February, 22 2008
Kalyani Steel to set up 1 million tonne steel plant in WB
Bharat Forge announced that its specialty steel maker Kalyani Steel will set up a 1 million tonne integrated steel unit in West Bengal. The steel unit, which would make high grade steel for the engineering and the automobile sector, would also have a 500 MW power plant along with some downstream units.
Mr Amit B Kalyani ED of Bharat Forge signed a MoU with the West Bengal Industrial Development Corporation and the West Bengal Mineral Development and Trading Corporation for setting up the steel unit. Mr Kalyani said the detailed project report would be ready in 12 months and the project will be completed in 36 months to 45 months.
Mr Nirupam Sen industry minister of WB said that they were shown two sites for the project, one at Salboni near the Jindal project and another in Durgapur.
This is the third steel project of the Kalyani group. The group has integrated steel plants at Ginigera in Karnataka and Tadipatri in Andhra Pradesh.
Bharat Forge is also in talks with the State Government for setting up a manufacturing hub here on the lines of the one proposed in Maharashtra. The high end manufacturing hub will cater to Kalyani Steel’s international clients in the automotive, engineering and infrastructure sectors as well as to Bharat Forge.
SAIL inks JV agreement with Jaiprakash Associates
Steel Authority of India Limited announced that it has inked a joint venture Agreement with Jaiprakash Associates Limited on February 21st 2008 for formation of a JV company to set up a cement plant for producing 2 million tonnes of Cement at Bokaro by using slag generated at Bokaro Steel Plant of SAIL.
SAIL would hold minority stake of 26% in the JV and the remaining 74% stake would be with Jaiprakash Associates Limited.
MSPL to set up long product plant in Karnataka
Metal Bulletin reported that Baldota family, which owns Mineral Sales Private Limited, is to invest about USD 1 billion in a 1.3 million tonnes per annum special and alloy steel long products plant at Koppal in Karnataka.
The new plant will use the blast furnace, basic oxygen furnace, ladle furnace and continuous casting route. The precise end-products have yet to be defined.
Mr Rahul Baldota executive director of MSPL said that “We aim to start commercial production by the end of 2009. We will make alloy and special steel in the first phase and then ramp up to 5 million tonnes per annum making flat products in a second phase. There will be no cross subsidy between Aaress and MSPL. They will have to buy their iron ore at the market price. In fact, we have applied for leases for captive mines.”
Mr Baldota said that it expects to sell 6 million tonnes of iron ore in 2008. Of this, 25% is lump, the rest fines and concentrates. Everything apart from a tiny portion sold domestically is shipped through ports in eastern and western India to China. Mormugao handles about 45% of the tonnage while, Chennai handles 40%.
Bihar government approves SAIL processing unit at Vaishali
TNN reported that Bihar government state Cabinet in principle approved a Steel Authority of India Limited proposal for setting up a steel processing unit at Sahdei in Vaishali district.
As per report, the proposed unit's annual capacity would be of 0.1 million tonne capacity.
Mr Girish Shankar state cabinet secretary told newsmen after a cabinet meeting that SAIL on its own will purchase land for the plant directly from the farmers.
L&T to build heated pipeline from Barmer to Salaya for Cairn India
Larsen & Toubro Ltd announced that its Engineering and Construction Projects Division has been awarded another major Contract by Cairn India for the Engineering Procurement and Construction services for the Export Crude Oil Insulated Pipeline and Gas Pipeline from Barmer in Rajasthan to Salaya in Gujarat. The project is slated for commissioning by June 2009
The scope of work involves the laying of a cross country 24 inch skin heat traced pipeline with PUF insulation for crude oil transportation from the Mangala terminal at Barmer to the Salaya Oil Export terminal near Jamnagar. The pipeline travels 330 kilometers south from the Mangala Field to a pump station and oil take off point at Viramgam. From Viramgam the pipeline continues for 261 kilometers south west up to an Export Oil terminal at Salaya.
Another pipeline of 8 inch diameter will be laid for transporting Natural Gas from the Raageshwari Fields which will be laid alongside the 24 inch pipeline to the Salaya receiving facility for feeding the Gas generator sets located at 32 sites en route. These Gas generator sets are meant primarily for producing electricity for Skin Effect Heat Management System to maintain the fluidity of the waxy crude.
L&T's Pipeline Engineering Centre, which is a JV of L&T and Gulf Interstate of Houston, will provide complete engineering services for the cross country pipeline and the intermediate facilities for this project.
Mr K Venkataramanan president of Engineering & Construction Projects & member of L&T's Board said "L&T is proud to be associated with Cairn in being able to leverage our own strengths to build the unique mega pipeline of this kind, for the first time in India. Our technical expertise in engineering and construction, and a dedicated team, will enable us to deliver the job on time".
Cairn has a resource base of 3.6 billion barrels of oil equivalent in place. Field developmental activities have already commenced with a targeted production level of more than 150,000 bpd. Completion of this export oil Pipeline will match the evacuation plans of Cairn for H2 2009.
Cookson Group acquires 20 % stake in Foseco India
PTI reported that UK based Cookson Group Plc announced that it has acquired a 20% stake in Foseco India for about INR 53.64 crore through an open offer. Cookson Group Plc has bought 1,277,292 equity shares, representing around 20% stake in Foseco India at a price of INR 420 per share.
Following the acquisition of 20% stake in Foseco, the shareholding of the public in the firm stands at 13.52% as prior to the public offer, the public shareholding stood at 33.52%. The figures are based on the share capital as on December 26th 2007, the date on which the Letter of Offer was made.
Foseco supplies consumable products for use in the foundry and steel making industries.
High level panel to assess SAIL requirement of Chiria iron ore
PTI reported that centre and Jharkhand government will set up a high powered committee to assess the quantum of reserves in Chiria iron ore mines and make a realistic projection of SAIL's need of the mineral in view of its expansion plans in Jharkhand.
A top union steel ministry official said that "During a meeting last month at Ranchi, both the central and state government officials decided to set up the committee, to be headed by Jharkhand chief secretary, to determine the quantum of reserves in Chiria and make a realistic projection of SAIL's needs in view of its Greenfield and brown field expansion plans in Jharkhand."
At present, both SAIL and the Jharkhand government are locked in a battle over the Chiria mines in the state High Court.
Meanwhile, the Prime Ministers Office has asked Jharkhand government to renew mining leases of Chiria to SAIL and allow it 2 billion tonne of the reserves. The PMO has asked Jharkhand to immediately allow SAIL access to 1 billion tonne for present use. For another 1 billion tonne, SAIL should strike a separate deal with the state to feed the expansion of its Bokaro Steel Plant and a new plant in the state.
Hike in royalty and export duty will hit mining industry – FIMI
Federation of Indian Mineral Industries said that the proposed move by the government to increase royalty and export duties on iron ore would adversely affect the mining industry.
FIMI, in a recent memorandum to union mines ministry, said that if the proposals were carried out, it would lead to the closure of several mines and in turn, would affect the domestic steel industry.
It added that "The members said if the proposals are implemented, then India will be the highest taxed country amongst major iron ore producing regions with the proposed royalty and duty rates and the additional tax burden on exporters will marginalize exports, resulting in the closure of many mines."
FIMI members said that at the current rate, India should be able to sustain the projected domestic steel demand for close to 200 years and the current iron ore resources of about 25 billion tonnes would last for the next 85 years.
FIMI members had also stated that higher profitability of iron ore exporters in recent years is part of a normal industry cycle and in line with that experienced by other sectors. They also said that the current profitability levels will not hold for long as major players from Australia, Brazil and South Africa bring significant new capacity online in the coming years.
As per reports, Brazil has a royalty of 2% and no export duty. Similarly, Australia has a royalty of 3.5% to 7.5%, with no export duty, while South Africa has a royalty of only 3% and also does not impose any export duty. Indian government has proposed a royalty of 10% ad valorem on sales realization and an export duty of 10% to 15%.
Essar eyeing Indonesian coalmines to feed Jamnagar plant
Mint reported that Essar Power Limited is planning to spend up to USD 500 million in acquiring a coal mine in Indonesia or inking a long term supply contract for 6 million tonnes a year of coal for its 1,200 MW power plant at Jamnagar in Gujarat.
Mr AK Srivastava MD of Essar Power said that “We are working on two models, either we will take an equity stake in coal mines in Indonesia or we will tie up for coal from the existing suppliers there. An announcement will be made in a couple of months.”
Essar Power aims to generate 6,000 MW by 2012. It has a turnover of around USD 2.2 billion and is present in sectors such as steel, oil and gas, power and shipping.
Welspun to buy slabs for plate mill from CIS – Report
Metal Bulletin reported that Welspun Gujarat Stahl Rohren will enter into long term contracts for the supply of over 1 million tonne per year of slabs from mills in the CIS. Welspun needs X70 slabs in order to produce plates with a maximum width of 4.5 meters used to manufacture pipes for transportation of oil and gas.
The report quoted Mr Vipul Mathur VP plate & coil division of Welspun as saying that “Indian mills are not geared up to supply the quality of slabs that we require for our new plate mill so we are looking for long term contracts with Russian and other CIS mills for supply of slabs.”
Mr Mathur added that its new 1.5 million tonnes per year plate mill in Gujarat is currently going through trial runs and will come on stream in the next couple of weeks. The mill should reach capacity in the next 8 to 10 months.
Kamdhenu Ispat to venture into PVC segment
Kamdhenu Ispat decided to foray into the segment of PVC pipes under its franchisee business model. The franchisee units will manufacture the PVC pipes under the norms and specifications of the company and market the same under Kamdhenu Brand’.
Kamdhenu Ispat registered a net profit of INR 31.68 million for the October to December 2007 quarter up by 22.03% YoY growth as compared with INR 25.96 million for October to December 2006 quarter.
CIL MCL coal dispatch affected due to strike
SNS reported that coal dispatch to power stations from Talcher coalfield has seriously been hit as the strike by the drivers engaged in private transport companies working in Coal India Limited’s Mahanadi Coalfield Limited entered its 4th day. Only 5 rakes had been dispatched instead of the usual 24 rakes.
As per report, both the production and dispatch at all the 7 open cast mines have been affected due to the strike by the drivers demanding the release of their president and the Zilla Parishad member Mr BK Pradhan from jail.
Mahanadi Coalfield Limited sources said that per day they suffer coal production of about 130,000 tonnes to 140,000 tonnes at Talcher due to the strike. The daily normal production at Talcher comes around 200,000 tonne of coal.
Mr Sriram Upadyaya CMD of Mahanadi Coalfield Limited is camping at Talcher in order to sort out the problem. But the drivers have stuck to their decision not to join the duty unless their leader is released.
Among the worst hit consumer is NALCO Power Plant which received no rakes for the last 3 days due to strike by transport drivers. NTPC of Kaniha is also facing problems which got about 18000 tonnes on Monday against the normal of 55000 tonnes from Talcher. The dispatch has been drastically down to about 10000 tonnes to the NTPC power plant.
Meanwhile, some transportation works had been resumed at Lingaraj and Jagannath mine by deploying outside drivers in the job. In other coal mines, works are yet to be started due to want of alternatives. Three platoon of police force have been deployed in coal field area to prevent any untoward incident.
Bhoruka seeking coal supply for its Karnataka power projects
BS reported that Bangalore Bhoruka Group, which is into power generation, real estate and specialty gases production, is seeking dedicated coal supplies from Indonesia for its power projects planned in Karnataka. As per report, Bhoruka is looking at reserves in excess of 10 million tonnes to produce 500,000 tonnes coal annually and is close to acquiring a coal mining lease in Indonesia.
Mr SN Agarwal chairman of Bhoruka Group said that “We have inspected a few locations in Indonesia. We intend to complete the process in the next 3 months following which the coal mining lease will be awarded to us.”
He added that it is working out the investment required to procure the lease. Its overseas subsidiary Singapore based Bhoruka Overseas Investment Limited will finance the acquisition of the coal mines.
Mr Agarwal said that “We can finalize the investment only after the location is selected. We will not deploy any machinery or human resources. We will go in for contract mining with key personnel from Bhoruka monitoring the project. We have to pay a certain royalty to the Indonesian government also.”
Bhoruka Group operates power projects in Karnataka and Rajasthan through its subsidiary Bhoruka Power. It has lined up INR 580 crore capital expenditure over the next 2 years to double power production to 200 MW. It is acquiring the coal mining lease to also enter the trading business.
Fiat and Krishna Group form auto exhaust systems JV
It is reported that Italian auto major Fiat SpA’s component arm Magneti Marelli has signed two JV agreements with SKH Metal and SKH Sheet Metal Components to manufacture automobile exhaust systems.
Fiat’s JV with SKH Metal will have a manufacturing facility at the Maruti Suzuki Industrial Suppliers Park in Manesar. The exhaust system components designed, produced, assembled and tested here will be used in the production of vehicles for Maruti Suzuki India and Suzuki Motor firms.
Meanwhile, the venture with SKH Sheet Metal will be located in the auto cluster at Pune. It will design and produce exhaust systems for Fiat, TATA and other automotive customers from the region.
SKH Metal, formerly known as Mark Auto, was established as a JV between Maruti Udyog and the Krishna group. The JV was bought over by the Krishna group in 2005 and renamed as SKH Metal.
Magneti Marelli, designs, produces and markets advanced systems and components for motor vehicles. It supplies to all the leading carmakers in Europe, the US and the Far East. Its business areas include power train suspension and shock absorber systems, electronic systems and other service.
Congestion surcharge on iron ore traffic creates problems
BL reported that Indian Railway’s imposition of congestion surcharge on iron ore traffic has thrown up various problems for domestic steel makers.
The problem has arisen because not all the traffic booked to port serving stations are meant for exports. There are domestic steel producing units, which book iron ore traffic to port serving stations because of the physical proximity of their plants to these stations. But the Railways would not differentiate between iron ore consignments for exports and domestic consumption. In other words, even the domestic consumers of iron ore booked to port-serving stations are being required to pay the 60% congestion surcharge. This is unacceptable to them.
Precisely for the same reason, several domestic steel producers located on the west coast but receiving iron ore by the coastal route through Visakhapatnam port too are being required to pay 60% congestion surcharge.
It may be noted that Indian Railways slapped 60% congestion surcharge on iron ore traffic booked for ports or stations identified as port serving, the idea being to earn as much revenue as possible from the booming iron ore exports.
Reliance Energy bags Mumbai trans harbour link project
It is reported that Reliance Energy has bagged the ambitious INR 4,500 crore Mumbai Trans Harbor Link project.
Financial bids were opened on February 20th 2008 for the 25 kilometer long six lane project of Maharashtra State Road Development Corporation.
Reliance Energy has quoted a concession period of 9 years, 11 months, as compared to 75 years quoted by the only other bidder, a consortium led by IL& FS.
NTPC to generate 1000 MW of renewable energy by 2018
It is reported that National Thermal Power Corporation Limited is planning an investment of INR 6,000 crore to generate 1,000 MW of renewable energy, including 650 MW of wind based power unit, by 2018.
NTPC's board of directors granted approval for going ahead with the project and is now on the process of preparing the feasibility report. NTPC is looking for suitable locations for its upcoming projects.
GVK Energy becomes GVK Power’s wholly owned subsidiary
GVK Power & Infrastructure Limited has announced that it has incorporated GVK Energy Limited as its wholly owned subsidiary company on February 18th 2008.
Global crude steel production in January up by 4.9% YoY
World crude steel production for the 66 countries reporting to the International Iron and Steel Institute was 113 million tonnes in January 2008 up by 4.9% YoY.
IISI said that “This month's figures from China are estimates from the China Iron and Steel Association as official figures have not yet been released.”
Total production in China was 40.9 million tonnes for January 2008 up by 7.3% YoY. Japanese production was 10.3 million tonnes up by 1.8% YoY and India produced 4.8 million tonnes up by 8.8% YoY.
Total crude steel production in the 27 EU countries was 17.9 million tonnes down by 0.4% YoY. Germany produced 4.1 million tonnes of crude steel down by 4.9% YoY. France produced 1.6 million tonnes down by 7% YoY and Italy produced 2.8 million tonnes up by 6.6% YoY.
Production in Turkey was 2.2 million tonnes up by 8.6% YoY. Russia produced 6.5 million tonnes up by 3.4% YoY and production in Ukraine was 3.6 million tonnes up by 0.8% YoY.
North America increased production to 11.6 million tonnes up by 10.5% YoY. USA produced 8.4 million tonnes up by 11.4% YoY.
Brazil produced 3.0 million tonnes of crude steel up by 13.6% YoY.
BHPB bid for Rio – EUROFER warns on merger
Europe's steelmakers blamed concentration in the global mining industry for soaring ore prices and warned regulators against a proposed merger of giants BHP Billiton and Rio Tinto.
Mr Gordon Moffat DG of European Confederation of Iron & Steel Industries said that "Over concentration in the supply chain of steelmakers has resulted in an explosion of prices. Ultimately, these extra costs will have to be passed on to the consumer. This will inevitably result in higher prices for steel in Europe and worldwide."
Mr Moffat said that the executive EC should scrutinize carefully whether mining giant BHP Billiton's hostile bid to take over Rio Tinto would breach EU competition rules. He added that "We urge the EU and the member states to react firmly on the BHP Rio merger which is not in the interest of the consumer."
Mr Moffat said that "If the three price setters would be reduced to only two, this could lead to even higher prices for raw materials and to a lower incentive for mine expansion."
Eurofer represents European firms with total annual turnover of EUR 140 billion and direct employment of 370,000 people, producing 200 million tonnes of steel per year.
Thai Tinplate Co to boost tin free steel capacity
Bangkok Post reported that Thai Tinplate Manufacturing Co plans to invest about THB 200 million to increase production capacity for tin free steel by 30% to tap ever growing local demand.
The report quoted Mr Fumio Nishimura deputy MD of Thai Tinplate Manufacturing as saying that the company planned to boost its production capacity for tin free steel to 156,000 tonnes per year by the end of 2008 up from 120,000 tonnes now. He added that the company planned to use its own cash flow and reserves to finance the project.
Mr Nishimura said that “Thai Tinplate now operates four production lines, including three lines for tinplate and one for tin free steel. It has no plan to increase capacity for tinplate. Once the tin free steel expansion program is completed, the company's capacity would rise to 552,000 tonnes per year from 516,000 tonnes now.”
Mr Nishimura said that the expansion is aimed at serving existing customers and competing against imported products. He said that “Thailand consumed about 200,000 tonnes of tin free steel in 2007, while local tin free steel demand is forecast to expand by several percentage this year through to 2009. However, tinplate products turned out to record zero growth in 2007 with consumption of about 570,000 tonnes.”
Thai Tinplate's regular customers are mostly in the can making industry. Tin free steel is used for cans containing foods such as tuna, which have a crowned top. In recent years, tin free steel consumption in Thailand had grown by more than 10% annually.
Vale to build a 5 MTPA steel mill in Para state
Brazilian mining giant Vale has announced that it intends to build a 2.5 million tonne to 5 million tonne per year steel mill with partners in Para state in Brazil's north region.
Mr Tito Martins director of corporate affairs at Vale said that the mill would integrate Vale's development projects in Para, where its massive Carajas mine is located. Partners have not been defined yet. He added that "We have been talking with Brazilian Development Bank to begin the setting up of a steel mill project in Para."
Mr Martins further added that the location and logistic details of the project would be decided together with the strategic partner.
ArcelorMittal raises base prices for flat products in Europe
ArcelorMittal announced a further price increase for its flat carbon products in Europe of EUR 40 per tonne. This takes the minimum base price to EUR 600 per tonne for hot rolled coil and to EUR 680 per tonne for cold rolled and coated products.
Quarto plate will increase by a minimum of EUR 40 per tonne for commercial grades. This comes in addition to the earlier announcement of a EUR 50 per tonne increase. The new price level will be effective for all new contracts for the Q2 and is implemented with immediate effect.
ArcelorMittal said that today's announcement follows the final settlement for the 2008 iron ore contracts. It has indicated in a recent release announcing price increases of some 12% to 15% that further increases might be required as a result of the final outcome of the ongoing negotiations.
Mr Christophe Cornier CEO of ArcelorMittal Flat Carbon Europe said that "Raw materials have reached an unprecedented cost level for our industry. It is now important to secure sufficient supply and to overcome all logistic hurdles, to make sure our customers obtain the volumes they require."
Vale Xstrata tie up – Unconfirmed reports point to higher bid
Reuter reported that, according to the sources with direct knowledge of the negotiations, Brazilian miner Companhia Vale do Rio Doce has raised its offer price informally in takeover talks with Swiss rival Xstrata PLC.
One high level source in Brazil confirmed a report in local newspaper O Estado de S Paulo that said Vale had sweetened its bid for Xstrata to GBP 47 (USD 92.22) a share from GBP 40 previously or to more than USD 89 billion. But when pressed on the new bid price, the source declined to comment further.
A London based source close to the deal also said that Vale had raised its offer but stressed that a price range was still being discussed.
A third source said that “There has been no offer, either formal or informal, which could possibly be construed as GBP 47 a share ... There have been some price discussions but not anywhere near 47.”
Xstrata declined to comment on the matter.
Analysts said that although Vale executives and Xstrata's management team may agree in principle on an informal offer price in the coming days, several other details would have to be agreed upon before a formal offer could be put together.
German steel association expects industry to recovery in H1
German steel trade association Wirtschaftsvereinigung Stahl said that it expects the industry to pick up speed in the H1 after inventories were reduced between September and December 2007.
The association said that “Despite rising macroeconomic risks, there is still reason for optimism in Germany's steel industry.” It said that new orders are advancing, with a 5% gain in the Q4 after an initial slowdown last summer.”
The association said that new domestic orders edged up 2% while orders from abroad jumped 11% YoY putting total order volume at 10.3 million tonnes.
Workers shut down Ternium Sidor in a 16 hour strike
Reuters reported that workers have shut Venezuelan steelmaker Ternium Sidor in a 16 hour strike over their labor contract.
It may be noted that thousands of Sidor workers walked off the job in late January 2008 in a dispute over their labor contract, returning to work 2 days later, but threatening to strike again in the future. Workers earlier struck for 24 hours as part of the same conflict.
Sidor produces around 4.5 million tonnes of liquid steel per year and employs around 13,000 workers, including contractors.
O'Neal Steel acquires assets of TAD Metals
Birmingham Business Journal reported that Birmingham based O'Neal Steel Inc has purchased the assets of TAD Metals Inc's regional operations in New Jersey, Massachusetts, Texas and Ontario.
As per report the purchase covers TAD Metals Northeastern, Southwestern and Canadian regional operations. The acquisition also includes six metals service centers and one sales office. The operations will run as a wholly owned subsidiary of O'Neal under the TAD Metals name. But two of TAD Metals' Southeastern locations were not included in the sale and will now be known as AP Specialty Metals.
TAD Metals processes and distributes stainless steel and aluminum for consumer appliances, construction materials, industrial equipment, automotive and marine components and architectural elements.
O'Neal is based in Birmingham and is a metals service center with USD 2.3 billion in annual sales and 75 locations in North America, Europe and Asia.
Nippon Steel planning to raise stake in Mitsui Mining – Report
Reuters reported that Japan's top steel producer Nippon Steel Corp is planning to raise its stake in Mitsui Mining Co to above 20% to ensure itself a steady supply of raw materials.
Public broadcaster NHK said that Nippon Steel will along with trading house Sumitomo Corp buy 40 million preferred shares in Mitsui Mining from Sumitomo Mitsui Banking Corp.
As per report Nippon Steel plans to convert those shares into common stock, boosting its stake in Mitsui Mining to above 20% from about 13%.
Alter Trading acquires Doggett Auto & Truck Salvage
Alter announced the acquisition of Mississippi based Doggett Auto & Truck Salvage. The acquisition of Doggett Auto & Truck Salvage will enable Alter to secure a valuable scrap resource for customers and will ensure continued growth in the southern United States.
Doggett Auto & Truck Salvage located at Laurel in Mississippi was founded by Jerry Doggett 30 years ago. The company, which initially only handled vehicles has expanded its operations and now handles and processes all grades of ferrous and nonferrous metals.
Doggett Auto & Truck Salvage will now be known as Doggett Recycling A Division of Alter Metal Recycling. Doggett will continue to be actively involved in the business. Cody Waite, formerly the facility manager at Alter's Norfolk location, will serve as the facility manager of Doggett Recycling. Jerry Jones, area manager of marketing, will continue to oversee all commercial aspects of the southern region.
Mr Robert Goldstein CEO & president of Alter said that “Jerry’s hard work and dedication have truly established Doggett’s reputation in the industry. We are proud to align the two companies, offering more options and enhanced solutions for our customers."
Olympic Steel Q4 profit rises on higher sales
Olympic Steel Inc announced that it has posted a net income of USD 4.5 million for 4th quarter of 2007. Its sales for the Q4 increased to USD 236.06 million from USD 226.06 million in the same quarter last year. Total operating expenses for the Q4 rose to USD 228.69 million from USD 219.47 million in the prior year quarter, while operating income was USD 7.37 million, higher than USD 6.59 million in the year ago quarter.
Mr Michael Siegal chairman & CEO of Olympic Steel said that “We are excited to report that in 2007 we surpassed the USD 1 billion threshold in annual sales for the first time in our company's history. We are pleased with our 2007 accomplishments in a volatile year for the steel market. We were able to gain market share in 2007, maintain better than industry asset turnover and generate strong cash flows to strengthen our balance sheet, achieve our third most profitable year in company history, and continue to invest in equipment, facilities and technology. This in spite of declining steel industry shipments and prices for most of the year.”
Olympic Steel Inc is founded in 1954 and is a leading US steel service center focused on the direct sale and distribution of large volumes of processed carbon coated and stainless flat rolled sheet, coil and plate steel products. Headquartered at Cleveland in Ohio Olympic Steel Inc operates 16 facilities.
National Power fails to get bids to buy coal for second time
Bloomberg reported that National Power Corp, the state run provider of about 43% of the electricity in the Philippines, failed for a second time this week to attract bids to supply coal.
Mr Juan Carlos Guadarrama VP of National Power vice president in an interview in Manila said that BHP Billiton Marketing Asia Pte Ltd, which had previously supplied to National Power from a PT Arutmin mine, told the utility it was difficult to supply the commodity at prices sought by the Philippine generator.
Mr Guadarrama said that National Power planned to buy 130,000 tonnes of steam coal for its Pagbilao plant for between USD 125 and USD 127 a tonne including freight.
Indonesia's PT Andalan Tiga Berjaya told National Power it does not have the availability to meet the Philippine company's requirements.
Outokumpu sees price rise for SS
Reuters reported that stainless steel prices are moving higher and global economic uncertainty has yet to impact the sector.
The report quoted Mr Juha Rantanen CEO of Finnish stainless steel maker Outokumpu while speaking on the sidelines of the European Business Summit conference in Brussels as saying that "Everyone agrees that prices are moving up gradually. There is positive momentum. We still see very good end user demand."
Mr Rantanen said that much stainless steel was going into big energy related projects such as for liquefied natural gas and oil production. I don't believe these types of projects will be impacted.”
Rautaruukki Raahe workers stage two hour walkout
It is reported that employees belonging to a trade union branch at Rautaruukki's Raahe Works in Finland started a strike at 10AM yesterday. The workers have stated wage disputes as the reason for the strike.
The strike has stopped hot rolling until Saturday morning. Steel production is running at half capacity. Despite the strike, all functions essential to the personnel, processes and environmental safety are being maintained.
According to information received by the employer, workers on the day shift will return to work at 7AM on Monday February 25th 2008 and shift workers at 6 AM on Saturday February 23rd 2008.
Rautaruukki' said that “The workers' action is contrary to the commitment to industrial peace in the valid collective bargaining agreement. On February 20th 2008, the Labor Court judged the trade union branch's threat to call a strike on February 21st 2008 as unlawful and ordered the branch to pay the Federation of Finnish Technology Industries compensatory damages for breaking the commitment to industrial peace.”
Outotec to deliver ferrochrome technology to ASA Metals in SA
Outotec announced that it has agreed with South Africa’s ASA Metals Limited for the design and delivery of a chromite ore palletizing plant and two Outotec preheating kilns for ASA Metals expansion project in South Africa. The value of the contract exceeds EUR 25 million.
Outotec's scope of delivery includes the license, basic engineering, supply of key equipment, supervision of installation and commissioning, as well as training of ASA Metals' production personnel. The local contractors, Pyromet and Metix, will provide the equipment outside Outotec's scope as well as construction and installation of the new plant.
ASA Metals' new plant will be based on Outotec's renowned ferrochrome process, which recently won the Cleantech Finland 2008 award. The pelletizing section will use Outotec's steel belt sintering technology and the two 66 MVA ferrochrome smelting furnaces will be equipped with OPK preheating kiln technology.
The plant is designed to produce 600,000 tonnes of chromite pellets annually and it is expected to be commissioned in the second half of 2009.
Mr Tapani Järvinen president & CEO of Outotec said that "ASA Metals' new ferrochrome plant will be already the eleventh plant using Outotec's steel belt sintering technology and the ninth plant using Outotec's preheating kiln technology in South Africa. Because of its cleanness and energy-efficiency our technology has been a success in the global market, and today it is used to produce approximately 35% of the world's ferrochrome.”
Worker dies after falling off ladder at Jackson steel plant
AP reported that a man Mr Dennis D Philyaw has died after falling from a ladder at the Gerdau Ameristeel plant in Jackson.
The Madison County Sheriff's Office Mr David Woolfork said that 59 year old Mr Philyaw of Alamo fell about 12 feet on a fixed maintenance ladder Wednesday. The sheriff added that there are no indications of foul play and the county medical examiner's office has ruled the death as accidental.
Mr Tom Hohs vice president & GM of Ameristeel plant said that Mr Philyaw had worked with the company for two years following 12 to 15 years working at the plant for a contractor.
Ameristeel plant has some 400 people.
Siemens to sell equipment to Vietnam Steel Plant
Thoi Bao Kinh Te Viet Nam citing Siemens' local unit reported that Siemens AG will sell equipment to a new Viet Steel plant in southern Vietnam.
According to the report Siemens AG will provide electronic and other equipment to the steel plant, which is scheduled to be operational by the middle of 2009. But the report didn't give a value for the contract.
Midwest Corp to move iron ore by rail
It is reported that a planning appeal decision has cleared the way for Midwest Corporation to move its iron ore from road to rail.
As per report Mr Alannah MacTiernan planning and infrastructure minister said that Midwest now has approval to build a siding at Tilley, 2 kilometers north of Morawa to transfer iron ore trucked from its Blue Hills and Koolanooka mines to rail for the 180 kilometers trip to Geraldton Port.
Ms MacTiernan said that “I considered carefully Morawa Shire's concerns about the impact of the project on the town and its preference for it to be built 5 kilometers from Morawa at Tilley East as a shared facility with Gindalbie Metals. However on balance, I decided that it was in the strong interest of Mid West region residents that this facility is built and a significant tonnage of ore is taken off the road between the mine and the port.”
Ms MacTiernan said that "The proposal already has EPA approval and the company has agreed to take significant measures to reduce the visual, dust and noise impact of its operations on surrounding areas.” she added that “I did not consider it reasonable to further delay the project on the chance that the Tilley East proposal, which does not yet have environmental approval, would be developed by Gindalbie. The Gindalbie project at Mount Karara is at least two or three years away and, if it proceeds, will use different, heavier infrastructure and rolling stock than the MWC proposal. The conversion of Midwest's operations to rail would see the equivalent of 100 fewer large truck movements on the region's roads each day. The company has already invested $6 million in rail cars to enable them to make the change and should be in a position to start constructing the facility very quickly."
The minister said that she had also approved an extension of the company's permit to carry iron ore by road until March 25th 2008.
Mr Argus meets Caroona Basin coal mine stakeholders
ABC news reported that Mr Don Argus chairman of BHP Billiton has met selected community stakeholders likely to be affected by its plans for coal mining in the Caroona Basin.
A company spokeswoman said that the private meeting in Gunnedah involved business and land holder groups and affected councils. She added that one of those at the meeting was Caroona Coal Action Group chairman Mr Doug Rankin.
The group is challenging the plans to mine coal and say it will damage groundwater aquifers and farming land.
Mr Rankin said that he raised several issues, but left without any company commitments. He added that "We as a community are calling for an independent catchments wide study. They took that on board, they acknowledged it but didn't give us any commitment.” He added that "The second issue, we stand united as a community that we wanted our access agreement on the table for discussion."
Ruukki cabin project provides ideas and networking
It is reported that Ruukki’s cabin development project with Helsinki University of Technology has got off to a good start.
Started in September last year, the project is part of Helsinki University of Technology’s annual product development course, in which Ruukki is a partner for the second year running. The team taking part in the cabin development project consists of 11 students from different disciplines and is tasked with developing a lightweight timber loader cabin and building a prototype of it.
In October last year, the students taking part in the project visited Ruukki’s unit at Kurikka in Finland to learn about cabin production. Since then, they have taken the project forward by examining different concepts, costing and planning technical implementation. Initially, the team prepared a dozen concepts, which were short-listed to four before the final concept was chosen. A start has been made on 3-D modeling of the frame and base.
The chosen cabin concept was presented in mid February. Team members came up with ideas for the cabin heating system, windows, side door and rear section, which will be made entirely using a new material and method. Heated windows will improve visibility and a possibly larger side door will improve cabin access.
Mr Mika Kukkonen team’s project manager said that "We have utilized different product development methods in the design and examined the situation using analytical tools for product design. One of the main challenges in design was to reduce the weight of the frame and base. The project provides a great opportunity for networking. We work so closely together that these days we see team members more than we do our own friends. We are also in close contact with our contact people in Ruukki Engineering.”
Argentinean steel output in January up by 24.1% YoY
According to Argentina’s steel industries association CIS, Argentina's crude steel production reached 417,000 tonne in January 2008 up by 24.1% YoY from 335,900 tonne in January 2007 but down by 14.9% MoM from 489,900 tonnes in December 2007.
The report said that primary iron output came to 409,300 tonnes in January 2008 up by 31.3% YoY over 311,800 tonnes in January 2007 but 3.7% less than 425,100 tonnes in December 2007.
CIS said January's output was affected by annual upkeep stoppages normally carried out this time of year which caused production volume to fall from December 2007. It added that "Steel output from the last month of the year was higher than it was in January 2007 because of investments that Argentine steelmakers have been carrying out to boost capacity and improve quality.”
CIS said the industry reported total hot rolled output of 414,900 tonnes last month up by 38.5% YoY but 9.1% short of 456,400 tonnes produced in December 2007. However cold rolled production hit 135,400 tonnes down by 2.4% YoY from 138,700 tonne in January 2007 and up by 0.8% MoM from 134,300 tonnes in the previous month.
CIS said that “Economic activity is expected to keep growing in Argentina during 2008 with a positive impact on the steel industry.”
Nippon Steel to purchase coking coal on spot basis from US
JMB reported that Nippon Steel has decided to purchase 200,000 tonnes of US coking coal immediately.
As per report, Nippon will contract for April 2008 arrival to supplement the inventory when the inventory decreases after late March 2008 due to supply trouble from Australian major mines.
Nippon decided the additional purchase for preparation to further supply trouble when Australian miners still prepare for recovery.
Kobe Steel and Nisshin Steel also purchase coking coal at spot base. The integrated steel makers try to avoid raw material shortage through the first spot purchase in 3 years under very tight worldwide coking coal supply.
Minor fire at Corus Scunthorpe
It is reported that a fire began on a workshop roof at the Scunthorpe Corus plant yesterday afternoon.
As per report three crews from Humberside Fire and Rescue Service helped put out the fire at its Dawnes Lane site. The report added that they were called out at 2.15 PM and worked closely with the emergency teams at Corus.
A Corus spokesman said that "Fire fighters attended to a small amount of dust that was smoldering on the roof of a workshop this afternoon. No one was hurt and there was no damage."
Quanex to vote on Gerdau merger proposal on March 31st 2008
BNamericas reported that Quanex Corporation plans to hold a special shareholders meeting on March 31st 2008 to approve merger plans with Brazil's Gerdau.
Quanex said that shareholders of record as of the close of business on February 29th 2008 will be entitled to vote at the special meeting.
Porto Alegre based long steelmaker signed a definite agreement in November to snap up Macsteel, the steel mill operation of Quanex, in an all cash deal worth USD 1.46 billion plus the assumption of debt and liabilities.
According to the agreement signed last year, prior to the acquisition, Quanex will spin off its non steel operations as a stand alone company called Quanex Building Products. Following the spin off, Gerdau will acquire all of the outstanding shares of Quanex for USD 39.20 per share.
Macsteel is the second largest long specialty steel producer in North America, with steel and rolled steel capacity of 1.2 million tonne per year and 1.1 million tonne per year, respectively.
ArcelorMittal Inox Brazil considering BF technology conversion
AE Setorial reported that Brazilian specialty steel producer ArcelorMittal Inox Brazil, formerly known as Acesita, is due to decide in the coming weeks on a possible technology conversion at its blast furnace no 2.
The technological conversion at the mill located in Minas Gerais state's Timóteo city would require roughly BRR 90million (USD 52 million) and would include equipment and forestation activities that ensure the charcoal supply.
The report quoted Mr Jean Philippe André Demaël CEO of ArcelorMittal Inox Brazil as saying that the proposal to use charcoal instead of coal to fire the blast furnace will be submitted to the board of directors in March or April 2008.
Japanese shipbuilders orders in January rise more than 3 fold
According to Japan Ship Exporters Association, orders for vessels received by Japanese shipbuilders more than tripled in January 2008 to a combined gross tonnage of 1.3 million tonnes up by 226.7% YoY as compared to 398,640 tonnes in January 2007.
The association said that comparative orders received last month were for 27 bulk cargo ships with a combined gross tonnage of 1.26 million tonnes and four oil tankers with a combined gross tonnage of 39,700 tonnes.
Indonesian firms to ship less tin in 2008
ITRI reported that, although two further tin export licenses have been issued by Indonesia’s ministry of trade recently, officials expect the volume of tin exports to fall in 2008.
Mr Hartojo Agus Tjahjono director of exports of mining and industrial products at the trade ministry told Reuters that Indonesia government has issued a 17 license. The government has approved an export license for PT Bangka Timah Utama Sejahtera. Previously PT Bangka Kudai Tin had become the 16th company and 14th independent smelter to be granted a licence at the end of January.
However the ministry does not expect the 15 independent smelters to be major exporters in 2008.
Ms Diah Maulida director general of foreign trade at the department of trade told Bisnis Indonesia at the end of last week that the total export volume of tin ingot this year is estimated at 85,000 tonnes, down from 118,555 tonnes in 2006 and approximately 92,000 tonnes in 2007. She added that PT Timah would export 60,000 tonnes, PT Koba Tin 15,000 tonnes, and small smelters only 10,000 tonnes. Therefore, the total export will reach around 85,000 tonnes or lower than last year.
Indonesian cabinet to decide on Newmont mining contract
It is reported that Indonesian cabinet will decide on the mining contract of Newmont Mining Corp.'s local unit if it fails to meet a deadline to wrap up a 10% share sale.
Indonesia last week said that it may annul the contract of PT Newmont Nusa Tenggara, which runs the Batu Hijau copper and gold mine in the Nusa Tenggara Island as it was not selling its shares quickly enough to local investors. The ministry has given Newmont until February 22nd 2008 to fulfill its commitments, but the company says it needs more time.
Mr Purnomo Yusgiantoro told parliament that "We do not automatically terminate its contract on February 22nd 2008. The minister will terminate the contract. But I will only do it after approval from the cabinet meeting."
Mr Yusgiantoro did not spell out the timeframe for the meeting, but said based on the contract Newmont has a maximum of six months to meet its commitment after the government sends a default notice.
PT Newmont Nusa Tenggara is required to sell 51% of its shares to local investors. It has already sold 20% to local firm PT Pukuafu Indah and has agreed to sell 31% gradually by 2010. It reiterated it had not defaulted on its contracts because it sold 2% of a planned 10% to the Sumbawa regency government on January 28.
Newcastle Port coal shipments in last week up by 15%
Bloomberg reported that coal shipments from Australia's Newcastle port rose by 15% last week. As per report loadings increased to about 2.04 million tonnes in the week ended from 1.78 million tonnes. It said that Thirty six vessels were waiting off the port as of February 19th 2008 morning, five fewer than a week ago.
According to the globalCOAL NEWC index, thermal coal prices at Newcastle, rose to a record for a fourth week to AUD 139.16 a tonne in the period ended February 15th 2008, as floods cut deliveries in Queensland, adding to supply disruptions in China and South Africa. Xstrata Plc, Rio Tinto Group and other miners are struggling to meet increasing demand due to bottlenecks in port and rail networks in Australia's east.
Newcastle port official said that an average of 9.33 days was needed to load coal last week compared with 0.46 day for general cargo.
SFA releases TechSpec on cold formed steel framing
The Steel Framing Alliance announced the release of the first TechSpec on Cold Formed Steel Framing a document the Washington, DC based market development group says is an excellent resource for any builder considering making the switch to cold formed steel.
The four page document provides a comprehensive overview of steel framing, including what it takes to make the switch, what to consider when determining if cold formed steel is right for the next project and steps to take when a builder decides to start building with steel.
Cold Formed Steel Framing, the first TechSpec on steel framing was prepared for both the Steel Framing Alliance and the Partnership for Advancing Technology in Housing by the National Association of Home Builders Research Center.
According to Mr John Peavey applied technology director for the National Association of Home Builders Research Center, TechSpecs serve as a resource that can help builders implement construction innovations in manageable, systems based packages. He added that “TechSpecs are designed to be a one-stop resource for technical stakeholders who are charged with implementing the technology. These documents essentially take the guesswork out of choosing cost effective technologies and methods that can not only improve the quality of a home but also deliver a distinct market advantage.”
Mr Larry Williams president of Steel Framing Alliance said that “Any time a builder decides to take a look at using new or alternative technologies, they are going to have a lot of questions. This new TechSpec on Cold Formed Steel Framing is an excellent resource that covers everything from costs and benefits of building with steel to even some real world.
ToolBase Services is the housing industry's resource for technical information on building products, materials, new technologies, business management, and housing systems. The NAHB Research Center provides the services, with funding from the Department of Housing and Urban Development through the PATH program and other industry sponsors. PATH is dedicated to accelerating the development and use of technologies that radically improve the quality, durability, energy efficiency, environmental performance, and affordability of America’s housing.
Pakistan to finalize policy for auto parts industry – Report
Business Recorder reported that Pakistan government is expected to shortly finalize its long term policy for the auto parts industry so as to help increase its exports in the international market.
Official sources said that a detailed study was being conducted to identify issues in the auto parts industry and as soon as the study was completed, it will be placed before the federal cabinet for approval. The study also sought to address issues concerning quality development, standards, domestic and international market potential, the employment potential, and a mechanism for successfully tapping the full potential of Pakistan’s auto parts industry.
The auto parts industry is USD 125 billion market dominated largely by the industrialized countries. The share of Pakistan in the total exports is only USD 25 million. Auto parts consumption is huge but the local production is only 12% of total sales. The auto parts vendors are also showing steady growth and becoming one of the most dynamic sector in Pakistan’s manufacturing.
Pakistan government was informed by its planners that the automotive industry has potential for growth and employment because of its greater backward and forward linkages. Since 2000-01, there has been a rising trend in the capacity utilization and the industry at present is operating at full capacity. The sector employs about 300,000 workers and that is expected to rise sharply due to a positive outlook of the industry. Similarly, the motorcycle industry is growing steadily. It has greater linkages with the vendor industry that shows its potential for growth.
The industry has generated 110,000 jobs and exported USD 25.03 million thus saving foreign exchange of PKR 23 billion. As the production of automotive is increasing in Pakistan, the auto parts vendor industry is also expanding. The components produced in Pakistan range between 55% and 70% of total completely knocked down kit. The global exports of auto sector are over USD 600 billion while Pakistan’s share is approximately USD 50 million. The domestic market is expanding with rising income levels and auto financing facility extended by banks.
MMK eying stake in Esfahan Steel – Report
According to Mr Ahmad Ali Haratinik head of Iranian state holding company for mines & metals Imidro, Mr Victor Rashnikov owner of Russian steelmaker Magnitogorsk is interested in taking a controlling stake in Iran’s Esfahan Steel Company.
Metal Bulletin quoted Mr Rashnikov as saying that the capacity of Esfahan Steel Co could be raised to 5 million tonnes per annum after 1 year and to 10 million tonnes per annum after 2 years.
Mr Rashnikov visited Esfahan Steel, Mobarakeh Steel, Khuzestan Steel and Gol e Gohar Iron Ore Mining on a 4 day trip to Iran over January 25th to February 9th 2008.
Alstom bags major order from Fujairah in UAE
BS reported that Alstom SA France’s Indian subsidiary Alstom Projects India Limited has bagged 2 exports orders worth INR 592 crore.
Alstom Projects India Limited announced that it has received INR 242 crore order for Fujairah independent water and power plant at Fujairah in UAE. Alstom Projects will supply heat recovery steam generator for Fujairah plant, one of the largest desalination plants in the world. The order comprises design engineering, supply and delivery of five HRSGs.
Alstom Projects India Limited also announced that it has bagged INR 350 crore order for Bujagali hydro electric power station at Jinja in Uganda. The order for 5x51 MW Kaplan turbines for Bujagali hydro electric power station at Jinja has been awarded by Salini.
Iran and Russia to set up joint energy company
Mr Gholam Hussein Nozari Iranian oil minister has announced that Tehran will soon close a deal with Russia’s Gazprom to form a JV company for implementing energy projects.
Mr Nozari, after a meeting with Mr Alexey Miller CEO of Gazprom, said that “We have reached an agreement with Gazprom to form a JV company with the participation of a third country.”
Mr Nozari said that the two sides agreed to set up working groups and Mr Miller would visit Iran within the next two months to finalize the deal. He added that an agreement had almost been reached on the joint development of 2 phases of the South Pars gas field.
Mr Nozari said that Gazprom has voiced interest in cooperating with Tehran to develop the upstream and downstream sectors in Iran’s oil and gas industry and implement liquefied natural gas projects in Iran.
Govt not to issue LoIs for imported coal power plants
Daily Times recently reported that Pakistan government has decided in principle not to issue LoIs to those power generation companies desirous for using imported coal in their power plants.
A senior official told Daily Times that earlier, as far as imported coal is concerned, two LoIs have been issued one to AES and the other to Mitsui and no letter of intent for imported coal power plants would be issued in future. Official said that imported coal power plants would have the same drain on foreign exchange reserves as oil because coal has shown the same steep upward price trend in recent years.
He said “As the price of imported coal has surged in last 6 months, there will be a need to give subsidy either to AES and Mitsui or WAPDA to supply electricity to the consumers at the reasonable rates. In this scenario Pakistan has decided to disallow the letter of intents to the companies operating plants on imported coal that would encourage using the Thar coal reserves.”
Official further said that National Electric Power Regulatory Authority has no experience of determining the tariff for imported coal plants and it would be difficult for determining the tariff for the coal based imported power plants due to variation in prices of imported coal.
IAE urges OPEC to maintain production
It is reported that International Energy Agency wants OPEC to keep oil production levels unchanged to rebuild low crude stocks at its next meeting.
Mr Julius Walker oil market analyst at IEA said that "We consider OPEC need to continue producing to rebuild crude stock levels that are way below average."
Mr Walker said that IEA would of course welcome any rise in crude oil production but understood the downside risks for OPEC at a time when the global economy was weakening and hence potentially curbing oil demand. He added that "Despite a lot of talk, there is little weakening in oil demand so far."
Mr Walker further added that the significance of the oil price's rise above the USD 100 level was largely symbolic. He said that "Our position is that prices remain very high whether they are just under USD 100 or just above USD 100. Regarding the impact on the consumer, a couple of dollars make virtually no difference at all. It's mainly a symbolic threshold."
The US crude price reached a new peak of USD 100.10 per barrel on February 19th 2008, one cent beyond the previous high reached on January 3rd 2008, but has since retreated to around USD 99. The price rise was driven by concern that OPEC will hold or even cut output when it meets on March 5th 2008, as well as by uncertainty about Venezuelan and Nigerian supplies.
Simplex and Towell consortium bags Seeb Corniche road project in Oman
It is reported that a JV of Indian Simplex Infrastructures and Omani business house W J Towell’s Towell Construction has bagged a contract from Muscat Municipality to implement the Seeb Corniche road project at a cost of OMR 29 million.
The 12 kilometer project, complete with six new wadi bridges, will significantly enhance Seeb’s seaside appeal, as well as serve as a new adornment in the wilayat’s rapidly developing civil infrastructure.
As part of the road project, the contractor will build six wadi bridges that will span flood channels that intersect the corniche road en route to the sea. The largest of these bridges will be around 360 meters long, while all six bridges will run a total length of about one kilometer.
Work on the dualised coastal road, which suffered major damage during last June’s adverse weather conditions, is now under way. When completed, by mid-2009, the road will be robust enough to withstand possible damage in future flood events, as well as wave action.
Mehr e Iranian buys 40% stake in IRALCO
Mehr News Agency reported that Mehr e Iranian Investment Company has bought a 40% block of the Iran Aluminum Company for IRR 14,367.
Mr Mehdi Oqdaie deputy head of Iranian Privatization Organization also announced that 100% of the Razi Petrochemical Company shares valued at IRR 6.3112 trillion was tendered on the Tehran Stock Exchange and was bought by a Turkish consortium for IRR 6.350 trillion (USD 6.7 million).
An official said that this is the first time that a foreign company has bought 100 percent shares in an Iranian company at TSE.
Iran may export 200 MW of power to Turkey – Report
Mehr News Agency reported that Iran may export 2,000 MW of electricity to Turkey.
Mr Masoud Hojjat MD of Electricity Network Management Company said that related agreements have been inked, hoping that tin addition to power export from Khoy Power plant, Iran can sell electricity to Turkey via Dogobayazid. He added that "Preliminary steps have been taken by Iran and we are waiting for Turkish officials to receive the necessary permits."
Mr Hojjat noted that 150 MW of electricity are expected to be sold to Turkey in the initial stage and the figure will be increased to 1,000 MW. He added that "Once we manage to transfer 1,000 MW of electricity, it will be possible to link up to Europe’s power network via Turkey."
He said that negotiations are underway between Iranian contractors and Turkish officials on power plant construction in the two countries. Turkey is due to build 2 power plants in Iran and Iran will also construct 2,000 MW power plant in Turkey.
Mr Hojjat further stated that 40 MW of electricity will be exported from Dogobayazid in the initial phase and the figure can be raised to 250 MW or 300 MW later.
Chinese steel makers hike prices ahead of BaoSteel announcement
It is reported that many small and medium sized steel manufacturers in China have raised their prices ahead of an expected price increase announcement by Baosteel. It is reported that over 20 steel mills have lifted their EXW prices alone on Wed, involving rebar, HRC, wire rod and etc.
As per report, Jiangsu Shagang Group raised the factory price of rebars by CNY 240 per tonne, Shandong Laigang Group raised the price of several steel products by CNY 100 per tonne and Baotou Steel announced it was raising hot roll and cold roll steel price by CNY 400 per tonne from March.
Analysts said steel manufactures reacted quickly to the expectation of a larger price jump by two largest steelmakers, Baosteel and Shougang Group, in the second quarter.
Mr Gao Bo an analyst at Mysteel said "Many distributors are hoarding steel products and waiting for the price to rise. In doing so, they have created a temporary supply squeeze.”
An industry insider said Baosteel's price adjustment has already been settled in an internal meeting yesterday morning, and the new price will fully cover the rising cost from the expected 65 percent increase in iron ore price. But he declined to elaborate.
Analysts said that the added cost from a 65% iron ore price jump ranged from CNY 783 per tonne to CNY 824 yuan but the added cost for large steelmaker such as Baosteel is lower than that for other small and medium-sized manufactures. Mr Zhou Tao, an analyst at Sinolink Securities Co Ltd said that “Baosteel can fully cover the rising raw material cost by raising price by CNY 400 per tonne or 10%in the second quarter.”
Chinese Iron and Steel Group increases stake in Apollo
Apollo Minerals Ltd has announced that the Chinese Iron and Steel Group have increased its stake in the Company to 11.7% following a placement of USD 2 million at 30 cents per share.
The Chinese strategic investor is looking to increase this stake to 19.9%, subject to shareholder and regulatory approval. The USD 2 million placements follows the original non binding MoU signed in December 2007. As part of the agreement in relation to the USD 2 million placements, the parties undertake to work in good faith to establish a joint venture on the Mount Oscar Iron Ore Project on terms to be agreed and have a representative appointed to the Board.
The release said the board believes completion of this placement is another key milestone in the development of Apollo Minerals into a leading diversified resources company, with the significant backing of a Chinese partner. Under the terms agreed, the investor may subscribe for a further USD 2.3 million in Apollo shares at 34 cents by April 30th 2008. On completion, Apollo’s Chinese partner would have made an investment of over USD 5 million and obtain approximately 19% of the company.
Apollo is currently developing two iron ore projects one in Western Australian and one in South Australia. Apollo continues to review other opportunities in the iron ore sector in Australia and overseas in a time of rising iron ore prices. Securing a strategic Chinese partner provides the Company with further assistance in its iron ore acquisition strategy to become a significant iron ore company.
Kobe Steel to establish welding company in China
Kobe Steel Ltd announced that it plans to establish a company to produce welding materials at Qingdao in Shangdong Province of China. The new company will make flux cored welding wire for welding carbon steel used in shipbuilding.
Called Kobe Welding of Qingdao Company Limited the joint venture will be formed in April 2008. Production is scheduled to begin one year later in April 2009. The plant will have a capacity of 1,000 tonnes per month.
Kobe Welding of Qingdao to be capitalized at CNY 3 billion will employ about 90 people. Kobe Steel will have a 90% share in the venture and subsidiary Shinsho Corporation 5%. Sojitz Marine & Engineering Corporation and Tokokosen Corp will each have 2.5%.
In the 1980s, Kobe Steel pioneered the development of flux cored welding wire for carbon steel and widely promoted its commercial application. This technical breakthrough streamlined welding in the shipbuilding industry. Today, flux cored welding wire is an essential material in the construction of large ships.
Flux-cored welding wire consists of a steel sheath with flux in the middle. This type of wire is generally around 1.2 mm to 1.6 mm in diameter. Flux contains a deoxidant, slag generator, arc stabilizer, alloys, steel powder and other substances. Flux composition contributes greatly to the mechanical properties, welding workability and other capabilities of the welding wire. Flux cored welding wire for carbon steel is commonly used in shipbuilding and offshore marine structures, such as oil rigs. In recent years, demand has been growing for this welding consumable. As one of the leading producers of flux cored welding wire, including that for specialty steel, Kobe Steel has been increasing its production capacities for this material at its plants in Japan, China, South Korea and Europe.
China is the largest market for welding consumables, using an estimated 2.5 million tonnes of welding materials of various types per year. China's shipbuilding capacity is anticipated to steadily grow, with capacity in 2010 expected to double, in comparison to 2007. In addition, the use of welding electrodes in shipbuilding is shifting to high-efficiency flux cored welding wire for carbon steel. As a result, Kobe Steel predicts that demand for flux cored welding wire will increase sharply.
World Demand for Welding Consumables (Kobe Steel estimate)
(In thousands of metric tons/year)
| | 2003 | 2006 |
| Europe | 500 | 650 |
| North America | 450 | 530 |
| Asia | 1,955 | 3,650 |
| Other | 445 | 570 |
| Total | 3,350 | 5,400 |
| China (subset of Asia) | 1,000 | 2,500 |
Chinese HDG export prices firming up further
It is reported that Chinese steel makers have increase HDG coil export offers again citing the surge in production cost and improvement in domestic market price.
On Shanghai market, 1.0 HDG by Anshan Steel is being offered at CNY 5950 per tonne to CNY 5980 per tonne, price for 0.5mm material by private producers goes at CNY 6250 per tonne up by CNY 150 per tonne and CNY 100 per tonne respectively.
On export market, most steel producers have not updated their quotations and they are expected to shoot up prices substantially in early next week. As per report, Wuhan Steel offered limited quantity of 1.0mm HDG in Z140 coating at USD860 per tonne on FOB basis up by USD 50 per tonne to USD 60 per tonne from February beginning.
Sinosteel to invest USD 400 million in South African JV ASA Metals
It is reported that Sinosteel has recently decided to increase its investment in South Africa by USD 440 million.
Mr Zhang Suwei GM of ASA Metals said the company has drafted out plans to expand the output.
ASA Metals was set up jointly by Sinosteel and the South Africa Limpopo Province Development Corp in 1997. It owns a chrome mine with reserves of around 45 million tonnes.
Shenhua sales in January 2008 up by 15% YoY
Reuters reported that Shenhua Energy has posted a 14.6% increase in sales of the hydrocarbon in January 2008 slowing slightly from 2007 pace but still robust amid double digit economic growth.
As per report sales came to 18.8 million tonnes in January 2008 of which 2.4 million tonnes were exported. In 2007, Shenhua racked up a sales increase of more than 20%.
The worst snowstorms to hit China in 50 years also did little to hold back output which increased by 10.7% last month to 14.5 million tonnes.
Baosteel and China Shipping form iron ore marine JV
It is reported that Baosteel Group and China Shipping (Group) Company will form a marine firm to ship iron ore to China's largest steel maker, Baosteel, parent of Baoshan Iron and Steel. The two companies signed a framework agreement to establish the joint venture in Hong Kong.
The firm will be 51% owned by China Shipping, parent of China Shipping Development Co and Baosteel will hold the reminder 49% stake.
The joint venture will provide six cargo ships with a total freight capacity of more than 1.5 million tonnes and will double the capacity to 3 million tonnes by the end of 2015.
Mr Li Shaode president of China Shipping said "It will help Baosteel to control shipping costs and help China Shipping to increase market share.”
Alashankou Port receives Russian iron concentrate
Xjbs.com.cn reported that Alashankou customs has recently transacted duty free certification for 15,000 tonnes of USD 1.89 million worth of iron concentrate from Russia, as the port received Russian origin iron concentrate for the first time.
It's reported a local company signed with an overseas seller to buy 250,000 tonnes with a value of over USD 30 million. The shipped resources contained 65.5% Fe at a price of USD 126 per tonne.
Benxi steel increase flat product prices for next quarter
It is reported that Liaoning's Benxi Steel has raised prices for products yielded in the based on prices released on January 15th 2008
1. HR price up by CNY 200 per tonne
Q235 3.0mm HRC is now quoted at CNY 4400 per tonne
Q235 5.5mm thick and 1500mm wide HRC at CNY 4150 per tonne
2. CR price up by CNY 250 per tonne.
Latest EXW price prevails at CNY 5070 per tonne for Q195 1.0mm*1250 cased CR sheet and CNY 5000 per tonne for 1.0mm CRC
3. HDG price up by CNY 250 per tonne for products yielded by No 1 and No 2 mills
ST01Z 1.0mm*1250 galvanized coil is offered at CNY 5150 per tonne
4. PPGI price up by CNY 200 per tonne
TDC51D 0.47mm*1250 color coated steel is priced at CNY 6300 per tonne
Prices listed above are EXCLUSIVE of 17% VAT, effective as of February 20th 2008
Tisco starts energy saving projects
It is reported that Tisco started energy saving technology reform project on February 17th 2008 including 91 items. It is expected that energy cost per tonne steel, new water cost per tonne steel, soot emission per tonne steel and sulfur dioxide emission per tonne steel would decline substantially by the end of “11th five-year plan” and energy environmental index would reach international most advanced level.
As per report Tisco has totally invested CNY 3.97 billion from 2004 to 2007, completed 76 energy saving projects and closed down 1.3million tonnes of coking capacity, 480,000 tonnes of iron making capacity and 500,000 tonnes of steelmaking capacity. Comparing with 2005, energy cost per tonne steel, new water cost per ton steel, soot emission per tonne steel, sulfur dioxide emission per tonne steel and COD reduced by 41.4%, 14.4%, 42%, 20.7%, 39.6% and 63.7% in 2007 respectively.
Tisco is aiming to construct the most competitive stainless steel producer in the world and to increase sales income to CNY200 billion by 2015. In order to make the plan come true it should depend on new round of energy saving and emission reduction. It is introduced that total investment of the new round project is as high as CNY2.97 billion, covering all production procedures in the company.
Masteel Wheel Co develops B38 wheel
It is reported that Masteel Wheel Co has recently successfully designed B38 wheel and the design drawing has passed the approval of AAR, reflecting that Masteel is able to provide cargoes to North America.
AS per report B38 is the heaviest wheel in standard of AAR. It is used for the manufacture of over loading trucks. The annual demand in North America is 20,000 sets.
Baotou seamless pipe sales in 2007
It is reported that sales structure of seamless pipe in Baotou steel has been changed from general pipe products to high value added pipe products and the sales volume amounted to 449,500 tonnes in 2007.
As per report the sales volume of seamless pipe products through direct supply amounted to 390,000 tonnes accounting for 47% of the total sales volume of pipe products.
Anshan steel TMCP SBQ plates pass product assessment
It is reported that Anshan Steel has developed TMCP extra high strength shipbuilding steel plates, which have passed product appraisements.
As per report Anshan Steel initiated TMCP application in extra high strength, high strength and common shipbuilding steel production, which boast lower cost and less energy and resource absorption.
In 2006, Anshan shipbuilding products as well as that used in ocean engineering were accredited by nine countries' classification society.
Chinese geologists discovered uranium and coal deposits
Xinhua reported that after 17 years of work, Chinese geologists have made a minerals breakthrough which they discovered the country's first 10,000 tonne level leaching sandstone type uranium deposit in the Yili basin which is in the northwestern Xinjiang Uygur Autonomous Region.
Mr Wang Cheng general engineer said that the deposit would produce more than CNY 300 billion worth of uranium, coal and associated minerals, with coal resources totaling more than 4 billion tonnes. He said the find would boost development of an existing large scale coal and electricity production base in the region.
Nanjing and Shanghai high speed rail line work to start soon
Xinhua reported that work will start soon on a high speed inter city passenger rail link between Nanjing and Shanghai. The line will cut the trip between the two cities from two hours at present to one and a half hours.
The new railway will have a length of 300 kilometers, of which 269 kilometer will be inside Jiangsu Province. The dual track railroad will take four years to complete and will be able to accommodate trains traveling at 200 kilometer to 250 kilometer per hour.
Mr Zhang Xiaoling deputy chief with Jiangsu provincial office of railways said that the feasibility report for the project, estimated to cost CNY 42.2 billion has been approved by the National Development and Reform Commission and ground breaking will occur in the first half of the year.
Mr Zhang who declined to provide further details said the investment will be borne by the Ministry of Railways, Jiangsu and Shanghai.
ArcelorMittal Kriviy Rih calls tender to build new sinter plant
Ukrainian Journal reported that ArcelorMittal Kriviy Rih has called a tender for a contract to build a 10.136 million tonnes per year sinter plant.
The deadline to submit bids is March 10th 2008.
As per report, Siemens is designing the plant.
Metalloinvest ready to merge with Norilsk Nickel
RIA Novosti reported that Metalloinvest, a leading Russian mining and ferrous metals company is ready to merge with metals giant Norilsk Nickel.
Mr Maxim Gubiyev CEO of Metalloinvest said "We are ready for a merger as this would be quite an interesting move for us."
Russian business papers Kommersant and Vedomosti quoted on February 20th 2008 Mr Andrei Klishas chairman of Norilsk Nickel's board of directors as saying he had received a letter from Dresdner Kleinwort with a proposal to consolidate the world's largest nickel producer with Metalloinvest owned by Mr Alisher Usmanov Russian billionaire.
The report said Mr Mikhail Prokhorov and his former business partner Mr Vladimir Potanin are two key shareholders of the metals giant Norilsk Nickel. As of late 2007, they held 28.2% and 25.3% of Norilsk Nickel's shares respectively. Both businessmen announced plans early in 2007 to divide the assets, but eventually failed to agree on the business's division.
In late 2007, Russia's newly created aluminum giant United Company RusAl, controlled by Mr Oleg Deripaska Russian billionaire announced that it had reached an agreement with Onexim Group owned by Mr Prokhorov. The announcement came after Interros holding company refused to buy Prokhorov's blocking interest.
UC RusAl is currently raising a USD 4.5 billion syndicated loan to finance the deal.
VSDPP plan to commission a thin wall refrigerator pipe mill
Prime Tass reported that CJSC Volgograd Small Diameter Pipe Plant plans to commission a thin wall refrigerator pipe production mill in summer of 2008.
The report said mill installation will allow increasing pipe production by 400 tonnes per month. The mill is currently preparing facilities to install the mill. Cost of the equipment for installing the mill is RUB 155 million.
The installation will be made by the experts of the equipment supplier.
ZMP increases January roll production
It is reported that JSC Zlatoust Metallurgical Plant smelted 53,983 tonnes of steel in January 2008 and production of roll amounted to 40,729 tonnes. 40,000 tonnes of products was shipped to the consumers.
As per report product mix continues to change towards quick cutting and high alloy steel grades. Production of calibrated steel increases, in January 1,220 tonnes of calibrated steel were shipped. Seasonal demand for stainless steel was marked. Its December shipments were 1,032 tonnes in January 2008, 1,135 tonnes orders for February amount to 1,300 tonnes.
Mechel plans to sell rails to Russian Railways
Interfax reported that Mechel coal and steel group plans to begin production of railroad rails and is counting on guaranteed purchases by Russian Railways.
The report said rail production will be organized at Mechel's Chelyabinsk Metallurgical Plant but it did not provide any other details.
Mechel and RZD also declined to comment. However in a joint statement recently the two companies said they would sign a cooperation agreement in Moscow on February 26th 2008.
The statement said "The agreement concerns long term, mutually beneficial partnership to supply Russia's railroads with transport steel produced at Mechel facilities in the 2010 to 2030 periods."
Russian Copper Company to build new nickel complex
Reuters reported that Russia’s third largest copper producer the Russian Copper Company plans to invest USD 160 million building a complex to produce nickel in the Urals region of Chelyabinsk from 2009.
The report said the design capacity of the plant to produce nickel metal, a vital component of stainless steel is expected to be 7,000 tonnes per year.
Russian Copper Company said it plans to launch the first stage of the complex in 2009. It said the company has already started building a mine and an ore enrichment plant, Uralgidronikel at the Kulikovskaya group of nickel and cobalt deposits.
The world's top nickel miner, Norilsk Nickel produced 295,209 tonnes of the metal last year. Yuzhuralnikel, a unit of coal miner and steel maker Mechel and Russia's second largest producer produced 17,140 tonnes.
Mechel starts construction of railroad to the Elga deposit
Mechel has announces that it has signed a contract and is starting construction of a railway spur track to the Elga coal deposit.
The release said the contract for designing and constructing the railway spur track to connect Ulak railroad station of the Baikal-Amur Mainline with the Elga coal deposit was signed between Mechel and Transstroy Engineering Corporation, a subsidiary of Transstroy Design and Construction Company on February 19th 2008.
The total length of the railroad will be approximately 315 kilometers. The railroad’s design comprises about 420 engineering structures, including 194 bridges. The railroad’s throughput capacity after completion of all construction stages will be 25 million tonnes annually.
Construction of the railroad is the first stage in the development of the Elga deposit, from which annual coal output is planned to reach about 30 million tonnes. Commissioning of the railroad for permanent operations will take place not later than September 30th 2010.
Mr Vladimir Polin CEO of Mechel Management OOO said that “This project is a key aspect of our plans to develop the promising Elga coal deposit, and is consistent with the implementation of Mechel’s strategic program aimed at further growing its mining segment. The construction will be carried out in three phases. Concurrently with the railroad construction, development of the Elga deposit itself will start. This will enable Mechel to ensure the possibility to transport coal from the deposit simultaneously with the completion of the railroad Phase 1.”
SDS to raise the coal output by 10%
It is reported that Siberian Business Union intends to raise the coal output at Voroshilov Mine in Prokopyevsk by 10% to gain 550,000 tonnes due to the expanded usage of hydraulic technologies.
SDS includes 15 coal entities in Kemerovsky region and engineering entities, mass media assets, food making, agro, engineering entities, recreation companies, Novotrans, air transport assets.
Gazprom, Total and StatoilHydro ink Shtokman JV deal
It is reported that Mr Alexey Miller chairman of the Gazprom, Mr Christophe de Margerie CEO of Total SA and Mr Helge Lund president & CEO of StatoilHydro signed a shareholder agreement relating to the creation of Shtokman Development AG.
Gazprom will hold a 51% stake in Shtokman Development AG while Total holds 25% and StatoilHydro 24% shares.
Shtokman Development AG will be organizing the project engineering, development, construction, financing and exploitation of first phase facilities related to the development of the Shtokman field.
The partners also indicated that front end engineering design on the project has commenced, and will be finished at the second half 2009 allowing a final investment decision to be made. Among other things, Russian and international subcontractors for FEED studies have already been identified and a site has been chosen for the technical and transportation complex near Teriberka in Murmansk Region.
Mr Alexey Miller said “This strategic partnership of our companies brings together long experience, vast resources and advanced technologies which are fundamental to the success of this unique project, which will guarantee reliable and long term gas supplies for European consumers. The establishment of the Shtokman Development Company marks the starting point in the realization of the development of the Shtokman field.”
Mr Christophe de Margerie said ”The creation of this joint company by Gazprom, Total and StatoilHydro is a major milestone allowing us to combine our forces and experiences in large developments in harsh and remote environments to meet the challenges of the Shtokman project.”
Mr Helge Lund said”Shtokman can become a locomotive for new developments in the arctic region, with safe operations under cold and harsh condition. We look forward to the next stages in cooperating with Gazprom and Total on this large and challenging project by contributing with our competence and experience from the Norwegian Continental Shelf.”
RZD to rebuild rail infrastructure in Algeria
RIA Novosti reported that Russian Railways expects to close a deal on railway construction in Algeria in late March 2008.
The report said that under the agreement, RZD will rebuild and modernize 14 suburban stations, dismantle over 58.5 kilometer of outdated railway tracks and lay 95 kilometer of the new ones.
The project also envisages the construction of 34 auxiliary facilities, a 1.7 kilometer tunnel and the Algerian Railways logistics control center.
Naftogaz pays UkrGazEnergo almost UAH 900 million
Interfax reported that Naftogaz Ukrainy paid the UkrGazEnergo joint venture UAH 898.9 million toward its debt for imported gas delivered in November to December 2007.
Recently Naftogaz Ukrainy paid UkrGazEnergo UAH 524.6 million for gas debt on deliveries prior to November 1st 2007 which was used to supply power plants and budget financed organizations.
Gazprom had threatened to cut some supplies to Ukraine over the debts, but last week Moscow and Kiev clinched an agreement to settle payment of arrears and over time, to do away with intermediaries.
UkrGazEnergo is a joint venture between Naftogaz Ukrainy and Switzerland registered RosUkrEnergo, the exclusive supplier of natural gas to Ukraine since April 2006.
Ukraine and Russia agree for signed agreement for gas supplies
It is reported that Ukraine and Russia's prime ministers have confirmed their commitment to the gas agreements reached by their presidents in February 2008. As per report Mr Viktor Zubkov PM of Russian has received his counterpart Ms Yulia Timoshenko in Moscow.
Mr Viktor Zubkov said that "We discussed cooperation in the energy sector, including gas and confirmed our mutual commitment to strict compliance with the agreements reached by our presidents in this sphere.”
He said "Our proposals to Ukraine concern not only transit operations, but also the joint development of hydrocarbons deposits in both countries, with a commensurate swapping of assets."
As per report Mr Vladimir Putin president of Russia and Mr Viktor Yushchenko president of Ukraine's agreed on a plan to settle Ukraine's USD 1.5 billion debts for Russian gas deliveries during a last ditch meeting on February 12th 2008.
An agreement was also reached to cut out intermediaries and establish direct fuel supplies between Russia's Gazprom and Ukraine's Naftogaz.
Yakutia to build oil refinery
FIS reported that Taas-Yuryah Neftegazodobycha Limited in which 35% is owned by Urals Energy is planning to build an oil refinery of the capacity of 1.5 million tonnes in the city of Lensk.
The report said however, the company has not finalized the production capacity yet as it continues to study the region's requirements. The company will specialize in the production for the needs of Sakha Republic and facilitate the solution of the Republic's fuel problems.
Lukoil suspended oil supplies to Germany
FIS reported that in February 2008 Lukoil suspended oil supplies to Germany because of the company and its traders disagree on the prices.
Germany's Sunimex refused to pay for the crude oil a price higher than that agreed before. Under the existing agreements Germany had to receive 520,000 tonnes of crude oil in February 2008.
In August 2007, Lukoil reduced oil supplies to Germany by one third of the preceding volumes.
