JSL plans INR 6,000 crore CAPEX for 2 years

BS reported that Jindal Stainless Limited is planning to spend INR 6,000 crore over the next 2 years for expansion of its manufacturing capacity. The bulk of the investment would go into the construction of phase II of its stainless steel plant at Jajpur in Orissa.

Mr Ratan Jindal vice CMD of Jindal Stainless said that "We would spend about INR 5,600 crore in the setting up of second phase of 0.8 million tonnes per annum of steel in Jajpur in Orissa. The plant would be commissioned by 2012." He added that it has already invested INR 2,250 crore in setting up of phase I of 0.8 million tonnes capacity in Jajpur.

Mr Jindal said that it would borrow INR 3,200 crore from Indian and foreign banks for this project, while INR 1,000 crore would be accumulated through external commercial borrowing. Another INR 1,200 crore would be invested through internal accruals and promoters would infuse equity of the balance amount of INR 200 crore.

He said that expansion plant at Hissar in Haryana would require INR 400 crore. He added that "We would take our current cold rolling capacity of 0.275 million tonnes at Hissar to about 0.4 million tonnes by the end of 2009. The investment in Hissar plant would be done mainly through internal accruals."

With new capacities being planned in two phases of 0.8 million tonnes each in Orissa, the total capacity of Jindal Stainless would be 2.5 million tonnes by 2012, making it one of the largest integrated stainless steel manufacturers in the world. It also plans to expand its ferrochrome unit in Vietnam from the existing 60,000 ton to 200,000 tonne.

Indian Railways scrap sales in 11 months up by 28% YoY

Indian Railways has posted INR 2,355 crore through the sale of scrap material in April 2007 to February 2008 period up by 28% YoY as against INR 1,834 crore in April 2006 to February 2007 period.

Usually, Indian Railways sells thousands of tonnes of scrap, over 12,000 to 16,000 wagons, 1,200 to 1,300 coaches, 50 to 100 locomotives, every year through tenders or public auction. The increase is on account of rise in quantity of scrap being sold as well as firming up of metal prices.

In the current fiscal, Indian Railways had a target of generating INR 2,000 crore earnings from sale of scrap. As part of disposing of the over aged assets, Indian Railways aims to scrap 17,400 four wheeler wagons in the current fiscal. This includes almost 3,400 wagons with vacuum brakes, which would be sold off.

In 2006-07, Indian Railways had earned INR 1,834 crore through scrap sale, while in 2005-06 the amount was INR 1,365 crore and in 2004-05, Indian Railways had earned INR 1,032 crore from scrap sale.

Indian railway’s scrap items comprise worn out rails, unserviceable items, condemned machinery and plant, rolling stock wagons, coaches and locomotives.

2 major SS SEZ to come up in India – Report

It is reported that stainless steel could shine brighter in India as in their scramble for market share the steel makers want to locate users of steel next to their factories in special economic zones. Jindal Stainless Limited and Steel Authority of India Limited have plans to capture customer right next to their stainless steel plants.

SAIL is increasing capacity of its stainless steel plant in Salem to up total capacity to 1.5 million tonnes from 0.65 million tonnes by 2010 and JSL is setting up a Greenfield 1.6 million tonne SS plant in Orissa. Accordingly, both are setting up SEZs in Orissa and Salem to have customers just next door.

Mr Ratan Jindal vice CMD of JSL said that "We are setting up an SEZ next to our Orissa plant on a 300 acre land which will have shops, which use our steel for making products. It will give us assured customer with no export expense since rupee appreciation is making exports less attractive."

The formation of SEZs are becoming quite a trend in stainless steel sector and with more international players setting up shops in India, competition is going to rise within the coming period.

BHEL to acquire BHPVL to enhance manufacturing capacity

It is reported that Bharat Heavy Electricals Limited is planning to acquire Bharat Heavy Plates & Vessels Limited to augment its power equipment manufacturing capacity.

Visakhapatnam based BHPVL manufactures combustion systems, including industrial boilers and fired heaters, cryogenic systems, multi player vessels, LNG import terminals and other utility systems to be used by power generation units.

Mr K Ravi Kumar acting CMD of BHEL "We are talking to them for an acquisition. We expect a decision by the first half of the next fiscal year. It will probably acquire the entire company, depending on various factors."

Mr Kumar said that BHEL is looking for more domestic acquisitions in the engineering space. He added that "We are looking at acquisitions worth INR 300 to INR 400 crore each. We have recently got some contracts from Sudan at coal based plants."

He also said that BHEL will spend INR 4,200 crore to augment its capacity to make equipment to generate 15,000 MW of electricity by 2009, from the current 10,000 MW.

Update on ongoing power projects in India

Mr Sushilkumar Shinde union power minister said that according to information available with Central Electricity Authority, 120 generation projects aggregating to 66,862 MW were under construction as on December 1st 2007. He added that an estimated expenditure of approximately INR 93,700 crore has been incurred on these projects and the anticipated requirement to complete the projects is estimated to be approximately INR 187,800 crore.

Out of the projects under construction, 24 thermal, 30 hydro and 4 nuclear projects have reported some delays. The segment wise details are under

Source: Central Electricity Authority

CIL NCL and NLC to form JV for coal based power project

It is reported that Northern Coalfields Limited and Neyveli Lignite Corporation have signed a MoU to form a 50:50 JV for setting up a 1,000 MW coal based power station at Gorbi mines in the Singrauli Coalfields of Madhya Pradesh.

The setting up of the pit head power station at Gorbi mines will help NCL directly feed the power stations of Panipat, Rajghat and Indraprastha.

The INR 5,200 crore project also includes mine development. Of the total cost, around INR 4,500 crore will be for setting up the power unit and another INR 700 crore will be invested for development of mines.

CIL officials said the necessity to set up pit-head power stations was mostly because of evacuation problems currently faced by its subsidiaries and huge amount of coal is lying unutilized on the mine heads.

NLC is also holding talks with CIL’s Mahanadi Coalfields for setting up a 2,000 MW pit head power unit at Vasundhara mines in the Ib Valley coalfields.

Steel output may touch 300 million tonnes by 2020 – Mr Rao

Mr Y Sivasagara Rao joint MD of JSW Steel Limited said that India’s target of 200 million tonnes by 2020, as envisaged in the steel policy, can be achieved and in fact the output may even touch 300 million tonne mark, but there are quite a few challenges ahead.

Mr Rao, while addressing at the 'Global Steel Conference Vision 2020', said that land acquisition, allotment of captive iron ore mines, logistics, upgrading of technologies and environment were some of the key issued to be faced by the industry in reaching the goal. He added that finding the right human resources is also crucial.

He suggested a package for land acquisition for the new projects. He said that “The displaced family should be paid the market price for the land, and shares should be allotted equivalent to the value of the land out of the promoters’ quota, subject to the condition that they should not be sold till commencement of commercial production. A job should be given to a member of each displaced family and training should be imparted to the member, if necessary.”

He said "This package has worked well in West Bengal where we have acquired 4,500 acres for our 10 million tonne steel plant. India, too, should conserve iron-ore like China. Otherwise, our reserves may be exhausted by 2041 and we may have to import ore then."

Mr Sivasagara Rao said that logistics too presented a major problem, as four tonnes of material would have to moved for every tonne of steel produced and therefore the railways, ports and roadways should be upgraded to handle at least 800 million tonnes by 2020.

RITES and Ircon to get relief on old Iraq projects

Indian government has decided to provide relief to Indian Railways’ public sector units RITES and Ircon International against outstanding dues of INR 133.81 crore for projects executed in Iraq in the 1980s. Centre has also decided to provide the interest rate in cash.

According to an official release, the cabinet committee on economic affairs has given its approval for providing relief against the outstanding dues of RITES and Ircon International for projects executed in Iraq in the 80’s on deferred payment basis.

RITES and Ircon will be paid the balance amounts as per the approved exchange rate of INR 47.86 per dollar. They will be also paid balance amounts of INR 117.75 crore and INR 16.06 crore respectively in cash through additional budget allocation provided by ministry of finance to railway ministry. Moreover, they would both be paid interest in cash at 8.75% per annum, effective from October 2001.

The move comes in the run up to the initial public offer of RITES and as Indian Railways mulls an Ircon IPO.

Indian Railways freight loadings in February up by 14% YoY

Indian Railways has carried 70.54 million tonnes freight traffic in February 2008 up by 14.38% YoY. Though Railways has not yet released the commodity wise loadings figures, it has been seeing higher loadings in iron ore and cement traffic in the last few months.

Indian Railways carried 714.25 million tonnes of freight traffic during April 2007 to February 2008 period up by 9% YoY.

Blackstone acquires minority stake in Titagarh Wagons

It is reported that private equity fund Blackstone has picked up a minority interest in Titagarh Wagons for INR 672 a share in a pre IPO placement.

It is learnt that Blackstone has bought nearly 235,000 shares for around INR 16 crore from the Strategic Ventures Fund of Mauritius, which bought equity in Titagarh in July 2005 for INR 976 a share. But its acquisition cost came down, following a 1:8 bonus issue. The bonus issue also brought down the average cost of acquisition of shares by the promoters to INR 1.1 apiece.

Blackstone is the fifth major investor to put money in Titagarh Wagons. The other investors include GE Capital Infrastructure with 15%, JP Morgan with 5%, 2i Capital with 6% and ChrysCapital with 6.5%.

Kolkata based Titagarh Wagons will sell 2.38 million shares in the primary market through an entirely book built issue. It will sell 2.06 million fresh shares while two investors will offer 315,000 shares through the issue. It is expected to announce the price band for the issue in a couple of days and the public issue is likely to be opened next week.

Titagarh Wagons is a leading railway freight wagon manufacturer. It makes railway wagons, balley bridges, heavy earth moving and mining equipment, steel and SG iron castings. It is one of the approved vendors for defense manufacturing as an industry partner to the Defense Research & Development Organization, Ministry of Defense and also manufactures other products for the Indian defense establishment, such as special purpose wagons, shelters and other engineering equipment.

Iron ore price negotiations – Vale defends direct talks

Brazil's Vale the world's biggest iron ore miner told the World Steel Conference that it will stick to direct price negotiations with clients and ruled out the use of trading houses as mediators.

Mr Jose Carlos Martins executive director of Vale's Ferrous Metals said that trading houses were to a big extent responsible for the recent oil price rally that took a barrel to record highs above USD 100. Mr Martins said that "When we negotiate, we do it face to face, with no trading companies involved. There are no mediators. I don't think any floating system will help to balance out demand and supply.”

He said that the current system has been working efficiently for 30 years.

Vale has just hammered out an iron ore price rise of 65% to 71% with its clients for this year.

ArcelorMittal SA to fight power plant lawsuit

It is reported that ArcelorMittal South Africa will fight a legal summons from power developer EcoElectrica asking for damages after its JV power plant project with ArcelorMittal was canceled.

ArcelorMittal South Africa a unit of the world's largest steelmaker, ArcelorMittal said that there is no clear legal basis for the claim of damages with regard to the cancellation of a 120 MW co generation power plant project that would have sourced waste gas from ArcelorMittal's Vanderbijlpark Steel Works and then sold the electricity to state owned electricity company Eskom under a long term contract.

According to an ArcelorMittal spokesman EcoElectrica is seeking ZAR 27.1 million (USD 3.4 million) in damages.

ArcelorMittal in a statement said that "After an investigation, it was determined that the project would not be financially viable on the basis of the proposal made by EcoElectrica. EcoElectrica chose not to continue with the project development on terms proposed by ArcelorMittal South Africa and as a result no commercial agreement could be reached between EcoElectrica and ArcelorMittal South Africa.”

EcoElectrica in a statement said that the steelmaker canceled the project in order to register the same project with Eskom independently. ArcelorMittal then offered EcoElectica ZAR 2 million to purchase one of its consents and informed the entrepreneurs that it wished to pursue the project independently of EcoElectrica. "We were shocked to learn of Mittal's duplicity," said Chief Executive Vanessa Gounden, who claims Mittal used the due diligence process to secure key project information on the ZAR1.2 billion project.

Japanese ferrous scrap price export hits record

JMB reported that Japanese ferrous scrap export price hit record JPY 50,000 per tonne for H2 grade.

As per report successful bid increased by JPY 6,700 JPY 52,250 per tonne from Tokyo bay for April shipment at monthly tender held by Kanto Tetsugen on Tuesday.

Iron ore price negotiations - CRU sees decline after 2009

According to CRU Analysis, iron ore prices will fall after 2009 as increased supply from producers such as BHP Billiton Ltd and Cia Vale do Rio Doce begins to match demand from China.

Ms Helen O'Malley senior consultant in steelmaking raw materials at London based CRU at a conference in Perth said that ''Growth in supply will eventually catch up with growth in demand. Iron ore prices will retreat from 2009.''

Ms O'Malley in an interview said that ''After 2010 prices will fall off moderately, but they won't necessarily drop dramatically.” She's forecasting a gain between 10% and 20% in 2009. ''But if all the supply that we have anticipated doesn't come on, this will keep the market tighter for a longer time.''

Ms O'Malley said that ''It is fairly unlikely they will be able to achieve more than 71% that would break from the tradition of the past.'' She said that China's iron ore output is slowing because of rising costs, infrastructure constraints and lower grades. It will become more dependent on imports.

Ms O'Malley said that shortage of raw materials is crimping steel output, which grew 16% in 2007 compared with 23% in 2006. Steel prices in China gained USD 100 a tonne in the past month and are approaching USD 1,000.

She added that ''The steel price rises have been very aggressive of late, and added to that, further price rises are in the pipeline with no signs yet of widespread customer resistance.”

Quanex gets favorable ruling on Gerdau deal

Quanex Corp which is expected to sell its auto unit to Brazil's Gerdau SA said that a Texas court has denied an investment firm's request to temporarily halt the deal.

Quanex a maker of steel and aluminum components for the auto and building industries said a Harris County state district court denied Momentum Partners' request for a temporary injunction of Quanex's pending deal with a Gerdau subsidiary.

Momentum Partners had filed a motion for a temporary restraining order as part of a class action lawsuit.

Quanex said last November its board approved the spin off of its building products business. After the spin off, Gerdau is expected to pay about USD 39.20 per share in cash for the auto unit. The sale price indicated a total enterprise value of about USD 1.67 billion for the auto products business, as of November, when the deal was announced.

ArcelorMittal Trinidad steel workers protest over wages

Reuters reported that a trade union representing workers in Trinidad employed by ArcelorMittal threatened to intensify a protest over compensation.

The workers said that ArcelorMittal was supposed to establish an Employee Share Ownership Plan under an agreement with the government when it bought the formerly state owned steel company 14 years ago. The union estimates the value of the 40% shareholding was between USD 300 million to USD 350 million.

Mr Philip Sancho secretary general of the Steel Workers Union told Reuters that "We shut down production and workers used their lunch time to protest and they will do so until we decide to step up the pressure and take further action against Mittal.” He added that since the beginning of the year, workers have been protesting during their lunch breaks. When the government sold the Iron and Steel Company to Mittal Steel, 40% of the shares were to be listed on the local stock exchange. 10% of those shares were supposed to be held in an employee share ownership plan.”

Mr Mariano Browne junior finance minister of Trinidad said that he does not think an ESOP was ever set up by Mittal Steel. He said that "I don't think they've set up the ESOP for one reason or the other. I think this goes back to six or seven years ago.” Mr Browne told reporters that the company argued that incentive bonuses were distributed in full. Under normal employee share purchase schemes, workers might have been able to convert the incentive bonuses into shares.

Mr Fazad Mohammed a spokesman of ArcelorMittal said that the company would continue talking with the workers in the hope of reaching an amicable agreement.

Gulfside Minerals inks deal on Mongolian coal project - report

Gulfside Minerals Ltd on Friday said it has entered into a definitive agreement on its Mongolian coal project.

Completion of the acquisition is subject to the approval of the TSX Venture Exchange. Once approval has been received, the company would be issuing a comprehensive news release outlining the details of the acquisition.

Norwest Corporation a coal consultancy based at Salt Lake City in Utah would finalize the NI 43 101 technical report on the coal property.

Koba smelter to re start

It is reported that Indonesia’s PT Koba Tin is expected to recommence production at its smelter on Bangka Island on Monday. As per report output has been stopped since January 29th 2008, on the orders of the local police chief, following allegations that the company’s sub contractors had been involved in illegal mining on forest land. Police have alleged that two contractors were involved in illegal mining.

The smelter has a capacity of 2,000 tonnes per months, but had been operating at a rate of 1,000 tonnes per months prior to the latest police action. About two thirds of this production comes from the company’s own mining operations, while until January some 350 tonnes per months was obtained from sub contractors. Koba introduced the sub contracting system with the approval of the Department of Mineral Resources and other authorities last August.

However last week Koba’s majority shareholder Malaysia Smelting Corporation said in a statement that on further investigation “It was discovered that one of them was no longer a sub contractor of PT Koba Tin. The alleged production from the other sub contractor under investigation was part of a shipment of only 3 tonnes to PT Koba Tin internal control measures and investigation have confirmed that all production from its appointed sub-contractors have been derived from mining activities carried out within the Company's Contract of Work area and outside of the forest area.”

Crude oil rises to record USD 111 in New York

Bloomberg reported that crude oil rose to a record USD 111 a barrel in New York as the sinking value of the dollar attracted investors to commodity markets.

Crude oil for April delivery rose 41 cents or 0.4%, to settle at a record $110.33 a barrel at 2:49 PM on the New York Mercantile Exchange. Brent crude for April settlement rose USD 1.27 or 1.2% to USD 107.54 a barrel on London's ICE Futures Europe exchange.

Mr John Kilduff senior vice president of energy at MF Global Ltd in New York said that ''Energy trading continues to be dollar dominated. The reverberations from the credit markets and US economic policies are creating an inflation wave in hard assets and traditional inflation havens. Unless and until the dollar policy changes, energy prices will continue to soar.”

Energy and metals prices have surged over the past year as the US currency plunged, prompting investors to seek a hedge against inflation. The euro rose over the past year as the Federal Reserve cut rates amid the worst housing slump in a quarter of a century and USD 190 billion of US subprime mortgage related losses and markdowns by financial institutions.

O'Neal Steel acquires Southern Nickel and Titanium Company

Birmingham Business Journal reported that Birmingham's O'Neal Steel Inc has acquired Southern Nickel and Titanium, a metals distributor based in Houston. Financial terms were not disclosed.

Southern Nickel and Titanium is a distributor of nickel titanium alloy and stainless steel. It will be folded into O'Neal subsidiary Aerodyne Alloys, which is based at South Windsor in Conn.

Mr Greg Chase president of Aerodyne in a statement said that "We are excited about the acquisition of Southern Nickel and Titanium because it now gives Aerodyne Alloys a presence in Texas and diversifies the industries we serve.”

O'Neal Steel is a family owned, full line metals service center with annual sales of more than USD 2.3 billion. It has 80 locations in the North America, Europe and Asia.

Strike eyes sale of Peru iron ore mines

Junior explorer Strike Resources Ltd said that it is discussions on the possible sale of its iron ore interests in Peru and in talks with steelmakers for potential supply.

Strike said it had been in discussions over the past several months with certain parties regarding the part or entire sale, of its iron ore interests in Peru or a potential investment in the projects. It said that the size or quantum of such a transaction is significant and if finalized would value the company's interest in these iron ore projects at an amount substantially greater than the company's current fully diluted market capitalization of AUD 254 million.

Strike said it was also conducting preliminary discussions with steel mills in China and Japan in relation to the potential supply of iron ore.

The company holds the Apurimac and Cuzco projects north east of San Juan in Peru and has flagged plans to produce up to 20 million tonnes of iron ore per annum by 2011.

Steel imports more competitive than domestic steel in Vietnam

Vietnam steel traders implied that imported steel from overseas countries, especially China, is more profitable than domestic steel, since the imported pig iron price has surged dramatically recently.

Some traders even said that they could get more profit by importing steel products from China rather than purchasing those from local mills. They said "We receive additional profits of USD 60 to USD 70 per tonne if we buy the steel from China."

Over the past few months, the steel supply on the domestic market has not been able to meet demand, causing steel prices to increase.

A figure from Viet Nam General Customs shows that in January 2008, nearly 872,000 tonnes of steel were imported into the country. Of this, more than 50% was from China.

European HR import price touch new high of USD 1,000 per tonne

European import price of hot rolled coil has reached above USD 1,000 per tonne. The price surge mainly resulted from high market demand, high raw material cost and tight import supplies.

Traders in Europe said that although the local mills’ price and importer price is almost the same, they prefer to purchase locally because the local mills are able to deliver earlier.

(Sourced from YIEH.com)

Boulder Steel Euro Forming poised for growth

Boulder Steel Ltd announced that its 50% owned Euro Forming Services GmbH is set for significant growth in the 2008-09 year from its operations in Germany and Austria.

In Germany Euro Forming Services GmbH has received a new contract for the production of further 2 meter airbag containers from an existing customer. This contract will start in August and it will generate EUR 6.6 million revenue over a three year contract period.

Euro Forming Service’s current contract for the production of gas dampening cylinders has been enhanced to allow for the production of an additional 10,000 units per month. This will generate additional revenue of EUR 960,000 a year.

To enable Euro Forming Services to increase its plant capacity to accommodate the new contracts it is planned to extend the building of the manufacturing plant in Bitburg.

Funding for this extension is readily available from cash flow and bank loan. Meanwhile, the new production plant in Austria is completing preparation for the start of production in July.

RAG proposals on resumption of mining in Saarland - report

Westdeutsche Allgemeine Zeitung citing no sources reported that RAG Deutsche Steinkohle the operator of Germany's remaining hard coal mines will present proposals on the resumption of mining in the German state of Saarland.

At the end of February, Saarland issued a complete halt to coal mining after an earthquake induced by mining activities led to severe damage to buildings in the region. The sudden halt to hard coal mining affects German utilities RWE AG and E.ON AG that operate several hard coal fired power plants in Germany.

As per report, German miner RAG will keep digging for coal in southwest Germany until 2012, but with reduced activity, despite an earthquake last month which the firm says was caused by mining. An earthquake measuring 4.0 on the Richter scale shook the Saarland region in February, causing large cracks in buildings and cutting off power. Mining in the region was brought to a halt.

Germany plans to exit hard coal mining, which is limited to the historic mining regions of Saarland and North Rhine Westphalia and phase out related subsidies by 2018, as German hard-coal is not price-competitive.

RAG Deutsche Steinkohle operates Germany's eight remaining hard coal mines.

Caterpillar Inc and Claycrete enter marketing agreement

Caterpillar Inc and Claycrete Ltd announced that they have entered a marketing agreement to provide a roadway and pad construction solution to operators of mines and oil and gas sites as well as to owners and builders of unpaved roads and paved roads.

Under the agreement Caterpillar® dealers will have exclusive rights to market Claycrete products worldwide and Caterpillar Global Mining, a division of Caterpillar Inc will support and oversee the business. Claycrete Ltd based in Perth, Western Australia, provides a unique process that combines project management and proprietary chemicals to transform native soils containing clay and or limestone into pavement like roads, site pads or solid base for paved roads.

The result is weather resistant, long lasting and environmentally friendly. Since the Claycrete process uses in situ soils, it is fast and relatively simple.

For more than 15 years Claycrete has been contracting with a variety of natural resource businesses and governmental organizations to manage and supervise construction using the Claycrete process. Clients include AngloGold, ArcelorMittal, BHP Billiton, BP, Freeport McMoran, Murchison Metals POSCO, Newmont Mining, Rio Tinto, Statoil and the governments of Western Australia, Algeria, Ivory Coast and Nigeria.

Caterpillar and its dealers have long-established relationships with many of these same clients. The global dealer network will expand the opportunity for the Claycrete construction process to all parts of the world and will offer ongoing support to users of Claycrete.

Caterpillar also brings expertise in road building equipment applications and will tailor equipment and processes for greatest efficiency. In mines Claycrete haulage roads provide improved safety, productivity, tire life and dust control while reducing machine and road maintenances costs. Oil and gas fields benefit from fast construction and long lasting roads and site pads when using the Claycrete process.

Metalico 2007 net income up by 44% YoY

Metalico Inc announced its best year ever, with increases in revenues, operating income and net income for 2007 compared to 2006. Net income for the year ended December 2007 was USD 14.8 million on sales of USD 334.2 million as compared to net income of USD 10.3 million on sales of USD 207.7 million for the year ended December 2006. These results represent an increase in sales of USD 126.5 million or 61% YoY over the 2006 results. Operating income for 2007 increased USD 9.5 million or 48% YoY to USD 29.4 million as compared to USD 19.9 million for 2006.

2007 record financial results highlights:

1. Revenues of USD 334.2 million exceeded 2006 by 61% YoY.
2. Operating income of USD 29.4 million, a 48% YoY increase over 2006.
3. Net income of USD 14.8 million compared to net income of USD 10.3 million in 2006, an increase of 44% YoY.
5. EBITDA of USD 37.2 million compared to USD 24.3 million in 2006, an increase of 53% YoY.

Mr Carlos E Agüero president & CEO of Metalico said that "Our record financial performance in 2007 resulted from a successful acquisition program, strong pricing across most commodity products sold and dedicated execution by our employees and managers. Despite the challenging environment we expect that 2008 will be another year of strong growth for Metalico."

Metalico Inc is a rapidly growing Ferrous and Non Ferrous scrap metal processor operating in New York, New Jersey, Pennsylvania, Texas, Mississippi and Ohio. It is also the nation's largest fabricator of lead based products, other than batteries. The Company sells its products on a nationwide basis to a diverse industrial customer base.

Hereford Galvanisers fined after worker burned by molten metal

The Hereford Times reported that a Hereford company has to pay nearly GBP 20,000 in fines and costs after a worker was badly burned by molten metal.

Hereford Magistrates Court was told how the worker suffered 12% burns to his chest and upper arms when he was splashed with superheated zinc without having the kind of protective clothing to cope with such temperatures.

Hereford Galvanisers Ltd admitted breaching the Health and Safety Act and was fined GBP 13,000. The bench also ordered the company, based on Westfield Trading Estate, to pay GBP 6,564 in costs.

The court was told that in June 2006 the worker was helping dip metals into a bath of molten zinc when hooks holding two steel joists each weighing over a tonne gave way. Both joists dropped into the dip bath splashing the worker with zinc heated to 450 degrees. Part of his overalls dissolved at the temperature and he suffered 12% burns, mainly to his chest and upper arms.

ThyssenKrupp Energostal remains top distributor in Poland

According to a new report from PUDS, the industry group Thyssen Krupp Energostal remains Poland's number one steel distributor with 2007 sales revenues of PLN 1.7 billion.

However, the ranking, which shows several interesting new appearances in the top 15, does not include Złomrex, the listed company that came second last year.

According to unofficial information, Złomrex is set to unseat Thyssen as market leader when it publishes its 2007 figures in two weeks time. Its revenues in 2007 soared to about PLN 2 billion from PLN1.2 billion in 2006, industry observers believe. As it stands, the second place in the ranking went to Bowin, which saw revenues jump by 63% in 2007 to PLN 943 million.

The report added that new arrivals include Budmat, which came third with revenues of PLN 745 million, Blachy Pruszynski in seventh or ArcelorMittal SSC Polska a subsidiary of Poland's number one steel maker in eleventh.

Metso Minerals expands manufacturing operations

Metso Minerals Industries, Inc has announced plans for a major new expansion of its manufacturing operations in Northeast Ohio. The new fabrication facility will be located in Northeast Ohio near the company’s existing, state of the art engineering and manufacturing facility in Brunswick.

Metso expects the new facility to be online in the spring of 2008. It will have a total crane capacity of 80 tonnes and is expected to double the fabrication capacity of Metso Minerals Industries’ Ohio operations.

To support the increased production, the company has added personnel in the automation, mechanical design, electrical design and controls departments, along with control panel building and assembly. The expansion is part of the company’s ongoing effort to be the preferred supplier of precision-engineered equipment and turnkey-systems for North America’s bulk material handling industry.

The Brunswick operation was acquired by Metso in March of 2007 and since the beginning of 2008 has increased its fabrication capacity by 100%. The existing Brunswick facility produces the complete line of Brunswick operation vibratory feeders, screeners, conveyors, tables, bulk bag loaders and unloaders, single and twin screw feeders and complete weighing systems for filling drums, cartons and boxes.

The new facility will allow Metso Minerals Industries to increase output, reduce manufacturing lead times and produce larger bulk material handling systems. It will include a full technical test laboratory where customers’ products and materials can be demonstrated in a test or simulation environment to ensure final results.

PSM rebar sales dipping after recent price surge

The Dawn reported that the sales of rebars in Pakistan is falling after recent surge of prices to record PKR 65,000 per tonne levels.

Mr Shamoon Baqar Ali president of Karachi Iron & Steel Merchants Association said that the sale of steel bars had been falling after a persistent increase in its prices.

He said “The builders and even consumers, who plan to start construction activities, think twice either to buy steel items right now or to wait for a price decline. But the builders who have to meet deadlines for project completion are bound to purchase the item at higher prices.”

Mr Babar Mirza Chughtai chairman of Association of Builders & Developers said that builders who were already under pressure to provide the completed units at old rates are now facing problems, with the rising prices cement and steel products.

Mr Babar said that the Pakistan Steel has been frequently increasing rates of raw material and finished products, thus encouraging the vested interest in the market to play havoc with prices. He added that "The relevant government departments are not doing their job to check prices of Pakistan Steel products. The state owned unit should break the monopoly of private sector market players but it seems that it had joined hands with them in pushing up rates."

He further added that the construction industry is heading for a serious crisis when builders and consumers will be seen fighting each other on rising prices of their projects. Builders do not have an option of increasing the project cost, like other private sector contractors.’

Oman considering duty reduction on steel and cement

Oman Times reported that Mr Khalil bin Abdullah Al Khonji chairman of Oman Chamber of Commerce & Industry held a meeting with the private sector companies and establishments from the construction sector in the presence of contractors within the context of a series of initiatives taken by the chamber to discuss inflation in various sectors.

Mr Khonji said that Oman is considering reducing import duty on building materials in an effort to put a cap on rising inflation in the construction sector. He said "We are revising the import duty on building materials to help reduce the cost of cement, steel and wood."

However Mr Khonji did not say to what level the import duty would be reduced. Oman's import duties range from 5% to 15%.

The traders also mooted the idea of collective import of building materials from overseas markets, instead of imports by individual companies. This will not only reduce the cost of import but also enhance supply of building materials within the country.

Another proposal was on relaxing technical and engineering specifications on building construction. OCCI said "These specifications, in many cases, lead to additional use of materials. New mechanism to distribute building materials, especially iron and cement, will ensure uninterrupted supply in interior regions.”

Cement and steel prices have been soaring in the recent past and touched an all-time high.

Oman had restricted the import of cement two years ago to support the sale of local firms Oman Cement Co and Raysut Cement Co but the move caused shortage in the market. Mr Al Barwany chairman of Al Barwany Construction said Oman needed an extra 20,000 tonnes per day of cement to help reduce the shortage.

UAE economy in 2007 up by 7.4% YoY

Arabian Business reported that UAE economy had grown up by 7.4% YoY in 2007 to reach AED 698 billion on the expansion of the manufacturing and construction sectors as well as oil & gas.

According to a ministry of economy report last week crude oil production accounted for 35% of the GDP down from 37.3% in 2006 and non oil sectors accounted for 65% of the GDP of UAE in 2007,. Manufacturing sector, whose diversified activities in oil, liquefied gas and factories in free zones contributed 13% to the GDP in 2007. Trade and repair services sector is the third biggest contributor to the country's GDP at 11%. The report said that the real estate sector is fast emerging a big contributor to the UAE's GDP. Last year real estate contributed 8% to the country's GDP by investing AED 25.8 billion in 2007.

The size of fixed investments in 2007 increased to AED 144.5 billion as compared to AED 121 billion in 2006 and the investment percentage to domestic product reached 20.7% in 2007.

The report attributes rise in private expenditure to the annual population increase, the rise in standards of living, rising consumption, as well as the increase in prices for all goods and services.

UAE has been striving to diversify its economy away from a dependence on energy exports by pouring oil revenues into real estate, financial services and infrastructure.

Pakistan urged for alternative energy resources

Business Recorder reported that Mr Mohammad Ali Mian president of Lahore Chamber of Commerce & Industries has expressed concern over the growing energy crisis in Pakistan and has urged the government to hunt for alternative energy resources to keep the industry running.
Mr Mian said that electricity is the basic raw material for a large industrial segment and in the face of the rising oil prices in international market it would be impossible for the government to continue feeding the industry with thermal power. He suggested it would be wiser to evolve a short term strategy after the government consulted the private sector to use other energy resources.

Mr Mian said that the industry was suffering heavily in winter because of gas shortages and now facing the power crisis crippling it. He added that "All long term projects will take at least 8 to 10 years to complete and there is no short term project, which will be able to start power generation before 2 years. In two years' time, the whole economy will face a meltdown and its turnaround will be impossible. So this is the time that the government constituted a high level committee made up of public and private sector members to cope with the situation."

He also urged the government to finalize the Pakistan Iran gas pipeline deal to help run power generating units at cheaper rates as compared to those of furnace oil. He said that the private sector was unable to understand that why it was not being taken into confidence when the demand and supply gap was widening and that why the domestic consumer was being given priority over the industrial consumer.

He claimed that India is waging a water war against Pakistan by building several dams making Pakistan unable able to have water for irrigation. He said the power breakdowns would be more than 6 hours in the coming days.

Egypt signs EGP 300 million electricity contracts

It is reported that Egyptian electricity sector has signed 3 contracts with local companies to link power stations in Tebbin, southern Cairo and Bahtim to the national power grid.

Mr Hassan Younis Egyptian minister of electricity & energy has attended the signing ceremony of the EGP 300 million contracts that will be implemented in 10 to 12 months. He said that Egyptian Electricity Transmission Company will finance the project.

Saudi Arab to fund Gaza reconstruction

Arabic daily Al Jazirah reported that Saudi Arabia will pay for reconstruction of all buildings demolished in Gaza by Israel during lrecent incursions in which more than 130 Palestinians were killed.

Mr Hamad Al Manie health minister of Saudi Arabia said that King Abdullah had ordered the reconstruction as part of the kingdom's support for the Palestinian people and their cause. He added that "The king has ordered the reconstruction of Palestinian houses at the expense of the Saudi government."

According to the Palestinian Centre for Human Rights, more than 70 buildings are either completely or partially destroyed by Israeli forces.

Chinese HRC export prices surge lead to default of old orders

Chinese domestic steel prices were still in adjustment stage last week but export offers continue to edge as a large part of the export allocation for April production has been booked and good transactions are believed to be bolstering the strength of export price.

Domestic HRC price seem to be still in adjustment. On Shanghai market, offers for commercial 4.5mm to 11.5mm HRC are at CNY 5180 per tonne to 5200 per tonne for 1500mm and CNY 5480 per tonne to CNY 5500 per tonne for 1800mm wide material. Low alloyed 1500mm HRC is being tagged at CNY 5400 per tonne and 1800mm at CNY 5560 per tonne.

Chinese hot rolled steel coil export offers are raised again despite weakening of domestic market prices. Most steel producers were trying to improve price as higher as possible at moment. Now the highest quotation for commercial HRC has jumped to USD 860 per tonne of FOB basis and prevailing offers are at USD 850 per tonne of FOB basis.

Steel mills told Mysteel that there are more enquiries than export allocation and the lowest acceptable contract price is USD 835 per tonne of FOB basis. Supply is said to be tight and export prices are expected to approach USD900 per tonne of FOB basis in the end. Steel producers insist on higher offers, seeking better profit from overseas market, at least CNY 200 per tonne than that from domestic market. In addition, most steel mills claim that they have received much more enquires than their normal export allocation.

As per report, Beitai Steel has declared to default its HRC export allocation which is concluded at average level of USD 730 per tonne to USD 740 per tonne FOB basis in this February. It is said that only 30% of its allocation could be ensured and the promise breaking is resulted from the price difference, which is as large as USD 100 per tonne.

China's top two coal firms granted lower export quotas

It is reported that China's top two listed coal firms have received lower coal export quotas for the year from March 2008.

A trader said China Shenhua Energy Co the country's largest coal producer by output will be allowed to export up to 21.85 million tonnes in 2008 down from last year's quota of 23 million tonnes. China Coal Energy Co the country's second largest coal producer after Shenhua has a 2008 coal export quota of 22 million tonnes.

Traders said overall, China's government has cut its 2008 coal export quota by 24% from 2007 to 53.15 million tonnes.

Mr Meng Xuenong the governor of Shanxi province, the country's top coal production hub said China imposed a ban on coal exports at the height of the shortages, although officials repeatedly signaled the move was only temporary.

Shougang confirms that mine purchase in Australia blocked

It is reported that Mr Zhu Jimin chairman Shougang Group has confirmed that its acquisition for Australian iron mine company Mount Gibson Iron Ltd is blocked.

As per report the Takeovers Panel of Australia has noticed Shougang that it has accepted the petition raised by Mount Gibson Iron and is dealing with the arbitration and therefore Mr. Zhu declined to give any comment.

Shougang Concord International Enterprise Co Ltd, a listed arm of Shougang Group, reached an agreement with Russia's Gazmetall Holding to buy 9.74% of Mount Gibson Iron and gain an option to buy another 9.98% stake. But this deal puts Shougang Group under suspicion of breaking the Australian law of corporate, because what it effectively controls in Mount Gibson Iron is already large enough to trigger tender offer.

Mount Gibson Iron announced that it found Shougang Group had already held 20.22% and 16.09% stakes in it via another two subsidiaries, while the local requires the investor to start tender offer process if it has controlled 20% of an Australian listed company.

China to accelerate relocating mills to coastal areas

Mr Zhang Xiaogang the chairman of the China Iron & Steel Association while speaking on the sidelines of 2008 NPC&CPPCC said that Chinese steel makers will accelerate merger and acquisition activity within three years

As per report the coastal steel mills only account for minor share of China's steel production, with the combined capacity totals 30 million tonnes to 40 million tonnes representing some 6.4% of the country's total steel output. However, 60% of foreign steel mills with capacity of over 5 million tonnes per year have already been located at coastal regions as early as 1980's.

So far only two major steel complexes are being built in coastal areas, namely Shougang's Caofeidian complex in Hebei and Anshan Steel's Bayuquan complex in Liaoning.

Tsingshan to build ferronickel and ferrochrome plant in Fujian

It is reported that privately owned stainless steel producer Tsingshan Group recently inked an agreement with the Fu'an municipal government in Fujian Province to construct a 300,000 tonnes ferronickel and ferrochrome facility in the southwestern Chinese province.

Gas explosion in southwest China coal mine kills 14

Xinhua reported that a coal mine gas outburst killed 14 people and injured four in southwest China's Yunnan Province. The accident occurred at 8:40 PM on Friday at the Shuidongping coal mine in Zhaotong City when 18 miners were working underground.

Rescuers found all the 14 bodies at the spot. The four injured were in stable condition.

A preliminary investigation revealed the colliery, with a designed annual production capability of 60,000 tons, was a fully licensed private enterprise.

The cause of the accident is under investigation.

Baosteel develops steel for earthquake resistant damper

It is reported that Baosteel has developed steel for earthquake resistant damper and spring plate for turbine generator, filling the blank in the country that no producer can produce such materials.

Steel for earthquake resistant damper is a construction structural steel with excellent features of yield strength, elongation rate and impact toughness that could effectively absorb earthquake wave and ensure buildings safety in earthquake.

As per report construction of venues in the Shanghai World Expos will adopt this steel produced by Baosteel, rather than import from overseas market. Spring plate for turbine generator is a key component to manufacture generator. It is one of the highest grade steel in low alloy steel with strong tenacity and plasticity.

Taizhou to build steel logistics center

It is reported that Taizhou Logistics Zone signed agreement with Jiangsu Xinchangjiang Group recently and tow companies plan to construct “Taizhou Changhong Steel Logistics Center” together. With an investment of CNY600 million and it would become the biggest steel logistics center in province Jiangsu.

The center is supposed to be located at No.2 port in the logistics zone. It is introduced that the logistics center would become a modernized steel logistics center specialized in distribution, storage, loading and discharging, transportation, processing, etc. The sales income is expected to be CNY 10billion and total tax and profit over CNY 50million within three years after the completion of the constriction.

Jinchuan Group to speed up overseas investments

It is reported that Jinchuan Group Limited will accelerate its investment in overseas mineral resources. The group has announced that its after-tax profit reached CNY 6.016 billion last year.

As China's biggest nickel and cobalt producer, Jinchuan Group has an annual production capacity of 100,000 tonnes of nickel, 400,000 tonnes of copper, 10,000 tonnes of cobalt, 3,500 kilograms of platinum group metals, 8 tonnes of gold, 150 tonnes of silver, 50 tonnes of selenium and 1.5 million tonnes of chemical products. Its nickel output increased

Mr Li Yongjun board chairman of Jinchuan Group said compared with its overseas competitors, such as giants in Canada, Russia and Australia, Jinchuan Group still needed to raise competitiveness

Analysts point out the group pours investments to overseas countries owing to scant non ferrous mineral resources in China. Despite retained nickel reserve of 4.5 million tonnes retained copper reserve of nearly 3 million tonnes and mine life of more than 50 years.

An official from the group has unveiled it plans to pour over CNY 1 billion to buy copper and nickel mines in overseas countries. The group is expected to produce 120,000 tonnes of nickel and 300,000 tonnes of copper this year.

(Sourced from MySteel.net)

China's coal production can meet domestic demands

Xinhua reported that China's overall capacity of coal production meets domestic demands.

Mr Jia Qihai director of mineral resources development and management department under the MLR while speaking on the sidelines of the First Session of the 11th National People's Congress said that "Recently, some areas of China suffered inadequate electricity and coal supply, but the phenomenon was caused by a variety of reasons, such as transportation strain."

Mr Jia said after rectification, coal production output exceeded 2.5 billion tonnes in 2007 and the phenomenon that China's coalmines were too many, small and scattered has been changed. He said “Through intensive management, there will be no problem in guaranteeing long term and adequate coal supplies for the domestic market.”

Chinese province wise coke production in 2 months

China’s coke output in February 2008 is reported at 25.713 million tonnes up by 13.8% YoY. And during, January to February 2008 it is reported at 52.444 million tonnes up by 12.6% YoY.

Province wise coke production is as under

In million tonnes
(Sourced from MySteel.net)

Laiwu Steel appoints Mr Luo Dengwu as new GM

Laiwu Steel Corporation announced that it has named Mr Luo Dengwu as new GM to replace Mr Ren Hao.

3 bodies recovered from flooded moly mine in North East China

Xinhua reported that rescuers in northeast China's Liaoning Province pulled three bodies from a molybdenum mine on Saturday morning two days after six miners were trapped in a flooding accident.

The report added that the death toll currently stood at four as rescuers continued to search for the remaining two. Progress however remained slow due to serious situation in the shaft.

The flooding occurred at around 2 PM on Thursday at an underground pit operated by the Magou Mining Co. Ltd under the Lianshan Molybdenum Corp in Huludao City.

Neither officials nor the mining company would give further details on the accident, but the Huludao municipal safety supervision administration immediately ordered all ore mines, but not coal mines, to stop production, and undergo thorough safety inspections.

Huludao is one of the most important molybdenum ore production centers in China. The hard, silvery white metallic molybdenum is used to toughen steel alloys and soften tungsten alloys.

Ukrainian pipe output down in 2 months dips by 15.6% YoY

Ukrinform reported Ukraine production of pipes in January to February 2008 down by 15.6% YoY to 371,000 tonnes as compared to 2007 period. In February 2008, Ukraine produced 205,900 tonnes of pipes.

In tonnes

Metall Profile signs exclusive contract with Corus

FIS reported that Metall Profile group has signed an exclusive contract with Corus concern on the supply of polymer covered roll Colorcoat Prisma, which is used in the production of profiled façade systems.

The report added that one of its features is the application of Galvalloy surface composed of 95% zinc and 5% aluminum. The technology allows extending the life of items made from such roll.

Metall Profile plans to increase the share of Colorcoat Prisma in total sales to 10%. Russian market of steel with such coating grows at 10% to 15% per annum and by 2010 Russia will go to the first place in Europe by the volume of use of this group of metal products.

Norilsk Nickel wins right to explore East Siberian mineral fields

It is reported that Russia's Norilsk Nickel has won the right to explore and mine nickel, copper and platinum group metals in the Iisko-Tagulskaya area of East Siberian Irkutsk region. Vostochno-Sayanskaya Nickel Company representing Norilsk Nickel paid RUB 726 million for the license. . Exploration and other preliminary prospecting and feasibility work is estimated to cost another RUB 2.5 billion.

The licensed area includes Tokti-Oy deposit of nickel, copper and platinum and covers 15,867 square kilometers.

The company's data on geological structure and prospects of Iisko-Tagulskaya area, however, is more extensive than in the license particulars as Norilsk Nickel has been involved in exploring the Eastern Sayany region which includes Iysko-Tagulskaya area since 2003. Norilsk Nickel is also involved in exploring neighboring Kingashskaya area in the Krasnoyarsk region.

In 2007 Norilsk Nickel signed agreements with state authorities on financing prospecting and estimation of Eastern Sayany resources and geological exploration, including drilling was started.

Severstal eying stake in Italian Finmeccanica turbine unit

Il Mondo newsmagazine reported that Russian steel maker Severstal is interested in stakes in Italy's Finmeccanica turbine unit and in power equipment maker Sofinter.

Il Mondo said Severstal has signed a letter of intent with Sofinter and is offering to buy 60% to 70% of the unlisted Gallarate turbine and boiler maker. It said it also could soon make an offer for a stake of perhaps 30% to 40% in Finmeccanica power gear unit Ansaldo Energia.

Il Mondo said "A formal offer is not yet on the table. It gave no sources for its story.”

Spokesmen for Sofinter and Severstal's Italian unit, Lucchini were not immediately available to comment. A Finmeccanica spokesman had no comment.

Ukrainian gas output in 2 months down by 0.8% YoY

Ukrainian Journal Staff reported that gas output on Ukrainian territory in January to February 2008 down by 0.8% YoY to 3.47 billion cubic meters as compared to the same period of 2007 with natural gas production down by 0.5% to 3.303 billion cubic meters.

Naftogaz Ukrayiny enterprises reduced gas production 0.3% to 3.222 billion cubic meters in the two months, including natural gas by 0.1% to 3.076 billion cubic meters.

Russia to switch to annual oil export schedules

Reuters reported that Mr Viktor Khristenko Energy Minister of Russia's has approved a resolution allowing oil firms to switch to annual oil export plans from the previous quarterly schedules in a move designed to improve long term planning.

A ministry's resolution obtained by Reuters and signed by Mr Viktor Khristenko calls on oil firms and countries shipping oil via Russia, such as Kazakhstan to submit annual oil export schedules 35 days before the start of the period.

The reported added that the resolution, however, says that changes to the annual plan will still be available on a quarterly basis depending on the throughput capacity of the national pipeline monopoly Transneft. The resolution did not say when it would come into force, but traders said the trial annual schedule is already being compiled and may come into force as of the second quarter.

A trader with a Russian major said "It may seem a big change, this switch, but in fact not much will change given that quarterly schedules will remain in place."

Some Russian oil firms have also requested a re introduction of the practice of oil flow coordination on specific routes.

Nano materials plant to be built in Tatarstan

FIS cited Mr Boris Petrovich Pavlov first deputy PM of the Republic of Tatarstan as saying that two nano materials making plants will be constructed in Tatarstan.

The report added that the project's costs will total RUB 1 billion and the project will be financed mostly from the federal budget. The project will be implemented within 18 months.

The federal budget has earmarked RUB 200 billion for the development of nanotechnologies until 2011.