India withdraws export subsidy on some steel products

As a measure to control inflation and boost domestic supplies, Indian government on Thursday has suspended export subsidy under the Duty Entitlement Pass Book scheme on some steel products temporarily.

Indian government’s Director Gneral Foreign Trade vide notice no 130 (RE-2007) /2004-2009 dated March 27th 2008 announced that its has temporarily suspended DEPB on Product Group: Engineering Code 61 with the Serial numbers 67b, 67c, 85, 326, 327, 328, 329, 330, 336, 337, 341, 342, 343,344, 345, 350,351, 352, 381, 386, 387, 390 and 391 with immediate effect.

DGFT vide its notice no 17(RE-2007)/2004-2009 dated 12.7.2007 had made amendments / additions / corrections etc. in the Book Titled “Schedule of DEPB Rates” valid for shipments made till March 31st 2008.

The list of effected products is as under

Rate in %
Cap in INR per tonne
Amount in INR

Indian ferrochrome sector benefiting from power crisis in SA

BL reported that inadequate availability of electricity in South Africa, which has 80% of the world’s chrome ore reserves and accounts for 45% to 50% of the global market for ferrochrome, has provided Indian ferrochrome exporters with an opportunity to grab a larger share of the global market for ferrochrome.

With hardly any capacity addition its power sector in the last 7 years to 8 years, the power situation in South Africa has deteriorated. The problem has been compounded by an increase in the demand for power from both the industry and the household sectors. Ferrochrome industry is highly power intensive and any abnormality in power supply adversely impacts it.

The report quoted an industry sources as saying that "South Africa has always been regarded as a stable and reliable supplier of ferrochrome. However, given the present power situation in South Africa, consumers of South African ferrochrome are now a little apprehensive on this score, especially as the next major power capacity there is likely to go on stream only by 2010-11. As such, large global buyers are looking to diversify their sourcing base."

As per report, the global ferrochrome market has been pegged at 5.5 million tonnes. India produces 800,000 tonnes of ferrochrome annually, out of which almost 500,000 tonnes are exported to countries in the Far East, Japan, Korea, China and Taiwan and a small quantity is also exported to the US and Europe.

NMDC and New Millennium Capital in talks for iron ore project

It is reported that National Mineral Development Corporation is in talks with Canada’s New Millennium Capital Corporation Limited for a USD 3.5 billion project to develop one of the world’s largest undeveloped low grade iron ore deposits. NMDC is one of several companies competing for the project.

The Millennium Iron Ore Range, in which New Millennium holds a majority stake, has over 9 billion tonnes of iron ore reserves. Apart from developing the deposits, the project includes building a pellet plant and a 700 kilometer long slurry pipeline. It has floated a global tender for a 50:50 JV to expand and develop facilities in current or new mineral properties overseas.

Mr Rana Som CMD of NMDC said that a bid would be submitted by mid April 2008. Mr Som said that though the gestation period for the Canadian project was a 5 and a half to 6 years, it could help bridge the gap. He added that "Once our reserves are exhausted, the Millennium Iron Ore Range could last another 40 to 50 years."

Global firms in race for Sasan supply contract

ET reported that at least 5 global equipment majors are in the race for supply contract of main power equipment to Reliance Power’s Sasan ultra mega power project.

The players reported to be in the race are
1. Ansaldo from Italy
2. Doosan from South Korea
3. Toshiba from Japan
4. Power Machines from Russia
5. Shanghai Electric from China

The report cited a source close to the development as saying that "The discussions are now in final stages and the selection of the boiler, turbine and generator supplier would be made very soon. All major equipment suppliers are currently in Mumbai to submit their final offers to the company. It has sought boiler, turbine and generator package for unit size 660 MW. The successful vendor would be one that offers the best price along with a very good delivery schedule."

As per report, Reliance Power is expected to finalize the order worth over INR 5,000 crore for boiler, turbine and generator package soon for its 4000 MW ultra mega power project as it has put work on Sasan UMPP on the fast track to advance commissioning schedule for two 660 MW units within the Eleventh Plan period. It has already submitted mine plan for captive coal mine to the ministry of coal. The forest and environment impact assessment clearances are also expected soon. On the land front also, initial hurdles have been removed and the company expects full possession of land by April 2008 end. It would achieve financial closure by October 2008.

Jharkhand cabinet to clear R&R policy in a month

Ranchi Express reported that Jharkhand cabinet would clear the rehabilitation & resettlement policy within a month.

Mr Sudhir Mahto deputy chief minister of Jharkhand said that "As per the central R&R policy, the state government could only increase the package, but most of the points have been touched during a meeting of the committee."

He added that there is another meeting in near future and the final report would be brought before the cabinet within a month.

Iron ore prices are determined by market – Sesa Goa

Mr PK Mukherjee MD of Sesa Goa said that iron ore producers do not determine the price, since it is the market which does it. He added that the spot market is holding very stable for last 3 to 4 months though there are some signs of slowing down.

Mr Mukherjee, while giving an interview with CNBC TV18, said that "We sell in the domestic market based on who can offer us the higher price, which materials can be consumed in the domestic market. International price means that it has to go to a port and in case of Indian market, it is ex mines. So in case of going to the port, there are lot of hurdles including getting the railways and putting the material on to the port. So the cost is also huge, which is not comparable."

He added that "Sesa Goa does not announce such prices, NMDC announces the prices, they must be having the contracts accordingly but we do not have such contracts so we do not announce the price. Whenever materials are available, we go to the market, ask for the price and whatever market price is determined, we sell. There are cases when we are announced for the availability of the material in the newspaper for 5 years, for domestic users and there was not a single bidder."

Neepaz Tubes sells stake in Adhunik Metaliks

Adhunik Metaliks Limited informed BSE that one of its promoters. Neepaz Tubes Pvt Ltd, which has since been merged with Unistar Galvanisers & Fabricators Pvt Ltd by order of Hon'ble High Court, Calcutta, has sold their entire shareholding of 35,000 equity shares of the company to other promoter Company Adhunik Steel Ltd.

CLW sets loco production record in 2007-08

BS reported that Chittaranjan Locomotive Works has surpassed its production target in 2007-08 financial year as well and is set to dispatch 200 units, the highest ever number of locomotives in this financial year.

Mr V Shanker GM of CLW said that the record for finished loco dispatches was 165 locos in the years 1997-98 and 1998-99. He added that it is poised to achieve its production target of 200 locomotives for the year 2007-08.

Mr Shanker said that the CLW team would aim for production of 220 and 250 locomotives in the next 2 financial years. He added that higher production this year was largely made possible by the higher productivity of the skilled work force.

Gujarat NRE to set up coke oven gas based power plants

BS reported that Gujarat NRE Coke is planning to set up coke oven flu gas power plants in its production facilities at Bachau in Gujarat and Dharwad in Karnataka. The plans will have a combined capacity of 15 MW.

Mr PR Kannan CFO of Gujarat NRE Coke said that "We are looking at setting up 2 power plants in the next 18 months for which we will earmark around INR 130 crore."

He added that "The first plant would come up at Dharwad at a cost of INR 65 to INR 70 crore. The power would be used for the company's own requirements and there are no plans to commercialize it. A third plant is also being considered which could need a further investment of INR 80 crore.”

PFC inks MoU with RITES to expertise import of African coal

Power Finance Corporation Limited announced that it has signed a MoU with RITES Limited on March 27th 2008, whereby both the parties have agreed to combine their resources and expertise to the facilitate import of coal from African countries and elsewhere to address the problem of power deficit in India.

Under the agreement, both the parties are desirous of combining their resources and expertise to facilitate import of coal from African countries and elsewhere, subject to the parties reaching a mutually satisfactory understanding to address the problem of power deficit and to fill the demand and supply gap in availability of coal for the thermal generation plants in India.

PFC has identified funding of coal based thermal power projects as the mainstay for a long term sustainable growth of power sector and Indian economy and feels that there is a urgent need to supplement coal supplies from Indian mines that with imported coal on long term basis at competitive price. RITES, besides being a technical partner will identify the countries from where possibility of owning coal mining exists, excavation and transportation of coal is feasible for export of coal to India. RITES long overseas presence will be of immense help.

Railways constitute the major system of coal transportation in India and coal is the largest single commodity transported by the Railways. RITES being a technical arm of Indian Railways will liaison with Railway authorities for carrying and expediting sectoral studies, development of suitable plans and ensure adequate rail network for coal movement, development of new rail links with Ports connectivity.

Both the parties shall make joint efforts with concerned agencies for augmentation of port capacity to meet the increased demand, early completion of the existing projects and Port connectivity through seamless hinterland road and rail development to meet requirement of imported coal. Provide advisory services to Indian companies in acquiring mining rights. SPV, if required, would be formed which would along with local company acquire mining rights, out source the mining of coal and import the same to India for selling. Other Indian / foreign partners could also join the SPVs to be formed for the above objective, with the mutual consent of PFC and RITES whenever required.

FACOR Steels secures RBI loan for ECB of USD 2 million

FACOR Steels Limited announced that it has received loan registration number from Reserve Bank of India for availing external commercial borrowing of USD 2 million under the automatic route.

The lone would be used for partly financing capital equipments required for its proposed forged round bar plant project and balancing equipments for its existing steel melting shop and bright bar shop located in MIDC Industrial Estate at Hingna Road in Nagpur.

The board of FACOR had already approved the availing of ECB up to USD 5 million in November 2007.

CIL and Indian Railway to work out a wagon loading program

FE reported that Coal India Limited and Indian Railways have agreed to work out a coalfield wise wagon loading program that is in tune with off take targets, with 21 of the 32 thermal power plants supplied by CIL facing critically low stocks. CIL's stand is that Indian Railway is not giving enough wagons on the other hand Indian Railway, while admitting to a shortage of wagons, feels that CIL can help by ensuring faster turnaround of rakes.

Mr K Ranganath marketing director of CIL said that 21 thermal power stations have stocks for only 7 days, while 11 have stocks of 8 to 10 days. He added that coal transport volumes have become larger and distances traveled longer, so there is a need to work out new strategies for evacuation. He said that "Unless CIL and Indian Railways work out a holistic strategy, the desired level of growth in coal off take cannot be achieved."

Mr RN Varma additional member for traffic at Railway Board said that CIL and Indian Railway have agreed to attune their functioning more closely, given that coal movement is expected to increase by 65 million tonne during 2008-09.

CIL aims to increase daily loading to 24,016 four wheeled wagons during 2008-09 as against 22,150 four wheeled wagons during the period April 2007 to February 2008. Going by CIL's production plan, it will need 32,500 wagons a day by the time the 11th Five Year plan ends in March 2012.

Total coal off take for 2007-08 is projected at 375 million tonne up by 24 million tonne on off take in 2006-07, with 207 million tonne to be moved by rail.

Ramsarup Group to set up cement & power plant in WB

It is reported that Kolkata based Ramsarup Group is planning to set up a 2 million tonnes per annum cement grinding unit and a 300 MW thermal power unit at Siuri in Birbhum district of West Bengal. The project will entail an investment of INR 2,200 crore.

Ramsarup Group has already sought 1,200 acres of land and coal linkages for the proposed project from the state government. The fly ash generated from the power plant will be utilized to manufacture cement. It is also planning to set up a coke oven plant in the same premises.

Petron Engineering bags electricals order from Bina Refinery

It is reported that Petron Engineering Construction has received letter of intent valued at INR 15.81 crore from Bharat Oman Refineries for electrical works at Bina Refinery in Madhya Pradesh.

Petron has also received letter of intent recently from Samsung Engineering for electrical work at Indian Oil Corporation's MEG project in Panipat in Haryana for a contract value of INR 3.3 crore.

Petron Engineering is engaged in providing total solutions in construction. It operates through its 5 divisions of construction, Pertron Mechanical Industries, Petrofab, Petrotech and Rockwool Insulation providing services in mechanical, erection, piping, electrical, instrumentation, painting, refractory and insulation work for refineries, chemicals, petrochemicals, cement, fertilizers, metallurgical, power plants.

Simplex Infrastructure secures orders worth INR 653 crore

BS reported that Simplex Infrastructures Limited has bagged projects worth INR 653 crore from different segments.

The orders include
1. Civil and structural construction work of Hotel Ritz Carlton in Bangalore worth INR 139 crore
2. Chandra Cement Works in Maharashtra worth INR 116 crore from ACC
3. Sewerage system and allied works worth INR 175 crore from Indore Municipal Corporation
4. Thermal power plants worth INR 207 crore and piling works worth INR 16 crore.

Mr Rajiv Mundhra director of Simplex Infrastructures said that "It speaks of our strength as a company with diverse business portfolio. It is because of this, we have been able to tap the best out of different segments in the industry."

He added that it Simplex Infrastructures has maintained growth and its order book is around INR 10,100 crore.

SK Jain appointed as contractor for water jetties project in MP

BS reported that government of Madhya Pradesh has appointed Bhopal based SK Jain as contractor for the construction of water jetties in Madhya Pradesh.

In all 13 jetties are being developed for the development of intra water transportation at Bansagar reservoir and sites have been identified for the purpose. Of the 13 jetties, work on 9 jetties is underway and the remaining 4 are likely to commence work by April 2008.

It may be noted that Madhya Pradesh government had in April 2007, invited bids from the contractors for the construction of these jetties, but the proposed tender was cancelled due to high tender cost. Again bids were re invited in July 2007 by the state government, for which SK Jain emerged as the successful bidder.

Work on all the 13 jetties is expected to be completed by June 2008.

Bridge across Falku River in Gujarat to complete by 2009

It is reported that construction works on major bridge across Falku River on 124 kilometer long Viramgam Halvad Malia Road at Dhrangadhra in Surendranagar district of Gujarat is expected to complete by mid 2009.

The project being implemented by Public Works Department, Gujarat will entail an investment of Rs.2.79 crore. Earlier in April 2007, PWD, Gujarat had invited bids for which Gujarat Construction Co bagged the contract.

Currently, around 30% of the bridge work is completed.

TATA Motor’s eco car project in Thailand to get approval

BS reported that TATA Motors is likely get approval from Thailand’s Board of Investment for its proposal to make an eco car. A Board of Investment official in Bangkok said that the internal approval meeting, scheduled for April 2nd 2008, is likely to give its nod to TATA Motors to manufacture the eco car.

The eco car is an initiative of the Thai government to make it a prominent producer of cars that meet state of the art emission and safety norms with a stringent fuel economy of 20 kilometer a liter.

It may be noted that Board of Investment has issued a notification in June 2007 inviting proposals from global car makers to manufacture the eco car. It set a minimum pollution standard of Euro IV or higher, with emissions no more than 120 grams of carbon dioxide per kilometer. The car should also satisfy passenger safety standards for both front and side impact as specified by UNECE Reg 94 and Reg 95 respectively.

TATA Motors has not made a formal announcement on its proposed investment for this project. But Board of Investments stipulates a minimum investment of THB 5 billion. Approved eco car projects will receive corporate income tax exemption for 8 years and permission to import machinery duty free.

TATA Motors will be the third global car maker to get approval for such a project after Suzuki Motor Corporation and SIAM Nissan Automobile, whose projects are expected to start commercial production in 2010.

ONGC to supply fuel for NEEPCO plant

It is reported that ONGC will supply natural gas to the North Eastern Electric Power Corporation Limited for its power generation plant in Tripura.

As per report, ONGD has signed a term sheet, which is a precursor to signing a contract for supply of 0.5 million standard cubic meters of gas per day from future exploratory efforts of ONGC’s to NEEPCO’s power generation plant at Monarchak in West Tripura.

NEEPCO plans to produce 104 MW of power by end 2010.

Xstrata Coal lifts force majeure at Rolleston mine

AAP reported that Xstrata Coal has lifted force majeure on coal shipments from its 8 million tonnes per annum Rolleston thermal coal mine near the flood-ravaged town of Emerald in Queensland.

Mr James Rickards communications manager of Xstrata Coal told AAP that "We have sent out a note to clients today informing them that the force majeure has been lifted and shipments will resume shortly.”

Mr Rickards however clarified that its 6.8 million tonnes per annum Newlands thermal coal mine remains under force majeure. He said “We are still not getting much coal out of Newlands while we are still going through the clean up process due to the heavy rains.”

Mr Rickards said the mines were placed under force majeure around February 19th 2008 near the end of heavy rains.

BHPB bid for Rio –Rio challenged to prove that bid is low

Reuters reported that BHP Billiton has challenged bid target Rio Tinto to give financial details to support its arguments that a spurned all share offer worth USD 135 billion is too low.

Mr Alberto Calderon COO of BHPB told Reuters in an interview that "How can they justify turning away a 45% premium and synergy share that we have offered them? What is it they have that they are going to outperform BHP Billiton?"

He said that "They need to put numbers to that. But they have not done it. They just say 'It doesn't come close' and evade the question of relative value."

He added that “The question of relative value was key to the argument since BHP's offer was based only on shares, not cash.”

Mr Calderon said BHP has strong exposure to the underlying carbon steel market through its production of various products needed in the sector. He said "We are longer on carbon steel because of the combination of coking coal and manganese and iron ore, so we will slightly outperform Rio Tinto if the steel market explodes.”

He stressed that "To really be able to say that they have a better proposition, they have to outperform BHP by more than the value Rio shareholders would get from the significant uplift in their share of the new company and the available synergies that we are offering. The market has valued that uplift at over USD 40 billion. That's a hurdle they haven't addressed."

Mr Calderon added that "We believe we have a strong economic argument of why this merger would not harm competition. We have studied this, we have done our homework."

Rio Tinto has repeatedly said BHP's hostile bid of 3.4 of its shares for each Rio share is ballparks away from a fair offer.

Salzgitter announces 2007 results

Salzgitter Group announced that in the financial year 2007, it has set a new record high for consolidated sales, thereby considerably exceeding the already excellent operating result of the previous year. Along with the ongoing exceptionally good market for rolled steel products and tubes, the consistent implementation of further growth strategy measures contributed to these gratifying developments.

Salzgitter said that its external group sales rose by 21 % YoY to EUR 10.19 billion. The first time consolidation of Klöckner Werke AG, acquired at the start of the second half year, in the new Technology Division and other companies in the Tubes Division contributed EUR 665 million to this result. Earnings before tax of EUR 1,314 million and after tax profit of EUR 905 million.

Salzgitter said that “Good capacity utilization in steel processing sectors raised the demand for steel further in 2007. The total sales of the Steel Division climbed EUR 617 million to EUR 3,967 million. Primarily due to higher selling prices the sales of the large steel companies grew significantly. The Steel Division generated an excellent pre tax profit of EUR 749.4 million, thereby outperforming the previous year’s figure of EUR 433.8 million by 73 %. Against the backdrop of excellent market conditions, the consistent leverage of profitability improvement potential was also a contributing factor.”

BHPB bid for Rio – BHP to talks to Chinalco

Bloomberg reported that BHP Billiton Ltd is seeking talks with Aluminum Corp. of China to convince the state owned producer to sell its stake in the London based company.

Marius Kloppers CEO of BHPB said “We will seek to meet with them in the same way we are meeting with all the top 20, 50 shareholders of Rio Tinto.”

He added that “We clearly want 100% of the company but 50% acceptances will be enough to gain control.''

Chinalco bought a potential blocking stake in Rio last month and its chairman Mr Xiao Yaqing said on March 18th 2008 that he may buy more shares to secure the metals needed by China.

Brazilin slab export prices to SEA surge

It is reported that Brazil exports its slab to Indonesia and Korea at USD 850 per tonne C&F and USD 820 per tonne to USD 830 per tonne C&F respectively for Q2 of 2008.

It is said that the price will continue to rise and as per some trading sources the price for new deals has already hit USD 900 levels

Indonesian government has started to impose anti dumping tax on hot rolled coil from China, India, Russia, Thailand and Taiwan. The higher price on imported HRC has caused domestic HRC to hike. Local mill PT Krakatau expects to sell over USD 1,000 per tonne. That’s the reason Brazilian slab price climbs to USD 850 per tonne.

The increasing slab price will cause HRC price to boost in third quarter. The current HRC price to Asian countries from Japan is USD 850 per tonne FOB but it will expectably soar to USD 1,000 per tonne in the third quarter.

(Sourced from Yieh.com)

Sumitomo Metals completes capacity expansion for railway wheels

Sumitomo Metal Industries Ltd has completed a production capacity expansion for railway wheels, which has been undertaken at the Railway, Automotive & Machinery Parts Company's Osaka Steel Works. This initiative enabled the Company to boost annual production capacity by 40,000 units to 240,000 units.

Sumitomo Metal said that “Although approximately 1.5 million freight cars are in service on the railways of the whole of North America, several factors have driven up demand for wheels both for new freight cars and for replacement of the wheels of existing freight cars. These factors include the rising price of petrol, which has prompted a shift from road to rail transport; an increase in the volume of freight from Asia, which has boosted shipments by rail from the West Coast to the East Coast; and the tightening of standards governing the replacement of wheels.”

Demand for wheels in North America is estimated to be in the region of 1.4 to 1.5 million units per year; yet the Company has been requested by major users to increase production, as manufacturers in North America are only about to supply around 1.2 million units per year. In addition to the increase in wheel demand in North America, demand for these products from areas other than North America is also expanding; for example, Sumitomo Metals recently received a large order for railway wheels from Indian Railways.

Bumi extends bid for Herald Resources

Indonesia's largest coal miner PT Bumi Resources Tbk has extended its AUD 444.8 million takeover offer for Australian zinc hopeful Herald Resources Ltd to April 18. The offer was set to close on April 4th 2008.

Bumi said 10 days ago that it had not yet finalized debt funding to partially finance the bid, so it extended the deadline for execution of the debt facility to April 4.

Bumi in a statement said the conditions contained within its bidder's statement have not been fulfilled. It said Herald shareholders who had accepted the offer had the right to withdraw their acceptance within one month of receiving Bumi's statement.

Bumi said on March 11th 2008 that it was mulling over the future of its bid after the target backed a rival AUD 505 million offer by Indonesian state controlled mining group PT Antam Tbk and Chinese government backed miner Shenzhen Zhongjin Lingnan Nonfemet Co Ltd.

Vinalines to invest USD 3 billion on fleet, ports and logistics

VietNamNet Bridge reported that Vietnam National Shipping Lines will invest USD 3 billion on upgrading its fleet, building ports and developing its logistics workforce by 2010. The corporation intends to build 32 new freighters and buy second hand, foreign made ones to increase fleet capacity by 1.4 million tonnes.

The report added that the plan also includes developing 11 key infrastructure projects, including building the Van Phong international seaport in central Khanh Hoa province, the first deep water port in Vietnam with an annual cargo capacity of 300 million tonnes.

It said that Vinalines will construct a port in Lach Huyen in the northern province of Hai Phong and Hiep Phuoc in Ho Chi Minh City and expand Tien Sa port in central Da Nang city and Ben Dinh-Sao Mai port in southern Vung Tau province. In an effort to diversify services, the shipping giant plans to change Nha Rong port in Ho Chi Minh City and Da Nang city's Han River port into tourist ports.

The corporation will also build three transport logistics centres in the north, south and centre. Additionally, investments cover constructing facilities such as oil tanks and petrol ports in southern Dong Nai province and northern Quang Ninh province, as well as shipyards in Ba Ria Vung Tau, Quang Ninh and Haiphong provinces.

Australia exports 26.465 million tons of iron ore in January

According to the related statistics, Australian exports of iron ore in January 2008 up by 23.4% YoY to reach 26.465 million tonnes.

The port wise details are as under
1. Hedland - 10.611 million tonnes
2. Dampier - 9.603 million tonnes
3. Walcott - 4.604 million tonnes
4. Esperance- 0.450 million tonnes
5. Whyalla- 0. 399 million tonnes
6. Yampi Sound- 0.369 million tonnes
7. Geraldton – 0.358 million tonnes
8. Latta – 0.071 million tonnes

It is forecast that the Australian iron ore exports in 2008will reach 318 million tonnes.

(Sourced from YIEH.com)

Global steel prices driven up by rising costs and limited supply - MEPS

UK based MEPS said that “US mill transaction prices continue their positive trend. They are being driven by escalating input costs and higher energy and transport charges, rather than any improvement in real consumption.”

MEPS added that “Indeed, demand from a number of major end user sectors is lackluster and a good proportion of mill order books are taken up by service centers replenishing the inventories they had allowed to drop to record lows. The steelmakers have announced further substantial hikes for May as they take advantage of the lack of any overseas supply whilst continuing to explore export opportunities.”

MEPS said that “The Canadian mills report strong order books amidst an overall dearth of import competition. As expected, transaction values continue to advance as delivery lead times move out. Producers have tabled more increases for May. The upward price movement is being propelled by limited supply and higher production costs. Most end-user sectors are sluggish. The strong Canadian dollar is hurting manufacturing industry. Service centres are reducing their inventories as buyers hesitate to purchase at these inflated prices.”

MEPS added that “Since it was announced that iron ore prices would rise by 65%, Chinese mills have sought to lift steel values quite substantially. Japanese producers have tabled advances of JPY 20,000 per tonne for April deliveries and may even adjust prices further in the third trimester. Market values have already strengthened considerably in the wake of the announcements, amidst tight supply caused in part by buoyant demand from the auto makers. Although quayside stocks of imported flat products, at the end of February, were barely changed from January, traders fear that the strength of the Yen will encourage more imports during the second quarter. Inventories held by steelmakers and distributors went up in January by 2.4%, for the first time in five months, exceeding the 4 million tonnes level which is considered appropriate.”

MEPS said that “In South Korea, POSCO is looking to compensate for huge raw material cost rises, which kick in at the start of April, by ramping up steel prices. Supply is very tight in Taiwan and this, together with robust sales, is helping to push up prices.”

MEPS also said that “The Polish economy maintains its strong pace of growth. This month, ArcelorMittal successfully imposed higher prices and announced further positive developments for second trimester deliveries. Czech/Slovak demand is very robust. The upward price movement has begun. All flat product values are higher in Euro terms but the Czech Crown is so strong that the improvement is not evident when figures are quoted in the local currency.”

MEPS further added that “In Western Europe, values have been substantially affected by the tremendous raw material cost escalations announced recently. Price demands from domestic mills have shot up in the last few weeks and the major producers are talking of even higher numbers in the near future. With third country import offers comparatively scarce, buyers have nowhere else to go. The upward trend is certainly not demand led.”

Flat product prices hit record levels in Tokyo

JMB reported that sheet market price hits record around Tokyo. As per report the price reached JPY 90,000 per tonne for hot rolled coisl, to JPY 92,000 for pickled steel and JPY 96,000 for cold rolled coils.

The dealers try to increase the reselling price after integrated steel makers announced JPY 20,000 per tonne hike for April shipment. The market shows sign of uncertainty when the buyers built certain inventory before the hike and the import is increasing.

Goldman raises US coal sector to neutral

Reuters reported that Goldman Sachs has raised its rating on the US coal sector to "neutral" from "cautious" and upgraded two companies to "buy," citing in part a strong steel market which uses coal.

Goldman in a note said that "Given that valuation has retracted, we feel that now is a good time to take profits on our cautious coverage view and upgrade to neutral.”

Goldman raised Alpha Natural Resources Inc and Consol Energy Inc to buy and Arch Coal Inc, International Coal Group Inc and Massey Energy Co to neutral.

Scrap steel prices are up - CMC

Commercial Metals Co said this week that prices for the scrap metals it sells are up significantly in the quarter ended February 29th 2008.

CMC in a statement said that its recycling business saw average ferrous scrap sales prices for the quarter increase USD 73 per short ton to USD 287 and the average nonferrous scrap sales price for the quarter was USD 2,780 per ton up by 2% YoY.

Mr Murray McClean president & CEO of CMC said that “December ended excess inventory hangovers and the quarter saw an unanticipated USD 97 per short ton spike in ferrous scrap pricing followed by an USD 85 per ton increase in rebar and merchants by quarter end.”

Mr McClean added that “For the rest of 2008, supply of steel products in global markets is likely to be significantly impacted by the Chinese cut back in steel exports. The recently announced contract iron ore prices for 2008 up by 65% should support higher pig iron and ferrous scrap prices in global markets."

Tokyo Steel to increase H2 scrap price

Japanese Tokyo Steel in a release on March 26th 2008 said that H2 scrap price has hit to JPY 55,500 per tonne to JPY 57,500 per tonne up by JPY 2,500 per tonne to JPY 3,000 per tonne.

For American market, H1 scrap price keeps stable for two weeks in a row, reaching at USD 351.17 per ton. Moreover, the average price of bundled scrap was USD 299.5 per long ton last week, similar to the price in two weeks ago.

(Sourced from YIEH.com)

Cerro Matoso losses USD 76.6 million in 29 days strike

BNamericas reported that the 29 day strike at Colombia's Cerro Matoso metallurgical complex has generated partial losses of COP 140 billion (USD 76.6 million).

Mr Roger Herrera president of the Sintracerromatoso union told BNamericas employees paralyzed operations on February 27 demanding the company hire more workers.

However sector expert Mr Jairo Herrera director of Colombia's mining information website IMCPortal, believes the losses are difficult to quantify since the company's official figures are still unknown. He said that "It is tough to say the exact figure of the losses but we know they are huge.”

Cerro Matoso is located in Colombia's Córdoba department and produces ferronickel, iron alloys and nickel.

Czech Republic wins arbitration with ArcelorMittal

Dow Jones reported that Czech Republic won an international arbitration with ArcelorMittal over compensation for a minority share in the group's Czech steel mill.

Mr Miroslav Kalousek finance minister of Czech said that the tribunal in Paris also ruled that the Czech state's legal fees of EUR 500,000 are to be reimbursed. He added that "The Czech Republic will not have to pay a single koruna.”

The Czech Republic had pledged to transfer the disputed shares, now administered by the finance ministry, as part of a privatization deal with Mittal Steel. The transfer, however, has been blocked by the state's legal dispute with a Czech businessman to whom the government had promised a share in the steel mill in the 1990s but then backed out of the deal.

ArcelorMittal had demanded USD 355.37 million in compensation for a nearly 14% share in its steel mill in the northeastern city of Ostrava, which it acquired from the Czech state in 2003. ArcelorMittal's Czech unit is the country's largest steel maker, which had produced 3.06 million tonnes of the steel in 2006. The company has 7,450 employees.

Mr Owens says US economy is probably in recession

Mr Jim Owens chairman & CEO of Caterpillar Inc recently said that the US economy is probably in a recession and is unlikely to start recovering until late this year.

According to Mr Owens, fiscal stimulus would help support an economy dogged by mortgage foreclosures, a steep drop off in residential construction and financial market turmoil triggered by the subprime loan crisis.

He said that "The US economy is probably in recession now but will likely have real growth this year of around 0.5% so very very slow growth and probably a couple of quarters of negative growth.”

Mr Owens said that Caterpillar is eager to expand in Asia, where it trails local competitors such as Komatsu Ltd and as a slowdown in the US economy dampens the outlook for construction equipment demand in its home market.

Brazilian export of manganese ore up in 2007

According to the related information, Brazil exported about 12.88 million tonnes of manganese ore in 2007.

In the meantime, the export to France was 481,798 tonnes up by 4.2% YoY; China was 187,860 tonnes down by 27.8% YoY.

Norway imported around 98,623 tonnes from Brazil down by 13% YoY. Moreover, the exports of manganese ore in 2004, 2005 and 2006 were 1.86 million tonnes, 1,817,000 tonnes and 1,136,000 tonnes respectively.

(Sourced from YIEH.com)

Government Liquidation holding large scrap auction

It is reported that US based Government Liquidation will be holding an online auction of a host of decommissioned military aircrafts on April 21st 2008 and that the bidding closes on April 25th 2008.

The aircrafts comes from the US Air Force’s Davis Monthan base at Tucson in Arizona and a total of 4,200 decommissioned aircraft are located at the site.

This 27 million pound scrap sale consists of aircraft parts such as wings, wheels and hulls and includes scrap materials such as aluminum, steel, magnesium, titanium and rubber.

Interested parties can bid on the aircraft by going to the site at www.govliquidation.com.

Montezuma Mining acquires iron ore rights at Mt Padbury

Montezuma Mining Company Ltd announced that it has negotiated an agreement with Independence Group NL to acquire their 90% of the iron ore rights over the Mt Padbury licence E52/1529

The license contains approximately 23 strike kilometers of the banded iron and chert sediments that make up the Robinson Range.

Outotec and Geological Survey of Finland ink partnership

Outotec and the Geological Survey of Finland announced that they have made a partnership agreement for developing collaboration in the research and development of mineral technology. This collaboration includes process development for new ore deposits on laboratory, minipilot and demonstration plant scale as well as process improvements in existing concentrators.

The release said that “The target is also to develop new competences and technologies in environmentally sound and sustainable new process applications for minerals processing, in the utilization of by products and tailings and in environmental risk management at mines.”

It added that “Outotec and the Geological Survey of Finland have also agreed on researcher exchange in demonstration plant tests and when commissioning new plants for Outotec's customers. The partnership agreement further deepens the long-term relationship between the Geological Survey of Finland and Outotec in exploitation of natural resources and in development of new technologies in minerals processing.”

The Geological Survey of Finland is a significant geological competence center with an international profile as a provider of state of the art expertise in geological resources and their mapping and sustainable use. The Geological Survey of Finland acts as a national geo information centre with the aim of creating vitality, employment and welfare at regional level and of meeting the challenges in its field at global level.

Australasian to double iron ore project

Australasian said on Thursday it could double initial production from the project to 24 million tonnes per annum. The project is slated to commence production in 2010/11.

According to Mr Andrew Caruso MD of Australasian Resources Ltd, alliances with Chinese steel makers will be the key to determining whether iron ore explorers become producers and exporters. Mr Caruso was responding to comments by Mr Sam Walsh CEO of Rio Tinto that only a handful of the 90 or so iron ore juniors on the Australian stock exchange would graduate to export the bulk commodity in the next few years.

Mr Caruso told AAP that "I think there is competition for iron ore resources in the market and the more likely aspirants will be competing with Rio Tinto Ltd and BHP Billiton Ltd. Those companies that have the support of China, the support of a major partner are more likely to be able to face that challenge rather than those who are facing longer timeframes to get into production without a major partner."

Mr Caruso told a WA Mining Club function that China's large cash reserves continued to offer great finance opportunities for future iron ore developments in Australia. He said that "The Chinese want to influence iron ore supply and will make more investments in the future."

Australasian is documenting a joint venture agreement for its flagship Balmoral South project in Western Australia's Pilbara region with Chinese state owned Shougang Corporation. Shougang is an 8.4% shareholder in Australasia and China's fourth largest steel maker. Shougang has invested AUD 56 million into Australasian and will decide whether to proceed with financing the Balmoral South project in June after reviewing the feasibility study, which is currently underway. At this point, it can earn 50% of the project and secure all product offtake for 25 years, offering 100% of the project financing interest free in return.

Japanese construction machinery shipments to reach record levels

Japan’s industry data showed that construction machinery shipments in Japan are expected to hit an annual record in fiscal 2007 ending Monday.

The Japan Construction Equipment Manufacturers Association said that shipments totaled JPY 2,380.1 billion in the first 11 months through February, already exceeding the current record of JPY 2,300.6 billion posted in fiscal 2006. It added that the growth is led by robust exports to Asia and Europe.

In February alone, shipments rose by 19% YoY to JPY 226.6 billion rising for the 65th straight month. Exports grew by 30.1% to JPY 161.9 billion. But domestic shipments decreased by 1.8% YoY to JPY 64.8 billion marking a fall for three months in a row.

Ascot awards contract for ship loader for Swamp mine

Ascot Resources Ltd announced the signing of contracts for the construction of the full scale ship loading facility for its 100% owned Swamp Point Aggregate Mine. Completion of the ship loading facility will allow full scale aggregate production, including the loading of vessels up to Panamax size. Ascot expects to be in a position to begin deliveries to export and local markets in the Q1 of 2009.

Ascot Resources said that “Fabrication and delivery of two ship loaders was awarded to Telestack International Limited of Northern Ireland, UK. Broadwater Industries Ltd of Prince Rupert has been chosen to be general contractor for the construction of the marine facilities including steel substructures and the erection of the Telestack loaders. Subcontractors Fraser River Pile & Dredge Ltd. and Pacific Blasting Ltd both of Vancouver, BC, have been retained for construction related to pile installation and earthworks. Structural design engineering and construction supervision is being provided by Sandwell Engineering Inc of Vancouver.”

Two independent 2,000 tonne per hour Low Tail Telestack shiploaders are designed to provide an average loading rate of 4,000 tonnes per hour and individually can be driven for short periods up to 2,500 tonnes per hour if a higher productivity is required. The two units, which allow for 100% operating redundancy, will be mounted on a dual elevated rail system providing full longitudinal travel along the hatch length of the ship thus eliminating any need to move the vessel during loading.

The entire ship loading facility has been designed to be a cost-effective and low environmental impact alternative to traditional ship loading designs. It is anticipated that the ship-loaders will be delivered to the Port of Prince Rupert by year end where they will be assembled and delivered to the Swamp Point site for commissioning in the first quarter of 2009.

The Mine, located on tidewater in northwestern British Columbia is being developed to provide high quality aggregates to California and other Pacific coastal markets. A camp, access roads and sediment control structures were built in 2007.

STX Pan Ocean aims to overtake Hanjin Shipping

Yonhap reported that South Korea STX Pan Ocean Co expects sales to rise by 43% YoY in 2008 to KRW 8.1 trillion (USD 8.2 billion) due to higher shipping costs of its main bulk shipping business. The revenue target of STX Pan Ocean is comparable with target of KRW 7.5 trillion set by industry leader Hanjin Shipping Co.

An official at STX Pan Ocean said that "This year would be a historic moment for STX Pan Ocean to become the nation's No 1 shipping company.”

Analyst said that Hanjin Shipping, which specializes in container shipping, is struggling with fierce competition from its Chinese rival.

Last year, STX Pan Ocean reported sales of KRW 5.6 trillion lagging behind Hanjin Shipping's KRW 6.9 trillion.

Breakaway Resources announces nickel drilling success in WA

Breakaway Resources Limited advised that further significant nickel sulphide intersections from drilling at The Horn Prospect, part of the 100% owned Wildara Nickel Project in Western Australia, have extended the total strike of mineralization delineated to date to 350 meters.

The Horn is emerging as a significant discovery with the potential to host substantial tonnages of nickel metal

Western Canadian suggested to buy Falls Mountain

Western Canadian Coal Corp announced that an independent proxy advisory services firm has recommended company shareholders to vote in favor of the approval of the Falls Mountain Coal Inc acquisition and the amendment to the conversion rate in the related party loan made to the company by its largest shareholder, Cambrian Mining PLC, at the special meeting of shareholders to be held on March 31st 2008.

Last month, Western Canadian Coal said it had entered a definitive deal with Cambrian Mining to buy Falls Mountain Coal and added it sees capital cost savings of about CAD 70 million in developing the company's Brule mine to its full capacity.

Western Canadian Coal on September 18 said that major shareholder Cambrian Mining had agreed to give a short term loan facility of CAD 5 million to the company.

Tube City IMS receives 35 safety awards from NSA

Tube City IMS LLC a provider of products and services to steel mills and foundries announced that several of the Company's sites received a total of 35 Safety and Industry Best Practices awards from the National Slag Association for 2007.

Overall, Tube City IMS received 50% of the awards recognizing "Job Sites with at Least 200,000 Hours since the Last Recordable Accident" and 60% of the awards presented for "Lowest Incident Rate, 11-50 Employees."
Mr Raymond Kalouche president & COO of IMS Division for Tube City IMS said that "The Company is honored to receive these prestigious awards. They stand as testimony of our teammates' active participation in safety and innovation throughout our organization. We will continue to look for new ways to improve safety programs. I am extremely proud of all our colleagues for their dedication and commitment to safety."

The NSA Safety awards recognize superior performance as measured against Occupational Safety and Health Administration recordable injury rates. The awards were recently presented to the Company during the NSA's annual spring meeting in Las Vegas.

Tube City IMS, LLC is a leading provider of outsourced steel services, including raw materials procurement, scrap management, raw materials optimization, slag processing, metal recovery and surface conditioning services to integrated steel mills, mini mills and foundries. Tube City IMS has operations at 69 plants throughout the United States, Canada, Europe, Mexico, South America and Asia.

Inmet Mining and Teck Cominco sign arrangements for Petaquilla

Inmet Mining Corporation and Teck Cominco Limited announced that they have entered into an agreement to proceed with the development of the Petaquilla copper project in Panama.

Under the agreement Teck Cominco and Inmet Mining will work closely together during this next crucial phase of project development. Inmet Mining owns a 48% interest in Minera Petaquilla SA, the Panamanian company that holds the Petaquilla concession. Petaquilla Copper Ltd currently owns a 52% interest in Minera Petaquilla.

Under the existing Minera Petaquilla shareholders agreement between Teck Cominco, Inmet Mining and Petaquilla Copper in connection with the Petaquilla project, Teck Cominco may acquire from Petaquilla Copper a 26% interest in Minera Petaquilla by committing to participate in work plans and budgets and to fund up to 52% of development costs for the project through to commercial production. Teck Cominco would receive 52% of project cash flow until it has recouped its entire investment plus interest on amounts advanced on behalf of Petaquilla Copper. In lieu of receiving funding from Teck Cominco, Petaquilla Copper may elect, within 30 days of Teck Cominco's commitment, to finance all or part of its 26% share of development costs.

Teck Cominco and Inmet Mining will make the commitments to proceed contemplated by the existing Minera Petaquilla shareholders' agreement. Inmet Mining and Teck Cominco have agreed that on an interim basis Inmet Mining will provide additional personnel to an affiliate of Teck Cominco that will act as operator of the project, and will fund project expenditures instead of Teck Cominco. Teck Cominco has been funding 100% of front end engineering and design costs to date. At the end of the interim period Teck Cominco may elect either to continue participating in the project and resume funding or to sell its interest.

Mr Don Lindsay president & CEO of Teck Cominco said that "We have a high regard for the enormous potential of the Petaquilla project. This arrangement with Inmet Mining allows the Petaquilla project to proceed expeditiously, while preserving Teck Cominco's flexibility to progress other projects in our growth pipeline such as the Quebrada Blanca hypogene project, the Andacollo hypogene project and several other growth projects in oil sands and gold."

Mr Richard Ross chairman & CEO of Inmet Mining said that "This agreement allows Inmet Mining to advance Petaquilla to the next level and gives us the opportunity to realize the full value of the project. Petaquilla is a world class project and an important element of our growth strategy."

Allegiance trade soars after Zinifex buy

It is reported that Tasmania focused Allegiance Mining was the most traded stock on the Australian Securities Exchange, after suitor Zinifex increased its stake in the company to 69.35%.

As per report Zinifex increased its stake in the company by 39 million shares increasing its voting stake by about 5% while a total of 43.1 million Allegiance shares worth AUD 47.4 million changed hands on the market.

Zinifex prevailed with its AUD 790 million, three month takeover battle for Allegiance Mining earlier this month, after the company increased its stake in the miner to 51.1%.

Egypt bans cement exports until October 2008

Reuters reported that Egypt will ban cement exports from March 29th 2008 until October 1st 2008 as part of measures to control the markets.

Ms Samiha Fawzi, first deputy to Trade and Industry Minister Mr Mohamed Rachid, said the move is a temporary measure to face the seasonal increase of demand for construction material during summer. She said "Our construction sector is booming and we have shortages in the local market of cement and steel."

She added that "Once more companies start production and supply comes back to normal, we will lift the ban.”

Egypt granted 13 licenses for Greenfield cement operations and factory expansions in October 2007 and another one in January 2008. The government expects the new plants to add production capacity of 20 million tonnes, taking total annual production to 55 million tonnes.

Rising local cement prices drove the ministry of trade to introduce an export duty on cement at EGP 65 per tonne in February and raised the duty to EGP 85 per tonne in August.

Egypt increased export duties on some steel products on Wednesday in response to rising global prices, but kept duties on cement exports unchanged. The ministry also said in a statement that cement and steel factories would not be allowed to halt production without a special permit. Twenty executives of local cement companies are already facing trial in Egypt on charges of conspiring to fix prices.

Turkish scrap market remains steady at high levels

Affected by price rise on scrap in Turkey, some steel mills in Turkey did not reach any agreement last week due to higher price.

According to the latest 2 deals of scrap in Turkey, the price of mixed scrap number 1 and number 2 was at CFR USD 553 per tonne, P&S scrap was at CFR USD 563 per tonne. In addition, the price for A3 scrap of Baltic Sea, including few bonus scrap and shredded scrap, was at CFR USD 564 per tonne.

The scrap price is uncertain in Turkish market this week owing to shortage of American scrap. Meanwhile, the bonus scrap from Far East region is about CFR USD 590 to USD 600 per tonne. The price of mix scrap number 1 and number 2 from the Europe is at CFR USD 547 per tonne. Besides, the price for A3 scrap of black sea to Turkey is around CFR USD 550 to USD 560 per tonne.

Regarding the review on the performance of scrap market in the past 4 months, the scrap price in Turkey is CFR USD 550 per tonne in March 2008 up by 57% from CFR USD 350 per tonne in December 2007. Also, the scrap price is expected to keep skyrocketing with the increase of 65% in iron ore price.

(Sourced from Yieh.com)

Furnace oil price up by PKR 1,872 per tonne in Pakistan

APP reported that, after an increase in the prices of petroleum products, the oil marketing companies have also increased the prices of furnace oil by PKR 1,872 per tonne.

OCAC officials said that the price of furnace oil after this increase has touched PKR 38,063 per tonne. They further told that the main reason of the increase in price of furnace oil is reaching the price of crude oil the record level in international market.

A large quantity of furnace oil imported to the country is used in power plants and steel manufacturing plants.

ABB bags major contract from DUBAL

The leading power and automation technology group ABB has won a USD 53 million contract from Dubai Aluminum Company Limited to upgrade electrical and automation systems at the company’s 480 hectare smelter complex in Dubai. Commissioning of the new units is scheduled for completion in late 2009.

Under the terms of the contract, ABB will replace 16 high voltage regulating transformers with five larger units, rated at 86 megavolt amperes, to increase capacity and combine two smelting potlines. ABB will provide design, installation and commissioning services for the project, and dismantle the existing equipment. The delivery includes control and protection systems, 250 kilo ampere field oriented measuring equipment, and upgrades to existing high voltage cables, low voltage and control cables, fire detection and fire fighting equipment.

Mr Veli-Matti Reinikkala head of ABB’s Process Automation division said “ABB’s comprehensive service and product portfolio gives customers like DUBAL the solutions they need to grow capacity while using energy more efficiently. Backed by extensive experience and expertise, we are a leading player in the metals industry.”

DUBAL operates one of the largest single site aluminum smelters in the world, having produced approximately 890,000 tonnes of aluminum in 2007 and is one of the largest non oil contributors to Dubai’s economy. This order follows a similar contract awarded by DUBAL in 2006. ABB was commissioned to deliver a similar scope of supply for an earlier expansion of this smelter complex.

India to import Pakistani cement to control prices

It is reported that Indian government is considering the import of 92,000 tonnes of cement from Pakistan to shore up domestic stocks and stabilize prices of the commodity.

Dr Ashwani Kumar union minister of state for commerce & industry said that "The retail price of imported cement from Pakistan varies from INR 200 to INR 220 per 50 kilogram bag, as compared to the average prevailing price of INR 231 per bag of indigenously produced cement."

Mr Kumar noted that the Pakistani cement, which would be imported through the Minerals & Metals Trading Corporation, would have to conform to quality norms set by the Bureau of Indian Standards.

Oman Shipping to spend USD 4 billion on fleet expansion

Reuters quoted Mr Kuldeep Mathur CFO of Oman Shipping Company as saying that it is aiming to spend up to USD 4 billion over the next 3 to 4 years to expand its fleet size to meet the demand for energy transportation. Mr Mathur said that "We are expanding the fleet with a view of the future demands for our export grade crude and products."

Part of Oman Shipping Company's multi billion dollar expansion includes a recent order to build 10 very large crude carriers. In February 2008, it placed 2 separate orders with South Korea's Hyundai Heavy Industries Co to build 5 supertankers and with Daewoo Shipbuilding and Marine Engineering Co to build another 5 very large crude carriers.

Mr Mathur said that financing for Oman Shipping Company's fleet expansion could likely come via loan arrangements from the North Asian institutions, Japan Bank for International Cooperation, Korea Export Insurance Corporation or European banks BNP Paribas and Societe Generale. He added that "We have a very good relationship with several banks and could look to either one to finance our expansion plans."

Mr Mathur added that Oman Shipping Company is in discussions with the National Iranian Tanker Company on securing a long term charter contract for at least 5 of the recently ordered supertankers. He added that "Yes, we are discussing the option with them, along with others, but we are not decided yet."

ADB may fund revival of TAP pipeline project

Dawn reported that Asian Development Bank is regrouping officials of Turkmenistan, Afghanistan and Pakistan in the third week of April 2008 to revive the Turkmenistan Afghanistan Pakistan gas pipeline project in view of the energy shortage in the region.

The TAP pipeline of 56 inch diameter needs at least 30 billion cubic meter of gas per year from Turkmenistan to reach Pakistan via Afghanistan.

The sources said that an earlier steering committee meeting of the TAP project did not take place after Turkmenistan signed an agreement with Russia’s gas giant Gazprom to increase gas supplies to Europe at enhanced rates.

They said that the security situation in Afghanistan and relations between Pakistan and India needed to be improved and fuel subsidies in the two countries would have to be phased out. Above all, the long term competitive advantage of the TAP over the option of LNG has to be determined.

Lucky Cement to export cement to South Africa

The News reported that Pakistan’s Lucky Cement is optimistic about the expansion process of its first production line of 4,200 tonnes per day or 1.26 million tonnes per annum in its southern plant and plans to start producing clinker by November 2008, which will increase its annual cement capacity to 7.6 million tonnes per annum.

Recent positive development for Lucky Cement was the consent of South African authorities to import cement from Pakistan as it is facing a shortage of cement due to the upcoming football world cup in 2010. Pakistan can potentially export 9 million tonnes of cement to South Africa in the next 2 years. Lucky Cement is the only local cement producer that has received an export certificate from the South African Bureau of Standards.

Lucky Cement holds 39% of the total cement export market of Pakistan. It reaps the benefit of having plants both in the North and South regions, enabling it to export through both land and sea at low costs. It exports in bulk through sea to India, Middle East and Africa. The management of Lucky cement believes that commissioning of new capacities in Saudi Arabia and UAE will be less of a threat as the development of new cities will create incremental demand in the region.

Petrofac secures construction deals for Syria gas project

Petrofac has received a letter of intent for the award of a EUR 291 million lump sum contract from the Hayan Petroleum Company in Syria to construct a gas treatment plant. The project is due to be completed in the first quarter of 2011.

The plant will be built on the Jihar field in the Hayan Block, located near to the town of Palmyra, which consists of the gas, condensate and oil fields for Jihar, Al Mahr & Jazal.

Petrofac’s comprehensive scope of work will cover engineering, procurement and construction, pre commissioning and commissioning, and start up of the gas processing facilities. In addition to the plant, Petrofac will build an LPG recovery system, LPG storage and loading facility, gas gathering and collection systems, satellite gathering station, well sites, flow lines, utilities and offsite facilities, gathering pipelines and living quarters.

ONGC and Hinduja Group to sign Iran agreement by April

BL reported that Oil & Natural Gas Corporation along with Hinduja Group is likely to sign an initial agreement to develop 12th phase of the South Pars gas field and South Azadegan oilfield in Iran by mid April 2008.

The development of the two fields is a part of the USD 20 billion investment the two partners have planned. They also plan to rope in NICO, a unit of National Iranian Oil Co, for the deal.

GCC project services to touch USD 4 trillion by 2028 – Report

MEED reported that GCC project services industry has reached USD 2 trillion and is expected to hit USD 4 trillion in the next 20 years.

Mr Edmund O'Sullivan chairman of MEED events said that Gulf project spending in the public and private sectors is shifting from construction to services. He added that "Half of that will be in logistics. About 25% of the spending will go to worker income. The numbers of workers are also expected to grow rapidly. Presently, there are at least 4 to 5 million people working in the project industry, in the full value chain."

Mr O'Sullivan said that this figure is expected to double in the coming years. He added that "Arabtech has 40,000 workers and is expecting to double them in 5 years."

He said engineering firms have similar expectations and the project market will involve about 25 million people over the next 20 years. He added that "This is a genuine international movement of people, on an unprecedented scale. Never before have so many people left their home country for another country in search of work."

Gaz de France eyeing Qatar as potential gas supplier

Reuters reported that Gaz de France would welcome more gas imports from Russia and is looking at Qatar as a possible new supplier. Gaz de France is also looking at other countries for new gas imports. Qatar, the holder of the world’s third largest gas reserves, has frozen all new gas projects until 2012 to assess reserves at its vast North Field.

Mr Jean Francois Cirelli head of Gaz de France said that "We are willing to get more Russian gas but the problem today is that Russians do not have more, so we will wait until Shtokman comes on stream to see if we can get more gas."

Mr Cirelli was referring to the giant Arctic gas field, one of the world’s biggest gas fields with reserves estimated at 3.8 trillion cubic meters of gas. Russia’s Gazprom, France’s Total and Norway’s StatoilHydro will develop the USD 15 billion, 25 year first phase of the project. Under current plans, production is due to start in 2013.

Mr Cirelli said that "Why more Russian gas? Because it is here and it is easy. The pipelines are here and if tomorrow, we are told that we are going from Russian import volumes of 12 billion cubic meters to 14 billion, I will take the extra two." He added that increasing Gaz de France’s share of Russian gas would not call into question the company’s strategy to diversify its suppliers.

Mr Cirelli said that Gaz de France has opened a representative office in Qatar and hopes for a long term supply deal once the moratorium is lifted. He added that "Our goal is to have a contract with Qatar one day. Today it is impossible because of the moratorium. They have sold roughly what they have discovered so we can not get anything."

Russia currently represents 15.8% of Gaz de France’s gas imports, behind Norway’s 21.1%. The Netherlands, Algeria and Egypt also supply gas to Gaz de France, which is set to merge with electricity group Suez in 2008.

Steel consolidation in China to speed up – CISA

Mr Luo Bingsheng deputy director of CISA while speaking during Shandong Steel Group's unveiling ceremony yesterday said that "Steel consolidation in China would speed up as many enterprises are under negotiations."

Mr Luo said formation of Shandong Steel Group has accelerated the pace of Chinese steel industry's consolidation and is of major significance in raising the industry's concentration.

He said there are a host of steelmakers under talks about M&A. He said that “The big problem China's steel industry is faced with is allocation of productive force, moving steel industry toward coastal areas is a trend. To build modernized, new steel works on the coastal region can source iron ore resource at a lower cost in virtue of geographical advantages.”

Mr Luo said “Economics of scale is required by the industry. Through assets consolidation, resources can be better allocated and utilized, division of work rationalized, and enterprises competitiveness also sharpened. If China's steel concentration further increases, it will also gain a bigger say in purchasing of raw materials, especially iron ore.”

The state council lately approved prophase work of Fangchenggang and Zhanjiang projects, suggesting combination between Baosteel, Liuzhou Steel and Shaoguan Steel is expedited and an essential regrouping will happen between Wuhan Steel and Liuzhou Steel.

Chinese steel exports in February dips to 3.107 million tonnes

According to the recently released information by Chinese custom authorities, Chinese steel exports during February 2008 amounted to only 3.107 million tonnes.

The exports were made to 176 countries but top 20 destinations accounted for 82% of the total volumes.

In million tonnes

Chinese import of ferrochrome in 2008 to surge

Platts cited Mr Wan wu Dong director of marketing for Kermas China while speaking at the Metal Bulletin's 9th Asian Ferroalloys Conference in Hong Kong as saying that China will import more than 2 million tonnes of ferrochrome in 2008, marking an increase of a minimum of 650,000 tonnes over 2007.

Mr Dong said China imported about 1.39 million tonnes of ferrochrome in 2007 up sharply as compared to only about 449,385 tonnes imported in 2006 and 233,140 tonnes in 2005.

Mr Dong said the continued growth of stainless steel production in China will continue to drive the country's ferrochrome imports. He said "In 2007, China increased its stainless steel production by 40% and China was the driver of growth in the stainless steel industry and that its consumption of ferrochrome would increase further.”

Mr Dong also said that South African producers' ferrochrome output was limited by the power concern in the country. He said that "Electricity shortage in South Africa is a big threat and producers' stock levels of ferrochrome, particularly in South Africa are at a critically low level and forecasting supply to tighten further.”

Mr Dong said that ferrochrome prices in China would continue to rise as the rapidly expanding consumption in China has changed the market's dynamics, while the medium term shortage of electricity in South Africa would remain a concern. He said "The boom of chrome has just started."

Kazakhstan, South Africa and India are the three major exporters to China. Kazakhstan exported 616,619 tonnes of ferrochrome to China in 2007 followed by South Africa with 551,632 tonnes and India with 181,991 tonnes.

Mexico levies provisional AD duty on Chinese steel plate

The Economy Ministry of Mexico has announced on March 24th 2008 that it would levy a 29.27% provisional anti dumping duty on steel plate originating in China.

On November 30th 2006, Altos Hornos de Mexico and SA de CV applied to the local government for carrying out an investigation into the steel plate imported from January 1st to December 31st of 2006. The Economy Ministry decided to wage the investigation on March 26th 2007.

(Sourced from MySteel.net)

Chinese steel imports in February amount to 1.224 million tonnes

According to the recently released information by Chinese custom authorities, Chinese steel imports during February 2008 amounted to only 1.224 million tonnes.

The exports were made to 58 countries but top 3 sources accounted for 84% of the total volumes.

In million tonnes

Taigang to increase SS prices in April 2008

Taigang Stainless Steel Co Ltd has announced that it will raise core product prices by as much as CNY 1,800 on April 1st 2008 in order to offset climbing raw material prices.

The details of hike is as under
1. 304 series CR by CNY 1,500 to CNY 1,800 per tonne
2. 410 series CR by CNY 500 per tonne
3. 430 series CR by CNY 800 per tonne
4. 304 series HR by CNY 1,500 per tonne

A Taigang Stainless sales official told Intefax China that "The April price hikes reflect market supply and demand, as well as raw material price hikes. However, despite these recent corrections, the average nickel price in March remained above that of February, and stainless steel mills are so confident that nickel prices will rebound in April that they have already decided on the April product price hikes.”

The official said "Ferrochrome price hikes rather than high nickel prices is becoming a bottleneck for stainless steel mills right now. We're really feeling the squeeze from the drastic growth in ferrochrome prices. In addition, ferrochrome supplies are still tight."

Handan Steel hikes April prices

It is reported that Hebei's Handan Steel has raised prices for some products for April productions on the basis of prices released on February 27th 2008.

HRC prices are hiked by CNY 150 per tonne,
Pickled steel prices hiked by CNY 120 per tonne
Color coated steel prices hiked by CNY 300 per tonne
Galvanized steel prices hiked by CNY 260 per tonne
CR prices hiked by CNY 150 per tonne
Full hard prices hiked by CNY 150 per tonne.

Latest EXW price for Q235 3.0mm HRC is quoted at CNY 5590 per tonne that for 5.5mm HRC at CNY 5460 per tonne.

Prices listed above are inclusive of 17% VAT effective as of March 26th 2008.

(Sourced from MySteel.net)

Sutor Technology modifies HDG expansion plans

It is reported that China’s Sutor Technology Group operations will now begin on its new, redesigned zinc and aluminum HDG line in the third quarter of 2008.

Start up was originally planned for last month at the company’s mill at Changshu in Jiangsu Province in East China. But after further assessment of customer demand and operating costs, Sutor decided to include two galvanizing pots, instead of one, for improved flexibility, enhanced reliability and reduced down time.

Consequently the commissioning period was extended to enable the change to optimize the new galvanizing system, which will provide an extra 400,000 tonnes per year of capacity, taking the mill’s total HDG capacity to 600,000 tonnes per year.

The new system will allow Sutor to galvanize both zinc and aluminum coatings on HR as well as against current capacity of only zinc coating on CR substrate.

When the new HDG line nears completion, Sutor says it then plans to expand its annealing and degreasing capabilities to 300,000 tonnes per year with full production starting in Q2 next year.

Mr Lifang Chen president of Sutor Technology Group said “The expansions will further diversify our product portfolio, expand our market applications, improve our value proposition to our customers, mitigate our supply chain and quality sourcing risks, as well as expand our revenue base for the future.”

Sangang Minguang net profit in 2007 up by 35% YoY

Sangang Minguang, a listed steel producer in Fujian Province, has reported a net profit of CNY 499 million last year up by 35% YoY on 2006. Sales revenue was CNY 11.3 billion up by 29% YoY while operating income was higher by 40% YoY at CNY 742 million.

It produced 3.33 million tonnes of crude steel up by 4.8% YoY, 2.65 million tonnes of pig iron up by 9.5% YoY and 3.34 million tonnes of finished steel products up by 5.5% YoY.

Its main products are bar, wire rod and plate. Sangang Minguang foresees steel demand in the southeast Chinese province increasing this year as fixed asset and real estate investments are expected to rise.

It aims to produce 3.83 million tonnes of crude steel, 3.26 million tonnes of pig iron and 3.6 million tonnes of finished steel products in 2008 thus generating sales revenue of CNY 14.6 billion. It also plans to refinance this year, or next year, to purchase a plate mill from its parent, Sangang Group.

China nickel pig iron demand rises on iron ore hikes

Reuters reported that high prices of iron ore are spurring Chinese stainless steel producers to increase purchases of nickel pig iron for which iron is a byproduct.

Mr Xinfang president of Shanghai Tsingshan Mineral Co Ltd said that "In the price of nickel pig iron, iron is free. That is why the use of nickel pig iron in China has risen. He said we do not have any technical problem and I do not believe Taigang and Baosteel would have."

Mr Jiang said China's two top stainless steel producers Shanxi Taigang and Baoshan Steel are using more nickel pig iron to lower production costs.

He said that “Chinese nickel prices are at CNY 245,000 per tonne. But the price of nickel in nickel pig iron is about CNY 155,000 per tonne after deducting the value of iron. Costs to process imported laterite ores into nickel pig iron containing 5% to 7% nickel are at USD 8,000 per tonne to USD 9,000 per tonne in China.”

Mr Jiang said Tsingshan has 200,000 tonnes of nickel pig iron capacity in China equivalent to 10,000 tonnes of nickel per year and 1 million tonnes of stainless steel capacity. He added that “A new project would include the building a power plant, the laterite mine and a stainless steel plant with 300,000 tonnes of capacity a year using nickel pig iron as the main feed. Total investment would be USD 350 million.”

9 killed in coal mine gas explosion in Hunan

Xinhua reported that at least 9 miners are killed and 5 others missing in a colliery gas outburst in Central China's Hunan Province.

The report added that the accident occurred at about 6:30 PM at the Zhangjiazhou coal mine in Chenzhou City when 17 miners were working underground and only 3 workers managed to escape.

A number of officials, including the deputy governor of Hunan and chief of the provincial work safety watchdog, were supervising the rescue operation at the site.

The colliery, with legal business licenses, was being merged with other mines under the local government's plan to reform the mining industry.

Taigang develops super austenitic stainless steel 904L

It is reported that recently, TISCO has successfully smelted super austenitic stainless steel 904L, which is widely used in wastewater treatment, chemical industry, paper and other manufacturing industries.

Super austenitic stainless steel 904L belongs to high chromium, nickel, molybdenum containing cooper kind of ultra low carbon steel. It has good corrosion resistance and has been dependent on import all long, is a state shortage steel.

Chinese major industries profit in 2 months up by 16.5% YoY

Xinhua reported that major industrial enterprises posted CNY 348.2 billion in profits during the first two months of this year up by 16.5% YoY from a year earlier.

National Bureau of Statistics said major industrial enterprises are defined as those with annual primary revenues of more than CNY 5 million. It said that profits of state owned companies down by 5.6% to CNY 140.5 billion y largely affected by conditions in the power and oil refining sectors.

Power utilities' profits went down by 61% YoY and oil refineries and coking plants moved to a loss of CNY 20.6 billion from a year earlier profit of CNY 15.6 billion. But some other sectors including oil and gas production, coal and construction materials saw profits surge more than 50%. Profits of steel enterprises rose 12.2% and those of chemical plants rose 16%.

The NBS also reported higher profits for private and foreign funded enterprises up by 52% and 22.5% respectively.

Chinese construction steel export price keep firm

It is reported that export offers for Chinese construction steel remained firm this week, bolstered by the improvement in both domestic and overseas market price.

Chinese domestic market prices have seen rebound this week. On Shanghai market, HRB335 20mm rebar is being quoted at CNY 4800 per tonne to CNY 4810 per tonne up by CNY 40 per tonne, HRB400 at CNY 4840 per tonne to CNY 4850 per tonne. Commercial wire rod goes at CNY 5020 per tonne, hi speed material at CNY 5040 per tonne.

Export offers are largely unchanged. Prevailing export offers for rebar are still at USD 860 per tonne to USD 870 per tonne FOB. Wire rod is being quoted at USD 890 per tonne to USD 900 per tonne FOB an increase of USD 10 per tonne. Some steel makers are tagging at USD 860 per tonne FOB for material with boron.

(Sourced from MySteel.net)

China Datang Power to invest CNY 3.4 billion in coal mine

It is reported that China's Datang Power would invest up to CNY 3.4 billion to buy a 51% stake in a venture that will develop a large coal mine in Inner Mongolia.

Datang, without specifying that when the project might start production, said that the coal project in the Chinese region of Inner Mongolia, which still needs government approval, will produce 60 million tonnes of coal a year.

Datang Power also said it would invest CNY 2.9 billion and CNY 3.3 billion in two projects to turn coal into gas in Inner Mongolia and northern China's Liaoning province.

It also said that its net profit in 2007 rose by 17% YoY to CNY 3.41 billion due to increased power generation and higher power prices as revenues climbed up by 32% YoY to CNY 32.83 billion.

Taiwan ends ban on direct shipping to China

Port World reported that Taiwan's President elect Ma Ying-Jeou has confirmed that seven ports are to be allowed to develop direct transport links with China, signaling an end to a 5 decade ban on direct shipping with China.

The ports are Keelung, Taipei harbour in Taipei County, Taichung, Pudai harbour in Chiayi County, Anping harbour in Tainan County, Kaohsiung and Hualien.

As per a report in China Post, 6 of the ports are ready to start direct services. Authorities of all the seven ports, except those at Pudai harbor, have indicated completion of preparation for the new services.

Analysts said that Taiwan's busiest port, Kaohsiung, could benefit from the new policy. Major shipping lines have been canceling calls at Kaohsiung, preferring to reach Chinese ports directly and employ feeder services to transship containers from Kaohsiung.

Luoping Zinc net profit in 2007 up by 14% YoY

Interfax China reported that Yunnan Luoping Zinc and Electricity Co. Ltd, which is listed on the small and medium sized enterprise board of the Shenzhen Stock Exchange, reported that it's net profit in 2007increased by 14.35% YoY to CNY 100.39 million (USD14.25 million). Luoping Zinc generated operating revenue of CNY 1.24 billion in 2007 up by 26.24% YoY.

It attributed the hike in operating revenue and net profit to increased production and sales, despite a zinc ingot price decline in the second half of 2007.

In 2007, Luoping Zinc produced 5,268 tonnes of zinc and 2,701 tonnes of lead, both in concentrate form, as well as 50,288 tonnes of zinc ingot up 44.35% YoY and 240.22 tonnes of cadmium up by 34.24% YoY. It also produced 1.91 tonnes of germanium in concentrate form, 1.65 tonnes of indium ingot, 3,561 tonnes of zinc powder and generated 266.28 million kilowatt hours of electricity up 4.52% YoY.

Luoping Zinc intends to boost its electrolytic zinc production capacity from a current 60,000 tonnes per annum to 80,000 tonnes per annum by the end of 2008, and to an eventual 120,000 tonnes per annum through an ongoing technical upgrade project.

SeverStal to fully acquire SeverCorr in 2008 - Interfax

Interfax reported that Severstal plans to acquire and consolidate American joint venture SeverCorr by the end of 2008.

It already holds a 71.1% stake in the joint venture and now intends to acquire another 20% stake from SeverCorr founder and from other private investors of SeverCorr. Financial details were not disclosed.

The American joint venture was established in 2005 together with SteelCorr.

IUD buying coking coal from Canada and US

Ukrainian News Agency reported that The Industrial Union of Donbass intends to buy 2 million tonnes of coking coal from Canada and the United States in 2008.

Mr Anatolii Starovoit GD of the Ukrkoks Association recently said that “There are contracts of the Industrial Union of Donbass for 2 million tons of Canadian and American coal.

He emphasized that thus Ukrainian metal industry is trying to replace the deficit of Russian coking coal. Mr Starovoit added that “One should not await a great influx of coking coal from Russia due to the Evraz’s purchase of three coke ovens belonging to the PrivatBank Group.

He said “The sale of the plants does not yet stand to mean that coal will start flowing there.”

ArcelorMittal appeals against tax claim in Kazakhstan

ArcelorMittal in its annual report said that it is awaiting the final verdict on an appeal lodged against a USD 1.1 billion tax claim levy from the Kazakh government and expects that a final verdict could be revealed within several months.

ArcelorMittal appealed a decision by the Karaganda Court to support the government's USD 840 million tax claim against its Kazakh subsidiary ArcelorMittal Temirtau plus USD 261 million in administrative charges in February 2008.

ArcelorMittal in its annual report said that "The company considers it has no liability in respect of either tax assessments, since its obligation to pay income tax is capped under the share purchase agreement and related agreements pursuant to which it acquired ArcelorMittal Temirtau from the government of Kazakhstan.”

The report added that the Kazakh government lost a separate tax claim against ArcelorMittal amounting to USD 1.04 billion and that the Kazakh tax committee has one year to appeal that decision, made in January 2008.

Ukrainian steel makers profit margins in 2008 to go down

Ukrainian Journal Staff cited Mr Vasyl Kharakhulakh head of industry association Metallurgprom as saying that average profit margins in Ukraine's steel industry in 2008 down by 6.5% from 14.75% last year due to higher prices for raw materials, energy and transportation.

Mr Kharakhulakh said the average margin already dropped to 6% in January, as four companies operated at a loss, four were close to the breakeven point, and seven had a profit margin that was half the figure a year earlier.

ENMZ adjusts charter fund

Millennium Capital reported that at the EGM on 21 March shareholders of Yenakievskiy Steelworks voted for a1 .7% charter fund increase.

The report added that the equity adjustment is of a technical nature in line with Metinvest Holding's restructuring.

Mechel posts offer document to Oriel shareholders

Mechel announced that it has posted the Offer Document and Form of Acceptance to Oriel’s shareholders on March 26th 2008.

The release added that the posting of the Offer Document represents the formal offer by Mechel for the entire issued and to be issued share capital of Oriel Resources plc.

The Offer proposes that 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.

Mr Kolomoyskiy may buy stake in RosUkrEnergo

Ukrainian Journal Staff reported that Mr Ihor Kolomoyskiy the third richest Ukrainian has started talks seeking to buy a 50% stake in RosUkrEnergo, a controversial Swiss-based supplier of natural gas to Ukraine.

The reported added that Mr Kolomoyskiy seeks to buy out two Ukrainian shareholders, Mr Dmytro Firtash and Mr Ivan Fursyn who respectively own 45% and 5% of the gas trader. Gazprom of Russia owns the remaining 50% in the trader and controls its management.

It was formed in 2006 after a price row between Moscow and Kiev led to a gas cut that briefly affected Europe. But many Ukrainian politicians, including Prime Minister Yulia Tymoshenko, said it masked corruption in the gas sector. Ukraine and Russia agreed this month to cut out gas middlemen.

Gas price for Ukraine to make not less than USD 320 in 2009

It is reported that Mr Vadym Karasyov director of Institute of Global Strategies forecasts that Ukraine will see a new wave of problems in the energy sphere, which will cause the growth of the gas prices.

Mr V.Karasyov claimed that “The gas price will be not less than USD 320. It will be a shock for the Ukrainian industry, and a shock for everybody.”

He said the agreements, which were achieved by the government in the gas sphere, are nothing but postponing the problem. In line with the wording of the agreement, it means that we should expect the year 2009 as a shocking year for the economics and social state of people.

Mr V.Karasyov said that the work of the government should focus on the anti crisis economical and not political, activities.

Russian commodity exchange to be registered soon

Mr Vladimir Milovidov head of Russia's Federal Financial Markets Service said Russia's new international commodity exchange will be registered as a legal entity in April 2008.

Mr Milovidov said the regulator is planning to grant the exchange a license in May, prior to the annual St. Petersburg economic forum. The majority of the founders of the commodity exchange are oil and gas companies, such as Transneft, Rosneft, Zarubezhneft and Transnefteproduct in which the government holds large stakes.

The official noted that, while VTB, Gazprombank and Sberbank have already confirmed their interest in the project, the FFMS expected other companies, such as Surgutneftegas and NOVATEK to follow their example.

Mr Putin praises assembly of Lada cars in Egypt

Russian president Mr Vladimir Putin praised that assembly of Lada cars in Egypt from kits supplied by Russia is an industry that has earned a good reputation for itself in its several years of existence,

Mr Putin told a news conference after talks with Egyptian President Mr Hosni Mubarak that "Supplies of Russian cars and equipment for Egypt have quadrupled in four years.”

Crude producer Slavneft's net profit down 90% in 2007

RIA Novosti reported that oil company Slavneft net profit calculated to Russian Accounting Standards plummeted 94% YoY in 2007 to RUB 1.17 billion.

Slavneft said its profit was declining steeply as the company had significantly cut the commercial component of its operations.

Slavneft earlier reported a 10% drop in oil production to 153.9 million barrel in 2007.

The oil company is co owned by Gazprom Neft, the oil arm of the Russian energy giant Gazprom and Russian British joint oil venture TNK-BP. Its authorized capital is RUB 4.75 million.