Indian iron ore spot prices stay flat last week

China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on January 28th 2008 as under

The change is with reference to that posted on January 21st 2008.

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 & Exporters are the largest trading association in China.

Steel bullock carts replacing wooden ones in rural India

It is reported that steel bullock carts are fast replacing conventional wooden ones in India as the bull used to pulling the heavier wooden carts, is finding the load so light that brakes are needed to be applied to prevent him from racing down the muddy roads of rural India.

Mr RKP Singh director general of Institute for Steel Development & Growth said that “We actually had to devise brakes for the steel carts, since bullocks are used to pulling heavier carts.”

Mr Singh said that the Khadi and Village Industries Commission and INSDAG have tied up for providing training to fabricators for building the carts which will cost INR 15,000 compared to the wooden ones whose cost vary between INR 10,000 and INR 18,000 depending on the availability of wood in that state. However with a bit of painting, the steel carriage serves for nearly 30 years while the wooden one last for about 5 years.

Mr Singh said that “While promoting, the consumption of steel was our main motive. The project has simultaneously scored on 2 other points, it promoted environmental conservation and second it was kind to the animals since these carts are lighter.” He added that although the present rate of steel consumption had exceeded the forecasts made in the national steel policy, the share of the rural market was still very small although there was a good potential in promoting steel use.

The idea, mooted during the recessionary years of the Indian steel industry as part of a programme to boost steel consumption, has now taken off in Maharashtra. The Madhya Pradesh government is also floating tenders to procure steel bullock carts for distribution among tribals.

Instead of baring forests for making a conventional bullock cart, which weigh between 500 to 700 kilogram hollow, square and rectangular mild steel sections are used for the block carts of modern India which weigh only 280 kilogram.

The promoting agencies for INSDAG include the union government, the Joint Plant Committee for Steel, Steel Authority of India Limited, Rashtriya Ispat Nigam Limited, TATA Steel, Essar, Jindal and JSW.

JSW Steel net profit in Q3 dips by 9.3% YoY

JSW Steel Ltd has announced the following unaudited results for the quarter ended December 31st 2007.

JSW Steel has posted a net profit after tax of INR 3,281.8 million for October to December 2007 quarter down by 9.3% YoY as compared to INR 3,621.5 million in October to December 2006 quarter. Its total income has increased from INR 23,173.4 million October to December 2006 quarter to INT 25,981.9 million for October to December 2007 quarter.

JSW's costs of iron ore and coal surged by 75% and 57% respectively in the quarter from a year ago, while total raw material costs jumped by 30% to INR 14 billion. Other expenses climbed by 50% to INR 3.95 billion. Profit margin before tax narrowed to 18% from 23%.

JSW has increased prices in January 2008 to cover higher raw material costs and forecast a 10% jump in rates for the January to March 2008 quarter.

Surging demand in China may help support demand for steel even as a recession looms in the US. Mr Sajjan Jindal VC of JSW Steel said that “The US and EU are not the growing markets for steel. If at all there's a recession in the US, the impact will be minimal.''

Manaksia to set up long product plant in Georgia

Manaksia Limited announced that its board has approved a new project for manufacturing of steel long products in Georgia at a capital cost up to USD 35 million.

JSPL profit in Q3 of 2007-08 surges by 68% YoY

Jindal Steel & Power Limited has posted net profit of INR 319.05 crore for October to December 2007 quarter up by 68% YoY as compared to INR 189.90 crore in October to December 2006 quarter.

JSPL’s total income during October to December 2007 quarter also surged by 39.01% YoY to INR 1,407.41 crore from INR 1,012.43 crore in October to December 2006 quarter.

SAIL MTI inks MoU with ISM for mining programs

Ranchi Express reported that Ranchi based Management Training Institute of the steel Authority of India Limited has entered into an agreement with the Indian School of Mines University to conduct join programs for various organisations in areas of mining, in particularly in steel and allied sectors.

Mr SP Patnaik executive director of MTI and Dr T Kumar director of ISM, while singing a MoU, said that the event is a milestone in the era of mutual cooperation between the 2 premier institutions in the related field in India. The specific areas of mutual cooperation include joint research programs, exchange of faculty and consultancy.

The MoU between the 2 institutions will help modernisation plans of SAIL. The expertise of ISMU in mining and raw material studies will come handy to MTI, while the ISMU students will have practical exposure through the tie up.

Vizag port handles 51.7 million tonnes cargo in 9 months

BL reported that Visakhapatnam port has handled 51.7 million tonnes of cargo in April to December 2007 period up by 15% YoY and retained the number 1 slot again for the 8 time in succession although Kandla is very close on its heels.

Mr K Ratna Kishore chairman of Visakhapatnam port said that during April to December 2007 period, the major ports in India had posted 13% growth and by the end of the financial year the total cargo in all the ports may touch 520 million tonnes.

He said that Vizag port had set a national record by handling 5.83 million tonnes in October 2007, surpassing the previous best of 5.69 million tonnes set by Kandla port in May 2007.

Mr Kishore said that Vizag port has registered growth in all cargoes like iron ore, thermal coal, coking coal, fertilisers and containers. He added that “We are handling Panamax vessels with 10.7 metres. From March 2008, the inner harbour can cater to 11 metre draft vessels. We have plans to deepen the harbour further to handle 12.5 metre draft vessels.”

Meanwhile, Vishakhapatnam port had received approval from the union ministry of shipping to upgrade the outer harbour so that it would be able to handle 200,000 DWT vessels at a cost of INR 185 crore. Apart from that, a project was under way at the general cargo berth in the outer harbour to set up integrated mechanised unloading and stacking facilities at a cost of INR 292 crore on build own and transfer basis. The construction of 2 more berths in the inner harbour would also be taken up in the inner harbour.

Essar Steel to build a new jetty at Hazira

BS reported that in order to match its expansion plans, Essar Steel has sought necessary clearances on an urgent basis to build a new jetty as its captive port facility is unable to handle heavy engineering equipment needed for the on going expansion project at the steel plant and has sought urgent permission from the Gujarat Maritime Board for the purpose.

The report cited a government official as saying that “Essar Steel has communicated to us that they need to construct the roll on roll off jetty very soon so that they can handle very heavy machinery required for the expansion project.”

Meanwhile, Gujarat Maritime Board had last year given the necessary clearances to Essar Steel to expand its jetty at Hazira in south Gujarat by an additional 150 metre, where it is planning to invest INR 450 crore for the expansion. SEZ Hazira Limited, a group subsidiary, had committed investments to the tune of INR 12,750 crore to develop a steel plant, Hazira plate mill and a deep water port and allied facilities at Surat.

Essar Steel currently operates a gas based hot briquetted iron plant with a production capacity of 4.6 million tonnes per annum, which will be doubling to over 8 million tonnes per annum. The plant is supported by a captive power plant of 32 MW.

Chhattisgarh cancels Korba power plant contract with Chinese firm

It is reported that Chhattisgarh government has cancelled the contract awarded to China National Machinery and Equipment Import & Export Company to set up 600 MW thermal power plant at Korba West Hadeo and now awarded it to Bharat Heavy Electricals Limited. It is noted that BHEL had earlier lost the bid to the CMEC which won the contract by quoting the lowest rate of INR 3.61 crore.

Mr Rajib Ranjan chairman of Chhattisgarh State Electricity Board said that “The decision to cancel the letter of intent given to the CMEC was taken after a high level meeting.”

He added that the state constituted a committee to initiate further action against the Chinese firm for delaying construction of the project by 2 years.

LoI was issued to the CMEC with a proposal to design the two units with a capacity of 300 MW each instead of 250 MW in August 2007 but did not start work and asked the board to raise the project cost, citing rise in prices of steel and other inputs as a reason. CSEB held several rounds of negotiations with CMEC but failed to end the standoff and refused to consider CMEC’s proposal and invoked the bank guarantee of INR 35 crore deposited as bid money.

BHEL has earlier bagged the procurement and construction contract for setting up two units of 250 MW each at Korba thermal power project. While the first unit had been commissioned, the second was scheduled to start production by February 2008.

UAC agrees to meet government on POSCO issue

SNS reported that the socio economic survey for the proposed POSCO steel plant, which had a stuttered start after a two year long delay, is likely to resume soon.

As per report, the United Action Committee, a group formed by villagers, has agreed to hold a meeting with the state government on issues raised in connection with the rehabilitation package and resumption of the survey work. An UAC member said that "We are prepared to meet the government any day after January 30th 2008, with a clear 3 day notice."

Another UAC member Mr Nirvaya Samantray stated that the committee will meet after it receives the notice for a meeting with the government and chalk out details of what more is needed in terms of rehabilitation etc. He added that "Each and every aspect needs to be clarified before resumption of the survey work."

It may be noted that the socio economic survey which had started after a two year delay came to an abrupt halt just two days after the start, when some of the UAC members expressed doubts over the rehabilitation package and certain remarks made by an officer of POSCO. The survey work has been stopped for 20 days and repeated efforts to hold meetings and discussions with UAC members have failed with only faction leaders of the UAC turning up for such meetings.

Importantly, the district authorities have been trying to explain to the UAC that it is just not possible to work out every detail, compensation costs etc unless the basic survey is done. But some of the UAC members are insisting on detailed rehabilitation, compensation etc prior to the survey.

JSW line up plans for carbon business

It is reported that JSW Steel is planning to cash in on carbon credit incentives by recycling waste gases into energy fuels.

Mr Seshagiri Rao director finance at JSW Steel recently told media that "We have already registered one of our units with the UNFCCC. As and when we firm up our plans for the other project, we will apply for those as well."

He added that it has already sold 760,000 carbon credits to record an additional income of around INR 111 crore in the second quarter of the current financial year.

With the rise in global concern about climate change, the International Iron & Steel Institute has drawn a route map for carbon emission reductions as part of post Kyoto regime. The objective is to continue research and development efforts towards breakthrough technologies, draft legislations or regulations to legally implement and enforce commitments in individual member countries and engage individual member countries in negotiations.

PTC India plans USD 1 billion fund to acquire overseas coal assets

BL reported that PTC India Limited, which plans to diversify into the coal business, will create a USD 1 billion fund for the acquisition of overseas coal blocks. The fund will be part of the overseas arm PTC is setting up to acquire these blocks. It is also looking to divest 70% stake in this overseas arm.

An official of PTC said that “The offshore firm will be registered in Singapore and we will own a 30% stake in the firm. To start with, PTC India will put INR 300 crore in the fund. The rest of the money will be brought in by the firms that will take the balance 70%.”

After looking for coal supplies from Australia, South Africa and Indonesia in an international market that is becoming increasingly competitive, PTC has decided to focus on Indonesia, prompted by the proximity of the South Asian country to India, which will mean lower freight costs. It has set itself a target of bringing 15 million tonnes per annum of coal to India for a minimum period of 30 years, which will enable it to supply the fuel to power projects with an aggregate generating capacity of 5,000 MW.

L&T profit after tax for Q3 of 2007 up by 40% YoY

Engineering and construction major Larsen & Toubro has posted profit after tax of INR 481.79 crore for October to December 2007 quarter up by 40.09% YoY as compared to INR 343.90 crore in October to December 2006 quarter. Its total income grew up by 53.47% YoY to INR 6,483.55 crore from INR 4,224.49 crore.

L&T’s engineering and construction segment contributed the lion’s share of the income during the quarter at INR 4,962 crore up by 57% YoY. Order inflow of INR 11,462 crore in the E&C segment also grew by 40%. The segment had orders worth INR 47,605 crore by the quarter ended December 31st 2007 including international orders worth INR 6,403 crore.

Mr YM Deosthale whole time director and CFO of L&T said “Primarily, three reasons contributed to our growth in business, an order book in excess of INR 50,000 crore, higher operating margins for engineering and construction, machinery and industrial products and the electrical and electronics segment and growth in sales through the strategy of taking up high value long gestation selective projects.”

For the first time, the L&T Board met at Dubai today to review and approve the quarter’s results. L&T attributed this gesture to its strong presence and growing business interests in the Gulf region.

L&T’s total order inflow during the quarter was INR 13,019 crore up by 37% YoY.

NALCO’s loan plan faces resistance from employees

SNS reported that National Aluminum Company’s plan to procure a loan from Standard Chartered Bank by mortgaging a unit of its power plant met with resistance from its employees and trade union members.

As per report, some SCB officials who came to assess the value and condition of the power plant had to return without getting much work done in face of strong opposition from the recognized trade union of the NALCO captive power plant.

Mr Paresh Jena general secretary of NALCO Sramik Congress Union and Mr GC Mishra VP has vehemently opposed mortgaging the power plant to raise money to finance a proposed smelter plant In Indonesia. They fear such a move might pave the way for privatisation.

Mr CR Pradhan CMD of NALCO said that it had applied to Standard Chartered for a loan of INR 500 crore to fund the firm's expansion project. He added that loan at a rate of 5% was economically viable for the country.

Punjab initiates steps to develop solar power projects

ET reported that Punjab government has initiated steps to develop clean energy by inviting proposals from Indian and global companies to set up photo voltaic power projects in the state.

Punjab Energy Development Agency, while inviting proposals from domestic and international companies, said that the photo voltaic power projects would be developed on the built operate and own basis.

It added that "The state is endowed with vast potential of solar energy estimated at 4 to 7 KWH per square meter of solar insulations levels and the government is keen to tap this resource for increasing the renewable energy share in the state by setting up solar photo voltaic power projects."

PEDA said that Punjab government is planning to offer 100 MW in the first phase to bidders in the lot of 5 MW each and only one project would be allocated to a company. It added that the bids for setting up photo voltaic power projects from the private sector companies would be accepted till March 4th 2008.

Companies with net worth of INR 1 crore and turnover of INR 3 crore would be eligible to submit their proposals with PEDA.

CERC approves RPL tariff for Krishnapatnam UMPP

It is reported that Central Electricity Regulatory Authority has adopted the INR 2.33296 per unit tariff quoted by Reliance Power for the 4,000 MW Krishnapatnam power project in Andhra Pradesh under section 63 of the Electricity Act 2003.

The CERC, in its order on a petition filed by the Coastal Andhra Power, has ruled that the year wise tariff for 25 years quoted by Reliance Power will be charged in accordance with the provisions of the power purchase agreement signed on March 23rd 2007.

The tariff will also be charged in accordance with the bid of the selected bidders as accepted by the procurers, which has been subsequently made a part of the power purchase agreement. The commissioning date of first unit has been scheduled for September 30th 2013.

Reliance Power has emerged as the lowest bidder for the 4,000 MW Krishnapatnam ultra mega power project in Andhra Pradesh in November 2007 outbid L&T and Vedanta group firm Sterlite for the proposed project.

BHEL Trichy secures major power plant equipment orders

It is reported that Bharat Heavy Electricals Limited's Tiruchirapalli unit has secured orders worth over INR 15,000 crore for supplying power plant equipment.

Mr RN Mishra executive director of BHEL said that "Customers placed consistent trust on the PSU and orders were received through negotiated process."

Mr Mishra said that the ongoing phase II expansion at an investment of INR 732 crore is the single largest quantum of investment in the history of BHEL Tiruchirapalli unit. He added that it has also inducted 1,200 skilled artisans and 160 supervisor trainees, while more recruitment has been planned for the next few years.

BHEL has recently signed a MoU with Tamil Nadu Electricity Board for supplying super critical boilers for the 1600 MW thermal power station near Chennai. The boilers would be manufactured with the technology from US based Alstom.

BHEL was also augmenting well with its capacity expansion plans and has increased its manufacturing capacity to 10,000 MW in the phase I.

TVS Motor Q3 2007 net profit dips by 49% YoY

TVS Motor Company has posted net profit of INR 5.83 crore for October to December 2007 quarter down by 49.13% YoY as against INR 11.46 crore in October to December 2006 quarter. Total income has decreased by 5.97% YoY to INR 896.13 crore from INR 952.98 crore.

Supply disruptions to push coal prices to record levels

Coal prices in Asia jumped to a record high on Monday as the region suffered acute shortages because of disrupted supply in Australia, South Africa and China. The impact is spilling into other regions, with coal costs rising sharply in the US, Latin America and Europe.

According to the GlobalCoal trading platform weekly prices for the regional benchmark, Australia’s Newcastle coal rose to USD 93.35 per tonne up by almost 75% in 2007. As per reports, the European benchmark Rotterdam spot coal prices jumped to USD 130 a tonne up from USD 68.5 per tonne in 2007.

Australia
Mining companies in Australia, the world’s largest producer, announced force majeure at several mines last week after flooding in the state of Queensland. Among those was one owned by BHP Billiton and Mitsubishi which produce nearly half of Australia’s coal exports.

South Africa
Coal mines here, which produce about 10% of the world’s coal exports, were evacuated last week after the country had extensive electricity blackouts. Some mines have restored production since then, but others are still halted.

China
Miners and port authorities were told last week to stop coal exports for two months to ensure the local market remains well supplied and to help end a severe power crisis.

Mr Emmanuel Fages a coal analyst at Société Générale in Paris said that the coal market was already tight before the recent supply disruptions. It would take weeks rather than days, before supply and demand balanced and prices eased. He said that “We will not see a downturn in prices, but we will see an easing after some weeks, starting in March or April. On top of rising demand in China, the coal market is facing a short term increase in consumption in Japan as the country’s power utility, Tepco, relies more heavily on its coal thermal power plants to offset the impact of the closure of the Kashiwazaki Kariwa nuclear plant after an earthquake in July.”

The coal market’s tightness and the supply disruptions suggest that the outcome of the current annual secretive price negotiations between the mining companies and the Japanese steelmaking industry will result in much higher prices.

Tenaris to sell Hydril pressure control business to GE

Tenaris S.A has announced that it has entered into an agreement with General Electric Company pursuant to which it will sell the pressure control business acquired as part of the Hydril transaction to GE for an amount equivalent on a debt free basis to USD 1,115 million. The agreement is subject to governmental and regulatory approvals and other customary conditions and is expected to close during the second quarter.

The Hydril pressure control business manufactures, sells and services pressure control products and systems that control and contain fluid and gas pressure during drilling, completion and maintenance of oil and gas wells in harsh environments.

The release said since its acquisition of Hydril Company in May 2007, Tenaris has integrated Hydril's premium connection business into its core tubular business and managed the Hydril pressure control business separately.

Mr Paolo Rocca chairman & CEO of Tenaris said that "The Hydril pressure control business is one with excellent technology, an impressive team and solid prospects but has limited synergies with our core tubular business. We believe that its opportunities will be enhanced within GE, as part of its growing oil and gas business, and that this transaction is in the best interests of its employees and customers and our shareholders."

Tenaris is a leading global supplier of steel tubes and related services for the world's energy industry and certain other industrial applications.

MEPS forecasts hot band price increase in EU in H1

UK based MEPS reported that the EU Average Hot Rolled Coil transaction value moved down in January as slow buying activity continues to depress local figures. But it added that as imports are expected to reduce over the coming months, coupled with rising input costs, it is likely to cause transaction prices to increase once again.

MEPS said that European mills will attempt to recover the higher cost of raw materials by pushing through significant selling price advances during the second quarter. It said “Rises of over 10% are predicted by the summer, as new iron ore and coal contracts force producers to gradually increase transaction figures further.”

It added that “Recent changes to export taxes in China should drive EU import prices upwards. This is expected to support the upsurge in transaction values as the import threat reduces.”

MEPS concluded that “Consequently, hot rolled coil prices are forecast to move above previous record highs, topping EUR 530 per tonne in the third trimester.”

However MEPS cautioned that values are expected to soften in the second half of this year as the weaker economic climate dampens buying activity.

ArcelorMittal Sverige and BE Group join forces in Sweden

It is reported that ArcelorMittal, through its steel service center subsidiary SSC Sverige and BE Group, has finalized the creation of a 50:50 JV to serve the Swedish market with processed flat carbon steel.

The combination of the ArcelorMittal SSC Sverige facility forms the third biggest player in the Swedish market, with a market share of 20%, shipments of 120,000 tonnes and a turnover of more than EUR 80 million. This JV contributes to the necessary consolidation of this sector. Through this acquisition, the conditions for long term development are created on the sizeable Swedish market.

The ambition of the joint venture is to
a) Grow on the Swedish market
b) Develop services to customers and thereby increase added value
c) Increase efficiency in a bigger structure
d) Strengthen and stabilize profitability in the long term

ArcelorMittal SSC Sverige is a facility processing 60,000 tonnes of cut to length and slitted products, including IB Andressen in Denmark, for general industry, automotive, construction and stockiest. It employs 34 persons.

BE Group is one of Northern Europe's leading trading and service companies within steel, stainless and aluminum, processing also near 60,000 tonnes of cut to length and slitted products, mainly for general industry. This facility employs 29 persons. It is recognized for its excellent service and quality.

Nippon Steel net profit dips by 0.1% YoY in 9 months

Nippon Steel Corporation has posted net profit of JPY 263.06 billion in the April to December 2007 period down by 0.1% YoY as against JPY 263.38 billion in April to December 2006 period, hit by lower evaluation gains in its steel inventories. Pretax profit dropped by 0.7% YoY JPY 434.67 billion, although revenue expanded by 14.3% YoY to JPY 3.51 trillion.

Nippon Steel produced 9.24 million tonnes of crude steel in the October to December 2007 quarter up by 3.3% YoY as against 8.94 million tonnes in October to December 2006 quarter. Delivery prices of its steel products averaged at JPY 80,200 per tonne up from JPY 76,300.

Nippon Steel posted pretax profit of JPY 150.6 billion for October to December 2007 quarter down from JPY 169 billion in October to December 2006 quarter due to a JPY 21 billion decline in appraisal gains on its steel inventories.

For the year to March 2008, Nippon Steel is maintaining its forecasts made in October 2007, with net profit projected at JPY 365 billion and pretax profit at JPY 600 billion. It also forecasts full year revenue of JPY 4.75 trillion in line with its earlier guidance.

ThyssenKrupp inaugurates new BF No 8 in Duisburg

It is reported that ThyssenKrupp Steel AG has inaugurated its new blast furnace 8 in Duisburg on January 28th 2008. The new unit is part of its EUR 340 million program to secure hot metal production for its German plants.

On its 9.5 square kilometer site in Duisburg, ThyssenKrupp Steel operates 4 blast furnaces which produce around 11.5 million tonnes of pig iron per year. Blast furnaces Schwelgern 1 and 2 are among the biggest of their kind in the world. The new blast furnace 8 replaces blast furnace 4, built in 1963, which will serve as a spare in the future. It has invested EUR 250 million in the construction of blast furnace 8 alone. Around EUR 80 million was spent on pollution control equipment. All emissions are well below the limits set by the relevant environmental standards.

Ms Christa Thoben minister for economic affairs of Germany represented the state government of North Rhine Westphalia at the ceremony. She said that “These days a lot is talked about the responsibility of businesses, especially the big players, in connection with globalization. I am therefore all the more pleased to be at ThyssenKrupp.”

Dr Ekkehard D Schulz chairman of executive board of ThyssenKrupp AG said that “This program will ensure Duisburg remains one of the world’s most efficient steelmaking sites with an ideal plant configuration. In the medium term this will secure 1,200 direct jobs and a further 3,600 indirect jobs in the region.”

In addition to the blast furnace program at the Duisburg site, ThyssenKrupp Steel is currently investing around EUR 6 billion in a new steel mill in Brazil.

SA ferrochrome majors shut furnaces due to power shortages

It is reported that South African ferrochrome producers have announced that they had closed their smelting operations in order to reduce electricity demand to a minimum.

International Ferro Metals, an integrated ferrochrome producer said that it had been instructed by power utility, Eskom to switch off its two ferrochrome furnaces to prevent damage to the equipment and health hazards.

Xstrata also said that it had reduced load across furnaces at its Xstrata-Merafe Chrome Venture “until further notice” from Eskom.

Ms Sunel Pretorius Samancor Chrome spokesperson said that furnaces at three plants Witbank Ferrochrome, Ferrometals in Witbank and Tubatse in Limpopo were being switched off. She said that the operations would now move into a maintenance and safety cycle.

The struggling state owned power company Eskom advised its industrial clients that the emergency measures would remain in place for the next two to four weeks, as it could not meet the country’s growing demand owing to planned and unplanned outages. Most of South Africa’s big gold and platinum mines also came to a halt recently sending the prices of these metals to record highs.

Japanese steelmakers need to shed defensive stance – Fitch

Fitch Ratings recently said that a focus on high end products with higher margins is protecting Japanese steelmakers from increased raw material costs, but their strategy in defending themselves from hostile takeovers is likely to distract resources from more productive uses.

Fitch said that “It remains difficult for foreign competitors to replace Japanese steelmakers in their relationships with major industrial firms in that country because these companies have advanced technologically and also due to the close ties they build with customers from the earliest stages of product development.”

Fitch believes that Japanese steel manufacturers may have to follow an acquisition route to increase their size and improve their geographical imprint. It added that they also suffer from a lack of self sufficiency in raw materials which makes them particularly sensitive to the prospect of a BHP Rio Tinto merger and the deteriorating bargaining position which would follow.

Fitch said Japanese steelmakers would be better off securing access to raw materials than buying shares in their peers.

SDI posts record results for 2007

Steel Dynamics Inc has announced strong fourth quarter and full year results for 2007. Its net sales in 2007 grew to a record USD 4.4 billion up by 35% YoY over 2006 net sales of USD 3.2 billion. Its 2007 net income was USD 395 million approximately the same as 2006’s net income of USD 397 million.

Its consolidated shipments increased by 32% YoY to 6.2 million tons of steel, fabricated steel, and ferrous and non ferrous scrap resources.

Mr Keith Busse chairman & CEO of Steel Dynamics Inc said that “Our 2007 results are indicative of our success as it relates to diversification and growth strategies. In a year when flat rolled steel, the largest market segment in the US steel industry, struggled, we experienced record consolidated results. Our strategy to diversify from the flat roll steel business that we started in the mid 1990s into a multi product steel producer has resulted in five steelmaking operations plus related steel processing, fabricating, scrap and virgin iron resource operations. Our steelmaking operations each produce distinct steel products that permit us to serve a variety of end markets. During 2007, while our shipments of flat rolled sheet declined 2% our structural steel volume increased 15% and shipments of engineered bars increased 9% netting a 4%YoY increase in steel shipments from our three Indiana mills that were owned and operated throughout 2006 and 2007. Total steel shipments, including acquired steelmaking operations, grew to 5.6 million tons in 2007 a 17% increase over 2006.”

He said that “Also contributing to SDI’s revenue growth were three noteworthy acquisitions in 2007: OmniSource Corporation, The Techs and Elizabethton Iron. The integration of these operations is proceeding well, and we anticipate further efficiencies to be realized throughout 2008.”

NSSC agrees for 19% price rise on ferrochrome in Q1

It is reported that Japanese Nippon Steel & Sumikin Stainless has signed the contract of ferrochrome prices with Samancor and Xstrata for the first quarter of 2008.

As per report, South African ferrochrome manufacturers insisted to increase the price by 19% to USD 129 due to the strong demand from China and price raise of coke.

As 40% of global ferrochromium is produced from South Africa, which is a major source for NSSC, it had no choice to accept the price raise from South African manufacturers.

CSC update on 2007 production

Taiwanese China Steel Corporation has released its production, sales and income of the year 2007. It has recorded sales of TWD 901,719 million, exported 218,172 tonnes of steel and has recorded revenue of TWD 18,978 million in 2007.

The production volumes are as under

In tonnes

The fiscal performance is as under

Amount in TWD millions

Pacific Steel to raise prices by 12% from March 1st 2008

Pacific Steel Group has announced that it will increase the price of all its steel reinforcing & wire products by 12% with effect from March 1st 2008 due to a 25% jump in the cost of scrap metal.

Mr John Beveridge GM of Pacific Steel Group said that ongoing volatility in global steel commodities market means the company will be continually reviewing its prices in the coming months.

He added that “It is highly possible we may have to increase the price of our steel products again in the near future, even as early as April 2008.”

It is noted that the unprecedented rise in the price of scrap metal has been attributed to booming demand for steel in India and China, a revival of demand in South East Asia and a tightening of the supply of scrap metal from large sources such as Russia.

Pacific Steel Group in Auckland is New Zealand’s only manufacturer of reinforcing steel and wire, under the Seismic and Wiremark brands respectively. Its products are made entirely from New Zealand sourced recycled scrap metal, but the price is set by the international market.

Tenova to build a pusher type furnace in France

It is reported that the GTS Industries France has awarded Techint Italimpianti Deutschland GmbH, Düsseldorf a company of Tenova LOI Italimpianti the contract for engineering, supply, erection and commissioning of one Pusher Type Furnace for plate mill in Dunkerque. The complete equipment will be started up in June 2009.

The furnace is designed for a capacity of 200 tonnes per hour to heat up slabs with different qualities up to 1,250 °C. The furnace fulfils the highest conditions about homogeneity of temperature, scale losses, efficiency and emitted values.

The new furnace will be connected in series to the existing furnaces with the purpose to increase the mill load capacity. The order includes a turnkey plant of a bilateral heated Pusher Type Furnace equipped with Tenova LOI Italimpianti FlexyTech®–LO-NOx high speed and roof radiant burners firing natural gas.

ThyssenKrupp aims for revenue growth from higher prices

It is reported that ThyssenKrupp expects revenue growth at its carbon-steel segment to come from higher prices as shipments are expected to remain flat this year.

Mr Karl Ulrich Koehler head of ThyssenKrupp Steel on the sidelines of a news conference at the official opening ceremony of its new Blast Furnace 8, said that "A range of 4% to 8% growth in revenues is possible.

Mr Koehler said that "The most recent positive signals in the market give us confidence that we will realize this target of higher prices already in the next quarter and thus cushion the cost pressure from energy and raw materials."

He said that a critical number of its key annual steel shipment contracts starting in January were already concluded with price increases ranging from EUR 50 per tonne to EUR 70 per tonne.

Indonesia to offer 15% stake in PT Krakatau after IPO

According to Mr Sofyan Djalil Minister of State Enterprises of Indonesia, 15% of the shares of PT Krakatau Steel, a steelmaker wholly owned by the state, will be offered to strategic investors after it launches an initial public offering.

Mr Sofyan said that PT Krakatau will sell not more than 40% of its shares through the two schemes IPO and sales to strategic investor. ,

He said that the IPO would soon be launched after the share market was stable adding that funds from the share sales would be used to expand the capacity of the country's largest steel maker.

The production capacity of the company would be expanded to 4 million tonnes from 2.2 million tonnes at present.

Universal stainless reports 2007 Q4 full year results

Universal Stainless & Alloy Products Inc announced that sales for the fourth quarter of 2007 were USD 49.6 million as compared with USD 55.8 million in the fourth quarter of 2006.

Its net income for the fourth quarter of 2007 was USD 4.4 million as compared with USD 6.3 million in the fourth quarter of 2006. Results for the fourth quarter of 2007 included USD 586,000 of other income from the receipt of import duties compared with USD 465,000 in the fourth quarter of 2006

For the full year 2007, sales rose to a record USD 229.9 million and net income increased to a record USD 22.5 million as compared to sales of USD 203.9 million and net income of USD 20.6 million in 2006.

Mr Dennis Oates president & CEO of Universal Stainless & Alloy Products Inc said that "Our fourth quarter sales reached the high end of our forecast which recognized volatile raw material costs and economic uncertainty as well as normal conservative year end order patterns. While we expected nickel to be the most volatile of our costs, the magnitude of its decline in December impacted our profitability for the quarter. Nickel prices have moved higher since then and we expect their volatility to continue.”

He said that "While there is caution in our marketplace due to ongoing concern about the US economy, the end markets we serve are global in scope and have solid backlogs going out for several years. Although our direct customers will continue to make periodic inventory adjustments, we expect to see improving trends through the balance of the year. We also expect our cash flow to remain strong."

Mr Oates added that "We have entered 2008 with a high level of optimism about our prospects. To generate further growth, we are focused on quickly developing new business opportunities. Additionally, we are accelerating efforts to eliminate waste in our operations and enhance customer satisfaction."

Japan exports 36.48 million tonnes of steel in 2007

JMB reported that Japan has exported 36.48 million tonnes of iron and steel in 2007 up by 4.7% YoY as compared to 2006.

Out of the total products, Japan has exported 30.25 million tonnes to Asia.

The major importing countries and regions include the following
1. Association of Southeast Asian Nations - 8.9 million tonnes
2. US - 1.55 million tonnes
3. Middle East - 1.45 million tonnes
4. EU - 469,000 tonnes
5. Russia - 89,000 tonnes

EU sets inquiry deadline for ArcelorMittal acquisition of OFZ

According to the European Commission the deadline for its inquiry into steel manufacturer ArcelorMittal's proposed acquisition of Slovak ferroalloy and cored wire maker OFZ is set for February 25th 2008.

OFZ has been a supplier to ArcelorMittal's eastern European steel mills which are near its 150,000 tonne plant in the north of Slovakia. It produced 141,000 tonnes of ferroalloys in 2006.

ArcelorMittal to meet French unions soon

It is reported that European steel giant ArcelorMittal has agreed to talk with unions over the planned elimination of 590 jobs at the company's French steel facility at Gandrange.

Mr LN Mittal president and CEO of ArcelorMittal met with Mr Nicholas Sarkozy president of France recently and agreed to take some extra time up to the beginning of April to consider alternatives to the closure of some units at the facility.

Mr David Martinon spokesman for French president in a brief statement said that "Mr Mittal has accepted the proposition of the President to pursue a dialogue with the unions and to reflect until the beginning of April on all the alternative solutions proposed by the unions.”

He said that Mr Sarkozy backs the union proposals, which he said present an economic viability in the medium and long terms.

ArcelorMittal plans to shut down one of the steel furnaces and a billet mill at the Gandrange facility, which is in the Moselle valley. The company has offered to relocate the affected employees elsewhere. ArcelorMittal faces higher operating costs, especially for energy, in an increasingly tough competitive environment.

IMF warns of global recession

Mr Dominique Strauss Kahn head of the International Monetary Fund has called for a serious response to counter a US recession.

In a session on the outlook for World Economy Forum in Davos, he said that a US recession would trigger global economic problems which should be faced by both monetary and fiscal measures.

He added that "We are facing global imbalances and the subprime crisis is only part of it. We are facing also currency imbalances, surpluses rising in some countries all those imbalances have to be addressed. The problem cannot only be addressed by monetary policy, even tough monetary policy is very important. We have to look at the whole picture."

The World Economic Forum, which began in Davos on January 23rd 2008, brought some 30 heads of states, 110 cabinet ministers and several hundred corporate chiefs together. However, participants have often been criticized for using the summit as a cover for backroom deals while pretending to deal with important economic issues.

Arcelor Mittal goes open access for freight trains in Spain

Railway Gazette reported that Arcelor Mittal’s subsidiary Arcelor Mittal Siderail has become the 8th company to be granted a licence by the Spanish ministry of development to operate freight trains on the national network.

Arcelor Mittal Siderail is the first private company to be issued with a licence covering the operation of between 1 and 10 million kilometer a year.

Alongside RENFE and EuskoTren, freight operating licenses are also held by Comsa Rail Transport, Continental Rail, Acciona Rail Services, Activa Rail and Tracción Rail from the private sector. An application from FCC is still being considered by the ministry.

Air Products JV to supply ASUs to Shadeed Iron & Steel

Pennsylvania based Air Products & Chemicals Inc announced the signing of a contract to supply two new air separation units to Shadeed Iron & Steel's production plant at Sohar Industrial Port of Oman. Air Products & Chemicals Inc said that the contract would be executed by the joint venture partnership between the Air Products and Abdullah Hashim Group of Saudi Arabia. However, financial terms of the deal were not disclosed.

Under the terms of the deal, the company will provide ASUs that will supply oxygen and nitrogen for iron and steel production at the Shadeed Iron & Steel facilities at Sohar in Oman. The ASUs, to be designed and engineered by Air Products in the United Kingdom, are scheduled to come on stream in August 2008.

Shadeed Iron and Steel Co is the first iron and steel plant in Oman and the Gulf region's third iron and steel plant. The plant shall comprise of DRI plant of 1.5 million tonnes per annum capacity and steel melt shop of 1.1 million tones per annum capacity of steel billets.

Air Products also indicated having supplied a number of ASU production facilities to Abdullah Hashim Group during their relationship in the past 30 years and combined regularly to supply ASUs to other clients in the region.

The Abdullah Hashim Group is a privately owned Saudi company, which has been in business for more than half a century with turnover exceeding USD 450 million. The company employs more than 1700 people.

Air Products serves customers in industrial, energy, technology and healthcare markets in over 40 countries, and has annual revenues of USD 10 billion. Air Products also employs around 22,000 employees.

Interpipe opens warehouse at Jabel Ali in Dubai

AMEINFO reported that Ukrainian pipe major Interpipe has announced the opening of a warehouse facility in Jebel Ali Free Zone in Dubai.

The new Interpipe facility will provide a wide range of the company's pipe products for the oil and gas, construction, housing, and other industries and will help to reduce delivery times for customers across the region.

Mr Vera Smal director of sales for pipes for industrial application said that “Interpipe has more than seven years experience in the Middle East, supplying its products to a number of Gulf based customers. When we opened our regional headquarters in Dubai last year, we strongly felt the need for warehouse facilities in the region. The new warehouse will ensure that we can serve all of our customers in the Middle East, providing them with first-rate service.'

Interpipe opened its regional headquarters in Dubai in November 2007, to service clients across the region.

AMZ Securities to raise funds for Tuwairqi Steel Mills

The News reported that Tuwairqi Steel Mills Limited has inked an agreement with AMZ Securities (Pvt) Ltd, under which AMZ will act as financial advisor and financial arranger for Tuwairqi Steel Mills Limited projects. Mr Zaigham Adil Rizvi director projects of Tuwairqi Steel Mills Limited and Mr Athar Naseem Sheikh chairman of AMZ Securities signed the agreement on behalf of their respective organizations on Monday.

Tuwairqi Steel Mills Limited is currently in the process of setting up a steel and iron plant at Bin Qasim in Karachi. The additional capital expenditure is required for improvements in the scope of phase 1 by including an intermediate phase of the project till phase 2. The Tuwairqi Steel Mills Limited plant has a designed capacity of 1.5 million tonnes per annum and an initial operational capacity of 1.28 million tonnes per annum of directly reduced iron and billets.

Mr Sheikh said that this foreign investment, which is the first in an infrastructure project in recent years, reflected the confidence of Al-Tuwairqi Group in Pakistan and would be helpful in attracting foreign direct investment into the country for industrialization.

Oman to build the first coal fired power plant in Gulf

MEED reported that Oman is considering building the first coal fired power plant in the latest sign of concern about a gas supply shortage in Gulf Arab.

Oman Power & Water Procurement Co has told consultants that they may have to study the option of using coal as fuel at its next power and water project. The plant will have capacity of 700 MW of power and 26 million gallons a day of desalinated water.

Mr Mohammed Al Hamli energy minister of UAE said last year that Gulf states are struggling to feed the appetite for gas because the speed at which economic growth was driving demand has taken the region by surprise.

Gulf Arab states have about 30% of the world’s oil reserves and 8% of its gas, but an economic boom spurred by record crude prices is driving demand for power and water so rapidly that many are considering turning to coal imports.

INIGC mill produces 890,000 tonnes of steel products

It is reported that, since the beginning of Iranian year started March 20th 2007, more than 890,000 tonnes of various steel ingots and construction steel have been produced by Iran National Industrial Group Company.

Mr Rasuli MD of Iran National Industrial Group said that this quantity has increased by 34% YoY as compared to 2006. He added that the main products include construction steel, ingots, various kinds of wires and rods, pipes and girders and are used in construction and developments projects of the country.

He said that the company has a production plan of 1.2 million tonnes until the end of 2008. He added that in order to supply construction steel, all the products of this company are used for domestic projects.

Egypt to launch tender for first nuclear reactor in February

MENA news agency reported that Egypt would launch a tender for offers in February 2008 to build its first nuclear reactor.

MENA cited Egyptian officials as saying that "The nuclear energy agency will launch an international tender for offers to build Egypt's first nuclear reactor worth USD 1.5 to USD 1.8 billion. The type of reactor and its constructor will be chosen according to international safety standards and reputation as well as costs. The offer is open to all countries."

In October 2007, Mr Hosni Mubarak President of Egypt announced the beginning of a national plan for setting up nuclear plants for peaceful uses. On January 10th 2008, Egypt said that the first nuclear reactor will be built at Dabaa on the Mediterranean coast, west of the port of Alexandria.

France has offered to share its nuclear expertise with Egypt, which initiated a nuclear energy program in the 1970s but abandoned it in 1986 after the Chernobyl disaster in the Ukraine.

Samsung bags AED 1.3 billion contract from DWTC

Dubai World Trade Centre has announced that it has awarded AED 1.3 billion development contract for Dubai Exhibition World to international construction firm Samsung.

Under the contract, Samsung and Baytur JV will take on the responsibility for the construction, completion and provision of 1 year's full maintenance of the exhibition complex once it becomes operational.

Mr Helal Saeed Al Merri director general of Dubai World Trade Centre said that "We are now taking the final steps toward creating a truly world class business and event infrastructure. The final contract award for the DEW facility is a major step in the development of our world class commercial destination that is set to change the face for business networking for the region."

Mr Dave Chung regional director for Samsung said that "Dubai Exhibition World is an ambitious project, which will help drive growth across the region and internationally. We are proud to be part of the creation of this business landmark."
Work on the project will begin immediately following the contract signing, with construction due for completion by 2010. DEW will offer 120,000 square metres of column free exhibition space in its first phase cementing its position as the largest event facility in the Middle East. The largest single hall will offer 85,000 square metres of uninterrupted exhibition space and will be the longest single column-free exhibition hall in the world.

The facility is planned to expand post completion of first phase, ramping up to over 300,000 square metres of venue space through its second and third phases, to become one of the largest exhibition facilities internationally and to enable Dubai to attract and host the world's most prestigious events. Surrounding the facility will be a boardwalk and series of green spaces set around three interconnected lakes making it a truly unique destination.

Dana Gas inks emissions trading pact with EcoSecurities

Arabian Business reported that Dubai Multi Commodities Centre and EcoSecurities have formed a strategic alliance agreement with Dana Gas and Crescent Petroleum of Sharjah to develop emissions reduction projects in the oil and gas sector under the Kyoto Protocol's clean development mechanism.

Under the deal, Dana Gas and Crescent Petroleum will identify projects across their regional oil and gas operations to reduce greenhouse gas emissions and improve energy efficiency. EcoSecurities and DMCC will facilitate the development of the lean development mechanism component of these projects and create value by trading the certified emissions reduction credits generated.

In addition, DMCC and EcoSecurities will collaborate with Dana Gas and Crescent Petroleum to identify opportunities to work with other energy companies and governments throughout the region, to reduce their greenhouse gas emissions.

Mr Rashid Saif Al Jarwan GM of Dana Gas said that "Since its establishment, Dana Gas has aimed to conduct its operations to international standards and we involved the World Bank Group in devising our corporate environmental policies. This partnership is the logical next step, applying market techniques to enhance the environmental benefits of major energy projects in our region."

Dana Gas is one of the largest private sector natural gas company in the Middle East.

New pipeline to transport Iraqi gas via Turkey

Zaman reported that Turkish pipeline company BOTAS has launched feasibility studies for the Turkish segment of the planned Iraq to Turkey natural gas pipeline, to be built parallel to the existing Kirkuk to Yumurtalık oil pipeline.

As per report, BOTAŞ will complete the segment of pipeline that crosses through Turkey's territory along a Silopi Bismil Şırnak Diyarbakır Yumurtalık line. The project aims to transfer 10 billion cubic meters of Iraqi natural gas annually to the Turkish and world markets.

According to a MoU signed on August 17th 2007 between the Turkish and Iraqi energy ministers, the project management will be carried out by the Iraqi oil ministry and the BOTAŞ Turkish Petroleum Corporation joint initiative. The project will be completed by private contractor Tekfen, TPAO and BOTAŞ according to projections as to developments in Iraq and the energy need in European markets.

The project is an integrated one covering the exploration, extraction, processing and transportation of natural gas in Iraq's northeast. Around 10 billion cubic meters of natural gas will be extracted from five different fields and then transported to world markets through Turkey. The construction tender will be held by BOTAŞ, as was the case with previous projects, and the tender will be open to international bidders. The pipeline will be 30 to 40 inches wide and will include many pump stations, proportional to the amount of gas the line is to carry.

Mr Hilmi Güler energy & natural resources minister of Turkey previously said that talks regarding the Iraq Turkey natural gas pipeline were on track and that the estimated 280 billion cubic meters of natural gas in Iraqi reserves would be exported to European markets via Turkey.

Chinese HR export prices edging upwards

It is reported that export offer for hot rolled steel coil continue to edge up in China on continuous appreciation in CNY and recovery of international market prices.

Quotations for commodity grade HRC have exceeded USD 700 per tonne FOB, which we have forecast in early January. Most offers are prevailing at USD 705 per tonne to USD 710 per tonne FOB. Steel makers indicate that they have to raise export price due to appreciation in CNY and expectation of higher raw material prices.

An export director with a steel producer in North China said that "Exports do not bring us much more profit than domestic sales and we have to take the risk of the weakness of the US dollar against CNY. For example, USD 700 per tonne FOB only translates to CNY 4700 per tonne for us which are only CNY 60 per tonne higher than local market prices. And we even have not factor in the change of foreign exchange rate."

South Korea remains to be an important destination and local traders are raising sales price for Chinese origin HRC. Despite a low season, prices are on the rise, bolstered by rising domestic demand and low inventory level. Sales center with HYSCO plans to shoot up HRC price to KRW 720 per kilogram in February from current level of KRW 670 per kilogram to KRW 680 per kilogram. Hence there is still room for increase.

Sinosteel lifts stake in Midwest to 18.7% last week end

It is reported that China's Sinosteel Corporation has acquired an 18.7% stake in takeover target Midwest Corp Ltd, following heavy trading the iron ore company's shares on weekend.

A substantial shareholding notice lodged on Tuesday with the Australian stock exchange said that Sinosteel had lifted its interest from 11.1% on Thursday to 18.7% on Friday. Some 22.5 million Midwest shares worth $117.6 million changed hands on Friday.

A report in the South China Morning Post last week said Sinosteel was seeking a stake of about 20% to increase its bargaining power in regard to securing further off-take agreements with Midwest. Sinosteel in December made an AUD 1.15 billion incomplete and non binding bid for Midwest of AUD 5.60 a share as compared to an earlier scrip bid from Midwest rival Murchison Metals Ltd of around AUD 719 million.

SinoSteel already has an off take agreement in place for Midwest's Weld Range hematite project.

Coal's Shanghai IPO draws USD 433 billion

It is reported that China Coal Energy Co attracted CNY 3.12 trillion (USD 433 billion) of subscriptions to its Shanghai IPO, a shade smaller than record CNY 3.38 trillion drawn by construction giant China Railway Group in its Shanghai IPO in November 2007.

China’s second biggest coal miner drew huge demand for its initial public offer of A shares despite a plunging Shanghai stock market, which has been hurt this month by sliding foreign markets, tighter monetary policy and big supplies of new equity.

China shifts railway capacity to coal transport

Xinhua reported that China's Ministry of Railways issued an urgent announcement ordering all local railway bureaus to step up concentrated efforts in coal transport to ensure the operation of the nation's key electric power plants.

It warned the shutting of some coal mines during the Spring Festival, which falls next month, tended to exacerbate supply tensions in the dry season when hydropower output declines. Thermal power plants also consume large quantities of coal, reducing the stock sharply.

To ensure fuel supply during the upcoming Lunar New Year and the National People's Congress session, the ministry said policies would favor coal transport. Coal heading for power plants in the country's economic hubs the eastern and central regions would be transported first. In addition, the Ministry of Communications asked shipping companies to halt exports and transfer coal more swiftly to the big cities.

China is heavily dependent on coal as it is considered an affordable energy resource at a time when oil and natural gas prices rise steadily in the international market.

CVRD plans more pallet JVs after 1st one at Zhuhai starts

It is reported that Vale plans to establish 4-5 iron ore pellet plant in China after starting of its first one at Zhuhai in south China's Guangdong Province. The joint venture pellet plant, Zhuhai Yujia Pellet Products Company which was the first investment of CVRD in china, was officially put into production. The plant has an annual output targeted at 1.2 million tonnes.

Vale’s subsidiary Brazil United Mining holds a 25% stake in the joint venture, Zhuhai Auyufeng steel company holds 40% stake and Hong kong Jiaxin steel group holds 35 %. Total investment was CNY 360 million and CVRD invested USD 4 million and signed a 30 year contract of supplying at least 70 % of the iron ore the new plant will need.

Mr Jose Carlos Martins of CVRD said that his company would build more joint venture pellet processing plants in China and is conceiving to rent or build top size ore transport vessels, so as to gain a more competitive edge against Australian ore producers that are geographically adjacent to Chinese markets.

CVRD’s CEO Jose Carlos Martins said the company plans to establish five more pellet plants in China. He said that “When the five projects are operational, there will be a scale of 10 million tonnes. The five plants would be situated in the inshore areas, such as Rizhao, Qingdao, Caofeidian etc, where the logistics will be more convenient.”

He said that CVRD's first investment in China, although not large, showcases their confidence in the future development in the Chinese market. He also revealed that based on CVRD's Chinese market study, the company plans to make its Chinese pellet processing plants output as much as 40 million tonnes of products annually.

Fosun sells stake in Nanjing Iron & Steel

It is reported that Fosun International its subsidiary, Nanjing Steel United has disposed 79.355 million tradable shares of Nanjing Iron & Steel at an average price of CNY 22.15 apiece on market during the period from July 25th 2007 to January 23rd 2008.

The CNY 213.74 million net proceeds will be used as Nanjing Steel United's general working capital.

The portion of net profit realized from July 25th to December 28th 2007 by Nanjing Steel United from the disposal will be accounted for in the financial results of Nanjing Steel United for year 2007 which is currently estimated to be CNY 655.44 million.

Kam Hing and Wusteel join hands for Madagascar iron ore deposits

Kam Hing International Holdings Limited company announced on January 27th 2008 that it has signed two cooperation agreements with Wusteel for exploration right and the terms of cooperation of Madagascar Bekisopa area.

According to the first agreement, the two sides will set up a joint venture company, Kam Hing accounts for 40% rights and interests, it will use Bekisopa areas exploration and mining rights as fund for the joint venture, the detailed investment and other situation of the two companies will be further consulted by the two sides.

According to the second agreement, the two sides agreed to use the joint venture company to acquire the exploration and exploitation mineral right in Madagascar other areas, if the joint venture company acquire the exploitation right, the strategic partnership should set up and operate the production field, and purchase all the metal mining resources by the current international market price.

Kam Hing and its strategic partnership have dispatched professionals and experts to make investigation in Bekisopa area, and collect samples for testing purposes, the sample contains 53.25% ferrous metals and 11.42% titanium.

Kam Hing International Holdings Limited has already acquired an area of about 287 square kilometers of mineral exploration and mining rights and other regions’ mineral resources.

Chinese Iron and Steel take 3.9% stake in Apollo Minerals

Newly listed diversified Australian resources company Apollo Minerals Ltd has confirmed that Chinese Iron and Steel Group have taken a 3.9% stake in the company and is looking to increase its stake to 19.9% subject to shareholder and regulatory approval.

The release said that Apollo Minerals completed AUD 1 million placements of 2.94 million shares at 34 cents per share to Chinese Iron and Steel Group and Chinese Iron and Steel Group has option to subscribe to a further 6.7 million shares at 34 cents per share on or before until March 31st 2008

The AUD 1 million placement follows completion of the formal Joint Venture Agreement as announced on December 24th 2007 in relation to Apollo's right to earn up to 80% of exploration license applications 47/1378 and 47/1379. These two tenement applications cover a significant portion of the newly discovered Mt Oscar Iron Ore Project, located in the Pilbara region of Western Australia.

The MoU also gives the ability, subject to successful exploration and development, to negotiate in good faith an agreement giving the Chinese Iron and Steel Group the right to market iron ore produced from its Mount Oscar Iron Ore Project

Apollo focusing on two iron ore projects: one in West Australia and one in South Australia

The release said that “Within these tenements a number of areas with hematite and magnetite targets have been identified which could represent a significant iron ore resource. Importantly for any proposed development of this project it is located close to infrastructure including ports which are located around 35 kilometers from the project area. Apollo will commence an aggressive exploration program including drilling pending all regulatory approvals which is expected to occur in the next two months.”

It added that “Apollo also owns the Commonwealth Hill Project in South Australia, which contains three key targets highly prospective for iron ore including an iron ore deposit at Sequioa which is located approximately 30 kilometers from the Adelaide/Darwin Railway line.”

Chinese CR export prices remain stable

It is reported that Cold rolled steel coil prices are largely unchanged in Chinese domestic market. Export quotations remain firm and most steel mills are dealing with business for March shipment.

Current prevailing offer for 1.0mm CRC has risen to USD 750 per tonne FOB from USD 730 per tonne to USD 740 per tonne in the past two weeks. There have been more transactions than before taken into account the competitive price.

A North East China based tier one steel maker has been fully booked for March shipment at USD 30 per tonne FOB as base price. It is expected to announce the price for April shipment in end January or early next month. While another major steel mills in central China also have finished its contract for March shipment now, with base price at USD 720 per tonne FOB which is likely to be the most competitive in China.

Export price are anticipated to move up further on ascending domestic CRC prices. On Shanghai market, 1.0 CR sheet by Anshan Steel goes at CNY 5800 per tonne 1.0 CR coil by Maanshan Steel is being offered at CNY 5700 per tonne.

Now the price for 1.0 CR sheet by Anshan steel is very close to the target of CNY 5900 per tonne which we have already forecast late last year. If it could surpass CNY 5900 per tonne, there should be another round of increase. Normally CR coil price would be CNY 100 per tonne to CNY 150 per tonne lower than that of CR sheet.

China regrets AD action on tubes by Canada

China's Ministry of Commerce has voiced regret over Canada's initiation of investigations into the alleged injurious dumping and subsidizing of carbon steel welded pipe imported from China.

Mr Wang Xinpei spokesman of China's Ministry of Commerce said that “The government regretted that the Canadian authorities treated China's iron and steel industry as a non market-oriented industry and started investigations even after China removed the export rebate and levied a 15% export duty on the product.”

Mr Wang said “By investigating so frequently, the Canadian authorities had been sending the wrong signal to other WTO members and that it would hurt the sustainable and steady development of bilateral trade.”

He hoped the Canadian authorities would carry out the investigations in strict accordance with WTO regulations and Canadian law and in an impartial and transparent way.

He however added that China would retain the right of appeal to the WTO Dispute Settlement Mechanism.

The Canadian International Trade Tribunal initiated a preliminary injury inquiry into a complaint on January 24th 2008 by ArcelorMittal, that it had suffered injury as result of dumped and subsidized imports of carbon steel welded pipe originating in or exported from the People’s Republic of China.

Shagang to invest CNY 3 billion to build Green Steel City

According to Jiangsu Shagang Group, Shagang would invest CNY 3 billion in further saving energy, reducing emission and developing recycled economy.

Shagang hopes to reduce integrative energy cost per ton steel to less than 600 kilogram of standard coal to reduce new water cost per tonne steel to 3.6 tonne to raise the utilization rate of industrial water to 97.55%, and to raise the utilization rate of varieties of gas to 100% by the end of “11th five year plan.”

Looking at statistics, the integrative energy cost per tonne steel of Shagang in 2007 was 630 kilogram standard coal. The emission of sulfur dioxide per ton steel was 0.88 kilogram which took only 47.3% in average emission in China. Emissions of dust and powder per tonne steel and wastewater per tonne steel were 0.66 kilogram and 1.7 tonnes respectively taking 49.6% and 59.8% in the average level in China.

Baosteel and Chinalco to join jet venture

Reuters reported that China's Baosteel and Aluminum Corp of China the parent of Chalco are set to join a state backed consortium to develop and build large commercial jets.

In addition to Chinalco and Baoshan Iron and Steel Co, the venture will include China's two large aviation companies, AVIC I and AVIC II and could be officially established before the National People Congress in March. The report said the central government would inject cash into the venture from the state owned Assets Supervision and Administration Commission to become the largest stakeholder.

The China Aviation Industry Corp I and II would together be the second largest shareholder in the planned company which is designed to reduce the country's reliance on Boeing and Airbus.
AVIC I, parent of Xi'an Aircraft International Corp is developer of the ARJ21 regional jet. AVIC II's Hafei Aviation Industry Co makes the ERJ-145 regional jet in partnership with Brazil's Embraer ERJ.N.

It is reported that China intents to establish its first manufacturer of big passenger jet airplane before March and the new company will design and assemble large aircraft and China’s ARJ21 with 90 seats launched last year.

China studying launch of environmental tax

According to China State Environmental Protection Administration, Chinese government is considering launching an environmental tax this year in order to encourage the efficient use of energy and stem the growth of greenhouse gas emissions.

Mr Zhou Shengxian a SEPA director in a statement said that the government will raise emissions charges and garbage disposal fees this year. He said that power producers above a certain size are required to complete the installation of desulphurization facilities this year.

In June, SEPA and the National Development and Reform Commission also announced that power firms with coal-fired plants must install desulphurization facilities in building new generators or upgrading existing ones. The two agencies said the move will help the country achieve its 10% emissions reduction target under the 11th Five Year Program.

Qinggang sales income in 2007 up by 16.5% YoY

It is reported that in 2007, Qingdao Iron and Steel Group produced 3.39 million tonnes of iron, 3.27 million tonnes of steel and 3.1893 million tonnes of finished steel increasing 1.19%, 0.56% and 0.98% from those in 2006.

In 2007, the group had a production value of CNY 25.014 billion increasing 17.17% from that of 2006. Meanwhile, Qinggang realized sale income CNY 28.2 billion up by 16.52% from that of 2006; revenues CNY 1.154 billion up by 8.33%; profits CNY 368 million up 38.38%; profit per tonne steel came to CNY 113 up by 57%.

Tangsteel issues CR and HR steel price policy for February

It is reported that Tangsteel has issues price policy for February on January 25th 2008 as under.

1. Keep the EXW price of HR coiled sheet unchanged and now EXW prices of Q2352.75mm HR coiled sheet and 5.5mm HR sheet are CNY 4,780 per tonne and CNY 4,650 per tonne respectively.

2. Raise the EXW price of CR coiled sheet up by CNY 100/ton and now the EXW price of SPCC1.0mm CRC is CNY 5,500 per tonne.

3. Raise the EXW price of CR chill coil up by CNY 100 per tonne and now the EXW price of SPCC1.0mm coil is CNY 5,050 per tonne.

4. Raise the EXW price of acid washed steel up by CNY 120 per tonne.

All prices above include 17% VAT and the price policy starts since January 25th 2008.

Severstal to modernize billet caster at Cherepovets

Severstal has awarded Siemens Metals Technologies a contract for the upgrading of their 6 strand billet caster located at Cherepovets in Russia. Upon completion of this project in early 2008, Severstal will be able to increase their casting speed and thus their total billet production.

This order was received following casting trials where billet speeds exceeding seven meters per minute could be demonstrated on a test strand equipped with a Siemens DynaFlex Oscillator. The remaining five strands will now be installed with this technology.

As part of a test campaign, Siemens replaced the existing electro mechanical mold oscillator with a DynaFlex hydraulic oscillator on one of the strands, adapted the strand containment system and modified the secondary cooling system in order to demonstrate high speed casting operations. The replacement of the electro mechanical oscillator was necessary due to the limitations of this equipment unit at higher casting speeds with respect to increased vibrations and oscillation deviations, in addition to the inability to adjust the oscillation stroke of the unit during operations to satisfy the actual casting requirements. The casting tests were performed on a 100x100 billet and casting speeds in excess of seven meters per minute could be demonstrated more than one meter per minute faster than during normal operations with the existing facility.

On the basis of these successful high speed casting demonstrations, Severstal commissioned Siemens to outfit the remaining five strands of the billet caster with DynaFlex oscillation technology and to modify their secondary-cooling systems to satisfy the requirements for higher-speed casting. Additionally electrical equipment and the Level 1 automation system will be modified.

The DynaFlex oscillation system allows the mold oscillation parameters, such as stroke and oscillation frequency, to be controlled and optimized online according to the actual casting requirements. This leads to improved strand-surface quality and casting operations. As opposed to other systems based on the use of bearings, the leaf-spring guiding system of the DynaFlex oscillator is the basis for virtual wear free performance.

As part of its modernization program to improve the output and quality of steel, a 6 strand continuous billet casting machine was installed in 2002 and a second EAF was subsequently installed in the electric arc shop in Cherepovets. The billet caster produces approximately 1 million tonne of steel per year in 100mm x 100mm and 150mm x 150mm square billets for subsequent rolling into rebars and structural steels for use in the construction industry.

MMK completes reconstruction of BF No 9

It is reported that the works included installation of the bell less charging device at Magnitogorsk Iron & Steel Work’s blast furnace No 9 has been completed. The furnace will now be able to smelt about 5,000 tonnes of hot metal per day as compared to 4,000 tonnes previously.

The furnace was shut for repairs for 76 days. During this period the blast furnace complex was almost completely modernized. Innovations will secure higher production levels, improved quality and significant reduction of coke consumption by installing bell less charging device.

There are now 3 bell sell charging devices installed in MMK’s blast furnaces complex and one more is to follow in the 2nd quarter of this year as Blast furnace No 10 will be reconstructed.

Ukrainian thermal coal prices to rise by 27% in 2008

It is reported that Mr Poltavets the minister of the coal industry of Ukraine has announced that thermal coal prices will rise 27% this year.

He stated that this new forecast has been worked out in concert with representatives of the power generation industry who have approved the increase. He also noted that this increase will bring prices for thermal coal in line with prices for other fuels including natural gas.

He said that “We criticized the previous cabinet forecast of a 36% increase as unrealistic. Now we are happy that the government has seen the light and its new forecast is very close to our own estimate of a 20% to 25% rise.”

Metinvest and Illich ink iron ore concentrate supply deal

It is reported that Metinvest signed a mid term contract with Mariupol based Illich Iron & Steel works for supply of iron ore concentrate.

According to the contract, 24 million tonnes of concentrate will be supplied to Illich’s sinter plant by 2011. This includes 6 million tonnes of concentrate per year from Inguletsliy OMEP for Illich’s own needs and 2 million tonnes per year more from Severniy OMEP and Tsentralny OMEP to be processed into sinter for Azovstal.

The current concentrate price is fixed at USD 70 per tonne but is a subject to revision each April 2008.

Ukraine coal firm Lubel to float on AIM

It is reported that Lubel a Ukrainian coal mining group is planning to float on AIM by the end of this year. The flotation plan comes after Lubel raised EUR 60 million from institutional investors in Britain, America and Eastern Europe through a private placing handled by JP Morgan Cazenove.

The float plans are still at an early stage, but analysts believe the company will need to raise more than EUR 100 million as the development plans are accelerated.

Lubel has two coal licenses in western Ukraine with proven reserves of 162 million tonnes. Funds raised from the placing will be used to complete a feasibility study and start development of the mines. Lubel estimates that total development costs will be around USD 450 million and is aiming for full production by 2013.

Lubel is majority owned by a group of Ukrainian businessmen and entrepreneurs; forecasts the mines could be producing about 4 million tonnes of coking coal a year around 15% of Ukraine’s annual coal production. The mines could have a 25 year lifespan.

Evraz to take a decision on plate mill shortly

FIS reported that within two months the opportunities of making large size pipes on mill 5000 will be discussed at the council of shareholders of Evraz Holding.

In addition to large size pipes the mill could be used to make steel plates for the needs of the national shipbuilding under the federal project on fleet modernization.

In 2008, Evraz will continue the reconstruction of the wheel roll, wheel tread and rail and beam productions at the Nizhniy Tagil Metal Integrated Works which is to be completed in 2009.

WTO recommends Ukraine entry into organization

Ukrainian News Agency reported that the working group for the issues of Ukraine's accession to the World Trade Organization has endorsed Ukraine's report on accession to the WTO.

Mr Hryhorii Nemyria Natalia Lysova press secretary of the Vice Prime Minister for European and International Integration disclosed this to Ukrainian News. Mr Lysova said that "Recently after a meeting in Geneva working group for Ukraine's accession to WTO endorsed Ukraine's report on accession to the WTO."

According to the vice prime minister of Ukraine the decision of the working group would allow Ms Yulia Tymoshenko PM of Ukraine to launch talks on creation of the free trade zone during her visit to Brussels, which is scheduled for January 28th to 29th 2007.

As Ukrainian News earlier reported, WTO General Council meeting is scheduled for February 5th 2008.

Russian 2007 GDP growth revised to 7.7%-7.8%

RIA Novosti, citing Ms Elvira Nabiullina minister of economic development and trade of Russia, reported that growth of the gross domestic product in Russia in 2007 has been raised from 7.6% to 7.7% to 7.8%.

Ms Nabiullina while speaking at a recent meeting said that the correction was due to the indicator's rapid rise in December of last year, which was 8.4% over that of December 2006.

According to Rosstat, the state statistics service, the volume of the GDP rose 7.8% in the first three quarters of 2007 compared with the same period of the previous year. The Russian GDP rose 6.7% in 2006.

Gazprom strikes deal on European gas hub in Austria

RIA Novosti reported that Russia's state run gas giant Gazprom and OMV Austrian oil and Gas Company signed a cooperation agreement in Vienna to set up a gas trading platform and storage facility in Europe.

The agreement signed by Mr Alexander Medvedev deputy chairman of the Gazprom management committee and Mr Wolfgang Ruttenstorfer, CEO of OMV's will give Gazprom a 50% stake in one of the largest gas hubs in Europe the Central European Gas Hub at Baumgarten in Austria.

Mr Medvedev said "The agreement signed with OMV is a substantial contribution to securing natural gas supplies to Europe."

The agreement is based on the Memorandum of Understanding signed in May, 2007 by Mr Ruttenstorfer and Mr Alexei Miller CEO of Gazprom during a visit to Austria by Russian President Mr Vladimir Putin.

Russian delegation in North Korea to discuss rail project

It is reported that a Russian delegation has arrived in North Korea to discuss a joint project to rebuild a cross border rail link. As per report the delegation will discuss providing power to the northeastern port of Rajin. Both sides will focus on discussing the issue of supply of electricity to Khasan-Rajin railways and Rajin Port.

Russian officials have visited North Korea to discuss modernizing the 55 kilometer line between Rajin and Russia's Khasan. Rajin is also referred to as Najin in South Korea.

A Russian railway spokesman told last week a preliminary agreement had been reached with North Korea on renovating the railway section, while North Korea had yet to respond to Russia's proposal to build a cargo terminal in Rajin.

Mr Vladimir Putin president of Russia has expressed interest in connecting the Rajin-Khasan line to the Trans-Siberian Railway.