India’s Union Budget Highlights 2008 - 09

1. Customs duty on steel scrap and aluminum scrap has been cut to 0% versus 5%

2. Customs duty on project imports has been cut to 5% versus 7.5%.

3. Coal regulator to be set up

4. The fourth Ultra Mega Power Project at Tilaiya will be awarded shortly

5. INR 5,500 crore in 2008-09 for Rajiv Gandhi Grameen Vidyutikaran Yojana including NER.

6. To provide INR 800 crore in 2008-09 for the Accelerated Power Development and Reforms Project

7. To create a national fund for transmission and distribution reform

8. 7th round of bidding under the New Exploration Licensing Policy was launched in December 2007 and bids have been invited for 57 exploration blocks. It is estimated that the round will attract investment of the order of USD 3.5 billion to USD 8 billion for exploration and discovery.

9. Export duty on chrome ore from the current INR 2,000 per tonne to INR 3,000 per tonne

Indian government maintains status quo on iron ore export tax

Mr P Chidambaram Indian finance minister while presenting the 2008-09 Budget in Parliament did not change the export tax on Indian iron ore. Budget had brought issue of iron ore exports to the center stage once again with steel industry was hoping for increase in export duty on iron ore to curb exports and miners were expecting withdrawal of the same to attract investments.

Mr Chidambaram had for the first time imposed an export duty of INR 300 per tonne on iron ore and concentrates and INR 2,000 per tonne on exports of chrome ore and concentrates while presenting 2007-08 Budget. Considering the prevailing FOB spot price of USD 62 per tonne for 63.5% Fe content during February 2007, the imposition of INR 300 or USD 7 per tonne export tax, worked out to about 11% of the FOB price. But after intense lobbying by Indian iron ore miners, he reduced the export duty on iron ore fines with Fe content of 62% and below to INR 50 per tonne and maintained INR 300 for iron ore fines having Fe content above 62%.

In 2006-07 fiscal, India produced about 160 million tonnes of iron ore and exported about 95 million tonnes. About 85% of this export comprised fines sold largely in the spot market in China at high price. This fiscal, the export level may touch 100 million tonnes as the impact of export duty has been negated by over 100% increase in iron ore spot prices in the global market.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has announced that the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on February 25th 2008 as under

Considering these price levels, existing INR 300 or USD 7.5 per tonne export tax for iron ore with Fe content of 62% or more works out to about 5% of the FOB price an INR 50 or USD 1.2 per tonne export tax for iron ore with Fe content of 62% or more works out to about 1%.

Mr Roongta welcomes initiatives in Budget 2008-09

Mr SK Roongta chairman of Steel Authority of India Limited has welcomed the initiatives announced by Mr P Chidambaram Indian finance minister in Budget 2008-09.

Mr Roongta said that “Higher outlays for Bharat Nirman, irrigation projects, mega power projects, rural housing, etc., will help in infrastructure development and, together with excise duty cut for auto sector, will spur demand for steel.”

Mr Roongta said that “Reduction in CENVAT from 16% to 14% will also help in containing the cost of steel, especially for construction purposes.’

Mr Roongta added that “Customs duty reduction on project imports will have a favorable impact on capital costs at a time when the steel industry is undergoing massive expansion.”

He concluded that “We welcome the special initiatives and measures relating to skill development and higher education, which are critical from the point of view of long-term needs of the entire manufacturing sector.”

SAIL SSP orders for SS slab caster

Steel Authority of India Limited’s Salem Steel Plant has awarded SMS Demag contract for the supply of a single strand continuous casting machine for the production of slabs of stainless steel grades. Commissioning is scheduled for the beginning of 2010.

The X-Cast slab caster is rated for the production of 140mm to 200 mm thick and 600mm to 1,300 mm wide slabs at a maximum attainable casting speed of 1.5 meters per minute. The unit is designed to produce 300,000 tonnes of slabs per year.

The scope of supply comprises the detail engineering, mechanical equipment, hydraulic system, as well as the complete X-Pact® electrical equipment and automation package including process models.

Salem Steel Plant can offer a wide range of hot- and cold-rolled as well as surface treated stainless steel strip. The new slab caster will in the future cover the continuous demand for slabs.

TATA Steel eying Chinese steel market

The Telegraph reported that TATA Steel, which has a small presence in China through Natsteel Asia, is planning to enter China in a big way.

Mr HM Nerurkar COO of TATA Steel recently said that “If TATA Steel wants to be one of the world’s top steel players, it has to be in China. We will go there. We will finalize our plans in the next 6 to 9 months. It is not a pie in the sky. We are serious about it.”

Mr Nerurkar said that “China produced 489 million tonnes of steel in 2007 and is expected to reach 700 million tonnes in 10 years. All major steel companies, therefore, are trying to carve out a niche for themselves in China.

He added that “There are 3 options before us, one can start from the beginning or do what ArcelorMittal and Nippon Steel does from galvanizing to customer end. The third option is to set up service centers.”

It may be noted that no foreign company can own majority stakes in any of Chinese big steel companies. However, it permits controlling stakes in relatively small private companies. China also insists that foreign steel makers should bring more advanced technology rather than making commodity grades.

Indian Railways earn 65% of its revenue from freight

Indian Railways has earned 65% of its revenues from freight movement while, passenger fares contributes a meager 26%.

According to the explanatory memorandum for the Railway Budget presented in Parliament by Mr Lalu Prasad union railway minister, in 2006-07 Indian Railways saw 65 paise out of every rupee earned coming from freight earnings. Passenger earnings accounted for 26 paise while other coaching earnings, sundry earnings and miscellaneous receipts gave three paise each. Dividend to the government took 7 paise out of every rupee earned and an equal sum went towards depreciation reserve fund. Special railway safety fund was given one paise and development fund 3 paise.

SAIL BSL awards major contracts for expansion project

Projects Today reported that the modernization and expansion project of the Steel Authority of India Limited's Bokaro Steel Plant expansion in Jharkhand made further headway with the recent placement of large orders.

McNally Bharat Engineering recently won an INR 71 crore order for the coupled pickling line tandem cold mill. Era Infra Engineering also bagged an INR 126 crore order for carrying out structural works at the new cold roll mill.

Mr Sanjay Tiwari senior spokesperson of Bokaro Steel Plant said that the current steel capacity of the plant that stands at 4.58 million tonnes per annum is expected to go up to 7.44 million tonnes per annum when the project commissions by 2010. He added that "The plant's crude steel capacity will be around 7 million tonnes per annum."

The plant expansion is part of SAIL's overall plan of stepping up total saleable steel capacity from the current 14.6 million tonnes per annum to 26 million tonnes per annum by 2010. This would be achieved across all the integrated steel plants like Bokaro, Bhilai, Rourkela, Durgapur and IISCO Steel Plant.

TATA Steel to launch technical courses at IIT Kharagpur

The Telegraph reported that, alarmed over the acute shortage of skilled manpower in the manufacturing industry, TATA Steel is planning to launch technical courses to attract the youth. In a recent move, it has decided to run undergraduate programs targeted specifically towards the steel industry.

Mr Amit Chatterjee advisor to Mr B Muthuraman MD of TATA Steel said that “We are planning to run a 4 year undergraduate course, tailor made to cater to the steel industry and this would be done in association with IIT, Kharagpur.” He added that 60 students would be selected in each batch for the proposed course and it would also float TATA scholarships.

Mr Chatterjee further added that "The idea behind the scholarships is not to lure young engineers but to build an understanding with them. Our remuneration is on a par with any good IT company and youngsters need to know this. The Indian steel industry is going through a bad phase in terms of adequate and skilled manpower. For every tonne we need at least 500 engineers and 1,500 diploma holders. Therefore, unless drastic steps are taken we cannot come out of the crisis."

Indian Railway’s production units perform well in 10 months

It is reported that Indian Railway’s infrastructure manufacturing units, except Integral Coach Factory and Rail Wheel Factory, have exceeded their respective targets during April 2007 to January 2008 period.

The production update for the month of January 2008 is as under

JSW Steel to pass on excise duty cut to customers

Sify.com reported that JSW Steel Limited will pass on the excise duty cut, announced in the federal budget, to its customers with immediate effect.

The report cited r MVS Sheshagiri Rao director at JSW Steel as saying that "We will definitely pass on the benefit to the customers. Prices will drop by 2% or by INR 500 to INR 600 a tonne."

NTPC inks JV agreement with UP for coal based power station

It is reported that National Thermal Power Corporation Limited has signed a JV agreement with Uttar Pradesh Rajya Vidyut Utpadan Nigam Limited for setting up 2X660 MW coal based power station at Meza in Allahabad on build, own and operate basis.

A MoU to this effect was signed in the presence of Ms Mayawati chief minister of UP, Mr GB Patnayak chairman of UPRVUNL, Mr VN Garg principal secretary in the state energy ministry and Mr T Sankaralingam CMD of NTPC.

Sandvik opens research & development centre in Pune

BL reported that Sandvik has inaugurated research & development modeling centre under the Sandvik Materials Technology division at Dapodi in Pune. This is Sandvik’s first research & development centre outside Sweden.

The area of focus would be computer modeling, both on alloy design from thermodynamic models and metallurgical processing such as rolling and extrusion using finite element method or finite element analysis. Modeling allows reduction of development time for alloys and metallurgical products such as tubes, sheets and wires by a process of simulation and optimization using hi tech computational systems.

Mr Peter Gossas president of Sandvik Materials Technology said that India ranked high in research capabilities both from competence and cost point of view. He added that "The new centre in Pune would showcase the local representation of modeling experts in Asia, where the market is up surging with rapid pace."

Mr Hakan Kingstedt MD & president of Sandvik Asia Limited said that the need for experimentation is reduced and introduction of new products are speeded up. He added that “Sandvik Group will be looking at establishing India as a global hub for knowledge sourcing.”

Dr Olle Wijk executive VP of Sandvik Materials Technology said that “We want to establish the R&D activity in India because the Asian region is big and rapidly growing for Sandvik Materials Technology. The R&D centre gives us an opportunity for close co-operation with customers in the Asian market.”

Sandvik Group has been investing nearly 4% of its earnings annually in research and development over the years.

Steel & cement output declines and coal surges – Survey

According to Economic Survey report, the production of India’s steel and cement have declined during April to December 2007 period but performance of the coal sector saw marginal improvement.

Coal import figures released in the survey shows that India imported 3.4 million tones coal in 2003, 4.5 million tones in 2004, 10.4 million tones in 2005, 9.7 million tones in 2006 and 7.3 million tonnes in 2007. It said that "Coal fired thermal units account for around 62.2% of total power generation in India. Thus coal continues to be the mainstay for the power sector."

The Survey pointed out that the gas based power plants are getting inadequate supply and that commitments of gas allocations made to power stations in the past were not being fulfilled, thereby leading to loss in power generation, even though the power sector is expected to grow at 9.5% per annum.

Government updates on IPI pipeline project

Mr Murli Deora union minister for petroleum & natural gas informed Indian parliament that India has been pursuing the import of natural gas from Iran through the IPI transnational gas pipeline.

Mr Deora said that important issues concerning the implementation of the project are under discussion amongst the participating countries. He added that "As per current indications, pipeline within Iran up to Iran Pakistan border will be laid and operated by an agency to be nominated by Iran. Iran wants to sell gas at Iran Pakistan border. So, all responsibility for safety and security of the pipeline within Iran will vest with Iran."

He added that discussions regarding the security package by the Pakistan government and the transit fee are continuing. Suitable provisions will be included in the contract with the Pakistan side for safety & security of the pipeline. It has been agreed that the pipeline proposed to be laid in Iran, Pakistan and India will be constructed as per the international standards, incorporating all safety features. It is envisaged to provide round the clock communication and supervisory control system all along the pipeline.

Mr Deora emphasized that such multilateral projects involve protracted discussions, as all the aspects have to be carefully examined and deliberated upon to the satisfaction of the participating countries to protect each country’s interests and avoid any problems in the future in the successful operation of the project. He added that “No official communication has been received regarding China joining IPI gas pipeline project.”

PSU rail track company to own new tracks

ET reported that union finance ministry has suggested setting up of public sector rail Track Company to own new tracks and signals, while allowing free entry of private and public private partnership rail freight companies.

The ministry said that public transport systems in metros and large cities must be run by organized private companies that can use modern logistics and back office systems for planning routes and timings, acquiring and analyzing data on usage densities and running an integrated people movement system. It added that comprehensive system of road parking fees must be devised and introduced in metros and large congested cities.

Mumbai to get high speed monorail services

BL reported that Mumbai Metropolitan Region Development Authority is planning to develop high speed monorail services from Mantralaya to Chhatrapati International Airport at Andheri and the draft & final modalities of the project are currently being worked out.

The monorail trains will run at over 80 kilometer per hour and will begin from Mantralaya with stops at Nariman Point, Haji Ali, Worli, Siddhivinayak Temple, Bandra and Santacruz Domestic Airport before terminating at International Airport. It will traverse through Girgaum Chowpatty, Haji Ali, Mahalaxmi, Worli Naka, Bandarwadi Siddhivinayak, Shivaji Park, Kapad Bazar, SV Garden, Nandadeep Garden and Domestic & International airports.

The proposed high speed monorail services will be in addition to the 3 normal speed monorail services already planned for the city.

Jharkhand to purchase power from PTC to meet demand

Ranchi Express reported that Jharkhand government has decided to purchase additional power to the tune of 150 MW to 200 MW from Power Trading Corporation of India Limited in order to fight power crisis.

The deal was clinched at Ranchi after Mr TN Thakur CMD of PTC met Mr Madhu Koda chief minister with the request that the state government should avail his company's services for long term gains.

Mr Koda immediately grabbed the opportunity and asked Mr Thakur to provide 150 MW to 200 MW of electricity everyday.

Sadbhav Engg bags contract for Omkareshwar canal project

It is reported that Sadbhav Engineering has bagged an order worth INR 310.20 crore for execution of Omkareshwar project canal system phase III.

The scope of work includes work of survey, planning, design, estimation, preparation of land acquisition cases, construction of canal by excavation and earth work, cement concrete lining, all inline concrete structures like VRB/DRB/NHB/SHB, CD works, aqueducts, super passages, falls, head or cross regulators, escapes, outlets etc and commissioning of canal system.

World Bank approves 6 road tunnel projects in HP

It is reported that World Bank has approved 6 new road tunnels in Himachal Pradesh. Out of the 6 road tunnel projects, 4 will be developed in Shimla. The detailed project report of the proposed projects is expected to complete by April 2008.

The road tunnel projects includes longest one of 1,705 meter long tunnel project on National Highway 21 in Chandigarh Manali section between Kanchimore to Mela in Bilaspur district and another tunnel in Kangra district will be built on Ranital Kangra road near measuring 270 meter.

Besides, World Bank has also sanctioned INR 1,365 crore to widen some 2 lane roads into to 4 lanes. The roads included in the project are
1. 45 kilometer long Mehatpur Una Ambala
2. 107 kilometer long Una Badsar Juhu Bhawala Kalkhar
3. 81 kilometer long Theog Kotkhai Hatkoti Rohroo
4. 42 kilometer long Sarkaghat to Khumarwin
5. 39 kilometer long Ranital Kotla
6. 72 kilometer long Sarahan Nahan

Newcastle Port to reduce coal export quotas – Report

Reuters reported that the world's largest coal terminal Australia's Newcastle Port is considering reducing shipping allocations to coal producers in the Q2 of 2008 to cut rising ship queues and waiting times, producers and traders.

Port Waratah Coal Services operator of the port, has notified producers this week that the port's YTD throughput was 1.1 million tonnes behind target and has requested miners to voluntary reduce their export allocations. It also said that more vessel arrivals were expected to add another 400,000 tonnes to the backlog.

According to a Web site notice by rail operator Hunter Valley Coal Chain Logistics Team, Newcastle port has initially set total Q2 shipping allocations at about 24 million tonnes. Port congestion and long vessel queues at Newcastle have been a headache for coal miners such as Centennial Coal and Xstrata Coal which have seen surging demurrage costs and lower sales cut into profits.

The number of ships carrying thermal coal from fell to 19 in the week ended February 23rd 2008 from 22 the week earlier. Eighteen headed to Japan and one to Taiwan. Coal shipments from Newcastle fell 46 percent to 1.1 million tonnes in the week ended February 25th 2008. 29 vessels were waiting off the Newcastle port on February 25th 2008 as compared with 36 a week earlier. An average of 12.24 days was needed to load coal last week as compared with 0.23 for general cargo. The week before, the average waiting time for coal carrying ships was 9.33 days.

Newcastle Port, which reinstated a capacity balancing system in May, cut allocations three times last year. The CBS system provides all coal producers with an equal pro-rata share of available coal chain capacity and matches vessel arrivals with capacity, so that excessive vessel queueing is eliminated.

This will put further pressure on tight global supplies, with Australian coal prices already reaching a record high of AUD 150 a tonne this month and may force major importers to look further for alternative supplies.

United Spiral Pipe breaks ground for new facility

United Spiral Pipe, LLC, a JV of United States Steel Corporation, POSCO and SeAH Steel Corporation broke ground for a state of the art spiral welded pipe manufacturing facility. The plant is expected to come on line in May 2009.

The new plant will have world class pipe making and coating facilities and be capable of producing 300,000 net tons of API specification line pipe per year in outside diameters ranging from 24 inches to 64 inches. The facility will also benefit from an advanced and automated two step welding process that will differentiate United Spiral Pipe from its competitors.

Mr John P Surma chairman & CEO of US Steel said "North America is experiencing strong demand for spiral welded pipe due to a number of construction projects for new natural gas and oil transmission infrastructure. Both the capacity and location of the spiral welded facility will favorably position the joint venture to build a presence in the rapidly growing North American large diameter line pipe market."

Mr MS Lee president of United Spiral Pipe said that "The strengths and expertise of our partners position United Spiral Pipe to be very competitive in the North American market. POSCO and US Steel will provide high quality hot rolled coils and SeAH is a highly experienced spiral pipe producer."

US Steel and POSCO each own 35% of the joint venture. They have been partners in USS-POSCO Industries in Pittsburg for more than 20 years. The new spiral welded pipe facility is located on land owned by UPI. SeAH Steel Corporation, a manufacturer of tubular products in the Republic of Korea, will own the remaining 30% of the joint venture and brings broad expertise in manufacturing spiral welded pipe to the new company.

BHP Billiton approves DMO project

BHP Billiton announced approval of the Dougla Middelburg Optimization Project with an expected capital investment of USD 975 million.

The Dougla Middelburg Optimisation project scope includes utilizing reserves across the Douglas and Middelburg Mine Services collieries and development of new mining areas with low strip ratio coal, with product being fed into a new 14 million tonne per annum coal processing plant. The new coal processing plant will replace the existing, less efficient washing plant at Douglas. The project will enable BHP Billiton to maintain energy coal exports from the combined Douglas Colliery and Middelburg Mine Services at around current levels whilst also fulfilling domestic contractual commitments.

First coal from the new mining areas is expected in mid 2008 and the new plant is expected to receive coal in mid 2010. The anticipated life of mining operations is to 2034.

The Douglas and Middelburg Mine Services collieries are currently owned through the Douglas Tavistock JV in which BHP Billiton has an 84% share and Xstrata has a 16% share. To facilitate the Douglas Middelburg Optimisation project, which is to be developed and owned solely by BHP Billiton, the Douglas Tavistock JV will be restructured with each of the joint venture partners being allocated coal resources according to their ownership share.

A number of regulatory approvals are being sought to give effect to this restructure.

Mr Dave Murray president BHP Billiton coal said that "Approval of the DMO project is a core component of BHP Billiton’s coal strategy and is in keeping with BHP Billiton’s focus on operating low cost, long life assets. This project allows us to realize maximum value from these assets by optimising the existing reserves at Douglas and MMS and enabling us to maintain exports through to 2034. With the recent approval of the US$450M investment in the Klipspruit Project, our South African coal operations will now comprise of three world class assets, namely Middelburg Mine Services, Khutala Colliery and Klipspruit Colliery."

Vale resumes iron ore shipments from Itaguaí terminal

Companhia Vale do Rio Doce hereby informs that the Itaguaí maritime terminal in the Brazilian state of Rio de Janeiro, resumed its operations yesterday at its regular annual shipload capacity of 25 million tonnes of iron ore.

The release said that “Since mid December 2007 until the beginning of January 2008, Itaguaí operated with limitations since two of its equipments were damaged. As from January 7 to February 9th 2008, operations at Itaguaí were suspended in order to allow foundation works by means of soil nailing for the three new equipments. On February 10th 2008, the Company resumed its shipments from Itaguaí which is currently operating at full capacity.”

Corus increases wire rod prices in UK

Corus has announced increase in wire rod prices in UK by GBP 70 to GBP 90 per tonne on deliveries from March 31st 2008.

Gareth Beese GM sales and marketing said "Recent agreements concluded for iron ore contracts are at prices considerably above analyst forecasts. Coking coal contract prices are expected to be considerably above 2007 levels. In addition, increases in scrap prices, combined with the additional costs of bulk freight and utilities are resulting in unprecedented levels of input cost increases."

The release added that “Corus recognizes that these price increases will need to be passed through supply chains in the wire industry to end users.”

Coking coal supply disruption might affect global iron ore price rally

It is reported that supply disruption of coking coal due to severe flooding in the mining district of Queensland in Australia might have a domino effect in checking global iron ore price rally.

Market analysts said global coking coal price looks set to roar up following news that BHP will see 6.5 million tonnes to 7.5 million tonnes of coal production loss and the production at its mines would resume till July 2008. As a result steelmakers in Japan and South Korea would be forced to slash production for lack of sufficient coking coal supply. The reduced demand for contract ore would prompt ore miners to sell more iron ore at the spot market and put a cap on ballooning iron ore price.

As per report BHP's coking coal mainly supplies to steelmakers in Japan and South Korea under long term contract. Its coal losses would add more fuel to the booming coking coal market. Rio Tinto has already lifted its offer price by 143% to USD 135 per tonne while the spot price has soared nearly 50% so far this year.

Queensland produces two thirds of world's seaborne coking coal and the deluge has impacted at least six producers in the region, driving up the spot price three times higher than the contract price. The flooding has affected 40% of global coking coal production, the major reason behind the steep price rally these days.

Royal Laser completes acquisition of assets of Winston Steel

Royal Laser Corp announced that it’s wholly owned subsidiary Ontario Limited carrying on business as Venture Steel has successfully completed its previously announced intention to purchase substantially all of the operating assets of Winston Steel Inc, a Mississauga, Ontario based steel service centre. The total purchase price of approximately CAD 9.6 million was satisfied by payment of cash and assumption of liabilities, subject to adjustment for working capital realization.

Winston is a custom flat rolled steel processor specializing in hot rolled, cold rolled and galvanized steel for the tubular, building products, automotive and general manufacturing market sectors. Winston operates out of two plants totaling approximately 145,000 square feet located at Mississauga in Ontario and has capacity to process in excess of 300,000 tons of steel.

Mr Beric Sykes president of Venture Steel said "The addition of Winston to Venture Steel augments our current operations and provides us with additional space and slitting capacity required to service our anticipated growth. We are excited to be a leader in the consolidation of this industry and we believe that this will strengthen our overall operating results going forward. The additional capacity from the Winston acquisition will create improved efficiency in our operations and create additional service capabilities for our customers. These operational improvements will enable us to consolidate our operations from four facilities into two facilities totaling 240,000 square feet.

Venture Steel is a custom flat rolled steel processor specializing in all types and grades of hot rolled, cold rolled and coated steel. Venture Steel operates out of combined facilities totaling approximately 240,000 square feet located in the Greater Toronto Area of Ontario.

Royal Laser Corp, through its wholly owned operating subsidiaries, services steel and manufactures custom wood and metal products targeted at the multi-billion dollar automotive, high end retail in store development industry, the OEM industrial products and construction industries, in Canada, the United States and overseas.

WCC signs deal to buy Falls Mountain Coal

Western Canadian Coal Corp has signed a definitive agreement to buy Falls Mountain Coal Inc from Cambrian Mining plc. Financial terms of the deal were not released.

Falls Mountain owns the Willow Creek coal properties, wash plant and rail load out facilities in northeast British Columbia. The wash plant has a current annual capacity of 2.2 million tonnes with potential to be expanded to approximately three million tonnes of annual capacity to handle coal from both Brule and Willow Creek. The acquired reserves consist of approximately 60% PCI coal and 40% hard coking coal.

Falls Mountain will increase WCC’s run of mine coal reserves by approximately 15.7 million tonnes or about 18%. Western Canadian also said that the deal will help reduce costs in developing its Brule mine to its full capacity by about USD 70 million.

Tenaris 2007 net sales up by 30% YoY

Luxembourg based steel pipe producer Tenaris reported that it made a net income of USD 2.08 billion in 2007 as compared to USD 2.06 billion in 2006. Net sales for the year 2007 rose by 30% YoY to USD 10 billion with EBITDA in the period expanding by 13% YoY to USD 3.45 billion. Total sales volume was up by 23% YoY to 4.31 million tonnes as compared to 3.50 million tonnes in 2006.

Tenaris in a statement said that "Demand for our large diameter pipes for pipeline projects in South America was strong in 2007 as major gas pipeline infrastructure projects in Brazil and Argentina, which had previously been delayed, went forward. Orders for new projects in Brazil and Colombia have been received and we expect to maintain a strong level of sales in this segment in 2008."

It added that “Results for last year reflect steady overall demand for our products and services from the global oil and gas industry. They were achieved in a context of rising costs and a severe decline in Canadian gas drilling activity. We expect our sales to increase in 2008, led by higher sales of specialized, high end OCTG products and that the increase in sales should result in higher operating and net income.”

Tenaris continued that however increased volatility in economic conditions in addition to raw material and commodity prices could impact market conditions for products and services provided by Tenaris and consequently, our results for the second half of the year.

JFE Steel to add new slab caster at Fukuyama

JFE Steel announced that it expands the steel making capacity at Fukuyama area of West Japan works for around JPY 50 billion.

JFE said that it invests for new continuous slab caser with 2.4 million tonnes of annual output capacity, expansion of degasser and new slab treatment facility starting operation in first half of fiscal 2010.

The firm also expands the raw steel output capacity from current 21.5 million tonnes per year to 23 million tonnes in West Japan works for expansion plan for 33 million tonnes for JFE Steel.

Titan Metal opens new steel processing facility at Tampa

Titan Metal Service, Inc a tenant at the Port of Tampa will officially open a new steel processing facility on Hooker’s Point on February 28th 2008. The 50,000 square foot facility has the capacity to process 50,000 to 60,000 tonnes of steel coil annually.

The new facility will include 30 and 15 tonne cranes. For efficiency a six car rail siding enables crane unloading inside the facility. The investment in an indoor rail spur with overhead crane service will also reduce wait time and coil damage from weather and incorrect coil handling methods. They are able to switch up to 12 cars per day.

Titan has also invested in indoor service for truck loading and unloading, to allow for uninterrupted service during inclement weather. Additionally, Titan Metal Service offers a company owned truck fleet for pick up and delivery service.

Mr Richard Wainio port director & CEO said that “This is a great day for the Port of Tampa, as the opening of this modern state of the art facility further solidifies role of the port as a full service steel distribution center gateway.”

Mr Chris Bush GM of Titan Metal Service said that “We are thrilled to bring a first class steel processing operation to the State of Florida and particularly to the Port of Tampa. This facility will reduce inefficiencies in the logistics and processing of steel coils to the manufacturing customer base in Florida and stretching to the Southeast.”

Mr Rossi GM of Titan Metal Service said that “The Port of Tampa provides a wonderful position for our facility. The opportunity to provide ship-to-customer service from one provider will increase productivity for all of our end users. We believe that our investment will further enhance the viability of the Port of Tampa as a long term provider of steel coils in the Southeast.”

Atlas Iron to acquire Haddington's iron ore rights

Australia's Atlas Iron announced that it has entered into an option agreement to acquire the iron ore rights in the Pilbara region of Western Australia from Haddington Resources.

The tenements are between 75 and 160 kilometers from Port Hedland, less than 60 kilometers from the FMG and BHPB railways and less than 60 kilometers from the Great Northern highway. Some of these tenements adjoin the company's Abydos project.

Under the option agreement, Atlas will make an initial payment of AUD 500,000 in cash or in shares and then another AUD 1 million at the time of exercising its option to purchase the iron ore rights. The entire deal is expected to be completed no later than 12 months.

Haddington will retain the right to explore for other minerals on the Pilbara tenements and it plans to continue investigating the tenements for tantalum, tin, base metals and gold. Haddington will retain a 2% gross sales royalty on any iron ore sold from the tenements.

Mr David Flanagan MD of Atlas said that "These tenements are proximal to good infrastructure and prospective for iron ore. We are an active explorer we look forward to getting on the ground, drilling some holes and building on our recent success on adjacent tenements at Abydos.”

South Korea to seek Zimbabwe chrome

Yonhap reported that South Korea's state run mineral resources developer will explore in Zimbabwe for chrome deposits.

As per report Mr Lee Han ho president of Korea Resources Corp met with the African country's ambassador and agreed to expand cooperation in the mineral development sector.

RathGibson to acquires Mid South Control Line

RathGibson a manufacturer of welded, welded and drawn and seamless stainless steel, nickel and titanium tubing has announced the acquisition of Mid South Control Line Inc.

Mid South Control Line Inc established in 1989 is a global source for downhole control line tubing for land based subsea oil and gas wells. The company is located in Marrero at Louisiana in USA. It has supplied major oil companies and service companies throughout the world with coil tubing, encapsulated control line products, instrumentation tubing, NAS class filtration services, spooling units, certification and tubing support products.

Mid South Control Line Inc and RathGibson have partnered on many projects and this acquisition is a natural extension of their on going collaborative efforts.

U Mining Resources update on agreement with the Republic of Guinea

U Mining Resources Inc has provided updates on the Build Own Operate Transfer agreement between its majority owned subsidiary Comitrag SA and the Republic of Guinea. As per the terms of the Agreement, the government of Guinea will grant Comitrag a Mining Concession for the exploration, development and production of a world class iron ore resource located in Guinea.

Under the terms of the Agreement, Comitrag a majority owned subsidiary of U Mining Resources will be responsible for the management and operation of these scheduled infrastructure projects

Significant portions of this world class iron ore resource are currently being developed by a major mining and extraction company, under the terms of a previously issued agreement by the Republic of Guinea.

Revenues generated from the production and sale of iron ore under this additional and markedly smaller concession are earmarked by the government to fund the initial stages of its planned infrastructure upgrade. This upgrade will include the construction and redevelopment of a major railroad line and mineral seaport.

U Mining Resources said that the purpose of this update is to provide our shareholders with a better understanding of the planned financing for the Build Own Operate Transfer agreement, which is being structured by leveraging the Mining Concession.

South Korean CR output reduces

South Korean buyers are looking for new availability, since the domestic mills including Dongbu Steel, Hyundai Hysco have reduced the production output.

As per report South Korea’s domestic major companies have cut output by 30% than the same time of last year. Consequently the prices in April will up again. Besides, the supply of CR sheet and pickling sheet will be tightened.

(Sourced from YIEH.com)

PT Bukit Asam to raise export coal price by 47% - Report

Kontan newspaper citing Mr Eko Budhiwijayanto Corporate Secretary of Bukit Asam reported that Indonesia PT Tambang Batubara Bukit Asam plans to raise its coal price for foreign buyers by 47%.

Mr Budhiwijayanto told the newspaper that the company plans to sell its coal to overseas buyers at USD 70 a metric tonne effective in March or April 2008 as compared with USD 47.50 a tonne currently.

American rebar prices soar on tight supply

YIEH reported that due to good rebar market demand and constricted supply, American domestic rebar mills hope to increase prices in April 2008.

As per report, American rebar price is around USD 797 to USD 808 per tonne at present and it is estimated that American domestic rebar price will maintain its current status in March; although the scrap price trend is towards a decline in April, it is hoped that the rebar price will rise.

In comparing the American rebar price with the international price, the difference is very great, which will push domestic market to raise prices as well.

(Sourced from YIEH.com)

Beaconsfield Gold turns to nickel business

It is reported that the Beaconsfield Gold Mine hopes a nickel exploration program in western Victoria will supplement its Tasmanian operation.

As per report the Victorian government has given the Beaconsfield Gold Mine an AUD 80,000 grant to look for nickel on un mined land in western Victoria.

Mr Bill Colvin CEO of Beaconsfield Gold said that the government shares its view the area has potential. He said that "It is very early days but obviously what we'd be hoping for is to try and repeat the success that Allegiance have had with their nickel discovery down on the west coast of Tasmania and they've grown that from very small beginnings to a very significant business.”

Fincantieri and Aker Yards merger facing EU antitrust issues

Thomson Financial reported that any merger of Italy's state owned shipyard Fincantieri SpA with the Norwegian Aker Yards ASA would face EU antitrust opposition, given that a combined cruise ship builder would have a high market share.

An analyst said that governments in Italy, France and Norway are reportedly looking to block South Korea's STX gaining control of Aker Yards via a tie up with Fincantieri its main rival for building cruise ships.

STX has already bought a 39% stake in Aker Yards, though exercising votes in the stake is subject to EU approval.

Mr Terje Mauer of Oslo based Glitnir Securities said that “I would expect STX to get EU approval for the 39% stake because STX is not in the cruise ship business. The combination would be complimentary and not an aggregation of market shares. So there is no antitrust issue.”

Last December, the European Commission opened an in depth merger investigation, thus suspending the STX stake acquisition and is aiming to take a final decision on the deal by May 15th 2008. The commission said STX was very close to entering the cruise ship market as an independent player and that taking the stake removes this possibility, with potentially anti competitive effects.

European shipyard sources said the commission's investigation into the STX stake should look widely at the impact on competition, including whether STX has been unfairly subsidized in the past.

Areva wins power supply contract from Rio for Alcan smelter

It is reported that French energy giant Areva had signed a contract worth some EUR 80 million with aluminum producer Rio Tinto Alcan, to build a power supply system for its new smelter in Port Elizabeth in South Africa. The announcement was made during Mr Nicolas Sarkozy president of French visit to South Africa.

Under this contract, Rio Tinto Alcan would deliver a conversion substation that would supply the smelter with direct current for the aluminum production process.

Ms Anne Lauvergeon CEO of Areva said that “This contract strengthens our long standing partnership with Rio Tinto Alcan. It represents a step forward towards our global objective to double our order intake for the electro intensive industries by 2010.” She added that the contract also reaffirmed the company’s commitment to strengthen its position in the country’s nuclear industry.

Linde Group FY 2007 sales up by 13.9% YoY

Munich based Linde Group has announced its financial statements for Linde AG and The Linde Group for the 2007 financial year and recommended them to the Supervisory Board for approval. The key figures for The Linde Group in the 2007 financial year, which have already been audited, demonstrate that in the first year following the acquisition of its British competitor BOC, Linde has substantially strengthened its operating business.

On this basis, Group sales increased by 13.9% YoY to EUR 12.306 billion. Group operating profit rose to EUR 2.424 billion which represents an increase of 18.1% YoY. Earnings before taxes rose from EUR 363 million to EUR 1.375 billion. Earnings after taxes from continuing operations showed a corresponding increase from EUR 219 million to EUR 996 million.

Professor Dr Wolfgang Reitzle CEO of Linde AG said that “The new group is solidly positioned and successful. In a short period of time, we have created an efficient global organization and exceeded all expectations for the 2007 financial year.”

The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide. Following the acquisition of The BOC Group plc, the company has gases and engineering sales of approximately EUR 12 billion per annum.

Alpha Natural Resources appoints Mr Buerger as director

The Board of directors of Alpha Natural Resources Inc announced that it elected Mr Hermann Buerger as a director to the board effective February 29th 2008 in conjunction with an increase in the size of the board from eight to nine directors. The Board also appointed Mr Buerger to serve as a member of its audit committee.

Mr Buerger held various senior management positions at Commerzbank AG and was their regional board member and CEO of the Americas at his retirement in 2004. He is currently serves as a director and chairman of the Audit Committees for EMS Technologies, Inc a company that designs and manufactures wireless, satellite and defense solutions and Sapient Corporation.

Alpha Natural Resources is a leading supplier of high quality Appalachian coal to electric utilities, steel producers and heavy industry. Approximately 89 percent of the company's reserve base is high Btu coal and 82 percent is low sulfur, qualities that are in high demand among electric utilities which use steam coal.

Perilya H1 of 2007 profit down by 84% YoY

Australian largest zinc miner producer Perilya has announced its first half profit fell by 84% YoY because of a decline in zinc prices and disruptions to production. Its net income dropped to AUD 12 million in July to December 2007 from AUD 76.1 million.

Perilya in a statement said that despite the healthy figures, earning were affected from a lower than expected production at Perilya's Broken Hill zinc and lead mine. It said that contained zinc production was down 41,000 tonnes while lead production was down 25,000 tonnes.

The statement added that it was in talks for a possible merger with CBH Resources Ltd. to combine their Broken Hill operations. Output from Broken Hill may be cut this half.

Mr Len Jubber CEO of Perilya said that the company has been putting effort into improving its productivity, with a number of notable successes. He added that "We have a changing work force, like any other mine in Australia. We have recently started the Potosi mine and that was an opportunity for local and regional employment, we are starting to ramp up our production at the North Mine and those all give opportunities to move people around."

Hyundai Heavy inks a offshore oil platform deal in Nigeria

Korea Net reported that Hyundai Heavy Industries Co, the world's largest shipyard has clinched a USD 1.6 billion deal to build an oil platform in Nigeria.

Hyundai Heavy Industries in a statement said that the deal with Elf Petroleum Nigeria Ltd a subsidiary of France based Total SA calls on Hyundai Heavy to build the floating production storage and offloading vessel by October 2011.

Aaccording to Hyundai Heavy, the FPSO will be deployed in a massive oil field located 100 kilometers southeast of Bonny Island in Nigeria and the vessel, which is 320 meters long, 61 meters wide and 32 meters deep can store as much as 2 million barrels of crude oil. It added that the facility also can refine 160,000 barrels of crude oil and produce 5 million metric tons of gas on a daily basis.

Hyundai Heavy has won USD 6.7 billion worth of deals to build offshore plants and facilities so far this year, accounting for 25% of its yearly target of USD 26.2 billion in the business.

Bangladesh enters international shipbuilding market

It is reported that Bangladesh will debut in the international shipbuilding market with two ships being handed over to Denmark.

As per report Western Marine Shipyard Ltd, one of the shipbuilding companies in Bangladesh, will formally kick start its historic journey Monday when two ships, made by the company, will be handed over to Denmark. It added that a ceremony marking the auspicious occasion will be arranged at the country's largest shipyard at Patia.

Addressing a press conference at a city, Mr Saiful Islam chairman of Western Marine Ltd said that the company has already received orders for making 18 oceangoing ships. Of them, five will be made for Denmark while 12 for Holland and one for Singapore. He added that it will be possible to earn USD 180 million worth of foreign exchange by exporting those ships.

Bangladesh to develop coal field with own experts

Reuters reported that Bangladesh will develop a coal field with its own expertise to save natural resources in the northern region of the country.

The report quoted Mr Rezaul Halim a senior manager of Petrobangla as saying that the state run Bangladesh Oil, Gas and Mineral Corporation, or Petrobangla, will develop a coal mine at Dighipara in Dinajpur district, 350 kilometer northwest of the capital Dhaka. He added that "We have received a letter from the energy division to develop the coal mine.”

Mr Halim said that Bangladeshi firm Barapukuria Coal Mining Company Limited, a subsidiary of Petrobangla, was extracting coal at the Barapukuria field with technical assistance from a Chinese coal mining firm. He added that "We will also be able to develop and explore this coal field with such foreign technical assistance.”

Another senior energy official said that a number of foreign coal firms had shown interest in this field, but the government was eager to use Bangladeshi expertise.

The current coal reserve in the country's five coal fields was around 2.55 billion tonnes. Of them, the Phulbari coal field was awarded to the Asia Energy Corporation (Bangladesh), a sister firm of UK based GCM Resources PLC.

Turkish company eyeing stakes in Kremikovtzi

Sofia News Agency reported that a Turkish company is interested in acquiring a majority stake in Bulgaria's troubled steelmaker giant Kremikovtzi. The report cited Mr Petar Dimitrov economy & energy minister of Bulgaria as saying that a Turkish company is interested in acquiring a majority stake in Bulgaria's troubled steel giant Kremikovtzi. He did not give details.

Mr Dimitrov told the parliament that "Five investors have expressed an interest in buying the steel mill, and all could be called strategic.

He declined to name the companies, but said two were Ukrainian, one from the US, one Russian and one Turkish.

As per earlier reports, Ukrainian tycoons Mr Kostyantin Zhevago who controls London listed Ukrainian iron ore producer Ferrexpo and Mr Rinat Akhmetov owner of metallurgic firm Metinvest, along with US Steel Corp were vying for the mill. The details of Russian and Turkish companies are yet to be unveiled.

Bulgaria sold 71% stake in Kremikovtzi to the Bulgarian Finmetals Group in 1999 for a token USD 1 along with debts to the state and suppliers standing at USD 420 million. In mid 2005, Global Steel Holding Limited bought Finmetals and took control. Global Steel Holding Limited holds a 71% stake in Kremikovtzi while the government holds 25.3%.

Aramco to spend USD 90 billion to enhance production

It is reported that Saudi Arabia’s oil industry has barely scratched the surface with regards to solutions to carbon sequestration. Mr Abdallah Jum‘ah president of Saudi Armco president "The world simply cannot afford to leave massive quantities of oil, gas and coal in the ground and move precipitously to unproven alternatives while still hoping to satisfy future growth in global energy demand."

Mr Jum‘ah said that "I am deeply concerned that if the prevailing confusion involving energy issues continues and key players scatter in different directions, there is considerable risk that the necessary expansion of energy supplies would be significantly compromised."

He added that "With time, we will need to draw upon a variety of energy sources, including alternatives, to help meet demand. The world community needs to reach a consensus on this issue and clearly articulate a future path so that we can work together."

Mr Jum‘ah also said that Saudi Aramco is planning an investment of USD 90 billion over the next 5 years to help strengthen energy security amid growing global demand.

Saudi Aramco is the world's largest oil company by production and reserves and manages 102 oil and gas fields in Saudi Arabia as of mid year 2007. It has proven crude oil reserves of around 259.9 billion barrels of oil and delivers an average daily crude oil production of 8.9 million barrels per day. In 2006, its crude oil exports stood at 2,541,692,569 barrels.

Turkish court suspends Izmir Port tender

Reuters reported that a Turkish court has suspended a privatization tender for Izmir port, won by a consortium of Hong Kong's Hutchison and Global Investment Holding.

Mr Metin Bayyar lawyer for the Liman-Is union which had appealed for last year's tender to be cancelled told Reuters that the court has suspended the deal, not cancelled it as local media had reported earlier.

The Hutchison consortium, which also includes Turkish port operator EIB, made the winning bid of USD 1.28 billion May 2007 for the operating rights for 49 years to the Aegean port.

Turkish CRC export and import price soaring

It is reported that the global increasing raw material price has generated the Turkish cold rolled coil export price up to USD 150 per tonne from around USD 800 per tonne.

As per market reports “The local sole CRC producer Erdemir is now stopping to export with a new offer undecided. On the other hand, with Russian exporters back to Turkish market slowly, the import price of CRC is going upwards gradually.”

For the past 2 months, the price was also seeing to increase. Currently, the CFR price for CRC imported to Turkey is settled at USD 900 per tonne while for HRC, it is USD 840 per tonne.

Alba accuses Alcoa of overcharging and fraud

Wall Street Journal reported that Aluminum Bahrain has accused US aluminum giant Alcoa of overcharging, fraud and bribery. The suit brought by Aluminum Bahrain BSC in a federal court in Alcoa’s home town of Pittsburgh, Pennsylvania is an unusually sweeping assertion by a foreign government of improper behavior by a US corporation.

Alba alleges that Alcoa overcharged it for an aluminum precursor ingredient, funneled inflated payments to offshore companies and then paid kickbacks to government officials in Bahrain.

However, Mr Kevin Lowery spokesman of Alcoa said that "The suit is an unusually sweeping assertion by a foreign government of improper behavior by a US corporation. We have not had the opportunity to review these allegations and are not in a position to comment. However, we are completely unaware of any wrongdoing by Alba or its employees."

The suit comes amid efforts by Bahrain to root out corruption in its state owned enterprises.

China may build power project at Sinda Jerruk – Report

PakTribune reported that China has conveyed to the government of Pakistan that it wants to build 405 MW integrated coal mining cum power project at Sinda Jerruk at the cost of USD 600 million.

As per report, a 5 member delegation headed by Ms Qin Ruijan VP of China National Machinery Import & Export Corporation, in a meeting Mr Muhammad Ismail Qureshi secretary of water & power has conveyed its desire to set up the power project.

The CMC is the 10th largest state owned corporation of China and is the largest foreign trade enterprise engaged in import and export of machinery products in China having a trade sum of over USD 73 billion and has substantial experience in the development of coalmines and coal based power projects.

Zorlu Enerji submits bids for 9 power stations

Turkish Daily News reported that power firm Zorlu Enerji has submitted bids for 9 power stations being sold by the government.

The power stations are units of state owned Ankara Elektrik Üretim.

Master plan for small & medium industrial zone in Multan

Pakistan Press International reported that federal government has finalized a master plan on small and medium industrial zone in Multan to promote the small and medium industry in this area and providing maximum jobs to skilled workers.

Mr Khawaja Muhammad Jalaluddin Roomi minister for industries of Punjab said that "Credit goes to the caretaker government which got approved a project of gas supply to this industrial estate within shortest time and also labor complex project was approved and funds were allocated."

Mr Roomi said that a dispensary and schools for boys and girls, recreational parks and 600 homes in the first phase would be constructed, while total 1200 to 1500 single storey homes would be constructed and equipped with all facilities like gas, electricity, water, drainage etc. He added that "This project was being shifted to other major city but we used our good offices to stay at Multan."

Earlier, Mr Multan Iqbal Hassan president of industrial estate management board has demanded for not increasing the cost of land in industrial estate Phase II.

Iraqi oil exports in January 2008 up by 6% MoM

According to a statement released by the Iraqi oil ministry, Iraq's crude oil exports rose to 59.6 million barrels in January 2008 up by 6% MoM as against 56.24 million barrels in December 2007.

Iraq's average production stood at 2.4 million barrels per day in January while exports reached an average of 1.92 million barrels per day, the ministry's figures showed. December's exports averaged 1.81 million barrels per day.

Still, an enormous difference in output remained between the southern port of Basra, which exported an average of 1.54 million barrels daily, and the northern city of Kirkuk, which exported nearly 380,000 barrels per day.

Last year, Iraq's oil exports rose 9.2 percent, largely because improved security allowed shipments through a key northern pipeline from the Kirkuk oil fields to Turkey's Ceyhan terminal on the Mediterranean Sea.

Total oil exports in 2007 reached nearly 600 million barrels, an average of 1.6 million per day. The vast majority of the oil was exported from Basra, while nearly 40 million barrels were exported from the north.

RasGas joins hands with QCVA for CSR work

The Peninsula reported that, under its corporate social responsibility, RasGas Company Limited has joined hands with the Qatar Centre for Voluntary Activities to support its awareness campaign promoting the value and benefit of voluntary work.

Mr Abdulla Hashim public relations manager of RasGas has presented a cheque to Mr Yousuf Ali Al Kazim secretary general for QCVA and the Arab Federation for Voluntary Activity on behalf of RasGas.

Mr Hashim said that "RasGas is committed to working with organizations such as QCVA to provide not only financial support but to assist them in their mission of raising awareness in Qatari society about the importance and indeed the personal rewards, of voluntary work. Through our CSR program RasGas aims to foster an environment that values the role of voluntary activities."

DP World appoints new executives

DP World has announced the appointment of Mr Flemming Dalgaard as senior VP & MD of its Europe and Russia region and Mr Anil Singh as senior VP & MD of its Africa region.

Mr Dalgaard joins DP World in April 2007 from Maersk Line, where he is currently UK and Ireland MD. During his 20 career with Maersk Line, he has worked around the world, including in Africa, the Middle East, Europe and the Far East. He has also worked on various marine terminal projects for Maersk Line in Germany, China and the UK.

Mr Singh joined DP World February 2008 from Thailand, where he was Group CEO of Laem Chabang container terminals B1 and A0.

Chinese offers for steel export surge in this week

It is reported that export offers for Chinese steel products are up strongly this week as most steel producers were quoting higher prices due to surge in home market price and expectation of further rise in input cost but transactions were said to be fairly well and there seems to be further room for increase.

Chinese hot rolled steel coil export prices went up substantially this week reflecting the boom in domestic market. Offers for commercial HRC are prevailing at US 800 to USD 810 per tonne on FOB basis a jump of US 50 to US 60 per tonne from early February.

Steel plate prices, which have always been on the increase since 2007, are still on an upward trend with another round of price jump in this week. Commodity grade steel plate is still being quoted at USD 870 to USD 880 per tonne on FOB basis by tier two steel makers and USD 885 to USD 900 per tonne on FONB basis by tier one producer.

Cold rolled steel coil export prices went up substantially this week, reflecting the strong rise in home market prices. Steel producers are said to be raising export prices in succession and offer for 1.0 CR coil is prevailing at US 855 to USD 860 per tonne on FOB basis as compared to USD 800 to USD 810 per tonne in early February.

Export offers for rebar and wire rod also went up this week reflecting the rise in production cost. A Jiangsu based steel producer has raised its rebar quotation to USD 810 per tonne on FOB basis up by almost USD 50 per tonne from the level before holiday. Offer for commercial wire rod has gone up to around USD 840 per tonne on FOB basis up by USD 50 to USD 60 from early February.

(Sourced from MySteel.net)

Wuhan Steel's price hikes beyond market expectation

It is reported that Wuhan Iron and Steel Company Limited hiked its April 2008 prices significantly recently. Analysts believe the price advances have surpassed market expectation and strengthened confidence in future steel industry.

1. HRC, common carbon, low alloy and quality carbon products price up by CNY 300 per tonne
2. Wheel steel price up by CNY 400 per tonne
3. CR and common carbon products price up by CNY 600 per tonne
4. Quality carbon coil price up by CNY 700 per tonne
5. Grain oriented silicon steel price up by CNY 1500 per tonne to CNY 1700 per tonne.
6. Non grain oriented silicon steel or higher grade price up by CNY 200 per tonne for 500
7. Others product price up by CNY 450 per tonne
8. Medium plate price up by CNY 500 per tonne
9. HDG price up by CNY 700 per tonne

The prices came into effect on February 28th 2008.

According to Guosen Securities, Wuhan Steel notably raised prices, in virtue of advanced product mix. As output of its newly operated CR project exceeds previous expectation, CR galvanized steel products take a bigger proportion in all the products besides, the steelmaker has realized mass production of high grade HIB, which is badly needed in the constructions after the snowstorms. It noted the price hike elevated the possibility that Wuhan Steel would harvest a better than expected sales revenue in this year.

China Iron and Steel Association said Chinese steelmakers would face higher production costs as iron ore price rockets and prices for steel products both at home and abroad would maintain on a high track in 2008.

China starts up nationwide iron ore exploration program

It is reported that the land and natural resources department of China has started iron ore exploration to ease the stress of rising iron ore prices.

Mr Wang Min the vice minister of LNRD said "To launch the iron ore exploration and achieve prospecting breakthrough is the effective way to increase the support capacity of domestic iron ore resources."

He said that China's central leadership had clearly pointed out that the mineral resources strategy of China is based on domestic resource first and then actively exploit overseas. He added that the first and foremost task is to find large mines in China to ease the resources pressure.

The international iron ore price has rise 65% in 2008 making China's steel production costs sky rocket by nearly CNY 400. As a result, China Steel Industry Association and the Department of Commerce called on the same day for domestic steel enterprises to increase investment on mining in foreign countries, individually or jointly with other companies.

Handan Steel Hikes Prices for HR and CR Products

It is reported that Hebei's Handan Steel raises March 2008 prices for some products, on the basis of the prices published on January 28th 2008

Q235 3.0mm HRC is now offered at CNY 4390 per tonne
5.5mm HRC is offered at CNY 5260 per tonne.

HR price up by CNY 560 per tonne
Pickled and PPGI price up by CNY 600 per tonne
HDG price up by CNY 700 per tonne
CR price up by CNY 650 per tonne
Full hard price up by CNY 650 per tonne

Prices listed above are inclusive of 17% VAT effective from February 27th 2008.

(Sourced from MySteel.net)

Hanbao orders for automation and drives for pickling line

Siemens Metals Technologies is supplying the complete automation and drive technology for a new, five stand coupled tandem pickling line of the Chinese Hanbao Iron & Steel Company Ltd. The project is part of the company's expansion of its cold steel strip production. The new line is scheduled to start production by mid 2010.

For the new coupled tandem pickling line, Siemens is supplying the drive technology and the entire automation system. Non salient pole synchronous motors will be used as the main drives and will be supplied with power via DC link converters. Automation of the plant will be based on the Siroll CM solution concept and will include the technological control systems as well as the complete process automation. Gauge control according to the advanced mass flow concept, online rolling process control on the basis of analytical mathematical models and self learning neural networks will also be provided as well as the flatness measurement and control system.

In addition, the order includes HMI equipment with user friendly process and plant diagnostic functions. Moreover, Siemens will supervise assembly and installation of all the components, while also being responsible for commissioning and customer training. The power supply system, the motors for the auxiliary drives and all the infrastructure devices and equipment will be provided by Chinese companies.

Handan Iron and Steel Co and the Baosteel Group Hanbao Steel JV Hanbo Iron & Steel Company Ltd is located at Handan in Hebei Province about 400 kilometers south of Beijing and is building a new 2080 mm cold rolling mill for automotive applications with a capacity of 2.15 million tonnes a year. The first coupled tandem pickling of Hanbao Steel is operating since 2005, and has also been equipped with electric and automation from Siemens.

Analysis of Chinese ferroalloy exports in 2007

China exported 3.209 million tonnes of ferroalloys in 2007 to 84 countries.

Ferrosilicon accounted for 48.1% of total ferroalloy exports

In tonnes

Japan accounted for 34.3% of Chinese ferroalloy exports in 2007. The top 20 destinations accounted for 92.9% of China’s total exports of ferroalloys in 2007.

In tonnes

Item wise and country wise details are as under

In tonnes

Baosteel, Shanghai Auto and Nanjing Auto to jointly operate tooling project

It is reported that Baosteel Group, Shanghai Automotive Industry Corporation Group and Donghua Co signed a pact on February 28th 2008 to recompose Nanjin Motor Group Tooling Company Ltd agreeing to take 35% stake each in the new company once regrouped.

As per report this cooperation is a successful attempt by the three parties to carry out the nation's industrial policy of promoting cross region and industry linkage economy.

Donghua Company is a fruit of partnership between SAIC and Nanjing based Yuejin Automotive Group operating assets of part and components of the former Nanjing Automobile Group. The two founders take 75% and 25% shares respectively in Donghua.

Yuan hits new high against US dollar

It is reported that the Chinese currency hit a new high breaking the 7.13 mark to reach a central parity rate of CNY 7.1209 to one US dollar. The yuan, also know as the Renminbi climbed 246 basis points from the previous trading day. It was the 18th new high for the yuan since the beginning of this year.

Observers said the appreciation was mainly caused by the overnight US dollar decline. The yuan has appreciated more than 13% since it was de pegged from the dollar in July 2005. It climbed 6.9% against the dollar in 2007. However, some US critics said it remained undervalued, giving Chinese exporters an unfair advantage and contributing to the massive trade imbalance between the two countries.

Analysts said that the yuan's appreciation would help reduce the country's massive trade surplus, mop up excess liquidity and curb inflation.

They forecast that the Chinese currency would rise at least 7% to 10% against the US dollar for the whole year.

China Railway Construction IPO raises USD 3.1 billion

It is reported that China Railway Construction which built part of the controversial train line to Tibet raised CNY 22.25 billion from a domestic initial public offering.

China Railway Construction said in a statement filed with the Shanghai Stock Exchange that the company priced the CNY 2.45 billion denominated A shares offered at CNY 9.08 each, the top end of an indicative range of CNY 8.00 to CNY 9.08 per share.

It said the price valued the company at 30.56 times 2007 projected net profit based on Chinese accounting standards. The offering attracted about CNY 3.1 trillion of subscription funds with the retail tranche 156 times oversubscribed and institutional tranche 78 times oversubscribed.

Nearly two years after the world’s highest railroad was completed at a cost of USD 1.4 billion, the International Campaign for Tibet said it was accelerating an influx of Han Chinese into the region and threatening its fragile high altitude environment.

Hebei to build world's largest coal export port cluster

It is reported that Hebei province, in northern China will build three modern comprehensive ports, including Qinhuangdao Port, Tangshan Port and Huangyi Port in the next three years. This will become the world's largest coal export port cluster.

In 2007, the design and handling capabilities of ports in Hebei doubled growing to 392 million tonnes and 399 million tonnes respectively, from 170 million tonnes and 140 million tonnes in 2002. And Qinghuangdao Port is the world's first and largest port to transport more than 200 million tonnes of coal.

China tightens environmental standards

It is reported that Chinese corporate polluters may have a harder time raising capital if they do not improve and disclose their environmental performance.

The International Herald Tribune reported that Beijing has enacted a green securities plan to make polluters comply with stricter environmental standards. The move comes in the wake of the closure of China's largest plastic bag producer just a few months after the government enacted a plastic bag ban.

Mr Pan Yue deputy head of the State Environmental Protection Agency, said "It will curb excessive growth in highly polluting sectors, reduce capital market risk and spur listed firms to improve their environmental performance."

Under the green securities program, sectors such as thermal power, steel, cement and aluminum need the agency’s approval before they can apply to sell shares. The agency objected to the capital raising plans of 10 of the 37 listed companies; eight eventually sold shares after making pollution related improvements while some used the raised capital to expand production rather than make planned environmental improvements.

China to implement metal materials market management criterion

It is reported that China's industrial standards Technical specification of Management on Metal Materials in Market of Transaction will start implement from March 1st 2008.

As per report Metal material market of transaction is one of most important merchandise marts in China's production material markets and also an important channel for metal material transport. These metal materials mainly include steel, iron, aluminum, cooper, zinc and other alloy materials, not including gold, sliver, platinum and other precious metals.

Official from commerce department of China said that the standard contents include two aspects:
1. From site selection, field environment, transaction ground environment, facilities and equipment etc four aspects, make market regulatory requirements to the market operating environment.
2. Introduces the ISO9001 standard management ideas and methods, from the merchandise quality management, franchiser management, service management, and the establishment of market etc four aspects, make regulatory requirements.

Russia approves ArcelorMittal coal mine buy from Severstal

RIA Novosti reported that Russia's Antimonopoly Service has approved on a bid from a subsidiary of ArcelorMittal to buy Russian coal assets.

Russian Federal Anti Monopoly Service in a statement on its Web site said that "The completion of the deals will not result in limiting competition on the commodity markets in question.”

Mittal Steel Holdings AG, 100% owned by ArcelorMittal, will now be able to buy 100% of voting shares in six Russian coal companies.

Severstal earlier signed a contract with ArcelorMittal to sell 97.6% in the Beryozovskaya mine and 99.35% of the Pervomaiskaya mine for USD 650 million. Both mines are located in West Siberia's Kuzbass coal basin and handle coking coal production. ArcelorMittal will also buy up all the shares of the Anzherskaya mine, owned by Severstal's affiliates, for USD 70 million. The three mines together have total reserves of more than 140 million tonnes and produced 3.14 million tonnes last year. The Zhernovskaya-3 deposit has additional estimated reserves of 46 million tonnes.

Evraz intends to invest in the rails production

It is reported that in 2008 to 2011 Evraz Group S.A intends to invest EUR 500 million in the reconstruction of the rails production. FIS cited Mr Alexander Frolov board's chairman & CEO of Evraz as saying that in 2008 to 2011, Evraz Group is planning to invest EUR 500 million in the reconstruction of rail and rail wheel production.

The report said rail production at Novokuznetsk Metal Integrated Works will grow to 750,000 tonnes by 2011 and at Nizhniy Tagil Metal Integrated Works to 950,000 tonnes.