clearly share our belief that the merger creates significant value and a bright future for the company and for the exceptional people who have participated in our success."

Chaparral Steel Company headquartered at Midlothian in Texas is the second largest producer of structural steel beams in North America. Chaparral is also a supplier of steel bar products and is a leading North American recycling company.

Chinese crude steel production in August up by 13.6% YoY

As per unconfirmed reports, citing industry sources, China's production of crude steel increased by 13.6% YoY to 41.58 million tonnes in August 2007 and 321 million tonnes during January to August 2007 up by 17.7% YoY.

The report said that production of finished steel products increased by 23.7% YoY to 48.27 million tonnes in August 2007 and 366.97 million tonnes during January to August 2007 up by 24.1% YoY.

Please note that all data herein are for reference only, official figures will be available in mid August 2007.

(Sourced from MySteel.net)

Australian resource exports cross USD 100 billion in last FY

A report by Australian Bureau of Agricultural and Resource Economics showed that Australia's export earnings from mineral resources surged by 17% YoY in the last financial year. The report showed that earnings from the export of mineral and energy products increased to more than USD 106 billion during the year to June 2007.

Australian Bureau of Agricultural and Resource Economics said the result has mainly been driven by higher prices for almost two thirds of the products exported.

The commodities that recorded the largest increases in export earnings included nickel, zinc, refined gold and crude oil. But earnings for coking coal were down 11% along with steaming coal mainly because of a stronger Australian dollar.

Australian Bureau of Agricultural and Resource Economics Ms Jane Melanie said that the minerals sector continues to perform strongly on the back of varied growth. She said "It's underpinned by a very strong performance by a number of commodities for instance nickel we've seen a massive increase in export earnings from the nickel sector, about 145%. She also said Gold has also been a very high performer with an increase of about 46%."

Hyundai Steel suspends CR production at Incheon plant

Yonhap reported that South Korean steel maker Hyundai Steel Co has suspended the production of cold rolled steel plates at its plant in Incheon because of diminishing raw materials and a decrease in demand.

Hyundai Steel in a regulatory filing said that it would soon resume operation of the plant, located about 40 kilometers west of Seoul.

Last year, the Incheon plant produced KRW 491.9 billion (USD 527.5 million) worth of steel products.

TMK Corinth pipe JV makes first shipment of pipes to Rosneft

ZAO TMK-CPW, a JV between TMK’s Seversky Tube Works and Humbel limited of Cyprus, which is a subsidiary of the Greek pipe industry leader Corinth Pipeworks SA, announced that it has delivered its first shipment of a new pipe range to the Rosneft Oil Company.

Rosneft received about 2,000 tonnes of 15 meter electric resistance welded longitudinal pipes with 325mm diameter and 10mm wall thickness made of low alloyed steel.

The release added that TMK’s logistics team also successfully resolved the transportation issues associated with the length of the product. This new pipe range can have up to 18 meter in length, as opposed to the standard 12 meter, making them difficult to transport.

Mr Konstantin Semerikov CEO of TMK said that “This first TMK-CPW shipment allows us to enter a new market segment. It is the first time the company has produced ERW longitudinal pipes intended first and foremost for the oil and gas industry. We forecast further growth in sales of this type of product and we see good prospects for strengthening TMK’s market position. The JV’s production will also increase the company’s share of premium products.”

The TMK-CPW JV was launched at the Seversky Tube Works in July 2007 and produces ERW longitudinal pipes for oil and gas companies in Russia and the CIS. It also produces other tubular goods used in the rapidly developing construction industry. The JV annual production capacity amounts to approximately 200,000 tonnes of tubular goods.

US weekly crude steel production down by 2.5% YoY

American Iron & Steel Industries reported that in the week ending September 8th 2007, US’s raw steel production was 2.092 million net tons while the capability utilization rate was 88.4 %. Production was 2.147 million net tons in the week ending September 8th 2006 while the capability utilization then was91.2%. The current week production represents 2.5 % YoY decrease from the same period in 2006.

Production for the week ending September 8th 2007 is up by1.4% from the previous week ending September 1st 2007 when production was 2.062 million net tons and the rate of capability utilization was 87.1%.

Adjusted YTD production through September 8th 2007 was 73.080 million net tons at a capability utilization rate of 85.4%. That is a 5.1% YoY decrease from the 77.044 million net tons during the same period 2006 when the capability utilization rate was 90.2%.

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months.

US Steel to partially shut steel operations at Texas plant

It is reported that the news of the permanent shutdown of two operations at the US Steel’s Texas Operations plant at Lone Star affecting about 200 workers was announced Tuesday afternoon. The official said that the shutdown is effective immediately, but workers will be paid through November 14th 2007.

The company officials said that the action is part of it's plans to indefinitely idle the rolling mill and steel making operations at the plant about 30 miles north of Longview, while officials assessed production efficiencies.

Mr John Armstrong, manager of public affairs for US Steel, confirmed the company's plans. He said "They will be paid full wages for 60 days, and those eligible will receive severance benefits." He said about 200 workers are affected.

Mr Randy Dean president of United Steelworkers Union Local No 4143 at the Lone Star plant said that he was initially notified of the these plans by a VP. He said "I got a call from him telling me the news was coming from the company and a short time later, the action was confirmed in a meeting between local union representatives and plant management. We are all pretty devastated. But it is official. There's not much else we can do."

Mr Armstrong said that "Even through these decisions are very difficult, we do think this will help strengthen the Texas Operations in the long run. We expect the new business model for Texas Operations to strengthen its position in the very competitive tubular marketplace and make it a leader in the value added welded tubular products business."

The action will leave about 1,400 workers on the company's payroll at the Lone Star plant.

AK Steel worried on MMK proposed CR plant at Ohio

Middletown Journal reported that AK Steel Corp’s executives and union officials worry that if the state offers incentives to lure Russian steel maker MMK's USD 1 billion plant to Ohio it could hurt AK and its peers. Its representatives will travel to Ohio on September 17th 2007 to meet with Governor Ted Strickland.

A Russian newspaper RIA Novosti reported that MMK wants to build a mill in Scioto County. MMK's proposed Ohio plant would make cold rolled steel for the car industry, a market AK Steel serves and giving MMK incentives could give it an unfair leg up on the competition.

Whether Ohio has offered MMK any incentives remains unclear. But Mr Alan McCoy vice president of government and public relations for AK Steel said that he bases his concerns on press reports suggesting that state officials have discussed incentives with the Russian company. He added that AK Steel doesn't care that MMK is based overseas. But the West Chester based company and the International Association of Machinist and Aerospace Workers Local 1943, which represents its Middletown Works, have told state officials they want a level playing field.

Mr McCoy said that "We're not shy about meeting the competition. However, if that competition has received any kind of significant incentive from the state, then that really puts us at an unfair disadvantage. We certainly applaud the administration's efforts to preserve and grow manufacturing jobs in Ohio. We very much believe it's an important part of Ohio's economy and the US economy."

Brazilian steel makers to focus on domestic market

BNamericas cited Mr Pedro Galdi an investment analyst with ABN Amro Real Corretora as saying that Brazilian steelmakers are due to keep focusing sales on the domestic market in 2008 as they have this year. Demand for steel products has been strong in 2007 in the civil construction and automobile sectors, among others.

Mr Pedro Galdi said "I believe steel prices will increase slightly in the local market next year, but will rely heavily on the US. If the US goes through a sharper slow down, it impacts the whole world. As a result, export demand could decline and have an impact on international prices."

Mr Galdi said meanwhile steelmakers in Brazil will likely pass on to steel prices a possible increase in their iron ore supply costs. Prices for the steelmaking input have risen steadily in recent years. According to Mr Galdi international slab prices are expected to stay at USD 500 per tonnes to USD 540 per tonnes during the second half of 2007.

Kardemir Q2 profit rises by 65%YoY

It is reported that Turkey's second biggest steel maker Kardemir Karabük Demir Çelik’s April to June 2007 net profit is TRL 63.1 million an increase of 339%YoY compared to April to June 2006.

Kardemir net non operating income up by 396%YoY reaching TRL 84.54 million. Its sales rose by 19% to TRL 198.2 million.

China chrome ore import in 7 months up by 38.3% YoY

It is reported that China’s chrome ore imports climbed in January to June 2007 to 2.834 million tonnes valued at USD 620 million up by 38.3%YoY and 86.3%YoY respectively as compared with the same period of 2006. Import price averaged USD 219 per tonnes up by 34.7%.

South Africa and Turkey are the top exporters with 802,000 tonnes and 558,000 tonnes respectively up by 140% YoY and 88.4% YoY. The two countries provided 48% of China's total imports during the period. Imports from India dropped dramatically by 32.8% YoY to 521,000 tonnes owing to export quota and export tariff.

Increased prices and higher import volume can be attributed to the following reasons.

1. A severe undersupply emerges in China's domestic market as its crude stainless steel output registered 5.3 million tonnes in 2006 up by 68%YoY. The figure is expected to grow to some 7 million tonnes this year. However, the country's proven reserve of chrome ore merely recorded over 10 million tonnes and few of them can be exploited due to inconvenient transportation and high exploitation costs. In such a case imported chrome ore become the main sources to feed domestic demand. 80% of the consumption is derived from overseas resources and China thus becomes one of the major importers of Cr ore.

2. Exporters are negatively affected by policies. India was the largest exporter to China, but it began to impose an export tariff of INR 2000 per tonnes (USD 44 per tons) on chrome ore from this March 1st 2007 following the release of export quota. Average import price for Indian chrome ore thus gained by 68.6%YoY to USD 293.6 per tonnes in January to June 2007. China then turned to South Africa and Turkey for resources yet Turkey followed India to raise export price. Besides, South Africa adjusted policy in a bid to export high value added ferrochrome instead of raw materials such as chrome ore to China.

3. Ferrochrome price advances prop up chrome ore price. Stainless steel producer have agreed with South Africa on price hike of USD 0.08 per pound in Europe and USD 0.07 per pound in Japan for the second quarter. Export price for South African ferrochrome has risen to some USD 0.9 per pound hitting a new high. This also drives up chrome ore price.

Against such a backdrop, a united import strategy should be framed to raise China's pricing power in chrome imports. The country should also broaden import channels and accelerate reserves. Besides, is should speed up the research and development of substitutes and set up recovery system to promote reutilization.

China had imported 4.321 million tons of chrome ore in 2006 up by 42.9%YoY.

(Sourced from MySteel.net)

Shagang inks agreement for new DRI facility with university

Interfax China reported that Shagang Group has inked a cooperative framework agreement with China's Central South University to construct a multiphase direct reduced iron facility in Jiangsu Province with an eventual capacity of 2 million tonnes of pellet per annum.

Central South University will provide technical support for the facility in the form of its self developed DRI technology, which directly uses coal instead of coke for steel pellet production while Shagang Group will provide capital investment.

The first phase of the facility has a designed production capacity of 150,000 tonnes of pellet per annum and the second phase will increase capacity to 500,000 tons per annum. Moreover, Shagang Group aims to eventually expand facility capacity to 2 million tonnes of pellet per annum.

According to Central South University in addition to the DRI facility, Shagang Group and Central South University have proposed to set up a JV company specializing in the development of overseas mineral resources. Shagang Group will hold an 80% stake in the JV with Central South University holding the remaining 20% stake. The JV will make use of both Central South University facilities and advanced mine exploration technology in order to develop overseas resources Shagang Group officials were reluctant to provide detailed information about either the DRI facility or the proposed JV plan.

In 2006 Shagang Group produced a total of 11.41 million tonnes of pig iron, 14.63 million tons of steel and 12.72 million tonnes of steel products lifting 45%, 40% and 65% respectively from 2006 and generated a total revenue of CNY 58.8 billion (USD 7.78 billion) up 45%.

World Bank revises Chinese GDP growth in 2007 to 11.3%

World Bank in its quarterly report on China announced that China's gross domestic product is expected to grow by 11.3% in 2007. World bank had previously revised its projection for China's GDP growth rate from 9.6% to 10.4% in its quarterly report released in May.

China's GDP grew by 11.5% in the first half of 2007.

Wednesday's report held that China's economic growth pattern remains unchanged, as continued strong external trade and an investment driven recovery in domestic demand are still major factors behind the rapid growth.

According to the World Bank's estimates, the net external trade has contributed more than one fourth to the aggregate growth, remaining at a high level as in the second half of 2006. The trade surplus is adding to domestic liquidity and contributing to steady asset price increases, share prices in particular. The main macroeconomic task remains containing the rising trade surplus.

Interpipe to upgrade Niko Tube plant

It is reported that Ukraine’s leading steel company Interpipe has commenced the upgrade of its finishing lines at the Interpipe Niko Tube facility as part of its ongoing program of investment in its production facilities. This investment will involve the replacement of existing finishing lines with two higher productivity lines that will be equipped with NDT units. The first line is scheduled to launch in October 2008, the second one on December 2008.

Austrian company Linsinger, German companies Reika and Foerster and Czech Prestar are selected as the suppliers of equipment for the project.

Mr Andrey Korotkov director for production and investments said “Interpipe has designated the increase of pipe production at the Interpipe Niko Tube mill as a key part its overall business development program. Investment in new finishing lines is crucial to be able to deliver this upswing in productivity, and this investment will increase the production levels of finishing lines at the mill to 525,000 tonnes per year.”

NDRC approves Jinchuan stake in Allegiance Mining

It is reported that Asia's largest nickel refiner Jinchuan Group has gained approval from the China’s National Development & Reform Commission for an option to buy into the Australian company Allegiance Mining.

By financing the nickel sulfide project of the Avebury nickel mine, Jinchuan Group will have exclusive rights of selling products of the mine, which is on Tasmania's west coast, owned by Allegiance Mining. By subscribing Allegiance's stock, Jinchuan Group will also have a position in its board.

Allegiance Mining was set up in Sydney in 1993 and then listed in Australian Stock Exchange. With reserves of 11.6 million tonnes, the Avebury nickel mine is projected to serve at least eight years.

Jinchuan had also signed a nickel concentrate off take and subordinated debt financing contract with the Australian miner, agreeing to buy 70,000 tonnes of metal in next 10 years and providing AUD 5 million loan.

Jinchuan is China's largest alnico production base and platinum metals refiner, supplying 90% of nickel resource.

(Sourced from MySteel.net)

Baosteel orders for more equipment for SS mill

It is reported that International Technology Group Andritz has received a major order from Baosteel Group to supply an annealing and pickling line for cold rolled stainless steel strip and a skin pass mill for the new stainless steel mill at Shanghai in China.

The annual capacity is 370,000 tonnes and the start up is scheduled for May 2009. The order value is approximately EUR 45 million.

Andritz will be responsible for engineering, supervision of erection and start up of the lines as well as for the supply of key equipment.

As per report after having ordered an annealing and pickling line for hot rolled stainless steel strip from Andritz in 2006 just recently the line successfully started production and Baosteel’s stainless steel division placed a follow up order for an annealing and pickling line for cold rolled stainless steel strip including an inline skin pass mill and a separate off line skin pass mill.

CVRD inks MoU to exploit natural gas

Brazilian Companhia Vale do Rio Doce announced that it has signed a memorandum of understanding with Shell Brasil Ltda to jointly evaluate opportunities and develop partnerships aiming to meet CVRD’s energy consumption needs.

The MoU also includes the possibility of participating in exploration blocks in the Espírito Santo basin, off the Brazilian Southeastern Coast, where Shell already has interests.

At the same time, CVRD is evaluating opportunities to acquire some other areas already under concession for the exploration of natural gas. CVRD is also gearing up to participate in the next round of public tenders for the exploration of hydrocarbons to be conducted by Agência Nacional do Petróleo, the Brazilian regulatory agency for the oil industry.

As a major energy consumer, CVRD is seeking to diversify and optimize its energy.

AIC Ventures acquires facilities of Brown Steel

AIC Ventures has announced that it has completed a sale leaseback transaction with Brown Steel LLC a fabricator of structural and plate steel products for commercial and industrial customers located at Newnan in Georgia. AIC Ventures’ real estate fund NL Ventures VI acquired the property and simultaneously entered into a long term absolute net lease with Brown Steel.

The transaction includes Brown Steel’s corporate headquarters at Newnan in Georgia, a sub market of Atlanta. The asset encompasses 58,600 square feet of office manufacturing and fabrication space.

Mr Peter Carlsen president of AIC Ventures said “Brown Steel is a vibrant growing and entrepreneurial organization that epitomizes the type of partnership we seek. We were truly impressed with the depth and ability of the management especially with regard to their real estate expertise, which guided their decision to obtain this high quality, new construction facility in an emerging market outside of Atlanta.”

AIC Ventures is a leading provider of capital to middle market companies. With over USD 700 million in completed transactions, AIC Ventures structures innovative corporate finance solutions for companies facing limited, short term or expensive alternatives for capital. The company has closed more than 70 transactions in 25 states. Whether sellers need to close quickly have private equity interests, environmental or other challenges AIC Ventures can help.

Ternium launched Compliance Line in all plants in Mexico

It is reported that in line with its integrity and compliance standards, Ternium has launched the Compliance Line, a confidential communication channel available to all personnel, suppliers, investors and third parties in general. It has now been enabled for new Ternium's plants in Mexico.

The objective of the Compliance Line is to offer a confidential channel of communication either anonymous or personalized for employees and third parties in order to report potential irregularities. The Compliance Line allows users to report potential irregularities, including but not restricted to those related to accountability, auditing and internal control.

Situations that must be reported to the Compliance Line include, for example, non compliance with laws norms or internal company policies asset misappropriation or misuse, the use of confidential information or improper commercial incentives. The Compliance Line does not receive administrative complaints.

In order to ensure the analysis of the reports received through the Compliance Line, it is important to provide precise information on what happened who was involved, when, how and where the event took place.

The Audit Management under the direct supervision of Terbium’s Chairman and regarding accounting, auditing and internal control of accounting reports issues under the supervision of the Ternium Audit Committee, will analyze the reports received via the Compliance Line, considering all data supplied as strictly confidential as long as it is in accordance with the applicable legislation.

Kuzbassrazrezugol coal production in 8 months up by 4.6% YoY

Interfax reported that Russian coal major Kuzbassrazrezugol Coal Company increased coal production 4.6% YoY in January to August 2007 to 30.281 million tonnes including 3.926 million tonnes in August 2007. The total included 3.18 million tonnes of coking coal up by 19.8% YoY. Kuzbassrazrezugol Coal Company mined 469,900 tonnes of coking coal in August 2007.

Kuzbassrazrezugol Coal Company shipped 28.263 million tonnes of coal to consumers in the eight months up by 1.5%YoY. This included 3.235 million tonnes of coking coal up by 22.8% YoY. Kuzbassrazrezugol Coal Company exported 14.89 million tonnes of coal up by 13.9%.

Kuzbassrazrezugol Coal Company, one of Russia's biggest coal producers, operates 11 strip mines with licenses. It is run by UMMC Holding. Its coal production rose by 2.6% YoY to 41.36 million tonnes in 2006.

Severstal to start construction of tube plant in Sheksna

FIS reported that Severstal would start construction on September 27th 2007 for a new tube mill in Sheksna. As per report, the new plant's production output will be 250,000 tonnes per annum.

As per report, in addition investments will be made to construct new mini plants in Saratov and Nizhniy Novgorod each of the capacity of 1 million tonnes.

AV Dawson bags scale cleaning contract at Corus Skinningrove

It is reported that Teesside based UK’s Logistic firm AV Dawson is expanding its operations at Corus after winning a contract handle the scale cleaning operations at the Special Profiles mill in Skinningrove, which will help keep the 24 hour operation running smoothly.

Mr Gary Dawson MD of AV Dawson said "As the steel is rolled, hot scale is removed as it passes through the mill in order to ensure top quality surface condition. That scale continually has to be collected and removed otherwise it clogs up the system. He said the fact that we are still a family run business is a major factor and has seen us win contracts in the past over major national and international companies."

AV Dawson has had a long relationship with Corus after starting as one of a number of hauliers moving steel products from the Skinningrove site. In October 2004, it successfully tendered to become the sole domestic distributor of steel for the Skinningrove mill and had 22 trailers working at the site. Corus has increased productivity during the intervening years, which has led to AV Dawson operating more than 70 trailers out of Skinningrove. That success was followed by a contract win to take over all the shunting work at the plant.

Mr Dawson said "Corus has no area for domestic distribution at Skinningrove where it can put the steel on the floor and pick it up for distribution. Everything that is made in the mill goes straight on to trailers which need shunting. We have made a number of safety improvements since winning this contract in August 2005."

AV Dawson has operated freight transport in Middlesbrough since 1938.

Cosco dry bulk fleet to be largest in the world

It is reported that China Cosco Holdings Company Ltd will buy its parent’s dry bulk shipping fleet for USD 4.6 billion making it the world’s largest transporter of resources. The acquisition of the world’s biggest bulk shipping business will make China Cosco a global shipping player rivaling AP Moller-Maersk in terms of fleet size though the Danish firm focuses on container shipping and energy resources.

China Cosco plans to fund the acquisition by selling more than USD 3 billion of new yuan denominated Chinese A shares at no less than CNY 18.49 apiece to its parent and nine institutional investors. The balance would be paid via bank loans and internal resources.

The highly profitable bulk fleet business, which is flourishing amid China’s rapacious demand for iron ore, metals and other resources and resultant high global freight rates will boost China Cosco’s earnings several fold.

Cosco’s total container fleet operated 139 vessels with a total capacity of 399,237 TEUs as at the end of 2006.