India past shows way for corrosion resistant phosphoric iron re bars

The Gupta period Delhi Iron Pillar near Kutub Minar at New Delhi in India is testimony to the high level of skill achieved by the ancient Indian iron smiths in the extraction and processing of iron. This Pillar has attracted the attention of corrosion technologists because it has withstood corrosion for the last 1600 years.

The presence of relatively high phosphorus with 0.25% in the forge welded Delhi Iron Pillar plays a major role in its excellent corrosion resistance. The presence of phosphorus leads to the formation of a protective passive film on the surface, which provides the Pillar its exceptional corrosion resistance properties.

In the normal steel making process, the phosphorus content is controlled to be less than 0.05% because phosphorus segregation to grain boundaries reduces ductility of steel.

A detailed study has been done by Professor Dr R Balasubramaniam of the Materials and Metallurgical Engineering Department of Institute of Technology of Kanpur India to understand possible industrial applications of phosphoric irons aiming to render the phosphoric irons ductile and locate a modern application wherein the corrosion resistance of phosphoric irons could be put to good use.

The findings indicate excellent properties for highly corrosion resistant rebars for use in reinforcement of concrete especially in chlorides atmospheric conditions, prevailing on the coastal areas.

If you are interested to know more about it, please send a mail at research@steelguru.com to receive a free pdf file.

Essar plans in US being opposed on its plans in Iran

Just two days after the deal was announced, Star Tribune reported that plans to build a taconite to build ISD 1.6 billion steel plant on the Iron Range are in jeopardy because Essar Global is working with Iran.

Governor Tim Pawlenty had announced the deal as one of the crowning moments of his trade mission to India. But on Saturday, moments after touching down in Minneapolis from Mumbai, Governor Pawlenty said that the deal may be in jeopardy and that he would personally oppose it if the company is engaged in activities prohibited by the US government.

Governor Pawlenty said that "Minnesota will oppose, and I will oppose, any economic support for a company that does business with Iran. Iran is a terrorist state. I told Essar representatives that if they are engaged in problematic transactions with Iran, we will be parting ways. Until these matters are resolved to my full satisfaction and that of the United States government, I will strongly oppose any state assistance for the Essar Steel plant project."

Governor Pawlenty said that he would talk to Minnesota Steel Industries to find out what, if anything, the group knows about Essar Global's plans in Iran.

According to media reports Essar is expected to start construction on a 300,000 barrel per day refinery plant in southern Iran early next year. Essar is also trying to build an Iranian steel plant and acquire oil exploration rights for the country's Azadegan field.

US government, which earlier this week announced tighter sanctions on Iran, must now determine if a potential Essar arrangement with Iran could shut down it's involvement in the Iron Range project.

Essar Group closed a deal to buy Minnesota Steel last week, planning to begin construction on a steel mill near Hibbing early next year.

Indian iron ore exports to dip due to port problems

Federation of Indian Mineral Industries foresees a drop of about 15% in iron ore export during 2007-08 due to handling problems in 2 iron ore exporting ports.

Mr Rahul Baldota president of the FIMI said that “Snags with loading equipment in Mormugao and an ore handling plant in Paradip port have cut about 1 million tonne to 1.5 million tonnes a month from exports. There could be a 15% to 20% fall in exports this year mainly because of the port problem."

Indian iron ore traded last week at USD 185 a tonne delivered in China versus USD 160 to USD 170 for Brazilian material and under USD 100 for Australian term prices. A global shortage of ships has pushed up freight rates, giving India a temporary advantage over rival Brazil for sales to China.

Mr Baldota said that "India is not able to really take advantage because of the port situation. The situation in Paradip has eased but Goa will take some time."

Mr Baldota added that costs were rising due to higher railway freight charges over the past year, while the strengthening rupee and export duties were also cutting into revenues. He said that "Our costs have gone up drastically."

According to Goa Mineral Ore Exporters Association, exports from Goa, which accounts for 40% of India's iron ore overseas sales fell by 15% between April and September to 10 million tonnes from the same period last year. Industry officials said that the port situation in Mormugao, which accounts for about 30% of India's iron ore exports, is not likely to be resolved for at least one month. One of the two ship loaders in the port has been out of action since July 2007.

TATA to decide on steel plant in Vietnam after study

It is reported that TATA Group would take a final decision on building a 4.5 million tonne steel plant in central Vietnam after the ongoing feasibility study to ascertain its technical, commercial and environmental viability.

The report cited Mr Alan Rosling ED of TATA Sons as saying that "Of course, we have done some preliminary research which leads us to believe the project would be viable. However, we still need to look at the technical, commercial and environmental feasibility before we can say yes to the project. It will take some months before we have the detailed numbers and then additional months until we put them all together and have a look at the total viability of the project."

Mr Rosling added that "This is a challenging and complicated project, but we believe it is very exciting and the partnership we have developed with Vietnam Steel Corporation is very encouraging."

Vietnam Steel Corporation had signed a MoU with TATA Steel to build a 4.5 million tonnes plant worth about USD 3.5 billion in May 2007. On the successful completion of the study and financial closure, TATA Steel will have a stake of minimum 65% and Vietnam Steel Corporation will have 35% in the JV. TATA Steel will also have 30% stake in Thach Khe Iron Ore Joint Stock Company which would undertake mining in the Thach Khe iron ore mine.

JSW Steel to raise up to USD 500 million through GDR issue

PTI reported that following merger with Southern Iron and Steel Company, JSW Steel now plans to raise up to USD 500 million through a GDR issue in order to bring more liquidity to the company's stock.

Mr Sajjan Jindal vice chairman & MD of JSW Steel told PTI that "We are looking at secondary listing through a Global Depository Receipts issue other than India in which we plan to raise USD 300 million to USD 500 million. This will help us to expand the investors' base and bring more liquidity to the company's stock. This raising through a GDR issue is the best way we can do without diluting equity. The idea is to give more liquidity to the company's stock.”

Mr Jindal added that "With Siscol's merger, the market cap would be nearly about USD 4.5 billion to USD 5 billion and is now coming to that size, where it can be listed overseas.”

JSW had acquired government owned SISCOL in 2004, which produces round and long products for construction and engineering applications. Following SISCOL merger, at a swap ratio of 22:1, the promoters' stake in the merged would be around 45%. SISCOL currently manufactures 0.3 million tonnes of specialized steel. Mr Jindal said that "Siscol will produce 1 million tonne of steel from January next year. There is a possibility to take it to 2 million tonnes."

The management's plan to opt for a secondary listing through a sponsored global depository receipts issue would not dilute the equity, Jindal said, but did not give a time frame for the listing.

TATA Steelium re launched in Sri Lanka

TATA Steel, which has been selling its cold rolled steel products to the Sri Lankan market for more than 15 years, has now shifted from transactional sales to relationship based sales.

Mr Anand Sen VP flat products of TATA Steel during the re launch held on Saturday said that TATA Steel is planning to capture 50% market share in this segment within the next five to ten years. He said “For this purpose TATA Steel has established a professional distribution network for its cold rolled products with state of the art service centre capabilities to meet the myriad requirement.”

TATA steel will offer consistent supplies, differentiated products for various applications, source credibility through product branding and facilitate continuous knowledge dissemination and sharing of good practices to help the Sri Lanka cold rolled users to compete in the global market.

Sonic Steel Industries Pvt Ltd is the local partner of TATA Steel for cold rolled products in Sri Lanka and TATA Steel opened an office in Sri Lanka in 2006.

TATA Steelium, which was launched in 2003 in India, serves a wide spectrum of customers including the auto ancillaries sector, the panel industry for electrical & telecom applications, furniture industry and drums & barrel industry.

BEML to pick up 48%, CIL, DVC 26% each in MAMC

PTI reported that Bharat Earth Movers Limited, Coal India Limited and Damodar Valley Corporation have agreed to pick up 48%, 26% and 26% stakes respectively in the special purpose vehicle being formed to revive the closed public sector Mining and Allied Machinery Corporation in West Bengal.

BEML will be the main operator for MAMC as equipment manufacturing and had earlier sought 51% stake but both CIL and DVC pressed to retain at least 26% each to maintain a certain control in the SPV.

Mr Asim Burman CMD of DVC told PTI that "We have started due-diligence process and we will submit the revival package to the court for approval to go ahead with the process. A consultant would be appointed to prepare the revival package and it would be submitted within the next 13 weeks.”

Currently, MAMC is closed and all employees have been separated through a voluntary retirement scheme. MAMC's liabilities are estimated at INR 1,800 crore. Once MAMC is operational, BEML is likely to restart manufacturing underground mining equipment and spare parts for power plants. Revival of MAMC will help backward integration of CIL and DVC, while for BEML, it will help in diversification into mining equipment.

Mr VS Jain resigns from JSL

Jindal Stainless Limited informed BSE that Mr VS Jain MD & CEO has resigned from the board of directors of JSL and the board of directors in its meeting held on October 26th 2007, has accepted his resignation with effect from October 26th 2007.

Jharkhand industrialization remains mostly on paper

Although Jharkhand government has signed MoUs with 52 companies in the past 4 years but most projects have failed to take off and in the past 3 years, only 7 companies started their first phase of operation. The MoUs were signed mainly in the steel and power sectors. The total proposed investment was more than INR 2 trillion.

Out of the 52 MoUs, 1 was signed in 2003, 13 in 2004, 30 in 2005 and rest in 2006. The MoUs were valid for 2 years by which time the companies had to start work.

The state government last week renewed MoUs of TATA Steel and Arcelor Mittal for another 3 years. But most other companies have not applied for renewal of MoUs. A state industries department official said that "Only 13 companies have applied for renewal."

Jharkhand government has failed to keep its promise of helping investors set up industries and left investors to their fate in deciding the location of industries and negotiating with landowners. Other things like providing coal blocks and iron ore mines are still pending with the government.

BHEL signs MoU with TNEB for Udangudi power project

Bharat Heavy Electrical Limited has signed a MoU with the Tamil Nadu Electricity Board to form a JV for setting up a 2x800MW coal based thermal power unit at Udangudi in Tuticorin district of Tamil Nadu. The new JV is expected to be in place by January 2008 with an investment of INR 8,500 crore. The project is expected to be operational by 2011.

The project will be set up through a JV, in which BHEL and TNEB will hold 26% each and the rest is expected to be contributed by financial institutions.

The proposed project will come up on a 938 acre wasteland area at Udangudi in Tiruchendur talk of Tuticorin district in southern Tamil Nadu.

The boilers and the turbine generators will be manufactured by BHEL at its Tiruchirapalli and Ranipet works in Tamil Nadu in technical collaboration with Alstom, France Siemens and Germany respectively.

The project is to come up near the coastal area and a jetty would be set up to handle coal for the power plant, which will use saline water as coolant. A desalination plant will also be set to meet water requirements, a state government release said.

PTC begins due diligence for coal mines in Indonesia

It is reported that PTC India is identifying coal mines overseas and has started due diligence to buy stakes in them.

Mr TN Thakur CMD of PTC India in an exclusive interview with CNBC TV18 said that "We have identified some coalmines in Indonesia for import, so that we can provide to our prospective developers power on a long term basis.”

Mr Thakur informed that “We have already begun the process of due diligence on coal. Now, we have to form a company outside India for investment into their coal companies in Indonesia. That process is on and we hope to complete it in about 3 to 5 months time.”

L&T plans more port ventures

BS reported that Larsen & Toubro has decided to build 2 new ports at a combined cost of INR 3,000 crore.

The lead company for the ports will be its subsidiary L&T Infrastructure Development Projects Ltd. L&T will build the ports, operate it for a while and then transfer it to L&T IDPL. Consequently, the new ports, like shipbuilding, will not sit on L&T’s books though it will reap the benefits as the constructor of the projects.

L&T is already involved in the building of a port at Dhamra in Orissa in partnership with TATA Steel and will be owned jointly and another at Kakinada in Andhra Pradesh in conjunction with the state government. At Haldia in West Bengal, it extended the port and built a new berth.

NTPC Q2 net surges by 30.6% YoY

National Thermal Power Corporation Limited has announced the following unaudited results for July to September 2007 quarter.

NTPC has posted a net profit of INR 19255 million for July to September 2007 quarter up by 30.6% YOY as compared to INR 14739 million for July to September 2006 quarter . Its total Income has increased from INR 83840 million for July to September 2006 quarter to INR 87492 million for the July to September 2007 quarter.

NTPC’s net sales for April to September 2007 also rose by 11.54% YoY INR 16,975.67 crore as compared to INR 15,218.87 crore in April to September 2006 period. It’s profit after tax for the half year increased by 41.92% YoY to INR 4,295.42.

Power load factor of NTPC’s coal based stations was higher in the first six months of the year at 88.63% as compared to 85.12% in April to September 2006 period.

L&T Q2 net surges 73%

Larsen & Toubro has posted a net profit of INR 348 crore for July to September 2007 quarter up by 73% YoY as against INR 201.20 crore in July to September 2006 quarter. Its total income was recorded at INR 5,523.20 crore up by 43.54% YoY as against INR 3847.80 crore.

Mahindra Ugine Q2 net down by 46% YoY

Mahindra Ugine Steel has posted a net profit of INR 75.11 million for the July to September 2007 quarter down by 46.21%YoY as compared with INR 139.64 million for the July to September 2006 quarter. Its net sales rose by 20.22% YoY to INR 2,280.40 from INR 1,896.92 million.

Its total income stood at INR 2,282.31 million for the July to September 2007 quarter up by 20.1% YoY where as the same was at INR 1,900.20 million for July to September 2006 quarter.

INR in million

Mahindra Ugine Steel, part of the Mahindra group, manufactures alloy steel and stampings. Its steel division manufactures tool, alloy and special steels through the electric arc furnace route and caters to high end applications in the bearings, railways, automotive, engineering, and other industries. The plant is located in Khopoli with an installed capacity of 180,000 tonnes per annum. The stampings division manufactures panels, pressed sheet metal components and assemblies for the automobile industries. It has three factories at Kanhe and Nasik in Maharashtra and a new plant for metal pressing and painting in Rudrapur, Uttaranchal. The company produced 29,500 tons of stampings in 2006-2007.

Xstrata makes AUD 3.1 billion bid for Jubilee Mines

Xstrata plc and Jubilee Mines NL announced that they have entered into a binding agreement for an all cash offer by Ithaki Australia Pty Limited, a wholly owned subsidiary of Xstrata plc, to acquire all of the issued and outstanding shares of Jubilee by way of a recommended off market takeover offer. The Offer will be financed through Xstrata's existing credit facilities and cash on hand.

The Offer is for AUD 23 per share, valuing Jubilee at approximately AUD 3.1 billion. The Offer represents a 35% premium over the closing price of AUD 17.1 per Jubilee share on the Australian Securities Exchange on 26 October 2007, a 36% premium over the volume weighted average price of Jubilee shares over the last 30 trading days on the ASX and a 25% premium to Jubilee’s all time record high share price.

The Offer will be open for acceptance for a period of not less than one month from the date the documents are mailed and will be conditional upon, among other things, valid acceptances of the Offer by Jubilee shareholders owning not less than 90% of the Jubilee shares. The terms of the conditions of the Offer are set out in Appendix 1. Once the 90% acceptance level is achieved, Xstrata intends to take steps available to it to acquire any outstanding Jubilee shares.

Xstrata has received informal clearance from the Australian Competition and Consumer Commission for its Offer. No further anti trust approvals are required. The Offer will be subject to certain customary conditions, namely approval by Australia’s Foreign Investment Review Board and the absence of a material adverse change with respect to Jubilee.

Morgan Stanley is acting as financial adviser and Cochrane Lishman is acting as legal adviser to Jubilee in relation to the Xstrata Offer. Macquarie Bank Limited is acting as financial adviser and Mallesons Stephens Jacques and Freshfields Bruckhaus Deringer are acting as legal counsel to Xstrata.

The board of directors of Jubilee, after consultation with its financial and legal advisors, has unanimously recommended Xstrata’s Offer in the absence of a superior offer and believes that it is in the best interests of Jubilee shareholders to accept the Offer. Each of the directors of Jubilee intends to accept the Offer in respect to the shares held or controlled by them.

Mr Ian Pearce CEO of Xstrata Nickel said “The combination of Jubilee with Xstrata Nickel marks an exciting step in our strategy to create a world-class nickel business, and represents our entry into Western Australia, one of the world’s great nickel provinces. Jubilee is clearly the premier independent nickel company in Australia and benefits from a highly experienced team of people. In making this Offer, we have taken full account of Jubilee’s existing operations and its various exploration and development projects. We believe this Offer presents Jubilee shareholders with a highly attractive, fully priced cash premium for their investment.”

Japanese steelmakers to develop hydrogen powered BF - Report

Nikkei reported that Japan's Ministry of Economy, Trade and Industry plans to launch a project with Nippon Steel Corp, JFE Steel Corp and others to develop a new type of blast furnace that emits about 30% less carbon dioxide than existing furnaces. The report said that the new furnace will run on hydrogen, instead of coke, thereby achieving the significant emission cut.

As per report, the ministry plans to spend a total of JPY 25 billion starting in the year to March 2009 to commercialize the technology in 10 years.

In addition to developing a new method of using hydrogen to operate blast furnaces, the project aims to develop ways to utilize waste heat from the furnaces and technology to isolate carbon dioxide from blast furnace emissions, it said.

The steel industry is the biggest emitter of carbon dioxide in Japan's industrial and energy sector, accounting for 41.2% of the sector's overall discharge or 13% of national emissions.

EU and Russia sign trade deal on steel products

It is reported that the European Union and Russia recently reached an agreement on trade in certain steel products. The two sides agreed on quota levels for 2007 and 2008 on certain flat steel and long steel products, in order to replace autonomous EU measures that had been in place since January of 2007.

The agreement increases the quota on flat steel and long steel products to 2.904 million tonnes in 2007 and 3.031 million tonnes in 2008, versus a level of 2.4 million tonnes which was in effect in 2006.

Quota levels were raised to take into account the enlargement of the European Union with Bulgaria and Romania as well as to cover deliveries to steel service centers in EU member states. It also takes into account the volume of Russian exports of steel products to Bulgaria and Romania before they joined the European Union in January 2007.

Russia has long been the most important source of imported steel products for Europe, and is now second only to China. In the first six months of 2007, the EU imported 4.5 million tonnes of steel products from Russia, 17.5% of total imports of 25.7 million tonnes. These figures also cover other steel products such as semi finished steel products and pipes and tubes. In value terms, 2006 imports of steel from Russia represented EUR 3.366 billion of trade. For the first 7 months of this year 4.75 million tonnes of Russian steel imported had a value of EUR 2 billion .

EU court rejects US Steel Kosice lawsuit over CO2 cap

Reuters reported that a European Union court has rejected a lawsuit filed by the Slovak unit of US Steel Corp against the European Commission over the proposed carbon emission limits. The Commission set the Slovak annual cap for 2008-2012 at 30.9 million tonnes, compared with Bratislava's request of 41.26 million.

Mr Juraj Baca a spokesman of US Steel Kosice said that "The Court's decision is negative it's a disappointment for us. We have received the decision and we need to study it, therefore we will neither talk about details, nor possible alternatives."

US Steel Kosice challenged the European Commission in February 2007 over cuts in the proposed carbon dioxide emissions cap for 2008-2012.

Slovakia which filed its own lawsuit against the European Commission in February 2007 became the first country to launch a court challenge against the European Union after Brussels cut its proposed CO2 emissions limit by 25%.

Global ship breakers form International Trade Association

According to International Ship Recycling Association, ship breaking yards have formed an international trade association, the first time a trade body has represented the ship recycling industry. It said that International Ship Recycling Association plans on making representation to the International Maritime Organization, a United Nations agency charged with promoting international maritime safety through international conventions.

International Ship Recycling Association in a statement said that it aims to promote exchange of knowledge, ideas and training programs. It also aims to promote ship dismantling on a global scale using environmentally sound practices. It added that "The members agree to have their yards certified to the latest standards."

International Ship Recycling Association's initial members are
1. Chine Jiang Xiajang Changjiang Shiprepair Yard of China
2. Zhongxin Ship Recycling & Steel Co of China
3. OGe Gemi Sokum of Turkey
4. Cemas Celik of Turkey
5. Leyal Ship Recycling of Turkey
6. Adem Simsek & Simsekler Group of Turkey
7. Demtas of Turkey
8. Dortel Ship Recycling Limited & Co of Turkey
9. Sparrows Point Shipyard of US
10. Scheepsloperij Nederland BV of Netherlands

According to Ms Liu Guohong the first chairman of International Ship Recycling Association, up until now, the recycling yards have never been involved in international legislation. He said it was important to handle ship recycling on a global scale. Ms Guohong said that "With the foundation of the International Ship Recycling Association we can start to work on the international legislation of this important issue in our industry. As responsible ship recyclers, we can join our forces against the dreadful practices of countries that allow beaching methods. We want this organization to bring a voice to the IMO. We want to show the world, things can be done in a green, high quality way and there can still be return and it is good business."

Ship breaking has been a highly controversial industry with much of it based on the Indian subcontinent, where beach based operations cause widespread pollution and an alarmingly high injury and fatality rates among yard workers. Ship owners expect to sell their ships for scrap, rather than pay for them to be recycled.

Stelco shareholders formally approve takeover by US Steel

Stelco Inc announced that at the special meeting of shareholders held on October 26th 2007, the shareholders of Stelco overwhelmingly approved the arrangement of the Corporation under section 192 of the Canada Business Corporations Act involving the acquisition by an indirect wholly owned subsidiary of United States Steel Corporation of all of the common shares of Stelco.

The Arrangement was approved by approximately 99.99% of the votes cast at the special meeting. Subject to the satisfaction of the remaining conditions to the Arrangement, including the final order of the Court at the hearing scheduled for October 30th 2007, it is anticipated that the completion of the Arrangement will occur on or about October 31st 2007.

Stelco is one of Canada's largest steel companies. It is focused on its two Ontario based integrated steel businesses located in Hamilton and in Nanticoke. These operations produce high quality value-added hot rolled, cold rolled, coated sheet and bar products.

Mr Surma forecast good outlook for US steel industry

According to Mr John Surma president and CEO of US Steel Corp, although world’s steel consumption continues to increase, the US steel industry faces several challenges. Mr Surma in the keynote address at CRU’s North American Steel Conference in Chicago said that the current trends bode well for domestic steelmakers.

Mr Surma said that “Currently, the highest per capita steel consumption has been concentrated in emerging economies such as China and the former Soviet nations. The still very minimal amount of steel consumption in countries such as South America and Africa is a good indicator of the industry’s growth potential. Plus, the higher input costs for scrap and energy has leveled the market between the integrated mills, which produce steel from iron in blast furnaces, and the minimills, which use scrap melted in electric arc furnaces to make steel.”

Mr Surma said that “Yet the industry still faces serious challenges with China the most significant. Although China’s industrialization has spurred steel demand at rates not seen since after World War II, the country’s steel production has jumped to an estimated 140 million net tons this year from 130 million net tons in 2000. Its production has increased in that period at a rate that is greater than the total capacity of US mills.”

Mr Surma added that "It’s capacity is three times the US and growing and there is no real indication that China’s obsolete and environmentally outdated mills are being forced to close. It's the largest steel exporter as the result of government ownership and subsidies. It has the potential to destabilize world markets.''

Mr Surma said that human resources present another challenge to the industry, he said. Employee retirement will escalate in the next to five seven years, and replacing them with a work force with equal skills will be difficult. The talent pool is shrinking because of global competition for trained workers. Also, a generational gap that stops new entrants into the industry and ethnic diversity may make it difficult to merge different cultures. The labor force is growing at a slower rate. There is competition for top talent.”

Mr Surma further added that climate change is another factor for steel companies, which are responsible for emitting 15% of the carbon dioxide globally and 1% of it in the United States. Mr Surma said that “Steel has a positive role to play in climate change. We need to educate the public about our industry and what we’re doing about it. Steel is the best material available to build a better world and we need to do it in a cost effective manner.''

SA domestic carbon steel sales in 9 months up by 1.6% YoY

According to the South African Iron and Steel Institute, South Africa domestic carbon steel sales totaled 4,111 million tonnes during January to September 2007 period up by 1.6% YoY as compared with January to September 2006 period. This was despite a 10.7% QoQ decrease in domestic carbon steel sales in the Q3 of 2007, when sales totaled 1,316 million tonnes.

South African Iron and Steel Institute said that sales of carbon steel flat products decreased by 8.6% while sales of profile products increased by 2.2% QoQ as compared with Q2 of 2007.

Imports of finished carbon and alloy steel products totaled 131,819 tonnes during the Q2 of 2007. This represents 8.8% of the total apparent domestic carbon and alloy steel consumption and is an increase from 8.4% in the first quarter.

Exports of carbon steel products as reported by South African producers decreased by 23.4% YoY to 1,456 million tonnes.

CVRD cuts 2007 nickel production forecast

Metals Insider reported that Brazilian giant CVRD is cutting its 2007 nickel production forecast by 24,000 tonnes to 246,000 tonnes of finished nickel. Factoring in production of nickel from third party tolling arrangements, total supply from the company this year will be 260,000 tonnes.

The report added that the downgrade follows a disappointing Q3 production report. Although group finished nickel production of 55,100 tonnes was up by 10.1% on the year earlier level of 50,000 tonnes, it was well off the pace of the prior quarter’s 62,500 tonnes.

Sumitomo Corp launches Bolivian zinc mining

YIEH reported that Japanese Sumitomo Corporation would have the first zinc concentrate shipment from Bolivian silver, zinc and lead mine San Cristobal.

The mine has already made its very first shipment from Chilean Mejillones port on September 22. The mine also made its debut shipment to Asia with 9,100 tonnes of zinc concentrate on October 18, and it hopes to run in full capacity at the end 2007.

San Cristobal a 35% share owned by Sumitomo, produces bulk concentrate containing zinc, lead and silver.

TIMET and Carpenter Technology enter agreement

Titanium Metals Corp and Carpenter Technology Corp announced a joint agreement under which TIMET will supply Carpenter with titanium metal and scrap melting services and Carpenter will provide specialized titanium conversion processing to TIMET.

Under the supply agreement, TIMET will supply Carpenter with titanium specialized titanium conversion processing to TIMET. Metal and toll melting services for Carpenter's titanium scrap at agreed upon prices for a minimum of 12 years and a maximum of 20 years. Under terms of the processing agreement covering the same period, Carpenter will provide TIMET with forging and related processing services at agreed upon prices for TIMET's titanium products. Financial terms of the two agreements were not disclosed.
Mr Steven Watson vice chairman & CEO of TIMET said that "We are very pleased to expand our relationship with Carpenter by entering into these mutually beneficial agreements. TIMET will gain access to significant forging capacity that will allow us to continue to serve the expanding needs of our customers under long-term agreements. These strategic agreements further demonstrate TIMET's commitment to achieve profitable growth for our shareholders by adding production capacity in a cost efficient manner and leveraging our position as a leading producer of titanium mill and melted products."

Mr Anne Stevens chairman & CEO of Carpenter said that "These agreements provide considerable benefits to both companies and to our customers. We are excited about the opportunity to work jointly with TIMET which is one of the premier companies within the titanium industry."

Environmental hurdles push back CVRD’s Vermelho nickel project

It is reported that CVRD has pushed back the development of its Vermelho nickel project in Brazil due to difficulty in securing environmental licenses.

Mr Fábio Barbosa CFO of CVRD told reporters during a press conference that "We have two big nickel projects for 2008. 60,000 tonnes per year Goro project in New Caledonia due for completion next year, in addition to the 58,000 tonnes per year Onça Puma project also in Pará where commissioning is expected in late 2008.”

He added that the board of CVRD had approved the development of Vermelho in 2005 and at that time the project was expected to start operations in the last quarter of 2008. Mr Barbosa said that "There is a difficulty in putting all the pieces together. Adding hurdles also include having engineers for the project development.”

Vermelho in Pará state is slated to churn out 46,000 tonnes per year of nickel and 2,800 tonnes per year of cobalt and is due for completion in early 2012.

Western Australia to put brakes on iron ore exploration

A Western Australian Government report said that it would deny number of junior iron ore companies in the mid west approval for their projects, because they fail to meet strict environmental conditions. The report reviews almost 30 projects planned for the region.

Iron ore exploration is meant to revitalize the drought ravaged region, with mining projects estimated to be worth more than USD 75 billion. However there has been criticism of the Government's handling of environmental guidelines for the mid west.

Mr Clive Brown chairman of Geraldton Iron Ore Alliance said that the Government report was due months ago. He said that "Delay for the industry means considerable cost and continuing uncertainty so it is most unfortunate this delay has occurred."

Mr Chris Tallentire conservation council said that the government has dragged its feet on the issue and the area in question is environmentally significant. He added that "We risk losing species of plant and animal, we also risk losing geological heritage."

Allegheny Technologies sees SS recovery only in early 2008

US specialty metals and stainless products manufacturer Allegheny Technologies recently said it only expects a recovery in its standard stainless sheets business early 2008.

Allegheny Technologies said that divergent performances in its specialty metals and stainless segments. Shipments of standard stainless products slumped by 52% YoY to 57,000 short tons in the Q3 of 2007. Like other stainless operators, Allegheny has been hit by the aggressive de stocking cycle caused by the slump in nickel prices.

Mr L Patrick Hassey chairman, president & CEO of Allegheny Technologies said that “We had expected orders and shipments of our flat rolled standard stainless sheet to improve once the price of nickel stabilized. The monthly average price of nickel did stabilize during the third quarter and the October surcharge for Type 304, the most common nickel-bearing stainless grade, is the lowest surcharge for that grade in eleven months. In addition, US service center data indicates that inventories continued to decline during the third quarter. However, according to published information, mill owned inventories of finished goods increased”. Mr Hassey added that Allegheny itself hadn’t built any significant inventory in the period.

Tenova starts up 2 Consteel® in German and Greece

Tenova announced that it has recently started up two new CONSTEEL® plants in Germany and in Greece.

The first to start up was the Trierer Stahlwerk GmbH plant at Trier in Germany. The Trier plant has a production capacity of more than 29 heats per day. Tenova supplied the German steelmaker with a melt shop including an EAF featuring the Consteel® system and a Ladle Furnace. The furnace has a capacity of 60 tonnes and a 40 MVA transformer. By the end of 2007, TSW will also start up a Tenova Vacuum Degassing Treatment to complete its quality steel production line.

The second Tenova melt shop was started up at the SOVEL steelmaking plant at Volos in Greece, where a Consteel® was installed on an existing furnace. The Consteel® applied to the existing 130 tonnes furnace will allow SOVEL to easily achieve the increase of steel production required. After only 2 days in operation the plant was already exceeding its previous levels of productivity and is now in full swing operation with maximum respect of the environmental aspects.

Tenaris strengthens commercial ties with OMV

Tenaris announced that the Austrian oil company OMV has a partnership agreement with Tenaris covering the supply of the majority of its OCTG requirements worldwide.

Mr Wolfgang Ringhofer head of procurement and contracting for OMV Exploration & Production said that “It was the first agreement of this type signed by OMV E&P and it has been very successful from the start. In order to maintain the on time delivery of casing and tubing pipes, it is important to hold periodic meetings to review OMV E&P's global OCTG demand as Tenaris currently covers almost 90% of our OCTG demand.”

Mr Ringhofer said that “For our global supply we evaluated different providers, but finally we chose Tenaris for its high quality production processes, good terms and conditions, compliance with our specific needs, an effective delivery system, competitive prices and capability to provide the timely delivery of constant quality and timely products and services for all our operations worldwide.”

In the current standardization effort carried out by OMV E&P, the TenarisBlue® premium connection has been chosen as its preferred premium connection and TenarisBlue® DopelessTM, the dope free version, is being tested in some of OMV E&P's most environmentally sensitive operations, such as those in Austria and New Zealand. Furthermore, OMV's acquisition of a controlling share of Romanian oil company Petrom took place at almost the same time as Tenaris's integration of the Romanian pipe mill Silcotub, creating the opportunity for further business opportunities.

Since 2004 Tenaris has maintained this long term agreement with OMV. Over the years, the agreement has developed to include additional products for OCTG applications, such as sucker rods and a variety of on site services, such as running assistance.

Nissan CEO sees steel prices hurting automakers

Mr Carlos Ghosn CEO of Nissan Motors recently said that rising steel prices will be a drag on the auto industry's overall profitability.

Mr Ghosn during Tokyo Motor Show told reporter that "Steel prices are going up you just have to realize that. We have to absorb this. We can not just pass on the higher prices to the customer like other industries do.”

Outotec delivers grinding technology for Kevitsa project

Outotec has agreed with Scandinavian Minerals Limited of Canada for the delivery of grinding technology for Scandinavian Minerals' Kevitsa project in Finland. The contract value exceeds EUR 20 million. The mills are due to be delivered in the first quarter of 2010 and the processing plant is planned to be operational in 2010.

Outotec's scope of delivery consists of three fully autogenous grinding mills of Outotec's proprietary design, planned to treat approximately five million tonnes of ore per year. Outotec's fully autogenous mills will bring substantial savings in operational costs of the grinding circuit compared to traditional semi autogenous mills.

Kevitsa located at Sodankylä in northern Finland, is an undeveloped sulfide nickel deposit containing also copper and platinum group metals.

New tube plant to contribute 700,000 tonnes to Venezuelan market

BNamericas reported that the seamless tube plant that the Venezuelan government is building in Bolívar state will contribute 700,000 tonnes per year to the local oil sector.

An executive at the Venezuelan ministry of basic industries and mining told BNamericas because of new exploration projects being carried out by the government, several major pipelines under development require a large amount of seamless tubes. He added that "And the goal is to supply them as soon as possible without providing a timeline.”

Mr José Khan head of Venezuelan ministry of basic industries and mining met with delegates from the Russian Federation in Caracas to review joint investment projects including the tube plant.

In September, the government announced the start of construction of the USD 830 million plants. It will produce seamless tubes and have an initial production capacity of 280,000 tonnes per year, which will be increased since state oil company PDVSA alone will need an average of 480,000 tonnes per year over the next two years.

Perilya zinc production ramped up in Q3

Metals Insider reported that Australian producer Perilya increased contained zinc production to 35,700 tonnes in Q3 of 2007 from 25,600 tonnes in Q2 of 2007 and 30,200 tonnes Q3 of 2006 period.

Perilya said that the boost to Q3 of 2007, production came from the company’s Beltana mine, which produced 12,700 tonnes of contained zinc in direct shipping ore as compared with just 3,600 tonnes in Q2 when it first came into production.

Perilya is forecasting group zinc production of 120,000 tonnes to 140,000 tonnes for the financial year to June 2008. An extra boost to production will come from the Potosi mine, which produced its first development-stage ore during the third quarter.

Production in the last financial year 2006-2007, was 95,600 tonnes of contained zinc, lower than originally forecast after a fatal accident in January at the core Broken Hill mine interrupted loading activities and led to bottlenecks.

DGCX to start trading in rebar futures today

The Dubai Gold and Commodities Exchange will begin trading steel futures today on October 29th 2007.

DGCX in a statement said that "The contract provides the region's steel community with a cost effective tool to hedge risk arising from extremely volatile prices. In addition, it offers an alternate and attractive avenue for investors with exposure to either steel equities or the physical market.

Mr Colin Griffith chairmen of DGCX said that the contract is open to all international companies and investors. He said that “It will lead to best price discovery for Dubai rebar, which is relevant to the European and Asian long product steel market.”

Mr John Short ED Steel and Base Metals with Dubai Multi Commodities Centre said “Currently, almost all steel is bought in the physical forwards market. Given that a bulk of the steel in the region is either imported or locally produced from imported semi-finished steels, most of it, at some point in the supply chain, is bought based on forward prices. The new DGCX futures price for Dubai rebar will not only factor in the market’s views on these forward prices, but also serve as a ready reference for spot prices. DGCX Steel Rebar futures price is set to evolve as the benchmark for prices of regional rebar as well as other price-correlated steels. Reason being, Dubai is the single largest import market, both for rebar as well as billet, used for producing rebar.”

Rebar accounts for the major portion of steel imported into the region because of the ongoing construction boom. DGCX said that rebar consumption in the GCC in 2006 was estimated to be 12 million tonnes and demand is expected to grow about 9% until 2010 against the global growth of 3%. UAE's rebar demand is about 4 million tonnes per year while Saudi Arabia's consumption is put at 5 million tonnes per year. DGCX said the region is estimated to import around 10 million tonnes per year in the next decade. Turkey is a major supplier of rebar to the UAE market, while 65% of the regional supplies come from Gulf based steel mills.

The list of approved rebar makers include
1. Kromen of Turkey
2. Emirates Iron and Steel Company of UAE
3. Izmir Demir Celik Sanayi of Turkey
4. Ekinciler Iron & Steelworks Inc of Turkey
5. Diler Iron and Steel Co Inc of Turkey
6. Al Tuwairqi Group of Saudi Arabia
7. Hadeed
8. Qatar Steel Company.

Al Jazeera board approves sale of 51% stake to Global Investment

Al Jazeera announced that its shareholders have approved a plan to sell a 51% stake to the private equity unit of Global Investment House KSCC, Kuwait's biggest investment bank.

Al Jazeera is a tubing manufacturer of mild steel black and galvanized round tublings with a plant at Sohar in Oman. Promoted by a group of Omani entrepreneurs with a fairly large holding with the general public of the Sultanate, Al Jazeera has become one of the leading tubing manufacturers in the Middle East. From its plant at Sohar in Oman, Al Jazeera offers both mild steel Black and galvanized round tubes. Jazeera supplies both types of pipes with ends threaded and coupled as per British, DIN, ASTM and other International specifications.

United Steel Industries to start Fujairah bar mill in 2008

It is reported that the first rolling mill in the Emirate of Fujairah and the largest in the United Arab Emirates will be built by United Steel Industries FZC and would start production in 2008.

The mill will produce the bar in coil and straight lengths in diameter rages of 6mm to 16 mm & 10mm to 40 mm diameter and wire rods in 5.5mm to 16 mm. It is expected that rolling mill furnace capacity will be 175 tonnes per hour. The capacity of this rolling mill will be 1 million tonnes per annum.

The mill designer is Italian VAI POMINI srl Minimill Technologies, which is specialized in engineering, manufacturing and delivering of hot mills for production of bar and rod.

US Sanctions extend to Russian branches of Iranian banks

It is reported that the US sanctions that targeted Iran’s largest banks have also extended to the Moscow branch of Bank Melli Iran, ZAO Bank Melli Iran.

Similar to other banks on the black list of the United States, the Moscow branch is banned from making any transactions or transferring money to the US companies or individuals and all assets that are under the US jurisdiction have been frozen.

The sanctions announced by US Treasury Secretary Henry Paulson and Secretary of State Condoleezza Rice target three state owned banks.
1. Bank Melli
2. Bank Mellat
3. Bank Saderat

Bank Melli has several subsidiaries, including Bank Kargoshaee in Tehran, ZAO Bank Melli Iran in Moscow, Melli Bank in London and Arian Bank, a JV with Bank Saderat in Kabul.

The new sanctions are also in force for the Islamic Revolutionary Guard Corps, which Washington accuses of proliferating mass destruction weapons and of supporting terrorism.

Overall, the sanctions hit more than 20 companies, banks and individuals of Iran as well as the Defense Ministry of the country. The timing of Washington pressurizing is interesting. The United States has toughened the sanctions against Iran when pressing for the third resolution of the United Nations that will impose wider economic pressure on Tehran in another effort to force it to halt the nuclear program.

Georgia’s sea seizures pose threat to Abkhaz coal industry

Apsnipress news agency quoted Mr Daur Arshba, an Abkhaz lawmaker, as saying that a Turkish Abkhaz company Tamsaş quarrying coal in Tkvarcheli in Georgia faces bankruptcy because of an inability to export it. As per report, the territorial waters and ports of breakaway Abkhazia are closed under Georgian legislation.

Mr Arshba said that “Tamsaş may stop operations. Coal stocks are waiting to be exported, but it is impossible because of the many seizures of vessels by the Georgian side.”

Mr Arshba said that the Abkhaz National Security Council should immediately discuss the issue. He said that 70% of Tkvarcheli’s municipal budget came from coal mining related taxes. New 678.4 million tonne coal discovery increases Red Hill Energy's Mongolian coal inventory to more than 1 billion tonnes

According to the Georgian Border Police, over 25 vessels have been detained by the coast guard for illegal maritime activities in the Abkhaz section of Georgia's territorial waters in the past 2 years. A vessel flying the Cambodian flag, loaded with coal from Tkvarcheli, was seized by the Georgian coast guard on October 21st 2007. Another vessel, also loaded with coal, was seized in July 2007.

Lahore HC suspends revised tax notice for steel melting units

Pakistan Daily Times reported that Justice Mr Hamid Ali Shah of the Lahore High Court has suspended a notification under which the sales tax assessment policy was revised for steel melting units and put off the hearing till October 29th 2007. Mr Shah said that if the policy were implemented, the steel melting industry would be closed.

The counsel of the petitioners, including Quality Steel, Lucky Steel Foundries and others, said sales tax was imposed on the production of manufactured goods, but the procedure had now been changed and the sales tax was levied on the consumption of electricity.

The counsel said that there was a significant increase in electricity bills while the cost of production had also been increased from 10% to 20%. He added that the Pakistan steel industry is meeting the 60% demand of the steel consumption in the country and if the policy was implemented, steel melting industry will be ruined.

Chinese domestic steel prices edges up last week

According to statistics released by China’s top planning body National Reforms & Development Commission, China's steel price edged up last week along with continuously climbing iron ore price.

Based on market monitoring of 22 key cities, the four major steel products' composite price averaged CNY 4477 per tonne up by 0.2% WoW or 19.1% YoY.

Prices for wire rod, rebar, medium plate and CR sheet posted at CNY 3970 per tonne, CY 4148 per tonne, CNY 4671 per tonne and CNY 5120 per tonne respectively.

In specific, medium plate and CR sheet lost CNY 6 per tonne and CNY 13 per tonne respectively down by 0.1% WoW and 0.3% WoW. Rebar and wire rod gained CNY 30 per tonne and CNY 27 per tonne both up by 0.7% WoW.

Wire rod gained CNY 743 per tonne, rebar CNY 939 per tonne, medium plate CNY 921 per tonne and CR sheet CNY 242 per tonne up by 23% YoY, 29.5% YoY, 24.6% YoY and 5% YoY respectively.

(Sourced from MySteel.net)

NDRC urges strict implementation of obsolete capacity elimination

China’s National Development and Reform Commission, in an announcement released recently, has urged strict implementation of obsolete capacity elimination.

At a State Council conference held earlier on Apr 27th NDRC had revealed that 10 provinces or municipalities Beijing, Hebei, Shanxi, Liaoning, Jiangsu, Zhejiang, Jiangxi, Shandong, Henan, Xinjiang, had signed first round of written commitments to shut down and eliminate outdated iron making capacity and obsolete steelmaking capacity of 39.86 million tonnes and 41.67 million tonnes respectively in the next five year, with 22.55 million tonnes and 24.23 million tonnes to be closed down by the end of 2007. Hebei, Shanxi, Henan, Jiangsu and Shandong are responsible for 70% of China's outdated iron making capacity and 50% of obsolete steelmaking capacity.

So far the 10 provinces or municipalities have washed out 9.69 million tonnes of outdated iron making capacity and 8.73 million tonnes of obsolete steelmaking capacity, accounting for 43% and 36% respectively of the target. Shanxi Province has washed out another 2.98 million tons of outdated iron making capacity and Ma’anshan Steel, which is not included in the first round of written commitments, has also shut down five 300 cubic meter blast furnaces with total iron making capacity of 1.75 million tonnes.

However, according to NDRC, some enterprises reconstruct those would-be eliminated equipments and expand production scale to ward off the elimination; some only suspend productions and can resume operation at any moment; some sell outdated equipments to other regions; some switch iron making blast furnaces to the productions of ductile iron pipes and ferroalloy, which are already severely oversupplied. These problems all weaken the effectiveness of elimination.

NDRC thus urged local governments to strictly carry out and supervise the elimination to prevent these measures. NDRC also nailed down the detailed standard: blast furnaces, converters, electric furnaces and affiliated equipments such as sintering and chimney should be demolished and the ground should be leveled off.

In the meanwhile it asked local governments to strengthen law enforcement and weed out unqualified enterprises in virtue of business license, manufacturing license and electricity and water supply.

(Sourced from MySteel.net)

Baosteel modernizes Majishan Port to double capacity

Baosteel has completed a project to double the capacity of the Majishan Port near the estuary of the Yangtze River. The project, which was completed on Saturday, is expected to boost the port's handling capacity from about 26 million tons to 50 million tons a year.

2nd phase project of the Majishan Port included establishments of berths that can accommodate ships up to 300,000 DWT and a 0.32 square kilometer ore ground built on polders.

The Majishan Port, located on the Majishan island off east China's Zhejiang Province, was China's first deep water port built on an island. The 1st phase project of the port, which became operational in 2002, was planned to facilitate iron ore imports for Baosteel and other steel companies along the Yangtze. It handled about 26.16 million tons of cargoes in 2006.

Chinese SS producers to raise prices further in November 2007

Interfax China reported that major Chinese stainless steel mills will raise prices for core products by CNY 500 (USD 67) per tonne in November from the October price level in response to recent rises in nickel prices.

The rise is the latest in a series of recent price increases. Major Chinese steel mills raised their ex works prices for core products by CNY 1,500 (USD 200) a tonne in October when compared to September 2007.

According to a notice released by t Taigang Stainless Steel Co Ltd, the listed arm of China's largest stainless steel mill Taiyuan Iron and Steel Group, it will raise ex works prices for core products, including 304 series cold rolled and hot rolled sheet, by CNY 500 (USD 66.76) a tonne in November when compared to October. However, the company noted that ex works prices for its 400 series cold rolled and hot rolled sheet will be unchanged next month.

As per common practice, other major stainless steel mills such as Baosteel Stainless, Ningbo Baoxin Stainless, POSCO Zhangjiagang and POSCO Qingdao will raise their own prices at the same time to the same level as TISCO.

Chinese fixed asset investments in 9 months up by 25.7% YoY

China’s National Bureau of Statistics announced recently that China's fixed assets investment rose to CNY 9,152.9 billion (USD 1,220.4 billion) in January to September 2007 up by 25.7% YoY from the same period in 2006.

Mr Li Xiaochao spokesman for NBS said that the increase was 1.6% points lower than the growth rate in the same period last year despite investment in fixed assets running at a high level.

Investment in urban areas reached CNY 7,824.7 billion up by 26.4% a drop of 1.8% points from the first three quarters of 2006; investment in rural areas was CNY 1,328.2 billion up by 21.2%. Of the total investment in urban areas, CNY 93.8 billion went into primary industry, up 41.1% secondary industry accounted for CNY 3,452.2 billion up by 29.3% and tertiary industry CNY 4,278.7 billion up by 24.0%. Investment in state owned and state holding enterprises was CNY 3,395.1 billion up by 16.2%. Investment in real estate was CNY 1,681.4 billion up by 30.3%.

Mr Song Guoqing a researcher with Peking University said that "The government increased the cost of investment to discourage the start of new projects. It put small and medium sized private enterprises under considerable pressure, but had little effect on large state-owned firms." Mr Song said fixed assets investment was influenced by wide ranging factors including government policies, enterprise development and international demand. The government needed to focus on avoiding repeated construction.

Premier Mr Wen Jiabao at a State Council executive meeting recently called for continued control of excessive fixed assets investment, especially in industries with high energy consumption and pollutant discharges and those with excessive capacity along with tightened supervision on credit granting by commercial banks.

China becomes net zinc importer again in September 2007

According to the latest trade figures released by the China customs department China flipped back to being a net importer of zinc metal in September 2007 by a marginal 704 tonnes.

Exports of zinc metal dropped a gear from the previous two months to 12,325 tonnes, while imports moved up a gear to 13,029 tonnes. Both import and export levels were comfortably within the monthly range seen over the first eight months of 2007.

But cumulative January to September 2007 exports were up by 43.7%YoY while cumulative imports were down by 56.1%, which is why the country has turned net exporter to the tune of 143,500 tonnes so far in 2007 from net importer of 66,300 tonnes in the same period of 2006.

August’s imports of concentrates at 208,000 tonnes were a fresh all time high. They accelerated again to another all time high of 294,400 tonnes in September.

Shougang to cut production during Olympics

Mr Zhu Jimin president of the Shougang Group revealed to China.org.cn on October 22nd 2007 that "Shougang will cut its production up to 70% during the Beijing Olympic Games. We will do our best to support the success of the Olympics."

Mr Zhu said "We have made great efforts to curb pollution for ten years. Shougang now takes the lead in the world on environmental protection. Shougang voluntarily decided to cut production during the Olympics to show the world that China is a country with responsibility and Beijing is a city that keeps promises."

He said "Our Company previously had an annual steel production of 8 million tons in Beijing. Starting from the next year, we will lose profits of more than CNY 2 billion annually. This is our biggest loss. But thanks to the relocation, we have a new steel company with great potential. We have the opportunity for development."

The first phase project of the new Shougang base will start production in October, 2008. In 2010, the most advanced steel company with production capability of tens of thousand tons will be completed.

Chinese coke output in January to September 2007

China’s province wise coke output during January to September 2007 is as under

In million tonnes

(Sourced from MySteel.net)

Steel traders seek ways to survive controlled export market

It is reported that China has not stopped strengthening macro controls over the steel industry, higher threshold for import & export trade and stricter quota system are still being studied, along with further potential cuts in export rebates, which have jointly made jammed domestic traders' business.

China Securities Journal has outlined views of some of them as under.

Mr Said Wang Jianzhong who has been doing trading for over a decade said "Just to buy and sell is no way out. He once developed iron ore in Vietnam and sold it to Chinese steelmakers in the form of ore fine, making fairly good profit. Yet, as China further hiked requirements for environment protection, Mr Wang had to move his processing plant to Vietnam. Later on, his plan to sell Chinese steel in Vietnam while trading Vietnamese ore in China also failed because of a series of rebate changes. He is also worried once heard NDRC wanted to set qualifications for steel importer & exporters and probably 30,000 tonnes per year is a must, since he only does 10,000 tonnes per year to 20,000 tonnes per year. He is now thinking to tie with others in order to survive.

Mr Dong Mingsheng, who operates Zhejiang Material & Metal Corporation with a trade value of CNY 20 billion, the curbing export measures have not deprived his competency but squeezed the profit margin. Mr Dong said he has changed his business, got orders of 28 ships and handed over the orders to shipyards while to supply steel himself, so as to extend the trade industry chain and avoid export curbs.

Mr Xue Changjiang GM of Shanghai Shunye Steel Group expressed his confidence that "The international market is tremendous, domestic traders should seize the opportunity. In possession of more than 20 domestic steel suppliers and a big sales network overseas, Shunye is ensured of steady trade volume and considerable revenue.”

(Sourced from MySteel.net)

Evraz owns 100% of its major Russian production companies

Evraz Group SA announced that Evraz Group through its subsidiaries has completed the buyout of all outstanding common stock of steel mills NTMK and Zapsib, iron ore mining and processing complexes KGOK and VGOK, and the Nakhodka Commercial Sea Port. As a result of the buyout, Zapsib, NTMK, KGOK, VGOK and NMTP have become Evraz’s wholly owned subsidiaries.

The procedure was carried out in accordance with the Russian legislation through mandatory offers to all minority shareholders of the respective Russian companies.

Mr Alexander Frolov chairman & CEO of Evraz said that “Successful completion of the buyout is an important step in simplification and optimisation of Evraz’s ownership and management structures allowing to effectively align all the business processes and strategic management decisions within the group. The way the buyout process was organized and carried out has demonstrated the Company’s commitment to international best practices in corporate governance.”

Mr Usmanov denies Vallourec bid

FT reported that Mr Alisher Usmanov, the Russian metals tycoon, said recently that he was considering building a relationship with Vallourec.

Mr Usmanov denied that he was bidding for the company but said his Metalloinvest metals concern was considering building relations. He said “We are only starting to study the question.”

Shares in the French pipe maker rose 4% to EUR 214.17 on rumors that Mr Usmanov was bidding for it at EUR 280 per share.

TMK to support pipe plant venture in Venezuela

FIS reported that TMK has prepared a contract with Venezuela on pipe supplies, after preliminary agreement on this issue was reached with the plant's delegation during the visit to Venezuela at the beginning of October 2007. TMK is to provide a necessary package of documents on designing, construction and operation of the pipe plant in Venezuela.

Binding of the agreements is to be made on October 24th to 26th 2007 in the course of a bilateral intergovernmental committee presided by the Mr Alexander Zhukov vice minister of RF and Mr Horhe Rodriguez Vice President of Venezuela.

RUSAL yielded leader’s position in aluminum

United Rio Tinto Alcan has announced through the web it is a new global leader in aluminum production. Rio Tinto emerged as an absolute leader once it completed takeover of 79.4% in Canada’s aluminum producer Alcan. The deal budget reached USD 38.1 billion. As a result, the share of aluminum in Rio Tinto’s output stepped up from 9% to 32%.

United RUSAL of Russia fell to the second place. The company had won the leading standing on consolidation of RUSAL, SUAL and the alumina assets of Glencore. That deal was finalized in late March of 2007.

Today’s RUSAL annually produces 3.9 million tonnes of aluminum and 11.3 million tonnes of alumina. But united Rio Tinto Alcan will make 4.3 million tonnes of aluminum and 8.7 million tonnes of alumina.

US Alcoa that also attempted to buy out Alcan is the last of the global trio.

Rautaruukki eying construction boom in Russia

Mr Sakari Tamminen CEO of Rautaruukki Oyj recently said that it is stepping up output in Russia as a construction boom extends to cities beyond Moscow and St Petersburg. Mr Tamminen said the Rukki plans to triple output at its Ventall plant in Russia.

Mr Tamminen that the healthy growth is more and more outside Moscow and St Petersburg and there are about 20 big cities with very high drive in consumption.

According to the Economy Ministry Russia's economy, the world's 10th biggest expanded 7.7% in the first eight months as construction and retail sales thrived. Growth in emerging markets, including Russia, may be 8.4% this year.

Mr Tamminen said demand for Rautaruukki's products is also increasing in Poland and Hungary, while Turkey and Kazakhstan may become a new frontier for economic growth, leading to non residential construction. It also started building a factory in Romania to serve the local and Bulgarian markets as both nations benefit from joining the European Union.

MMK to get new environmental management certificate

It is reported that Magnitogorsk Iron & Steel Works has successfully undergone the re certification audit procedure and proved its compliance with the international ISO 14001-2004 environmental management standard. The audit was conducted by TUV NORD CERT; it proved that MMK’s environmental management system is functioning properly.

Magnitogorsk Iron & Steel Works introduced its environmental management system and had it certified in 2004. Every year since, MMK has been undergoing additional audit to prove its compliance with the standard. The last certificate was valid through November 2007, and the re certification audit showed that the company meets all the international requirements and can be given the EN ISO 14001: 2004 certificate. The certificate covers most of MMK’s departments, including the by-product coke department that used to be part of Russian Copper Company. The new certificate will be valid for three more years.

Magnitogorsk Iron & Steel Works implemented a number of restoration and modernization projects on its premises, which led to the amount of harmful emissions decreasing by three times compared to 1991. The company has a long term Environmental Program that provides for the use of the best existing conservation technologies in all of its divisions. The annual investments in the fulfillment of the Program come to more than RUB 1 billion.

Ukraine exported 20.21 million tons of iron ore in 2006

It is reported that Ukraine exported 20.21 million tonnes of iron ore in 2006 up by 3.8% YoY as compared to 19.47 million tonnes in 2005.

Among them, Czechoslovakia imported 3.97 million tonnes, followed by Czech Republic and Poland with 3.82 million tonnes and 3.33 million tonnes respectively. Austria imported 2.51 million tonnes, followed by China, Yugoslavia, Rumania, Turkey, Hungary, Bulgaria, Germany, Italy, Kazakhstan, India and Russia.

Chelyabinsk lifts refined zinc production

Metals Insider reported that Russia’s Chelyabinsk Zinc Plant produced 122,676 tonnes of SHG zinc and zinc based alloys in the January to September 2007 period, representing an 11.3%YoY increase.

Chelyabinsk Zinc Plant mining subsidiary Nova Zinc which operates the Akzhal zinc and lead mine in Kazakhstan saw mined zinc fall by 3.6% to 23,365 tonnes as a result of lower grades which were only partly offset by higher throughput.

Ukraine’s GDP growth to slow down in 2008

According to an October analytical review of the Standard & Poor's international rating real GDP growth in Ukraine in 2008 could slow to 4.55% down from 6.8% expected in 2007.

According to the review, in 2009 the pace of GDP growth could increase to 4.8%, and in 2010 to 6%. Annual average inflation in the country in 2007-2010 could be 13%, 16%, 17% and 9%, respectively.