Indian government to talk to iron ore exporters

It is reported that, after steel producers announced to exercise self restraint on exports and demanded raw material security, centre has decided to begin dialogue with iron ore exporters to sensitize them on problems being faced by steel utilities.

Mr RS Pandey secretary steel said that "Major steel producers have shared the concern arising out of rise in steel prices. Government will begin dialogue with them to solicit their views on how to deal with the price situation. With all seriousness the difficulties being faced by the producers will be addressed."

Mr Pandey said that "We will also begin dialogue with major iron ore exporters to sensitize them on the raw material insecurity being faced by steelmakers and find out ways and means to ensure the same to enable new steel capacities to come up."

He added that based on discussion with the steel industry representatives, steps would be taken to ensure power, logistics and raw material inputs to secondary steel producers. He said "With all seriousness the difficulties being faced by the producers will be addressed.”

TATA Motors enters into definitive agreement with Ford for purchase of Jaguar Land Rover

TATA Motors announced that it has entered into a definitive agreement with the Ford Motor Company for the purchase of Jaguar Land Rover, comprising brands, plants and Intellectual Property Rights.

The transfer of ownership to TATA Motors is expected to close by the end of the next quarter, subject to applicable regulatory approvals. The total amount to be paid in cash by TATA Motors for Jaguar Land Rover upon closing will be approximately USD 2.3 billion. At closing, Ford will then contribute up to approximately USD 600 million to the Jaguar Land Rover pension plans.

Mr Ratan N Tata chairman of Tata Sons and Tata Motors said that “We are very pleased at the prospect of Jaguar and Land Rover being a significant part of our automotive business. We have enormous respect for the two brands and will Endeavour to preserve and build on their heritage and competitiveness, keeping their identities intact. We aim to support their growth, while holding true to our principles of allowing the management and employees to bring their experience and expertise to bear on the growth of the business.”

Mr Alan Mulally president and CEO of the Ford Motor Company said that "Jaguar and Land Rover are terrific brands. We are confident that they are leaving our fold with the products, plan and team to continue to thrive under Tata's stewardship. Now, it is time for Ford to concentrate on integrating the Ford brand globally, as we implement our plan to create a strong Ford Motor Company that delivers profitable growth for all."

As part of the transaction, Ford will continue to supply Jaguar Land Rover for differing periods with powertrains, stampings and other vehicle components, in addition to a variety of technologies, such as environmental and platform technologies. Ford also has committed to provide engineering support, including research and development, plus information technology, accounting and other services. In addition, Ford Motor Credit Company will provide financing for Jaguar and Land Rover dealers and customers during a transitional period, which can vary by market, of up to 12 months.

The parties believe these arrangements will support Jaguar Land Rover's current product plans, while providing Jaguar Land Rover with the freedom to develop its own stand-alone capabilities in the future that will best serve its premium manufacturer requirements.

Maoists’ strike affects NMDC iron ore shipments in Chhattisgarh

IANS reported that a daylong work stoppage called by the Maoist guerrillas Wednesday in southern Chhattisgarh affected normal life as the transport operators kept passenger vehicles off the road.

As per report, the transportation of iron ore from the National Mineral Development Corporation’s Bailadila in Dantewada district mines was affected as no trains plied on Jagdalpur-Kirandul rail section for fear of violence during the strike.

India’s largest iron-ore producer and exporter in public sector, the NMDC has major mining facilities in Kirandul and its neighbouring pockets that form vast Bailadila hills.

Mr Patnaik trashes National Mineral Policy

Mr Naveen Patnaik chief minister of Orissa said that "The National Mineral Policy 2008 is not only shortsighted and formulated with an eye on elections, but it smacks of a surreptitious deal with hidden or foreign hands or even with the international mining lobby. It is detrimental to all mineral bearing states."

Mr Patnaik said that chief ministers of Chhattisgarh, Jharkhand, Rajasthan, Madhya Pradesh, Karnataka and Orissa had jointly opposed the proposed policy and had met the Prime Minister the home minister and the mines minister in this connection.

He added that "We had demanded that the draft mineral policy be shared with us before it is approved by the cabinet but instead of doing so the central government has just gone ahead and approved it. The surreptitious manner in which the entire matter has been handled by the central government raises doubts about its intentions, especially the policy being tabled in the Rajya Sabha in the last hours before the recent recess of Parliament."

Mr Patnaik said that the policy is heavily influenced by the international mining lobby. He dismissed the contention that the mining sector needs state of the art technology and that it is a standalone activity where security of tenure and seamless transition from prospecting to export is required. He said such an approach was fundamentally flawed as far as bulk minerals like iron ore, bauxite, chromite and limestone were concerned. He added that "If the policy is adopted, a few multinational mining companies will acquire control over vast mineral resources of the country and exports of finite resources will be encouraged."

Objecting to the provision of a seamless transition from prospecting to mining and export, as also to the security of tenure argument, Mr Patnaik said that once an applicant gets a prospecting license she will automatically get a mining license leaving no scope for the state government to impose any conditions relating to value addition within the state.

He added that "Mineral bearing states can prosper by insisting on value addition to ore within the state and Orissa is a bright example of how it has attracted investment by adopting such a policy fetches revenue and provides employment."

Steel prices slide in Punjab – Report

PTI reported that steel price has moved down by INR 1,000 to INR 2,000 per tonne in Punjab on March 26th 2008, a day after the Indian steelmakers offered to stop export. The prices of ingot have come down to INR 38,500 per tonne from INR 39,800 per tonne within a day. Similarly, the rates of round have fallen down to INR 43,000 per tonne from INR 45,000 per tonne.

As per report, the rates are expected to fall down further by another INR 1,000 to INR 1,500 per tonne within a couple of days.

The report quoted a Mandi Gobindgarh based steel trader as saying that "The prices have softened because of the announcement by the Indian Steel Alliance that the steel producers would immediately stop steel export. In view of the present situation, the prices might further go down a little bit even more."

But the report added that the slight relief emerged in the shape of softening of steel prices could not accrue to steel consumers like light engineering industry of the state as induction furnaces have temporarily stopped booking orders from the industry due to reduction in prices.

Mr SC Ralhan regional chairman of Engineering Export Promotion Council said that "We are not getting any benefit out of reduction in steel prices as the induction furnaces are not booking orders at reduced prices even as the demand for steel is there."

Indian government congratulates TATA Group

PTI reported that Indian government has showered rich compliments on the TATA Group for acquiring Jaguar and Land Rover car brands and holding India's flag high in the highly competitive international business.

Mr Kamal Nath union commerce & industry minister said that "My congratulations to the TATAs and entire corporate world as they have held India's private sector flag high. The world is looking at India." He added that homegrown Indian firms have demonstrated to the global business how competent and progressive they have become even in the midst of a slowdown.

Kamal Nath further added that "The most important thing is that world is recognizing India's credibility."

Indian steel users upbeat on government measures

It is reported that with the recent reports of Indian government proposals for abolishing the import duty on steel and withdrawal of duty entitlement passbook facility on its exports, Indian steel users are hoping for a respite in domestic steel prices.

Mr Narinder Bhamra president of Fasteners Manufacturers Association said that "We are too pleased to hear these proposals and have been intimated that a meeting to this effect took place in Delhi today."

Mr Charanjit Singh Vishvkarma president of united cycles parts and manufacturers association said that "The international prices of steel are around INR 40,000 per tonne. When made duty free, the prices will come down to INR 38,000 per tonne. We will be saving INR 7,000 per tonne if we import from outside. Moreover with open market, the monopoly of the major steel producers will also come down."

Mr KK Seth spokesperson of the association added that "We expect a good response from our producers only if they stop exporting steel which was our main demand and hence prices will automatically come down because abolition of import duty is still a proposal."

TATA’s overseas acquisitions table

Following are some major overseas acquisitions by TATA Group companies in recent years

Readers may kindly note that above list is subject to omissions

India to attract INR 100,000 crore FDI in mining – Report

Mr Subbarami Reddy union minister of state for mines said that India expects to attract foreign direct investment of INR 100,000 crore per annum in mining exploration of gold and diamond. He added that the new mining policy National Mineral Policy 2008 is expected to go through in next month's Parliament session.

Mr Reddy said that over a dozen companies from Australia, Canada and South Africa have expressed their interest in bringing technical expertise to identify the potential of a mining block, and Indian officials would soon visit these countries to explore the possibilities of more investment. He added that under the new policy, those who invest heavy risk capital will automatically get the mining lease to enable them to protect their capital, while enabling India to achieve capital intensive mineral exploration.

He said India produces 89 minerals, out of which 11 are metallic and 52 non metallic. It is estimated to have 2.92 billion tonnes of bauxite or 10% of the world's reserves and 276 billion tonnes of coal. India is also estimated to have 14,000 tonnes of gold reserves. He added that "The new policy also aims to address a major complaint of investors by shortening the time taken for granting new mining leases by state and central governments to between six months and one year. After this period, applications will be automatically referred to a tribunal."

Mr Reddy also said that after the policy announcement, states would get more royalty, which would be decided on the basis of the selling price of the mineral against the present system based on volumes.

Union cabinet has approved the policy last week after a delay of 2 years and aims to attract around USD 250 million in foreign direct investment annually in the mining sector in the next 5 years.

CIL takes up new initiative for coal supply

It is reported that Coal India Limited has taken some new initiatives and will formulate separate fuel supply agreement for power, non power, new consumer and middle and small scale industries. The fuel supply agreement model will be implemented by May 2008.

Mr K Ranganath marketing director of CIL said that it has already issued letters to the power and non power sectors, which are interested to take coal from CIL. He added that "After the companies submit the necessary documents, CIL will sign fuel supply agreement contract with them to supply coal. It will book 140 million tonne of coal for the new consumers in power and non power sector."

Mr Ranganath said that while the contract with the new power companies will be for 24 months, the CIL will sign the agreement with non power sectors for supply of coal for 12 months. He added that the middle and small industries, having a requirement of more than 4,200 tonne a year, will have to approach the CIL to get coal through an authorized state government agency.

CIL has already requested the state governments to send the name of their respective agencies. It will also supply coal to the consumers through forward e auction. Initially, CIL has booked 7 million tonnes for distribution to consumers.

NRB Bearings to tap global market

It is reported that Mumbai based auto ancillary supplier NRB Bearings is focusing on leveraging opportunities in the industrial sector and overseas markets in a bid to offset the sluggish demand from its key customer segment, the domestic automobile industry.

In the overseas market, NRB Bearings has received orders from leading European truck and automobile companies. The industrial segment and export sales together constituted about 15% of the company’s turnover of INR 303 crore in 2007 and this will be raised to 20% to 25% over the next 2 to 3 years.

NRB Bearings refused to name the European automobile companies being targeted for exports. Meanwhile, in a bid to keep rising costs of inputs such as steel and allied metals under check, NRB Bearings is relying on operational efficiency.

GAIL awarded Oil & Gas Pipeline Transportation Company of the Year

GAIL India Limited recently announced that it has been adjudged the Oil & Gas Transportation Company of the Year 2006-07. Mr Murli Deora union minister of petroleum & natural gas presented the award to Dr UD Choubey CMD of GAIL.

GAIL owns and operates 6700 kilometer of natural gas transmission network which is over 82% of the total pipeline infrastructure in India. The extensive natural gas infrastructure established over the last 2 decades has enabled sustained development of sizeable gas market in India.

During the year 2006-07, GAIL handled around 28 billion cubic meter of natural gas through its transmission network and currently, its market share in gas transmission is 79%. The operating performance of the pipelines operated by GAIL has been excellent in 2006-07 and 100% availability of natural gas pipeline systems was maintained. It has robust future plans and a road map has been developed to increase pipeline infrastructure to 11000 kilometer by 2011-12.

In addition to gas pipeline network, GAIL owns and operates world's longest exclusive LPG Pipeline Jamnagar Loni pipeline (1269 km) and another one, Vizag-Secunderabad LPG pipeline (653 km). These pipelines have efficiently substituted rail/road transportation of LPG to a large extent in the respective areas and also resulted in reduction of emissions.

During the year 2006-07, GAIL added 4 new natural gas pipelines namely Dahej Uran Pipeline, Vijaipur Kota Pipeline, Kelaras Malanpur Pipeline and Jagoti Pithampur Pipeline to provide connectivity to consumers in various parts of India. In the current financial year, it has completed Dahej Dabhol pipeline project which has not only revived the Dabhol power project but also provided connectivity between key locations across Gujarat and Maharashtra.

NTPC to take over Patratu power plant in Jharkhand

Union power ministry has laced with sweeteners its offer to let National Thermal Power Corporation take over Jharkhand State Electricity Board's coal fired power station at Patratu for turning it around.

Mr Anil Razdan union power secretary has informed the Jharkhand chief secretary that NTPC will also set up state of the art generators and provide power to villages in the plant's vicinity besides taking up distribution in Ranchi.

According to the proposal, NTPC will use the land available at the power plant to set up units of 660 MW to 800 MW capacity, while at the same time renovate the existing 110 MW generators to improve efficiency and ensure they are good for the next 10 years or so. The new generators will be less polluting than the existing machinery and will run longer before needing maintenance shut downs.

NTPC is also willing to take over the distribution license for Ranchi. Not just that, it also promises to supply electricity in villages within a radius of 10 kilometer of the Patratu plant through the centre's Rajiv Gandhi Grameen Vidyutikaran Yojana.

NTPC has a remarkable track record of turning around old power plants doddering on the brink of blowing their fuse permanently. It has turned around and expanded units such as Unchahar and Tanda in UP, Talcher in Orissa and Badarpur in Delhi. It is also working on the Kanti plant in Bihar's Muzaffarpur district.

RPL to spend INR 3,000 crore for mines to fuel Sasan UMPP

BS reported that Reliance Power Limited is planning to invest about INR 2,500 to INR 3,000 crore over a period of 3 years to develop 3 coal mines to fuel its Sasan ultra mega power project in Madhya Pradesh.

A top official at Reliance Power said that "We have submitted the plan for the pit head mines to be developed in a strategic partnership with the North American Coal Corporation to the ministry of coal and expect the final clearance within a few months."

According to the MoU signed with Reliance Power, North American Coal Corporation, the largest lignite coal producer and among the top 10 coal producers in the US, will provide technical assistance, including evaluation of geological data, mine planning and design, supervision of mining operations and training for Reliance professionals.

Sources said that the coal mining plans of Reliance Power for the Sasan project would be one of the largest and unprecedented in India, with advanced coal handling equipment. One of the transportation vehicles of 240 tonne capacity that will be used is equivalent to the size of 4 railway wagons.

The INR 18,300 crore Sasan project is scheduled to go on stream with the first 660 MW unit of the 3,960 MW project to go on line ahead of schedule within a few years. The ultra mega power project will require about 15 million tonnes of coal annually.

Reliance to set up third refinery at Jamnagar

BS reported that Reliance Industries Limited is evaluating a plan to set up its third refinery at Jamnagar in an ambitious project to reach a total capacity of 100 million tonne per annum. It has appointed a global oil and refinery consultancy firm to evaluate the feasibility of the project, which will help capitalize the increased requirement for global crude distillation capacity.

RIL has a 33 million tonne per annum refinery at Jamnagar, which is the third largest at a single location in the world. The refinery’s capacity is 22.6% of India’s total refining capacity. It is also setting up a second refinery near the existing one with a capacity of 29 million tonne per annum.

This export based refinery is being set up under its subsidiary Reliance Petroleum Limited and is scheduled to be operational by the end of 2008. RIL will require a capacity addition of 38 million tonne per annum through its third refinery at Jamnagar to reach the 100 million tonne per annum capacity.

Bhagawati Gases enters into MOU with Rotor 1

It is reported that Bhagawati Gases has entered into an agreement with Russian company Rotor 1 for detection of direct hydrocarbon in South Kadi Area of western onshore basin in Gujarat.

The tender was awarded by Oil & Natural Gas Corporation for low frequency passive seismic survey for contract value of USD 885,300.

NHAI projects INR 28,000 crore expenditure in 2008-09

It is reported that National Highways Authority of India has projected an expenditure of INR 28,000 crore for 2008-09 to complete its ongoing projects and the new projects announced under the National Highways Development Project.

Some ongoing projects that are expected to be completed in 2008-09 include
1) 56.25 kilometer long Garhmukteshwar Muradabad expressway
2) 32 kilometer long Chennai bypass
3) 15 kilometer long Chennai Ennore expressway
4) 14.35 kilometer long Jawaharlal Nehru Port phase-II project

To meet this projected expenditure, NHAI is in advanced stages of talks with the Asian Development Bank for a loan of INR 400 crore. This is in addition to the INR 1,900 crore it is expecting from multilateral institutions through the central government’s budgetary allocation. INR 14,000 crore is expected to be contributed by the private sector through public private partnerships while INR 7,000 crore is projected to come from fuel surcharge. Besides, NHAI is planning to re float the 54 EC tax free capital gains bond for 2008-09 with a ceiling of INR 3,700 crore. NHAI officials say the new 54 EC tax free bonds will be launched once the Finance Act is passed in Parliament. In the current financial year, the NHAI has managed to mop up more than INR 200 crore through the 54 EC bonds. Officials expect it to mop up nearly INR 300 crore by the end of the current financial year.

Mr Didar Singh member of finance committee at NHAI said that "We are quite comfortable with our financial position to meet all the requirements of the various projects under implementation."

In 2005, the committee on infrastructure had prepared a comprehensive plan envisaging a mammoth investment of INR 220,000 crore under the NHDP on concessions or contracts to be awarded by 2012. According to the plan, projects under second, third and fifth phases of the NHDP are expected to be completed by December 2012, while concessions or contracts for fourth, sixth and seventh phases would be awarded by December 2012 and work completed by December 2015.

Sona Okegawa buy of Prazisionsschmiede in Germany

BS reported that Sona Okegawa Precision Forgings is likely to have paid INR 620 crore to acquire Germany’s ThyssenKrupp Prazisionsschmiede earlier in 2008. The deal was announced in January 2008 without detailing the buyout amount.

However, Mr Surinder Kapur chairman of Sona Group has been refusing to comment on the deal size. In January 2008, he said that the acquisition would be funded through a combination of debt and equity, without giving any further detail. Mr Kapur said that "Whatever funding exercise we take up, we will ensure there is no impact on the Indian company." He added that post acquisition, Sona Okegawa has become the largest precision forgings company in the world.

ThyssenKrupp Prazisionsschmiede, a subsidiary of German steelmaker ThyssenKrupp Technologies, posted sales of INR 1,740 crore in 2006-07. It has 3 plants in Germany and 1 in the US to make forging equipment for the automobile industry.

Gujarat to set up 10 MW hydro power projects

BS reported that Gujarat government is planning mini hydro power projects with a total capacity of 10 MW along all major dams in central and south Gujarat. These plants are likely to come up on Karjan, Damanganga and Vanakbori projects in south Gujarat.

Mr Nitin Patel water resource minister of Gujarat said that "We intend to utilize the excess water during monsoon to generate electricity. At present, this water is being wasted."

He said that Gujarat government has planned 2 units of 1.5 MW each on the Karjan project at an investment of INR 16 crore. Similarly, it would invest INR 24.40 crore in the Damanganga project to generate 5.25 MW apart from 1 MW that will be generated on Vanakbori.

Mr Patel further added that around 500,000 hectare had benefited due to various water harvesting programs carried out during the past 5 years. According to him, around 20,000 million cubic feet water was being harvested as a result of 100,000 check dams built in various parts of the state.

Global HRB spot prices in super volcanic eruption

SteelBenchmarker reported that the US hot rolled band spot price for March 24th 2008 surged by 3.7% to USD 865 per ton, FOB the mill for the tenth consecutive rise totaling USD 288, world export HRB price rise by 6.6% to USD 870 per tonne FOB the port of export, for the eighth consecutive rise totaling USD 289, Chinese HRB ex works price slipped slightly to USD 627 per tonne for the fifth consecutive rise and the Western European HRB surged by 4.7% to USD 930 per tonne ex works for the fourth consecutive time totaling USD 217.

USA
USD 865 per tonne FOB the mill
Up by USD 31 per tonne from USD 834 two weeks ago
Up by USD 305 per tonne from the recent low of USD 560 on August 13th 2007
Up by USD 235 per tonne from the recent high of USD 630 on April 9th 2007

China
USD 627 per tonne ex works
Down by USD 1 per tonne from USD 628 two weeks ago
Up by USD 157 per tonne from the recent low of USD 470 on October 22nd 2007
Up by USD 140 per tonne from the previous high of USD 487 on September 10th 2007

Western Europe
USD 930 per tonne ex works
Up by USD 42 per tonne from USD 888 two weeks ago
Up by USD 267 per tonne from the recent low of USD 663 on July 23rd 2007
Up by USD 234 per tonne from the recent high of USD 696 on June 11th 2007

World Export Price
USD 870 per tonne FOB the port of export
Up by USD 54 per tonne versus USD 816 two weeks ago
Up by USD 320 per tonne from the recent low of USD 550 on July 23rd 2007
Up by USD 274 per tonne from the recent high of USD 596 on March 26th 2007

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

ArcelorMittal to close production activities at its Lachine Wire mill in Canada

ArcelorMittal Long Carbon North America Wire Group announced to employees at the Lachine and Saint Patrick plants in Montreal that it would close of production activities at its Lachine facility.

As per release, the Lachine wire mill accounts for 153 positions and will close down on June 30th 2008. The release said that “Different measures will be put into place to eliminate the need to lay off employees impacted by this decision. There will be a net loss of 100 positions within ArcelorMittal in the Montreal area and ArcelorMittal will work with the United Steelworkers union to facilitate the phasing out process through regulatory and labor contract mechanisms. “

The Saint Patrick wire mill workforce will increase from 105 to158 employees. As well, employees impacted by the closure will be offered positions in other ArcelorMittal locations in the Montreal area. In addition, ArcelorMittal will offer incentives to those eligible for retirement. All these measures should eliminate the need to lay off employees impacted by this decision.

Mr Alain Robitaille GM of Wire Group said that "The Lachine and Saint Patrick wire mills have both been operating at less than 50% capacity since the beginning of 2007. This situation entails high production costs in the North American wire market where supply has been consistently exceeding demand since the early 2000s. We cannot continue operating two wire mills in a context where it is more advisable to operate only one plant and thereby bring our costs down to more competitive levels to ensure long term profitability."

Mr Robitaille added that US markets for automotive construction and steel wire consumption have been on the decline in the past five or six years, while the value of the Canadian dollar continued to rise against the US dollar.

Mr Robitaille concluded that "This closure represents the best option for Lachine and Saint-Patrick customers. They will see no difference in their business dealings with us and will continue to receive high quality products and services.”

BHPB bid for Rio – Rio CEO says rejection on value only

Reuters reported that Rio Tinto recently said that price alone is behind its rejection of BHP Billiton's USD 147 billion hostile takeover offer aimed at assembling a super mining house.

Mr Tom Albanese CEO of Rio said during a lunch with reporters in Australia said that "In these strong market conditions and business conditions, it is not difficult to see different values in these mergers. We rejected BHP's proposal strictly on the basis of value.”

Mr Albanese added that at some point miners run the risks of losing efficiency gains if they enlarge too greatly.

Mr Albanese has long argued BHP's offer of 3.4 of its shares for every Rio share was ballparks away from what his company was worth, but also said that Rio is better off pursuing its own growth paths.

Citigroup improves 2008 steel forecasts as prices continue to rise

Platts reported that Citigroup is raising its steel price forecasts for 2008 while predicting margin expansion at US mills but warning of the potential for dropping prices later in the year.

Mr John Hill an analyst of Citigroup said the dichotomy of rising prices amid economic weakness and saw specific reasons for the phenomena. He said that "Steel prices have tacked on USD 100 per tonne to USD 200 per tonne since end 2007 and are at near records in the US, Europe and Asia. This is unusual during a US recession, and driven by a tight supply chain, raw materials escalation and structural change against a backdrop of weak end demand."

Mr Hill added that "With steelmakers onto their fourth and fifth round of price hikes since 2007 our forecasts have proved conservative. As such, we are raising 2008 HRC estimates to USD 743 per tonne and CRC to USD 840 per tonne, 2009 HRC and CRC estimates to USD 700 per tonne and USD 800 per tonne, and 2010 HRC and CRC estimates to USD 650 per tonne and USD 750 per tonne. This contemplates peaking spot market prices in Q2 2008, with gradual easing through 2009 and 2010."

Mr Hill said that captive iron ore and coke sources will allow US mills to see better margins. Our sense is that US mills are set for a period of strong margin expansion in Q1 to Q2 of 2008. Due to internal domestic iron ore and coke sources. He added that "We note that higher prices have developed in a slack demand environment with soft auto and appliance and potential spillover from residential to commercial construction. High prices remain vulnerable to a swift downside. The violence of the steel rally begs the question of whether this has involved raw materials anticipatory restocking or double ordering by end users and thus whether this has drawn orders forward from May to June. If so, prices could see a sharp reversal in mid summer."

Mr Hill further added that if the industry had misinterpreted a previous price rise just last year. Exactly a year ago, the industry misjudged a short lived seasonal re stocking bounce, and brought back idled furnaces in February and March 2007 just in time for orders to crumble. We see no evidence of a repeat of this dynamic, but is alert for any signs of excess Steel at end users.

Vale Xstrata tie up - Both poised for lighter takeovers

Reuters reported that global mining majors Vale and Xstrata are likely to focus on smaller takeovers and internal expansion until the dust settles on volatile markets that may have helped torpedo a plan to merge the two firms. Analysts said that both vale and Xstrata will no doubt keep an eye on other possibilities for mega-mergers, but could be wary in the short term after recent lurches in equity, metals and credit markets.

Mr Rogerio Zarpao of Brazilian bank Unibanco said that "Vale has clearly stated when bidding for Xstrata that they want copper and coal, so I guess we can expect isolated acquisitions at a smaller scale for now. They secured USD 50 billion in financing for Xstrata, and it would not be difficult for them to raise a smaller sum very quickly.”

Mr added that "Also, from the second quarter, they will have a lot more firepower with their cash flow reinforced by the recent iron ore and pellets price hike."

Among the possible takeover targets mentioned by analysts were Grupo Mexico's Southern Copper unit, London listed Chilean miner Antofagasta and US based Freeport-McMoRan Copper & Gold as well as coal companies in China and elsewhere in Asia.

SSINA releases special steel data for January 208

US based Specialty Steel Industry of North America has released statistical data on imports, US consumption and import penetration for January 2008. The data represents US consumption, imports and import penetration for YTD January 2008 compared to the same 2007 one month period.

Stainless Steel
Imports of total stainless steel in YTD January 2008 were 61,607 tons, a 14.5% decrease compared to YTD January 2007; US consumption was 164,157 tons down by 25.7%; one month import penetration was 37.5%, a 4.9% point increase from 2007.

Alloy tool steel
Imports in YTD January 2008 were 11,187 tons, a 37.7% increase compared to YTD January 2007; US consumption and import penetration were not calculable.

Electrical steel
Imports in YTD January 2008 were 12,789 tons, a 62.3% increase compared to YTD January 2007; US consumption was 38,679 tons, a 9.1% increase from January 2007; one month import penetration was 33.1%, a 10.9% point increase from 2007.

SSINA is a Washington DC based trade association representing virtually all continental specialty metals producers. Specialty metals are high technology, high value stainless and other specialty alloy products. Its member companies are AK Steel Corporation, ATI Allegheny Ludlum Corporation, ATI Allvac, Carpenter Technology Corporation, Crucible Specialty Metals, Electralloy, Haynes International Inc, ThyssenKrupp Mexinox SA de CV, North American Stainless, Outokumpu Stainless Inc, Precision Rolled Products Inc, Latrobe Specialty Steel Company, Universal Stainless and Alloy Products and Valbruna Slater Stainless Inc.

South African ferrochrome price negotiation still on

South Africa is now negotiating with buyers for the second quarter high carbon ferrochrome prices at USD 2 per pound because European stainless mills have resumed their production. Besides, South Africa has reduced its ferrochrome supply by 10 to 15% due to government’s restriction on electricity supply.

It said that European mills has unofficially agreed ferrochrome price of USD 1.95 per pound while South African’s suppliers offer at USD 2.05 per pound for high carbon ferrochrome, but such information has not been proved.

Due to limited supply on ferrochrome, the stock prices for high carbon and low carbon chrome have increased to USD 3 per pound and to USD 5 per pound respectively.

Inco plans USD 212 million CAPEX in 2008

It is reported that PT International Nickel Indonesia Tbk Inco plans to more than double its capital spending this year to USD 212 million to help fund a hydroelectric plant and a processing facility in Sulawesi.

Mr Indra Ginting director of investor relations and corporate secretary of Inco told reporters that "We will use our internal cash flow to finance our spending. So far we have not thought of bank loans.”

He added that the budget included spending on the Karebbe dam hydroelectric project in Sulawesi. Construction on the project resumed in the fourth quarter of 2007 after it was suspended in January 2006, pending the issuance of a forestry permit.

The Karebbe dam which will cost USD 275 to USD 280 million is expected to provide an additional 90 MW of power per year and to help boost production to about 200 million pounds of nickel in matte annually.

The company also plans to build a processing facility at Sulawesi's Sorowako to add another 48.5 million pounds of nickel in matte annually using high pressure acid leach process. The project at Sorowako is estimated to cost USD 1.1 billion.

Inco spent USD 102 million on capital spending in 2007.

FMG Pilbara project 90% complete

Fortescue Metals Group Limited advised that 90.2% of the overall iron ore project at its Pilbara site was completed and remained on track for shipping in mid May. However, the firm said the final cost had been assessed at AUD 2.796 billion, AUD 31 million higher than the previous month.

Fortescue advised that the main contributor to the higher cost was a AUD 22.2 million adjustment to the direct costs at the mine site and a AUD11.7 million adjustment for rail costs.

Fortescue in a statement said that “There was also a recovery of AUD 4.6 million following the decrease of certain EPCM services no longer required. While these costs have effectively used up all of the original contingency provisions, project liquidity will be provided through the company’s capital management program which includes operating leases.”

Fortescue said that its rail works were 91% completed and noted that significant progress had been made within the rail program that management does not see the rail project causing any slowdown for shipment in mid May. It added that “The focus now is very much on commissioning and particularly on the port assets as the company starts dry commissioning some of the product handling in loading systems at the port.”

Fortescue said port works were 93% completed with permanent power connected to the port facility substation on March 16th 2008.

USW not surprised on closure of ArcelorMittal wire plant

A union official of Montreal steel said that workers have known for several months ArcelorMittal was going to close one of its two Montreal wire factories.

Mr Denis Trottier a spokesman of United Steelworkers said that "They told us in January they were looking at closing one of their two wire factories.” He added that ArcelorMittal told the union then that it had lost USD 23 million in 2007 in the wire operations.

Mr Trottier said that "They gave workers a reprieve so they could review their business operations. They wanted to look at the 2008 market and how they could come out of it more profitable."

He noted that it was the second time in recent months the company has had bad news for its employees. In December, ArcelorMittal announced the closure of two steel rolling mills in Contrecoeur which resulted in the loss of 500 jobs.

Vale Xstrata tie up - Xstrata shares slide talks collapse

Reuters reported that shares in Anglo Swiss miner Xstrata tumbled on Wednesday after the collapse of talks with Brazil's Vale to buy the company and forge a massive mining group.

As per report Xstrata shares dropped more than 12% at the opening, after the two firms said late on Tuesday they failed to agree on terms of what would have been one of the world's biggest takeovers, valued by some analysts at USD 90 billion.

Summary of Chile iron ore export in 2007

According to the related information, Chile exported 6.715 million tonnes of iron ore in 2007, up by 15.3% YoY than 5.823 million tons from a year ago.

Among Chile’s iron ore export, China imported 3.329 million tonnes, increasing by 778,000 tonnes or 30.5% YoY as compared to the same period last year; Japan imported 1.465 million tonnes up by 34,000 tonnes compared to the same period last year. Indonesia imported 969,000 tonnes up by 405,000 tonnes or 71.7% YoY as compared to the same period last year.

(Sourced from YIEH.com)

Japanese steel raw materials cost could rise over JPY 2 trillion

Japan Iron and Steel Federation launches development program for innovative iron making process in fiscal 2008 starting April to reduce carbon dioxide emission in worldwide steel industry.

Japan Iron and Steel Federation plans to develop technology to separate CO2 from CO2 rich blast furnace gas and technology to recover hydrogen from coke gas efficiently to utilize for reducing iron ore when Japanese government tries to halve the greenhouse gas worldwide by 2050 by developing new technology.

The federation also plans to start utilize those technology in commercial base between 2030-2050 targeting 30% CO2 reduction.

South African iron ore exports in 2007 jump by 16% YoY

South Africa exported 30.336 million tonnes of iron ore in 2007, increasing by 4.175 million tonnes by large range than 26.161 million tonnes in 2006. The figure was increased by 16% YoY.

Regarding the import country for iron ore from South Africa in 2007, China imported 11.772 million tonnes, accounting for 38.8%, increasing by 8.2% YoY. Japan imported 6.57 million tonnes, accounting for 21.7% up by 33.7% YoY. German imported 5.658 million tonnes, accounting for 18.7% up by 54.8% YoY.

(Sourced from YIEH.com)

Vina Kyoei Steel posts USD 10 million profit in 2007

VNA reported that Vina Kyoei Steel Co Ltd in 2007 sold 340,000 tonnes of steel in the Vietnamese market and made a profit of USD 10 million.

The report added that Vina Kyoei Steel now plans to focus on technological innovation and renewing their warehouse, with aspirations to produce 350,000 tonnes of steel in 2008.

Vina Kyoei Steel was established in 1994 as a joint venture company between Kyoei Steel Ltd, Mitsui Co Ltd and Itochu Corporation in Japan and Vietnam Steel Corporation.

Caterpillar, Mitsubishi Heavy, Shin Caterpillar announce JV

Caterpillar, Mitsubishi Heavy Industries and Shin Caterpillar Mitsubishi have announced a definitive agreement for their JV in Japan. Under the share redemption plan, Caterpillar would become the majority shareholder in Shin Caterpillar Mitsubishi Ltd with an option to reach full ownership after five years.

Definitive agreements include a share redemption plan which will result in Caterpillar owning 67% of Shin Caterpillar Mitsubishi. The business will be renamed Caterpillar Japan when the first phase of the deal closes, expected to be in the third quarter of 2008.

The estimated value of the first phase of the share redemption is JPY 50 billion. Under the terms of the agreement, Shin Caterpillar Mitsubishi will redeem half of MHI's shares in Shin Caterpillar Mitsubishi. Once the share redemption is completed, Caterpillar will own 67% of the outstanding shares of the business and MHI will own the remaining 33%. Shin Caterpillar Mitsubishi also has an option, exercisable after five years, to redeem the remaining shares owned by MHI, which if exercised, would make Caterpillar the sole owner of Shin Caterpillar Mitsubishi.

Mr Jim Owens chairman & CEO of Caterpillar said that "This is a strategic decision for Caterpillar and it is an important part of our comprehensive business strategy for competing and winning in the rapidly expanding emerging markets of Asia and the Commonwealth of Independent States. Our joint venture with Mitsubishi Heavy Industries has been remarkably successful, and moving forward, I'm confident that as SCM is fully integrated with Caterpillar's core operations, our customers will see greater benefits from this agreement.”

Shin Caterpillar Mitsubishi is primarily involved in the manufacture and sale of Caterpillar branded hydraulic excavators, wheel loaders and track type tractors. Shin Caterpillar Mitsubishi also owns several retail and rental stores that provide Caterpillar products and services in key markets in Japan. Shin Caterpillar Mitsubishi production facilities in Akashi and Sagami are major manufacturing centers, providing Caterpillar products to Asia and the world. In addition, Shin Caterpillar Mitsubishi's hydraulic excavator development center in Akashi is the global home for the development of Caterpillar's hydraulic excavator product line.

Thyssenkrupp Mexinox plans to expand production

It is reported that ThyssenKrupp Mexinox plans to increase its stainless steel production capacity by 15%in 2009 and the CR coil production will rise from 295,000 tonnes to 340,000 tonnes.

Every year, Mexinox sells 260,000 tonnes of CRC to Mexico, US and Canada. Mexinox occupied US and Mexico CR coil market for 12% and 72% respectively.

GKG becomes substantial shareholder in Lion Industries

Thestar online reported that Singapore’s GKG Investment Holdings Pte Ltd has emerged as a substantial shareholder in Lion Industries Corp Bhd with an indirect stake of 37.36 million shares or 5.25%.

A filing with Bursa Malaysia showed that of the 37.36 million shares, a total of 24.66 million shares were held by GK Goh Strategic Holdings Pte Ltd. Alpha Securities Pte Ltd held another block of 6.2 million shares while Future Equity Investment Ltd owned 6.5 million shares.

Lion Industries manufactures steel bars, wire rods and hot briquetted iron. It has also interests in timber, pulp and paper mills.

Rautaruukki’s first total delivery in Estonia successfully completed

It is reported that Rautaruukki’s first supply of structures to Estonian customer Joestoni Investeeringu AS for The warehouse and commercial premises serving as DHL’s logistics centre at Tallinn has been completed.

Ruukki was responsible for the design and manufacture of the wall, roof and frame structures, as well as for installation and other work to ensure implementation of the main contract. The project started in July 2007.

Ruukki designed, delivered and installed the sandwich wall panels of 4,500 square meters, load bearing profiles of 7,200 square meter and steel frames of 190 tonnes.

Mr Lasse Jokinen owner of Joestoni Investeeringu AS which is part of Jokinen Yhtiö said that “Ruukki’s total solution served our needs extremely well and also lowered costs. We are pleased with Ruukki’s delivery.”

Ausmelt to supply two more zinc furnaces to Korea Zinc

Metals Insider reported that Australian technology supplier Ausmelt has signed a licensing agreement with Korea Zinc for the construction of two new Ausmelt technology furnaces at the company’s Onsan zinc complex.

Korea Zinc already operates ten Ausmelt technology furnaces at Onsan, treating a range of zinc slags and residues as well as secondary lead and copper materials. The two new furnaces will be built at Onsan to recover lead and zinc from up to 120,000 tonnes per annum of zinc leach residues.

IEA urges residential sector to improve energy efficiency

According to a report from Paris based International Energy Agency, energy efficiency is the most effective way to meet 3 major energy related challenges namely increased energy security, reduced energy costs and a cleaner environment.

As per report, buildings can become energy efficient by adopting energy saving technologies and practices, as well as by the removal of market barriers to increased efficiency. It is estimated that buildings are responsible for over 40% of world’s total primary energy consumption and account for 24% of world’s carbon dioxide emission.

The market barriers inhibiting increased energy efficiency in residential buildings include difficulties in accessing capital, low priority for energy issues, presence of information asymmetries and principal agent problems or split incentives between investors and energy end users like between a landlord and a tenant.

IEA said that case studies in the residential sector of 5 countries namely Japan, US, France, Germany and the UK have brought out 5 policy lessons.

1) Given that financial barriers in the residential building sector are numerous and complex, multi policy packages are needed to address multiple barriers at the same time.

2) Public private partnerships offer the best opportunity to meet the 5 evaluation criteria namely relevance, effectiveness, flexibility, clarity and sustainability.

3) The creation of a market for energy efficiency is necessary to increase sustainable energy efficiency in the building sector.

4) Market transformation will require increased private sector involvement which must be triggered by strong political will to create the necessary conditions.

5) The national context plays a determining role in the success or failure of policies.

According to experts, world over builders are looking for energy efficiency technologies. The latest is zero energy or energy neutral buildings, also called green buildings. For a country like India with rapidly expanding real estate sector and worsening energy shortage, guided growth in energy saving or conservation would be the best thing to happen.

Deadlock over Greek port privatization

It is reported that Greek port workers and the government have reached a deadlock over plans to privatize cargo handling facilities at Piraeus and Thessaloniki.

Dockers working for the Piraeus Port Authority held a 24 hour strike last week. There was also a strike in Thessaloniki which effectively closed the commercial port. Port authorities have warned that container storage terminals are already running close to capacity and that further strikes will worsen congestion. Dock workers are slated to carry on in April their refusal to work overtime and on weekends or holidays.

Mr George Voulgarakis merchant marine minister of Greek however, said the government will hold firm to its privatization plans. He stressed that "both ports were heavily in debt and for the first time last year had asked to be included in the State budget." He called on the workers to engage in talks to avoid the possibility of some of them losing their jobs.

The strikes started this year after an announcement by Mr Voulgarakis that a global tender for operators to run Piraeus and Thessaloniki under a 30 year concession would be released. The tenders are for management contracts for two of the three container facilities at Piraeus and for the entire container terminal in Thessaloniki.

The Thessaloniki Port Authority on January 15 approved the global tender process while the Piraeus Port Authority approved the tender conditions on January 11.

Reports said that parties interested in the privatization include DP World, COSCO Pacific Limited, Maersk, Hutchison Port Holdings and Zim Integrated Shipping Services Ltd. Meanwhile, the Piraeus Traders Association is reportedly asking the government for measures to stave off the 'extinction' of hundreds of small and medium import/export companies.

Breakwater Resources buys Myra Falls zinc mine

Breakwater Resources Ltd has exercised its right to purchase the interests of the limited and general partners of the Myra Falls Mine Limited Partnership for approximately USD 18 million.

The release said that Breakwater has elected to purchase the interest by issuing 13,518,739 common shares of Breakwater at USD 1.3448 which, pursuant to the agreement, is the 20 day weighted average trading price of Breakwater's common shares on the Toronto Stock Exchange.

Pursuant to the joint venture entered into with the limited partners of the Myra Falls Mine Limited Partnership in December 2007, the Myra Falls Mine Limited Partnership was entitled to a 3% net smelter royalty from the Myra Falls mine. The Myra Falls Mine Limited Partnership deposited USD 20 million with a trustee into a QET as security for a portion of the reclamation obligations of NVI Mining Ltd a wholly owned subsidiary of Breakwater, which owns the Myra Falls mine.

The common shares of Breakwater to be issued as part of the exercise of its rights are not freely trade able until April 21st 2008.

Breakwater is a mining, exploration and development company which produces and sells zinc, copper, lead and gold concentrates to customers around the world. The Company's concentrate production is derived from four mines. Two of Breakwater's mines are located in Canada, one is located in Chile and one is located in Honduras.

BHPB workers face retrenchment at RBCT smelter

The National Union of Metalworkers of SA said that about 800 workers face retrenchment at BHP Billiton's Bayside aluminum smelter in Richards Bay. The retrenchments followed Eskom demand that big electricity consumers reduce their power consumption by 10%.

Mr Mziwakhe Hlangani a spokesperson said that company management confirmed that it would be issuing final notices to the affected workers at the weekend and the retrenchments would be effected on April 1st 2008.

Mr Hlangani said that the drastic decision to lay off metalworkers took place at a time when Numsa had made earnest appeals to the ANC and the minerals and energy parliamentary committee to intervene as planned retrenchments were connected to the countrywide power crisis. Rather than ensuring that other feasible alternatives were considered such as buying big industrial power generators, the largest resource company once intimated that it planned to relocate its smelters to the Democratic Republic of Congo, the union charged.

Numsa said it had always been aware that the closure of smelters in the town would affect more than 20 000 families. And, for that reason the union called on government and other stakeholders to urgently adopt a social plan, because the area would be negatively affected.

Mr Frankcombe joins Erdene board of directors

Erdene Gold Inc announced the appointment of Mr Jamie Frankcombe to its Board of Directors. He will brings 28 years of experience in the mining industry, most recently as the General Manager of the Americas for Xstrata Coal.

Mr Frankcombe is the GM of the Americas for Xstrata Coal and is responsible for the Donkin Coal Project in Nova Scotia, Canada and general business development opportunities in the Americas. In addition, Mr. Frankcombe is the Xstrata shareholder representative for the Carbones del Cerrejón Limited coal mining operation in Colombia and a board member of the FutureGen Industrial Alliance, Inc project.

Mr Peter Akerley president & CEO said that “Mr Frankcombe's extensive experience in the coal industry will be a tremendous asset to the Corporation's Board of Directors. We are fortunate to have gained his commitment to our success and look forward to working with Jamie and utilizing his strength and experience, in particular in advancing our Donkin Coal Project in Cape Breton, Nova Scotia."

Erdene is a diversified resource development company with multiple projects at various stages of development from exploration to production all focused on high growth commodities. The Corporation has a strong portfolio of exploration properties in Mongolia where it has a strategic alliance with Xstrata Coal to develop its coal properties and a strong focus on base metals, precious metals and energy.

AK Steel and SunCoke deal needs regulatory approval

AP reported that AK Steel wants to partner with a Tennessee based company to build a plant to make electricity and supplies for steel production in southwest Ohio.

AK Steel said it had a deal with SunCoke Energy of Knoxville to buy coke and electrical power from a plant to be built, owned and operated by SunCoke. The SunCoke plant would be capable of producing about 550,000 tons of coke and 50 megawatts of electrical power a year. AK Steel has agreed to buy all the coke and electricity the plant produces for 20 years.

The union is for it, and community supporters said that it's a welcome sign of AK's long term commitment to a city still trying to recover from a yearlong lockout at the mill. Opponents said that the plant could create air pollution and devalue their homes.

It said that the deal will need regulatory approval from several levels of government and SunCoke is seeking economic incentives to build and operate the proposed USD 340 million plant.

Nucor best in materials sector

AP reported that with 2008’s first quarter drawing to a close, Nucor Corp has been the top performer for the year thus far in the S&P 500's materials sector. Nucor is up by 20.3% so far this quarter.

At the other end of the 28 company spectrum, titanium producer Titanium Metals Corp has fallen 44.5% in 2008.

BHP Billiton mulls expansion to Escondida concentrator

According to local paper El Mercurio, Anglo Australian resource group BHP Billiton is considering an expansion to its 57.5% owned Escondida copper mine in Chile's northern region II.

The report quoted Mr Diego Hernández president of BHP Billiton Base Metals as saying that "We are working to see if it is worthwhile to expand the concentrator's capacity to compensate for falling grades, in order to maintain Escondida's production in 2007 or increase it slightly.”

Mr Hernández said that if the company decides to expand the concentrator's capacity, it would enlarge it by at least 50%.

Escondida, the world's largest copper mine, sold 1.44 million tonnes of payable red metal last year.

Iron Mountain's CFR raised to 'B1' from 'B2' - Moody

Moody's Investors Service said that it has raised Iron Mountain Inc's corporate family rating to 'B1' from 'B2' with a stable outlook.

Moody's said that “Notwithstanding higher than anticipated capital expenditures and year end compensation and benefit accruals, the upgrade recognizes continued strength in operating performance, including continued strong growth in storage revenues and improved debt maturity structure and overall liquidity following last year's refinancing activity.”

Moody's said the upgrade also incorporates its belief that the primary focus of the company has shifted from growth through acquisitions to achieving increased operational efficiencies.

It said that “The 'B1' CFR is supported by the company's prominent position as a global leader in information storage and data protection, including its strategic expansion in the digital market in recent years, as well as Moody's expectation of reduced emphasis on acquisitions relative to the company's current size going forward. However, the ratings continue to be constrained by high financial leverage, significant amount of goodwill and intangibles in relation to total assets and the low level of pro forma free cash flow relat

Turkish steel association suggest construction steel price index

The Anatolia news agency reported that Turkish Steel & Iron Producers Association has suggested separate index for contracts in which steel iron products are heavily used in order to not cause project delays.

Mr Veysel Yayan secretary general of Turkish Steel & Iron Producers Association said that contractors, the Housing Development Administration of Turkey and the Ministry of Settlement and Public Works should use another index for steel products because prices have increased by 40%since the beginning of the year.

Mr Yayan said there was a scarcity of raw material all across the world leading to the price of scrap metal to rise. He said Turkey has also been affected by this rise and that costs have gone up. However, he added that increasing costs had not been reflected in prices yet.

Emphasizing that forecasting the situation for the next two months is not possible, Mr Yayan said that even long term contracts based on the consumer price index and the producer price index were very risky. He said they had warned TOKİ and the Public Works Ministry, which make these kinds of long term contracts, about the risks of long-term forecasts. He said that “The contractors would not say whether they benefit from this or not, but if they suffer a loss, they will request compensation from the government,” he said, adding that administrators should set a new index for steel and iron.

Mr Yayan suggested a separate index for contracts in which steel iron products are heavily used in order to not cause project delays.

Pakistani steel makers demand uninterrupted power supply

The News reported that Pakistani steel makers have demanded the government to provide uninterrupted electricity and have also expressed serious reservations on exorbitant rates for an unreliable source of power. They said that the soaring cost of raw materials including coal, iron ore and scrap for smelting were already a burden and high cost of electricity was making the business of furnace casting and rolling mills unviable.

Mr Shahab Ahmed of Amaan Steel said that the rising prices of scrap and electricity are hitting furnace and rolling mills hard but worst affected are the end users because mills pass on the price burden to consumers. He said that “Furnace casting mills need uninterrupted electricity to run Electric Arc Furnaces; this is why a power breakdown of 4 consecutive hours proves to be an 8 hours breakdown for us as the Electric Arc Furnace needs 4 hours to heat up and work.”

An owner of another furnace casting mill said that “Electricity happens to be one of the most important raw materials of furnace casting mill. The rising prices of scrap and electricity have been building up pressure on our industry. Obviously, if we purchase costly raw materials like scrap and power we would pass on this to end consumer and resultantly the end products prices will shoot up. Manufacturers of mild bars are not increasing prices the cost of raw material is going up.”

Turkish rebar export price in upward trends

As per market reports, Turkish steel makers are offering rebar at the price of USD 950 per tonne to USD 970 per tonne on FOB basis almost USD 100 per tonne higher form the previous price.

The strong demand in Middle East market has stimulated Turkish rebar export prices. In the meantime, Turkish domestic market remains strong.

Erdemir to propose cash dividends of TRL 0.35 per share

Erdemir will propose payment of cash dividends of TRL 0.3533 per share and issuance of bonus shares of TRL 0.3611 per share.

The paid in capital will increase by 36.1% to TRL 1.49 million after the bonus issue. The timing of the dividend payment and the new share issue has not been determined yet.

Erdemir's annual shareholders' meeting will be held on March 31st 2008.

PSA starts operations at Gwadar

PSA Gwadar International Terminals has received its first commercial cargo vessel 'Pos Glory' in its deep water berths on March 15th 2008. The 40,000 gross register tonnage bulk vessel is the largest bulker to berth at any Pakistani port to date, carrying 64,000 tonnes of wheat.

Mr David Yang CEO of PSA's Middle East & South Asia regions said that "We are grateful to be given the opportunity to make a positive contribution to the city of Gwadar through the management and operation of its port. We are now ready to service both general cargo and container vessels at the terminal."

According to PSA Gwadar International Terminals, there is strong interest in Gwadar's facilities from importers and exporters currently shipping through Karachi ports. Meanwhile, road construction delays have led Pakistani officials to stress the importance of an efficient road network for success at Gwadar port.

The Senate body on Shipping and Ports has asked the government to give the highest priority to the development of road networks at Gwadar port. Pakistani ambitions for Gwadar are based on its strategic position at the tip of the Straits of Hormuz and the Persian Gulf.

Reports have highlighted Gwadar's significance as a modern deep-water facility for alternative routes to Gulf ports and as a strategic link to China and the Central Asian Republics.

DP World seeks approval to up 2 ICDs in Gujarat

BL reported that DP World has approached the Indian Railways seeking permission to set up 2 dry ports or inland cargo depots at Vadodara and Ahmedabad with an investment of USD 60 million.

Mr Ganesh Raj senior VP & MD of DP World said that "We have completed feasibility studies and are engaged in talks with Indian Railways for land acquisition and various other formalities."

DP World, which operates a chain of 43 ports across 22 the world, including 5 ports in India, is entering the inland cargo depots business with the prospect of even entering the container train operations segment. It would be engaged in direct competition with the Adani Group in container depots and rail transportation of containers when its plans materialize.

Omani mining sector in the midst of a revival – Report

It is reported that Oman's mining sector is in the midst of a revival, with high global mineral prices driving profits and attracting new investments.

Mining in Oman dates back some 4000 years, with archaeological evidence showing copper was both extracted and smelted in the region in ancient times. Though much of its known copper reserves have been played out, new mineral finds are being made, along with increased reserves of gold and silver. However, since the discovery of oil and gas in Oman, mining has taken something of a back seat to energy in the economy.

But in recent years, Oman has been working to broaden its industrial base to include many downstream facilities in the minerals sector. While the domestic mining industry is unlikely to eclipse the energy industry, or to rival the billions of dollars worth of downstream developments already built or on the drawing board, it is again starting to make news.

Pakistan invites India for talks on IPI pipeline project

IRNA reported that, in a major development that could result in a breakthrough, Pakistan has invited India for talks on finalizing the USD 7.4 billion Iran Pakistan India gas pipeline deal.

Mr Murli Deora union minister of petroleum & natural gas said that "I received an invitation from Pakistan's energy minister to visit Islamabad to finalize the transit fee issue so that the IPI pipeline deal could be wrapped up soon."

Mr Deora said that he hoped to resume negotiations on the issue as soon as the new government in Pakistan was installed. He added that "I will visit Pakistan sometime next month to hold talks and hope to wrap up the issue of transit fee and related matters as soon as possible and sign a formal agreement to make the project happen."

It may be noted that India and Pakistan had, in principle, reached an agreement on the transportation charges that New Delhi would be paying to Islamabad. A point of mutual concern for both nations was the incorporation of a new clause sought to be incorporated by Iran on revision of natural gas price every 3 years.

Update on Iran Turkmenistan Kazakhstan railway tender

IRNA reported that Turkmenistan will hold a tender for construction of Iran Turkmenistan Kazakhstan railway tracks. To start construction of the railways connecting the 3 countries, Turkmenistan will hold a tender in Ashkhabad in the presence of Iran, Turkey, Russia, Japan, China, Kazakhstan and European Union.

It may be noted that the initial agreement was signed by the Turkmenistan and Kazakhstan presidents in May 2007. However, the final accord was inked by Iran, Turkmenistan and Kazakhstan on the sidelines of the summit of the Caspian Sea littoral states in September 2007.

The railway length is 900 kilometer of which 700 kilometers go through Turkmenistan, 90 kilometers through Iran and the rest through Kazakhstan. 3 to 5 tonnes of commodities can be transferred via Iran Turkmenistan Kazakhstan railway and the figure can be raised to 15 tonnes.

Turkey to hold USD 1.1 billion railway tender in April

Daily Vatan reported that Turkey is planning a USD 1.1 billion auction on April 15th 2008 for the construction of a 466 kilometer long rail link from Ankara to the eastern city of Sivas.

As per report, the dual track railway will shorten the current 12 hour trip to 3 hours according to the state railway authority. Construction will include 8 tunnels, 88 bridges and 14 stations.

IPIC and QI to set up USD 2 billion acquisition fund

Reuters reported that Abu Dhabi government owned International Petroleum Investment Company and Qatar Investment Authority will invest USD 2 billion in a new fund for global acquisitions.

Mr Khadem al Qubaisi MD of IPIC said that "We plan to invest in all sectors, including oil and petrochemicals." He added that the fund could thus mark a new direction for the IPIC, which until now has limited its investments to the energy sector.

Mr Qubaisi said that IPIC and QIA initially will each invest USD 1 billion in the fund. Investment will be leveraged to maximize acquisition potential and the fund will be operating in about 6 months. He added that "We will look at any opportunities where we can make money and add value. That could be anywhere the Middle East, Asia, Africa, Europe and the United States."

IPIC is an investment vehicle for the government of Abu Dhabi, which controls more than 90% of the United Arab Emirates’ oil reserves. While, QIA is Qatar’s sovereign wealth fund. Its assets stand at around USD 60 billion.

Qatar signs deal for water & electricity plant

Doha Times reported that Qatar has signed an agreement to build the 2,730 MW Ras Laffan C integrated water & electricity project.

Mr Abdullah bin Hamad al Attiyah deputy prime minister and also minister of energy & industry said that it is a matter of pride for the country that the signing of the agreement took place a day after the opening of the 1,025 MW integrated water & electricity project called Ras Laffan B.

China may join IPI pipeline project – Report

UPI quoted some Pakistani sources as saying that China is ready to join the Iran Pakistan gas pipeline if India drops out of the USD 7.4 billion project. Tehran informed Islamabad if New Delhi remained reluctant to joint the project under the US pressure, Iran would then invite Beijing to participate in it.

According to the report, the Chinese have told Pakistan's petroleum ministry that they are ready to join IPI pipeline project. Pakistan and Iran have finalized a gas purchase agreement, but India is yet to complete modalities largely due to differences with Islamabad over the transit fee to be paid for the fuel carried through Pakistani territory.

It may be noted that Pakistan had urged Iran earlier in March 2008 to finalize the Iran Pakistan India natural gas pipeline project by April 2008 because of its growing demand for gas, while Tehran was holding final talks with India over the deal.

Mitsui to join USD 4 billion Qatar water & power project

Nikkei business daily reported that Japanese trading house Mitsui & Co will invest in a power and desalination project in Qatar expected to be worth more than JPY 400 billion.

As per report, Mitsui and a Belgian unit of French conglomerate Suez will each take a 20% stake in a venture to oversee the project while, state run Qatar Petroleum and others will hold the remaining stake.

A Mitsui spokesman said that the venture will manage the construction of power generating and water desalination facilities in the Ras Laffan Industrial City.

Mitsui is expected to shoulder about JPY 25 billion of the project investment. The power station is expected to have an output of 2.7 million kilowatts or the equivalent to two nuclear power plants, while the water facilities will be able to supply some 800,000 people with water for 25 years.

Dubai to host maritime arbitration conference

It is reported that the first Maritime Arbitration Conference will be held with the support of the Federation of UAE Chambers of Commerce and Industry.

The emirate of Dubai will be hosting the activities of this conference from April 5th 2008 to April 7th 2008, with the participation of a panel of commercial and maritime arbitrators and law figures on both levels of regional and international.

This conference is regarded as a major move towards the solving of any legal and professional disputes in relation with maritime arbitration and to communicate the same to the concerned entities and organizations.

Dubai and Czech Republic in cooperation agreement

It is reported that bilateral relations between Dubai and the Czech Republic are strengthened following the signing of a co operation agreement. Mr Abdul Rahman Saif Al Ghurair first VC of Dubai Chamber of Commerce & Industry and Mr Jaroslav Hanak VC of Confederation of Industry of the Czech Republic signed the agreement.

The agreement aims at improving and strengthening business ties while also exploring the need to foster a spirit of better cooperation between the business communities from both sides in general and between their respective members in particular. Under the agreement both parties will also work jointly in the fields of industrial relations, trade and services and setting up of JVs as well as equity investment.

At the signing, Mr Mirek Topolanek Prime Minister of Czech has highlighted the similar roles the Czech Republic and the UAE play in the region. He said that "As Dubai is the gateway to the Middle East, the Czech Republic is in the heart of Europe and is also the entry point for doing business with Russia and the Balkans." He also encouraged prospective investors to make the most of the opportunity to buy Czech's prestigious assets, the last of which are being privatized. He added that "We are not doing this for money but for better business."

In 2006, the Czech Republic ranked 44th in a list of Dubai's trade partners. Dubai's non oil trade with the Czech Republic reached AED 1.9 billion at the end of 2006 with imports touching AED 1.8 billion. Exports and re export stood at AED 80.3 million. There are now 13 Czech partnership companies operating in the emirate.

Dubai's main imports from Czech Republic in 2006 included articles of stone, plaster, cement, asbestos, mica, ceramic products, glass and glassware, machinery, electrical and electronics equipment, chemical or allied industries, vegetable products and miscellaneous manufactured articles.

RAK investments top AED 15 billion mark

Dr Khater Masaad CEO of Ras Al Khaimah Investment Authority said that investment in projects under construction in Ras Al Khaimah has topped the AED 15 billion mark. Dr Masaad said that industry is at the heart of the development of the emirate’s economy.

He added that "The world’s top countries are industrial ones, Ras Al Khaimah has a solid industrial base represented by Ras Al Khaimah Ceramics, Gulf Pharmaceutical Industries and others.

He added that "Sectors represented in the emirate range from manufacturing, tourism and construction to food processing, maritime services, and trade and commerce. And RAK Media City is being developed. Factors such as 100% income and corporate tax exemptions, 100% capital and profit repatriation, easy availability of labor, easy licensing procedures, excellent port facilities and the absence of foreign exchange controls, trade barriers and quotas, have attracted investors from across the globe."

He further added that production costs were lower in Ras Al Khaimah than in traditional markets such as Dubai and Abu Dhabi, a factor that could prove attractive to expat investors living in the UAE.

RAK has leased 8 million square meters of land for industrial use and has attracted a diverse mix of industries financed by European, Arab, Southeast Asian and Indian investors. The emirate offers investors a modern legislative environment that supports the private sector, in addition to the infrastructure and power projects that are currently being implemented. Ras Al Khaimah is busy in the development of four sectors industry, tourism, trade and real estate.

Shangdong Group becomes 2nd largest steel makers in China

It is reported that an official ceremony marking the launch of Shandong Iron & Steel Group was held on March 26th 2008, celebrating the successful merger of between Laiwu Iron & Steel and Jinan Iron & Steel.

The formal establishment of the corporation that will combine the two companies announced by their listed units had been delayed for two years by opposition of the companies' leaders. They have given no time frame for transferring their mills or other assets to the new company.

As per report the plan of creating the Shandong Group through a merger of the state owned Laigang and Jigang was first proposed by the Shandong provincial government in 2006. However, the consolidation has made slow progress due to obstacle in appointing leaders for the new entity. Fortunately, the government nominated top managers of the group late February 2008 paving the way for the launch of the new group.

As per report the state owned parents of Laiwu Steel Corp and Jinan Iron and Steel Co had been ordered to merge into Shandong Iron and Steel Group under a plan by the eastern Chinese province of Shandong to consolidate mills, shut older facilities and build a 20 million tonne Greenfield mill on China's east coast.

In 2008 Jigang and Laigang produces 12.12 million tonnes and 11.7 million tonnes of crude steel respectively, therefore their combined crude steel output amounted to 23.8 million tonnes which would have ranked the two only after Baosteel's 26.6 million tonnes in 2007.

Baosteel 2007 profit dips on SS weakness

It is reported that Baoshan Iron and Steel Co China's top steel maker reported 3% fall in its net profit for last year, the first annual fall since 2001, and blamed weakness in the stainless steel market following a plunge in nickel prices. Baosteel earned a net profit of CNY 12.72 billion in 2007 against CNY 13.08 billion a year earlier.

For the October-December quarter, BaoSteel’s net profit shrank to about CNY 2.17 billion, the lowest for any quarter of 2007. In the fourth quarter of 2006, Baosteel earned about 3.92 billion yuan.

Baosteel's turnover for 2007 surged to CNY 191.56 billion from CNY 162.33 billion in 2006. But its stainless steel products business made a loss in 2007 as prices slumped following a tumble in the price of nickel. It said "Sales prices fell more steeply than the decrease in production costs during the plunge in nickel prices.’

Baosteel sold 22.6 million tonnes of steel products in 2007 up by 6.5% YoY including 9.17 million tonnes of hot rolled and 7.70 million tonnes of cold rolled.

Baosteel plans to produce 24.55 million tonnes of crude steel and sell 24.19 million tonnes of steel products in 2008, in order to achieve turnover of CNY 200 billion. But it acknowledged it faced major uncertainties by saying that "There are still uncertain factors in the steel market in the second half of 2008, because the impact of possible further price increases for raw materials and energy is unclear.”

Chinese HDG export offers witness further increase

It is reported that export offers for hot dipped galvanized coil price are up again though domestic market prices are largely unchanged this week.

On Shanghai market, 1.0mm HDG by Anshan Steel is being quoted at CNY 6400 per tonne, 0.5mm by private producers at CNY 6700 per tonne, flat with last week. It is also the case with prices in Shandong's Boxing market, where 0.5mm remains at CNY 6350 per tonne, 1.0mm HDG remains at CNY 6050 per tonne.

Export offer for 1.0mm HDG is still at USD 980 per tonne FOB up by USD 20 per tonne. Most traders say that there is little allocation for exports even at higher prices. The transactions are believed to be fairly good and some tier one steel makers have not setting the price for June shipment until end March or early April.

(Sourced from MySteel.net)

US DOC initiates AD investigation of steel threaded rods from China

US Department of Commerce has announced its decision to initiate an antidumping duty investigation of imports of steel threaded rod from the People’s Republic of China on March 26th 2008.

The US International Trade Commission is scheduled to make its preliminary injury determination on or about April 21st 2008. If the ITC determines that there is a reasonable indication that imports steel threaded rod from China are materially injuring, or threatening material injury to, the domestic industry, the investigation will continue and US DOC will be scheduled to make its preliminary determination in August 2008.

From 2005 to 2007, imports of steel threaded rod from China increased 9.8% by volume and were valued at an estimated USD 72.3 million in 2007.

Volume in tonnes
Value in USD million

Vulcan Threaded Products Inc is the petitioner for this investigation ad the alleged dumping margins are 36.17% to 659.26%

The merchandise covered by this investigation includes steel threaded rod, which is certain threaded rod, bar, or studs, of carbon quality steel, having a solid, circular cross section, of any diameter, in any straight length, that have been forged, turned, cold drawn, cold rolled, machine straightened, or otherwise cold finished, and into which threaded grooves have been applied. In addition, the steel threaded rod, bar, or studs subject to this investigation are non headed and threaded along greater than 25% of their total length. A variety of finishes or coatings may be applied to the merchandise. Steel threaded rod is classifiable under subheading 7318.15.5060 of the Harmonized Tariff Schedule of the United States.

Excluded from the scope of the investigation are threaded rod, bar, or studs which are threaded only on one or both ends and the threading covers 25% or less of the total length and threaded rod, bar, or studs made to ASTM A193 Grade B7, ASTM A193 Grade B7M, ASTM A193 Grade B16, or ASTM A320 Grade L7.

Chinese coke export in February down by 24% MoM

It is reported that China's coke exports dived in February. Statistics reveal the country exported 729,900 tonnes of coke in February down by 24% MoM and decreasing by 99,000 tonnes or 11% YoY from last year. Short domestic supply is supposed to be the main reason for the declining exports. As domestic price surged on account of scant supply, coke producers mainly served domestic market.

Total export volume in the first two months amounted to 1.6893 million tonnes down by 20.36% YoY as compared with the same period of 2007. Export value added up to USD 553 million up by 70.5% YoY.

Major exporters in February included Shanxi, Xinjiang, Beijing, Yunnan and Tianjin. Shanxi alone exported 320,000 tonnes in February down by 22% and 860,000 tonnes during January to February 2008.

(Sourced from MySteel.net)

Shagang to supply 60,000 tonnes X80 steel to CNPC in 2008

It is reported that Shagang has further strengthened the research and development of X80 pipeline steel since its first time to supply X80 pipeline steel to Dragon Company in last year.

Now, Shagang and CNPC have established close strategic cooperative partnership. According to the cooperation intention between the two sides, Shagang will provide 60,000 tonnes of API 5L X80 pipeline steel to CNPC in 2008.

Mr Gong Sheng first VP of Shagang Group stressed that “West to East gas project is not only a economic project, but also a political project. To complete this task of providing 60,000 tonnes of good quality X80 pipeline steel to CNPC is a glorious move for Shagang.”

Ha asked the entire company from top to bottom must seize the opportunity, successfully complete this task.

Shenhua starts production at new 20 million tonnes coal mine

Reuters reported that China Shenhua Energy Co Ltd has started production at its 20 million tonne a year Buertai coal mine in Inner Mongolia.

An Official who declined to be identified said total investment in the mine was CNY 4.5 billion. He added that production had started on March 15th 2008.

Shenhua Energy Co Ltd said in its annual report earlier this month that a trial production run was scheduled at the mine in May 2008, although the official Shanghai Securities News reported recently that a trial run had already taken place.

Shenhua Energy has said it expected its coal output to grow 12% or 19 million tonnes to 177 million tonnes in 2008.

Tangshan Jianglong inks cooperation agreement with Sinopec

It is reported that Tangshan Jianlong Steel Company signed strategic cooperation agreement with Sinopec Hebei Tangshan Petroleum Branch on March 13th 2008.

Sinopec Tangshan Petroleum Branch is the largest oil products distribution base in Tangshan and the sales volume of diesel oil takes over 80% in total quantity in Tangshan. The agreement would maintain long term stable supply of diesel oil to Jianlong Steel Company and steady price, which could help the company effectively resist market risks.

Mr Xutao vice general manager of Jianlong Steel indicated that the signing of strategic cooperation agreement means the cooperation between the two sides will enter into deeper areas.

China Shipping 2007 net profit up by 65.8% YoY

It is reported that China Shipping Development Co Ltd 2007 net profit under Chinese accounting standards up by 65.85% to CNY 4.6 as capacity expanded and shipping volumes rose, offsetting the impact of high fuel prices.

China Shipping Development Co Ltd said all 42 bulk carriers bought from its parent company in 2006 put in a full year of operations in 2007 increasing the company's shipping capacity by 1.4 million DWT. It said its shipping volume was 119.2 billion tonne miles in 2007 up by 50.3 % generating revenue of CNY 7.639 billion up by 93.8%.

Its oil shipping volume was 97.2 billion tonne miles up by 6.2% although revenue generated from the segment fell 8% to CNY 5 billion. Coal shipping volume turnover was up 66.7% at 81.3 billion tonne miles, generating revenue of CNY 5.474 billion up by 89.3%. Operating revenue was CNY 12.69 billion in 2007 up by 34.38% while operating costs rose 23.6% to CNY 7.99 billion mainly due to higher fuel prices.

In 2007, the company disposed of 22 bulk carriers with a combined capacity of 408,000 DWT. It plans to dispose of another 13 carriers with a combined capacity of 210,000 DWT in 2008.

China Shipping to spend USD 3.3 billion buying vessels

Reuters reported that China Shipping Development plans to spend CNY 23 billion to buy 59 vessels over the next five years, more than doubling its capacity to ride an anticipated up swell in global trade.

Mr Li Shaode chairman of China Shipping Development said the oil and coal carrier, which is building up a fleet of more than 180 ships to meet the heavy resource needs of China's fast growing economy, the world fourth largest, currently maintains a total capacity of 7.82 million dead weight tonnes.

He said the 59 vessels, to be delivered in the years until 2012, come with a collective capacity of 8.69 million DWT and will more than double the firm's shipping capability.

Mr Li told Reuters early this month that his firm which began shipping iron ore for steel making last year intended to spend about USD 2.8 billion over five years to double its capacity.

Tangshan Steel starts producing Galvalume

It is reported that Tangshan Iron & Steel Group has started trial production on its continuous hot dipped galvanizing line No.3 to produce Galvalume steel and silicon coated steel.

The company has produced more than 10,000 tonnes so far in thickness range of 1mm to 2mm and 1250mm wide.

The line has a design capacity of 400,000 tonnes per year with product thickness between 0.25mm and 2mm and widths between 820mm and 1,650mm. The company has also just put its 1,810 mm hot rolling line into production which is capable of producing extra thin HR coil starting at 1.4mm thickness.

Tangshan Iron & Steel Group said that its new products have better corrosion resistance and wear resistance performance than traditional hot dipped galvanized steel. It also will have flexible production options between the three products in the future.

Jingye Steel to raise plate capacity

It is reported that Jingye Steel Group, based in Northern China Hebei province, will build a new plate rolling mill next month with annual capacity 1.5 million tonnes. It may take about 1 year to commission this new facility.

Jingye’s capacity is 1.5 million tonnes of plate from its plate rolling mill which started to produce last February. Plate size ranges from 6mm to 50mm thickness and 2800 width. Jingye also manufacturers round bar and rebar which diameters 12mm to 40mm.

China eying price hike for coal export to Japan

It is reported that Chinese coal exporters are slated to start negotiating benchmark price with Japanese importers soon while global coal price continues upward swing. China Industry News learns that Japanese buyers are insisting on larger coal shipment from China, while the suppliers are push for higher price.

The industrial insiders said that Japanese buyers are sitting on the fence right now in anticipation for a clearer market direction in Chinese coal export. They believe the export price would decline if China's coal export rebounds to 5 million tonnes to 6 million tonnes in April 2008.

Most experts and analysts surveyed by the newspaper are anticipating steep price rise ranging from USD 120 per tonne to USD 134 per tonne on coal export to Japan this time. Mr Wu Yongping chairman of Datong Coal Mine predicts that the export price should keep in line with that of last December or February 2008 as the thermal coal export has reached over USD 120 per tonne in February.

It's a long term practice that the benchmark price of Chinese coal export would refer to that of Australian thermal coal export to Japan which has yet to be finalized.

Qinghai to accelerate 400,000 tonnes SS project construction

It is reported that Qinghai will further strengthen its efforts to accelerate its 400,000 tonnes of stainless steel production base project construction in order to achieve the industrial added value growth rate of 15% this year, and industrial investment of CNY15 billion.

They set 56 major construction projects, and the total investment reached to CNY 54.3 billion, this will provide a platform for Qinghai to adjust its economic structure and promote industrial upgrading.

Pansteel to produce P510L-C cross beam plate

It is realized that Panzhihua Iron & Steel Group which lies in province Sichuan, southwest of China has completed the second round of industrial examination of 8 ovens of P510L-C crossbeam plate. Both quality and capacity have reached the standard, reflecting that Pansteel is able in mass production of the products.

As per reports, P510L-C cross beam plate is Pansteel’s HR knockout product with independent intellectual property rights and gained a number of National invention patents, the brand recognition and market share is the first in China.

At present, Pansteel is studying the possibility of using this technology in other kinds of typical steel products.

Beijing Sanxing inks export contract with Nigeria

It is reported that Beijing Sanxing Automobile of Xinxing Pipes Group has signed export contract of special purpose vehicle with Nigeria recently, including 20 model dump trucks and 3 water wagons. This is the first time for the company to sign foreign trade contract.

Under the intense time of delivery, Beijing Sanxing Automobile achieved the technical design, chassis and major brought-in components etc in only 20 more days. The model dump trucks and water wagons have done according to the contract at present.

Mechel makes offer for Oriel Resources

Mechel announced that it has reached an agreement on the terms of a recommended cash offer to be made by Mechel for the entire issued and to be issued share capital of Oriel Resources plc. The all cash acquisition will allow Mechel to more than double capacity of ferroalloys used to make steel and also gives it control of chrome and nickel mines in Kazakhstan which Oriel was preparing to bring on stream.

Under the terms of the Offer, Oriel Shareholders will receive 219.86 US cents in cash for each Oriel Share which based on an exchange rate of USD 1.9992, being the rate as at the close of business on March 25th 2008 is equivalent to 109.97 pence per Oriel Share. The Offer values the entire issued and to be issued share capital of Oriel at approximately USD 1.498 million.

The Offer represents a premium of approximately 13.7% to the average closing middle market price of 96.75 pence per Oriel Share on February 29th 2008, being the last Business Day prior to Mechel’s announcement that it was contemplating an offer and 90.2% to the average closing middle market price of 57.83 pence per Oriel Share for the six month period prior to the same date.

Mr Igor Zyuzin CEO of Mechel said “We continue to implement our strategy to improve the efficiency of our steel division. The acquisition of Oriel will enable Mechel to increase its competitiveness by expanding the existing ferroalloy business, entering new markets and operating new production facilities. We believe the Offer provides Oriel Shareholders with a significant premium to the long-term share price of Oriel and offers Oriel and its employees the opportunity of becoming part of Mechel’s integrated mining and metals operations.”

Mr Sergey Kurzin executive chairman of Oriel said “In the four years since Oriel’s foundation, it has managed to build a valuable portfolio of significant ferroalloy assets. Nevertheless we believe that the Offer from Mechel provides an attractive opportunity for Oriel Shareholders to realize their investment.”

Merrill Lynch is acting exclusively as financial adviser and corporate broker to Mechel in respect of the Offer. Allen & Overy LLP is acting as legal adviser to Mechel. Cannaccord Adams is acting exclusively as financial adviser, nominated adviser and corporate broker to Oriel in respect of the Offer. Norton Rose LLP is acting as legal adviser to Oriel.

Russia launches AD investigation on HDG

It is reported that the Russian Ministry for Economic Development and Trade has decided to launch an anti dumping investigation against galvanized sheet exported from or originating in China, South Korea, Belgium, Finland and Kazakstan on March 18th 2008.

Petitioners for the investigation, including Severstal, Novolipetsk Steel and Magnitogorsk Iron and Steel Works said galvanized sheet imports from these countries had grown too quickly and low prices had led to falling market shares of domestic fellows.

As per report the investigation will cover color coated and galvanized sheet of all width and thickness with HS Code of 7210708000, 7210903000, 7210908000, 7212408000, 7212600000 and 7225990000.

Severstallat acquired assets of Polish Technologie Buczek SA

JSC Severstallat has announced that it acquired the assets of Polish company Technologie Buczek SA for EUR 15 million at auction.

Technologie Buczek SA owned 4 pipe mills with a capacity of 70,000 tonnes of pipes a year. The business also owned 2 slitting lines a 50.72% stake in LLC Buczek Automotive a producer of stock for car exhaust silencers and a 100% stake in LLC Przedsiębiorstwo Usług Transportowych SAMKOL a transportation company. The company employs 260 people.

JSC Severstallat plans to use the assets to set up a production and storage facility for the processing and distribution of metal products along the similar lines similar to its existing business.

Mr Anatoly Kruchinin chairman of the Board of JSC Severstallat terming the acquisition as a logical and complementary step said that "Severstallat has run a metals trading business for 15 years. Our experience means we will be able to exploit the opportunities of the emerging Polish market very efficiently manner, expanding both the depot supply and the production/service components of our local business. In particular, we believe there are considerable opportunities in the structural pipes segment."

ArcelorMittal Kriviy net profit in 2007 by 29.6% YoY

Ukrainian Journal Staff reported that Arcelor Mittal Kriviy Rih boosted net profit 29.6% in 2007 to UAH 3.798 billion.

ABN Amro and Merrill Lynch get mandate for financing Mechel Oriel buy

Interfax reported that Mechel has given the mandate to organize financing for the USD 1.5 billion acquisitions of Oriel Resources to ABN Amro and Merrill Lynch.

Mechel did not specify the amount and form of the financing.

ArcelorMittal confirms sale of Sparrows Point to Severstal

ArcelorMittal has confirmed that the Court appointed divestiture trustee has entered into an agreement to sell ArcelorMittal's Sparrows Point steel mill to OAO Severstal for USD 810 million net of debt.

Mr Joseph G Krauss said the divestiture trustee was required to seek the sale of the mill by a consent decree entered on May 23rd 2007 in the United States District Court for the District of Columbia in order to comply with an anti trust ruling concerning the approval of the merger between Mittal Steel and Arcelor SA in 2006.

The sale 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.

Russian scrap exports up by 21.1% YoY

According to the latest statistics from Russian Federal Customs Service, Russia exported 977,300 tonnes of scrap during the first two months in 2008 up by 21.1% YoY as compared with the same period of 2007.

As per report, Russia is offering A3 grade scrap at USD 530 per tonne to Turkey market.

Auction on iron ore deposits in Yakutia declared null

FIS reported that auction on four large iron ore deposits in Yakutia was declared not taken place.

This information was disseminated by the Territorial Agency on Subsoil Resources Management of the Sakha Republic of Yakutia. Specialists of Yakutnedra refrained from disclosing the reason.

The auction was held on March 18th 2008 in Moscow in the Federal Agency for Subsoil Resources Management. All four deposits Tayozhnoye, Desovskoye, Tarynnakhskoye and Gorkitskoye were put for bidding as one lot. The start price was set at RUB 5,389 million.

Dnipropetrovsk Tube output in February up by 30% YoY

Millennium Capital reported that Dnipropetrovsk Tube Works increased steel pipe output by 30.2% MoM or 3,200 tonnes to 13,800 tonnes. Notably, in January 2008, DTRZ reduced steel pipes output by 24.1% MoM to 10,600 tonnes.

DTRZ significantly decreased production in H2 of 2007 due to the reconstruction of its seamless pipe shop.

Stroytransgaz may rebuild Kirkuk-Baniyas pipeline in Iraq

RIA Novosti reported that Stroytransgaz one of Russia's largest engineering and construction companies and Iraq's North Oil Company held another round of talks on reconstructing an oil pipeline in Iraq.

The Kirkuk-Baniyas pipeline designed to transport crude from north Iraqi fields to the Syrian port of Baniyas was destroyed by the US Air Force during an invasion of the Middle East country in 2003.

The parties signed a protocol on Stroytransgaz's involvement in the project to inspect and reconstruct the pipeline and discussed the pipe's technical state and working conditions.

Stroytransgaz, which is partly owned by Russian energy giant Gazprom, builds oil and gas facilities and operates in 15 countries.

Gazprom evaluates drilling site and pipeline at Kamchatka

Interfax reported that a group of specialists from Gazprom and pipeline contractor Sibtruboprovodstroi has arrived in Kamchatka to evaluate the drilling area at the Kshukskoye gas field in Sobolevsky district.

The territorial administration told Interfax that "They also plan to analyze the condition of the existing segment of the Sobolevo-Petropavlovsk-Kamchatsky gas pipeline and the work that will be required to complete it."

Construction of the gas pipeline in Kamchatka territory is being carried out by Gazprom Invest Vostok a Gazprom subsidiary created to implement projects in Russia's Far East.

Mr Alexei Kuzmitsky governor of Kamchatka held a meeting with Mr Dmitry Shelekhov Gazprom Invest Vostok recently to discuss construction of the Sobolevo-Petropavlovsk-Kamchatsky gas pipeline. The gasification efforts in the region are in line with an instruction from Mr Vladimir Putin president of Russia issued following a meeting held in Kamchatka on September 5th 2007.

Gas delivered on the 420 kilometer gas pipeline make will replace expensive imported fuel. The gas the first to be delivered in Kamchatka's history will initially be supplied to power companies, housing and public facilities.

FAS to curb growth of oil products prices

FIS reported that Mr Igor Artemiev head of the Federal Anti monopoly Service said that repairs of oil refineries in the time of high demand for oil products is undesirable.

FAS sent to Minpromenergo and a number of companies a request to provide it with information on oil refineries repairs schedule and planned actions aiming to prevent the shortages of oil products in March to April 2008.

Russia's TGK-13 extends deadline for SPO bids

Reuters reported that Russian power firm TGK-13 TGKM.RTS has extended the deadline for bids for its secondary share offering as it is still awaiting formal go ahead from its parent firm.

A source close to the deal said the deadline for submitting bids could be extended until after April 4th 2008 when TGK-13 parent firm RAO UES's state controlled board will meet to formally approve the sale of its stake in TGK-13. TGK-13 had initially planned to close the book on Wednesday.

TGK-13 is being sold under a scheme that differs significantly from most of UES's previous sales.

The TGK-13 placement is expected to generate up to USD 550 million and reduce UES's state to 31.5%.

Rosneft to invest USD 2.7 billion in gas processing by 2011

RIA Novosti reported that Russia's state controlled crude producer Rosneft would invest RUB 65 billion in associated petroleum gas processing to bring refining to 95% by 2011.

Mr Sergei Bogdanchikov CEO of Rosneft said the company would build about five electric power plants to process a third of associated petroleum gas by 2011. Another third of the associated petroleum gas will be sent to refining facilities for conversion into chemical products and stripped gas, which will be supplied to energy giant Gazprom. The remaining third will be used to maintain stratum pressure to boost deposit yields.

Gazprom Neft the oil producing arm of Gazprom said in February it had plans to invest 17.6 billion in associated petroleum gas processing in 2008 to 2010 to achieve a utilization rate of at least 95% at all its deposits by 2011.

Gazprom reviews Smolensk progress

It is reported that Gazprom Headquarters hosted a working meeting