Mr Paswan urges steel industry to exercise restraint on price hike

Mr Ram Vilas Paswan union minister for steel, chemicals & fertilizers, while addressing Summit on Mining to Steel Making organized by the Indian Chamber of Commerce, has urged the steel industry to exercise restraint on increasing prices.

Mr Paswan said that every price hike should have some relevance with the rise in cost. He added that "My request to the steel industry would be to exercise restraint on any arbitrary price hike for steel products as it directly affects the common man. The government has accepted several of the recommendations of the steel ministry and these have been incorporated in the latest union budget and any price rise of steel indirectly affects basic consumer goods."

TATA Steel hikes product prices on higher input costs

Thomson Financial reported that TATA Steel Limited announced that it has raised product prices with effect from March 1st 2008 on higher input costs of coal and iron ore.

The report cited a TATA official as saying that "We have raised prices of the long products by INR 1,500 to INR 2,000 per tonne and flat products by INR 2,500 to INR 3,000 per tonne."

Iron ore export to be discouraged – Mr Paswan

Mr Ram Vilas Paswan union minister of steel said that India must discourage iron ore export if it is to develop its steel industry.

Mr Paswan, while addressing at a conference organized by Indian Chamber of Commerce, said that "Steel producers and not iron ore exporters should be given priority in allocation of mining leases."

He said that steel consumption in India is growing at the rate of 12% a year and the demand trend showed that this figure will rise to 13% in 2008 even as production was still increasing at only 5.5%. He added that "The government should a take long term view on iron ore requirement of the steel industry and only excess production, if any at all, should be allowed for export."

JSW Steel February crude steel output up by 8% YoY

It is reported that JSW Steel Limited has posted crude steel production of 255,000 tonnes in February 2008 up by 8% YoY as against 236,111 tonnes in February 2007.

The break up of product wise production is as below

In million tonnes
Change is with respect to February 2007

TATA Steel gets back in race for Liberian iron ore deposit

BS reported that TATA Steel is back in the fray for the Western Cluster Iron Ore deposit project in Liberia, which was widely expected to go to South Africa’s Delta Mining Consolidated.

Mr Arun D Baijal group director global minerals of TATA Steel told BS that “While Delta Mining Consolidated was ranked first among the bidders short listed, a committee evaluating the bids had decided that the due diligence would be conducted for all companies short listed and these included TATA Steel and China’s Sinosteel. We are still in the fray for the project."

The project is under the supervision of an inter ministerial mineral technical committee that is chaired by the representative of the ministry of land, mines and energy and includes representatives of the ministries of justice, planning and economic affairs, labor, justice, national investment commission and the central bank. The provisional decision to award the project was announced by the Liberian president in January on the basis of recommendations of the committee.

The Western Cluster Iron Ore has several deposits over an area of nearly 210 square kilometer and the investment package is estimated in the region of USD 1.6 billion. These deposits include the Mano River Iron Ore, the Western Position of Bomi Hills Iron Ore and the Mountain Iron Ore. Besides mining areas, the project includes a pelletization plant, road, rail, power, water and upgraded port facilities.

L&T secures transmission line orders worth INR 458 crore

Larsen & Toubro Limited recently announced that it has bagged 3 orders totaling INR 458 crore for transmission line projects.

L&T has received a INR 238 crore order from Jaypee Powergrid Limited for the construction of 155 kilometer of transmission line for evacuation of power from the 1000 MW Kacham to Wangtoo hydro electric project.

The scope of work involves survey, fabrication & supply of transmission line towers and erection of 155 kilometer of transmission line from Kacham to Wangtoo to Rampur in Himachal Pradesh through hilly or mountainous terrain. The project will be completed in 30 months.

L&T has also secured two orders worth INR 220 crore from Power Grid Corporation of India Limited for the construction of 166 kilometer of 400 kV D/C transmission line associated with Parbati III hydroelectric power transmission system and 255 kilometer of 400 kV D/C Gorakhpur to Lucknow transmission line associated with Northern Region Strengthening Scheme II.

The scope of work involves detailed survey, fabrication and supply of transmission line towers and erection of 421 kilometer of transmission line. The projects are to be completed in 24 months.

NMDC to raise long term iron ore prices from April 1st 2008

Reuters reported that National Mineral Development Corporation will raise long term contract prices of iron ore from April 1st 2008.

Mr VK Jain director at NMDC said that the price increase would be pegged at 65% to 70% of the rise in international contract prices for the ore

CIL awaiting cabinet approval for Jharia Action Plan

Coal India Limited is awaiting cabinet approval of Jharia Action Plan and Raniganj Action Plan after which its subsidiary Bharat Coking Coal Limited will reopen 13 coking coal mines in Jharia, closed due to spreading mine fires, to provide some relief to Indian steel makers for their coking coal requirements.

Mr PS Bhattacharya CMD of CIL while addressing Indian Chamber of Commerce organized Mining to Metals 2008 Summit informed that “Jharia coal fields have been mined for more than 100 years and prior to their nationalization private companies engaged in highly unscientific mining operations.”

Mr Bhattacharya added that “At the time of nationalization about 17 square kilometer area was affected by underground fires. CIL has brought many fires under control and now the effected area is limited to about 5 square kilometer.”

He said that under JAP, about 400,000 persons from northern part of Jharia would be shifted. He said that “It will take about 2 years to start the work after approval and that it will take 10 years to relocate all people and start mining.”

As per earlier reports, JAP, formulated in 2003, has been updated and is expected to cost about INR 57 billion.

Jharia mines are rich in coking coal and this relocation is likely to free about 5 billion tonnes of prime coking coal.

SAIL considering steel price increase - Report

Reuters reported that Steel Authority of India Limited is considering a proposal to raise steel prices because of rising cost of inputs.

Mr SK Roongta chairman SAIL said that "We are reviewing the prices and within a week we will take a final decision, it may be even earlier than that."

TATA Power to import 12 million tonne coal for Mundra UMPP

Bloomberg reported that TATA Power plans to import 12 million tonne coal from Indonesia for feeding its proposed UMPP at Mundra in Gujarat.

Mr Amulya Charan MD of TATA Power Trading Co said that the plant will generate 4,000 MW of electricity. TATA Power may import 12 million tonnes of coal from countries, including Indonesia, for the plant.

Mr Charan said that “We are evaluating options on how to mitigate freight costs. We have set up a subsidiary in Singapore. We may also go in for buying ships ourselves.”

Reliance Power hopes for early clearance for Sasan UMPP

Reliance Power Limited said that it is expecting necessary clearances from the union and state governments within 90 days for its 4,000 MW Sasan ultra mega power project in Madhya Pradesh.

Mr Anil Ambani chairman of Anil Dhirubhai Ambani Group has asked the state government to speed up the clearance process for faster implementation. He met Mr Shivraj Singh Chouhan chief minister of Madhya Pradesh to review the progress of 3 projects namely Sasan, a 20 million tonnes cement project and a technology institute in Bhopal and proposed a combined investment of INR 50,000 crore for all the three projects.

He said that “We hope to get all the approvals shortly and commence the basic work within 90 days. We have a complete schedule of start to finish of between 50 months to 60 months depending upon various units. We are enthused with the current level of progress on all the three projects.”

Mr Chouhan said that “All clearance for the 3 projects will be in accordance with the industrial promotion policy of the state.”

Sasan will supply 1,500 MW power to Madhya Pradesh as was committed by Lanco, the first bid winner of the project.

Orissa gets 50% share for Machkund hydro project

It is reported that Orissa has succeeded in getting the consent of Andhra Pradesh for acquiring 50% share from Machkund hydroelectric project form the 30% earlier.

As per report, the issue was resolved at a meeting between Orissa's energy minister Mr SN Patro and his Andhra Pradesh counterpart Mr Sabir Ali Ahmed in Hyderabad.

Official sources said that the payment for the remaining 20% share would be decided by the Central Electricity Authority and both the states would file petition for this before the CEA, whose decision would be binding upon them.

As per decision, both the states would sign in the proceeding in the meeting and obtain the consent of respective chief ministers for the above decision and an agreement would be signed by the two states here on these issues next month.

RIL East West gas pipeline to complete in three months

BS reported that East West pipeline, linking Kakinada in Andhra Pradesh to Bharuch in Gujarat to evacuate gas from Reliance Industries Limited block in the Krishna Godavari basin, is set to be commissioned in the next 3 months.

The report cited an executive of RIL as saying that “We are close to finishing the civil and mechanical work for the pipeline and will soon start dry runs to make it ready for gas transportation. It will take 6 to 8 months for fully commissioning the refinery since it is the largest refinery in the world and includes about 30 to 40 different units at a single location.”

The 1,440 kilometer long 48 inch diameter East West Pipeline is the longest in India and covers Andhra Pradesh, Karnataka, Maharashtra and Gujarat. The pipeline would be tested in 3 phases, first to start from Bharuch in Gujarat to a section in Maharashtra and then from Maharashtra to Karnataka and up to Kakinada in the last leg.

RIL has tied up with the Gujarat State Petronet Limited to transport gas from Bhadbhut in Bharuch to RIL’s refinery and petrochemical complex in Jamnagar. After receiving gas from RIL, GSPL will transport the same using its existing pipeline between Bharuch and Rajkot and through new pipelines laid up to Jamnagar.

RIL is also setting up two advanced master control centers at its Nocil facility in Mumbai and at Kakinada to monitor and control the flow of gas through the pipeline using the supervisory control and data acquisition system. It is also planning another pipeline from Kakinada to Chennai in the next phase and from there to Bangalore and Mangalore.

OVL gets nod for investment in Venezuela and Qatar

BS reported that union cabinet has approved investments of USD 458 million by ONGC Videsh Limited in exploration projects in Venezuela and Qatar.

ONGC Videsh will invest USD 356 million to pick up 40% stake in the San Cristobal oilfield in Venezuela while, Petroleos de Venezuela will own the remaining 60% stake. The investment includes a signing bonus of USD 174 million and capital expenditure USD 182 million in the project.

The cabinet also approved ONGC Videsh’s proposal to invest upto USD 102 million in Najwad Najem oilfield in Qatar. ONGC Videsh won a stake in the field in March 2005 after it bid for the block in 2004.

Nagarjuna Construction bags INR 424 crore contracts

Projects Today reported that Nagarjuna Construction Co has secured three new orders aggregating INR 424 crore from

INR 266 crore orders are from commissioner of Indore Municipal Corporation for construction of sewerage system and allied works. Work order is scheduled for completion within 36 months

INR 112 crore orders are from Mumbai Metropolitan Region Development Authority for construction of flyovers on Dr Babasaheb Ambedkar Marg. Work order is scheduled for completion within 18 months

INR 46 crore order is from Volkswagen India for construction of body shop hall, to be completed over a period of 12 months

ThyssenKrupp and Worthington bundle TBA business in NAFTA

ThyssenKrupp Tailored Blanks GmbH brings its Mexican subsidiary company ThyssenKrupp Tailored Blanks SA de CV as a contribution into the US Joint Venture TWB Company LLC.

TWB was established in 1991 as a joint venture between ThyssenKrupp Steel North America, Inc and Worthington Industries for the production of tailored blanks. ThyssenKrupp Steel by the contribution of its Mexican subsidiary becomes the majority shareholder in TWB.

ThyssenKrupp Steel will provide the industrial leadership of TWB, which furthers the integration of TWB into their worldwide tailored blanks network. By bringing together the tailored blanks activities, ThyssenKrupp Steel responds to the demand by automotive industry customers for a supplier with global presence.

The Mexican company Tailored Blanks SA de CV has its registered office in Puebla and supplies a local car manufacturer with customized, laser welded steel sheets. The company was established in 2001 and has a workforce of 38 employees. TWB Company has a workforce of around 400 employees. TWB supplies the major US car manufacturers with tailored blanks. The company is based in Monroe, Michigan. There are also four additional production sites, two of which are also located in Mexico.

ThyssenKrupp Tailored Blanks GmbH is a subsidiary company of ThyssenKrupp Steel AG. In addition to their presence in Mexico and the US, ThyssenKrupp Tailored Blanks GmbH is also present with companies in China, Turkey, Italy, Sweden and the Czech Republic. In Germany, ThyssenKrupp Tailored Blanks operates three plants. Worthington Industries is one of the largest independent steel trading companies in the US.

Tailored blanks are sheets of different thickness, steel grade and coating which are joined together by laser welding. At the car plant, the blanks can be formed for example into doors, tailgates, floors and side members. Tailored blanks are designed from the outset to match the loads in the finished part.

ArcelorMittal launches offer for ArcelorMittal Inox Brasil

ArcelorMittal announced that it has launched the previously announced delisting tender offer for all of the outstanding shares in Arcelor Mittal Inox Brasil SA, previously named Acesita SA, pursuant to the tender offer registration granted by the Comissão de Valores Mobiliários, the Brazilian securities regulator on March 3rd 2008.

As per release “The Offer will remain open for 30 calendar days from this date and will be settled through an auction at the São Paulo Stock Exchange on April 4th 2008. As previously announced, this transaction will result in ArcelorMittal acquiring the 43% outstanding shares in the Company it does not currently own.”

The price offered by ArcelorMittal is BRR 100 per common share and BRR 100 per preferred share of the Company. This price will be adjusted to subtract the dividends and interest on equity declared by the Company from December 4th 2007 through to the business day prior to the auction date. As of the date hereof, this value corresponds to BRR 98.33 per common share and BRR 98.17 per preferred share, subject to adjustment by the Referential Rate plus 6% per year, starting February 28th 2008 through to the auction date.

At today's exchange rate, this transaction represents a cash disbursement of up to around USD 1.85 billion.

MEPS global composite steel prices forecasts

UK based MEPS said that “Global All Products average price jumped by approximately USD 55 per tonne to a new all time high this month. Substantial rises were recorded for the majority of flat and long product categories as sizeable hikes in raw material costs were passed to customers. Demand on the mills also went up as buyers placed orders ahead of probable further rises in transaction values.”

MEPS added that “With such rapid increases in input costs we have decided to upgrade our forecast for the next twelve months. Further but more modest gains are predicted for both flat and long products up to the middle of the year.” This should result in the MEPS figure climbing to in excess of USD 830 per tonne at that time. Weakening order books from slowing economies are expected to lead to a degree of price slippage in both the flat and long product categories later in the year. This is likely to be exacerbated by oversupply in Asia and rising import volumes into the EU and North America. However, the annual average price in 2008 will be substantially above the 2007 figure because the mills will have passed on their higher raw material costs to customers.

For EU, MEPS said that “All products EU average price increased significantly in February, rising almost EUR 40 per tonne. Escalating input costs and supply shortages caused values to climb faster than previously foreseen. Our forecast has been revised upwards as a result of the higher than anticipated iron ore settlement. Significant gains are expected over the next few months as mills try to recover rising raw material prices. Transaction figures for six out of the nine products are forecast to reach new record highs early in the second quarter.”

MEPS added that “Slowing construction activity and growing concerns over the economic outlook are expected to result in price weakness from the second quarter onwards for most products. A slowdown in steel consuming industries will almost certainly be recorded, impacting on end user demand. Distributors, building inventories ahead of the upcoming price increases, are likely to reduce buying as market activity declines. De-stocking is anticipated after the Summer. However, due to increased raw material costs, values should remain considerably above the previous low figures.”

For North America MEPS said that “All Products average price jumped by approximately USD 80 per tonne to a new all time high this month. Substantial rises were recorded in all flat and long product categories as hikes in raw material costs were passed to customers. Demand on the mills also increased as buyers placed orders ahead of a probable further jump in transaction values.”

MEPS added that “With such rapid rises in input costs we have decided to upgrade our forecast for the next twelve months. Further but more modest gains are predicted for both flat and long products up to the middle of the year. This should result in the MEPS figure climbing to in excess of USD 840 per tonne at that time. Weakening order books from a slowing economy, coupled with anticipated rising import volumes are likely to lead to a degree of price slippage in both the flat and long product categories by the end of the year. However, the annual average price in 2008 will be substantially above the previous year's figure because the mills will have passed on their higher raw material costs to customers.”

For Asia MEPS said that “All Products average price increased by approximately USD 40 per tonne to another all time high in February the seventh consecutive monthly gain. Substantial rises were recorded in all long product categories as hikes in raw material costs were passed to customers. More modest improvements were noted in the flat products segment. Demand on the mills also went up as buyers started to place orders ahead of probable rises in transaction values.”

MEPS added that “With significant increases in input costs we have decided to upgrade our forecast for the next twelve months. Further but more modest gains are predicted for both flat and long products up to the middle of the year. This should result in the MEPS figure climbing to approximately USD 760 per tonne at that time. Weakening order books from oversupply in the region is likely to lead to a degree of price slippage in both the flat and long product categories up to the end of 2008. However, the annual average price in 2008 will be substantially above the previous year's figure because the mills will have passed their higher raw material costs to customers.”

POSCO to raise SS prices by 7%

It is reported that South Korea POSCO will raise prices of stainless steel by 7% due to the rising costs of nickel.

According to a statement released by the company, the price of its hot rolled steel will rise by KRW 250,000 (USD 264) per tonne to KRW 3.65 million (USD 3,854 ) from March 17th 2008, with that of cold rolled steel rising to KRW 3.92 million (USD 4,139) from KRW 3.67 million (USD 3,875) per ton.

POSCO said the price of nickel used to make the alloy is hovering around USD 30,000 per tonne compared with USD 26,000 per tonne at the end of 2007. In February, POSCO raised prices of its stainless steel by as much as 11% to cover the higher costs of chrome, another raw material.

Vallourec prefers acquisitions to share buyback

Reuters reported that Vallourec, one of the world's largest producers of seamless steel tubes, is keener on spending its cash on acquisitions rather than on share buy backs.

The reported quoted Mr Pierre Verluca chairman of Vallourec during a news conference on the group's 2007 results as saying that "We wish to give growth a priority. We are continuously thinking about acquisitions adding though that Vallourec management's position on buying back its own shares were not set in stone."

Mr Verluca also said that Vallourec, the target of recent takeover rumors did not need a tie up with another group to implement its business strategy,

4 South African iron ore explorers form group

The Sydney Morning Herald reported that four iron ore explorers Centrex Metals Ltd, IMX Resources NL, Ironclad Mining Ltd and Western Plains Resources have formed a group to push for the development of export facilities at Port Bonython in South Australia after OneSteel Ltd scuttled plans to use the Port of Whyalla.

Port Bonython is about 20 kilometer from Whyalla and is used to export liquefied natural gas and crude oil from the Cooper Basin. The port has 2.4 kilometer jetty, which would allow the berthing of Capesize vessels.

The newly formed Port Bonython Bulk Users Group believes there could be demand for up to 8 to 10 million tonnes per annum capacity by 2010, increasing to 20 million tonnes by 2015. The formation of the group comes after Western Plains was advised by OneSteel that it had decided not to formalize a previous proposal to use excess capacity on transhipment barges at the Port of Whyalla to export its iron ore.

The group said the "tonnages are sufficient to underpin the development of the port without further delay, and without waiting for a commitment to the expansion of the Olympic Dam".

Port Bonython Bulk Users Group said it would work with the South Australian Chamber of Mines and Energy Inc, local and state government authorities, port operators, other current and potential users to expedite the development.

Steel carrying vessel sinks after collision off Japanese coast

AFP reported that 3 vessels an oil tanker, a cargo ship and another boat collided on Wednesday in Akashi Strait in Japan's Inland Sea killing one Filipino crew member and leaving three others missing when their cargo ship sank.

The 1,466 tonne Belizean cargo ship sank with nine Filipino crew on board and 6 of them have been rescued but three others are still missing. One of the six rescued Filipinos later died at a local hospital.

No casualties or major damage was immediately reported on the oil tanker, which was shipping ethylene, and the third smaller boat, the local coast guard said.

The coast guard dispatched 16 patrol boats to search for the missing.

They said oil, believed to be fuel, was also leaking from the sunken cargo ship, which was carrying steel products. The oil spread into an area about 3.5 kilometers long and 100 meters wide.

AK Steel and SunCoke plan cokeing plant in Middletown

The Hamilton Journal-News reported that AK Steel and SunCoke the are looking at up to 157 acres between Ohio Route 4 and the MADE Industrial Park for a new coke oven facility that would also regenerate steam and heat into electricity. According to the story, the project would cost about USD 300 million.

The companies didn't confirm that they are considering the project, but Martin Kohler, planning director for Middletown, told the Journal-News that the city has had recent discussions with the AK Steel and SunCoke about the possible project.

The Middletown Planning Commission is holding a public hearing March 12, on a proposal to rezone the area under consideration.

SunCoke, a Knoxville based unit of Sunoco Inc operates plants in Vitoria, Brazil; Vansant, Chicago and Haverhill, Ohio.

Metal prices up on LME last week due to dollar depreciation

Due to the depreciation of the US dollar, fund managers continued to shift their attention to the base metal market last week. Therefore, all metal prices listed on the LME rose last week.

As per report the three month price of nickel increased sharply by 12% to USD 31,500 per tonne and the three month price of copper soared by 2.8% to USD 8,430 per tonne.

The three month price of aluminum also up by 7% to USD 3,106 per tonne and the three month price of zinc boosted by 9.7% to USD 2,740 per tonne.

(Sourced from YIEH.com)

CSC February sales reaches TWD 16.87 billion

XFN ASIA reported that Taiwan’s China Steel Corp parent level sales in February 2008 rose to TWD 16.87 billion from 15.78 billion in February 2007.

The report added that during the January to February 2008 parent sales rose to TWD 36.91 billion from 32.24 billion in January to February 2007.

Scrap demand to sore in South Korea

It is reported that due to booming development of electric furnaces in South Korea, the scrap demand will be expected to increase to 6 million tonnes until late 2009.

According to statistics, the scrap import volume from January to November of 2007 in South Korea was 6.32 million tonnes up by 24.2% YoY.

As per report, Hyundai Steel will resume its two idled electric arc furnaces in June am Dongbu Steel is building two blast furnaces, which will be finished by 2011.

On the other hand, crude steel output for 2008 in will reach 54.6 million tonnes up by 6.2% YoY.

(Sourced from YIEH.com)

Vallourec to increase US seamless tubes prices by 10%

French seamless tube maker Vallourec SA announced a 10% price increase per metric ton of seamless steel tubes in the US due to a sharp increase in raw material prices.

Mr Pierre Verluca CEO of Vallourec SA said that "We have more confidence in our ability to pass price increases on to our clients than in January.”

Vallourec also said it plans to spend EUR 750 million on investment in 2008, after investing EUR 438 million in 2007.

Malaysian domestic tin price jumps on firmer LME

Platts reported that Malaysian domestic tin prices on the Kuala Lumpur Tin Market Tuesday continued their upward trend from the previous day and jumped above USD 19,000 per tonne. As per report The KLTM price gained USD 300 per tonne to settle at USD 19,100 per tonne Tuesday.

A Kuala Lumpur Tin Market source said that the Malaysian bourse was extremely active as buyers appeared to be busy making purchases fearing a further rise in prices on the London Metal Exchange,

The Kuala Lumpur Tin Market price had initially breached the USD 18,000 per tonne level the previous week. It hit USD 18,099 per tonne on February 28th 2008 a record high for the Malaysian bourse but the record was broken as the price continued to rise on the back of firmer LME tin prices, which held firmly above USD 18,000 per tonne. The Kuala Lumpur Tin Market price rose to USD 18,550 per tonne on February 29 and USD 18,880 per tonne on Monday.

An Asian trader said that the rise in tin and other nonferrous metals prices on the LME was triggered by the spike in the spot gold price.

The LME official cash price for tin was USD 18,710 to USD 18,720 per tonne Monday and the three month level was USD 18,800 to USD 18,900 per tonne.

AK Steel increases spot prices for carbon steel

AK Steel announced that it will increase spot market prices for its carbon steel products by USD 70 per ton for all new orders accepted for shipment May 1st 2008 and later.

AK Steel said that its May order book is now open for all carbon steel products.

It added that “The price increase is in response to increased demand for carbon steel products, as well as the need to recover higher costs for steelmaking inputs.”

Higher Ferrous Scrap Price in Tokyo

JMB reported that Ferrous scrap purchase price by electric furnace steel makers around Tokyo are reaching JPY 50,000 per tonne for H2 grade.

As per report Tokyo Steel Manufacturing increased the price to JPY 50,000 at Utsunomiya plant on Tuesday, which is the highest level since the start in 1995. Local makers try to secure the materials at higher price under tight supply.

Baffinland to sell 3 million tonnes of iron ore to ThyssenKrupp

The Canadian Press reported that Baffinland Iron Mines Corp has forged a tentative agreement to sell up to 3 million tonnes per year of iron ore to Germany's ThyssenKrupp Steel AG. Financial terms of the letter were not disclosed, but it represents about 15% to 20% of the potential initial output of the Mary River iron ore project on Baffin Island in Nunavut.

In the letter, ThyssenKrupp said it is interested in purchasing on a long term basis up to 2 million tonnes of lump and one million tonnes of fine ore per year beginning in 2014.

Mr Gordon McCreary president & CEO of Baffinland said that "Baffinland is moving forward towards production and unlike those letters of intent signed with trading companies by aspiring iron ore producers, this is our first letter of intent with an end consumer of iron ore.” He added that "ThyssenKrupp has reviewed Baffinland's comprehensive metallurgical database and we believe that they view Mary River iron ores as long term consistent and predictable, high quality feeds for their blast furnaces."

Baffinland hopes to see initial production of 18 million tonnes per year from Mary River. The project is looking to sell 16 million tonnes of its lump and fine iron ore into the European market and the rest into others.

Monadelphous to get major BHP Billiton contract

RWE Australian Business News reported that Monadelphous Group Ltd has received a letter of intent from BHP Billiton Ltd to enter a contract involving structural, mechanical and piping works at the Newman Hub, subject to final agreement.

The proposed contract is associated with BHP Billiton Iron Ore's Rapid Growth Project 4 in the northwest of Western Australia, and is valued at AUD 290 million.

Preliminary works have been approved and will start immediately with completion of the contracted works scheduled for the second quarter of 2009.

Mr Rob Velletri MD of Monadelphous said that “The proposed works followed on from a long and successful history of major contracts associated with BHP Billiton Iron Ore's development projects, including recent contracts associated with Rapid Growth Project 3.”

3 firms eying ArcelorMittal's Gandrange - Report

Agence-France Presse reported that several parties have shown an interest in acquiring ArcelorMittal's steel plant at Gandrange in northeast France.

Mr Edouard Martin, a representative of the CFDT union on ArcelorMittal's European works council, told the AFP that rumors are going around about a possible sale to Lucchini’s Ascometal, TATA Steel or German Saarstahl.

ArcelorMittal announced a plan in January to close parts of the site, leading to the loss of 595 of the site's total 1,108 jobs by 2009. ArcelorMittal put the restructuring on hold until early April in order to examine alternatives with unions, who are expected to present a counter proposal on March 14th 2008.

Italian rebar market remains steady in February

It is reported that after large price increases in January, Italian domestic rebar market appears stagnant in February 2008.

As per report in January 2008, rebar basic price rose and reached EUR 320 to EUR 330 per tonne. The increased prices are mainly related to the surcharge that was increased by EUR 20 per tonne in December 2007.

It said that market price has remained steady in February 2008 and will continue to the beginning of March. The reason for the lack of market price increases is weak domestic market demand and end users reducing purchase volume due to strong price and stagnant market conditions.

(Sourced from YIEH.com)

Rising steel prices to delay work on new MRT lines

Staff reporters reported that the Taipei City Government expressed concern over the construction of the Xinyi and Songshan MRT lines because of recent hikes in the price of steel and urged the central government to discuss solutions with the city government to prevent any further delays.

The Xinyi and Songshan MRT lines, which are scheduled to be completed in 2012 and 2013 respectively, are TWD 10 billion (USD 300 million) over budget and suppliers are refusing to provide a large quantity of steel bars.

Mr Chang chief of the Taipei department of rapid transit systems at a construction site on the Songshan MRT line said that "Increases in the price of construction materials pose a threat to MRT construction plans and we hope that the central government can share the responsibility to help us solve this difficult situation.” Mr Chang said the central government should establish a unified purchase and supply system for steel bars and other materials in the face of continuous price increases.

Mr Chris Lien executive deputy project manager of a construction company working on the Songshan MRT line said that the price of steel bars had increased from TWD 15,000 per tonne to TWD 30,000 per tonne over the last two years and that the number of steel bars provided by suppliers was only sufficient for three weeks of construction. He added that Mr Hau Lung bin Taipei Mayor promised to provide TWD 5 billion to help reduce the financial burden on the construction company and called on the central government to take responsibility for the other half of the budget shortfall.

Taiwan ministry of economic affairs in February announced to suspend exports of rebars and steel billets for three months to increase local supplies and curb prices. The ministry also ordered that exports of other steel products be strictly supervised to ensure steady local supply.

James River Coal reports Q4 net loss of USD 18.5 million

James River Coal Company announced that it had a net loss of USD 18.5 million for the Q4 of 2007 and a net loss of USD 54 million for the year ended December 2007. This is compared to a net loss of USD 15.8 million for the Q4 of 2006 and a net loss of USD 26.2 million for the year ended December 2006.

Mr Peter T Socha chairman & CEO of James River Coal said that "2006 and 2007 were transition years for our company and for our industry. The regulatory environment for mining coal in the United States has changed dramatically. At the same time, it has become increasingly clear that the world coal markets are also changing. The growth in demand from both new and existing coal-fired electrical power plants in developing economies is significantly greater than the current growth in world coal supply. The United States is now helping to fill this gap. We have changed both our mine operations and sales contracting process in response to these events. We believe that our shareholders and other stakeholders will see the benefits of these changes in 2008 and beyond."

Mr Socha added that "Our mine operations during the fourth quarter had both positive and negative factors. On the positive side, we continued to make great progress in the changes to our mine portfolio. We are continuing to adjust the mine portfolio to changes in the regulatory and cost environments. We are also very pleased by the progress that we have made in the areas of safety and risk management. On the negative side, we were impacted by fewer workdays due to the timing of the Christmas holidays. We were also impacted by higher costs for maintenance and raw materials. On balance, we were pleased with our progress this quarter."

James River Coal Company mines, processes and sells bituminous steam and industrial grade coal primarily to electric utility companies and industrial customers. The Company's mining operations are managed through six operating subsidiaries located throughout eastern Kentucky and in southern Indiana.

Northwest Pipe reports record results

Northwest Pipe Company announced that it reported the highest annual sales and earnings in its history. Sales for the year ended December 2007 were USD 382.8 million compared to USD 346.6 million in 2006. Net income was USD 20.8 million, compared to USD 20 million in 2006. The 2006 results included a non recurring gain on sale of approximately USD 7.7 million.

Water Transmission
Sales in the Water Transmission Group for 2007 were USD 274.8 million compared to USD 244.8 million for 2006. Gross profit for 2007 was USD 60.6 million compared to USD 46.6 million of sales in 2006.

Tubular Products
The Tubular Products Group's 2007 sales were USD 95 million, compared to USD 84.8 million in 2006. Gross profit was USD 10 million as compared to USD 8.9 million in 2006.

Fabricated Products
Sales in the Fabricated Products Group were USD 13 million for the year and USD 3.5 million in the Q4. The Group lost USD 400,000 in the Q4 and ended the year with a loss of USD 350,000.

Zinifex extends Allegiance Mining offer

Zinifex Australia Limited announced that it has extended the offer period under its takeover bid for all the ordinary shares in Allegiance Mining NL.

Zinifex said that “We have taken this decision as it has been drawn to our attention that it has taken longer than expected for Allegiance shareholders to receive Zinifex's revised Acceptance form. In the interests of ensuring that all Allegiance Shareholders have sufficient time to accept Zinifex's bid, the offer is now scheduled to close at 7 PM on March 20th 2008.”

Key features of the offer are as follows
1. The offer is AUD 1.10 for each Allegiance share. This price is final, in the absence of a superior proposal emerging.
2. Allegiance directors have recommended acceptance and intend to accept in respect of all shares held by them or on their behalf, in the absence of a superior proposal.
3. The revised price represents a premium of 55% over the closing price before our offer was announced in December.

Accepting shareholders will be paid within 5 business days of receipt of a valid acceptance.

Al Tuwairqi commissions largest bar mill

Saudi Arabia based Al Tuwairqi Group announced that it has commissioned new bar mill. By commissioning this plant of 1.35 million tonnes per year, the total capacity of ISPC Makkah will be 1.85 million tonnes per year in addition to its parent company ISPC Dammam, which has already been upgraded to produces 1.5 million tonnes per year.

The plant, originally designed to produce 600,000 tonnes per year of alloy steels was upgraded to produce 1.35 million tonnes per year by the EPC team of Al Tuwairqi Group. Reverse engineering, erection & commissioning of the equipments was done in house by Al Ittefaq Steel Products Co. Reputed equipment suppliers of the world like Danieli, MWE of Germany, Sund Brista of Sweden, NCO of Italy, Sicmemotori of Italy, Abus of Germany & MNS of Turkey participated in the equipment supplies and to upgrade the plant capacity.

This rolling mill is redesigned to produce 1.35 million tonnes per year of reinforced steel bars, round bars, flats, special & high quality steels. In the covered area of 42,000 million, the plant consists of 2 reheating furnaces, endless welding rolling machine, 20 H/V stands, 120 meter long cooling bed and 2 bundling stations to handle finished bars up-to 18 meter long. Total weight of the installed equipment is more than 10,000 tonnes.

Mr Sudarshan Singh technical director of Al Tuwairqi said that “During the 1st quarter of 2005, an intensive study was carried out to purchase SKET make rolling mill available in Kladno in Czech Republic. Based on the study, a recommendation to purchase the plant was put forward to the board of Al Tuwairqi Group. The same was subsequently approved. In July 2006, construction activities started and within 20 months only the commercial production started.”

Boulder Steel update on Sharjah tube plant

Boulder Steel Limited during a review report for October to December 2007 quarter outlined the progress of its steel project in Middle East as under.

1. A local office of Boulder Steel was set up and registered with the at Hamriyah Free Zone in Sharjah UAE

2. Industrial License No 3102 was granted by Hamriyah Free Zone for a Finishing Facility for Seamless Steel Tubes.

3. 15 hectares of land at Hamriyah Free Zone were obtained for setting up the UAE facility.

4. Mr KK Kahale was appointed Chief Operation Officer for the UAE facility. Mr Kahale is a mechanical engineer from India with more than 30 years experience in the international steel industry. He has held senior technical and management positions with major international steel companies

The update added that the technical concept, plant layout and project realization stages for the Sharjah facility have been finalized and the project will be executed in three phases

PHASE I
Threading line for the production of 50,000 tonnes per annum to 60,000 tonnes per annum of tubing and casing in the outer diameter range 2.3/8” 2.7/8” to 9.5/8”.

PHASE II
Lines necessary to reach a total capacity of 250,000 tonnes per annum of API pipes
a) Heat treatment line OD 4.1/2” to 13.3/8” (14.3/8”)
b) Quality assurance lines (EMI and UT)
c) Finishing line for API casing and tubing OD 4.1/2” to 13.3/8” with a capacity of 200,000 tonnes per annum
d) Coupling workshop OD 2.3/8” to 13.3/8”.

PHASE III
a) Sizing and threading line for premium connections OD 3.1/2” to 9.5/8”
b) Additional coupling threader in the coupling shop.

The update said that various quotes for the major plant equipment were obtained though EMS, the Italian based technical consultants to the UAE project.

Following targets have been set for March quarter
1. Finalization of the commercial and technical feasibility report by the UK based consultancy group, McLellan.
2. Obtaining preliminary environmental clearance to start project activities
3. Finalization of the contract with the local UAE consultant in accordance with UAE norms.
4. Obtaining final offers from major equipment suppliers through EMS and entering into pre contractual arrangements with them.

Madar Holding launches high corrosion resistance rebar

Alfozan Group subsidiary Madar Holding announced the launch of a so called super steel, claiming to be five times more resistant to corrosion and is twice as strong as the standard reinforcement steel. The new steel will be first made available in the UAE and will then be introduced throughout the Middle East.

The product is launched through an exclusive partnership with MMFX Technologies Corporation, a US based technology development company.

The release said that “The strength of the new MMFX steel enables designers and contractors to use up to 40% less steel in any building. This eventually leads to lesser use of energy in steel manufacturing and helps meet the UAE goal of building greener and environmentally sustainable structures. MMFX steel also gives structures up to 100 years of longevity.”

Mr Sameh Hassan CEO of Madar said “Innovation and sustainability are the two goals we have set for our growth in the region. We have partnered with MMFX Technologies to introduce this groundbreaking construction innovation to the Middle East region. This followed MMFX’s proven success model in the United States where over 20 governmental authorities have approved the use of MMFX steel in their building codes and major projects.

He added that "In addition to the remarkable easing of the rebar congestion issue, especially in the foundation phase of any structure, MMFX steel offers significantly higher levels of corrosion resistance and strength versus conventional steel. Here in the GCC, especially in the UAE, such factors are of paramount importance to deliver buildings that cope better with the environment at target speed and cost of construction. The construction industry demands this level of better constructability with low maintenance, which makes the new steel technology cost-effective. We believe this product will set new construction standards in the region.”

MMFX Technologies Corporation, headquartered at Irvine in California, is a materials science company that continues to invent and patent world changing breakthroughs in materials sciences. MMFX Technologies Corporation has invested over USD 62 million in research and development of this product.

Madar Holding is a subsidiary of Al Fozan Group. The group is a leader in its field with over 40 years experience in the building materials trade.

Gulf railway network to link Yemen mulled – Report

Khaleej Times reported that, under the ongoing study, Yemen will be connected to the Gulf Cooperation Council countries via a regional railway network.

The GCC council had started the feasibility study for its railway network without Yemen since September 2007 and it is expected to be finished in September 2008. Feasibility reports on the proposed project are likely to be ready between October and December 2008.

Mr Abdul Rahman Bin Hamad Al Attiyah general secretary of GCC said that three international consultancies are conducting the studies under the supervision of the World Bank and their reports are to be tabled at the next GCC Summit to be held in Muscat. He added that "Yemen will be included in the proposed railway project and a special conference on the regional transport industry is slated to be held here on May 19th and May 20th 2007."

Mr Abdul Aziz Al Hogail president of the Saudi Railways Organization said that a study in progress on the establishment of two railways, the first that would link Taif and Khamees Mosyait through a land bridge and the second that would connect Jeddah to Jizan. He added that "Feasibility study on the establishment of these two railways is being carried out currently as part of the railways expansion project that aims to connect Saudi's regions to important eastern and western ports through three paths."

Mr Al Hogail said that the authority is to purchase 8 new trains to improve services, face the growing demand of passengers and goods transportation, increase the capacity of the railway and raise trains' speed to 200 kilometers an hour, which will be done according to the latest international specifications.

OPEC to keep oil output steady

OPEC ministers have kept output steady and said that record high prices had been driven by a series of factors that were beyond their control. After less than 2 hours of talks at their meeting in Vienna, OPEC delegates told Reuters the group had reached agreement to keep supplies steady.

Mr Odein Ajumogobia Nigerian minister of state for oil said that he believed output should be kept steady, although he said oil above USD 100 was uncomfortable and above USD 80 a barrel was high. He added that "The OPEC official position has been anything above USD 80 is on the high side."

Mr Ali al Naimi Saudi Arabian oil minister said that it had been pumping 9.2 million barrels per day in, day out, which is roughly 300,000 barrels per day above its formal OPEC output target.

Washington has said that even a token supply increase from the OPEC would help to tame prices. But OPEC ministers have repeatedly said the market has been driven upwards by factors such as a weak dollar, speculation and political strife and not by a lack of oil.

US crude hit a record of USD 103.95 a barrel on Monday and was trading above USD 100 on Wednesday.

Port Qasim capacity being raised

Dawn reported that 10 private sector projects were being implemented for capacity enhancement of Port Qasim in Pakistan.

Rear Admiral Syed Afzal Chairman of Port Qasim Authority informed this to Mr M Saleem Khan Federal Secretary Port and Shipping during his recent visited to the port.

PQA chairman informed the secretary that with the completion of these projects by 2010, the cargo handling capacity of the port would be enhanced to 82 million tonnes while number of berths would be increased from 10 to 20. PQA is also striving for deepening of navigation channel to attract major shipping lines to call at the port.

The admiral further said the port handled over 24.4 million tonnes of cargo during 2006-07, showing a growth of 13% YoY

Aramco calls for developing new technologies

IRNA reported that Saudi Aramco officials have challenged the world’s leading geoscientists to hone existing technologies and help create new ones to maximize oil reservoir recovery and take exploration activities to a new level of performance and sophistication.

Mr Khalid A Al Falih executive VP at Aramco said that “Today, high end technologies such as satellite imaging, 3D visualization rooms, I Field development, remote control centers, real time drilling data transmission and mega scale parallel computer systems are increasingly commonplace.

He added that “Looking ahead, even more sophisticated technology will be indispensable to the success of our companies, whether they are national oil enterprises, multinational majors, or specialized service companies and technology development firms.”

Mr Al Falih noted that roughly 60% of the world’s proven reserves are in the Middle East and expressed optimism that there was more oil to be found. Research and development would be key factors both in improving returns from existing reservoirs and new breakthroughs in exploration. He added that “New technology does not just happen nor does it emerge fully formed overnight. Instead, the next generation of upstream technical tools and applications will stem from sustained research & development programs based on specific strategic objectives and technology targets.”

He said that Saudi Aramco is envisioning emerging challenges and opportunities and the futuristic technologies to address them. He added that “The future will see us tackling such resources as gas in tight sands and basin centered gas. Moreover, technology development to facilitate more effective discovery is also under way."

Iran signs major cooperation agreements with Iraq

IRNA reported that Mr Mahmoud Ahmadinejad President of Iran has signed the 8th cooperation agreement with Iraq in the field of trade and commerce.

Mr Mehdi Nejatnia Iranian commerce attaché in Iraq said that the agreement was in direction of expansion of trade and commerce between the two countries.

At the end of Mr Ahmadinejad's 2 day visit to Iraq, 7 cooperation agreements were already signed. The seven signed agreements were concerning custom, insurance, standard, industry, industrial towns, mining industry and transportation.

Iran invites Chinese to invest in economic projects

Mehr News Agency reported that Iran has called for the presence of Chinese investors and companies in Iran’s economic projects.

Mr Javad Mansuri Iranian embassy to Beijing, in a meet with the officials of Xiamen in southeastern china, expressed Iran’s preparedness for facilitating the Chinese investors’ presence in the projects of Iran.

Chinese CRC export offers move up

It is reported that CR steel coil export offer has seen all time high this week bolstered by the strength in domestic market price and better overseas demand. Export offers for 1.0mm CRC are prevailing at USD 900 per tonne USD 910 per tonne FOB a strong increase of USD 40 per tonne to USD 50 per tonne from last week. It remains to see how the transaction will be. Former export contract price is just at around USD 850 per tonne to USD 860 per tonne FOB.

Some traders told Mysteel that they have inked more CRC export contract for delivery to USA and the EU due to higher price in the destinations. But CRC export volume is on the decrease since August 2007. The export tonnage stood at 115,874 tonnes in January 2008 down sharply from 201,200 tonnes in December 2007.

Domestic market prices remain at high level. On Shanghai market, 1.0mm CR sheet by Anshan Steel is being quoted at CNY 6600 per tonne, 1.2mm to 2.0mm at CNY 6500 per tonne and 3.0mm at CNY 6650 per tonne. 1.0mm CR coil by Maanshan Steel goes at CNY 6450 per tonne.

(Sourced from MySteel.net)

Update on Chinese steel production in 2007

Records of technical and economical indices, for China, which produced 489.240 million tonnes of crude steel in 2007 up by 15.66% YoY and 469.4463 million tonnes of pig iron up by 15.19%YoY in 2007, are as under

1. Iron productions by BFs
A) Highest iron output - Baosteel Group, 24.3095 million tonnes
B) Highest utilization coefficient - Wuhan Iron and Steel Corporation 2.527 tonnes per square meter day
C) Lowest coke ratio - Baosteel Group, 287 kilogram per tonne.
D) Biggest blast furnace volume - No 4 blast furnace of Baosteel group, 4747 square meters

2. Coking production
Highest coke output - Baosteel Group, 6.6512 million tonnes

3. Steel productions by converters
A) Highest steel output - Baosteel Group, 28.577 million tonnes
B) Highest utilization coefficient - Tianjin Tiantie Metallgical Group, 76.791 tonne per day
C) Highest consumption of scrap - Changzhi iron & Steel group Company Limited 150 kilogram per tonne
D) Converter with the biggest volume - Baoshan Iron & Steel Company Limited 300 tonnes

4. Sinter production
A) Highest grade - Taiyuan Iron & Steel Co Ltd 58.42%
B) Sinter machine with largest area - Baoshan Iron & Steel Company Limited 495 square meters

5. Continuous casting production
A) Highest output of continuous cast billets - Baosteel Group, 27.001 million tonnes
B) Highest proportion of continuous casting - 56 steelmakers including Shougang Group, Shagang group, Anshan Steel, Tangshan Steel and Laiwu Steel 100%
C) Biggest steel ladle volume: Baoshan Iron & Steel Company Limited, 300 tonnes of steel ladles
D) Longest diameter of round billet: Pangang Group Chengdu Iron & Steel Company Limited, diameter of 450mm

6. Pellet production
A) Highest output - Angang Group Gongchangling Pellet Plant, 4.158 million tonnes
B) Biggest belt type palletizing machine - Angang Group Iron Plant, 321.6 square meters
C) Largest shaft furnace - Benxi Steel No 2 Iron Plant, 16 square meters
D) Grate kiln with highest output - WISCO Chengchao Iron Ore Mine Pellet Plant, 5 million tonnes per year
E) Highest grade - Angang Group Pellet Plant, 65.47%

7. Rolled productions
Highest output - Baosteel Group, 27.801 million tonnes

8. Electric furnace production
Electric Furnace with Largest Volume - Baoshan Iron & Steel Company Limited, Tianjin Pipe Company Limited and Zhujiang Steel Company Limited 150 tonne electric furnace.

(Sourced from MySteel.net)

China strongly opposes Canada's AD duties on casing pipes

China ministry of commerce said China strongly opposed Canada's decision to levy anti dumping and anti subsidy duties on seamless carbon or alloy steel oil and well casing pipes from China. Seamless casing pipes are widely used in oil exploration and gas wells.

The Canada Border Services Agency on August 13th 2007 initiated a probe into imports of Chinese steel seamless casing pipes and concluded last month that Chinese producers were subsidized by the government and deemed the Chinese industry as non market oriented.

Spokesman for China ministry of commerce said in a statement that the government and the country's industry strongly opposed this ruling. He said the Chinese government and enterprises gave sufficient support to the Canadian investigation. The evidence provided by the Chinese side proved that the casing pipe industry is a highly competitive one and the government did not intervene in the enterprises' daily operation and price setting decisions.

The statement said "We hope that the Canadian International Trade Tribunal can make a fair ruling, and we would keep a close eye on the progress and take measures to protect the legitimate rights of Chinese enterprises."

The Canadian International Trade Tribunal is yet to make a final decision on whether to impose anti-dumping and anti subsidy duties on Chinese manufacturers.

Anshan Steel to set up steel processing line in Spain

Dow Jones reported that Anshan Iron & Steel Group Corp will set up a steel processing line in Spain. The contract is expected to be signed within three months.

Mr Zhang Xiaogang GM of Anshan said on the sidelines of the National People's Congress meeting that the processing line will be jointly established with a major Spanish trading company.

He said that the company will also purchase a steel processing plant in Italy.

Mr Zhang said the company plans to buy a nickel ore mine in Australia as well.

China posts 10.6% GDP growth in 2007

Chinese premier Mr Wen Jiabao said in his annual work report to the National People's Congress recently that China's GDP rose by 10.6% in 2007. He said the Chinese economy had reached a new level with the country's international reserves exceeding USD 1.52 trillion in 2007.

Mr Wen said the government had set an inflation target of 4.8% for 2008, the same as in 2007 even though he had pledged earlier that 2007 inflation would stay under 3%. In 2006, inflation was 1.5%. He said the country should "expand the breadth and depth of openness and make its economy more open."

Mr Wen said China would limit or ban foreign investments in projects that are energy intensive or highly polluting. He said China would also introduce new standards for product quality and safety as part of an overhaul of its quality control system. The government had previously announced that the country's food exports would now carry a certification of quality mark in an effort to cut illegal shipments abroad.

He added that "It is imperative that people feel confident about the safety of food and other consumer goods and that our exports have a good reputation."

FerroChina to increase domestic shipments

It is reported that Galvanizer FerroChina is diverting 5% of its production, previously allocated for exports, to the domestic market in the aftermath of China’s severe winter storms. Reconstruction of major railways, airports, highways and buildings damaged in the storms across 19 of China’s provinces is expected to start in Q2, the Singapore-listed company told its local bourse.

FerroChina has already received orders for galvanized steel coils needed in the rebuilding work, it will reduce its export allocation to meet the sudden surge of orders.

A company official said that “We will also progressively ramp up our production for thick galvanized steel coils which are used in the construction industry, to meet the spike in demand.’

FerroChina revealed the change in its sales program while reporting it made a net profit of CNY 381million (USD53.6million) last year, a 41.7% increase on 2006’s figure. Turnover went up by 56.1% to CNY 5.9 billion due to higher sales at home and abroad, plus a CNY 1.4billion contribution from Supber Team’s plants acquired at the end of October. Galvanized steel accounted for 71.2% of total sales, while the value-adding cutting and slitting services contributed 21.4% of sales revenue.

FerroChina signed MoU last November to acquire two steel processors: Guangdong-based Richsun Steel (HK) and Vietnam based Zhongyue Steel. The investments are expected to add 200,000 tonnes to the expanded group’s production this year and 418,000 tonnes next year.

Samsung to add more service centers in China

Samsung Corporation has announced that it plans to set up a large scale coil center corporation which would establish a steel processing and distribution network in China in order to efficiently tap into China’s steel market where demand has been surging.

Samsung said “If we set up several coil centers and establish a network in China, we can maximize profits by efficiently responding to orders and balancing supply and demand.”

Samsung Corporation plans to build a steel processing and distribution network along the eastern coast of China, where demand for steel is concentrated. By combining three existing coil centers in Suzhou, Dongguan and Shunde, the company aims to maximize steel processing and distribution efficiencies.

In light of its focus on China’s eastern seaboard, the firm is trying to determine other potential locations along the coast such as Qingdao, Tianjin and Dalian.

A Samsung Corporation source said, “We have yet to decide where to build the branch. Once we have more than 10 branches, we can establish an efficient network. We will either build new coil centers or acquire existing ones.”

After establishing its own network along China’s eastern coast, Samsung Corporation plans to expand inland. Since the Chinese government has made an aggressive effort to develop the inland region, demand for steel is also expected to increase there.

Handan eyes 30 million tonnes capacity by 2015

Reuters reported that China's Handan Iron and Steel Group expect to raise its capacity to 15 million tonnes by 2010 and to double to 30 million tonnes by 2015.

Mr Liu Rujun the chairman of Handan said that it expects to raise its capacity to 15 million tonnes by 2010 and to double that to 30 million tonnes by 2015.

In 2007, Handan produced 8.33 million tonnes of steel. Most of its output is steel plate.

Handan and Baosteel Group, announced plans last May for a 4.6 million tonne plant that will produce higher value added steel products such as automotive steel and thin sheet used in consumer appliances.

17 killed in coal mine fire in Jilin

It is reported that a fire at a coal mine in Jilin Province in northeast China killed 17 people. 30 people were working in the mine, 85 meters underground at the time of the accident and 13 were rescued.

Mr Yin Yuke a local officials said "The fire broke out at 7:30AM on Wednesday at the Jin An colliery in Dongliao County in Jilin. They all suffocated to death."

Experts from Mr Yin's bureau and the provincial work safety supervision administration confirmed the fire was caused by the spontaneous combustion of coal. Part of the tunnel later collapsed which cut off the escape route for the trapped miners.

The mine was operating legally about 130 kilometers from Changchun, the provincial capital of Jilin Province.

Anshan Steel adjusts April 2008 prices

It is reported that Liaoning based Anshan Steel adjusts EXW prices for products produced in April 2008 on the basis of prices released on February 2nd 2008.

1. HR Products price up by CNY 750 per tonne for SPHD and SPHE low carbon steel price up by CNY 700 per tonne for others

2. Products of CR Mill:

i. CR Products price up by CNY 400 per tonne for low alloy high strength steel, CR dual phase steel, TRIP steel and steel for welded pipe up by CNY 550 per tonne, for carbon construction quality steel, low carbon drawing steel, low carbon deep drawing steel and ultra low carbon deep drawing steel up by CNY 570 per tonne for plates for household appliances up by CNY 1100 per tonne for corrosion-proof steel price up by CNY 650 per tonne for common carbon construction steel, structural steel and high strength structural steel H345 up by CNY 600 per tonne for others;

ii. Full hard price up by CNY 700 per tonne

iii. HDG price up by CNY 700 per tonne for S220GD+Z, STE220Z, SS230, SS250GD+Z, STE250Z, SS255, SGC340, S280GD+Z, STE280Z, SS275 and SGC400 products price up by CNY 800 per tonne for others;

iv. PPGI price up by CNY 700 per tonne

3. Electric Steel price up by CNY 530 per tonne for 50AW1300, 50AW1000 and 50AW1000G products price up by CNY 650 per tonne for 50A-SU7 product price up by CNY 500 per tonne for others;

4. Medium Plate price up by CNY 600 per tonne; for low alloy steel, bridge steel, constructional structural steel, boiler and vessel steel price up by CNY 620 per tonne; for 12Cr1MoVg, 15CrMog, 12Cr1MoV, 15CrMo, 12Cr1MoVR and 15CrMoR steel up by CNY 800 per tonne

5. Heavy Plate price up by CNY 800 per tonne

6. Wire Rod price up by CNY 500 per tonne for low carbon steel; up for spring steel up by CNY 800 per tonne, for others up by CNY 600 per tonne

7. Seamless Products price up by CNY 500 per tonne

8. Other: unchanged.

(Sourced fro Mysteel.net)

Minmetal to expand overseas

Reuters reported that China's state owned Minmetals is focusing overseas expansion on Latin America and Africa to secure natural resources to supply a fast growing Chinese economy.

Mr Zhou Zhongshu president of Minmetals said that Minmetal has its sights set on targets in South Africa and the Caribbean and wants to exercise its option to take a stake in a Chile copper mine. He said "We are looking at iron ore in Africa, chrome in South Africa and bauxite in the Caribbean."

Mr Zhou said "We want to exercise the option, and are in talks with Codelco. The decision is up to the other side. He said that expansion will help Minmetals' sales and profits at the firm to grow at over 10% in 2008.”

In September 2007, Minmetals said it had won approval to buy exploration rights to a South African ferrochrome deposit for USD 6.5 million.

The group currently has two listed units, Minmetals Resources in Hong Kong, which controls most of its aluminum business, and Minmetals Development Co Ltd in Shanghai.

China to be world's largest economy by 2025

Pricewaterhouse Coopers LLP said that China could overtake the United States by 2025 to be the world's largest economy and is anticipated to grow to about 130% the size of the United States by 2050.

Mr John Hawksworth head of macroeconomics at PWC said that the global centre of economic gravity was already shifting to China, India and other large emerging economies and this process had a lot further to run. He said apart from China, the fastest growing economy could be Vietnam with a potential growth rate of almost 10% per annum in real dollar terms that could push it to about 70% of the UK economy by 2050.

In the report, entitled "The World in 2050: Beyond the BRICs" Pricewaterhouse Coopers LLP said it was still upbeat about China, India, Brazil, Mexico, Russia, Indonesia and Turkey. However the report looked at an additional 13 emerging economies including Malaysia that had the potential to grow significantly faster than the Organization for Economic Cooperation and Development countries.

Iron ore price negotiations – To squeeze profit of Hebei steel industry

According to Mr Wang Dayong secretary general of the provincial Metallurgical Industry Association 2008 benchmark ore price hike will squeeze out 40% to 50% profit of Hebei province steel industry.

Mr Wang said regardless of other factors, 65% rise on long term ore price, pushing Brazilian ore from USD 47.81 per tonne to USD 78.88 per tonne will increase per ton pig iron cost by CNY 134.21 to CNY 248 given 45% of degree of reliance on import and 104.84 million tonnes pig iron output in 2007 of the province.

The experts said the ore price surge would lend effects of different degrees on the steelmakers that vary in production scale and product mix.

First group, large ones mainly using contracted ore resources, they may bear CNY 200 per tonne to CNY 400 per tonne increased cost for per tonne steel product

Second group, consisting small and medium ones that rely on both homemade and imported ore resources may suffer CNY 500 per tonne more for per ton steel production.

Third group, which holds million tonne grade complexes half depending on import and half on domestic spot market, per tonne pig iron cost would rise by CNY 200 to CNY 300

Fourth group, those who have self owned ore mines and depend on contracted resource for almost the left boast best acceptance ability.

Mr Wang said this ore price hike widens the gap between larger integrated steel complex, smaller ones and the independent iron smelters and steelmakers, favorable for accelerating elimination of backward steel capacity and facilitate M&A.

Shougang Concord gets USD 320 million for expansions

It is reported that the Hong Kong listed arm of the mainland's sixth largest steelmaker Shougang Concord has secured a USD 320 million loan to finance its acquisitions and expansion plans.

The four year loan was granted by five banks Bank of China, Fubon, China Construction Bank's Hong Kong branch, CITIC Ka Wah Bank and Agricultural Bank of China's Hong Kong branch. The loan adds to the CNY 3.3 billion that Shougang Concord already has in hand.

As per report securing the loan is seen as a move to help the steelmaker bankroll its two latest acquisitions totaling more than USD 400 million as well as future acquisitions. The arm spent USD 26 million on a 6.4% stake in the Australian-listed Australasian Resources a year ago.

In January 2008 Shougang Concord reached an agreement to buy 156.8 million shares representing a 19.73% stake in Australian iron ore miner Mount Gilbson from Russia's Metalloinvest for USD 381 million. The deal is still being reviewed by Australian regulators.

Mr Michael Chen deputy managing director of Shougang Concord said prices of iron ore have jumped 65 percent so far this year. He said Prices of steel plates have doubled so far this year to USD 1,200 per tonne. The price will further increase in the second quarter. He added that "The demand of steel plates is huge on the mainland and China is on track to replace South Korea as the world's largest shipbuilder.”

Chinese premier promises to cut pollution

Chinese premier Mr Wen Jiabao while speaking at the opening of the national legislature's annual session promised to cut pollution emissions, conserve energy and shut down outmoded and inefficient factories in heavily polluting industries such as electricity, coal and steel.

He said "We must increase our sense of urgency and intensify efforts to make greater progress. First, we will implement the plan to close down backward production facilities in the electricity, steel, cement, coal and papermaking industries."

Mr Wen said, he also promised a renewed push to rein in "haphazard" investment and unneeded development projects in highly polluting industries. He said China will work toward breakthroughs in technologies for producing vehicles powered by new energy sources and to develop high speed rail transport.

Mr Wen said Beijing also wants to strengthen efforts to protect and conserve its natural resources, including land, water, grasslands and minerals.

Magang to go for ore resources overseas on high price hike

It is reported that Mr Gu Jianguo general manager of Magang Group Holdings Co said that in order to handle increased pressure on iron ore price, the company is considering exploring iron ore abroad.

Mr Gu said that “Pressure brought by higher costs on the steel enterprises is substantial, while the iron ore import would add tens of millions of tons this year. Upon higher costs, Baosteel, Wuhan Steel, Shagang etc have raised up sales price of the steel products. Despite spiking costs, it's not appropriate to resort to hiking steel prices.”

Mr Gu said "But this helps change our visual angle. We will put more attention to study of the raw material and energy resources market."

Magang had cooperated with Wuhan Steel and BHP etc to explore ores in Australia. In future, it will go for more such opportunities so as to lower the cost, while at present it's difficult to plug in collaboration with the superior resource enterprises abroad due to the ore price hike.”

As per report when consolidation and acquisition become a trend for majority steelmakers, Magang will still focus on internal development, he noted. The company has blended with Hefei Steel and is not ready for more mergers. Starting with construction steel production, Magang is comparatively backward in equipment and how to upgrade product mix and improve competitiveness are more urgent problems.

(Sourced from MySteel.net)

TMK estimates 20% jump in 2007 revenue

Reuters reported that Russia's largest steel pipe maker TMK expects 2007 revenues to have risen about 20%YoY to more than USD 4 billion on strong demand and higher prices for pipes.

TMK said it expected 2007 earnings before interest, taxation, depreciation and amortisation to rise about 15%. It did not give an EBITDA number.

TMK said the EBITDA margin for the full year would be slightly lower than in the first half of 2007 and the whole of 2006. It said despite some weakness observed in global markets, particularly in North America, the Russian seamless pipe market remained strong.

TMK said "Given the more favourable situation in the Russian market, TMK increased its domestic sales by decreasing exports from its Russian plants by 8%. Consequently, the share of non-Russian sales volumes decreased to 28.5%."

TMK will announce final 2007 results in May.

Severstal’s Izhora pipe plant certified for Gazprom specs

OAO Severstal’s Izhorsky Trubny Zavod announced that it has become the first Russian pipe manufacturer to have its products certified for compliance with Gazprom’s Specifications for the Bovanenkovo-Ukhta pipeline system.

The release said the Izhora Pipe Plant has been certified for compliance with Gazprom’s Specifications for 120 atm working pressure pipes. The Izhora plant is the only pipe manufacturer in the world able to produce pipes of such quality. Deliveries are set to start in May or June 2008. The Specifications are a set of mandatory rules the plant must follow to manufacture and deliver pipes to the Bovanenkovo-Ukhta project.

Mr Oleg Urnev general director of Izhora Pipe Plant’s said “The specifications applying to pipes to be used in this project are among the most stringent in the industry, due to such extreme climate conditions. We are pleased to announce that, with assistance from Severstal’s Cherepovets Steel Works, which produces unique rolled steel for us, Izhora Pipe Plant has become the first pipe maker to be able to use a technology for manufacturing this complex product mix, enabling us to guarantee supplies to Gazprom.”

Ferrexpo update on February production

Ukrainian iron ore major Ferrexpo has given following update on production in February 2008

In ‘000 tonnes

In ‘000 tonnes

Ferrexpo is a Swiss headquartered resources company with assets in Ukraine, principally involved in the production and export of iron ore pellets, used in producing steel. Current output is over 9 million tonnes, approximately 85% of which is exported to steelmakers around the world.

Gazprom ends supply cut to Ukraine

Gazprom announced that “Following the telephone conversation between the Ukrainian President Victor Yuschenko and the Russian President Vladimir Putin, OAO Gazprom’s Chairman of the Management Committee Alexey Miller and NAK Naftogaz Ukrainy’s Chairman of the Board Oleg Dubina today have reached over the telephone an agreement solving the crisis situation in the gas area.”

It said that “The Parties have agreed that the gas delivered between January 1st 2008 and March 1st 2008 will be fully confirmed by relevant documents and paid by NAK Naftogaz Ukrainy in accordance with the delivery scheme effective as of the beginning of the year. Issues related to the deliveries of Russian gas will be settled. The negotiations on other matters in respect of cooperation in the gas area will be continued.”

The transit of the Russian gas across the territory of Ukraine for the European customers remains in full. Restrictions on deliveries of gas for the Ukrainian customers have been removed.

Russian court rules in favor of Mr Prokhorov over 2% stake in Norilsk

It is reported that the Moscow Arbitration Court has ruled in favor of Onexim Group President Mr Mikhail Prokhorov and invalidated the resolution of KM Invest BOD on the disposal of 2% in GMK Norilsk Nickel and 7.4% in Polus Zoloto, sources reported.

The decision could materially affect the divorce of former partners Mr Mikhail Prokhorov and Mr Vladimir Potanin. The matter at stake is 2% in Norilsk Nickel that may tip the scale in favor of one of contesting parties. Prokhorov consolidated a blocking stake in Norilsk Nickel and agreed to pass it to UC Rusal co-owner Mr Oleg Deripaska for 11% in UC Rusal and some money.

Deripaska in December agreed to buy a 25% stake in the world's largest nickel and palladium producer from Mr Potanin, who fell out with his former business partner, Mr Prokhorov. However, Mettalloinvest, the steel conglomerate controlled by Mr Alisher Usmanov is proposing a merger with Norilsk Nickel.

KM Invest has a month to appeal the resolution.

Ukraine has used 75% of quota for CR exports to Russia

Interfax reported that Ukrainian steel companies received licenses to export 150,000 tonnes of cold rolled steel products to Russia between July 1st 2007 and March 1st 2008 or 75% of the 200,000 tonne quota for the year to June 30th 2008.

The quota for Ukrainian exports of flat cold rolled steel products to Russia is 200,000 tonnes for the year to June 30th 2008, 205,000 tonnes for the year to June 30th 2009 and 210,000 tonnes for the year to June 30th 2010.

The report added that Ukrainian steelmakers in January and February also received licenses to export 24,881 tonnes of rods to Russia for reinforcing concrete structures or 7.54% of the quota of 330,000 tonnes for the current year.

The quota for exports to Russia of rods for reinforcing concrete structures is 330,000 tonnes for 2008, 363,000 tonnes for 2009 and 400,000 tonnes for 2010.

Metalloinvest and Hyundai Steel ink MoU

Interfax reported that Metalloinvest, which runs CJSC Gazmetall, the holding company for billionaire Mr Alisher Usmanov's iron and steel assets has signed MoU with Hyundai Steel.

Metalloinvest said in a statement the memorandum calls for strengthening and extending future cooperation between the two companies and switching from customer supplier relations to a strategic partnership. Both parties achieved a preliminary agreement on increasing supply rate and expanding the range of iron ore products delivered to Hyundai Steel from Metalloinvest plants.

Metalloinvest already supplies Hyundai Steel with hot briquetted iron produced at its Lebedinsky GOK mine. A first 12,000 tonnes were shopped in December 2006 and HBI has been shipped on a monthly basis since October 2007.

Rautaruukki bags steel structures contract for Samsung factory

Thomson Financial reported that Rautaruukki has won a steel structures contract from Korea's Samsung for the latter's first factory in Russia. No financial details were disclosed.

The delivery consists of more than 2,000 tonnes of steel structures, which will be manufactured at Rautaruukki's Obninsk unit in Russia.

Belon to extract about 7.1 million tonnes of coal in 2008

FIS reported that in 2007, Belon Group increased total production of coal in 2006 to 4.659 million tonnes up by 38% YoY.

Belon Group achieved significant growth in production of energy coal in 2006m which went up by 59% YoY to 2.670 million tonnes and its production of coking coal grew by 21% YoY to 2.003 tonnes.

Belovo Central Concentrating Factory processed 4.387 million tonnes of coking coal and made 3.053 million tonnes of coking coal concentrate.

It now plans to increase production of coal in 2008 by 1.5 times as compared with 2007 to 7.1 million tonnes.

Novomoskovsk gets USD 50 million debt from Interpipe

Millennium Capital reported that that Interpipe Limited floated a USD 50 million loans to Novomoskovsk Pipe Plant for increasing its working capital. The loan expires on February 14th 2018 and pays 11% interest.

As per report the contracted loan is of a derivative type as Interpipe attracts funds at international financial markets through Cyprus based Interpipe Limited.

Millennium Capital analyst said that “We think that NVTR currently has no need for a working capital increase and expect the loan to be floated through small tranches within the whole credit term. We think that the debt raising is aimed mainly in creating a credit history for Interpipe’s companies in view of the coming IPO.”

2 accidents reported in Donetsk coal mines

Interfax reported that 3 miners have been hospitalized with burns following a methane explosion at the Krasnoarmeiskaya-Zapadnaya Mine No 1 in Ukraine's Donetsk region.

The report added that the incident occurred at a depth of 708 meters on Monday. No fire followed the explosion. Thirty miners who were underground by the time of the incident managed to leave unassisted.

A miner was killed in another incident at the Shakhtarskaya-lubokaya mine also in the Donetsk region. He was killed as a result of a caving in at a depth of 1,240 meters.

Second stage of ESOP could begin in late 2009

RIA Novosti reported that the construction of the second stage of an oil pipeline being built from East Siberia to the Pacific Ocean could begin in the second half of 2009

The second leg will stretch for 2,100 kilometers from Skovorodino to the Pacific. It will pump 367.5 million barrels of oil annually. The second stage also envisages an increase in the Taishet-Skovorodino pipeline's capacity to 588 million barrels.

Mr Sergei Sergeyev head of the ESPO-2 project management center said "The project's feasibility study is to undergo a state expert study in December 2008. If the Russian government gives a special instruction, we could launch the construction of the project's second stage in the second half of 2009."

Mr Sergeyev said the project's second stage is estimated at RUB 320 billion to RUB 330 billion in 2006 prices and would take at least four years.

ESPO first stage envisages the construction of a 2,757 kilometer section with capacity of 30 million tonnes of oil per year. The project's first leg will link Taishet in East Siberia's Irkutsk Region to Skovorodino at the Amur Region in Russia's Far East. The project's first leg, estimated at USD 11 billion is expected to be commissioned in December 2008. However, project operator Transneft said on February 7th 2008 that the commissioning of the project would be delayed from late 2008 to late 2009.

Russian Coal intends to raise 2008 output by 20% YoY

It is reported that in 2008 Russian Coal relies to raise the coal output by 20% YoY from 2 million tonnes in 2007 to 2.4 million tonne. The highest growth is expected at Belorussky Pit launched in operation last year end. At Zadubrovsky and Evtinsky pies the output is assumed to be steady.

As per report, RUB 140 million will be invested in the development of the production in 2008 as against RUB 200 million last year. In the improvement of the railway infrastructure 9 million will be spent.

KEPCO to tap Kazakhstan’s electricity market

It is reported that the Korea Electric Power Corp a state run power firm has signed a MoU with Kazakhstan’s energy company for electricity projects worth some USD 500 million. The firm signed a preliminary deal with the Central Asian Power Energy Co in Seoul with the chief executives of the two companies on hand.

Under the MoU, KEPCO will jointly take part in energy projects in Astana City, the capital of the Central Asian country, involving the expansion of a 360MW plant to a 600MW one and build a new 240MW plant.

The officials of the power firm expected that the latest deal would serve as a catalyst to advance to the electricity market of Kazakhstan, which plans to invest a total of USD 10.5 billion by 2015 to modernize its electricity facilities.

Mr Lee Won gul president & CEO of KEPCO said “We have enormous business opportunities in Central Asia, including Kazakhstan and Azerbaijan. We will make further efforts to develop new business models that fit the region.”

KEPCO is scheduled to start construction of a 750MW thermal power station in Azerbaijan. It has recently stepped up efforts for global management, eyeing many regions including Africa as well as Southeast Asia and Central Asia.