SAIL RSP to expand capacity to 4 million tonnes

It is reported that Steel Authority of India Limited has rolled out a major expansion plan for Rourkela Steel Plant to augment the capacity from existing 2.2 million tonne per annum to 4 million tonne per annum by 2010.

Mr G Ojha director personnel and raw material of SAIL told newsmen that SAIL intends to undertake expansion and modernization of RSP at an estimated investment of INR 7800 crores and that the process of expansion would be completed by June 2010. Mr Ojha said that “The Rourkela Steel Plant will get to spend at least INR 7,800 crore over the next 3 years.”

Mr Ojha added that “The investment is being planned to keep the leadership position of SAIL intact. This growth plan will help boost employment opportunities and recruitment of locals will be taken up.”

SAIL was the oldest player as it had set up RSP in 1950s and now it’s employee strength was 21560, he said.

Essar Steel to start construction of Orissa steel plant in January

It is reported that Essar Steel’s fully owned subsidiary Essar Steel Orissa Limited expects to start construction work of its 6 million tonne integrated steel plant in Orissa from January 2008. The project is targeted to be commissioned in 2011.

Mr BK Panda director project of Essar Steel Orissa Limited said that it would invest about INR 15,000 crore in the project. Mr Panda informed that the technology selected would be eco friendly. He said that a beneficiation plant is located at Joda and Barbil so beneficiated ore will be transported through a slurry pipeline to Joda. Supply of iron ore through the pipeline will be cheaper too, he added. The company will set up a 200 MW captive thermal power plant.

He said that the total land requirement is about 1,900 acres including about 270 acres of Government land adding that so far 103 acres of Government land had been handed over to the company. He informed that the company is directly negotiating with local landowners to purchase about 1,100 acres of land in Udayabata, Nuagarh and Bijayachandrapur villages.

He informed that the number of displaced families have not yet been ascertained because the land survey has not been completed. He said that the company, the government and the people had all agreed to a rate of INR 0.950 million per acre as compensation and that some people had already provided their land at the said rate.

Indian infrastructure growth in July slumps to 6.3%

It is reported that India’s overall growth in the six core infrastructure sectors cement, steel, coal, power, crude oil and petroleum refining was restricted to 6.3% in July 2007 as against 10.9% in July 2006. Indian’s core sector growth rate declined to 6.1%during April to July 2007 as against 8.7% in April to July 2006.

The infrastructure sector accounts for 26.7% of the Index of Industrial Production. The data came a day after IIP data showed that overall industrial growth slowed sharply this July 2007, providing further evidence of a moderation in economic activity on account of a tight monetary policy and a perceptible slowdown in consumer spending. The IIP rose by 7.1% in July 2007 as against 13.2% in July 2006. This has been the slowest growth in the index in the last nine months. It had slumped to 4.4% in October 2006.

However, Mr P Chidambaram Indian finance minister said that there are no signs of a slowdown in investment and that demand will bounce back during festival season, beginning this month. He said “The slowdown is disappointing. There is no evidence of a slowdown in investment, albeit it has been seen in production in some sectors. We will try to find out whether it is due to mild slowing down or whether they have cut back on production. Except for automobiles, there is no evidence of production cut back either.”

Stranded iron ore laden MV Chang Le Min re floated

It is reported that salvage expert teams on Thursday successfully put the stranded Chinese cargo vessel MV Chang Le Min on refloat and guided it to the New Mangalore Port anchorage.

Mr Manoj Baadkar Coast Guard Commandant said that the ship was re floated back by NMPT tugs to the anchorage after bringing the tilted vessel to less than three degree from 15 degree,

MV Chang Le Min carrying 16,100 tons of iron ore from UAE to China and with 28 crewmembers suffered a drift about seven nautical miles away from Thannirbhavi on September 6th 2007. Eight salvage experts from Holland and another six member team from Singapore supervised the operations to put back the slanted ship on waters.

TATA Steel offering attractive compensation in Chattisgarh

IANS reported that TATA Steel has offered an attractive package to compensate people for the land it intends to acquire for its INR 100 billion integrated steel plant in Chhattisgarh.

As per report, TATA Steel would pay INR 100,000 per acre for barren land, INR 150,000 per acre for single crop land and INR 200,000 per acre for multi crop land, besides assuring a job to one adult from each affected family. TATA Steel also promises up to 2.47 acre under its land for land package for those losing between 75% to 100% of their land.

The report cited a TATA Steel officials as saying that Mr Neelkanth Tekam SDM for Jagdalpur town has started one on one meeting with the families on the compensation and is providing them details on how much of their land will be acquired if they agree.

TATA Steel had signed a pact in June 2005 with Chhattisgarh government for the 5 million tonne unit in Bastar district of Chattisgarh. The project needs 2,063 hectares or 5,098 acres in the Lohandiguda block that falls under Chitrakote assembly segment in Bastar. Out of 2,063 hectares, 86.5% is private land, 8.4% belongs to the government, while the rest is revenue and forestland. The project will cover 10 villages of Badanji, Bade Paroda, Belar, Beliyapal, Chindgaon, Dabpal, Dhuragaon, Kumhali, Sirisaguda and Takraguda, which have about 92% tribal population.

TATA Steel has already secured an iron ore prospecting license in Bailadila hills in the neighboring Danteawda district, estimated to have 150 million tonnes of high grade iron ore. The water will come from Sabri River, 60 kilometer from the plant site.

Xstrata aiming to sell 2 million tonnes coal to India in 2007

Reuters reported that Anglo Swiss miner Xstrata Plc is aiming to sell about 2 million tonnes of coal in 2007 to India and hopes to ship a similar quantity in 2008.

Mr Gary Beck GM marketing at Xstrata's coal arm on the sidelines of McCloskey Coal Conference in New Delhi said that "We are looking forward to increasing our sales."

He added that India's demand for coking coal is rising sharply.

INSDAG to offer design and consultancy services for steel industry

BL reported that Institute for Steel Development & Growth will soon embark upon project design and consultancy services on a commercial basis.

The report quoted Mr PK Bishnoi president of Institute for Steel Development & Growth and also CMD of Rashtriya Ispat Nigam Limited as saying that the institute has people with technical skills and domain expertise to offer project design and consultancy services to the steel industry. He added that “Besides promoting steel, INSDAG will also be generating revenue for itself by doing this. It will be able to stand on its own feet.”

INSDAG has already embarked upon these services in a small way. In the current fiscal, it hopes to generate revenue of around INR 2million from project design and consultancy services. It will also continue to discharge its original mandate of promoting R&D and steel in India.

Achieving financial self sufficiency is important for the institute, which gets a grant of INR 1.75 crore annually from the Steel Development Fund. The annual establishment cost of the organization has been pegged at INR 2.4 crore.

Delhi Metro order rails from Nippon Steel

PTI reported that Delhi Metro Railway Corporation has placed an order on Japanese trading major Mitsui & Co for providing 19,600 tonnes of high grade rails at a cost of INR 64 crore for its phase II network expansion form Nippon Steel of Japan. Shipment of the material will start in October 2007.

As per report, DMRC has chosen the heat treated rails to save cost of replacing ordinary rails that wear out faster.

This is Nippon Steel's first order for export of rails to India.

SPS Steel in Orissa sealed for violating pollution norms

It is reported that Orissa state pollution control board has sealed SPS Steel & Power Limited near Jharsuguda in Orissa for gross violation of pollution norms.

The report cited Mr SK Sahu regional director of Orissa’s pollution board as saying that “SPS Steel & Power Limited did not possess any no objection certificate issued by us. Neither did they bother to conform to pollution control board instructions.” He added that earlier pollution control board had sealed 4 kilns of SPS Steel and with 2 more closed on September 12th 2007 the entire unit is now sealed.

As per report, state pollution control board authorities at Bhubaneswar and Sambalpur have served show cause notices to SPS Steel many tines advising them to procure consent to operation certificate. But, pollution control board officials believe that the SPS Steel management hardly cared.

TATA Steel West Bokaro coalmine worker honored with Shram Shree Award

It is reported that Mr Om Prakash Singh senior mining associate of TATA Steel West Bokaro Division has been honored with Prime Ministers' Shram Shree Award for the year 2005, announced on August 14th 2007 by ministry of labor & employment Government of India.

Mr OP Singh is the first employee of TATA Steel West Bokaro Division, who bagged the most prestigious award. He will receive cash award and a SANAD from prime minister at New Delhi in a glittering function very soon He joined TATA Steel in 1990 as a manual coal loader in underground mines. Currently he is working as senior mining associate operating excavator.

TATA Steel’s West Bokaro Division has fully mechanized eco friendly open cast mines producing 5.5 million tonnes raw coal per year. It is also certified in environment management system ISO 14001.

The objective of the Prime Minister's Shram Awards is to recognize the outstanding contributions made by workmen as defined in the Industrial Dispute Act, 1947 in organizations both in public and private sector and who have distinguished record of performance, devotion to duty of a high order, specific contribution in the field of productivity, proven innovative abilities, presence of mind and exceptional courage and also to the workmen who have made supreme sacrifice of laying down their lives in the conscientious discharge of their duties.

HZL reduces zinc prices by 6.5%

Hindustan Zinc Limited announced on Thursday that it has reduced its zinc prices by 6.5% to INR 127,500 (USD 3,156) per tonne effective immediately.

HZL said that lead prices remain unchanged at INR 137,500 per tonne.

Gammon to enter into logistics business

It is reported that Gammon India Limited, is now thinking of making inroads into the logistics business. A spokesman of Gammon India Limited has reportedly explained that it had been changing its profile to become a project related company, as there are brighter prospects of incremental revenues.

Gammon India, a major player in the infrastructure sector, sees synergies and high growth potential in the logistics business now. Hence, it is considering entry into the logistics business in both port and the road sectors. In ports, it is looking at both physical and services business, while in roads it is thinking of the fleet management and transport services. It expects infrastructure and logistics to converge.

Gammon India recently won an INR 1,200 crore contract to build the Mumbai offshore container terminal besides commissioning 2 berths at Visakhapatnam port.

Gammon India, which had revenues of INR 1,860 crore in 2006-07, at present focuses on infrastructure projects through its unit Gammon Infrastructure Projects Limited and on transmission tower business through Associated Transrail Structures Limited.

Cochin Shipyard 2006-07 income up by 200%YoY

Cochin Shipyard Limited has posted a total income of INR 845 crore in 2006-07 up by 200% YoY and profit after tax of INR 58 crore up by 300 % YoY as compared to 2005-06.

Mr M Jitendran CMD of Cochin Shipyard Limited said that the annual accounts of the company were adopted at the AGM held on September 11th 2007. Mr Jitendran said that Cochin Shipyard Limited’s financial performance is the reflection of the strength and competence of its workforce, which is fully trained and ready to implement more ambitious projects including the construction of India’s first indigenous aircraft carrier.

The production achievement of Cochin Shipyard Limited in shipbuilding during 2006-07 is 181,395 compared to 110,206 in 2005-06 while the ship repair income is INR 241.53 crore in 2006-07 as compared to INR 151.26 crore in 2005-06.

Cochin Shipyard Limited’s net worth at the end of 2006-07 stood at INR 343 crore as compared to INR 267 crore in 2005-06 and the shipbuilding order book position consisted of 16 ships, including 3 bulk carriers, 12 platform supply ships and 1 Air Defense ship.

Government to raise retirement age of port & dock workers

BL reported that, after a meeting held between unions of port and dockworkers with the union shipping ministry, the retirement age of port and dockworkers at all the major ports would increase by 2 years to 60 years with effect from October 1st 2007. However, this is subject to the port and dockworkers withdrawing their proposed strike from September 21st 2007.

Mr SR Kulkarni president of All India Port & Dock Workers’ Federation said that “The department of shipping has provided several assurances to the workers including an increase in retirement age provided we withdraw the notice to go on strike from September 21st 2007.”

On the port workers demand for INR 1,000 per month interim relief with effect from January 1st 2007 till the wages are revised, union ministry has agreed to form a bi partite wage negotiation committee. Union shipping ministry has also agreed to form a committee to realistically assess vacancies in ports and consider the demand regarding regularization of contract workers in ports and docks.

It may be noted that the port and dock workers had threatened to go on strike from September 21st 2007 provided the above mentioned demands were not met. The unions are Water Transport Workers’ Federation of India, All India Port and Dock Workers Federation, All India Port and Dock Workers Federation, Port, Dock and Water Front Workers Federation and Indian National Port and Dock Workers Federation.

Konecranes to expand operations in India

BL reported that Finnish company Konecranes will set up an engineering centre in India and expand its service network in Indian market that it sees as among the fast growing ones. It also plans to carry forward its expertise in servicing cranes and hoists to start servicing machine tools as manufacturing sector in India is buoyant.

Mr Arto Juosila group VP of Konecranes Plc said that “Transport industry, infrastructure building and manufacturing sector in India are a major market. Market in India is growing at about 30% annually with the demand for cranes exceeding 10,000 units a year. This could eventually see Kone cranes one day setting up a hoist factory in India.”

He added that India is a big market but a slow one because of entry barriers like local prices and duties, other expenses, starting salaries were growing affecting competitiveness and there is a shortage of skilled labor.

As per report, India is absorbing over a 5,000 cranes a year with the West and South absorbing 40% and 30% and the North and East 20% and 10% respectively.

While the Asia Pacific market accounted for about less than a fifth of Konecranes’ sales against 65% in the EU and the US.

BHPB sees strong demand for iron ore in 2008

It is reported that world’s biggest miner BHP Billiton forecasts a strong demand for iron ore as mining companies and steel makers prepare for annual price negotiations later this year. Mr Marius Kloppers CEO designate of BHPB recently said that “The market is very tight. It’s very buoyant at the moment.”

Mr Kloppers said the Chinese will be very active in talks in 2007 and there is good demand from China and maybe India.

Merrill Lynch & Company has also said benchmark prices may rise 30% in 2009 because of a shortage of supply as Cia Vale do Rio Doce, Rio Tinto Group and BHPB can not expand production fast enough to meet the gap.

EU to hike its steel quotas for Russia

Bloomberg reported that European Union plans to expand its quota on steel imports from Russia by 28%, reflecting greater EU demand after the entry of Bulgaria and Romania. The limit applies to flat and long products, which represent about one third of the Russia's steel exports to the EU, which expanded to 27 nations when Bulgaria and Romania joined in January.

European Commission said that EU intends to set a 2007 quota on Russian steel of 2.9 million tonnes, up from 2.27 million tonnes in 2006. The Commission in a proposal at Brussels said that the higher ceiling would help ensure the orderly and equitable development of trade in steel. It added that the plan, due to be approved by EU governments in the coming weeks, will supplant a decision made in December to fix Russia's 2007 steel quota at last year's level pending a new agreement and will raise the limit to 3.03 million tonnes in 2008.

As per report, EU is also adjusting the steel quotas of other countries following its expansion in January 2007. In May 2007, it raised Ukraine's steel quota by 32% to 1.32 million tonnes for 2007 and plans to fix a new steel cap in 2007 for Kazakhstan.

US steel imports in August decline by 22% MoM

American Iron and Steel Institute, based on Steel Import Monitoring and Analysis data, has reported that steel import permit applications for the month of August 2007 totaled 2.49 million net tons down by 22% from the 3.20 million net tons recorded in July 2007, a 23% decrease from the July preliminary imports total of 3.22 million net tons and 7% lower than the 2005 monthly average.

Import permit tonnage for finished steel in August 2007 was1.95 million net tons down by 20% MoM from the preliminary imports of 2.45 million net tons in July 2007 and 7% lower than the monthly average of 2.09 million net tons in 2005.

For August 2007, the largest volumes of import permit applications for finished steel outside of North America are

Volume in tons

Mr Andrew G Sharkey III president & CEO of AISI while analyzing the SIMA data for July 2007 said that “While the SIMA data tend to vary month by month, the overall trend continues to be of concern, with imports from China year to date remaining at a high level.”

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

Nucor to acquire Nelson Steel to add mesh capacity

Nucor Corporation has announced that it has entered into an agreement to acquire substantially all of the assets of Nelson Steel, Inc for a cash purchase price of approximately USD 54 million. Finalization of the acquisition will occur after satisfactory resolution of any regulatory approvals, transfer of appropriate permits and other contracts and other closing conditions. The transaction is expected to close during the fourth quarter of 2007 and is expected to be immediately accretive to earnings.

Located at New Salem in Pennsylvania, Nelson is a producer of wire mesh and related products including wire rack decking, light weight galvanized mesh, mine mesh and engineering mesh. With approximately 80,000 tons of capacity and 120 employees, Nelson is a significant player in the mesh markets.

Mr Mike Parrish executive VP of Nucor said "The acquisition of Nelson is a good growth opportunity for one of our existing downstream businesses and complements and expands our wire mesh businesses at Connecticut and LEC. We look forward to welcoming the Nelson employees to the Nucor team."

Nucor and affiliates are manufacturers of steel products with operating facilities primarily in the US and Canada. The addition of Nelson further advances the downstream growth initiatives of Nucor and complements the company's existing mesh operations at Nucor Steel Connecticut and Harris Steel Group.

Australian iron ore miners looking for landed price benchmark

It is reported that Australian miners have been tentatively asking Chinese big mills for negotiating on delivery price basis for 2008 benchmark ore talks, to narrow the freight cost disparity between landed iron ore from Brazil and from Australia. Given current freight differentials, the landed Australian ore is around USD 50 per tonnes cheaper with the shipping charge than Brazilian ore priced at USD 130 per tonnes. Therefore, Australian ore suppliers are keen to share the benefit of the surging freight rates.

They have put forward two schemes for the shipping surcharge. First option is that Australian miners get a freight charge of USD 3 per tonnes to USD 5 per tonne on iron ore shipments to Chinese mills, which has been sought in 2005 negotiations but turned down by Chinese mills. Second option is that suppliers and buyers negotiate on CIF price basis with the transportation issues handled by the miners.

According to industrial analysts However, Chinese leading steel mills like Baosteel are unlikely to accept such deal since they could exert well control over shipping costs from long term shipping contracts. By contrary, those small and medium steel mills may be interested in such pact given current tight availability of vessels.

(Sourced from MySteel.net)

Spot iron ore price in upswing in China

It is reported that as ocean freight rate rises, spot imported iron ore market continues climbing amid insufficient supply. AS per market reports, 63.5% grade Indian ore fine is priced at USD 112 per tonnes FOB or USD 150 per tonnes CIF. Increasing enquiries at ports indicate future price advances. Imported iron roe futures will remain at a high level.

As per report 63.5% Indian ore at Tianjin Port is concluded at CNY 1200 per tonnes or quoted at CNY 1250 per tonnes; 62.5% ore fine at CNY 1100 per tonnes up by CNY 20 per tonnes recently 61% at CNY 1050 per tonnes or USD 115 per tonnes CIF. Due to tight supply, prices for low grade resources also jump. 58% to 59% resource is mainly traded at CNY 880 per tonnes up by CNY 10 per tonnes day on day.

Ocean freight rate is unlikely to retreat in a short term and costs for imported iron ore maintains high. Average freight rates reported are as under
1. Brazil's Tubarao to China - USD 71.62 per tonnes
2. Western Australia to China - USD 27.58 per tonnes
3. India to China - USD 35 per tonnes
4. Philippines to China - USD 37 per tonnes
5. Iran's Bandar Abbas to China and USD 25 per tonnes
6. New Caledonia to China USD 36 per tonnes

Baltic Indices surges
1. BDI 8477, up 67
2. BCI 11526, up 92
3. BPI 8878, up 41
4. BSI 5453, up 65.

(Sourced from MySteel.net)

Chinese production update for January to August 2007

As per the recently released data by MySteel the production of various items related to steel industry during August 2007 and January to August 2007 is as under

In million tonnes

Considering the actual volumes during January to August and taking the August volumes for next 4 months, the estimates for 2007 are as under

In million tonnes

Readers may please note that all data herein are for reference only and official figures will be available later.

(Sourced from MySteel.net)

MMK orders for CR complex equipments

It is reported that Russian Magnitogorsk Metallurgical has awarded an order for the supply of equipment for secondary metallurgical facilities, a set of cold strip units with a coupled pickling line and tandem cold mill and strip refining plant equipment worth some EUR 530 million to SMS Demag AG. The facilities will be put into operation in 2009 and 2010.

The new order for secondary metallurgical facilities, a set of cold strip units and strip refining equipment, comprises the supply of all the mechanical components and the entire electrical and automotive systems.

The cold rolling stage consists of a coupled pickling line and tandem cold mill with an annual capacity of approximately 2 million tonnes. It is equipped with the proven turbulence tank pickling technology and possesses 5 four high stands. The facility is equipped with the rotary inspect inline inspection line to enable quality control to take place during the actual production wherever possible.

The strip processing lines comprise the hot dip galvanizing line and a combined hot dip galvanizing line and continuous annealing line, each with integrated skin pass stands, a recoiling and inspection line and two packaging lines. The entire automation system will be set up in our test facilities beforehand and tested according to the Plug & Work concept. Plug & Work simulates the production sequence and allows the automation functions to be tested and optimized under realistic conditions prior to installation in the works.

Together with MMK’s order for a continuous casting plant and a heavy plate mill placed with SMS Demag at the beginning of 2007, the order volume totals approximately EUR 1 billion. The expansion of the secondary metallurgical facilities, supplied by SMS Mevac GmbH, is a pre condition for the production of high quality steel grades. The supply scope comprises a ladle furnace with two treatment stations, a Duplex RH Top facility, a deslaging stand and two ladle treatment stations. The facilities will also be used for producing pipe and shipbuilding steels, which are to be processed in the 5 meter heavy plate mill.

Incentives for ThyssenKrupp Mobile steel plant in US approved

It is reported that Industrial Development Authority of Mobile County of Alabama in US gave a formal approval to its incentives for ThyssenKrupp AG's USD 3.7 billion steel plant north of Mobile County.

Industrial Development Authority has approved a 20 year package of tax breaks for the project, which is expected to begin production in early 2010 and create 2,700 permanent jobs. The package includes a break on non educational property and sales taxes worth an estimated USD 178 million in its first year.

It is noted that the board of Industrial Development Authority had voted unanimously with 3-0 to approve the tax package, but added a resolution requesting that ThyssenKrupp provide a copy of its diversity policy by the end of 2007.

Gazprom denies interest in buying Vallourec

Reuters quoted a Gazprom spokesman as saying that Russia's gas export monopoly Gazprom is not interested in buying French seamless steel tube maker Vallourec. Refuting a report in a British newspaper, he said that "We are not interested in this company."

Mr Fabrice Baron a spokesman for Vallourec also said by telephone that the company did not comment on speculation.

The Daily Mail said in its market report section on Thursday had reported that the Vallourec board was prepared to accept a bid of EUR 280 per share, 53% above Wednesday's closing price.

Consolidated Minerals backs revised Palmary bid

It is reported that Consolidated Minerals Limited has recommended a revised AUD 1 billion (USD 840 million) offer from Ukraine’s Palmary Enterprises. Palmary has increased its cash bid to AUD 4.50 late Wednesday from its previous AUD 3.95, trumping a bid of AUD 4.10 by investment firm Pallinghurst Resources.

Consolidated said the latest offer is in the interests of shareholders. It had previously recommended its shareholders accept the most recent Pallinghurst bid, made on September 6th 2007, which included the prospect of a top up payment to match the offer price of any subsequent off market takeover offer from a rival bidder.

Shares in Consolidated, which controls about 10% of the world’s supply of manganese a key metal used in steel making rose by 2.9% to 12 year highs of AUD 4.63 on Thursday. Consolidated shares have more than doubled since Pallinghurst led by former BHP Billiton Ltd head Mr Brian Gilbertson, first made an offer in February sparking a succession of counter bids.

Analysts said they expected higher bids to come in as demand for manganese shows signs of growing. Mr Andrew Harrington analyst at Australia and New Zealand Bank commodities said that "With steel making going up, demand for manganese from reliable sources such as Consolidated is going from strength to strength and that’s an attractive position to be in."

Palmary is Consolidated’s largest shareholder with 14.36%, while Pallinghurst holds around 5% of Consolidated. Consolidated has also rejected another offer from Australian miner Territory Resources.

Baosteel lowers HRC export prices for South Korea

According to Steel Daily, Baosteel has recently cut its Q4 of 2007 HR coil export prices by USD 25 per tonnes for shipments to South Korea. At moment, offers are at USD 565 per tonnes CFR, which compares with USD 590 per tonnes CFR for Q3 of 2007.

Mysteel understands that the reason why it lowers its export offer is that its prices are too high in Q3 of 2007 and this has led to complains among South Korean importers. Also the decrease is in line with its cut in EXW prices.

By comparison, Wuhan Steel has just raised export quotations by USD 45 per tonnes. It is offering pipe making HRC at USD 580 per tonnes FOB, re rolling grade material at USD 590 per tonnes FOB, November shipment. The surge in domestic HRC prices is bolstering the rise in export offers. At the same time, many steel mills have shoot up HRC export quotations to USD 600 to USD 610 per tonnes FOB, which is equivalent to CNY 4300 per tonnes plus 5% export tax.

But traders said that such quotations are not workable at moment since its delivered prices to EU are almost same with the EXW price of European steel makers. A Shanghai based trader indicated that "EU buyers would import from third countries at lower levels. There is no need to buy Chinese HRC when there is no margin at all."

Mysteel understands that hence, those who have lifted export offers to USD 600 per tonnes FOB and up probably just want to test the market. They would benefit regardless of acceptance or not since they could earn more when there is transaction; there also would be more room for price negotiation if there were decrease in domestic prices. By raising export offers, steel mills also could avoid profit transfer to traders. At the same time, some steel makers also have put additional clauses in contracts or offers so as to avoid possible rise in export tax rate. The rumor of change in export tax policy, though not probable, has been circulated for a long period.

(Sourced from MySteel.net)

Higher iron ore and coal prices to reduce profits for Chinese steel makers

According to the China Iron and Steel Association profits growth of China's major steel companies have slowed a little as the coal and iron ore prices have crept upward.

Mr Zhang Changfu deputy head of the CISA while speaking at a forum at Baotou in northern China's Inner Mongolia said that net profits of the nation's 77 large and medium sized steel firms soared by 91%YoY to CNY 91.5 billion (USD 12.2 billion) in the first seven months. He said autonomous region combined sales of the 77 producers rose 35.3% to CNY 1.1 trillion from January to July 2007. Six of the producers reported losses of CNY 132 million down by 61.2% YoY.

Mr Zhang noted the steel sector is facing higher costs as prices of coal and iron ore continued to rise and their production costs jumped 8.34% in the first six months. He added that CIF price of iron ore averaged USD 74.64 per tonnes during January to June 2007, USD 13.23 higher than January to June 2006.

He also added that the iron ore price hikes alone added additional costs of CNY 18.89 billion to the steel sector as China imported 187.9 million tons of iron ore in the first six months.

Erdemir H1 net profit surges by 266% YoY

Turkish steel maker Erdemir has posted a 266% YoY rise in January to June 200 net profit to TRL 375.8 million. Its sales rose by 26% to TRL 2.84 billion and Net operating profit rose by 68% to TRL 458.2 million while financial expenditure fell to TRL 48.2 million from TRL 320.6 million in 2006.

According to announcement by Erdemir, its profit margin during January to June 2007 also increased to 13.2% from 4.6%.

This performance is attributed to cost control and lower financial expenditure.

Minerita and MMX in talks over iron ore exports cooperation

BNamericas reported that Brazilian iron ore miner Minerita and compatriot mining and metals group MMX are in talks on an iron ore partnership.

The report cited Mr Marco Antônio Antunes logistic director of Minerita as saying that MMX would acquire the raw steelmaking material from Minerita and resell it to markets abroad. He said “If prices are good we will consider exports. We are concerned about the appreciation of the real versus the US dollar.”

He said that "We don't want to have to go out looking for clients adding its options would be to sell the iron ore to MMX, Brazilian steel maker CSN or compatriot mining and metals group CVRD.”

According to earlier reports, Minerita is in talks with the Minas Gerais state government and also with companies to install a steel or pig iron complex in the state that would use iron ore produced by the miner. According to Mr Antunes "We could pursue export opportunities and also provide the iron ore to the complex."

MMX is developing two iron ore projects
1. Amapá iron complex, which includes a port terminal in the Santana municipality. US based iron ore and pellet producer Cleveland Cliffs has a 30% stake in this project
2. Minas-Rio complex in Minas Gerais and Rio de Janeiro states, which entails the Açu port terminal. London based mining giant Anglo American owns 49%

Minerita was founded in 1972 and has iron ore reserves of some 350 million tonnes.

Severstal denies plans to raise USD 1 billion loan

Interfax reported that Severstal has denied reports that it is planning to seek a ten year loan of USD 1 billion and that it has sent proposals to banks to syndicate such a loan. The report cited Ms Olga Antonova of Severstal as saying that "We officially deny this information."

Two sources in banking circles had told Interfax earlier that Severstal intends to seek a ten year loan of USD 1 billion. One of the source said that "The company has already sent its request for proposals to syndicate the loan, which it intends to raise at LIBOR+1.25%.”

China and Iran enter into long term agreement for chrome ore

Chinese media reported that the Asian Energy Development Company, Limited has entered into a long term supply agreement with an Iranian company, in which Iran will ship high grade chrome ore to China for the use in ferrochrome production and China will ship coke to Iran for its iron industry.

Latin American SS demand to grow by 6% per year till 2011

BNamericas citing Mr Sérgio Mendes commercial and services director at Brazilian specialty steelmaker Acesita said in São Paulo reported that Stainless steel demand in Brazil and South America is due to grow 6% per year through 2011 above the world average.

Mr Mendes said that “Brazil has a per capita stainless steel consumption of 1.4 kg a year. There is an enormous potential for growth. By comparison Taiwan has a per capita usage of 43.4 kilogram.”

He added that “A good level of economic activity from the local civil construction and automobile sector, in addition to new projects in the petrochemical and sugar and ethanol industries are pushing upward demand for the specialty steel in Brazil.”

According to Mr Mendes Acesita has an operational flexibility that allows the company to maximize production of certain products while others are in a downward cycle.

Minas Gerais state based Acesita has liquid steel capacity of 900,000 tonnes per year.

Ma'anshan Luohe Iron Ore Mine put into operation

It is reported that Ma'anshan Steel's Anhui's Lujiang based Luohe Iron Ore Mine was put into operation on September 6th 2007.

The Luohe Iron Ore mine is reported to have proven reserve of 500 million tonnes of iron ore with average grade of 35.15%.

Total investment of CNY 1.56 billion will be poured to exploit 3 million tonnes in the first stage which covers seven parts including ore concentration, ore tailings, water supply, power supply and so on. It can realize sales revenue of CNY 800 million and pretax profit of CNY 200 million.

The second stage will deal with 6 million tonnes to 8 million tonnes.

Ma'anshan Steel has the controlling share of 55% in this mine.

(Sourced from MySteel.net)

Japanese steel maker may set up steel plant in South Africa - Report

Bloomberg recently reported that Australian iron ore explorer Aquila Resources Ltd said that Japanese steelmakers have expressed interest in building a mill in South Africa, should the company discover a large iron ore deposit.

Mr Toni Poli CEO of Aquila Resources Ltd said that “Aquila aims to start drilling next month at Thabazimbi in South Africa's Limpopo province and Sishen in the Northern Cape. He added that the two projects have attracted interest from a handful of Japanese steelmakers.

Johannesburg based Business Report citing Mr Poli said earlier the producers might build a steel mill if a deposit of at least 1 billion tonnes is found. But he declined to name the companies or confirm that figure. Mr Poli said that “We see the potential for a large discovery in the Northern Cape. We are quite excited about the two projects we have assembled in South Africa.''

Puda Coal to acquire Jingle Muguashan coalmine

Puda Coal, Inc has announced that it has entered into an agreement to purchase the Jingle Muguashan Coal Mine for a purchase price of CNY 460 million (USD 60.7 million).

Pursuant to the agreement, the first payment of CNY 200 million will be made within 10 business days after the Company's receipt of the mining permit. A second payment of CNY 150 million will be paid within 10 business days after the Company has been granted a commencement permit by the Shanxi municipal government, with the remaining CNY 110 million to be paid within one year after the receipt of the mining commencement report. The transaction will be funded through external financing. The Company is negotiating with banks and funds with respect to financing.

The Jingle Muguashan Coal mine, located on 18.166256 square kilometer of land in Jingle County is approximately 100 kilometers from Puda Coal's headquarters in Taiyuan. Drilling records indicate that there is approximately 55.6 million tonnes of raw coal in place. The coal reserve is of high grade thermal coal, which can also be used, in blended coking coal. The plant is expected to commence mining operations in 2008 and to generate positive cash flow in 2009.

Mr Zhao Ming chairman & CEO of Puda Coal's said that "This acquisition is very positive and will support our vision of becoming an integrated coal production and coal washing company with excellent near and long-term potential in China. As the price of raw coal continues to increase, our new coal reserve will allow us to take advantage of this market opportunity as well as ensuring a consistent supply of coal to our washing operations."

Puda Coal, through its affiliates and controlled entities, supplies premium grade coking coal and currently possesses 3.5 million tonnes of annual coking coal cleaning capacity.

Polish steel makers focusing on flat products

According to the information from the Polish Steel Association, in Poland’s steel industry there is quite large production for steel long products, which accounts for 66% comparing to 34% only for flat steel products. The association added that the current steel consumption in the Polish market falls largely in steel rebar and wire rods.

However, due to the growing demand for steels coming mainly from auto industry and white good sectors, mills’ production focus is shifting from long products to flats, especially after ArcelorMittal’s hot strip plant in Poland was commissioned at the end of July 2007.

Poland imports 6.5 million tonnes per year of steel and exports 4 million tonnes per year. EU is the major country for both its imports and exports.

Ural Mining wins Yuzhno Shameisk molybdenum deposit

It is reported that Basic Element has lost monopoly for molybdenum production in Russia after Ural Mining and Metallurgical Co emerged as the second player on the market after winning the tender to explore and develop Yuzhno Shameisk deposit of molybdenum ore.

As per report, the battle for Yuzhno-Shameisk deposit was really tough and UGMK had to offer RUB 330.6 million, which had a starting price was RUB 58 million.

Yuzhno-Shameisk deposit of molybdenum ore is located close to Malyshevo village in the Sverdlov region of Russia. The C2 ore reserves are estimated at 79.2 million tonnes, including 52,900 tonnes of molybdenum. As the metal content is very low in the ore, UGMK will have to acquire an ore mill in the next move.

Brunei inks MoU with Far East Energy to asses coal deposits

It is reported that in an effort to explore potential energy resources in the Sultanate of Brunei, a MoU was recently signed between the government of Brunei and the Far East Energy Pty Ltd from Australia on August 25th 2007 for the assessment of coal deposits in Brunei.

Mr Hj Zolkiflee Hj Abd Karim the Acting Director of the Petroleum Unit signed the MoU on behalf of the Brunei government while Miss Julie Hall chairman signed on behalf of Far East Energy Pty Ltd.

Mr Hj Zolkiflee in his welcoming speech said that the MoU is part of Petroleum Unit's continuing efforts to investigate potential energy resources other than oil and gas in the country. He stated that even though coal is widespread and of reasonable quality in certain places, its true potential has not been subjected to systematic exploration utilizing the current acceptable technology. Hence, to date it has not been possible to map and determine any potentially commercial targets for exploitation. The assessment would initially take a regional approach and thereafter target specific areas for more extensive exploration work under prospecting licenses.

Coal was reportedly found in the country as early as 1837. Coal deposits are known to exist in several areas in the country such as Kianggeh and the Mentiri valley in the Brunei-Mnara district, Labu syncline in Temburong, as well as in some parts of the Belait District. Between 1888 and 1924, Brunei produced about 0.6 million tonnes of coal, most of it coming from the Brooketown Colliery in Muara and some from Buang Tawar area at Pulau Berambangan. Production, however, ceased by 1924 due to the world economic recession and fall in coal prices.

As per report Far East Energy Pty Ltd has extensive experience, technical and managerial expertise in coal exploration, mining and in mineral financing.

Burj Dubai becomes world's tallest free standing structure

Khaleej Times reported that Burj Dubai has now surpassed the height of the world's tallest free standing structure CN Tower at Toronto in Canada, which at 553.33 meters has been the world's tallest free standing structure on land since 1976. Burj Dubai already holds the distinction of being taller than Taipei 101 in Taiwan, which at 508 meters has held the tallest building in the world title since it opened in 2004.

At 555.3 meters, Burj Dubai has now scaled 150 livable levels, the largest number of storeys for any building in the world.

Mr Mohamed Ali Alabbar chairman of Emaar Properties said "Burj Dubai is setting new world records in construction of super tall buildings and the accomplishment of being the world's tallest free standing structure is another defining moment for the multinational team of over 5,000 people who are using their collective intelligence to make this iconic structure a symbol of human achievement. This architectural and construction masterpiece is truly an inspirational human achievement that celebrates the 'can do' mindset of Dubai."

When completed, Dubai's landmark tower will be the tallest structure in the world in all four of the criteria listed by the Council on Tall Buildings and Urban Habitat, which measures the height of a building from the sidewalk level of the main entrance to the structural top in following categories
1. Height to the structural top
2. The highest occupied floor
3. To the top of the roof
4. To the tip of the spire, pinnacle, antenna, mast or flag pole

As per report, more than 320,800 cubic meters of reinforced concrete and 63,300 tonnes of reinforcing steel have been used in the tower's construction so far. Burj Dubai became the tallest free standing structure in the world in just 1,325 days since excavation work started in January 2004. Emaar Properties has teamed up with South Korean construction major Samsung Corporation, New York based Project Manager Turner International and global engineering consultancy Hyder Consulting to develop Burj Dubai based on the design of internationally admired architect Adrian Smith and Skidmore, Owings & Merrill of Chicago.

Sumitomo hikes domestic SBQ plate prices

JMB reported that Sumitomo Metal Industries has apparently agreed with domestic shipbuilders to increase the plate base price by JPY 3,000 per tonne for October 2007 shipment.

As per report, Sumitomo is in talks with the users to seek higher extra charge for shot primer and high tensile steel grades.

Botswana getting interest for its coal deposits

It is reported that Botswana is getting increased interest from mining companies for its coal resources which amount to 200 billion tonnes. There is a high level of interest in coal to meet energy demand and as such Botswana is looking to grow coal mining.

Mr Akolang Tombale, Botswana's permanent secretary in the Ministry of Minerals, Energy and Water Resources said last week during a presentation at the Africa Downunder conference that despite Botswana huge coal resources, the total output was only 1 million tonnes a year.

Mr Tombale said Coal was first found in Botswana in 1897. The majority of exploration in the country for coal was completed over the 20 years to 1989.

Mr Tombale said coal could be exported from Botswana to Zambia, Zimbabwe and the Democratic Republic of the Congo as well as to India and China.

He said that another possibility is for coal to liquids production in Botswana. He said this is a possibility that is being considered by the private sector.

Lindab bags SEK 50 million order in Russia

Swedish ventilation and construction systems provider Lindab International AB said that it has secured a SEK 50 million order in Russia. The order covers the delivery of 4 pre engineered single and multi storey steel buildings for use as leisure centers in the Nizhniy Novgorod region of Russia

The order will be carried out by Lindab's building systems subsidiary Lindab Astron.

Grevie based Lindab develops, manufactures and markets sheet metal products and system solutions for the construction sector. It has 5,000 employees in 29 countries and reported sales of SEK 7.61 billion in 2006.

Red River Resources to start drilling Feral iron ore property in WA

It is reported that Red River Resources Limited is set to undertake its first major iron ore drilling program at the Feral Prospect in the Mid West region of Western Australia, in late September 2007. The drilling program follows the successful completion of a rock chip sampling program at the Feral Prospect in May 2007.

The program will test several hematite targets over a combined 10 to 12 kilometer length. The initial program will comprise a total of 4,000 meters of Reverse Circulation drilling over approximately 80 holes with the option to extend the program with additional drilling until mid December.

Mr John Karajas MD of Red River Resources said the successful discovery of DSO would potentially lead to the rapid development of a mining project. He said "This drill program is designed to provide the Company with a better understanding of both the hematite and magnetite mineralization in the region, which has already proved to be a highly prospective address for iron ore exploration and project development."

The tenement, E70/227 is located 40 kilometer west of the Karara Magnetite Project and Mungada Hematite Project, currently being developed by Gindalbie Metals Ltd and Ansteel. Feral Prospect is well located to facilitate rapid development, lying only 10 to 15 kilometers away from the railhead at Perenjori, which is in turn only 200 kilometer from the Port of Geraldton or the proposed new port at Oakajee.

National Bank of Egypt endorses loan to a new DRI plant

It is reported that National Bank of Egypt is said to have endorsed an LE 1 billion loan to finance a new DRI grade steel mill at North West Suez Gulf Zone involving LE 1.6 billion estimated investments. No mention was given to project owner.

The project, which is scheduled to start commercial production by the end of 2009, would dispose annual capacity of 1.7 million tonnes of steel.

Mr Mee appointed as VP sales and transportation for Cleveland Cliff

Cleveland-Cliffs Inc has announced the promotion of Mr Terrence R. Mee to VP of sales and transportation effective September 16th 2007. Mr Mee currently serves as Cliffs’ GM sales and traffic and has been with the Company in positions of progressively increasing responsibility for the past 10 years.

Mr Mee holds an MBA from Case Western Reserve University and joined Cliffs as a Finance Associate upon graduating in 1997. Earlier this year, he completed the Advanced Management Program at the Harvard Business School.

Mr William Calfee executive VP of Cliffs’ Commercial North American Iron Ore said “Mr Terry’s leadership and understanding of our business in North America has been instrumental to our Company’s achievements, including our expanding offshore marketing efforts, which have contributed to Cliffs’ transformation to an international mining entity. We look forward to his ongoing contributions in iron ore, as well as in Cliffs’ growing presence in the metallurgical coal markets as a result of our recent acquisition of PinnOak Resources.”

Cleveland-Cliffs Inc, headquartered in Cleveland, Ohio is an international mining company, the largest producer of iron ore pellets in North America and a major supplier of metallurgical coal to the global steelmaking industry.

Moody's assigns Ba3 corporate family rating to Erdemir

Ratings agency Moody's Investors Service announced that it has assigned a 'Ba3' corporate family rating with a stable outlook to Turkish steel producer Eregli Demir ve Celik Fabrikalari, citing its strong market position in Turkey, low cost production base and strong internal cash generation which supports its organic expansion programs. It also assigned a Turkish national scale rating of 'Baa1.tr' to Erdemir.

Moody's said that the rating reflects a high level of earnings cyclicality, Erdemir's currently limited vertical integration, the risks involved with the significant capital expenditure program currently under way and the greater risks associated to its operations in Turkey, where a more volatile economic, financial and political track record indicates a higher business risk than in other developed countries.

Auditors re certify Mechel Beloretsk plant for ISO 9001

Mechel OAO has announced the completion of the quality management system audit at its subsidiary Beloretsk Metallurgical Plant, resulting in the re certification of its compliance with the ISO 9001:2000 international standards.

Beloretsk Metallurgical Plant obtained its original certificate for the quality management system’s compliance with ISO 9001:2000, issued for 3 years in 2003. Since then, it undergoes annual compliance audits to extend its effective certificate and a re certification audit is conducted at the plant every 3 years to re certify its quality management system’s compliance with the standard. The latest regular compliance audit of the quality management system was completed at Beloretsk Metallurgical Plant in September 2007.

In the process of the audit, the auditors visited the plant’s many units and departments. They examined the quality management system processes for compliance with the internal document requirements and the requirements for ISO 9001:2000. Summarizing the audit results, the inspection agency noted that Beloretsk Metallurgical Plant complies with all the requirements of ISO 9001:2000 and constantly develops its quality management system.

Report on US aluminum market

The aluminum market is characterized by huge demand and supply gap with respect to both primary and secondary aluminum. Market demand is regulated largely by the need for aluminum by the various industry sectors particularly transport and packaging sector.

The US aluminum industry relies heavily on imports to meet its demand. With the incessant rise in imports, the country is becoming more and more dependent. Aluminum is chiefly imported from a number of countries such as china, Australia etc where the cost of production is relatively less. This makes imported aluminum cost effective, thereby posing a significant challenge for the domestic producers.

Energy and labor are two of the major costs for companies in the aluminum industry. Each of these represents a share of about 33% of the total cost of smelting production in the US. Kentucky is one of the most attractive regions with favorable labor and energy costs, along with low state & local taxes. The overall cost of doing business in Kentucky is 15% below the US average.

RNCOS report “US Aluminum Market (2006)” provides extensive research and objective analysis of the Aluminum Market, its performance and future prospects to helps analyze the trends and the developments in the US Aluminum Market vis à vis the global scenario. The report gives crucial insights into the various facets of the overall industry including aluminum production and consumption by product and industry, price movements, import levels, supply and demand, demand by industry sector, Cost analysis etc. This report also highlights the success factors and challenges in the US aluminum industry. The research report also addresses the issues and facts that are critical to business success.

If you are interested to know more about it please visit Report on US aluminum market or send a mail at research@steelguru.com