SAIL gets PM support on Chiria iron ore mines

PTI reported that Dr Manmohan Singh prime minister of India has assigned Chiria mines to Steel Authority of India Limited and has suggested to the Jharkhand government to ensure the same.

The report cited a government source as saying that "In a letter to the Jharkhand government, the Prime Minister is understood to have suggested that it should expedite allocation of the mines to Steel Authority of India Limited, at the earliest to safeguard its interest. The Prime Minister has asked the state to immediately allow SAIL access to 1 billion tonne of iron ore and for the remaining 1 billion both SAIL and Madhu Koda government could strike a separate deal to allow the PSU to mine the mineral to meet its capacity expansion in Bokaro."

SAIL already enjoys the support of the union steel ministry over ownership on 2 billion iron ore mines. A top steel ministry official said that "Even Mr Ram Vilas Paswan union steel minister had also said that 2 billion tonnes be given to SAIL and the remaining, if any, be kept for the private players. He has opposed sharing of iron ore from the mines as that could be prejudicial to the long term interest of SAIL."

SAIL through its merger with IISCO last year had won the mining rights to three of the 6 blocks in Chiria while the remaining 3 are sub judice in Jharkhand High Court. Following cancellation of leases by the state government, SAIL approached the Mining Tribunal, which subsequently asked the state to revoke the cancellation. SAIL and the state government are now fighting the issue in court. Meanwhile, the centre has initiated efforts to evolve an amicable solution to the imbroglio and steel ministry officials have held talks with state government officials for a possible out of court settlement on the issue.

SAIL is carrying out modernisation of its Bokaro Steel Plant and has also proposed to set up a 10 million tonne Greenfield steel project near it.

Indian iron ore exporters claim to be hit by strengthening rupee

Indian domestic iron ore miners said that their export revenue has slumped by about INR 1,000 crore owing to rupee appreciation and demanded abolition of export duty on the mineral to offset the losses despite the spot export prices of iron ore nearly doubling in last few months.

Mr Rahul N Baldota president of Federation of Indian Mineral Industries said that “We have already lost about 15% of our export revenue, which is about INR 1,000 crore, owing to rupee appreciation. We seek immediate abolition of export duty to enable us offset the losses sustained. Imposition of export duty coupled with rupee rise against the dollar has served a double whammy to the miners and could lead to further trouble if no succor was provided to them.”

Mr Baldota said that “The only way through which the government could help us was to remove the export duty on iron ore. Another way to bail out the iron ore miners of the current situation was to abolish the service tax currently levied on mining the mineral. If this is done it would also provide a reprieve to us.”

But the steel industry was not impressed by FIMI’s assertion on sustaining losses, with the Indian Steel Alliance arguing that rising iron ore prices, both in domestic market and internationally, would definitely offset their losses. Mr Moosa Raza president of Indian Steel Alliance said that “The Indian Steel Alliance feels that there has been tremendous appreciation of the prices of iron ore both domestically and globally. Rupee appreciation may be absorbed by them in that case.”

Indian steel industry and miners are at loggerheads on the issue of ore export with the former saying that unabated exports of the mineral could seriously jeopardize the massive capacity expansions announced by major steel companies as they needed assured raw material linkages. On the other hand, minors contended that they were constrained to export iron ore since the domestic steel companies were unable to off take surplus production.

Indian steel industry asks for review of DEPB scheme

PTI reported that Indian domestic steel industry on Friday asked the government to review the DEPB scheme to adequately protect the interest of exporters due to the rupee appreciation impacting export realization severely.

Mr Moosa Raza president of Indian Steel Alliance told agencies that "Rupee appreciation will have an impact on the export realization of our leading steel producers and the commerce ministry has to take account of this and could review the Duty Entitlement Passbook Scheme to ensure that exports of value added steel are adequately protected.”

Mr Sajjan Jindal vice CMD of JSW Steel also said that exports would be affected and the steel producers could lose out on value addition. He said "Our exports would be affected and on value addition we may lose out. The government should ensure that interest of the steel industry was secured.”

Mr Jindal also pointed out that another possible fallout of the Rupee appreciation could be that steel imports might become cheaper which could also adversely affect the domestic producers. He urged that "The government should strengthen its anti-dumping mechanism to ensure that the industry's interests were duly protected as the current mechanism to ensure the same was inadequate.”

SAIL RSP sponsors two for special Olympics at Shanghai

Statesman News Service reported that Steel Authority of India Limited’s Rourkela Steel Plant is sponsoring two students of Home and Hope, an institution for the mentally challenged, patronized by RSP, to participate in the 2007 Special Olympics World Summer Games to be held at Sanghai in China, from October 2nd to October 11th 2007.

The students are Mr Firoz Alam and Mr MV Biswanath, who have won laurels in national level sporting events. Mr Firoz was selected on the basis of his performance in the Special Olympics National Games held at Jamshedpur in November 2006, in which he made 26 goals in handball. Mr Biswanath had bagged two gold and one silver medals in cycling events in the Special Olympics National Games held in Raibareily in October 2006.

Orissa CM calls for utilizing low grade iron ore

It is reported that Mr Naveen Patnaik chief minister of Orissa has reiterated the demand for a freeze on the export of iron ore at the current level and phase it out in a few years time.

Mr Naveen, while addressing a seminar organised by the confederation of Indian industry, said that besides imposing a freeze on the export of iron ore, new technology has to be brought in to utilise low grade ore. If China can utilise iron ore of 35 grade to 40 grade, there is no reason why India cannot do so.” He called for substantial investment in beneficiation, sintering and pelletisation.

Mr Naveen said that despite being rich in coal, iron ore and bauxite, Orissa is considered to be one of the poorest states in the country, as mineral resources have not been fully utilised. He also sought the assistance of mining companies and mineral based industries for strengthening of basic infrastructure in State.

Kandla Port handles 25.8 million tonnes in 5 months

It is reported that Kandla Port has crossed another milestone by handling 5.07 million tonnes of cargo in August 2007, the highest monthly throughput achieved by any major port in India. During the period of April to August 2007, Kandla Port handled an aggregate throughput of 25.877 million tonnes and maintained its number one position.

A Kandla Port Trust release said that “Had the Essar refinery at Vadinar not been shut down for routine maintenance during August, the Port’s performance would have been even better.”

According to the release, during the current year, the average rate of discharge has been 6,749 tonnes per day, as against 5,842 tonnes up by 16%.

Mr A. Janardhana Rao, Chairman of KPT, has expressed confidence that the same trend in cargo handling and expansion will continue in the months to come despite the stiff competition from neighboring ports.

NMDC to scout for new iron ore deposits in Chhattisgarh

Reuters reported that National Mineral Development Corp is looking to explore new iron ore deposits in Chhattisgarh.

The report cited a NMDC official as saying that "We have applied for acreage permit, looking at the possibility of low grade iron ore deposits in the state. It would need two to three years to ascertain the kind of deposits available. The investments on further prospecting will only be decided after completing the preliminary work.”

NMDC recently signed a joint venture with the Chhattisgarh government for developing a new deposit at Bailadila, but the actual mine production from the site could take three to four years. Bailadila has 14 iron ore deposits with high quality iron ore.

The official said that NMDC's iron ore production in the financial year ending March 2008 was likely to rise to 31 million tonnes from 27 million last year. It has a target of raising iron ore production to 50 million tonnes by 2015-16.

NMDC, which accounts for about 15% of iron ore production in India, operates 3 mines, 2 in Chhattisgarh and 1 in Karnataka. It is a leading supplier of iron ore to domestic steel companies such as Rashtriya Ispat Nigam Limited, Essar and JSW Steel.

New mineral policy to be discussed in winter session

Dr T Subbarami Reddy union minister of state for mines said that discussions have been carried out for the mineral bearing states to obtain a hearing by the centre before the finalisation of the new national mineral policy seem to have failed.

Dr Reddy said that "The allegation that the centre is trying to snatch the powers of the mineral rich states and dominate them is baseless. In fact, these states would gain and earn cash under the proposed new policy. Everything has been discussed and clarified. The policy would be placed before the Cabinet and then to the Parliament during the winter session." He also claimed to have held detailed discussions with the Mr Naveen Patnaik chief minister of Orissa and clarified all issues.

Justifying the policy initiatives, he pointed out the present rules are time consuming, discouraging and old fashioned. The new policy would attract global companies who would, in turn, bring in the technology for improved and sustainable mining activity.
Drawing attention to another significant provision under the proposed new mineral policy Dr Reddy said: "Earlier applications for PL or ML used to be held up for years together, but now a fixed time frame has been given, failing which the applicant can move a tribunal which would be soon set up. The centre will have no role in this, and the tribunal would judge on the lines of merit of the applicant."

It may be noted here that the chief ministers of Jharkhand, Chhattisgarh, Karnataka, Rajasthan and Orissa had raised several objections to the Hoda committee report. The mineral policy, which has been formulated, is based on this. They had jointly sent petitions to the centre and declared that they be taken into confidence before the draft policy is placed for cabinet approval.

Essar Construction to lay major portion of Vadinar to Bina crude pipeline

Essar Projects Limited’s subsidiary Essar Constructions (India) Limited has secured a INR 186 crore contract from Bharat Oman Refineries Limited for laying 504 kilometer of a 930 kilometer 24 inch crude oil pipeline from Vadinar in Gujarat to Bina in Madhya Pradesh.

Essar Constructions (India) Limited will execute the longest section comprising three stretches totaling 504 kilometers from Vadinar to the Gujarat-Madhya Pradesh border. The scope of work includes residual engineering, laying of the 24 inch pipeline, including building of a dispatch terminal, intermediate pumping stations and sectionalising valve stations.

Essar Constructions (India) Limited has executed various oil and gas pipeline projects and laid over 2,000 kilometers of hydrocarbon pipelines in the last three years for oil and gas majors such as Indian Oil Corporation, Hindustan Petroleum and Gujarat State Petronet Corporation. Currently, the company is executing an additional 900 kilometers of pipeline projects.

Reliance East West pipeline may be ready by March 2008

It is reported that Reliance Gas Transportation Infrastructure Limited is expecting to complete the implementation of 1,440 kilometers long pipeline project from Kakinada to Ahmedabad by March 2008. The pipeline will transport gas from Reliance Industries Limited’s east coast fields to Western India.

According to a source, Reliance Gas plans to put in place the East West pipeline for carrying gas from the D6 block of the Krishna Godavari Basin 3 months ahead of the scheduled production from the block. It is targeting the June or July 2008 deadline for gas production from the block. As per report, work is in progress at different locations and the company expects to meet the deadline.

RGTIL plans to connect the pipeline to GAIL India Limited’s network near Uran. It would be a 2 way pipeline, with capacity to transport 120 million standard cubic metres per day of gas.

An empowered group of ministers examining Reliance’s gas pricing formula recently gave its nod with minor modifications. According to the modifications proposed, the gas price at the delivery point, Kakinada, will be USD 4.20 per million British thermal unit excluding the marketing margins, transportation tariff and taxes. Meanwhile, Reliance India Limited has also proposed a new tariff plan for the transportation of gas from its KG find. As per RIL’s proposal, consumers close to KG basin will pay transportation charges of USD 0.17 per million British thermal unit, while those in other parts of the state will pay USD 0.45 per million British thermal unit and consumers in the rest of the country would pay USD 0.93 per million British thermal unit.

Indian small hydropower projects have carbon credit potential

BL reported that India, which accounts for 31% of world’s clean development mechanism projects, sees a huge opportunity for small hydropower projects to get carbon credits or certified emission reductions.

There is an estimated potential of 15,000 MW from small hydropower projects in India out of which, about 2,000 MW has been tapped so far.

Mr V Subramanian union secretary in the ministry of new and renewable energy said that “This shows that there is a significant potential for taking up clean development mechanism projects in this segment. We have 70 small hydro projects in the pipeline to get the clean development mechanism status. Of these, 31 have already been registered, while 34 are at the validation stage.” He also pointed to the lack of understanding about clean development mechanism requirements and methodologies.

Mr Michel JL Pommier regional coordinator (South Asian Region) of World Bank’s Carbon Finance arm said that hydropower was a huge opportunity. He added that “There are projects Okayed in countries like Brazil and Pakistan. This is a good opportunity for India.”

Chennai Port signs fresh MoU with Zeebrugge Port

Chennai Port Trust, in a press release said that it has signed a fresh MoU with Belgium based Port of Zeebrugge.

It is noted that in 1997, the 2 ports signed an MoU with the intention of cooperating in various fields related to maritime transportation and port development and working together as sister ports. At that point of time, both ports laid accent on handling of bulk cargoes such as coal and iron ore.

Over the last few years, the focus of Zeebrugge Port has shifted to handling of clean cargoes such as cars and containers. In these circumstances, since both ports are working towards a common goal, the need to draft a fresh MoU was realized.

According to the release, the fresh MoU is expected to enlarge the scope of cooperation between the 2 ports and enable active interaction between the management and personnel of the two ports for their mutual benefits. Chennai port in particular will draw on the available expertise in Zeebrugge Port in the field of containers, car carriers and cruise vessels.

Nuziveedu Seeds to invite bids Tidong hydel project in HP

ProjectsToday reported that Hyderabad based Nuziveedu Seeds Limited is likely to invite bids for setting up a 100 MW hydroelectric power project on Tidong khad, a tributary river of Satluj in Kinnaur district of Himachal Pradesh.

Officials of Nuziveedu Seeds Limited said that all necessary clearances had been received and preparations were on for inviting tenders from civil contractors and equipment suppliers. Tenders for the above jobs are most likely to be invited next month. They also informed that plans were afoot to set up a 25x2 MW hydel based power plant in Shimla district in Himachal Pradesh.

BHEL to enhance scope of quality circles

BS reported that Bharat Heavy Electricals Limited would enhance the scope and number of quality circles from the present 998 across its units.

Mr AV Krishnan GM of BHEL, while addressing the 18th inter unit quality circle convention, said that there were over 1,200 quality circles a few years back but this number had come down to 998 due to voluntary retirement scheme and superannuating exercises.

At present, the quality circles cover 14 areas like manufacturing and production, quality improvement productivity, cycle time and cost reduction and safety. Quality circles would also be set up in non manufacturing areas such as outsourcing, human resources activities, vendor development, engineering and design and also for canteens and medical services.

Meanwhile, the 3 circles of BHEL namely Trichy, Hyderabad and Haridwar, would attend the international quality convention to be held in October 2007 at Beijing.

CISA warns Australian iron ore miners over prices

It is reported that China has warned BHP Billiton and Rio Tinto not to abuse Australia's position as the preferred source of iron ore to force price increases on its steel mills, which are desperate for scarce supplies.

Mr Zhang Xiaogang chairman of China Iron and Steel Association is calling for a cooperative partnership with Australian iron ore exporters ahead of critical price negotiations, which would start in October 2007. Mr Xiaogang said that a long term strategic approach was needed rather than a deal based on the tight supply environment.

He said that “It is due to the growth of the Chinese steel industry that the Australian mining industry is booming. We need a cooperative partnership when the market is good we all take profit together, when the market is bad we share risks together. Australian iron ore suppliers and Chinese mills are linked into a chain if one part is broken all of us will fall into the sea.”

Australian miners, which have enjoyed a 189% rise in the iron ore price since 2002 are arguing they should reap some of the benefits flowing to Chinese mills because of lower shipping costs from Australia compared with rival countries. An industry analyst said the exporters will be pushing for at least a 40% price rise but it will be like getting blood out of a Chinese stone.

Marubeni acquires interest in Queensland Coal Mine Management

Marubeni announced that through its wholly owned subsidiary Marubeni Coal Pty Ltd, it has completed the purchase of 1/3 shares of Queensland Coal Mine Management Pty Ltd which holds 70% interest in the Jellinbah East Coal Mine and Lake Vermont Coal Mine through the acquisition of Ingatatus Pty Ltd.

Marubeni's commercial objective in buying the shares in Queensland Coal Mine for about JPY 40 billion includes the future expenditure for expansion and development is to increase its interest in the Jellinbah East Coal Mine by 15% to 38.33% and to increase its interest in the Lake Vermont Coal Mine by 10% to 33.33%.

Both coalmines have enormous open cut coal reserves and are highly competitive in the operating cost and product coal quality. Jellinbah East Coal Mine currently produces PCI coals at approximately 4 million tonnes per annum for the international steel industry. Lake Vermont Coal Mine is planned to achieve its first railing of product coal in the first quarter of 2009 and will produce coking and PCI coals with low ash and low sulphur at approximately 3 million tonnes per annum to 4 million tonnes per annum.

Through the acquisition Marubeni will participate in the coal mine management more deeply and aggressively as the major owner of Jellinbah East Coal Mine and Lake Vermont Coal Mine with a view to expanding the production to 10 million tonnes per annum or more in the future, which will contribute to the stable coal supply for customers in Asia, South America and other areas. After the acquisition, Marubeni will have total equity coal production capacity of 6 million tonnes per annum and will become one of the top PCI coal trading companies.

Marubeni Corporation was established in 1858 and is a core company of Marubeni Group, one of Japan's leading general trading houses. Its operations encompass domestic import, export and offshore trade. Activities range from the development of natural resources to the retailed marketing of finished products.

Acesita sees 6% per year growth in SS demand in Latin America

Brazilian specialty steel maker Acesita said that stainless steel demand in Brazil and South America is due to grow 6% per year through 2011 above the world average.

Mr Sérgio Mendes commercial director of Acesita at a meeting promoted by analyst and investor association Apimec said that “Brazil has a per capita stainless steel consumption of 1.4 kilogram a year. There is an enormous potential for growth. Worldwide stainless steel usage is due to grow 5% per year through 2011. “

He said that “Currently, the sector is going through a downward cycle on international markets due to a decrease in nickel prices which result in a reduction in stocks and a drop in apparent demand. This international movement impacts the local market. However, 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.

CISA cooperating with Mhag to ease iron ore pressure

It is reported that China is now under cooperation negotiation with Mhag Severcos E Mineraca a young iron ore giant in Brazil. This is hopeful to help China weigh heavier in the upcoming iron ore benchmark price negotiation.

Mr Luo Bingsheng VC of China Iron and Steel Association revealed recently at The 2nd China Steel Raw Materials & Fuels Summit that North Brazil based Mhag Severcos E Mineraca is visiting CISA and is expected to launch large scale cooperation with Chinese steelmakers.

Mr Luo said “Mhag plans to produce 3 million tons of iron ore this year and 5 million tons next year. The figure will reach 35 million in the following years. It is expected to officially cooperate with Chinese steelmakers next year and will provide the latter with some 30 million tons of iron ore annually. It will announce the details of the cooperation in the coming one or two months.“

As iron ore price rises in recent years, ore exploitations speed up. The three iron ore giants also accelerate M&As and cooperation to maintain competitiveness. Mr Yan Bangsong VC of China Chamber of Commerce of Metals Minerals & Chemicals Importers & Exporters forecasted the three iron ore giants would soon dominate some 80% of global iron ore resources from current 70%.

Besides cooperation with young large scale iron ore miners, cooperation with resourceful South Africa and Commonwealth of Independent States countries such as Russia, Ukraine and Kazakstan can also benefit China in competition with western steel giants.

(Sourced from MySteel.net)

LME to soft launch steel billet futures on February 2008

It is reported that the London Metal Exchange is to soft launch its physically deliverable steel billet futures contracts on February 25th 2008, two months ahead of the official launch date of April 28th 2007 to allow members to trade the contract on the exchange's select electronic trading system and over the phone, but stops short of permitting ring trading.

Electronic and telephone trading between members will be permitted from February 28th 2008 however the first cash settled date of July 28th 2008 remains unchanged. Initial warehouse stock reports will be available from July 28th 2008

Mr Martin Abbott CEO of LME said "We are not sure if people will use it because the official launch date remains April 28th 2008. It will be somewhat limited. It's something we've never done before but it shows that we can think nimbly and use our different platforms to launch contracts."

Ms Liz Milan of LME said that "The pre launch will allow members to trade between themselves and put early business through Select. Full trading will commence April 28th 2008 on Select, by telephone and in the ring. The first cash delivery date remains July 28, effectively five months forward.”

Ms Milan added that ""We are currently writing the procedures for brand listing. We hope to list them in the next couple of weeks. End user certification demonstrating the use of the material for a minimum one year period will be required from producers. We are not looking to test material, we can not. We will look for end user certification, test certificates and documentation from producers to push forward their listing."

She said that delivery points for the contracts remain Turkey, South Korea and Malaysia but other locations and specifications will examined as the contact matures. She said "We are open to further adjustments in order to capture liquidity and a benchmark price. We may add other grades, and perhaps other regions but of similar specifications to those in the Middle and Far East."

Samsung Engineering to build sintering plant for Hyundai

Yonhap reported that South Korea's Samsung Engineering Co has received a contract worth KRW 146 billion (USD 159 million) to build a sintering facility for Hyundai Steel Co.

Samsung Engineering in a regulatory filing said that the contract calls for Samsung Engineering to build the facility by 2011 at the Hyundai Steel plant in Dangjin 123 kilometers south of Seoul.

Cazaly to appeal in High Court against decision in favor of Rio

It is reported that Australian explorer Cazaly Resources Ltd has taken steps to bring its battle for the Shovelanna iron ore tenement in Western Australia to the High Court. Cazaly's appeal is aimed to overturn a state decision to terminate it's claim to the iron ore tenement in WA's Pilbara region. The application will be heard on a date to be fixed some time after September 25, 2007.

Late last month, an appeal by Cazaly to wrest back control of the tenement from resources giant Rio Tinto Ltd was rejected by the Supreme Court of WA and was ordered to pay the legal costs of Rio and the state government. Since then, Cazaly has taken advice from a senior barrister and will now bring an application to the High Court of Australia for special leave to appeal the decision of the Court of Appeal of WA.

Shovelanna had sat in Rio's portfolio and that of its partners Ms Gina Rinehart's Hancock Prospecting and Michael Wright's Wright Prospecting since 1981, with little work conducted after a 130 million tonne resource was defined. Cazaly snared Shovelanna in 2005 after Rio Tinto's exploration license for the tenement expired simply because a courier failed to deliver renewal documents on time. After Cazaly swooped on the tenement, Rio appealed to the WA government to invoke its power to refuse certain tenement applications, as allowed under the state's Mining Act, on the grounds of public interest. The tenement was handed back to Rio in April 2006 after then WA resources minister Mr John Bowler used his discretion under the Act.

Tenova to revamp melt shop at Mechel Izhstal plant

It is reported that Tenova has been awarded an order relevant to the revamping of the existing melt shop no 23 of Mechel’s Izhstal OAO plant located at Ishvesk in Russia. The new line will be able to achieve a production of 400.000 tonnes per year of low alloy carbon steel grades and alloyed steel grades and stainless steel.

The project consists in the supply of a new complete line of equipment including electric arc furnace, ladle furnace, vacuum degassing station, fume dedusting plant, water treatment plant and material handling plant.

The new EAF will combine high efficiency with low consumption and will be equipped with the last generation of Tenova technologies such us electrodes digital regulation system and KT injection system. The nominal EAF capacity will be 40 tonnes with an hourly production rate of 56 tonnes per hour.

Tenova, former Techint Technologies, designs and supplies advanced technologies, products and services for the metal and mining industries. It operates close to its customers through a network of 20 companies based in 14 different countries.

Luohe begins construction at iron ore mine site in Anuhi

Platts reported that the Luohe Iron Ore Mining Company has begun construction at its CNY 1.560 billion iron ore mining project located in China's Anuhi Province.

Phase one of the two phase project is due for completion in 2010 and will see the joint venture company mine an estimated 3 million tonnes per annum of iron ore with a 32% to 35% Fe content along 1.3 million tonnes per annum of with an approximate 65% Fe content. By 2015, both phases are expected to be completed with the company predicting an aggregate mining capacity of about 5.5 million tonnes per annum.

Luohe Iron Ore Mining was set up in 2005 as a joint venture between Ma'anshan Steel and Longqiao Mining.

Chinese Ferroalloy production province wise in 8 months

Chinese ferroalloy production during August 2007 is reported to be 1.466 million tonnes up by 23.7% YoY and 366.971 million tonnes during January to August 2007 up by 24.1% YoY.

Hebei province of China, with 9.314 million tonnes of crude steel production in August 2007 and 70.206 million tonnes in January to August 2007 remained the leader accounting for 19% of China’s total finished steel production.

Another highlight is that 4 provinces including Hebei, Jiangsu, Shangdong and Liaoning accounted for more than 48.7% of China’s total production.

The production figures of finished steel for various provinces is as under

In million tonnes

(Sourced from MySteel.net)

Signing of iron ore deal postponed in Ukraine

Ukrainian Journal reported that Ukraine has postponed indefinitely the signing of an agreement with a Russian Ukrainian consortium for the development of a major iron ore deposit. The report cited a spokeswoman of the Ukrainian State Property Fund as saying this on last Thursday.

Ukraine’s State Property Fund planned to sign the agreement on Thursday with the consortium of Russia’s Metalloinvest and Ukraine’s Smart Group to give the consortium a 50% stake in the project.

Hyundai Heavy increases stake in POSCO

Reuters reported that Shares in POSCO and Hyundai Heavy Industries surged to records recently after a unit of the shipbuilder bought another stake in the steel maker, highlighting greater ties between two firms facing stellar earnings.

Hyundai Heavy Industries unit Hyundai Samho Heavy Industries said that it had bought 436,000 shares in POSCO for a total of JPY 245.9 billion (USD 264.3 million) increasing its stake in the steel maker to 1.5%.

POSCO and Hyundai Heavy Industries had announced in April 2007 that they would do a swap deal in which they bought around 350 billion won worth of shares in each other.

Analysts said the increased shareholding could help anchor POSCO's management strategy while supporting its plans to adopt friendly shareholder measures such as share buybacks that would ultimately benefit the firms with which it swaps stakes. Hyundai Heavy Industries could also benefit as it depends on steel makers for the plates used to build vessels.

ArcelorMittal to take part Yakutian coal assets auction

It is reported that shortly after selling its last properties in Russia, ArcelorMittal is returning to Russia as it is interested in Yakutian coal assets, which will be auctioned off on October 5th 2007.

The Yakutian government confirms that the law firm of Baker & MacKenzie is preparing documents for the tender on the behalf of ArcelorMittal. As per report ArcelorMittal will have to find a Russian partner or establish its own structure in Russia to take part in the tender.

In a single lot, 68.68% of OAO Elgaugol, 75% minus one share in OAO Yakutugol and the 320 kilometer long unfinished Ulak-Elga rail line will be auctioned off with a starting price of RUB 47.396 billion.

Venezuela coalminer Carbones del Guasare declares force majeure

Reuters reported that Venezuela's biggest coal producer Carbones del Guasare has declared a force majeure warning of an interruption in its agreed supplies to buyers due to a transport strike.

According to El Universal newspaper "As a result of circumstances out of our control, related to the blockade and the transport stoppage our president has declared operations suspended as part of a force majeure.” The newspaper also added that striking truck drivers, who seek higher pay, had decided to return to work but it remained unclear if production had resumed.

Carbones del in the western state of Zulia is controlled by the state company Carbozulia and has as minority owners the US company Peabody Energy and Anglo American. It operates the Paso Diablo mine. Carbones del Guasare said that it produces 6.8 million tonnes of coal per year for electricity and steel plants across the world.

South African SS consumption in H1 up by 12% YoY

According to South Africa Stainless Steel Development Association the consumption of stainless steel in South Africa up by 12% YoY in H1 of 2007 as compared to H1 of 2006.

Mr Campbell a representative of South Africa Stainless Steel Development Association said that the main drivers of this growth were the fast growing economy and good market conditions due to major infrastructural developments.

He said that “The automotive sector is being driven by the Motor Industry Development Program and strong demand both locally and abroad while tank containers are continuing to recover after a wave of consolidation in the sector in 2003 to 2005.”

South Africa total apparent consumption of stainless steel was 111,025 tons in the H1 of 2007, in which 80,200 tonnes come from domestic mills and 22,370 tonnes of primary product and 8,455 tonnes of finished product was imported.

Europeans start buying coal from RBCT

Bloomberg reported that coal shipment from South Africa’s Richards Bay rose to a three year high as demand from European customers strengthened.

Mr John Howland an analyst at McCloskey Group “India was the biggest single customer in the first half. Europe didn’t want coal at the beginning of the year. Now European buying interest has come back in although it is small."

According to McCloskey Group Ltd coal from Richards Bay rose by 45 cents, or 0.7% to USD 61 per tonnes for the week ended September 14th 2007, that is the highest since the week ended August 20th 2004. The price of Richards Bay coal, which doesn’t include transport and insurance costs, has risen 19% this year.

Global demand for coal is being driven by Asia, which will take 31% of South African supplies by 2030, about five times more than in 2005, miner BHP Billiton Ltd forecast on September 4th 2007. That will squeeze supplies to European steelmakers and generators including Germany’s EON AG.

US equipment group urges for scrapping trade barriers on steel import

It is reported that the Motor and Equipment Manufacturers Association is urging the US federal government to abolish duties on imported steel, citing the continued hardships the tariffs place on the US motor vehicle industry.

Ms Ann Wilson VP of Motor and Equipment Manufacturers Association said that "Tariffs on imported steel have already cost this industry tens of thousands of jobs. The tariffs drive up costs and reduce the availability of steel used by the industry. The steel industry has moved to great profitability and it is time for these tariffs to be lifted."

In late July 2007 the US International Trade Commission conducted 5 year sunset reviews of tariffs on hot rolled carbon steel flat products. The ITC is expected to render a decision on the duties in October 2007.

Vietnamese rebar makers facing threat from Chinese rebar imports

VietNamNet Bridge reported that imports of Chinese rolled steel rose sharply in August 2007 allegedly threatening locally made products.

In fact, imports of Chinese rolled steel decreased sharply in July 2007 to 8,000 tonnes as China removed the VAT refund scheme for exporters while imposing 10% on exported finished steel which made imports from China more expensive. However, the situation suddenly changed just one month later with imports of rolled steel from China unexpectedly increasing to 16,000 tonnes or doubles the imports in July 2007.

The problem lies in the fact that the billet imported from China is increasing in price. Currently, Chinese ingot steel is going for USD 590 per tonne. The increased import price for billets has reduced the gap between imported billet prices and rebars.

The Vietnam Steel Association VSA said that it is trying to discuss the creation of technical barriers with relevant ministries in order to prevent steel imports from overflowing into Vietnam. Also according to VSA, China is still trying to boost finished product exports and limit semi finished product exports therefore, the prices of all input materials for steel production are remaining at very high levels.

Usiminas investing in energy business

It is reported that Usiminas started the construction of its second thermoelectric power plant in Ipatinga. The USD 100 million project is to be completed in the second quarter 2008. Objectives of the new thermoelectric plant is increasing power self supply and reduced energy costs.

The new power plant will generate 60 MW, taking Usiminas’ total power generation capacity to 117.6 MW, corresponding to 53% of the company’s power requirement for steel production. It will also minimize environmental impact due to the reutilization of blast furnace, coke oven and converter gases, with the consequent reduction in nitrogen emission into the atmosphere.

This investment is an integral part of the Usiminas System’s Development Plan, which will amount to USD 8.4 billion up to 2015. Another investment made by Usiminas in the energy area is the extension of the contract with Cemig up to 2014. This contract renewal is part of Usiminas strategic plan in the struggle for ensuring its power supply in the future.

Pakistan steel makers challenge sales tax levy rule

Business Recorder reported that over 10 steel melters and re rolling units in Pakistan have filed writ petitions in Lahore High Court challenging legality of PKR 4.75 sales tax levy per unit of electricity consumed by steel billets, ingots and mild steel producers.

Certain units registered in the jurisdiction of Collectorate of Sales Tax and Federal Excise, Lahore and Gujranwala have challenged the basis for collection of sales tax under the new system. They have argued that how the board can give one treatment to units having different capacity, production, losses etc. Secondly, some units have termed the new levy as excessive and un due tax on the industrial units, which is against the provisions of Sales Tax Act, 1990. Some units have taken the plea that they have different types of old machines having less capacity to operate.

Sources told Business Recorder that the Federal Board of Revenue and the concerned association had agreed on a formula to levy sales tax based on electricity consumption from July 2007. Contrary to this, some units have approached the court against the levy. The source added that the board is worried about the new course of action taken by some steel melters and re rollers, who have approached the court against the levy of sales tax under Special Procedure. However, the concerned association has still shown its commitment to pay sales tax under the formula agreed between the two sides. The association has termed the new formula as the best way to discharge tax liability, endorsing the board's decision.

UMMC reorganizing to get ready for IPO

Ukrainian Journal reported that Ukrainian metal traders, Mining & Metallurgical Company would be reorganized into a publicly held corporation in order to conduct an initial public offering.

A source said that the aim of the IPO would be to raise funds for the creation and development of steel trading bases and centers of the company abroad.

Baosteel and Hanbao forms alliance

It is reported that Baosteel Group formed alliance with Handan Iron and Steel Group and they would together establish a joint venture, Hangang Hanbao Iron and Steel Company Ltd.

As per report a ceremony was held for signing the joint venture contract. Both parties will work together to construct the joint venture a modern iron and steel company with a competing ability of world’s first level. Before the ceremony, executives from both companies had a deep talk on Hanbao’s construction and development and other specific items.

Novamerican foresees rebounding steel prices in Q4

Novamerican announced that during June to August 2007 quarter it earned USD 7.4 million down from USD 11.5 million in June to August 2006 quarter. It added that its net sales were USD 191.5 million during the June to August 2007 quarter down by 9% YoY from USD 211.3 million in the year ago period

Novamerican said that its “Sales volumes shrank due to longer than expected summer shutdowns, particularly in the automotive sector and the continued industry wide reductions of excess inventories. As a result, steel prices continued to decrease during the summer months, albeit at a slower rate than in May and June."

Novamerican management however said that "Management believes that the bottom of the current steel price cycle occurred in August. Recently announced price increases in steel coil and structural tubing should benefit the company in its fiscal fourth quarter."

Novamerican also pointed to trade action to reduce unfairly subsidized pipe imports from China and said the weakening of the US dollar will increase foreign demand for North American steel and make it harder for imports to compete.

Novamerican is a maker of steel tubing and other processed metal products with 11 plants in Ontario and Quebec and 11 in the United States.

Onesteel Limited and United Group Limited settle dispute

It is reported that in 2003 and 2004 OneSteel Limited and United Group Limited have resolved an old dispute on a commercial and confidential basis.

2004 OneSteel Limited and United Group Limited worked together on the reline of OneSteel’s Blast Furnace at Whyalla South Australia and have been in dispute over the cost of the work undertaken.

As per report, now the proceedings relating to that dispute in the Supreme Court of South Australia are to be discontinued by consent.

Iron ore prices to rise more than 10% in 2008

Mr Corretora an analyst with brokerage Planner told BNamericas that Iron ore prices are due to rise by more than 10% in 2008 driven by strong demand from Chinese steel producers.

The analyst said "I don't have an exact figure to disclose at the moment, but I believe prices will move upward. China can try to make negotiations tough, but their steel production is on the rise reinforcing the need for iron ore.”

According to the Planner analyst meanwhile, the value of the raw steelmaking material could move into more stable territory in 2009, following a possible decline in the US economy.

Brazilian mining and metals group CVRD which sets the annual price benchmark, secured a 9.5% increase to its selling price for 2007, following a 19% rise in 2006 and a 71.5% hike in 2005.

Panzhihua Steel aiming for record steel exports

It is reported that Chinese steel maker Panzhihua Steel has put away previous export strategy focusing on primary products and would now optimizes export product mix for getting better returns.

Panzhihua Steel has now laid emphasis on exports of high tech and high value-added products such as steel rail, flat products and seamless steel pipe and reduced exports of high polluting, high energy consuming and resource intensive products in line with government requirements. Export volumes of steel rail, flat products and seamless steel pipe all broke 100,000 tons during the first seven month.

Panzhihua Steel earned USD 324.44 million through exports during January to July 2007 setting a new record. Its export volume of steel rail remained the largest in China.

In January to June 2007 Chinese government levied a 5% to 10% export tax on a total of 83 types of steel products on June 1st 2007, followed by the cancellation of export tax rebate on the 83 types of steel product on April 15th 2007. In addition, the export tax on steel billet, steel ingot and pig iron was increased from 10% to 15% on June 1st 2007. These policies, as well as the continuous appreciation of CNY have curbed the exports of steel products.

(Sourced from MySteel.net)

China closes 400 polluters in a drive to clean rivers

It is reported that more than 750 industrial firms have been closed down or ordered to improve their environmental standards following a two month campaign by the top environmental watchdog to clean up the China's rivers.

China’s State Environmental Protection Administration launched the campaign in July in six cities, two counties and five industrial parks along the Yangtze, Yellow, Huaihe and Haihe rivers. Of the 1,162 firms investigated, 400 were closed down, 249 had their operations suspended while improvements were made to their environmental facilities, and 102 were given a deadline to correct wrongdoings. SEPA also recovered CNY 725 million (USD 96 million) in fines for polluting.

Mr Pan You deputy minister of the SEPA said "Punishment is not our aim. We want to push local industries to restructure their operations. He said the campaign was only run on a small scale. We still have a long way to go to curb the nationwide industrial expansion, which demands high volumes of energy and creates huge amounts of pollution."

Dealing with water pollution has become the SEPA's primary concern. Its figures showed that of the 1,406 accidents reported in 2005, water pollution accounted for nearly half. Chinese government has put the treatment of the river on the top of its working agenda and has allocated a budget of more than CNY 13 billion to fund more than 200 cleanup projects. According to the SEPA, 84 projects have already been completed or are under construction. Three wastewater treatment plants have been opened and 15 pollution sources have adopted clean production technologies.