SAIL and Kerala to form JV for SCL in April 2008

IANS reported that Kerala based Steel Complex Limited will be managed by Steel Authority of India Limited as a JV project. This will be SAIL’s first venture in Kerala as at present, it only has a steel depot at Kochi.

Mr Elamaram Kareem industries minister of Kerala said that "A rolling mill with 60,000 tonne capacity at an investment of INR 500 million will be set up at SCL by the JV. The draft of the MoU has been approved by the state cabinet and the board of directors of SAIL and the JV will come into being by April 2008."

Currently, the state government holds 93.2% stake in SCL while the rest is with private individuals. But in the JV, Kerala government and SAIL will have equal holdings. However, the management control will rest with SAIL.

As part of the agreement with SAIL, the government will consider settling SCL’s liabilities, which is in the tune of INR 1.03 billion. SCL expects a total investment of INR 2 billion from SAIL in the venture. Mr Kareem said that "We are ceding the management control to SAIL as this will bring in new technology. SAIL can also start the venture with a clean balance sheet."

He said that though SCL will initially produce iron bars for the construction sector, the government expects that the SAIL will undertake production of special steel at a later stage. He added that SAIL will find the steel plant handy as it will help it supply to a booming construction sector in the state.

The new venture will retain all the 195 employees of the SCL.

Mr Paswan calls for reclassifying steel as an essential commodity

PTI reported that peeved at steel producers repeatedly hiking prices, Mr Ram Vilas Paswan union steel minister has asked Dr Manmohan Singh to re classify the alloy as an essential commodity, withdrawing DEPB benefits from them and constituting a regulator for the sector.

Mr Paswan, in a letter to the Prime Minister, said that "In the 3 month period since December 2007, steel prices have risen by 20% to 24% and possibilities of setting up a regulatory mechanism for steel and its inputs and re classifying steel as an essential commodity may be considered by the government."

Suggesting a series of fiscal measures against the steel producers for hiking prices of their produce despite repeated appeals, Mr Paswan said that the centre should withdraw export incentives offered to them in the form of Duty Entitlement Pass Book scheme, which if withdrawn would hit the bottom lines of major steel producers by about INR 600 crore.

Mr Paswan said that "The net savings on account of DEPB withdrawal is estimated at around INR 593 crore. Withdrawal of DEPB benefits will make exports less attractive, even though in most cases, export realization will continue to be more than the earnings from domestic sales."

The steel makers currently enjoy DEPB benefits of 5% in galvanized products, 4% in billets, 6% in TMT bars and 4% in hot rolled coils.

GSHL signs up mining deals in Brazil, Colombia and Mozambique

PTI reported that Global Steel Holdings Limited has signed up mining leases for iron ore and coal reserves in Brazil, Colombia and Mozambique.

The report cited a Global Steel Holdings Limited spokesman as confirming to PTI that it has signed multiple iron ore leases with Brazil and for thermal and coking coal exploratory blocks with Colombia and Mozambique.

The spokesman said it may take 12 to 18 months to complete exploratory works in Brazil after which they will decide on beginning exploratory activity. The spokesman refused to confirm the quantum of iron ore reserves in Brazil saying that it is substantial.

In Colombia and Mozambique, the total coal reserves are estimated to be around 100 million tonnes to 110 million tonnes of medium to high grade coking and non coking coal.

As per report, the Mozambique project is near to ArcelorMittal, TATA Steel and CVRD coal projects in Tete region and Global Steel Holdings Limited has bagged a coal mining lease of around 30,000 hectares in that country as compared to ArcelorMittal's 45,000 hectares and TATAs 25,000 hectares.

Sujana Metals to buy steel plant in Vizag – Report

The Asian Age reported that Hyderabad based Sujana Metal Products Ltd is close to acquiring a steel plant in Vizag at a cost of INR 150 crore.

The report cited some sources close to the development as saying that the formalities for buying out the 0.14 million tonnes capacity mill will be completed in the next few days.

Mr VSR Murthy group director said "From a capacity of 0.128 million tonnes, Sujana has gone up to 0.298 million tonnes over the current fiscal. By 2010, we expect to expand the capacity to 1 million tonnes. We will be investing a total of INR 1,600 crore in two phases to put up this capacity.”

Sujana Metal Products Ltd is a manufacturer of TMT bars and structural steel products. It had recorded a turnover of INR 757 crore for the year ended June 2007 while the profit after tax was INR 23 crore.

SPS Steel may buy stakes in PT Kartika Selabhumi

ET reported that Kolkata based SPS Steel & Power is close to buying a strategic interest in Indonesian coking coal mine PT Kartika Selabhumi. As per report, SPS would pick up a 40% stake in the firm, which is also said to have 10 million tonnes to 12 million tonnes of thermal coal reserves.

Mr Bipin Kumar Vohra vice CMD of SPS Steel & Power said that "We will explore the Indonesian mine to determine the exact extent of coal reserve after which we would be able to arrive at a final valuation for the deal."

Mr Nirmalya Mukherjee of industry journal Steel & Metallurgy said that though the exact valuation of the Indonesian mining firm could not be ascertained, it is estimated to have reserves of about 6 million tonnes.

He added that Jai Balaji Industries, Adhunik Steel, Visa Steel and Vizag Steel, are also scouting for captive raw material sources in Australia, South Africa and South East Asia.

SPS has estimated that it would require about INR 1,000 crore to meet its expansion plans. It has already tied up 50% of the amount through debt and is making a private placement to raise the balance.

Jharkhand seeks suggestions on R&R policy

IANS reported that Jharkhand government has invited suggestions from industry before framing a policy to rehabilitate and resettle those people whose land is acquired for industrial projects. The industries department sent letters to industrialists and industrial associations, asking them to submit their suggestions by March 25th 2008.

Mr Sudhir Mahto deputy chief minister and in charge of industries department said that "We want to announce the rehabilitation & resettlement policy as soon as possible to help investors set up industries in the state."

He added that the draft R&R policy includes giving share to the displaced people in the industries to give a sense of security to the displaced.

It may be noted that the state government has signed MoUs with 64 companies in steel, mining, power and in other sectors. Mr Mahto said that “The United Progressive Alliance government is serious about translating the MoUs into reality.”

Mandi steel mills to stage protests from March 21st 2008

Punjab News Line reported that the industrialists of Mandi Gobindgarh have decided to close their business establishments from March 21st 2008 to lodge their protest against excise & taxation department.

Members of All India Steel Re roller Association, Small Scale Steel Re roller Association, Gobindgarh Induction Furnace Association, Gobindgarh Steel Chamber of Commerce and other associations held a dharna at Loha Bazar and later a 4 member delegation met the Punjab excise & taxation commissioner, threatening to hold indefinite strike.

Mr Harmesh Jain president of Small Scale Re rollers Association said that the taxation department was unnecessarily harassing the industrialists on the pretext of checking their bills, despite the fact that the vehicles pay entry tax at the prevalent rate of 4% before entering the state. He added that "The officials allege under billing and fine the vehicles to which we have no proof to prove them wrong and moreover it wastes precious time of the movement of vehicles."

Mr Mohinder Gupta president of Gobindgarh Induction Furnace Association said that the department has assured that these check posts will be removed soon.

It may be mentioned that the mobile wing of excise & taxation department has been holding regular nakas in the entry points of Mandi Gobindgarh since March 11th 2008 and checked the bills of the vehicles loaded with steel and iron scrap and keeping a xerox copy of the bills issued by the industry.

IIT Kharagpur confers doctor of science to Mr Ratan Tata

Mr Ratan N Tata chairman of the TATA Group has been conferred the degree of doctor of science by the board of governors of Indian Institute of Technology Kharagpur at its 50th annual convocation recently. The award is to recognize his outstanding leadership in globalizing India and transforming TATA Group as a company to reckon with.

Dr Damodar Acharya director of IIT Kharagpur, while presenting the award to Mr Tata, said that "Mr. Ratan Tata is a towering figure in the Indian engineering industry. Throughout his career in various positions in the TATA Group of Companies, he has set an unparalleled standard of excellence. With few ever to emulate his scale of achievements, he symbolizes India's entry into the global industrial map. Under his leadership, TATA Group has also emerged as one of the most respectable companies in the world, in terms of its contribution to corporate social responsibilities and philanthropy. As an individual, Mr. Tata has long commitment to social uplift of the disadvantaged people."

Every year, IIT Kharagpur honors industrialists, entrepreneurs, scientist and public figures. Some of the past recipients of this coveted award include Mother Teresa, Mr Satyajit Roy, Mr Mani Lal Bhowmik, Dr Suhas Patil, Mr RP Goenka, Dr Raj Reddy, Dr Parveen Chaudhari, Dr CNR Rao, Dr GS Sanyal, Dr Pallab Chatterjee to name a few.

Meanwhile, centre has announced that Mr Tata will be honored with its second highest civilian award the Padma Vibhushan later in 2008. Earlier, in 2000, he had been awarded the Padma Bushan. He has also been conferred an honorary doctorate in business administration by the Ohio State University, an honorary doctorate in technology by the Asian Institute of Technology Bangkok, an honorary doctorate in Science by the University of Warwick and an honorary fellowship by the London School of Economics.

HZL cuts zinc and lead prices

India's top zinc producer, Hindustan Zinc Limited announced that it has cut zinc prices by 4.6% to INR 114,600 per tonne (USD 2,837).

HZL has also reduced lead prices by 6.1% to INR 131,200 per tonne.

Elecon scouting for windmill gear units overseas

DNA Money reported that Gujarat based Elecon Engineering Company Limited is scouting for inorganic growth opportunities in the windmill gearbox manufacturing segment overseas. It is looking for an acquisition either in the US or Europe in the range of INR 300 to INR 400 crore for the purpose.

According to a company source, Elecon has also initiated talks with firms in ship fabrication for buyouts. Further, it plans to increase its exposure to the steel sector by bidding for modernization projects.

Mr Hemendra Shah CFO of Elecon Engineering said that "We are analyzing different options for growth, which includes acquisition and our investment bankers are working on the same." He added that however, everything is at preliminary stages and it will inform the stock exchanges as and when any arrangement is finalized and approved by the board.

Elecon would invest nearly INR 200 crore in the next 2 years to expand capacities, particularly in windmill gearbox manufacturing. Out of INR 200 crore, it would invest about INR 100 crore in a windmill gearbox manufacturing facility, which will be ready by June 2008.

Elecon supplies equipment to core sectors such as steel, fertilizers, cement, coal, lignite and iron ore mines, power stations and port mechanization. Around 70% of Elecon’s revenue comes from the power sector, followed by steel, mining, cement and fertilizers. It expects revenues of around INR 1,400 crore in 2007-08 as compared with INR 723 crore in 2006-07. At present, Elecon’s outstanding order book is at INR 1,091 crore, INR 876 crore from the MHE segment and INR 216 crore from the transmission segment. With this, growth in the outstanding order book for MHE and transmission segments stands at 73% YoY and 14% YoY, respectively.

India asks Bangladesh for gas transit through Chittagong

Mr Pinak Ranjan Chakravarty Indian High Commissioner has said that Bangladesh should grant transit facilities to India through the Chittagong sea port as it will significantly improve Bangladesh's economy and reduce dependence on foreign aid.

Mr Chakravarty said that "If Bangladesh gives transit to India through Chittagong Port, it will boost Bangladesh's economy and significantly reduce foreign aid dependence." He added that India had asked Bangladesh for the transit facilities long ago and is still awaiting a reply from Dhaka.

Bangladesh's communications ministry had earlier expressed its reservations about India's request for allowing transport of heavy equipment for power plants from Kolkata to Tripura via Bangladesh, saying the road infrastructure was not suitable for such transit. The ministry had said in a letter to India that "The roads and bridges, due to their present conditions, cannot bear the loads of such heavy equipment."

Meanwhile, analysts have said the long standing issue was a political hot potato in Bangladesh as subsequent regimes preferred to sit on the matter largely because of political considerations.

IL&FS acquires Elsamex in Spain

It is reported that IL&FS Transportation Networks Limited has acquired road maintenance, operation and management company Elsamex SA of Spain for EUR 50 million.

The proposed acquisition highlights the increased focus on the operation and maintenance capabilities of road operators in India. IL&FS Financial Services and Ernst & Young jointly advised ITNL on the transaction.

IL&FS Transportation Networks Limited is engaged in developing and managing a national and state highway network in excess of 3,200 kilometer spread across 9 states in India.

MAMC reopening awaits PM’s nod

SNS reported that central public sector undertaking companies, which have agreed to take over the Durgapur based Mining & Allied Machinery Corporation, are now looking for the Prime Minister's intervention in matter related to waiver of loans and liabilities of the closed CPSU.

Meanwhile the CPSU majors aspiring to reopen MAMC are likely to submit a complete package at the Calcutta High Court on March 24th 2008.

It may be noted that 3 CPSU majors namely, Bharat Earth Movers Limited, Damodar Valley Corporation and Coal India Limited, have come forward in a JV consortium for the reopening the MAMC that was liquidated on January 1st 2002. On June 1st 2007, the companies signed a MoU for the purpose at the Writers' Buildings.

Mr Buddhadeb Bhattacharjee chief minister of west Bengal has pleaded for waiver of loans and dues pending in MAMC account. The loans worth INR 1,100 crore borrowed out of plan and non plan assistance from the central government is posing severe difficulty in the reopening of MAMC.

On March 7th 2008, Mr Bhattacharjee made a correspondence to the Prime Minister's office in respect of waiver of loans. He intervened after Indian Institute of Management Bangalore and Industrial Development Bank of India Mumbai submitted a detailed survey report. Both the agencies suggested complete waiver of loans to help reopening of MAMC.

CIL in talks with GAIL and RCF for ammonium nitrate unit

ET reported that, in a bid to bridge the gap in supplies of mining explosives, Coal India Limited has entered into talks with GAIL for roping in Rashtriya Chemicals & Fertilizers to manufacture ammonium nitrate.

Mr Partha Bhattacharyya chairman of CIL said that it is now decided to modify the existing two arrangements among the three companies so that manufacture of urea can be incorporated in the existing agreements. He added that "CIL, GAIL and RCF have agreed in principle, but a formal agreement is likely to come through shortly."

CIL, GAIL and RCF have agreed in principle that RCF will manufacture 300 tonne per day of ammonium nitrate for which CIL will supply 2.5 million tonne of coal per year. CIL’s involvement in RCF’s production of ammonium nitrate is through a MoU recently entered into with GAIL for setting up an INR 2,400 crore surface coal gasification project. This plant will produce gas that will be used as feedstock for producing fertilizers. GAIL, in turn, had signed a MoU with RCF for using the gas produced by the CIL Gail JV to manufacture urea.

Ammonium nitrate is the principal ingredient for making explosive substances used as blasting material for extracting coal from mines. India is facing a crunch in the supply of ammonium nitrate, as a result of which CIL’s mining activities are suffering.

NTPC clears INR 4,375 crore for Bongaigaon power project

It is reported that National Thermal Power Corporation has cleared an investment of INR 4,375.35 crore for the coal based 750 MW thermal power project at Salakati in Kokrajhar district of Assam.

Mr Sushil Kumar Shinde union power minister said that a transfer agreement has been executed among NTPC, government of Assam and Assam Power Generation Corporation Limited for transfer of the existing infrastructure of 240 MW Bongaigaon thermal power station to NTPC.

Mr Shinde said that all the necessary key inputs and clearances including environmental clearance from the ministry of environment & forest have been obtained for the project. Site specific studies have been completed and the main plant equipment packages have been awarded to NHEL in February 2008.

13 firms submit RFQ for Rajpura thermal power project

PTI reported that 13 companies that have submitted request for qualification for the 1,320 MW Rajpura Thermal Power Project.

Firms, which have shown interest in the project, include
TATA Power
Reliance Power
Sterlite
Larsen & Toubro
Essar
Lanco Infratech
Bhilwara Energy
Indiabulls Power Projects
Consortium of JSW and IDFC
Consortium of Union Fenosa International & Isolux Corsen with Emco

The proposed project, to be awarded through tariff based international competitive bidding and run on build, own and operate basis, would involve an investment of INR 5,000 to INR 6,000 crore. The eligible bidders would be determined in April 2008.

The request for qualification for selection of developers for the project was issued on January 18th 2008 and a bidders' conference was held in Chandigarh in February 2008, where 19 companies expressed interest. The Power Finance Corporation is the consultant for selection of developer.

PSEB has already launched a special purpose vehicle called Nabha Power Limited to ensure coal and water linkages to the project. Site of the proposed project has been cleared by the Central Electricity Authority and 1,085 acres of land have been identified, for which the process of acquisition has started by the Punjab government.

RS India Wind Energy project to acquire land by May

RS India Wind Energy Private Limited is expecting to complete land acquisition for phase II of its upcoming integrated renewable energy project in Maharashtra soon.

Mr Gurmeet Singh spokesperson of RS India said that around 600 acres would be acquired in Sangli district by May 2008 fulfilling the requirement for the first 2 phases of the INR 700 crore project.

In phase I, it is planning to construct a 100 MW wind farm, a 5 MW solar power project and Jatropha plantation spread over 225 hectares. Work on phase I had already commenced and the wind power project was scheduled to commission by March 31st 2008.

In phase II, 200 MW of additional wind power capacity will be developed along with another 225 hectares of Jatropha cultivation. This phase is scheduled to complete by end of 2008. For evacuation of wind power generated, a power purchase agreement has also been signed with Maharashtra State Electricity Distribution Company Limited.

In phase III, another 100 MW of wind power capacity will be added. However, it might look at alternative locations like Goa and Haryana for the last phase.

RS India is promoted by Gurgaon based RS India Group, that holds 63% equity while, PTC India holds 37%. The project is being co financed through an INR 487 crore of lease finance from Power Finance Corporation Limited.

Chinese railway to develop Bhubaneswar railway station

SNS reported that a high level Chinese Railway delegation headed by Mr WU Wei director of Sino India Railway Cooperation Working Group along with 12 members held discussions with Mr AK Goyal GM of East Coast Railway in the context of developing Bhubaneswar railway station to a world class one.

Mr Goyal welcomed the Chinese delegation and briefed them on the performance of East Coast Railway in general and the Bhubaneswar railway station.

The Chinese delegation visited Bhubaneswar station and the proposed a site for the New Bhubaneswar railway station near Barang. They will study various pros and cons of the proposal of developing a world class station which can serve the twin cities of Cuttack and Bhubaneswar.

The delegation will also have discussions with the railway ministry level.

POSCO to raise steel product prices by 17% - Report

Reuter reported that POSCO the world's fourth largest steel maker will raise its steel product prices by at least 17% in April 2008.

The Maeil Business Newspaper quoted an unnamed POSCO official as saying that the rise in prices will be in line with increased costs of key raw materials including iron ore and coal.

The official said that "Coal import prices were at USD 98 a tonne last year, but sellers are asking for a lot more this year. It will be inevitable for POSCO to raise steel product prices.”

POSCO had previously said it planned to raise steel prices after agreeing on a 65% hike in iron ore prices with Brazilian mining company Vale last month.

BDI falls for seventh day on disruptions to cargo

Bloomberg reported that the Baltic Dry Index, a measure of shipping costs for commodities, fell for a seventh consecutive day as disruptions to coal and iron ore supplies reduced cargoes.

The index, which tracks transport costs on international trade routes, retreated 92 points to 7,801 points on Wednesday and the lowest this month. The index for all vessel types declined.

Ms Susan Oatway an analyst at Drewry Shipping Consultants Ltd in London said that “There are just slightly too many ships for the spot market and not as many spot cargoes on the horizon.”

She said that that “Supplies of coal, which ship in Capesize, have been disrupted by rain in South Africa and a derailment in Australia this month. Cia Vale do Rio Doce, the world's largest producer of iron ore, had to halt shipments after protesters blocked the Brazilian company's main railroad. The index's 10% decline from its peak this month isn't part of an ongoing trend.” She added that “For the first half, all the fundamentals are still fairly strong.”

Mr Philip Soutter a senior shipbroker at London based Galbraith's Ltd told the Sugaronline World Sugar & Ethanol Conference in Geneva that “Next year might be the turning point. Demand is there and the ships are not coming out today. Next year, we will see a raft of new building coming through.''

The index gained 52% in the past 12 months and reached a high of 11,039 points on November 13th 2007.

CSN announces share buyback

CSN announced that its board of directors authorized on the acquisition of up to 10,800,000 Company shares to be held in treasury for subsequent sale or cancellation.

The acquisition shall obey the following limits and conditions, pursuant to CVM Instruction 10/80:
1. The Company's objective: to maximize the creation of shareholder value through efficient capital structure management.
2. Number of shares to be acquired: up to 10,800,000.
3. Maximum term for the completion of the authorized operations: to April 28, 2008.
4. Number of shares outstanding: 455,343,843
5. Acquisition location: Sao Paulo Stock Exchange - BOVESPA
6. Maximum share price: the price may not exceed the stock market price.
7. Brokers: Itau Corretora de Valores SA, Pactual CTVM SA and Credit Suisse First Boston CTVM SA.

POSCO completes Vietnamese processing center

Korea Times reported that South Korean steel giant POSCO has completed a 100,000 tonne processing plant in Vietnam, a strategic operation that will supply the growing regional demand for automotive and motorbike steel sheets.

The USD 13.8 million facility, which is an 80:20 JV with Mitsubishi's Metal One, will mainly cut and shape steel produced from POSCO's 1.2 million tonne cold rolled steel plant currently under construction about 100 kilometers east of Ho Chi Minh City.

The cold rolled mill will begin output in the second half of next year.

Last week, POSCO broke ground for another processing center, with an annual capacity to produce 120,000 tonnes of steel goods, near Bangkok, Thailand. Its production is set to be fed to major global carmakers, such as Nissan and Honda.

Siat secures Enarsa pipe supply contract

BNamericas reported that Argentine steel tube and equipment producer Siat has won a tender to supply pipes to state energy company Enarsa.

It said in a filing to São Paulo's Bovespa stock exchange said that Siat is due to provide 1,182 kilometer of pipes to Enarsa under the contract worth USD 549 million, before taxes.

It added that São Paulo based TenarisConfab will provide another 327 kilometer of welded steel tubes in the deal worth USD 178 million before taxes.

Both pipes will be used for the GNEA natural gas pipeline, according to the filing.

Deliveries are expected to start within 21 months of the date the contract is signed.

Confab, part of Luxembourg's Tenaris, sold 427,800 tonnes of welded tube products last year, up 76% compared to 242,600 tonnes in 2006.

One employee dies in accident at Keystone Steel

AP reported that a longtime employee at Keystone Steel and Wire in Bartonville has died in an on the job accident. As per report 51 year old Mr Edward Schimmelphenning of Morton died while operating a crane at the central Illinois mill.

Mr Schimmelphenning was taking steel off the back of a flatbed truck at about 8 AM when the crane tipped over. It fell onto the back of the flatbed, crushing the crane's cab killing him almost instantly.

Mr Vic Stirnaman executive vice president of Keystone steel said that the US Occupational Safety and Health Administration are investigating.

US H1 scrap prices keep steady

On March 17th 2008, the average price of H1 scrap in Pittsburgh, Chicago, and Philadelphia was at USD 351.17 per long ton. The price of bundle scrap was at USD 299.5 per long ton.

Among them, the average price of H1 in Pittsburgh was at USD 324.5 per long ton; in Chicago was at USD 357.5 per long ton; in Philadelphia was at USD 371.5 per long ton.

For eastern coast, the average price of H1 in New York, Boston and Huston was remained steady at USD 312.5 per long ton; for western coast, the average price for H1 scrap was at USD 116 per long ton, the price was unchanged from the last week.

(Sourced from YIEH.com)

Cleveland Cliffs comment on MSHA United Taconite accident report

Cleveland Cliffs Inc provided comment regarding a US Mine Safety and Health Administration report. The report involves an April 2007 accident resulting in the death of a United Taconite miner.

Cleveland Cliffs said “The fatality occurred when a drill tipped over after four bolts failed, diminishing the load bearing capacity of the associated leveling jack assembly. The drill manufacturer, which expressly undertook responsibility for training the drill’s operators, represented that the drill was capable of being safely operated on slopes consistent with the grade level where the accident occurred.”

Cleveland Cliffs said “Since the accident, the drill manufacturer has stated that they have redesigned the drill, with eight stronger bolts replacing the four bolts previously used on each leveling-jack assembly. United Taconite officials are conducting a separate investigation, which is yet to be completed.”

After the accident, MSHA issued citations to both the drill manufacturer and United Taconite. The citations issued to United Taconite have been challenged before an administrative law judge of the Federal Mine Safety and Health Review Commission. United Taconite disputes the allegations that violations of the mandatory standards existed. This litigation is only in the initial stages.

Japanese H2 scrap export to Taiwan takes pause

The H2 scrap export from Japan to Taiwan has suspended due to depreciation of US dollar against Yen.

Moreover, the domestic price of scrap keeps soaring in Japan, as Tokyo Steel increased its purchase price of scrap by USD 10.12 per tonne on March 19.

According to estimate, the quotation of H2 scrap offered from Japanese trading companies to Taiwan is at least USD 600 per tonne CIF because of the appreciation of the Yen against the USD and soaring sea freight over USD 50 per tonne from Japan to Taiwan.

So far, Taiwanese mills are reluctant to purchase from Japan owing to the high costs on loading and unloading operation and land transportation.

(Sourced from YIEH)

Grindrod acquires Bay Stevedores

Grindrod announced the acquisition of the business of Bay Stevedores Ltd, backdated to be effective from July 1st 2007. The cost of the investment is undisclosed. Bay Stevedores will become a division of Grindrod Terminals Ltd, a 100% owned subsidiary of Grindrod Limited.

Bay Stevedores, situated in the port of Richards Bay, was formed in 1993 and is a stevedoring business specializing in the pay loading and separation of bulk cargo. The business provides services to Grindrod affiliated companies as well as third parties.

Mr Frank Phillips and Mr Dup du Preez, both directors of Bay Stevedores Ltd, will continue to run the operation.

Mr Dave Rennie executive director Grindrod Limited said that ''Our business is about moving cargo and taking care of all logistical factors on route. The acquisition of Bay Stevedores is simply the purchase of another piece of the supply chain puzzle. This business complements our existing terminal operations in Richards Bay and goes hand in hand with Grindrod's strategy to grow its service offering to customers in the bulk cargo handling market.”

Mr du Preez said that ''The deal has taken a while to finalise as the stevedoring license and property lease agreement with Transnet had to be transferred to Grindrod Terminals Ltd. We are very pleased with the eventual outcome and look forward to being part of growing Grindroda’s terminal operations going forward.''

US Steel shares surge

AP reported that shares of United States Steel Corp rose sharply Thursday after two analysts said the company is able to buy iron, from which it makes steel, at one of the industry's lowest costs.

Mr Aldo Mazzaferro analyst at Goldman Sachs raised his rating on the stock to Buy from Neutral and increased his price target to USD 150 per share from USD 128. He in a client note said that the company has high sensitivity to steel pricing and low input cost exposure.”

Mr Charles A Bradford analyst at Soleil Securities Group also raised his price target to USD 110 from USD 105 and kept a Hold rating on the shares. He in a client note said that "US Steel may be the lowest cost flat rolled steelmaker in the US given its strong iron ore position and major coke-making operations. We expect the company to experience single digit cost increases, which compares with the recent pellet deal between Vale and Ilva of Italy that will increase prices by 86.7% for fiscal 2008."

South Bangka holds 275,288.05 hectares of tin ore deposits

ANTARA News reported that South Bangka Regency in Bangka Belitung (Babel) Islands Province in 2008 has a total of 275,288.05 hectares of tin ore deposits.

The report quoted Mr Endang S Hermansyah head of the South Bangka industry, trade, cooperatives and investment agency as saying that the tin ore deposits are located in five sub districts, namely Toboali, Air Gegas, Payung, Simpang Rimba and Lempar Pongok.

He also said that the regency, which has a population of 152,728 people, also has granite deposits in a total of 66,312 hectares, kaolin 4.42 hectares and quartz sand 4,143 hectares.

The mineral deposits in South Bangka regency include 13,262,500 cubic meters of granite, 200,000 cubic meters of quartz sand, 120 cubic meters of kaolin, 11,011,522 cubic meters of tin ore, and 58,785 cubic meters of iron ore.

Mr Bollore owns 2.02% of Vallourec

Reuters reported that Bollore investment group controlled by financier Mr Vincent Bollore has resumed buying shares in Vallourec and now owns 2.02% of the French steel company.

As of January 25, Mr Bollore owned only 0.37% of Vallourec having sold off a large part of his stake.

US Steel appoints Mr Moss as GM logistics services

United States Steel Corporation announced that Mr William Michael Moss has been advanced to the position of general manager logistics services. In this role, Mr Moss is responsible for overseeing all outbound rail, barge and truck operations at US Steel facilities in the United States and Canada.

Mr Moss joined National Steel in 1978 as a yard clerk in the transportation department of the company's Granite City Steel plant in Granite City, Mo. Over the next 13 years, he advanced through positions in the facility's railroad and barge operations. In 1991, he was named director of operations for the Delray Connecting Railroad, which served National's Great Lakes Steel plant in Ecorse and River Rouge, Mich. He was named president and elected to Delray's Board of Directors in 1994.

When US Steel acquired steelmaking assets from National Steel in 2003, Mr Moss was named movement services manager and relocated to US Steel's Pittsburgh headquarters, where he managed rail and barge operations for the company's US facilities. In 2006, he was promoted to his most recent position, manager-logistics operations, and added management of truck operations to his area of responsibility

One miner killed and four injured at Matla coal mine in SA

It is reported that a miner was killed and four others seriously injured by an explosion in the Matla coal mine outside Witbank in South Africa.

Mr Paris Mashego spokesperson the National Union of Mineworkers said that a methane explosion occurred around noon. He said that "These workers were supposed to be home for the Easter weekend, but were lured into working through zama zama.”

Zama-zama was a voluntary shift system allowing mine workers to make extra money on their off days.

Mr Mashego said that "It is very dangerous to work this shift because employers do not pay much attention to the required safety standards.”

The union believed that the mine was under extra production pressure by the Matla power station, which apparently had low coal stocks.

Matla was owned by Exxaro Resources.

Korea Line to invest USD 586 million to buy 4 ships

Reuters reported that South Korean shipping firm Korea Line Corp plans to spend KRW 589.4 billion (USD 585.5 million) to purchase one very large ore carrier and three very large crude oil carriers.

Korea Line said in a filing to the Korea Exchange it would make the investment, intended to secure ships for the medium and long term, between 2010 and 2012.

Residents suing over proposed Chuitna coal mine in Alaska

A citizens' group has filed a lawsuit over a proposal to develop a large strip coal mine across Cook Inlet from Alaska's largest city.

The Chuitna Citizens NO COALition filed an appeal in Superior Court. It challenges a decision by the commissioner of the Department of Natural Resources not to consider its petition to designate the lands within the Chuitna River watershed as unsuitable for the coal mine.

PacRim Coal LP wants to develop the strip mine on the west side of Cook Inlet. The site is 45 miles west of Anchorage. The company hopes to pull out 300 million tonnes of sub bituminous coal, roughly equal to the energy of a billion barrels of oil, over 25 years.

But the group said the proposal threatens more than 55 square miles of wildlife and fish and once it is mined it can't be reclaimed. Ms Judy Heilman a spokeswoman for the coalition said in a prepared statement that "We're trying to protect our homes, our lifestyles, and the fish and game resources that we depend on. The vast majority of the residents of Beluga and Tyonek oppose a coal strip mine. It will destroy our way of life."

The group is upset with DNR Commissioner Tom Irwin's refusal to consider the petition, which asserts that the proposed mine site can't be successfully reclaimed. It says that under the state's mining law the agency must designate an area unsuitable for coal mining if reclamation in the area is not technologically feasible.

Alstom wins power plant contract with Suez's Electrabel

MarketWatch reported that French engineering company Alstom has secured a contract for over EUR 270 million with Suez's Electrabel unit for construction of a combined cycle power plant in the south of France.

Under the terms of the contract, Alstom will supply all engineering, procurement and construction services to deliver a fully integrated plant.

CEZ confirms buying stake in Romanian nuclear plant

Thomson Financial reported that Central Europe's biggest power producer CEZ confirmed that it has agreed to take a 15% stake in a Romanian nuclear power plant investment and said it plans to increase output capacity in its Czech nuclear plants.

Mr Vladimir Schmalz head of acquisitions of CEZ told a news conference that “In Cernavoda we have negotiated a 15% stake and our participation is certain.”

As per report the planned joint venture with Romanian state energy group Societatea Nationala Nuclearelectrica is aimed at building a EUR 2.3 billion nuclear reactor project.

CEZ, controlled by the Czech state earlier said that it will expand nuclear power generation by 6 to 7 TWH to a total of 31 TWH by 2012 as it faces up to environmental issues with its coal fired plants.

Czech media have earlier reported that the stake in the Russian power generator is estimated to cost CZK 16 billion while the acquisition would require an additional investment of CZK 40 billion in TGK 4's 26 power plants, 600 municipal boilers and 5,000 kilometers of heating pipeline.

Mr Schmalz also said that CEZ has offered the Polish government assistance in any expansion of the country's nuclear capacities, but gave no further details. But he declined to say how much the it plans to spend on acquisitions this year.

Iluka Resources to sells AUD 248 million in shares to fund mine

Perth based Iluka Resources the world's biggest zircon producer announced that it has issued AUD 248 million new shares to institutions to fund the development of the Jacinth Ambrosia project in South Australia's Eucla Basin. The offer price of AUD 2.55 was at a significant discount of 30% from the last closing price.

The stock emerged from a four day trading halt, with volatile trading signifying investor confusion about this move. Shares in ILU traded in a range between AUD 3.27 and AUD 3.94, to close at AUD 3.86, up 5.4%. Iluka said the share placement was 3.5 times oversubscribed.

Iluka Resources also said it plans to sell a further USD 105 million new shares to retail investors, with the terms of the retail offer the same as those of the institutional offer. That will mean eligible retail shareholders will be entitled to subscribe for 4 new shares for each 7 Iluka shares held at the record date at the offer price of AUD 2.55 per new share.

Iluka is a major participant in the global mineral sands sector and is involved in the sales and marketing of titanium based products and zircon.

Danieli bags steel mill contract from Suez Steel

It is reported that Italian equipment maker Danieli & Compagnia Officine Meccaniche has won a EUR 260 million contracts from Egypt's Suez Steel Co to build a mini mill.

The integrated mill will produce 2 million tonnes of steel a year and will be built in 30 months. The overall investment in the Egyptian complex will be EUR 550 million.

Qatar Steel’s Mauritania JV to begin production in 2011

The Peninsula reported that DR pellet project in Mauritania, a JV in which Qatar Steel is a major partner, is expected to begin production in 2011.

Mr John Bylsma executive director of Sphere Investments Limited while addressing the 8th International Arab Iron and Steel Conference said that the work on the project began in 2001 and now hydro geological research and final feasibility study have been completed. The Quelb el Aouj project is located close to a high quality iron ore deposit in Mauritania and it envisages producing 7 million tonnes of directly reduced pellets for 30 years.

Mr Frank Griscom executive director of Hot Briquetted Iron Association said that steel consumption is expected to grow faster in the Middle East over the next 5 years with the GCC leading the region. He added that as many as 27 steel projects came on stream in the region in 2007 and 97 more are expected to be commissioned by 2010.

Mr Ahmed Sidi Mohamed senior official from Mauritania’s vibrant iron ore mining industry said that it sits over a massive four billion tonnes of iron ore deposits. He added that the iron ore deposits were first discovered in Mauritania during World War II and exports began in 1963. The high-quality iron ore deposits are located in the northern province of Tiris. The region has thus earned the epithet ‘the Iron Ore Province’.

FATA coal output reaches 0.26 million tonnes a month

The News quoted Mr Muhammad Yaqub director of minerals department at Pakistan’s Federally Administered Tribal Areas as saying that coal production in the FATA has risen to 266,000 tonnes per month from earlier 30,000 tonnes per month.

Mr Yaqub said that North West Frontier Province governor would soon be briefed on the problems faced by the workers, contractors, leaseholders and mine owners in the production of coal and the responsibilities of the political administration.

Mr Yaqub said that the FATA mines department had introduced state of the art compressors, generators and water pumps in the market to increase the production using scientific techniques. He added that "In Hangu, authorities have set up a latest rescue centre, equipped with latest machinery to serve the people of Orakzai, Kurram agencies and Darra Adamkhel."

Gulf Arab power grid to come on line in 2009 – Report

It is reported that Gulf Arab countries are building the grid to help meet spiraling demand for power as record oil revenues fuel an economic boom in the region and a USD 1.1 billion power grid to connect Gulf Arab states is set to come on line in early 2009, paving the way for a regional electricity market.

Mr Hassan Al Asaad head of corporate affairs at GCC Interconnection Authority said that "Once the grid is ready, it will be a fundamental step, paving the way for a regional electrical energy market." He added that power shortages in the region mean that participating states were unlikely to benefit much from the grid in the short term as they would be unable to contribute power.

Mr Al Asaad said that the grid would eventually facilitate regional trade and encourage the private sector to participate in power generation projects in the GCC. He added that the project is about 55% completed and should be online before the second quarter of 2009.

Construction began in 2004 at a cost of USD 1.1 billion, with each state contributing equally. The grid will have capacity of 1,200 MW but could be expanded later. In the longer term, the grid may become part of a wider pan Arab electricity system and link up to a Mediterranean grid.

OPEC pumps 32.33 million BPD in February 2008

According to a Platts survey of OPEC, the 13 members of OPEC pumped an average 32.33 million barrels per day of crude oil in February 2008 up by 80,000 barrel a day increase on January 2008 levels. However, production from the 12 countries, excluding Iraq, bound by output allocations fell to 29.93 million barrel a day in February 2008 from 29.96 million barrel a day in January 2008.

Mr John Kingston Platts global director of oil said that "It used to be that when prices would soar, OPEC discipline would gradually break down and more supply would come on the market. When you look at numbers like this soaring prices accompanied by minor increases in output it's a sign of very strong discipline but with a significant mix of the apparent inability of many of these member countries to put more oil on the market. For most of them, they are simply tapped out."

Despite the 30,000 barrels a day drop, the OPEC 12 still exceeded their 29.673 million barrels a day collective output target by 257,000 barrels a day. Output increases totaling 190,000 barrels a day from Angola, Indonesia and Iraq were partly offset by decreases totaling 110,000 barrels a day from Ecuador, Iran and Saudi Arabia.

Iraq, which does not participate in OPEC output accords, boosted production to 2.4 million barrels a day in February 2008 from 2.29 million barrels a day in January 2008.

OPEC ministers decided to leave official output targets unchanged, ignoring pleas from major consuming countries for more oil and attributing record prices of more than USD 100 per barrel to factors beyond fundamentals of supply and demand.

OPEC is next scheduled to meet on September 9th 2008, but ministers have said that there could be informal talks on the sidelines of the International Energy Forum in April 2008 in Rome.

Pakistan may not achieve 10.5% growth target in industrial sector

The Dawn reported that Pakistan is unlikely to achieve its annual 10.5% growth target in the industrial sector during the current financial year following the sector's decline in output by more than 4% in December 2007 for the first time in the recorded history.

According to Federal Bureau of Statistics data, the recession in manufacturing production was witnessed in December 2007, when it declined by 4.12% YoY over December 2006. The worst energy crisis, reduced working days on the back of strikes in the wake of assassination of former prime minister Ms Benazir Bhutto, have been considered the sole factors for this slump in production.

Analysts said that the negative growth in industrial production in December 2007 dampened the chances of any reverse in industrial growth in the months ahead to achieve the 10.5% growth target. Industrial growth, as measured by quantum index numbers, showed that all major sectors like manufacturing, mining and electricity registered a slide in production growth. This also resulted into further widening the gulf between demand and supply issue.

The growth in industrial production had been steadily on decline for the last three years as it declined to 8.8% in the year 2006-07 from 19.9% in the year 2004-05 owing to capacity constraints and closure of many units as a result of high cost of doing business in Pakistan.

Iran to sign LNG and gas drilling contracts

PIN reported that 2 contracts for development of Iran’s LNG and drilling of Kish gas field will be signed.

PIN quoted Iranian Petroleum Engineering & Development Company PR as saying that the contract for the development of Kish gas field will be signed between the officials of IPEDC and National Iranian Drilling Company.

Kish field covers 48 trillion cubic feet of in place gas that it is projected to have a production capacity of 60mm to 100mm cubic meter a day. It is also planned to drill 10 wells onshore and 15 off the coast. Annual production of the first phase of Kish gas field is valued at USD 1.2 billion and for the all three phases more than USD 3.6 billion dollars in total. On this basis, the last part of Iran’s LNG project contracts will be also signed.

Referring to the last part of LNG contract, Mr Ali Kheir Andish MD of Iran LNG Company said that "We are in talks on the projects with an Asian company and 3 other foreign companies and also an Asian company has declared it is ready to invest on gas liquefaction part of the project."

Iraq unlikely to sign major oil contracts until summer

Iraq Directory reported that Iraqi government is unlikely to sign technical support contracts with major oil companies to work in some main fields until summer, a few months late from the date that Iraqi government had originally targeted.

Mr Hussein Al Shahrastani Iraqi oil minister has expressed his hope last month to sign such contracts in March 2008. However, executives of oil companies said that negotiators did not discuss details until now or the scope of the work, the financial amounts and relationship with the work of long-term development of fields which major oil companies aspire to work on.

The contracts will give the companies a larger role than ever before in managing the maintenance and development projects of the fields. Those companies have provided field studies, technical and training support for those fields for years in an attempt to gain the satisfaction of Baghdad.

As per report, the agreements aim to increase Iraqi oil production to 500,000 barrels a day within a year to add more than 20% to the current production of 2.27 million barrels per day.

Chinese HR export offers likely to surge

It is reported that export offers for hot rolled coil remained quite strong this week despite softening in domestic market prices as many steel makers are fully booked.

On Shanghai market, commodity grade 4.75mm to 11.5mm HRC in 1500mm width by Shagang was being quoted at CNY 5200 per tonne and 4.75mm to 11.5mm in 1800mm width at CNY 5500 per tonne.

Export offers for commercial HRC were prevailing at USD 855 to USD 865 per tonne on FOB basis.

A Hebei based steel maker told Mysteel that its allocation for April production is fully booked and most are concluded at around USD 850 per tonne on FOB basis and it will not announce its price for May production until April 10th 2008. Another steel mill in Shandong Province was quoting commercial 4.5mm to 11.5mm HRC at USD 865 per tonne on FOB basis for April production and May shipment.

It indicates that overseas demand is strong enough to shoot up price to around USD 900 to USD 950 per tonne on FOB basis in April.

(Sourced from MySteel.net)

Baosteel secures long term FeCr supply from Sinochem

It is reported that Baoshan Iron & Steel has signed long term ferrochrome purchase contract with Sinochem Hebei recently which would boost their cooperation in reliable FeCr supply and build up strategic partnership.

Mr Yao Xuejun GM of SinoChem Heibei Corporation and Mr Cao Zhineng deputy GM of purchasing center of Baosteel signed on the agreement of cooperation ceremony on March 20th 2008.

According to the agreement, the two sides will further strengthen and expand their cooperation in order to form a stable ferrochrome supply-demand chain.

As per report global FeCr producers are ready to push up the Q2 contract price to USD 2 per lb in the ongoing talks with stainless producers, compared with USD 1.21 per lb in the previous quarter. The move has come at a time when global demand keeps rapid expansion while power supply remains quite tight.

Shaoguan 3200 cubic meter BF breaks ground

It is reported that Shaoguan Steel's No 8 blast furnace has broken ground on March 12th 2008.

Construction period of the 3200 cubic meter blast furnace is merely 10 months, despite insufficient supply of construction resources in local region.

The furnace is expected to raise the steel maker’s capacity to 10 million tonnes from current 6 million tonnes.

Chinese rebar export offer shoot up again

It is reported that construction steel export offers have been raised again by steel makers on the news that Dubai has lifted the duties on imports of steel products

Domestic market prices are largely unchanged. On Shanghai market, HRB335 20mm rebar is being quoted at CNY 4730 per tonne to CNY 4750 per tonne, HRB400 at CNY 4820 per tonne to CNY 4850 per tonne. Commercial wire rod goes at CNY 5020 per tonne, hi-speed material at CNY 5060 per tonne.

Prevailing export offers for rebar are at USD 860 per tonne to USD 870 per tonne FOB, another increase of USD 30 per tonne to USD 40 per tonne from early last week. Wire rod is being quoted at USD 880 per tonne to USD 890 per tonne FOB. Some steel makers are tagging at USD 850 per tonne FOB for material with boron.

Mysteel forecasts that in the short term, the downward correction is expected to continue. Take Shanghai price for HRB335 20mm rebar as example, the supportive level is forecasted to be at CNY 4600 per tonne, above which the upward strength is intact. Otherwise, the downward adjustment will bring price to around CNY 4300 per tonne.

(Sourced from MySteel.net)

Analysis of Baosteel May price policy

It is reported that Baosteel which unveiled it price changes for May 2008 recently mainly touching upon HRC, CRC, HDG, HDG and many other varieties such as cold forged steel, low carbon wire rod, die steel and other high end steels is on brief analysis.

Analysts see from the change details that Baosteel is differentiating pricing for higher end steel products and the common products, reflecting higher quality, higher price principle. Analyst said this boosts the market confidence, though some common varieties are not adjusted, and gives a signal the top Chinese steelmaker is positive toward future steel market.

When the bullish factors such as 65% ore benchmark price hike, Baosteel pushing up Q2 prices and the market enthusiasms are fading out, wire rod, HRC and CRC prices went downward in March from previous wide surges, leading the market into slight adjustments.

While Baosteel's new policy for May rekindles the market sentiment and is expected to stimulate a rebound. However, it's close to the end of this month, traders are facing financial strain again, end users' consumption remains unreleased vigorously and the inventory is big.

Though high cost can push the market higher, it's not helping absorbing the low priced stocks, the analyst also warned not to be too optimistic as supply and demand correlation will finally decide the market situation.

(Sourced from MySteel.net)

Nanjing increases steel plate prices

China’s Nanjing Iron & Steel Union announced to increase the steel plate price, effective from April 1st 2008.

The new price rise will be CNY 300 tonnes for ship plate and CNY 600 per tonnes for heavy plate, low alloy plate, boiler plate and vessel plate.

The current price for Q235 with thickness from 16mm to 20mm is about CNY 5,780 per tonnes.

Sinosteel Hengyang to supply caster to CSN

It is reported that GM of CSN visited Sinosteel Hengyang Machinery Company on March 17th 2008 and they were very satisfied with R8m Three Machine Three-Fluid Continuous Casting System, which was designed for CSN by Sinosteel Hengyang Machinery Company.

Sinosteel Hengyang Machinery undertook R8m Three Machine Three Fluid Continuous Casting task of CSN with its strong technical power in June of 2007

As per report Sinosteel Hengyang Machinery Company is the manufacturer of largest continuous casting producer in China at present and exports to Japan, Thailand, and Indonesia as well as Turkey etc.

Shougang reports profit of CNY 4.36 billion for 2007

It is reported that in 2007, Shougang Group had a sale income of CNY 109.0 billion topping CNY 100 billion for the first time and CNY 16.0 billion more than the initial plan up by 31% YoY. Meanwhile, the group realized profit CNY 4.36 billion in 2007, CNY 2.56 billion up by 60% YoY than that of 2006.

In 2007, Shougang produced 7.13 million tonnes of strategic products, 1.5 million tonnes than the plan and 2.38 million tonnes more than that of 2006. The ratio of strategic products reached 53.1%, and the ratio of sheet to strip came to 37.4%, both making new records.

At the same time, the group produced 1.215 million tonnes of ship plate, increasing 778,000 tonnes or 1.8 times more than that of 2006, becoming one of the top three ship plate producers.

In respect of the Shougang Jingtang Iron and Steel Project, the group also made great progresses in 2007, completing the installation of structure and shell of the blast furnace for iron melting, the construction of the structures of No 1 and 2 hot blast stoves and the coal injection plant, and the ground work of 2250 hot rolling and 1700 cold rolling plants and so on.

Ningxia Yanchi discovers new coal resources

According to Ningxia Autonomous Region’s Land and Resources Office that Ningxia Geology and Environment Monitoring Department has discovered nearly 200 million tonnes of coal reserves in Si Gu quan in Yanchi County. It is the first large-scale coal producing area in Ningxia.

It is understood that the level of geological work of Si Gu quan region is low. Through the reconnaissance, the coal layer is estimated to reach 12 layers, and the most thickness coal layer is 6.26 meters. The coal genus is: one-third coking coal, a small amount of rich coal, gas rich coal, gas coal etc.

As per report, Si Gu quan coal area is about 25 square kilometer, the reserve is estimated to reach 200 million tonnes and the exploitation condition is very well.

Ma'anshan hikes steel price

It is reported that Ma'anshan Steel and Baotou Steel has increased HRC prices by CNY 100 per tonne for May and June to CNY 5280 per tonne after Baosteel Group has raise prices by CNY 300 per tonne for May productions.

Insiders disclosed that Ma’anshan Steel has hiked April prices by CNY 200 per tonne for HR products, CNY 300 per tonne for CR products and CNY 400 per tonne for HDG.

According to Mr Xu Xiangchun analyst from Mysteel, Baosteel's price increase aims to narrow the price gap with international prices. The price markup has strengthened confidence in steel prices. However, increasing pressure on downstream industries implies high possibility of government intervention.

Baosteel Group allowed to build Zhanjiang iron and steel base

It is reported that Shanghai Baosteel Group Corporation has recently been allowed to invest about CNY 60 billion in the construction of an iron and steel base at Zhanjiang, Guangdong Province in south China.

As per report recently the National Development and Reform Commission, China's macro economy regulator, gave nod to Baosteel Group's building scheme, with a view to further improving the country's iron and steel industrial structure and layout, eliminating the inefficient production capacity and helping domestic steelmakers sharpen their competitive edges.

People familiar with the matter said the Zhanjiang based project will be engaged in high end iron and steel production, with an annual production capacity of more than 10 million tonnes or 20 million tonnes. Meanwhile, sources said that Baosteel Group would acquire and integrate Guangdong Shaoguan Iron and Steel Group Company Ltd. and Guangzhou Iron & Steel Group Company Ltd, two local steelmakers. And then the buyer is likely to establish a new venture in Guangzhou, capital city of Guangdong Province.

Jigang to increase a third medium plate line in 2008

It is reported that Jinan Iron and Steel Corporation plans to spend CNY 1.8 billion to increase a third medium plate line in 2008.

As per report the new line, with 4300mm width will be put into production in 2008 and the company will also build a set of 3000 cubic meter blast furnace and one set of 210 tonnes converter.

An officer said that the new line was designed to enlarge the product structure of medium plate.

China to limit granting of mineral rights

It is reported that China may restrict the award of mineral exploitation rights to a limited group of people as part of a plan to boost domestic production as import prices rise.

Mr Wang Min deputy minister of land and resources said restricting exploitation rights is part of a plan to set up a national reserve system for minerals to ensure supply,. The plan requires the cooperation of several' agencies.

Baosteel Group Corp China's largest steelmaker agreed last month to pay 65% more to Brazil's CVRD for contract iron ore as China's demand for cars, buildings and appliances boost appetite for steel.

Laiwu undertakes trial run of variable frequency deposit welding machine

It is reported that the trial operation of variable-frequency deposit welding machine was successful on March 19th 2008 in Laiwu Steel.

The machine is able to weld concurrent and converse at the same time and the longest welding size is as long as 5,400mm. It is able to weld roller of different specification and both welding efficiency and quality would be increased significantly.

It is expected that the machine could bring a profit of over CNY 800,000 after commission

It was self designed in machine repair shop in sheet mill in Laiwu Iron & Steel Group, which lies in province Shandong, the east of China.

Severstal to acquire ArcelorMittal Sparrows Point plant in US

Russian steel major Severstal announced that it has reached an agreement to purchase Sparrows Point steel mill based at Baltimore Maryland in United States. The acquisition is subject to customary closing conditions, including approval by the United States Department of Justice and is expected to close in the second quarter of 2008.

Severstal has agreed to acquire Sparrows Point LLC for an all cash purchase price of USD 810 million.

Seversatl expects substantial synergies with its current US operations in Dearborn, Michigan and Columbus, Mississippi. With the addition of Sparrows Point, Severstal will also improve its distribution channels and increase its geographic reach as the plant provides direct ocean access and proximity to a number of major US railways and highways.

Mr Alexei Mordashov CEO of Severstal said that “With Sparrows Point, Severstal brings into its US portfolio an asset with significant existing value as well as unlocked growth potential. This acquisition presents us with an opportunity to enhance productivity at Sparrows Point through our high standards of operational performance and will benefit our existing US businesses. We expect to realize synergies in Sparrows Point and with SNA that will fuel increased production and profitability. We remain committed to growth in North America and believe in the long term promise of the US market; we’re confident that this acquisition will create value for our shareholders while strengthening our US platform as a whole.”

Merrill Lynch & Co is acting as exclusive financial advisor to Severstal and rendered a fairness opinion to the Board of Directors regarding this transaction. Skadden, Arps, Slate, Meagher & Flom LLP is acting as legal counsel to Severstal.

Ukrainian iron ore output in February down by 9.2% MoM

According to Millennium capital, Ukraine’s crude iron ore and ore concentrate output dropped 9.2% MoM in February 2008.

The ore mining companies that posted the worst output dynamics in February were: Sukha Balka crude iron ore output down by 64.2% MoM and 62.3% YoY and Ferrexpo Poltava OMEP pellets output down by 6.0% MoM but up by 0.8% YoY. There were only two ore mining companies that showed output growth in February:Pivdennyi OMEP concentrate output up by 0.5% MoM and Pivnichnyi OMEP pellets output up by 0.9% MoM.

Iron ore

Concentrate

Agglomerates

Pellets

Sourced from Millennium Capital

Russia starts AD investigation on coated steel

FIS reported that Russian ministry for economic development signed an order on the anti dumping investigation regarding imports of polymer coated metal roll from China, South Korea, Belgium, Finland and Kazakhstan.

The investigation was initiated by the request of Severstal, NLMK and MMK order and aims to establish the fact of dumping imports of such roll and resulting threat to the metallurgical industry of the Russian economy.

TMK new pipes plant to commence by September 2008

FIS reported that production of straight seam large size pipes will come on stream by September at Volzhsk Pipe Plant. Pipes with the diameter from 508 to 1,420 mm will be made from high strength steel, wall from 8 to 42 mm thick.

The mill supplied by Swiss HAEUSLER AG implements the new technology of pipe forming roll bending which is widely used by the world's leading pipe manufacturers and ensures high productivity and necessary quality parameters in addition to highly reliable operation.

Russian steelworks raise slab price again

It is reported that this week Russian steel mills are offering steel slab prices at USD 880 per tonne CFR Taiwan. It is USD 50 per tonne higher than the offer quoted to India last week.

It is said that ArcelorMittal’s Tubarao plant in Brazil offer second quarter price of slab at USD 630 to USD 660 per tonne FOB for European market.

Trades estimated that Brazil will offer the price for Asia at USD 770 per tonne CFR. Actually, the current deal prices are mainly made around USD 720 per tonne CFR Taiwan.

However, the ex work prices of flat rolled material in Taiwan are only around USD 800 per tonne. It is very difficult for Taiwanese users to accept this price.

Khpw plant to supply 40,000 tonnes of pipes for Kazakhstan

Ukrainian Khpw pipe plant, a subsidiary of Metinvest Group, has announced to supply steel pipe products for Kazakhstan’s oil pipeline project.

Khpw pipe plant is planning to produce and supply 7,000 tonnes of big diameter steel pipe with 813mm and 9.5mm thickness in March 2008 and total supply volume will reach 40,000 tonnes.

Dalpolymetall to boost production of zinc and lead

FIS reported that in 2007, Mining and Metallurgical Company Dalpolymetall produced 845,000 tonnes of complex ores, which is more than plan. Almost half of this volume was produced by Nikolaevsky mine.

All the ores produced were processed into metal concentrates, including 12,600 tonnes of lead, 17,900 tonnes of zinc and 36,200 tonnes of silver concentrates. This is the best result in ore production for the last five years although financial results turned out to be less impressive than in 2006. The explanation is the development of ores with lower concentrations of metals and the loss of a large Russian consumer Chelyabinsk Zinc Plant, which was not happy with the transportations costs.

Another long standing partner, Glenkor pursues a stringent price policy. In the APR countries, the company is known as the supplier of the concentrates of the best quality so the company is confident it will be able to market the increased amounts of concentrates.

Ukraine gas consumption in 2007 down by 5.5% YoY

According to the Ministry of Fuel & Energy of Ukraine, the consumption of natural gas in 2007 down by 5.5% YoY to 69.8 billion cubic meters. The volume of gas consumed by industry was 34.2 billion cubic meters, by individuals 16.5 billion cubic meters and by utilities 8.9 billion cubic meters.

The Ministry of Fuel & Energy said taking in consideration the continuously increasing prices for natural gas, we welcome this decrease in gas consumption. We expect that Ukraine will have to pay the same price for natural gas as other Central European or Baltic states within two years.

Sourced from Millennium Capital

Chinese automaker launches production in Kherson

Interfax reported that the Chinese car maker Shenyang Brilliance Jinbei Automobile Co Ltd will start manufacturing its Brilliance and Jinbei cars in Kherson.

The implementation of the project was discussed on March 14th 2008 at a meeting between Mr He Guohua president of Shenyang Brilliance Jinbei Automobile Company Ltd and Mr Borys Sylenkov head of the regional administration which was also attended by the senior staff of the new company, Kres Autogroup Ltd which will be the general importer of Brilliance cars into Ukraine.

Mr Sylenkov said the regional authorities are prepared to create favorable conditions for the company to develop the project.

Mr Ruslan Khomenko Director of Kres Autogroup told Interfax that currently it is being decided which facilities will be used to produce cars He said without saying which other facilities could be used for the cars assembly that "These could be the facilities of the Anto Rus car factory, but other options are also being considered."

He added that the start date for the project will be decided during this month, but would not give any further information, such as the projects cost, source of investment and expected production and sale figures. He also said that Kres Autogroup currently supplies ready made cars for sale on the Ukrainian market.

Mr Khomenko said the main competitive advantage of Brilliance cars in Ukraine is the good price/quality ratio. He said "In Ukraine, this E-class car costs USD 22,000 to USD 30,000, whereas prices of other cars within the same class start at USD 32,000."

Motovilikha supplies sheet roll to Norilsk Nickel

FIS reported that Motovilikha Plants that won the tender in November 2007 delivered the ordered volume of sheet roll for Norilsk Nickel to the Archangelsk Port.

Under the tender terms the Company has to supply 4000 tonnes of steel sheet by March 31st 2008.

Motovilikha Plants OJSC is a holding established on a base of the Ural eldest defense enterprise.

Gazprom may get Russia's share in Erdenet

FIS reported that Gazprombank may be transferred Russia's 49% shareholding in the joint venture Erdenet which produces 25 million tonnes of ore every year and makes copper and molybdenum concentrate from it.

In 2007 Erdenet's revenues from the sale of its products amounted to USD1.4 billion. Earlier the state owned Rosstekhnologii was called a candidate for obtaining Russia's share in Erdenet, which could be the source of molybdenum concentrate used in special steels production at Russpetsstal, the member of Rostekhnologii.