SAIL signs MoU with HEC for equipment supply

Steel Authority of India Limited has signed a MoU with largest integrated engineering complex in the country Ranchi based Heavy Engineering Corporation for supply of equipment for its ongoing modernization & expansion programs. Mr VK Gulhati director technical of SAIL and Mr GK Pillai CMD of HEC signed the MoU.

Under the MoU, HEC will supply torpedo ladle cars, transfer cars, slab dispatch cars, rolls, EOT cranes and other mechanical equipment required for the modernization & expansion of the SAIL plants.

SAIL's growth plan envisages increase in hot metal production capacity to over 26 million tonnes by the year 2010, under which major projects are being implemented at all its integrated steel plants, mines and other units. The MoU with HEC will enable SAIL in achieving security of critical equipments and spares during the growth plan period at competitive prices.

HEC was set up in 1958 to manufacture and supply capital equipment, machine tools for core sector industries, especially steel. The company has supplied quality equipment for critical areas during installation of Bokaro Steel Plant in the 1970s and during modernization of SAIL plants in the 1990s.

JSW Steel signs iron ore JV with Chilean Minera Santa FE

JSW Steel Limited announced that it has signed a JV agreement with Chilean MINERA SANTA FE for develop iron ore mines and other projects in South America including Chile. JSW Steel will hold a majority stake of 70% through its Netherlands based subsidiary and the other JV partner holds the balance 30%.

The JV Company currently holds iron ore exploration and exploitation concessions on a large area of over 26000 hectares in Belavista and Vinita mines located in Atacama region in North Chile. The initial aero magnetic survey over the entire target area and geological studies supplemented by exploratory drilling carried out in a part of Belavista mine indicate large insitu magnetite iron ore deposits. The JV Company also has right to use Punta Caleta Terminal in Caldera for export of iron ore and also applied for a concession to develop new Port for two berths suitable to handle Super Capsize and Panamax vessels. These mines are located just 50 kilometers to 70 kilometers from the Caldera region where the ports are located.

Mr. Sajjan Jindal vice CMD of KSW Steel informed that he is planning to invest around USD 500 million in this venture including development of new Port capable of handling Super Capsize and Panamax size ships and start mining in the next 18 months.

He further added that the business plan for these mines envisages to create a 4 million tonne per annum capacity for saleable high grade sinter feed quality iron ore in the next 12 months to 18 months and simultaneously take steps to enhance this to 20 million tonnes per annum over 3 years to 4 years.

MINERA SANTA FE is controlled by a locally renowned Entrepreneur Mr Leonardo Farkas Klein.

UGSL net profit in Q3 up by 29% YoY

Uttam Galva Steels Limited has recorded an impressive performance for the quarter ended December 31st 2007. It posted net profit of INR 29.15 crores for October to December 2007 quarter up by 29% YoY as compared to INR 22.63 crores in October to December 2006 quarter.

Its net sales for October to December 2007 quarter reached INR 582.69 crores up by 12% YoY as compared to INR 520.40 crores in October to December 2006 quarter.

UGSL’s net profit for April to December 2007 period stood at INR 93.39 crores up by 14% YoY as compared to INR 82.23 crores in the corresponding 9 months of previous year.

Mr Ankit Miglani director commercial of UGSL said “Our focus on value addition combined with operational efficiencies have contributed to our healthy bottom line We hope to further build on this performance going forward”.

He added that “With the completion of our expansion plans in their final stages, we will be better equipped not only to fulfill diverse customer needs in the domestic market but also further consolidate our presence in the global markets in the quarters ahead.”

Unemployed youths threatened to start roadblock Kalinga Nagar

SNS reported that Orissa's Vyas Unemployed Youth Organization has threatened to start an indefinite road blockade in Kalinga Nagar area, if its demands are not fulfilled by the first week of March 2008.

As per report, at least 500 VUYO gathered the office of the ADM Kalinga Nagar, demanding an immediate cancellation of illegal appointments and insisted upon fresh recruitment of local youths through open tests in various steel plants located in area.

The job seekers demanded that their 7 point charter of demands should be fulfilled soon. These include conducting a high level inquiry into the irregularities in selection processes for various posts, detection of illegal appointments and their immediate cancellation. They said that at least, one VUYO member should be involved in selection and appointment processes to bring about a transparency.

Mr Smrutiranjan Rout president of VUYO has alleged that the employment policies of all steel plants in Kalinga Nagar are anti youth, anti local and anti Oriya in nature. He added that massive industrialization in Kalinga Nagar can hardly solve the district's rising unemployment problem.

Mr Rout said that despite growth in production and profit of the plants, it is shocking that workers’ strength has reduced. There has been a high scale corruption during appointment processes by the steel companies and they have violated all norms of selection procedures. He added that “We will repeat our Kalinga Nagar road blockade agitation which paralyzed the region for more than a year until and unless our demands are fulfilled.”

CIL to launch forward e auction

It is reported that Coal India Limited is planning to introduce forward e auctioning of coal as compared to the current system of e auction, which provides a small quantity coal for spot bidding without any provision for long term supplies.

Mr PSS Bhattacharyya chairman of CIL said that “We plan to introduce forward e auction of coal from 2008 fiscal. The new auctioning platform would benefit companies that require coal over a longer period to meet the production schedule. We intend to support only genuine customers with forward e auctioning that would be undertaken to meet at least a quarter’s requirement of coal for a company. This would increase on a quarter to quarter basis for maximum supply of 1 year requirement.”

CIL is likely to set aside about 25% of coal on offer under the e auction route for bidding under the new dispensation. The quantity may be increased later as CIL grows its e auction platform. CIL proposes to offer about 40 million tonne of coal under e auction route next fiscal. This would mean that about 8 million tonnes to 10 million tonnes of coal would be available for auctioning under the forward e auction route.

IIL announces Q3 results

Ispat Industries Limited has announced the following Unaudited results for the quarter ended December 31st 2007.

IIL has posted a net loss of INR 360 million for the quarter ended December 31st 2007 as compared to net profit of INR 175.2 million for the quarter ended December 31st 2006. Its total Income has increased from INR 18795.6 million for the quarter ended December 31st 2006 to INR 21956.8 million for the quarter ended December 31st 2007.

UAC to meet on POSCO socio economic survey

SNS reported that united action committee, formed by some of villagers of POSCO area and the district administration would meet to try and bury their differences and facilitate resumption of the socio economic survey for the proposed POSCO steel plant.

The UAC held a preparatory meeting to discuss the points that they would raise during their talks with the administration. Members of the UAC said that focus would be on job generation for the displaced and rehabilitation measures. They said that the focus would shift from compensation amount to land acquired for the purpose of the plant and the working out of proper rehabilitation package.

It is noted that the socio economic survey of the project had started earlier this month after a two year long delay. But it had been stopped abruptly when UAC members objected to certain statements made by an official of POSCO, regarding the value of land. Only 20 households have been covered under the survey till date, and that too after UAC extended support. Dhinkia, the epicenter of the anti POSCO movement was left out of the survey work.

Orissa government is keen on expediting survey work and preparing the ground for laying the foundation stone for the project on April 1st 2008.

FACOR in talks for steel JV

It is reported that Ferro Alloys Corporation Limited has lined up INR 2,750 crore for capital expenditure that involves setting up a stainless steel plant and a power facility. As per report FACOR will be setting up a 50,000 tonne Greenfield stainless steel plant in Nagpur through a JV with a European stainless steel producer.

Mr RK Saraf CMD of FACOR said that it is in talks with a European steel producer and an agreement is likely to be concluded within the next 3 months. He said that “Apart from supplying technology, the JV partner will also hold some stake in the entity.”

He added that the steel project, which is estimated to cost INR 1,000 crore, would be funded through a debt equity ratio of 3:7. Part of this will be raised through its internal accruals, while the foreign partner will put in its share.

FACOR currently operates a 50,000 tonne steel plant at Nagpur, which produces carbon steel, manganese steel, alloy steel and stainless steel. It also operates a 50,000 tonne charge chrome plant at Bhadrak in Orissa. In addition, it has finalized plans to set up a 250 MW coal based power plant that involves an investment of INR 1,500 crore. Both the steel and power units are likely to be completed by 2011.

FACOR has posted a net profit of INR 31.41 crore in October to December 2007 quarter up by 270.8% YoY as against INR 8.47 crore in October to December 2006 quarter. Its turnover was INR 249.49 crore up by 15.5% YoY as against INR 215.94 crore.

Vedanta Q3 net profit dips by 7.3% YoY

Vedanta Resources Limited has posted a net profit of USD 671.5 million in October to December 2007 quarter down by 7.3% YoY as against USD 24 million in October to December 2006 quarter due to a stronger rupee and weaker metals prices.

Its total revenues rose by 7% YoY to USD 1.89 billion.

Godawari Power Q3 net up by 82% YoY at INR 23.79 crore

Godawari Power & Ispat Limited has posted net profit of INR 23.79 crore for October to December 2007 quarter up by 82.02% YoY as against INR 13.07 crore in October to December 2006 quarter. Net sales were recorded at INR 217.44 crore up by 74.64% YoY as against INR 124.51 crore.

For the April to December 2007 period, it has posted net profit of INR 66.16 crore up by 64.33% YoY as against INR 40.26 crore while net sales rose by 70.51% YoY to INR 565.86 crore as against INR 331.86 crore.

Mr BL Agarwal MD of Godawari Power said that the robust growth in volume and earnings is on account of expansion in manufacturing capacities in sponge iron, steel billets and captive power generation plant coupled with better sales realization of finished products.

NTPC's Coal import cost to go up due to higher prices

National Thermal Power Corporation Limited expects coal import costs to rise by 39% in the year starting April 2008 amid record prices and as it increases overseas purchases to meet electricity demand in the county.

Mr T Sankaralingam chairman of NTPC said that “Our import bill will certainly rise and we have to look at all options to contain costs.'' He added that at current prices NTPC will on average pay as much as USD 75 per tonne for imports next year compared with USD 54 in the year to March 31st 2008.

NTPC needs to ensure coal supplies to meet its target of almost doubling capacity to 51,000 MW in the next 4 years from the current 28,664 MW. India faces a 13% power shortage during peak hours and the government has set a target to boost output by 60% in the next 5 years to 210,907 MW.

Adhunik Metal Q3 2007 net sales up by 21.7% YoY

Adhunik Metaliks Limited posted gross sales of INR 268.94 crore in October to December 2007 quarter up by 23.1% YoY as compared to INR 218.40 crore in October to December 206 quarter. Net sale was recorded at INR 244.11 crore up by 21.7% YoY from INR 200.56 crore.

The profit before interest for the October to December 2007 quarter increased to INR 43.73 crore from INR 35.97 crore, up by 21.60% YoY and net profit was steady at INR 20.23 crore up by 0.3% YoY as compared to INR 20.15 crore.

Mr Manoj Agarwal MD of Adhunik Metaliks Limited said that “With successful commissioning of our state of art rolling mill and ferroalloy unit we are now confident of getting substantial orders from government undertakings, including the railways and defense establishments. Also the addition of forgings to our product portfolio gives us a new revenue stream.”

Pipavav power project achieves financial closure

It is reported that the 700 MW Pipavav power project of GSPC Pipavav Power Corporation Limited in Gujarat has achieved financial closure as Rural Electrification Corporation sanctioned the entire debt component of around INR 2,000 crore. The gas based power project is estimated to cost around INR 2,500 crore.

The 700 MW Pipavav project is the first stage of an eventual capacity of 2,100 MW, potentially making it Gujarat's largest gas fired power plant. The project is coming up at Kovaya village in Rajula taluka of Amreli district.

A senior project official said that Bharat Heavy Electricals Limited will receive the notice to proceed for the main plant package in February 2008. In October 2007, BHEL received the letter of intent for supplying the main plant package worth INR 1,900 crore. It is scheduled to commission the first unit within 30 months from the notice to proceed date and the second, 3 months thereafter.

GPPCL was incorporated in February 2006 as a special purpose vehicle to develop a mega power plant at Pipavav, with a view to energizing the power deficient Saurashtra region. It is a JV of Gujarat State Power Corporation and Gujarat State Petroleum Corporation. Prior to this, several attempts at constructing a power plant in Pipavav had failed, at both the central and state level.

Simplex Concrete Piles bags Mumbai Metro civil work contract

It is reported that Mumbai Metro One board has given its approval to award the INR 450 crore civil works contract for Versova Andheri Ghatkopar metro rail project to Simplex Concrete Piles India.

Civil works on the project is expected to begin by early February 2008 and is scheduled for completion within 18 months from the date of commencement.

Hindustan Construction launches new SPV

Hindustan Construction Company Limited has announced that it has incorporated a special purpose vehicle company called HCC Mauritius Enterprises Limited as its wholly owned subsidiary for promoting its business including those of the group companies.

Iron ore price negotiations – Round 2 has begun

It is reported that both China and Japan have in late January simultaneously kicked off the new round of negotiations for 2008 fiscal year iron ore prices.

As per report, a delegation of Vale from Brazil visited China to engage in a new round of price negotiations with Baosteel while an Australian mining delegation of Rio Tinto and BHP Billiton visited Japan on January 28th 2008, launching second round of negotiations on iron ore prices with five big steel plants including Nippon Steel Corporation, JFE, Sumitomo Metal Industries, Kobe Steel and Nisshin Steel of Japan.

As per experts, the prospects of negotiations between the two Australian companies and the five Japanese steel giants are blurred, and the chances for the two sides to reach an agreement are slim and Baosteel and Vale have more chances to reach an agreement.
Baosteel is the leader among the world's steel plants while CVRD is the leader among the world's iron ore suppliers. It is very likely for the two to beat others in reaching a final price for iron ore for the 2008 fiscal year.

Vale Xstrata tie up – Awaiting green signal from government

Valor Economico, citing people close to the negotiations, reported that Vale is ready to bid for Xstrata Plc after it arranged as much as USD 50 billion in financing and concluded all necessary proceedings,

Valor said that Vale is waiting for the green light from the government, which wants control of Vale to stay in Brazil.

Valor said that Vale may pay for part of the purchase with its own shares and if Glencore International AG, which owns 34.5% of Xstrata, accepts an all share payment, it would become Vale's largest shareholder, though it wouldn't be a member of the controlling group.

Valepar SA, the company that controls Vale, is owned by Previ, the employee pension fund of state controlled Banco do Brasil SA, Bradespar SA, Mitsui & Co and BNDES Participacoes SA.

As per a recent UK's Sunday Times eport, Vale has arranged a USD 50-billion financing plan from international bank consortium led by HSBC and understood to include Santander, BNP Paribas, Lehman Brothers, Credit Suisse and Citigroup.

Hot band spot price reach peak levels in last fortnight

SteelBenchmarker reported that the US hot rolled band spot price for January 28th 2007 surged by 7.1% to USD 706 per tonne, world export HRB price rise by 9.5% to USD 693 per tonne, Chinese HRB ex works price rose by 0.2% to USD 544 per tonne and the Western European HRB price slipped 0.7% to USD 713 per tonne ex works for the second consecutive time.

USA
USD 706 per ton FOB the mill
Up by USD 47 per ton from USD 659 two weeks ago
Up by USD 146 per ton from low of USD 560 on August 13th 2007
Up by USD 76 per ton from recent high of USD 630 on April 9th 2007

China
USD 544 per tonne ex works
Up by USD 1 per tonne from USD 543 two weeks ago
Up by USD 74 per tonne from low of USD 470 on October 22nd 2007
Up by USD 57 per ton from high of USD 487 on September 10th 2007

Western Europe
USD 713 per tonne ex works
Down by USD 5 per tonne from USD 718 two weeks ago
Up by USD 50 per tonne from low of USD 663 on July 23rd 2007
Up by USD 17 per tonne from high of USD 696 on June 11th 2007

World Export Price
USD 693 per tonne FOB the port of export
Up by USD 60 per tonne versus USD 633 two weeks ago
Up by USD 143 per tonne from low of USD 550 on July 23rd 2007
Up by USD 97 per tonne from high of USD 596 on March 26th 2007

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar, and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

ArcelorMittal hikes Acindar stake to 99.5%

Reuters reported that ArcelorMittal has increased its controlling stake in Argentina's Acindar to 99.5%.

ArcelorMittal, which announced the move in a statement to the Buenos Aires stock exchange, made an offer last year to buy the 35% of Acindar shares it did not already own. It did not say how much the stock purchase had cost.

ArcelorMittal first announced the plan last October in an operation valued at nearly USD 550 million. It said it would only go ahead with the transaction if its stake in Acindar rose to at least 90% of outstanding shares.

Acindar is Argentina's No 2 steelmaker and the market leader in rolled steel. It provides materials to Argentina's farm and construction sectors, along with local industry. The Argentine steelmaker is controlled by ArcelorMittal Brazil, which is in turn controlled by Luxembourg based ArcelorMittal.

Major fire shuts Esmark’s Bridgeview EG plant

An Esmark Inc owned steel coating plant at Bridgeview in Illinois State of US was severely damaged in a Tuesday evening fire. 4 employees who were in the plant when the fire broke out were safely evacuated. News reports out of the Chicago area said as many as 15 fire departments had responded to the blaze.

The cause of the fire is not known. The fire is under investigation by Bridgeview fire officials. A company spokesman said an electrical cause has been suspected, but an official cause hasn’t yet been established.

Mr James Bouchard said “We’re thankful that none of our employees were injured in the fire and want to express our sincere appreciation to the Bridgeview Fire Department and other local fire departments who responded so quickly for their efforts. The extreme winter weather conditions we experienced last night made for a very serious situation, and we’re grateful that no firefighters were injured.”

Mr James Bouchard said capacity from the plant is being transferred to its sister facility in East Chicago, which produces 8,000 tons per month and has the capacity to produce as much as 15,000 tons a month,

Bridgeview Electric Coated Technologies Inc is among the first acquisitions by Mr Craig Bouchard and Mr James Bouchard when they established Esmark as a steel services company in 2004. Electric Coated Technologies Bridgeview housed two electro galvanizing steel processing lines producing about 4,000 tons a month. The plant has 30 employees.

Rio and Mitsui to develop new coal mine in Queensland

Mining giant Rio Tinto Ltd and Mitsui & Co will spend up to USD 1.36 billion to develop a new Kestrel joint venture coal mine in Queeensland Australia. Mitsui said it would shoulder JPY 28.9 billion of the total development cost of up to JPY 144.3 billion.

Mitsui said that the development of the new mine will start by the end of this year and it will start operation in 2012, with annual output of 6.5 million tonnes in peak years.

Their Kestrel Joint Venture, owned 80% by Rio Tinto and 20% by Mitsui is currently producing 4 million tonnes of thermal and coking coal yearly at an existing mine in Queensland. That mine is likely to be depleted in 2014.

Rio Tinto announced last year that it had approved the project and that the investment will extend the life of the mine and increase production to an average of 5.7 million tonnes of coal a year until 2031, up from about 4 million tonnes currently.

Change of guard at ArcelorMittal South Africa

Arcelor Mittal South Africa said that that Mr Rick Reato CEO of Arcelor Mittal South Africa has resigned to join the global ArcelorMittal group and Ms Nonkululeko Nyembezi-Heita would take over as CEO from March 1st 2008.

Mr Reato is leaving his post to become the bigger group's operational excellence VP and would be based in London, where he would focus on the group’s steel businesses in South Africa, Ukraine and Kazakhstan.

In her position at Vodacom, Ms Nyembezi-Heita was responsible for mergers and acquisitions and continental business development group. Prior to joining Vodacom, she had served as CEO of Alliance Capital Management and chairperson of Alliance Capital Namibia.

Ms Nyembezi-Heita has graduated from the University of Manchester Institute of Science and Technology and masters from the California Institute of Technology and holds an MBA from the Open University Business School (UK).

In addition Mr Luc Bonte currently the CEO of Gent Belgium unit of ArcelorMittal would join ArcelorMittal South Africa as president and member of the board to take responsibility for operational management of the business. He would report directly to the CEO.

Mr Bonte was previously technical director of Sollac Atlantique and GM of blast furnaces and sinter plants for SIDMAR, which became ArcelorMittal Gent. He has 30 years of experience in the steel industry and has a PhD in applied sciences and a master of electrical engineering from the State University of Ghent as well as a middle management MBA from the Vlerick School of Management, Ghent.

Mr Khotso Mokhele chairman of board said “The board has been extremely impressed with her skills, leadership abilities and her stakeholder management record.”

He added that “As CEO of ArcelorMittal Gent, Luc has been responsible for managing one of the best performing divisions within the ArcelorMittal Group. We look forward to welcoming him to the business and believe his operational experience will be key in achieving the targets the company has set for the next five years.”

Thousands of workers strike at Sidor

Reuters reported that thousands of workers at Venezuela's largest steelmaker, Argentine controlled Ternium Sidor, went on strike on Wednesday night in a dispute over the labor contract. Strikers include 5,700 direct employees of Ternium Sidor plus 8,000 indirect and contracted workers.

Mr Nerio Fuentes secretary general told Reuters that up to 13,000 union workers and contractors would initially strike for 48 hours. He said "We have now had almost 12 months of talks about the labor contract and it's now impossible, there is no other route.”

Mr Fuentes earlier said the union, which pulled workers off the job for 24 hours last week in the same conflict, could strike indefinitely if management failed to meet demands.

Earlier this month the government began mediation to end the contract talks, which have dragged on for months.

As per report, Sidor is losing USD 7 million per day as a result of a union strike.

Sidor was privatized in 1997 and is Venezuela's largest steelmaker with average output of 4.2 million tonnes of liquid steel capacity. The Ternium steel group, which is part of Italian-Argentine Techint group, controls 59.7% of Sidor, the Venezuelan state holds 20.4% through state heavy industry holding company CVG and employees own the remaining 19.9%.

US steel import in December see declining trend

Based on preliminary Census Bureau data, the American Iron and Steel Institute reported that the United States imported a total of 1,977,000 net tons of steel in December 2007, including 1,583,000 net tons of finished steel. While full year 2007 total and finished steel imports declined by 27% and 26% respectively against 2006 all time record, total and finished steel imports in 2007 were up by 4% and 5% respectively against 2005 which itself saw elevated import levels.

The three largest suppliers of finished steel from offshore last year were China 4,595,000 net tons down by 14%, South Korea 2,004,000 net tons down by 28% and Japan 1,480,000 net tons down by 13%. While steel imports from China declined modestly in 2007 against 2006, they were double China’s import total in 2005. Imports of line pipe and oil country goods from China each increased by 20% in 2007 against 2006.

Mr Andrew G Sharkey III president & CEO of AISI said that “Steel imports for the full year 2007 ended up relatively high, notwithstanding the decline from the 2006 record and the decelerating overall import levels seen in the second half of the year. China, a non market economy, remains the largest steel exporting nation in the world. Trade and market distorting practices are still pervasive in the global steel sector. Less efficient steel producers in China and elsewhere continue to benefit from large scale subsidies and other artificial competitive advantages. Under these conditions, AISI will closely monitor the steel import situation in 2008, and domestic steel producers will stay vigilant about dumped or subsidized imports of individual products from individual countries.”

Corus makes 3 senior appointments

Corus has announced three key appointments within its Strip Products Division in both the Netherlands and the UK, who will report to Ms Marjan J Oudeman director of Corus Strip Products Division.

Mr Theo J Henrar MD of Corus Packaging Plus is appointed as MD of Corus Strip Products IJmuiden and as site manager of Corus in IJmuiden, with effect from March 1st 2008.

Mr Uday K Chaturvedi VP Coke, Sinter & Iron and TQM of TATA Steel is appointed as MD of Corus Strip Products UK with effect from April 1st 2008 based at Port Talbot in Wales.

Mr Hugo A Loudon MD of Corus Special Strip is appointed as MD of Corus Packaging Plus with effect from March 1st 2008, based at IJmuiden in the Netherlands.

Ms Oudeman said “I am delighted to announce these appointments to the Strip Product Division Team, which are a major step in having the Division ready for the continuing challenges of the industry and the continued integration process with TATA Steel. I am confident that our Division is now supported by a strong and highly experienced team, who will work together to deliver our full potential, as we continue to build on our ambitions as part of one of the most profitable and leading players in the global steel industry.”

Corus Strip Product Division comprises the manufacture and sale of coated and uncoated strip products including, hot rolled, cold rolled, galvanised and electrical steels and as well as pre-painted, plastic coated products and tinplate for a range of applications for the automotive, construction and packaging, domestic appliance, engineering and metal goods sectors. Corus Strip Product Division produces nearly 12 million tonnes of high quality strip products at its main steelmaking sites at IJmuiden in the Netherlands and at Wales in the UK.

Corus Packaging Plus is one of Europe’s leading suppliers of high quality packaging steels. The company focuses on innovative new materials, applications and processing technologies, working closely with its business partners to increase value all along the supply chain. Corus Packaging Plus supplies 1.5 million tonnes of high quality light gauge steels to the packaging industry worldwide.

ThyssenKrupp to buy back 3% shares

On the basis of the authorization granted by the Annual General Meeting on January 18th 2008, the Executive Board of ThyssenKrupp AG resolved on January 31st 2008 to purchase on the stock market up to around 15.8 million shares of the Company, representing around 3% of the capital stock, before the authorization expires on July 17th 2009.

As per release the purchase price paid per share (excluding incidental purchase costs) may not be more than 5% higher or lower than the Company’s share price determined by the opening auction in the Xetra trading system on the day of trading.

The release added that “The current ThyssenKrupp share price does not reflect the fair value of the Company and represents an attractive purchase price. At the same time, the buyback together with treasury stock already held in the amount of around 5% of the capital stock will enhance our strategic options for acquisitions and for safeguarding our growth strategy.”

The buyback is to be handled independently and uninfluenced by the Company by Commerzbank AG in compliance with the safe-harbor provisions.

Kinsteel to list Perwaja Steel

Malaysia Star reported that Kinsteel Bhd has submitted a proposal to the Securities Commission to list 51% owned unit Perwaja Steel Sdn Bhd on Bursa Malaysia main board.

It said that the flotation would entail the incorporation of Perwaja Holdings Bhd as the holding company of Perwaja Steel via a share swap with 500 million shares in Perwaja Steel issued to Kinsteel 51% and Maju Holdings Bhd 49% respectively. It would also involve the issuance by Perwaja Steel of 156.12 million 10 year 4% irredeemable convertible unsecured loan stocks in Perwaja Steel to Kinsteel at 10 sen per Icul, convertible into 156.12 million new shares in Perwaja Steel at a conversion price which represents the initial public offering price via tendering of one Icul and the balance in cash.

This would be followed by the public issue of 60 million new Perwaja Steel shares and an offer for sale of 90 million shares in Perwaja Steel by Equal Concept Bhd, a subsidiary of Maju and Kinsteel at IPO price to be determined later.

Mr Tan Sri Abu Sahid Mohamed non executive chairman of Kinsteel and executive chairman of Perwaja Steel in the statement said that “It is time to list Perwaja Steel to benefit shareholders following the success of the strategic alliance between Maju and Kinsteel. The flotation would allow Kinsteel to grow its downstream activities of manufacturing sections, bars, wire rods and bolts and nuts.”

Mr Tan Sri Pheng Yin Huah MD of Kinsteel and Perwaja Steel said that Kinsteel would continue to be an integrated steel manufacturer post listing. He added that the Perwaja Steel listing would allow the segregation of its core business. He said “The injection of capital raised from the listing of Perwaja Steel was expected to provide the company the opportunity to expedite future projects that would be earnings enhancing.”

Queensland floods cost coal miners over USD 1 billion

It is reported that coal exports worth as much as USD 750 million will be lost because of the Queensland floods, with full production not likely to return to some mines until the end of the year. With equipment and infrastructure losses added, Australian coal industry is expected to face a flood bill of more than USD 1 billion.

Mr Tom Price analyst at Merrill Lynch said that discussions with coal companies indicated the production of as much as 10 million tonnes of export coal would be lost. Mines in the flooded Bowen Basin would not resume full production for 6 to 9 months.

He added that "With demand in Asia for coal very strong and fetching high export prices, this has come at the worst possible time. It is already a very tight market and it is going to get a lot tighter now. There is no short term source anywhere else in the world for this type of coal."

Coal export prices are at record prices because of soaring demand in India and China, with coking coal fetching an average USD 96 per tonne and thermal coal USD 55. Supply shortages are expected to drive prices higher when contracts by Australian producers are renegotiated later this year, with up to USD 115 a tonne on offer for premium coking coal.

Can recycling in 2006 grows by 67% YoY

According to data gathered by the International Iron and Steel Institute in 2006, 6.6 million tonnes of steel cans were recycled, across the 35 countries represented in the data collection. This prevented approximately 11.9 million tonnes of carbon dioxide from being released into the environment.

IISI collects data on the world steel can recycling rate every year. This year, for the first time, recycling figures for Brazil, Turkey and China were reported. The overall packaging recycling rate was 67%YoY up in 2006

(In million tonnes)

China recycled an estimated 1.2 million tonnes of steel cans in 2006. In the US, 1.3 million tonnes of post consumer steel cans were recovered for recycling. Japan recovered 645,730 tonnes of post consumer food and beverage cans, and recycled a total of 720,600 tonnes of packaging steel. The 27 member countries of the European Union recycled 2.5 million tonnes in the same year.

Ms Julie Renner chairwoman of IISI’s Committee on Packaging said “The data from our members shows a continued high recycling rate for steel cans in many countries. In real terms, the tonnages of steel from packaging being recycled in individual countries are also steadily increasing. This is not only good news because of the high demand for scrap steel, it is also good news for the environment.”

CMC awarded national account for ICS

It is reported that the CMC Recycling division of Commercial Metals Company Irving, Texas has entered into an agreement with Industrial Container Services to oversee the handling and sale of scrap metals generated at all of ICS’s manufacturing plants.

Mr Calvin Lee president & CEO of ICS said “I was skeptical at first about what CMC could do for us because I believed we were handling our scrap metal competitively. However, CMC reviewed our scrap business and proved to us that they could create value for our organization without adding any additional cost. CMC delivered on their promise, and they are now our scrap metal partner at all ICS facilities.”

Mr Larry Olschwanger VP with CMC Recycling said that “We are pleased to have forged this relationship with ICS and look forward to working together to maximize the disposition of the scrap metals generated from their manufacturing process.”

CMC Recycling’s National Accounts Group currently provides scrap management services to more than 350 manufacturing plants in North America and Europe.

US Steel posts positive outlook for 2008

Mr Surma president of US Steel, while commenting on US Steel outlook, said that "We expect first quarter results to continue to reflect the volatile cost and pricing dynamics in our three major segments. Overall, we should be in a good position as 2008 progresses to take advantage of favorable supply side conditions, our expanded product and geographic positions in North America and our new galvanizing line at USSK."

He added that “For flat rolled, we expect improvement from fourth quarter results as shipments and operating rates are expected to increase compared to the fourth quarter, with the inclusion of USSC for the full quarter and the completion of the blast furnace projects. Our facilities in Canada have been operating much more reliably. Prices are also expected to be higher as increasing spot market prices will be realized throughout the quarter. In addition, customer commitments in place at USSC at the time of the acquisition are being completed and new commitments consistent with US Steel's commercial policies are being made. We also expect significant cost increases for raw materials, particularly for purchased scrap, coke and alloys. For US Steel Europe, we expect higher euro based prices; and shipments should increase as a result of higher facility availability in the quarter. Escalating raw material costs are expected to partially offset these improvements.”

He said that “Shipments and prices for the Tubular segment are expected to remain in line with the fourth quarter and semi finished steel costs will increase. Other businesses will reflect the normal unfavorable seasonal effects of the closing of the Great Lakes for taconite pellet shipments. Capital expenditures for 2008 are expected to total approximately USD 940 million. Total costs for pension plans and OPEB are expected to be approximately USD 200 million in 2008 compared to USD 266 million in 2007, primarily due to lower pension expense.”

He further added that “Volatility in net interest and other financial costs could increase going forward as a result of foreign currency accounting re measurement effects, primarily on a USD 1.2 billion inter company loan to a European affiliate, related to the acquisition of USSC. As this inter company loan is repaid, our exposure will decrease. Also, we expect to mitigate a portion of this volatility with our normal hedging activity.”

Thai scrap import climbs in 2007

YIEH reported that Thailand imported 1.58 million tonnes of scrap during the first 11 months last year up by 32%YoY and the total import is predicted to reach 1.724 million tonnes in 2007.

Among them, US occupied 651,000 tonnes weighted 41.2% of the whole volume & up by 76.8%YoY; Russia occupied 266,000 tonnes, weighted 16.8% & up by 103%YoY and Australia occupied 141,000 tonnes, weighted 8.9% & up by 33.4%YoY

Nominations sought for ASTM International Cavanaugh memorial award

ASTM International, one of the world’s largest standards developing organizations is seeking nominations for annual William T Cavanaugh Memorial Award, which is granted to a person of widely recognized eminence in the standards system who has made extraordinary contributions to the field of national and international voluntary standards.

Nominees for Mr Cavanaugh Memorial Award may or may not be members of ASTM International. The title of honorary member is bestowed upon recipients who are non-ASTM members. Established in 1987, the award honors Mr William T Cavanaugh who served as CEO of ASTM from 1970 until 1985.

Nominations should describe each candidate’s qualifications as completely as possible. Nomination packages should include relevant information about the candidate’s professional background; outstanding contributions made within ASTM International as well as other standards organizations or professional societies; and all offices and special positions held in each organization.

In addition, any of the candidate’s accomplishments to advance the efforts of the global standards community should be specifically identified, including standards interaction with governments, industry, or academia, as well as any past honors, citations and awards that relate to voluntary standards. No more than two individuals will be selected for the Cavanaugh award in a single year.

House orders probe into Ajaokuta Steel

The Tide reported that the Nigeria’s House of Representatives has directed its joint committees to conduct a public hearing on the controversial sale of the Ajaokuta Steel Company to ascertain its compliance with laid down rules. This was sequel to a motion sponsored by Mr Dino Melaye chairman House of Representatives Committee and 61 others on the sale of the steel company to Global Infrastructure Nigeria Limited.

The House directed both the committee on Privatization and Commercialization and that on Power and Steel to conduct the public hearing and report back to the House within four weeks. It also mandated the committees to investigate the sale of National Iron Ore Mining Company at Itakpe in Kogi.

Sahaviriya Steel aims for 30% sales rise in 2008

Thailand's largest HR steel coil maker Sahaviriya Steel Industries said that it aims for at least 30% rise in 2008 sales. Its 2007 sales were THB 28 billion.

Sahaviriya Steel also said that it would continue to focus on sales of high grade products.

Rio Tinto coal mines in Queensland back in production after floods

Rio Tinto said that its coal mines in the Australian state of Queensland have restarted production after heavy rain disrupted operations.

It said that “Its Kestrel mine, which was worst affected after access to the mine was cut off by flooding, has resumed operations and is expected to reach full production this week.”

Ms Amanda Buckley spokeswoman of Rio Tinto said that the Blair Athol mine had not been badly affected and production and shipments are on schedule and the Hail Creek mine had more rain but is meeting a revised rail schedule. She added that "We have not had to declare force majeure and have been relatively unscathed."

BHP Mitsubishi JV coal output to be reduced for months

Bloomberg reported that BHP Billiton Ltd the world's biggest mining company coal production at its joint venture with Mitsubishi Corp in northeastern Australia will be reduced for as long as six months due to flooding.

Ms Emma Meade a spokeswoman for Melbourne based BHP Billiton said "The alliance declared force majeure on deliveries last week. Production at the alliance, the world's biggest exporter of coal used in steelmaking, is continuing, but not at the level before the rain event.

She said that the rain will continue to impact operations over a number of months as all parts of the integrated mining processes were affected. The sequence of mining processes from drilling and blasting through to production can take months, therefore impacts will be evident for up to six months.''

She said the production disruptions have exhausted stockpiles at the Hay Point coal terminal and this will result in further delays to shipments. BHP Billiton Mitsubishi Alliance, known as BMA, is working with customers to try to minimize the effect of the delays.

Churchill mining increases coal reserves in Indonesia project

Churchill Mining PLC announced a significant increase in the outlined coal tonnage at its East Kutai Coal Project in Kalimantan in Indonesia, and added that it expects the cost of its exploration and drilling program to below budget, due to the consistency of the coal seams system.

Churchill Mining PLC said it has identified an additional 50 million tonnes of coal at East Kutai, bringing the total to between 135 million tonnes to140 million tonnes up from the 85 million tonnes to 90 million tonnes calculated in December 2007.

It added that “Further, the consistency of the coal seams is expected to reduce the drilling requirements to achieve the exploration targets of defining 500 million tonnes of JORC compliant coal resources by the end of 2008, inclusive of a mining reserve of 100 million tonnes.”

Naples to get new container terminal

It is reported that tenders will soon be invited for the construction of a new container terminal for the Italian port of Naples. The Terminal di Levante project would boost the port's handling capacity past 1 million TEUs.

According to Mr Francesco Nerli president of Naples port, the project would take some 30 months to complete although reports have quoted some sources saying that it was likely to take considerably longer.

Mr Nerli said that the bidding process would begin soon partly because of the unusual speed with which environment minister Mr Alfonso Pecoraro Scanio and vice premier Mr Francesco Rutelli signed off on the project's environmental approvals

The construction's first stage has been scheduled to dredge sediment from existing channels to fill a basin close to the Conateco terminal. This move will create new berth and yard space that will cost about USD 220 million out of a total projected investment of USD 587 million.

Conateco runs Naples' existing container terminal and is slated to run Terminal de Levante under a 50 year concession. Recent data showed that Conateco handled some 460,000 TEUs in 2007 up by 3.5% from 2006 volumes.

Eskom needs 15 million tonnes coal in 3 months

Reuters cited Mr Zoli Diliza CEO of South African Chamber of Mines said that South African state utility Eskom needs 15 million tonnes of additional coal over the next three months including 5.4 million tonnes immediately.

Mr Diliza said "The task force committee is working out how we can assist with finding the additional 15 million tonnes which Eskom needs in the next three months. He said tat we are looking at the issue as one of national importance. Everybody is coming together to resolve it."

Mr Zili said that South African producers have focused on more lucrative export markets instead of ensuring domestic supply. These people have not done their background checks. They need to look at the history of these power plants they were not set up to burn export coal but the discard, lower grade material which was produced as a result of export coal mining.

Mr Diliza said South Africa's major coal producers have formed a joint task force with the Chamber to find the extra coal Eskom needs and work in the national interest to resolve the crisis. He said if it would be difficult for producers to find an extra 15 million tonnes at such short notice. "It is doable."

The sources said the quantity of coal Eskom is seeking is so large that it must impact exports, whether producers are compelled to delay or cancel shipments or to try and buy export coal on the free market to maintain deliveries while diverting coal from the mines to Eskom.

CONSOL Energy reports earnings for Q4 of 2007

CONSOL Energy Inc has reported net income of USD 6.8 million for October to December 2007 quarter down by as compared with net income of USD 115.3 million for the same period a year ago.

CONSOL Energy Inc reported earnings of USD 267.8 million for the calendar year ended December 31st 2007 compared with USD 408.9 million for the calendar year 2006. Net cash from operating activities was USD 88.0 million for the quarter just ended as compared with USD 225.3 million for the December 2006 quarter.

In USD million

The Buchanan Mine roof fall that occurred on July 9th 2007 forced the mine to idle production and adversely impacted net income during the period just ended by approximately USD 31 million including additional expenses incurred in managing and monitoring the underground mine atmosphere since the mine was idled, as well as reduced income from lost sales.

Mr J Brett Harvey president & CEO of CONSOL Energy Inc said that "The idling of the Buchanan Mine for the entire quarter significantly capped fourth quarter earnings. However, now that we have reentered the mine, I expect this event to move quickly to conclusion with the result that financial performance should improve substantially. The impact from the idling of Buchanan, higher DD&A charges related to the purchase of AMVEST and several other non operational items combined to reduce net income period to period." He added that the company expects to make additional recoveries under the company's insurance coverage, which includes property damage, cost recovery and business interruption provisions.

Mr Harvey said that "Despite the loss of Buchanan for the entire quarter, coal operations still managed to report a period to period increase in average realized prices of 5.1% a modest increase in total costs per ton of 1.6% an increase in operating margins of 20.5% and an increase in financial margins of 33.8%."

He further added that "More importantly, coal fundamentals remain unusually good. Global demand for coal is strong and sets a positive tone in both our export markets and the steam market here in the United States. Steam coal supplies were in close balance with demand, while high quality metallurgical coal was in tight supply."

Caledon Resources starts production at Cook coal mine

Thomson Financial reported that Caledon Resources PLC has started commercial production at the Cook Coal Mine, Australia after the commissioning of a new mining system underground.

As per report the coking coal miner said it is focused on ramping up production as fast as possible towards the planned production level of 100,000 tonnes per month.

Caledon said there was no significant disruption to its operations due to heavy rains in mid January. It said it expects a reduction in available rail capacity in 2008 to 1.1million tonnes to 1.2 million tonnes from an expected 1.5 million tonnes. However, it also said available rail capacity might increase as a result of the flooding and subsequent disruption suffered by a number of open cut coal producers in the Bowen Basin.

Whitehaven Coal wins lease for Narrabri mine

It is reported that Whitehaven Coal Ltd seeking to develop an underground mine at Narrabri in New South Wales won a lease from the government allowing mining to start at the AUD 120 million projects.

Mr Ian Macdonald Minister for Mineral Resources of New South Wales said the mine will have a capacity to produce as much as 2.5 million tonnes a year of coal for as long as 50 years, starting in the first half of 2009.

Steel demand for GCC region may rise by 8% - Report

Gulf Times reported cited Mr Johan Schepens project manager for distribution at ArcelorMittal as saying that the demand for steel in the GCC region is expected to rise by 7% to 8% in 2008, beating even the 5% to 6% projected for the rest of the globe.

According to figures provided by Mr Schepens “Saudi Arabia is the biggest buyer of steel in 2006 with 5.8 million tonnes, followed by the UAE with 4.7 million tonnes. The number for the rest of the GCC states was 2.1 million tonnes. Steel worth USD 1.8 billion was purchased by buyers in the greater GCC region, including Egypt, in 2006.”

Mr Schepens said that “Steel is being used for building landmarks in GCC cities, where there is a fierce race to become the ultimate destination. The focus is not on tall buildings anymore, it now lies in, how different you can really shape a building. There are more than 200 towers coming up at any given time in the GCC region, with Saudi Arabia, Abu Dhabi and Dubai leading the way. It’s the world’s fastest growing areas in terms of population as well. There is huge, huge potential.”

Mr Schepens dismissed the notion that steel is not durable, can over heat and can not be used in building construction locally. He added that “It is a life long product. You can look at it from a cost and cash out point of view or you can look at the outcome. In real estate, space is cash and steel uses very less space compared to concrete and so it’s more cash. Steel has evolved to a new level. Cars used to weigh a ton, but not anymore. In a way all the research carried out by car manufacturers over the decades, helped us sell steel to the construction industry. Steel prices remain cyclical, reflecting overall economic trends and specific developments in consuming industries. It’s purely set on demand and supply equation.”

ArcelorMittal currently has no group production activity in the region to date, but holds a significant market share through its European offices. It also has a project office in Dubai, specializing in design and consultation.

Hyundai and Daewoo win Oman tanker contract

South Korea's Hyundai Heavy Industries and Daewoo Shipbuilding & Marine Engineering Co won a USD 1.54 billion contract to build oil tankers for Oman.

The companies will build five tankers each for the government of Oman, an embassy official and a spokesman for the Oman Tender Board said.

Pakistan to install 2,300 MW projects by 2009

Mr Tariq Hameed minister for water & power said that the independent power producers will install new power projects of 2300 MW by 2009 to meet current power shortage Pakistan. He added that another 13 power projects totaling 3120 MW will be commissioned by the year 2010.

Mr Hameed said that there was a rapid growth in economy and an expansion in the industrial sector was being witnessed because of the development reforms of the present government. He added that “The progress in the power sector is a proof of our commitment towards the development of the country and economic betterment of the people.”

Pakistan has also decided to create a capacity of around 1,000 to 1,200 MW for a period of 3 to 4 years to bridge demand and supply gap by 2010.

RAK GDP grows by over 50% in last 4 years

AME Info reported that Ras Al Khaimah's gross domestic product has grown by more than 50% over the last 4 years to AED 11.12 billion and the fast growing emirate is expected to clock an annual growth rate of over 15% in the next few years.

Dr Khater Massaad adviser to RAK crown prince & CEO of the Ras Al Khaimah Investment Authority said that there has been unprecedented all round socio economic prosperity in Ras Al Khaimah with the emirate recording tremendous growth in manufacturing, services and tourism and a considerable increase in living standards and per capita income. He added that "The GDP has grown by over 50% over the last 4 years and we expect the growth momentum to carry forward in the years to come."

Dr Massaad said that the RAK strategy for development has been to encourage and promote the role of private sector towards socio-economic development. He said “"The private sector has a big role to play in the socio-economic prosperity of the nation, and we have to make sure that the private sector is provided with the appropriate regulatory framework to operate efficiently and productively.”

He said that Rakia has been able to attract around USD 2 billion in industrial investments in the last two and a half years and the emirate has recently been rated by the FDI Magazine of the Financial Times Group of London as the best investment destination.

Shipping lines to impose USD 100 surcharge at Pakistani ports

Dawn reported that Pakistan's shipping lines have decided to impose USD 100 per TEU terminal congestion surcharge on all imports from February 1st 2008. The surcharge will be imposed on import cargo landing at all the 3 terminals at Karachi International Container Terminal and Pakistan International Container Terminal at the Karachi Port and Qasim International Container Terminal at Port Qasim.

According to shipping industry sources, the container terminals management having taken a serious view of the congestion has decided to impose penalty on cargo not cleared within 48 hours of the discharge. The penalty rates will be PKR 5,000 for a 20 feet container and PKR 10,000 for a 40 feet box. The management of all the 3 terminals has issued notices to the importers that the new charges will be effective from February 1st 2008.

Meanwhile, it is learnt that due to shortage of trucks and substantial increase in warehousing charges the importers prefer to keep their cargo under demurrage at the terminals as the latter rates are lower than the former. The shipping lines representatives, who met recently, have also decided to reduce demurrage free period for imports from the existing 7 days to 5 days also from February 1st 2008. It was also decided to double the detention charges for cargo lying at the terminal after the demurrage free days.

Over a dozen foreign shipping companies touch ports in Pakistan and the country has to pay freight bill of USD 1.5 billion to USD 1.7 billion per year for executing its foreign trade. The major shipping lines, which will charge surcharge, include Maersk, APL, MSC, CMA, NYK, Happaglloyd, USAC Cosca and MOL, etc.

Pakistan urges for IPI gas pipeline implementation

Mr Pervez Musharraf President of Pakistan has called for the implementation of the country's currently underway energy projects without delay. He stressed that necessary measures must be taken to ensure the uninterrupted supply of oil and gas to Pakistan.

Mr Musharraf had earlier called for the implementation of the Iran Pakistan India gas pipeline project irrespective of India's participation.

Tehran has urged New Delhi and Islamabad to resolve their differences over the transit fees for gas transfer which is the main obstacle in finalizing the multi billion dollar project. The three countries will reportedly meet in mid February 2008 in Tehran to discuss the issue and finalize an agreement.

Iran to supply LNG to Europe through Nobuko pipeline

It is reported that Turkey and Switzerland has discussed transfer of Iran's gas to Europe stating Iran has no responsibility for constructing Turkish pipeline.

Mr Mir Taqi Sarrafi MD of Pipelines at National Iranian Gas Company said that the contract with Switzerland will be signed in 2 months as Iran has reached a final agreement with the EGL Company. He added that the discussion with the Austrian OMV Company mainly details the sale of liquefied natural gas.

Iran will be a major supplier of natural gas to the 1800 kilometers long Nobuko gas pipeline. Construction of this pipeline in Iran will start in 2008 with an investment of USD 5 billion.

Keppel FELS completes second drilling rig for Gulf Drilling

Singapore based Keppel FELS, subsidiary of Keppel Offshore & Marine Limited, has completed the construction of its second jack up drilling rig for Gulf Drilling International Limited, a JV between Qatar Petroleum and Japan Drilling Co Limited.

The new rig Al Zubarah, was named after one of Qatar’s very important economic centres by Mr Mohammad Al Shirrawi chairman of the board of directors of GDI during a ceremony. Built to Keppel’s proprietary KFELS B Class design, the rig has been customized to GDI’s requirements for drilling in the Arabian Gulf. Al-Zubarah is capable of operating in water depths of up to 300 feet, drilling 30,000 feet deep and accommodating up to 110 men.

Mr Al Shirrawi said that “To make this rig ready for operations within such a tight schedule, many men and women have worked extremely hard and made many sacrifices.”

Al Zubarah is the second KFELS B Class jack up that Keppel FELS has completed for GDI. The first rig called Al Khor is successfully operating offshore Qatar in the Arabian Gulf.

Apart from offshore drilling rigs, the Keppel Group is also building for Qatar its first integrated solid waste treatment facility and its largest wastewater treatment and reuse plant. Other collaborations include the setting up of a shipyard in the port of Ras Laffan and the survey, maintenance and repair of a fleet of Liquefied Natural Gas carriers chartered by Qatar Liquefied Gas Company Limited.

North Pars gas field infrastructure taking shape

Tehran Times reported that, by earmarking over IRR 2.9 trillion for the creation of the required infrastructure for the North Pars gas field, the trend of development will greatly accelerate in the next Iranian calendar year starting March 20th 2008.

According to the plan, the North Pars gas field will be developed in four phases and the produced gas will be used for the production of liquefied natural gas

Mr Seyyed Abdoljalil Razavi MD of Pars Special Economic Energy Zone said that during the past year over IRR 500 billion has been spent by the National Iranian Oil Company for the development of Bushehr Province. A total of 15 infrastructure development projects are underway in the North Pars gas field, the most important of which are building access roads, establishing administrative and logistics departments, flood control, helicopter landing pads, fencing construction and port installations.

Mr Razavi said that the North Pars field has a 16,000 square kilometer area, extending along the towns of Dayyer, Dashti and Tangestan. The field holds about 80 trillion cubic feet of natural gas and has the capacity to produce 431 billion cubic meters of gas per day.

OVL seeks more stake in Iran's Yadavaran oilfield

ET reported that ONGC Videsh Limited, the overseas arm of Oil and Natural Gas Corporation, has sought doubling of stake in Iran's Yadavaran oilfield in lieu of earlier earmarked Jufeyr field that has been given to a Belarus firm.

Iran had in 2005 offered OVL 100% developmental rights of Jufeyr oilfield and 10% of Yadavaran oilfield in lieu of India importing 5 million tonnes a year of liquefied natural gas worth USD 22 billion from Iran.

An official of OVL said that "We were in March 2007 told that the government of Belarus had signed a MoU with Iran and Belarusneft was negotiating master development plan for Jufeyr field. We are well within our right to seek substitution of the Jufeyr field with additional 10 percent interest in Yadavaran field.” He added that OVL has told National Iranian Oil Company that it would not come in the way of Iran awarding Jufeyr field development to Belarusneft but.

OVL subsequently laid claim over an additional 10% participating interest in Yadavaran field, the majority developing rights of which have been awarded to a Chinese company.

India's plans to import 5 million tonnes a year of LNG from Iran beginning 2010 are in limbo after Tehran sought renegotiation of gas price. Despite a consortium of Indian Oil, GAIL, and Bharat Petroleum signing a legally biding LNG sale purchase agreement with National Iranian Gas Export Co, NIOC has refused to endorse the deal without New Delhi agreeing to pay a higher price.

China remains largest stainless steel producer in world

Xinhua, citing figures with the China Iron and Steel Association reported that China has remained the world's number one producer of stainless steel in 2007 accounting for more than 25% of the global output.

Mr Li Cheng chairman of the stainless steel council under the CISA said that “China churned out some 7.2 million tonnes of stainless steel in 2007 or more than one quarter of some 28 million tonnes of global output.”

China overtook Japan as the world's biggest stainless steel producer in 2006.

Iron ore price negotiations – CISA denies ceiling measures

According to a report in China Securities Journal, China Iron and Steel Association has denied market rumors that it has set a 30% ceiling price rise in talks with iron ore suppliers.

The paper cited Mr Luo Bingsheng deputy general secretary as saying that “We have no intention to insist on any bottom line, like 30% as rumored, since we believe such pre settled bottom line would be detrimental to the progress of the ore talks."

Mr Bingsheng added that the rumors are not helping negotiations for 2008 iron ore imports. He said that association would pay close attention to how the negotiations could benefit the Chinese iron and steel industry's development.

According to rumors, the world's three major iron ore providers, BHP Billiton, Rio Tinto and CVRD, wanted to raise prices by least 50 percent.

Mr Jintao calls for boosting coal supplies to snow hit areas

It is reported that Mr Hu Jintao president of China has called on the coal mining industry to boost supplies to power stations in regions affected by the worst snows in more than 50 years.

Mr Hu, during an inspection of coal fields in Datong in Shanxi Province and Qinhuangdao Port in Hebei province, through which much of Shanxi's coal is shipped, told workers at a mine that “Disaster hit areas need coal and the power plants need coal. Coal supplies are crucial to fighting the snow disaster.”

Mr Hu added that "I pay an early new year call here to those miners who will not go back home to celebrate the Spring Festival for the coal production."

In the monitoring room of the station, Mr Hu was told that the daily average transport volume for coal in recent days was 960,000 tonnes, 15.6% higher over the same period last year. The station is striving to achieve a daily volume of 1 million tonnes.

Qinhuangdao Port is the busiest shipping port, which transfers coal for power generation from Shanxi Province to southern China by ship, with a special railway connecting Datong. To maintain uninterrupted coal supplies, the port has been operating around the clock since the severe weather hit central and southern China.

The snow, the heaviest in a decade in many places, has been falling in China's east, central and southern regions since Jan. 10, causing deaths, structural collapses, blackouts, highway closures and crop destruction. According to media reports, the snowstorms have killed at least 46 people, caused CNY 32.7 billion of economic damage and destroyed or damaged more than 750,000 homes. At least half of the nation's provinces have experienced power blackouts. Freezing rain and snowstorms have killed 15.8 million livestock also,

The heaviest snowfalls since 1954 stranded millions of migrant workers preparing to return home for the Lunar New Year, China's most important holiday and the one time a year many see their families. More than 8,000 flights were canceled or delayed because of snowfalls and icy runways. People will make an estimated 2.18 billion bus, train and plane journeys during the six weeks surrounding the Lunar New Year, the Ministry of Communications estimates.

Iron ore price negotiations – Freight slide not to effect situation

It is reported that the freight rates from Brazil to China has fallen from USD 96.16 per tonne to USD 50 per tonne by January 29th 2008, nearly 50% down and that for Australia to China route also dropped by a half to USD 18 per tonne around, making some industry persons to believe the slumps may drag down spot iron ore price and give the Chinese side more leverage in the benchmark price talks.

Mr Zeng Jiesheng analyst with Mysteel said that as long as ore demand is a bit over the supply or even this equation stands balanced, and the top three ore suppliers still hold 70% of the trading, freight rate changes would never have a definitive effect on the contract price.

He said that ever since 2001, China's iron ore imports have kept on the rise amid freight rate fluctuations, while the combined percentage of ore imports from Australia, Brazil and India remain some 85% of the total imported. He added that the freight rate changes didn't alter the ore import structure, with Indian ore declined on price surge and the Brazilian took up a bigger share due to faster output growth.

Mr Zeng said that “Freight rate, spot ore price and the contract price have formed a vicious circle when the contract price is fixed, freight rate decides the landed price level; higher the landed price, higher the spot price too, forcing steelmakers to cut purchase and then drive down the freight rate; while once the freight rate is low, the steelmakers again expand buying and in turn push up the freight and spot price. If taking consideration of the global dry bulk transport force and steelmakers' acceptance on lead time, the situation would be more complicated.”

Chinese coal spot prices rise by 20%

Interfax China reported that Coal prices on China's domestic spot market have reached record highs this week due to widespread supply shortages and robust demand brought on by severe weather, despite government efforts to keep coal prices from rising higher.

Statistics released by the China Coal Transportation and Development Association show that spot prices for coal on the country's domestic market reached a record CNY 645 per tonne to CNY 655 per tonne. Such prices represent a 17% increase on those recorded at the start of the year. In comparison, spot prices rose by 10% over the entire 2007 year.

The price hike has come despite a warning last week by the China Coal Transportation & Sale Society ,an organization with ties to the government, that domestic coal producers will have their coal production and selling rights suspended if they raise their prices during the current supply crisis.

Coal industry analyst said that "While the government could put a cap on the prices being asked for by domestic coal producers, the many coal traders, the ones who are behind this coal price spike, are harder to control."

China's coldest and snowiest winter in decades has disrupted railway transportation in many areas, especially in the country's northern coal production heartland of Shanxi Province. In turn, this has led to widespread coal inventory shortfalls at the country's power plants.

China's Transport Ministry ordered ports to temporarily stop loading coal for export last Friday in a bid to ease the domestic shortage, but ports are continuing to load coal destined for overseas under contracts sealed before the ban.

Baotou Steel sees 2007 earnings going up by 150%

It is reported that China's Inner Mongolia Baotou Steel Union Company unaudited net profit increase more than 150%YoY in 2007 from a year earlier, with earnings per share rising over 50%.

Mongolia Baotou Steel Union Company said in a statement that its earnings were boosted by its purchase of steel manufacturing assets from its parent in the middle of last year.

Baotou Steel is scheduled to post full 2007 earnings on April 18th 2008. It reported a net profit of CNY 653.8 million for 2006 with earnings of CNY 0.19 per share.

Mr Zeng Peiyan stresses coal supply to power plants

Mr Zeng Peiyan Chinese Vice Premier stressed the need for the smooth production and transportation of coal and asked relevant departments to go all out to ensure power supplies as severe weather battered central and southern China.

He reiterated that all parties should keep a clear mind on the tough situation and spare no effort to guarantee power supplies. He asked state and local coal mines to enhance output and maintain production during the Spring Festival, while ensuring safe operations.

He urged the smooth channeling of rail and sea facilities to transport coal and urged that disrupted power grids be restored in timely fashion. He said that Coal supply of major power grids should be ensured first, and supplies to homes and schools, hospitals, communications and financial institutions should also be ensured.

Shanxi mines to continue coal production in holidays

The Shanxi Coal Industry Bureau announced that two thirds of the provincial major coalmines will keep going during the Spring Festival that falls in early February this year, and about 1,000 local coalmines will resume production 20 days earlier than last year in order to meet the electricity coal demand.

Authorities estimate that Shanxi will churn out more coal this February than the same period last year and thus alleviate the shortage.

Shanxi Province is the hub of China's coal industry. So far, the province has taken a series of measures to ensure adequate coal supplies. It is estimated that the shortage will be relieved next month.

A source inside the State Power Control Center said that the situation is still very urgent although electricity coal reserves have leveled off.

Formosa Plastics expects approval for Chinese SS JV

The Commercial Times cited Mr Lee Chih-tsun chairman of Formosa Plastics Corp as saying that Formosa Plastics group may obtain government approval before the presidential elections to establish a stainless steel joint venture in China.

Formosa Plastics Corp plans to invest USD 100 million in the joint venture in the southeast Chinese province of Fujian. The facility has designed annual capacity of 750,000 metric tonnes of stainless steel.

Separately, Formosa Plastics Corp is studying the feasibility of a proposed Formosa Heavy Industries Corp joint venture in Vietnam with annual capacity of 7.5 million tonnes of steel.

Longgang Steel and Chengshi Steel build steel sales center

It is reported that Longgang Steel and Chengshi Steel signed a strategic cooperation agreement to build a steel sales center. At present, this project has entered into the implementation stage.

Mr Wu Baolin GM of Longgang steel said that the establishment of the sales center will enhance the market grades for steel enterprises in Sichuan province and they will make effort to achieve the level of modernization.

China and ILAFA ink cooperation pact

It is reported that Iron and Steel Association of Latin America has signed an agreement with China in an effort to strengthen the cooperation among steel industries and relevant information exchange of two parties.

According to the agreement, the representative of two parties will hold work conference in order to strengthen the understanding. In addition, two parties negotiated on holding international conference, exhibitions and research meetings as well as the mutual visit plan of two parties.

Xiamen cargo turnover reached 81.17 million in 2007

It is reported that in 2007 cargo turnover of the port of Xiamen totaled 81.17 million tonnes. This figure is a 12.5% plus over the results of 2006. The volume of the containers transported through the port amounted to 4.63 million TEU

By the end of 2007 the port’s throughput capacity totaled 82.8 million tonnes per year it is 16 million tonnes more than in the end of 2006.

ArcelorMittal acquires 3 coal mines in Russia from Severstal

ArcelorMittal announces that it has signed agreements to acquire three coal mines and associated assets in Russia for a total consideration of USD 720 million. All the transactions are subject to regulatory approval.

ArcelorMittal will acquire a 97.59% stake in the Berezovskaya Mine together with a 99.35% stake in the Pervomayskaya Mine from OAO Severstal in Russia. Both mines produce coking coal and are located in the Kemerovo Region, Russia.

As part of the agreement ArcelorMittal will also acquire the exploration and mining rights to the Zhernovskaya 3 coal deposit, which is a subsidiary of the Pervomayskaya Mine. Furthermore, it will acquire the Severnaya Coal Preparation Plant which is part of the Berezovskaya Mine and three companies that provide the mines with associated services. It has also agreed to purchase 100% of the Anzherskoye mine.

Mr LN Mittal president & CEO of ArcelorMittal said "We are pleased to be acquiring these mines which will provide an important and competitive source of coking coal supplies for our steel production, raising our self-sufficiency from 10% to 15%. This acquisition also helps ArcelorMittal establish a presence in Russia, a fast growing market for steel production.”

Mr Roman Deniskin GD of Severstal Resurs said “This is a good deal for Severstal, allowing us to focus on the development of existing, strategically important assets, as well as invest new coal projects.”

In 2007, the Beryozovskaya and Pervomayskaya produced 1.77 million tons of coking coal concentrate.

Severstal announces a fire at blast furnace

Severstal announced that a fire at blast furnace five at its Cherepovets steel plant has resulted in the death of a Severstal employee and injury to two others who, though not in critical condition, are being cared for in hospital. The fire has been extinguished but operations at the blast furnace have been suspended pending an investigation.

The release said that as per early indications, the fire may have been the result of the dispersal and subsequent ignition of the furnace’s roofing material caused by the opening of the third Cowper stove in the upper part of the furnace. No explosion occurred at the furnace.

Severstal said that the No 5 blast furnace had been stopped and that a commission had been set up to investigate the incident.

Metinvest pulls out of bidding for Kremikovtzi

Sofia News Agency reported that Ukrainian investor Metinvest, which was interested in the acquisition of a majority stake in Bulgaria's biggest steelmaker Kremikovtzi, has withdrawn from the sale.

Mr Rumen Zankov spokesman Kremikovtzi of told the state run Bulgarian News Agency that "The owner of Kremikovtzi Corp said negotiations are underway with two investors and Ukrainian investor Metinvest has withdrawn from the negotiations.”

As per report, representatives of US Steel, the other bidder for Kremikovtzi next to Ukrainian Mr Konstantyn Zhevago, are currently having a look at the Kremikovtzi site.

Azovstal launches new ladle furnace

It is reported that Azovstal has put in operation a new ladle furnace in its converter shop. The unit has a capacity of 2 million tonnes per year and costs USD 30 million. The new plant will improve vessel lining life and increase the ferroalloy recovery level.

As per report the program for reconstructing the oxygen converter shop calls for the start up of a second ladle furnace unit along with a sixth continuous casting machine, with a 2.5 million tonne per year capacity, and a degassing plant. As a result the converter shop's capacity will reach 6.2 million tonnes per year and continuously cast products will rise to 80% of output. A long run investment program aims at increasing AZST’s steel output to 8 million tonnes per year by 2012.

Yuzhkuzbassugol to raise investments in 2008

It is reported that in 2008, Yuzhkuzbassugol will raise the investments 1.82 fold to RUB 6.2 billion from RUB 3.4 billion in prior years.

The major portion of investments in the volume of RUB 3 billion will be invested in the reconstruction of Alardinskaya Mine and building of the new mine Erunakovskaya-8.

In 2007 the investments declined 32% from RUB 5 billion, coal production being down 26% to 11.98 million tonnes due to the serious accidents at two leading mines at Ulyanovskaya and Yubileinaya.

Yuzhkuzbassugol involves 11 mines, one under building and 2 enrichment plants, 2 engineering plants, 2 engineering plants, transportation and servicing entities.

Severstal Resource to invest RUB 2 billion in Kuzbass

FIS cited Mr Aman Tuleev Governor of Kemerovo region's after signing the agreement on social and economic cooperation for 2008 with Mr Roman Deniskin Director General of the Company said that Severstal investment for development of its coal production in Kuzbass is RUB 600 million more than a year before.

The invested funds will be used primarily for the purchase of highly productive mining equipment. RUB 400 million will be spent on the creation of safe labor conditions, of which the largest part on coal bed degassing. RUB 26 million will be invested into the implementation of national projects in Kuzbass and RUB 93 million into social security programs for the company's employees.

Ukrainian domestic scrap prices climbing up

YIEH reported that under export market pressure, Ukraine’s domestic market steel scrap price rose again this week.

Currently the domestic purchase price is around USD 316 per tonne to USD 340 per tonne. Compared to last week, it has risen by USD 20 per tonne. The export price of A3 is around USD 415 per tonne to USD 410 per tonne.

The market predicts that the domestic Ukraine’s scrap price will keep soaring until it matches the price level of the export product. The main factor pushing up Ukraine’s scrap prices is the fact that global scrap and steel product continue to rise. In addition, the increased cost of energy and salaries also helps to push up scrap prices.

Ukrainian PM to visit Russia for gas talks

RIA Novost cited Ms Yulia Tymoshenko PM of Ukraine as saying that she will visit Moscow on February 21st to 22nd 2008 to discuss Russian natural gas supplies to the country.

Ms Tymoshenko said "My visit to Russia will take place on February 21st to 22nd 2008 at the invitation of Mr Viktor Zubkov PM of Russia. She said we will discuss a wide range of issues, including uninterrupted gas supplies to Ukraine."

Ms Tymoshenko said the Ukrainian government is looking into the possibility of switching to European-level prices for natural gas, but added that Russia should also heed Ukraine's demands for a transit fee rise.

The bulk of Russia's gas supplies to the European Union, which account for one quarter of the 27 nation bloc's consumption, run through Ukraine. A gas pricing dispute with Ukraine at the start of 2006 prompted Russia to briefly cut off supplies to the country. Europe bound exports were also affected.

DMKD to increase charter fund

Dniprovskiy Steelworks has announced its plans to increase its charter fund by 144% to USD 355.4 million. The equity increase is to be done through the issue of 4.0 billion new ordinary shares at USD 0.05 par values. The equity issue will be considered at the AGM on March 20th 2008 and if approved will take place from May 12th to December 5th 2008. The rise is aimed at financing modernization and an increase in working capital.

The equity issue had been previously announced by the company but not voted on at the AGM on October 12th 2007. The new equity issue looks consistent with DMKD's plans to invest USD 0.53 billion for modernization in 2008. We think that the postponing of the capital increase is due to adjustments to the modernization schedule.

Russian car market will be biggest in Europe in two years

Interfax cited Mr Carlos Ghosn president & general director of Nissan while speaking at the Russia Forum as saying that Russia's car market will be the biggest in Europe in two years.

He said that “Major car makers have changed their approach to emerging markets. They now work to adapt to local realities, to adapt their business and management system.”

Mr Ghosn said that Avtovaz is the leading brand on the Russian market and the company knows the market specifics. It also has broad networks of retailers and parts makers. Renault-Nissan wants Lada to continue being the leader on the market.

He said it has a partnership with Avtovaz but Renault will supply the technology, particularly the platform for future models.