SAIL Q2 2007 net profit up by 18% YoY to INR 1700 crore

Steel Authority of India Limited has posted a net profit of INR 1,700.24 crore for July to September 2007 quarter up by 18% YoY, which is the highest ever Q2 net profit. This helped SAIL to achieve highest ever April to September 2007 net profit of INR 3, 225.36 crore up by 14% YoY. SAIL also recorded highest ever July to September 2007 quarter turnover of INR 10,371.63 crore up by 8.2% YoY and with this, it achieved its highest ever April to September turnover of INR 19,270.08 crore up by 7% YoY.

The improvement in financial performance was due to higher production of saleable steel, including value added products, higher sales volume, improvement in major techno economic parameters, lower interest cost and higher interest earnings.

Mr SK Roongta chairman of SAIL said that "Record capacity utilization of 117% in the second quarter augurs well for strengthening the current performance. Thrust will continue to be upon implementation of our modernization & expansion plans, in order to play a vital role in the growth phase of India."

The highlights of performance during July to September 2007 quarter include
1. Record saleable steel production of 3.25 million tonnes up by 10% YoY
2. Thrust on stepping up production of value added items continued and output touched 1 million tonnes up by 20% YoY
3. Best ever capacity utilization of 117%
4. Improvement in key techno economic parameters also continued, with reduction of 2% in coke rate and 1% in energy consumption
5. Production through the continuous casting route went up to 2.13 million tonnes up by 6% YoY.
6. Thrust on production of value added items resulted in growth in production of electrode quality wire rods with 53%, high corrosion resistant TMT bars for coastal areas with 664%, LPG grade steel with 38%, SAILCOR with 100%, rails with 11% and tinplate with 59%

Indian iron ore spot price surge in China stalls last week

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced that the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on October 29th 2007.

The change is with respect to prices posted on October 23rd 2007.

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters are the largest trading association in China.

Bihar Tubes inks JV with Kusakabe to set up SS tube unit

Bihar Tubes Limited has informed BSE that it is charting an aggressive growth path ahead with expansion planned in Maharashtra and is at an advanced stage of finalizing a diversification into API grade pipes, precision automobile tubes, infrastructure pipes and stainless steel pipes.

Bihar Tubes has entered into an agreement with Japanese tube pipe supplier Kusakabe to set up a JV company with capacity of 12,000 tonnes per annum stainless steel pipes and tubes in India. Project cost for the first phase is estimated to be USD 5 million, which would be financed partly by an equity infusion of USD1.65 million, 20% of the equity stake would be brought in by Kusakabe against payment in cash, while the balance 80% stake will be initially held by Bihar Tubes. Balance would be funded in the form of bank loans.

Applications for stainless steel pipes and tubes include heat exchangers, boilers, condensers refrigeration, instrumentation, hydraulics fuel injection, exhaust systems for automobiles, general piping for power plants, space applications and special piping for nuclear applications. Its JV with Kusakabe would cover all products, except the automotive market serviced by Kuma Stainless Tubes, the other Indian JV company of Kusakabe.

JSW Steel looking to secure iron ore mines overseas

JSW Steel recently said that it is looking for acquisition of iron ore mines overseas to reduce dependence on imported ore.

Mr Sajjan Jindal vice CMD of JSW said "Currently, we meet 70% of our iron ore requirements through imports. We want to reduce this. Towards this, we are looking for acquisitions of iron ore mines overseas."

Mr Jindal said that "Our dependence on import is 30%. We want to maintain this level even after we reach up to 10 million tonne. Our goal is to achieve 60% of requirement from our own sources."

Without disclosing the location it is looking for acquisition of iron ore mines, he said that even if we can not bring iron ore from the country in which it is located, we will sell ore overseas at international price and buy from overseas at that price as well.

JSW Steel currently manufactures 4 million tonnes of steel in its Vijaynagar facility and is working on expanding capacity by additional three million tonnes by 2008 and further to 10 million tonnes by 2010.

Maharashtra Seamless Q2 net down by 6.5% YoY

Maharashtra Seamless Limited has announced the following un audited results for July to September 2007 quarter.

MSL has posted a net profit of INR 581.6 million for July to September 2007 quarter down by 6.5% YoY as compared to INR 621.8 million in July to September 2006 quarter. Its total Income has increased from INR 3533.8 million in July to September 2006 quarter to INR 3914.4 million for July to September 2007 quarter.

Jayaswals Neco BF at Siltara down for last 4 days

Jayaswals Neco Limited announced that the production at its steel plant division at Siltara Growth Centre at Raipur in Chattisgarh has been stopped since October 26th 2007 as a result of break down at the blast furnace.

The release said that technicians and engineers are working round the clock to repair and restart the production activities at the blast furnace and it is expected that the operations will be resumed in 4 days.

The release added that all other Divisions are working normally.

FACOR Q2 net profit up by 248% YoY

Ferro Alloys Corporation has posted a net profit of INR 43.75 crore for the July to September 2007 quarter up by 248% YoY as against INR 12.57 crore July to September 2006 quarter. Net sale has recorded at INR 266.07 crore up by 52.3% YoY as against INR 174.6 core.

INR in crore

Mr RK Saraf CMD of Ferro Alloys Corporation said that “Apart from the boom in the steel sector, better management of the production facilities and also cost cutting measures have helped phenomenal rise in the net profit for the current quarter.” He added that it would be investing around INR 3,000 crore in the next 4 years on various expansion plans. Out the total investment, around 30% would be raised from internal accruals and the rest from debt.

In the first phase, it would be setting up a 45 MW captive coal based power plant in Orissa. A separate division called Facor Power Limited has been created for this purpose and the project is likely to be commissioned in 18 months after January 2008. Also in the first phase, it plans to invest INR 25 crore for setting up a forging unit and besides, it will also be investing INR 2,500 crore to set up a 0.5 million tonnes Greenfield stainless steel plant in Orissa and a 250 MW power plant.

Prakash Industries inks MoU with MP for thermal power station

Prakash Industries Limited announced that it has entered into a MoU with the government of Madhya Pradesh on October 27th 2007 to establish and operate 1000 MW thermal power station at Sohagpur district with an investment of approximately INR 4500 crores.

Prakash Industries would be entitled to wheel the power through MP Transco, Other Grid Lines or its own dedicated lines for its own use or for its customers.

BHEL Q2 2007 net profit up by 91% YoY

Bharat Heavy Electricals Limited has announced the following unaudited results for the July to September 2007 quarter

BHEL has posted a net profit of INR 6876.6 million for the July to September 2007 quarter up by 91% YoY as compared to INR 3600.1 million for July to September 2006 quarter. Total income has recorded at INR 44662.5 million up by 26% YoY as against INR 35080 million.

Tuticorin Port sees rise in traffic volume

It is reported that Tuticorin Port has seen a rise in traffic volume after it announced changes through trade notice to handle deep draught vessels at anchorage beyond the permissible draught of 10.7 meters.

Mr A Subbiah, deputy chairman of Tuticorin Port Trust said that enthused by the amendment, importers brought a coal and a coke vessel carrying 53,106 tonnes and 46,759 tonnes respectively with draught of 12.5 meters and 12 meters and handled part cargo at the anchorage using self propelled barges till the vessel reached 10.7 meters and the balance cargo was handled at the berth directly.

He added that for the first time a vessel MV Bei Hai with a parcel size of 43,497 tonnes, drawing 11.45 meter draught, was handled at the port anchorage on October 8th 2007. It discharged 4,500 tonnes at the anchorage to self propelled barges to reach 10.7 meter draught and the cargo was further unloaded at zone B. This performance was achieved in spite of intermittent rain during the course of handling. The cargo was imported from Australia.

TATA eying more investments in SA mining industry

A report in Economic Times mentioned that TATA may soon make a foray into South Africa's lucrative mining industry. The report said that TATA could team up with one of South Africa's established mining companies instead of going it alone.

According to the report, TATA has already earmarked an investment of USD 450 million in sectors such as telecoms and ferrochrome in South Africa. And as the world's largest producer of platinum group metals, manganese, chrome, gold and vanadium, South Africa would be a good place for the company to strengthen its global presence as well as build on its strategy of progressing towards raw materials security for its global business. South Africa is also one of the world's top ten producers of coal, iron ore, aluminum, nickel and uranium.

Mr Raman Dhawan MD of Tata Africa Holdings told ET that it would not like to restrict itself to gold or diamond mining. He added that "We would like to engage ourselves in all forms of mining. Like in our other businesses here, we would like to partner with an established company in the mining sector too."

TATA is said to be exploring opportunities to mine chrome, manganese, coal and iron ore in South Africa. It is already constructing a ZAR 650 million high carbon ferrochrome plant in Richards Bay on the KwaZulu Natal coast and in May 2007, its local arm TATA Africa said that it was considering setting up a vehicle assembly plant in South Africa.

In August 2007, TATA acquired a 35% stake in Riversdale Mining's Mozambique Coal Project for USD 86 million. The project, which would provide coking coal for its plants in Europe and India, was seen as opening the door for TATA to invest in South African coal mines. TATA Steel currently imports 1.3 million tonnes or 30% of its annual coal requirement and it has said this could rise to two million tonnes.

Sical Logistics Q2 net profit up by 115% YoY

Sical Logistics Limited has announced the unaudited consolidated net profit for the July to September 2007 quarter.

Sical Logistics Limited has posted a net profit of INR 18.94 crore for the July to September 2007 quarter up by 115% YoY as against INR 8.79 crore for the July to September 2006, while profit before tax was recorded at INR 18.94 crore up by 54% YoY as against INR 12.27 crore. Consolidated net sales for the July to September 2007 quarter was INR 264 crore down by 2% YoY as compare to INR 269.52 crore for the July to September 2006 quarter.

Mr Sudhir Rangnekar Group CMD of Sical said that “The second quarter results are broadly in line with our internal targets. During this quarter, we signed the Sical road terminal agreement at Nagpur with MADC and the rail terminal agreement is also expected to be signed shortly. Our container rail operations are expected to commence by December 2007, for which the rolling stock will be received next month. The Sical iron ore terminal project is expected to commence from next quarter after financial closure. We maintained our leadership in container logistics, with steady growth in volumes at the Chennai, Vizag & Tuticorin ports. The success of the quarter was further highlighted by our winning the coveted ‘Best Bulk Logistics Provider’ award at the Express, Logistics and Supply Chain Conclave in Mumbai.”

Sical Logistics Limited is India’s leading integrated multi modal bulk and containerized logistics solutions provider handling around 22 million tones of bulk cargo as well as over 5,00,000 TEUs of containerized cargo. The services of the company are segmented are
1) Bulk logistics like stevedoring, port terminals, customs and agency services like trucking, rail road and warehousing.
2) Container logistics like box terminals, ICDS and CFS
3) Offshore logistics like owning PSV or dredging

Global Investor’s Indore Summit opens with a fabulous start

It is reported that Global Investors' Indore Summit has got a fabulous start as several MOUs worth INR 57,400 crores were signed in the presence of Mr Shivraj Singh Chohan chief minister of MP on the opening day of the mega event.

The first MoU was signed with Reliance Power Limited in the presence of its chairman Mr Anil Ambani. Reliance Power will set up a 3,960 MW Sasan ultra mega power plant in Sidhi district of Madhya Pradesh.

The second MoU was signed between Sanghi Industries and TRIFAC, under which, a Greenfield cement plant of 7 million tons per annum will be established at Katni and Satna districts with an investment of INR 5,000 crore.

The third MoU was signed with ACC. Limited for setting up of 2.2 million tons per annum capacity state of the art cement plant at a cost of INR 1200 crore.

In addition, a thermal power station at Chitrangi Tahsil of Sidhi district would also be established. Besides, 4 cement manufacturing plants each with capacity of around 5 million tons per year in the vicinity of Sasan project and limestone reserves in the state would be set up. An airstrip or airport would be developed in Sidhi district for the benefit of industrial and other development of the area. A technical institute would be set up at Bhopal. An investment of INR 50,000 crore will be allocated to these projects.

General Nice Resource upgrades its Indian office

It is reported that General Nice Resources (Hong Kong) Limited, a trading and mining company with interests in iron ore, steel and coke, has upgraded its Indian arm General Nice Mineral Resources (India) Limited to a fully operational company from a liaison office.

Mr Ravi Shankar CEO of General Nice Resources (Hong Kong) Limited said that the foray into India would help fulfill its vision to succeed on an axis of China, India and the ASEAN nations. General Nice Mineral Resources (India) Limited is targeting a sales turnover of INR 122 crore for the current financial year, although Mr Shankar expects that figure to touch INR 200 crore.

General Nice Resources Limited recently established mining and trading operations in Indonesia and plans to set up a metallurgical coke plant in Thailand, which will cater to the Thai and Indian markets. In China, it has trading interests based in the port city of Tianjin and a shareholding in a large steel mill there.

Hong Kong based General Nice Resources Limited had recorded sales worth USD 960 million in the last financial year, but has been expanding into the rest of Asia in the last few years. It set up a liaison office in India in 2005 and is now in the process of setting up a trading business in India. It also hopes to acquire mining interests in India and use India as a base to venture into the steel product trading market in West Asia.

Taiwan, S Korean and Indian JV to set up solar panel unit in WB

It is reported that a 8 member team from South Korea, Taiwan and Singapore and officials from Kolkata based Synergy Renewable Energy has met Mr Buddhadeb Bhattacharya chief minister of West Bengal and formalized an agreement to set up a USD 400 million JV project to manufacture solar wafer at Durgapur in West Bengal.

Synergy Renewable Energy will hold 30%, while South Korea’s Komex along with its associates from Singapore, Taiwan and South Korea will hold 60% stake in the company. The Komex led consortium members include Green Energy Technology of Taiwan, Glosil of South Korea, Smart Applications of South Korea, S&T Solar Pte of Singapore, Rectec International and Motech of Taiwan. The West Bengal government has decided to pick up 10% equity through the West Bengal Renewable Energy Development Agency in the project.

Under the agreement, a company christened Kits Solar, will be incorporated and registered in Kolkata with an authorized share capital of INR 200 crore. It will be a 100% export oriented unit., which will become operational in the next 1 year.

This will be the first wafer manufacturing facility in India and will also mark the entry of Korean and Taiwanese majors in the field of solar energy in India. Solar wafers are used to manufacture solar panels and modules which go into generating electricity from sunlight.

Nippon Steel H1 profit up by 5.6% YoY

Japan’s Nippon Steel Corp announced that its group net profit in the fiscal H1 of 2007 up by 7.5% YoY on solid sales of high grade steel and higher prices for some of its products.

Nippon said that its output and sales said its net profit increased to JPY 176.41 billion in the H1 of 2007 as compared to JPY 164.11 billion in H1 of 2006. Group sales went up by 17% YoY to JPY 2.316 trillion from JPY 1.983 trillion.

An overview of operating performance by business segment is as shown below

(IN JPY Billions)

(IN JPY Billions)

In the steelmaking and steel fabrication business, Nippon Steel strived to be a stable supplier in response to solid global demand amid the sharp rise in raw material prices while also adapting to the polarization between medium high grade and commodity grade steel.

In medium high grade steel products, Nippon moved forward steadily in expanding its own production capacity, smoothly bringing new facilities on stream, including hot dip galvanizing lines at the Kimitsu, Nagoya and Hirohata works and the expansion and relining of the No. 1 blast furnace at the Nagoya Works. At the same time, the Company drew on capacity from Group companies and strategic partners in Japan and abroad. These efforts enabled Nippon Steel to meet burgeoning demand from automotive, shipbuilding, machinery and other manufacturing industries. In product development, management stepped up efforts aimed at more closely coordinating manufacturing, sales, technologies, and research operations to better serve customer needs. Working together with a customer in development, the Company developed and commercialized the world’s first highly corrosion resistant steel plate for crude oil tankers. In commodity grade steel products, the Company continues to keep a close eye on key market indicators, such as real demand and market inventory levels.

In reaction to sharply higher prices for raw materials, the Company continues to move forward with internal efforts to the greatest extent possible on reducing costs, and as demand continues to be firm worldwide, it is also working to increase steel prices in many fields of application and product categories.

For the fiscal year ending March, Nippon Steel left its group net profit outlook unchanged at JPY 365 billion. But it lowered group sales outlook to JPY 4.750 trillion from JPY 4.800 trillion.

Vallourec to acquire 3 tubular business from Grant Prideco

One of the world leader in the production of seamless steel tubes, Vallourec announced that it has reached an agreement regarding the acquisition from Grant Prideco of Atlas Bradford® Premium Threading & Services, TCA® and Tube-Alloy™. The agreement is subject to customary regulatory approvals.

The purchase price is USD 800 million on a net debt free basis, payable in cash. For the last 12 months Atlas Bradford®, TCA® and Tube-Alloy™ had combined sales of USD 229 million and acquired EBITDA of USD 74 million, representing a combined EBITDA margin of 32%.

Atlas Bradford® is recognized in North America as a leading supplier of premium OCTG connection technology. Atlas Bradford® will complement Vallourec's VAM® product offering, providing an additional range of integral connections for the industry's most demanding applications.

TCA® specializes in heat treatment operations and markets high grade tubular products with a strong focus on short lead time orders. TCA® will provide Vallourec with additional premium capacity, a specific expertise in sour services as well as a clear geographical fit enabling Vallourec to extend its North American footprint.

Tube-Alloy™ produces and repairs down-hole tubular accessories for the oil & gas industry, and specializes in complex threading and machining for custom made orders. Combining this new activity with Vallourec's international client base, will open up interesting growth opportunities for the Group.

Mr Pierre Verluca chairman of Vallourec's management board said "This is an exciting opportunity for Vallourec. Atlas Bradford®, TCA® and Tube-Alloy™ have an excellent track record for providing leading premium connection technology and excellent customer service, and we look forward to welcoming the teams to our Group. These three businesses will significantly enhance our offer to customers in the North American oil & gas market whilst reinforcing Vallourec's leadership position in high value added products."

Rothschild, Calyon and Société Générale acted as Financial Advisers to Vallourec.

Nippon, Sumitomo and Kobe to further expand ties

Nippon Steel Corporation, Sumitomo Metal Industries and Kobe Steel have decided to study the following additional measures to further expand and enhance their cooperative ties.

1. They are studying ways to expand joint use of iron and steel making facilities at Sumitomo Metals’ Wakayama Steel Works as a source of high grade steel

Sumitomo Metals has decided on basic policies relating to the construction of a new No 2 Blast Furnace at its Wakayama Steel Works, with the aim of bringing the new furnace on stream in the 2nd half of the fiscal year ending March 31st 2013. This project involves renewal of the current No 5 Blast Furnace and expansion of steel making facilities among other measures. It follows the decision to build a new No 1 Blast Furnace at Wakayama Steel Works, which is scheduled to come on stream in June 2009. In response, Nippon Steel, Sumitomo Metals, and Kobe Steel have decided to study ways to expand the effective use of these new iron and steel making facilities jointly as a source of high grade steel.

2. Nippon Steel and Sumitomo Metals are studying 2 way collaborative measures

A. Study on ways to secure capacity for high grade sheet products
i) Study on Sumitomo Metals’ increased use of hot rolling capacity of the Nippon Steel Group - The two companies will study an integrated approach that will combine the use of the hot rolling capacity of the Nippon Steel Group with the downstream rolling facilities at Sumitomo Metals’ Wakayama Steel Works in processing Sumitomo Metals’ high grade steel slabs.
ii) Study on the Nippon Steel Group’s increased use of rolling capacity for sheet products at Sumitomo Metals’ Wakayama Steel Works

B. Study on effective use of facilities at Sumitomo Metals (Naoetsu) Ltd
i) Study on an integrated approach that will combine the use of Nippon Steel’s hot-rolling capacity with Sumitomo Metals (Naoetsu)’s downstream rolling facilities in processing nickel-based, stainless steel slabs from Sumitomo Metals’ Wakayama Steel Works ii) Study on the Nippon Steel Group’s use of the rolling capacity at Sumitomo Metals (Naoetsu)

3. Nippon Steel and Kobe Steel are studying w way collaborative measures

A. Study on the production and use of direct reduced iron as well as the recycling of dust generated by blast furnaces and basic oxygen furnaces

B. Study on sintering technology as well as application technology for higher quality pellets for blast furnaces, as part of the technology exchange between the two companies’ iron making departments

4. Sumitomo Metals and Kobe Steel are studying 2 way collaborative measures

A. Study on an alliance between their high-strength steel bolts businesses

B. Study on Sumitomo Metals’ consigning production of stainless steel boiler tubes to the Kobe Steel Group

C. Study on expansion of Sumitomo Metals’ consigning titanium hot rolling to Kobe Steel

The three companies have also decided to commence studies on additional cross purchases of shares for the purpose of ensuring the smooth and steady examination and implementation of the aforementioned collaborative measures.

Nippon Steel Corporation, Sumitomo Metal Industries and Kobe Steel have realized substantial benefits from ongoing collaborative efforts. These include Nippon Steel and Kobe Steel supplying hot rolled steel coils to Sumitomo Metals, the joint use of iron and steel making facilities at Sumitomo Metals’ Wakayama Steel Works, integration of some of their businesses and affiliates and reciprocal production support among the three companies.

Xstrata Coal acquires majority shareholding in Austral Coal

Xstrata Coal Pty Limited announced the successful acquisition of a majority shareholding of 85.85% in Austral Coal Limited via its subsidiary Helios Australia Pty Ltd following Centennial Coal Company Limited’s acceptance of its cash offer of AUD 1.83 per share, valuing Austral at approximately AUD 557 million on a fully diluted basis.

Xstrata said that this acceptance means that Xstrata Coal’s bid condition of a minimum 80% acceptance has now been met and Xstrata Coal now assumes management control of Austral’s Tahmoor underground mine.

Austral’s Tahmoor mine is an underground longwall hard coking coal operation in the southern coalfields of New South Wales, producing approximately 2.3 million tonnes in the last financial year.

The offer is now unconditional and remains open for acceptances by other shareholders until November 20th 2007.

WSD ranking of world class global steelmakers

World Steel Dynamics has released the ranking of global steel makers as on June 1st 2007. All companies in the list, in WSD opinion, are positioned to be winning performance in future. The purpose of the ranking are to better understand companies attributes rather than imply that one company is better than other

In million tonnes
AS of June 2007

The ranking is based on Weighted-Average Score of following areas

US Steel Q3 earnings dip by 35% YoY

United States Steel Corporation has reported third quarter 2007 net income of USD 269 million down by 10.9% QoQ as compared to USD 302 million in April to June 2007 quarter and down by 35.5% YoY as compared to USD 417 million in July to September 2006 quarter.

US Steel reported third quarter 2007 income from operations of USD 360 million as compared with income from operations of USD 391 million in the second quarter of 2007 and USD 561 million in the third quarter of 2006.

Mr John P Surma chairman & CEO of US Steel said that "We had a good quarter as each of our segments effectively responded to diverse challenges, including general economic concerns that affected our major markets. We made good progress in implementing a unified business model for our Tubular segment and are realizing synergies from the Lone Star acquisition."

US Steel said that “Management believes segment income from operations is a key measure in evaluating company performance. U. S. Steel's reportable segments and Other Businesses reported segment income from operations of USD 433 million or USD 78 per ton in the third quarter of 2007 as compared with USD 434 million or USD 79 per ton in the second quarter of 2007 and USD 652 million or USD 117 per ton in the third quarter of 2006.”

The release added that “Flat rolled income from operations improved for the third consecutive quarter, despite a USD 9 per ton decrease in average realized prices and higher raw material costs compared to the second quarter. The improved results primarily reflected higher operating rates including hot rolled band shipments to support Tubular, and lower outage and energy costs.”

US Steel said that the decrease in European operating results was due primarily to lower shipments related to outages, increased raw material costs and higher unit costs resulting from lower raw steel capability utilization.

US Steel said that tubular operating results declined due mainly to lower prices and the effects of integrating Lone Star into the U. S. Steel supply chain and establishing our unified business model. Distributor inventories and imports remained high.

MEPS forecast for North American steel prices

MEPS said that as per their earlier prediction, North American Average Hot Rolled Coil transaction figure climbed upwards this month. It said “The inventory drawdown is all but complete, which prompted buyers to return to the market. Further increases are forecast as buying activity picks up into the New Year.”

MEPS said that “Its North American Average Cold Rolled Coil transaction value also moved up during October at a similar rate to the hot rolled figure. The price differential between the two products fell to a three year low of less then USD 40 per tonnes in May 2007 after reaching its highest point for four years at the end of 2006. MEPS added that its cold rolled premium has now been relatively steady for the past four months at USD 55 to USD 60. Although it still remains below the average of recent times, we do not envisage it rising over the forecast period because cold rolled coil demand continues to be weak.”

MEPS said that the transaction figures for both products are expected to escalate well into the second quarter of next year as raw material costs increase and customers rebuild depleted inventories but due to a weaker US economy, values are not predicted to reach record highs in 2008.

Sumitomo Metals to replace 1 more BF at Wakayama Works

Sumitomo Metal Industries Ltd has decided to build a second new blast furnace to replace the No.5 furnace now in operation and reinforce steelmaking facilities at the Wakayama Steel Works. Total capital expenditure for these facilities is estimated at approximately JPY 90 billion.

The new No 2 blast furnace of 3,700 cubic meter size is identical in terms of size and specifications to the No.1 Blast Furnace now under construction. The sharing of operating know how and spare parts will thus facilitate stable operations and cost reductions. A new continuous casting machine will also be added to the steelmaking plant at the Wakayama Steel Works to manufacture high-quality slabs for high-grade steel sheets, thus eliminating a production bottleneck.

Schedule for replacing blast furnaces at Wakayama Steel Works is as under

This investment, combined with investments in the No 1 blast furnace now under construction to replace the existing No 4 furnace, will give Wakayama Steel Works a production capacity of ordinary crude steel of 5 million tons per year from the latter half of fiscal 2012, when the facilities announced today are scheduled for completion.

The increased crude steel output will be used to execute the growth and distinctiveness strategy of Sumitomo Metals' sheet and plate business as well as to expand and enhance ongoing cooperation with Nippon Steel Corporation and Kobe Steel Ltd by increasing the supply of slabs to these companies.

Voestalpine Profilform acquires 75% stakes in Meincol in Brazil

Austria's biggest steelmaker, Voestalpine AG has announced to buy Meincol Distribuidora de Aco Ltda of Brazil, its first venture in steel parts for trucks and buses in South America.

Voestalpine in a statement said that, voestalpine Profilform GmbH has acquired 75% of the company as well as the option to purchase the remaining interests from the previous owners, but not until 2011 at the earliest. The referring contract was signed at the end of last week in Brazil. The parties agreed not to disclose the purchase price.

Meincol Distribuidora de Aço Ltda has a workforce of around 300 employees and achieves annual revenues of approximately EUR 110 million. Founded in 1945, the company has an ultra modern production facility that has been expanded in recent years at considerable expense. Meincol Distribuidora de Aco Ltda. are mainly well known partners in the automotive and automotive supply industries, including the bus, commercial vehicle and cab segments, as well as the construction and furniture industries.

Voestalpine Group is represented in Brazil by two companies Special Steel Division Villares Metals SA and Railway Systems Division VAE Brasil Products Ferroviários Ltda.

Profilform, voestalpine's third largest unit, achieved operating earnings of EUR 146 million on sales of EUR 970 million for its financial year 2006-2007.

Zinifex and Umicore raise USD 2.5 billion in Nyrstar IPO

Zinifex Limited confirmed that the public offer of shares in Nyrstar NV, the world’s largest zinc metal producer, was successfully completed and announced the final offer price and details.

1. The Offer was priced at EUR 20 per ordinary share.
2. The total number of shares allocated amounts to 100,000,000. The Offer size was increased to 86,956,522 shares, an increase of 17,391,304 shares from the initial Offer size. The remaining 13,043,478 shares are subject to the over-allotment option outlined below.
3. The gross proceeds for the Selling Shareholders resulting from the sale of 86,956,522 shares amount to EUR 1,739,130,440, before any proceeds which may result from the exercise of the option to cover over allotments.
4. Zinifex will receive approximately 60% of the gross proceeds of the Offer less Offer costs and any tax payable.
5. Zinifex Limited and Umicore SA/NV have granted the underwriters an option to purchase at the Offer price up to 13,043,478 additional existing ordinary shares of Nyrstar, solely to cover over allotments. The option is exercisable for a period of 30 calendar days from the commencement of conditional trading. Any exercise, in whole or in part, of the option will be announced no later than December 5th 2007.
6. If the over allotment option is exercised in full, the Offer will result in a full exit by the Selling Shareholders.
7. To the extent the over allotment option is not exercised in full and the Selling Shareholders retain residual shares in Nyrstar, Zinifex and Umicore have agreed to a 360 day lock up period from the commencement of conditional trading of the ordinary shares of Nyrstar.

Mr Tony Barnes CEO of Zinifex said that ”We are delighted with the strong interest shown in Nyrstar shares that enabled us to increase the Offer size to the maximum limit and will potentially result in a full exit by Zinifex if the over-allotment option is exercised in full. Zinifex will now focus on growing our mining business to complement the already strong performance from our two mines Century and Rosebery. In addition to our portfolio of exploration and development projects, we believe that attractive opportunities exist to add to both Zinifex’s near term production and to extend total mine life through mergers or acquisitions. The proceeds raised from the sale of Nyrstar will enhance the range of acquisition opportunities that we might consider.”

CAP to increase iron ore and steel output

Dow Jones reported that Chilean steel maker CAP SA will invest USD 3.5 billion in the next 8 years to double its output of steel and more than triple its production of iron ore.

Mr Roberto de Andraca chairman of the board told reporters in Cartagena that CAP plans to expand its production of steel to 3 million tonnes a year within four years, up from a current 1.5 million tonnes. He added that "Our main goal is to grow in order to supply our domestic market."

Mr Andraca said that CAP will spend USD 1.5 billion in expanding its steel operations and will spend an additional USD 2 billion to boost production of iron ore to 15 million tonnes in 2009 and to 27 million tonnes in 2015.

Mr Andraca said that CAP would not contract any debt to pay for its expansion. He said that "We will finance all these projects with our own cash flow and with prepaid sales of iron ore.” He added that CAP is evaluating the possibility of opening up its capital to other partners. He said that “We may team up in a near future.”

CAP is 12.5% owned by Japan's Mitsubishi Corp CAP and currently produces 8 million tons of iron ore and consumes 20% of its iron ore production and exports the remaining 80% to Asia.

During the January t o September period it booked a USD 191 million net profit as compared with a net profit of USD 186 million in the full 2006.

Hübner revenues to increase by 160% by 2009

BNamericas reported that Brazilian metallurgical group Hübner expects gross revenues to expand some 160% through 2009 over the BRL 180 million (USD 102 million) reported for 2006.

Mr Nelson Roberto Hübner owner of Hübner told BNamericas that "We expect billing to reach some BRL 240 million in 2007, some BRL 350 million in the following year and in 2009 reach about BRL 470 million."

According to Mr Hübner, demand is strong this year from the local road equipment sector for products such as trucks and dump trailers. He added that "This industry has undergone a very good recovery."

Hübner is based in southern Brazil's Paraná state.

Change of guard at Xstrata Coal

Xstrata plc has announced the retirement of Mr Peter Coates CEO of Xstrata Coal. Mr Coates will step down from his current role and from Xstrata’s Executive Committee on January 1st 2008 and will remain with the group on a full time basis until March 31st 2008. From April 1st 2008 Mr Coates will take up the position of chairman of Xstrata Australia Limited and will provide, on a consultative basis, support to Xstrata in the area of government, industry and non-governmental organization relations in Australia.

Mr Peter Freyberg currently director of operations of Xstrata Coal will become CEO of Xstrata Coal from January 1st 2008 and will join Xstrata’s Executive Committee from that date.

Mr Mick Davis CEO of Xstrata said “Peter Coates has played an important and decisive role in shaping Xstrata since its creation in 2002 and leaves an impressive legacy at Xstrata Coal, having built the premier thermal coal business in the industry today. I would like to extend to him our best wishes and thank him, personally and on behalf of the Group, for the outstanding contribution he has made to Xstrata.”

Mr Davis added that “I also congratulate Peter Freyberg on his appointment as Chief Executive, Xstrata Coal. Peter brings with him over 28 years of international coal mining industry experience and has played a pivotal role in the success of Xstrata Coal, working closely with Peter Coates . I have every confidence that under his leadership, Xstrata Coal will continue to grow and deliver outstanding operational performance.”

CMC Q4 profit down by 19% YoY

It is reported that Commercial Metals Co has posted a 19% decline in fourth quarter profit, weighed down by the downturn in the U.S. housing market and higher costs. Its net income for the quarter fell to USD 104.7 million from USD 128.7 million a year ago.

CMC’s sales for the quarter rose to USD 2.3 billion from USD 2.2 billion in the prior year quarter. Selling, general and administrative expenses in the quarter rose to USD 156.4 million from USD 135 million in last year.

Adjusted operating profit at the company's domestic mills segment fell by 30% to USD 67.1 million in the quarter, hurt by slowed shipments and softer demand. CMC said that heavy rainfall in Texas and the housing slump slowed rebar shipments to construction sites.

CMC said that due to soft demand about four of its minimills and three melt shops were down for maintenance for 137 days during the quarter, compared with 20 days last year.

Korea Zinc Q3 earnings up by 37.5% YoY

Yonhap reported that Korea Zinc Inc, the world's No 2 zinc refiner net profit up by 37.5% YoY in the Q3 of 2007, because of higher zinc prices.

Korea Zinc Inc in a regulatory filing said that its net income was KRW 108.1 billion (USD 119 million) in the July to September 2007 period as compared with KRW 78.6 billion in July to September 2006 period.

SSAB investigates leak

SSAB has noted that information regarding the third quarter report leaked out before it had been made public. The company has therefore established an internal inquiry to investigate how the leak could have happened.

Helena Stålnert, Information Director at SSAB said “We view what has happened extremely seriously. It is not acceptable that this sort of thing should occur. If it proves to be the case that there are deficiencies in our system and routines, we will take all necessary measures to ensure that our information is released in a correct manner in the future.”

FerrAus identifies high priority iron in East Pilbara region

FerrAus Ltd announced significant new exploration results from recent gravity surveys at both Robertson Range and Davidson Creek iron ore projects in the East Pilbara region of Western Australia.

Mr David Turvey MD of FerrAus Ltd said that "Twelve high priority mineralisation targets that warrant immediate evaluation have been identified from detailed ground based gravity surveys. This success directly follows the use of gravity surveys in the discovery of iron mineralisation at the South West Zone at Robertson Range."

He added that "The excellent results of these gravity surveys have exceeded our expectations and confirm the outstanding exploration potential of FerrAus's Pilbara iron ore projects. They provide the company the basis for targeting an overall +200 million tonnes DSO Hematite resource base on its tenements."

Volumes boost CP Rail earnings in third quarter

Reuters reported that Canadian Pacific Railway posted a 34% rise in profit for the Q3 of 2007 because of higher freight volumes and revenue from coal and inter modal shipments.

Canadian Pacific Railway in a statement said that it earned CAD 219 million in the quarter. That compared with a profit of CAD 164 million in the same quarter a year ago.

Canadian Pacific Railway, which has tracks in both Canada and the United States said that it had revenue of CAD 1.2 billion, which was a 3% improvement. Its operating ratio was 72.9% YoY as compared with 74%.

IMIRDO to sell USD4 billion shares at Tehran Stock Exchange

Midland News Association quoted Mr Ahmad Ali Harati Nik head of Iranian Mines Mining Industries Development & Renovation Organization as saying that its shares worth over IRR 41 trillion (USD 4.3 billion) will be offered in the Tehran Stock Exchange by the end of current Iranian year.

He put IMIRDO’s current capital at over IRR 32 trillion (USD 3.4 billion). IMIDRO ranked 2nd in terms of export among 100 leading companies in Iran. It sold products worth IRR 93.531 trillion (USD 10 billion) in the last Iranian year. It sold 61%, 18%, 9%, 6%, 2% and 4% of steel, copper, mineral, aluminum, cement, and other products respectively last year.

Mr Nik added said that its exports fetched Iran USD 2.457 billion in the previous Iranian year up by 30% when compared to the figure of its preceding year. Shifting to mineral explorations, he announced that investment in the sector doubled last year in comparison with its previous year.

Dubai Metro faces delay as contractors seek more time

It is reported that the USD 4,600 million projects to build the red and green lines on the Dubai Metro scheme could be facing delays of up to 1 year after contractors on the scheme indicated to the Roads & Transport Authority that they need more time to complete work on the project.

According to several senior sources on the scheme, the JT Metro JV executing the civil engineering and construction works is seeking an extension to complete the project. A consultant said that “The amount of time being discussed is changing, but it is several hundred days.”

Significant changes in the design of the system are understood to be the reason for discussion. Roads & Transport Authority has revised the design of the project since the contract was awarded to the Dubai Urban Rail Link consortium in 2005 and the contractors are now seeking more time to accommodate these changes. A source on the project said that “Almost everything has changed except the tunnel diameters and the viaducts. It is very different to the specifications provided in the tender documents. The RTA is adamant that the red line will open on September 9th 2009. So the consortium may be compensated to get it finished on time.”

The Dubai Urban Rail Link consortium, which is led by Japan’s Mitsubishi Corporation, was awarded the contract to build the light rail system’s red and green lines in June 2005. Japan’s Mitsubishi Heavy Industries is responsible for the rail system and the JT Metro JV, comprised of Obayashi Corporation, Kajima Corporation and Turkey’s Yapi Merkezi, is executing the construction works. France’s Systra and US based Parsons International are overseeing the construction.

South Korea to sign a MoU with Oman for LNG supply

It is reported that a delegation led by Mr Kim Young Ju minister of commerce, industry and energy of South Korea has visited Oman and Abu Dhabi recently to discuss expanding cooperation in the energy and other sectors with these countries.

The South Korean delegation is expected to sign a MoU with Oman on long term supplies of liquefied natural gas, joint construction of LNG and storage facilities and joint development of gas fields. A ministry official said details of the MoU will be released after the delegation's visit.

Earlier, Korea Gas Corporation said that it will invest KRW 338 million in a 50:50 JV called Koman Energy with the Oman government. The JV will undertake the trading and storage of LNG in Dubai in United Arab Emirates.

Korean commerce ministry said that in Abu Dhabi, the delegation will discuss with its counterparts ongoing projects such as construction of a steel plant by POSCO Engineering & Construction Co and a local company, and a joint oil field development project by Korea National Oil Corporation and Mubadala Development Company.

Kersten bags tube bending contract from Arabian Aluminum

It is reported that Kersten Europe has won a contract worth USD 4 million (AED14 million) from Arabian Aluminum for tube bending work at the Burj Dubai.

The contract involves the bending and fabrication of around 9.5 kilometer of architectural and structural stainless steel tubes, which will be used for the Burj Dubai building maintenance unit system. Work also includes supply, fabrication and finishing of stainless steel brackets, along with fixing the brackets to the bent tubes.

Mr Rabih Ayash regional director of sales & marketing of Kersten Europe said that "Kersten Europe's proven record of complex projects across Europe and the Middle East was one of the reasons for securing this challenging contract."

Kersten is currently involved in other projects in the Gulf including the Kuwait Trade Centre and the Shaqab Equestrian Academy in Doha in Qatar. It also worked on the Doha Sports City Tower and the Burj Al Arab. It will require more than 4,000 tons of steel for the job.

Update on construction of Dubai Exhibition City

Middle East Economic Digest reported that Dubai World Trade Centre is moving ahead with plans for Dubai Exhibition City and the redevelopment of Dubai World Trade Centre, with companies lining up for both projects.

At least 3 companies including local Alec, Group Five of South Africa and Samsung Corporation of South Korea have submitted bids for the estimated AED 1,500 million (USD 409 million) main construction contract at Exhibition City. The contract involves sub and superstructure work, including the construction of 250,000 square meters of exhibition space. Beirut based Dar al Handasah is the consultant on the scheme.

Selected companies have also been invited to express interest in the first phase of the AED 16,000 million (USD 4,358 million) redevelopment of the Dubai World Trade Centre district. The proposal includes a convention centre, office and residential towers, hotels and hotel apartments, shopping facilities, and the Landmark Tower to be built next to Emirates Towers. The project will be developed over seven to 10 years.

Phase 1 will be split into 6 construction packages and will cover 242,000 square meters of offices, a five star hotel and apartments covering 150,000 square meters, a 35,000 square meter 4 star hotel, a 22,000 square meter 3 star hotel, a 450,000 square meter basement, 20,000 square meters of retail space and landscaping and infrastructure works.

The first 2 packages to be tendered will be for the piling and basement works. Piling work is expected to start in January 2008. Tender documents are expected in November 2007 for the 18 month basement contract.

Khansaheb Civil Engineering is working on the excavation. UK based Mace International is the project manager and is led by Hopkins Architects, with WSP as the engineer.

Construction material prices remain flat in Egypt

Egyptian newspaper Al Masry Elyom reported that building and construction materials are witnessing stabilization in prices these days, cement wholesale and retail prices lingered at EGP 350 and EGP 365 per ton in the delta governorates, while steel prices hovered between EGP 3600 and EGP 3650 per tonne.

Chinese iron ore imports to increase by 10.8%YoY in 2008

Interfax citing a senior industry official forecast at the 7th China International Steel & Raw Materials Conference 2007, held in Dalian recently that China reported that China will import 410 million tonnes of primary iron ore next year up by 10.8% YoY.

Mr Luo Bingsheng VC of the China Iron and Steel Association said "Despite a predicted increase in primary domestic iron ore output to 885 million tons next year up by 38 million tonnes iron ore from this year, China will still see an iron ore shortage of 34 million tonnes next year. On the basis of current market and steel mill stockpiles, we estimate China will import about 410 million tonnes of iron ore next year."

China's primary iron ore production is set to reach 805 million tonnes by the end of 2007, the equivalent of 383 million tonnes of grade 65% iron ore, up by 15.5% from last year. However, increasing demand will require China to import 370 million tonnes of primary iron ore this year, up by 14.2% from last year.

Mr Luo added China is set to produce 530 million tonnes of crude steel next year, up by 10.4% from this year in order to meet an expected increase in domestic crude steel demand of approximately 10% next year. Domestic pig iron production will also expand by 10% to 510 million tons next year.

Mr Luo forecast that China will produce 480 million tons of crude steel this year, up 14% from last year as well as 465 million tonnes of pig iron up 12.4%.

Chinese crude steel production in 2007 estimated at 480 million tonnes

China's steel production in 2007 is expected to hit 480 million tonnes.

Mr Luo Bingsheng VC of the China Iron and Steel Association during the 7th China International Steel & Raw Materials Conference 2007 at Dalian recently said that that steel production in the first nine months was 360 million tonnes and would cross 480 million tonnes in 2007.

China to introduce controls on iron ore imports from November 1st 2007

Interfax reported that China will introduce some measures to control import of iron ore from November 1st 2007.

From November 1st 2007, the China Chamber of Commerce of Metals, Minerals & Chemicals Importers & Exporters, will start recording all contract details, and closely monitor imports so as to avoid both market speculation and the sale of iron ore to outdated steel mills.

China cut the number of licensed iron ore importers from 118 last year to 112 this year.

Mr Luo Bingsheng VC of the China Iron and Steel Association during the 7th China International Steel & Raw Materials Conference 2007 at Dalian recently stressed that increasing freight rates and iron ore prices are having a negative effect on the profit margins of domestic steel mills, which have already dwindled from 9.65% in March to 6.79% in September.

Mr Luo said "In order to combat abnormally soaring freight costs, steel mills have been encouraged to jointly charter iron ore shipping capacity and increase contract of affreightment contracts to 80% of total shipments, or to collaborate with shipping companies on iron ore carrier construction."

Small steelmakers in China struggling to survive iron ore boom

It is reported that a host of small private Chinese steelmakers are increasingly feeling the pinch from escalating raw materials cost, surging freight rates against the backdrop of Beijing's consistent efforts to eliminate inefficient steel capacity.

Analyst with Everbright Securities said that “It is widely expected that contract ore price would continue upward path for fiscal 2008. Our calculation reveals that steel input cost increases CNY 240 per tonnes in the first half of this year, CNY 32 per tonnes rise for coking coal and CNY 178 per tonnes for iron ore. Of this, freight cost has increased by CNY 105 per tonnes. The raw materials cost would further rise CNY 80 per tonne in the second half of this year.”

The soaring iron ore price has hit the smaller private mills the hardest since the end users are holding back their orders in light of the steep steel price mainly driven by the raw material costs. A 1 million tonnes per year private steel producer in Tangshan has been forced to halt production for dearth of sufficient orders.

Securing iron ore supply is on top of the agenda for most private steelmakers these days. Some private mills even take the risk to remit the payment to Indian suppliers in advance, hoping to get iron ore supply a couple of months later.

Smaller steel players are going to race to reach what may be considered to be the desirable and sustainable capacity for steel producers, cautions market observers, as Beijing plans to close 30 million tonnes of low grade blast furnace capacity and 35 million tonnes of low grade crude steel capacity this year. Rising iron ore and coking coal prices are set to depress steel mill's margins and profitability, which would drive small, low efficiency producers out of business.

(Sourced from MySteel.net)

16 sailors on MV Shenhai No 1 feared dead

The Shanghai Evening Newspaper reported that all 16 male crew members on a cargo ship are suspected to be dead. However, there is no official confirmation about their deaths from rescue authorities.

The report said that MV Shenhai No 1 succumbed to gale winds and large waves and sank in the Bohai Sea near Liaoning Province on Sunday. Rescue workers found the body of one victim with a life buoy yesterday afternoon. It said authorities said they were still searching for survivors but suggested the other sailors had a slim chance of survival due to the extremely low water temperature.

The ship, which met with gales and waves of up to four meters high, fired off a mayday 20 kilometers away from the Lushun Port at 8:08AM on Sunday. After picking up the signal, the local maritime search and rescue center immediately sent out a rescue vessel. But Shenhai No 1 disappeared from the radar at 9:29 AM.

As per report the ship, carrying 4,800 tonnes of steel on its way back to Shanghai, belonged to Shanghai Yinghai Shipping Company Ltd.

Chinese SS consumption in 2007 to cross 6.5 million tonnes

Interfax China citing a senior industrial official at the China Stainless Steel Application Development Forum 2007 held in Taiyuan recently reported that China is set to consume up to 6.5 million tonnes of stainless steel this year up by 9.24% from last year's 5.95 million tonnes in 2006.

Mr Li Cheng chairman of the China Special Steel Enterprise Association's SS branch said "China has been the largest stainless steel consumer in the world for 5 consecutive years since 2002. In 2006, China's per capita stainless steel consumption hit 4.6 kilograms, rising above the world average of 4.3 kilograms."

Mr Li also revised a previous prediction for China's stainless steel production this year down to 6.5 million tons from 7 million tons, taking into account slashed production from domestic steel mills on the back of high nickel prices. He added that "Next year's stainless steel production in China will not grow more than 10% YoY.”

Mr Li claimed that the majority of domestic stainless steel mills are still running on reduced capacity in an attempt to support stainless steel prices. He explained that "Each company has adjusted its own production schedule according to its monthly sales performance. However, there is a consensus among domestic steel mills that reducing capacity is an effective way to maintain profitability in a market where nickel prices are experiencing high level fluctuations."

Mr Li commented that TISCO's final production figure is likely to be between 2 million and 2.1 million tons for this year, on the basis of currently production cuts.

According to a prediction from the association, China's stainless steel capacity will reach 12 million tonnes this year up 20% from last year's 10 million tonnes.

Chinese ferroalloy export surge in 8 months

It is reported that China’s ferroalloy exports, which have posted strong trend in 2007, will shrink within this year or even report a negative growth.

Statistics show China exported 2.1722 million tonnes of ferroalloy during January to August 2007 up by 53.2% YoY.
SiMn - Up by 65.9% YoY
75 FeSi – Up by 34.2% YoY
55 FeSi – Up by 32.1% YoY
Medium and low carbon FeMn – Up by 40.6% YoY
High carbon FeCr – Up by 2707.7% YoY
FeNb – Up by 3007.4% YoY

Insiders point out China raised export tariffs on FeSi and FeNb from this June 1st 2007 but this is proven of little avail since export volume is still increasing. In the first eight months FeSi export volume recorded 1.1029 million tonnes, up 34.25%YoY in August FeMn export volume registered 26,800 tonnes up by 93.5%MoM SiMn, 92,300 tonnes up 13,000 tonnes or 16.4%MoM.

Robust demand and price hikes in international market spurred Chinese producers and traders to accelerate ferroalloy exports. Ferroalloy price kept rising from the second half of last year to this June. In Japan transaction price for China origin FeSi stood at USD 810 per tonnes in last year end and gained USD240 per tonnes within half a year to USD 1050 per tonnes in this June 2007.

China is discouraging exports of high energy consuming, high polluting and resource intensive primary products. Exports of Mn ore, Cr ore and ferroalloy are all curbed by government’s macro control policies, including added export tariff imposition and check prices which equal to raising export tariffs to restrict excessive exports. The China government will continue to take measures such as added export tariff imposition, export license and export quota, in a bid to curb growing ferroalloy exports. Insiders note there are also some other uncertain factors.

Ferroalloy producers will see power rate and freight rate hikes, which will push up production costs; ferroalloy price may undulate; some outdated ferroalloy producers will be washed out and ferroalloy output will drop dramatically as the government strengthen energy saving and emission reduction.

(Sourced from MySteel.net)

Coke price to see CNY 80 per tonnes hike in November

It is reported that on October 26th 2007 meeting in Taiyuan, Shanxi Coking Industry Association decided on CNY 80 per tonnes hike on the coke price for November 2007, considering the rising coal prices this month and latest operation of steel and chemical product markets.

Though the coke indicative price is for November 2007 a rise of CNY 80 per tonnes on top of September price the coking enterprises have already asked steelmakers to raise purchase price this month. North China based mill pulled up by some CNY 50 per tonnes. Theoretically, the market price will be CNY 30 per tonnes higher in November 2007.

For instance, purchase price to Tangshan has reached CNY 1480 per tonnes compared with the Shanxi Coking Industry Association's indicative price of CNY 1400 per tonnes. The association cannot actually control the price rise on the market.

The market observers predict next month, the actual price is likely to add CNY 80 per tonnes based on the current market price rather than the indicative price, topping some CNY 1500 per tonnes.

(Sourced from MySteel.net)

Tanggang to set up steel plant in North Korea

According to Tanggang Group in Hebei Province, the group has signed letter of intend with related departments of North Korea to construct a 1.5 million tonnes iron and steel project in Kim Ch'aek Industry Zone in the country.

Kim Ch'aek Industry Zone is located in the eastern coast of North Korea, including two port cities, Kim Ch'aek Port and Tanch'ŏn Port. The zone is rich in mineral resources and is an integrated development zone centering on underground resources mining, metallurgy and smelting, high technology industries and also a manufactures free trade zone and international logistic center. The metallurgy zone is an important part of the development plan for the Zone, and iron and steel and coal based electricity projects are the key one.

After the merge with Xuan’gang and Chenggang, the new Tanggang has a steel capacity of more than 16 million tonnes per year. It intends to raise the crude steel capacity to 30 million tonnes per year by 2010 and have a sale income of CNY 100 billion per year.

Shouganag invests USD 280 million in environmental protection

Mr Zhu Jimin, delegate to the 17th National Congress of the Communist Party of China secretary of Party Committee and President of Shougang Group stated in an interview with China.org that the Shougang Group invested CNY 2.1 billion (USD 280 million) in environmental protection efforts from 1995 to 2006. Shougang has also expanded its factory. Currently, the Shougang factory has become a garden area and scenic spot of the nation's steel industry.

After ten years of ceaseless efforts, their overall waste discharge in 2006 had been lowered: sulfur dioxide, soot and dust discharges have dropped by 78%, 82% and 84% respectively in comparison with 1995 discharges. Today soot and dust is rarely seen around Shougang's former operations.

Mr Zhu believes that the key to pollution treatment is the source of the pollution. He said “Shougang has developed technology focusing on this area. It introduced both domestic and foreign advanced technologies in order to resolve source related pollution problems. In the past pollutants produced from coal coking dirtied the air. In order to solve this problem, Shougang introduced new advanced technology that fundamentally changed the coal coking process. Shougang is also cooperating with Japan to promote this technology.”

He said “We now convert the residual heat and energy and turn the discharged steam into hot water which can be used by local residents. Steel waste is used in making cement materials. We have established a production line consisting of 600,000 tons of water wastes and 300,000 tons of steel slag."

He added that "In addition to combating its own pollution problems, Shougang has begun to develop a friendly relationship with nature. We've developed the 'white waste recovery technology': mixing pieces of white waste with coal and transforming the mixture into an organic fuel. This method can not only solves pollution problems but also provides energy resources for other enterprises. We've made some sacrifices by adopting such practices. But I think that these sacrifices are worthwhile since they are beneficial to both society and nature and may help Shougang to explore a faster, more benign development path."

He also added that "Despite rising costs and investments, we have begun to earn profits from our efforts in fighting against pollution recently. Regarding the dry dust removing technology in large volume blast furnaces and the coke dry quenching technology, both have been sold to other enterprises. And in return, we've made reasonable profits. In fact, Shougang has reached internationally advanced levels in pollution treatment."

China Shipping orders four iron ore ships

It is reported that China Shipping Development Co ordered four iron-ore vessels for USD 360.6 million as demand rises for the raw material used in steelmaking.

China Shipping Development Co said in a statement to the Hong Kong stock exchange that it signed the accord with CSSC Guangzhou Longxue Shipbuilding Co to build four very large iron ore carriers of 230,000 deadweight tons each.

It said the four carriers will be delivered between April 2011 and December 2011, China Shipping said. It will borrow 80% of the ship costs from banks.

Yanzhou Coal 9 months net up by 1.01% YoY

XFN Asia reported that Yanzhou Coal Mining Co Ltd net profit in January to September 2007 rose by 1.01%YoY CNY to 1.83 billion amid higher operating costs and management expenses, which offset increased coal sales and selling prices.

In its financial report filed with the Shanghai Stock Exchange, Yanzhou Coal Mining Co Ltd said it produced 26.94 million tonnes of crude coal and 26.13 million tonnes of commercial coal in January to September 2007, up 3.26% and 4.48%YoY respectively. Meanwhile, it sold 25.69 million tonnes of commercial coal in January to September 2007 up 4.81%YoY.

Yanzhou Coal Mining Co Ltd said average selling prices in January to September 2007rose 11.1% to CNY 376.40 per tonnes despite weak export prices. Domestic prices rose 18.88% to CNY 419.23 per tonnes in January to September 2007 but export prices fell 6.31% to CNY 467.64 per tonnes.

Operating revenue in the first three quarters rose 15.53% to CNY 11.91 billion but operating costs were up 21.75% at CNY 6.45 billion while management expenses were up 30.37% at CNY 1.78 billion.

In the third quarter, the company booked operating revenue of CNY 4.136 billion up from CNY 3.28 billion a year earlier, while the net profit stood at CNY 716.24 million compared to CNY 448.19 million a year earlier.

Mechel may build cement plant at Beloretsk- Report

Kommersant reported that Mechel is planning to build a cement plant to supply fast-growing Russian demand for construction materials.

The newspaper, citing a source in the local government, said that Mechel plans to build the 1 million tonnes per year plant in the republic of Bashkortostan close to its Beloretsk Metallurgical Plant. The report said that the plant would produce clinker using limestone from its existing Pugachyov quarry and production would begin at the end of 2008 or early 2009.

UBS said in a daily note that "The cement market in Russia is likely to remain in deficit in the medium term, leading to high cement prices and hence high profitability. The existence of the limestone raw materials base should make the project more attractive from an investment cost point of view and shorten the time to commission the plant. In our view, diversification into the cement business has the potential to add value for Mechel."

CherMK OAO Severstal to construct a filtration plant

CherMK OAO Severstal’s announced that its environmental load program will include a new filtration plant which combined with other efforts will reduce iron and petrochemical discharge from outlet 10 into the Koshta River by 11 tonnes a year. Construction is expected to be completed in Q4 of 2008.

The 2,000 cubic meters per hour capacity filtration plant is intended for the after-treatment of bar rolling shop and sheet rolling shop No1 off-balance water discharged into CherMK OAO Severstal’s production and storm water drainage systems.

The design envisages the construction of a 700 square meters industrial building to accommodate 8 aluminosilicate media filters. The filters will be capable of after treating off balance waters and return them into the production cycle. The plant will be designed by the ZAO Design Institute’s“Leningradski Vodokanal-Proekt.

Aricom joins LSE main board from AIM

Reuters reported that Aricom began mining at the first of several Russian iron ore and titanium projects recently as it completed its transfer to the main board of the London Stock Exchange from the Alternative Investment Market.

Mr Jay Hambro CEO of Aricom said that "In a relatively short period, Aricom has grown from a small exploration company to a developer and now miner. This evolution will now be reflected in our London listing. He said the company had entered the FTSE 250 following its switch from the AIM, which involved the listing of 1.08 billion existing ordinary shares and 133 million warrants. It opens us up to a wider audience of people. That brings with it, I hope, a greater degree of liquidity."

Mr Hambro said that Aricom has begun mining at the Kuranakh deposit in the Amur region ahead of schedule and ore would be crushed from December for shipping its first concentrate in April 2008 or May 2008. From Kuranakh, Aricom will ship about 900,000 tonnes per year of magnetite ore, containing an average 62% iron and 290,000 tonnes of ilmenite, the ore from which titanium sponge or dioxide is made.

SUEK reports on development plans

FIS reported that Siberian Coal Energy Company published the report 'Energy of Creation' on sustained development by the results of 2006.

The report contains the main principles of the company's long term strategy, priorities of social and personnel policies, the purposes of the company in the sphere of the use of 'clean' coal production and processing technologies, nature conservation and labor safety improvement.

Coke Group launched the new mine in Kemerov

It is reported that Coke Group being under the Industrial Metallurgic Holding Managing Company control launched Romanovskaya-I into operation in Kemerov region.

The capacity is set at 900,000 tonnes coal per year and would need RUB 2.5 billion investments.

To meet the requirements in the K class coal, two more mines are to be launched.

Coke Group involves Berezovskaya, Gornyak, Butovskaya Mine, Tulachermet and Polema mines.

Severstal courts Celtic shareholders

It is reported that OAO Severstal said that management of gold miner Celtic Resources Holdings plc has a history of destroying shareholder value`` and urged investors to accept its EUR 161 million hostile offer. Severstal said "Celtic’s financial performance has been erratic and is punctuated by poor profitability and a volatile production record."

Severstal wants to diversify by acquiring the London based producer of gold and molybdenum. Severstal said that it would run Celtic as though it was a subsidiary even if its bid to buy the whole company fails.

Celtic said in a statement that Severstal’s offer ignored Celtic’s strong financial position and asset base. The company’s board reiterated its view that Severstal’s bid significantly undervalued the company.

Mr Peter Hannen chairman of Celtic said that "Severstal is trying to buy Celtic cheaply through this opportunistic and unsolicited offer. We expect record production levels for the Company in 2007 with substantial increases in 2008, against a background of a sustained rise in the price of gold.”

Russian government approves Titanium JV in India

FIS reported that the Russian Federation government has made a decision on a JV for development of titanium dioxide and other titanium products facility in the state of Orissa in India.

As per report, Rosimuschestvo has been asked to act as the partner on behalf of the Russian Federation in the proposed JV.