India changes export tax structure for steel

Indian government has carried out certain changes in the rates of export duty on Friday. Notification Nos 77 to 80/2008-Cus and Nos 39 and 40/2008-CE all dated June13th 2008 have been issued to implement these changes. They shall come into force with immediate effect.

A government release said that “Flat rolled products of iron and steel, including galvanized products and pipes and tubes that attracted export duty ranging from 5% to 15% ad valorem, have been fully exempted from export duty.”

It added that “The rate of export duty on long products such as bars and rods, angles, shapes and sections and wire has been increased from 10% to 15%, to improve their availability in the domestic market.

Indian government’s finance ministry’s revenue department vide notification No 66/2008-CUSTOMS dated May 10th 2008 under sub section (1) of section 25 of the Customs Act of 1962 (52 of 1962), said that the central government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the goods specified in column 3 of the table and falling under Heading No of the Second Schedule to the Customs Tariff Act of 1975 (51 of 1975), specified in the corresponding entry in column 2 of the table, when exported out of India, from so much of the duty of customs livable thereon under the said Second Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column 4 of the table

Essar Steel chooses Tenova for hot DRI transport system

Essar Steel has contracted with Tenova HYL to design and install a HYTEMP® Pneumatic Transport System for transporting hot DRI to their Hazira Works melt shop. The contract calls for a modified HYTEMP® System to transport hot DRI from hot DRI containers to charging bins above the EAF’s.

The Hazira Works currently operates 5 DR modules located at some distance from its steel mill. To transfer the hot DRI, it uses special containers transported on trucks, hoisted above the electric furnace with an overhead traveling crane and then unloaded into the furnace. This bucket system requires intensive use of cranes and time, which limits the percentage of hot DRI which can actually be charged to the EAF.

The HYTEMP® system for the Hazira Works has been designed for charging the furnace from the hot DRI containers, brought in on trucks at ground level just outside the steel mill. Furnace loading will be faster and simpler, with lower loss of temperature and greater overall efficiency. This type of system is an interesting solution for any plant dealing with problems of this kind. Prior to the development of the HYTEMP® System, this bucket method was the only viable hot transport method available. Essar, after visiting the Ternium Monterrey plant and observing the consistent operation and virtual lack of maintenance required, chose to install a HYTEMP® System at their site in India.

The HYTEMP® System was developed by Tenova HYL and installed in the Ternium Monterrey plant in 1998, feeding hot high carbon DRI from the HYL 4M ZR plant to two DC EAF’s in the adjacent melt shop. Over 8 million tons of hot DRI have been transported to date, with no operational problems, shutdowns or losses from the system. HYTEMP® is the only proven and reliable system in operation for the efficient transfer of hot DRI to the melt shop.

Tenova HYL is a unit of Tenova. Tenova designs and supplies advanced technologies, products and services for the metal and mining industries. Tenova operates close to its customers through a network of 30 companies based in 16 different countries.

PSL secures mega order for pipes from GAIL

Pipe maker PSL Limited recently announced that it has been awarded its 5th consecutive order from GAIL India Limited for supplying large diameter coated line pipes valued at INR 1,928 crore to be utilized for the Vijaipur Dadri Bawana Pipeline. With the present order in hand, PSL’s consolidated unexecuted order book now stands in excess of INR 6,000 crore, with a substantial portion secured over the course of the past one month.

PSL shall be manufacturing and coating large diameter helical steel pipes, varying in size from 20 inches to 48 inches and totaling 470 kilometers in length, in accordance with GAIL’s detailed technical specifications. The production against this order is expected to commence in July 2008 and is to be completed within the coming financial year. PSL’s Varsana facilities will be fulfilling the entire requirement of the order and are fully geared to meet this upcoming demand.

Mr Ashok Punj MD of PSL Limited said that "With this recent order, PSL has secured a major chunk of the Indian gas pipelines under construction, demonstrating its ability to successfully compete with both domestic and international companies in terms of quality, timeliness and cost." He added that it has a high level of HSAW pipe capacity preparedness as it believes that this will be a key strategic advantage and a major performance driver over the long term.

PSL is now in a position to execute both the recently secured HPCL Mittal Pipeline order totaling over INR 900 crore, along with the newly announced GAIL order from its plant at Kandla. Both the GAIL and HPCL Mittal orders were keenly contested global tenders, with participation from Indian and Chinese companies among other international pipe manufacturers.

JSW Steel completes land acquisition for W Bengal plant

JSW Steel’s Managing Director Sajjan Jindal told NDTV on Friday that the land acquisition for the new West Bengal plant, at Salboni near Kharagpur, has been completed.

The raw material for the 10 MT Greenfield steel plant would be supplied by the state government. In addition, JSW has applied for iron ore mines in Ankua in Jharkhand, he said. The company is also currently in talks with coking cola mines in Australia.

UGSL to set up 60 MW captive power plant

Uttam Galva Steels Limited has announced its plans to set up a 60 MW power plant close to its steel plant at Khopoli in Mumbai. The 60 MW captive coal fired power plant will be a part of Uttam Galva Steels Limited and will be commissioned within 24 months with an investment of INR 300 crore, which will be raised through a mix of debt and internal accruals. It has applied to government of India for the necessary coal linkages.

Mr Ankit Miglani director commercial of Uttam Galva Steels Limited said that "The plant will help the company to enhance its growth. We see this as one of the major initiatives to reduce our costs and protect margins."

With the increase in demand of steel and the increased efficiency in the production capacity the company is looking at a 30% higher sales target for 2008-09.

Uttam Galva Steels Limited is a one of India's largest manufacturer exporter of value added steel products. In the domestic market, it is a major supplier to the automobile, white goods, general engineering and construction industries. Some of its major end users include Bajaj Auto, Bajaj Tempo, M&M, Kirloskar, Crompton, L&T, etc. It currently exports its products to more than 135 countries including Australia, France, Germany, Greece, UK and USA.

Inflation jumps to 8.24% in Indian Economy

Bloomberg reported that India's inflation jumped to 8.24%, the fastest since August 2004, adding pressure on the central bank to raise interest rates. As per report, wholesale price gains accelerated for a seventh straight week through May 24th 2008, after increasing 8.1% in the previous week. Analysts had forecast inflation at 8.29%.

Lehman Brothers Holdings, Standard Chartered Bank and ICICI Securities Limited expect the inflation rate to rise to a 13 year high of 9.5% after the government increased fuel costs this week. Prices are rising amid slowing economic growth, making it harder for central bank governor Mr Yaga Venugopal Reddy to decide whether to increase borrowing costs.

Mr Reddy said that prospects of more food output this year and curbs on farm exports will boost supplies and help tame inflation, playing down chances of higher interest rates. He added that the central bank is ready to use its full range of instruments to curb inflation.

Still, India's benchmark 10 year bond yield was unchanged at 8.23%, the highest in a year, after the inflation data. Inflation was mainly driven by higher costs of fuel, power and light, basic metals including steel and food grains in the week ended May 24th 2008.

India, which imports 70% of its oil, increased prices for gasoline by 11%, diesel by 9% and cooking gas by 17% after oil reached a record USD 135.09 a barrel in New York on May 22nd 2008. India previously raised fuel prices in February 2008, the first time since June 2006.

The changes in fuel prices announced on June 4th 2008 will be reflected in the inflation data due for release on June 20th 2008. The commerce ministry today raised its inflation estimate for the week ended March 29th 2008 to 7.75% from 7.41%.

India reviewing new qualifying bid norms for infrastructure projects

Exim News Service reported that union finance ministry is holding talks with the shipping, road transport & highway ministry on the need to review the new model qualifying bid document, which allows only the top 5 or 6 players, based on maximum experience and net worth, to bid for infrastructure projects.

This formula had put domestic players in a disadvantageous position, as they are relatively new to the infrastructure sector in bidding for public private partnership projects in ports and highway sectors. Earlier, for such PPP projects, the technical qualification norms were based on turnover and experience and bids were invited from all players who met the specified norms.

But, the new model request for qualification for PPP projects firmed up a few months ago states that only up to 5 or 6 qualified applicants can be invited for participation in the financial bid stage. As the implementation of the new RFQ started for highway and port projects, several domestic firms, which did have experience in the infrastructure sector, or those eyeing the sector, wrote to the respective departments seeking changes in this norm.

The National Highways Builders Federation, a lobby body with membership from companies like Larsen & Toubro, Reliance Energy, Reliance Infrastructure, GMR, GVK and Unitech had even raised the issue with the Prime Minister.

Discussions between the finance ministry and the department of roads have already been held on the issue and another meeting is likely to be held soon with the department of shipping. However, the shipping ministry has decided not to delay the ongoing projects even as the review is on.

Visa Steel posts records growth in coke and ferroalloy production

Orissa based Visa Steel Limited has posted impressive growth in coke production and ferroalloy production in January to March 2008 quarter and will set up a special stainless steel plant is due for commissioning by 2010.

Visa Steel Limited has registered excellent growth with revenue increasing by 85% YoY to INR 2.6 billion, operating margins rose by 17.8% YoY while net profits surged by 30% YoY to INR 210 million in January to March 2008 quarter. The key attribute to this robust performance was overall buoyancy in realizations being witnessed in the commodities.

Coke production witnessed a staggering 90% YoY growth to 60,000 tonnes in January to March 2008 quarter. Gradual ramp up of ferroalloy facility post commissioning in November 2007 drove ferroalloy production to 10,300 tonnes in January to March 2008 quarter. Sales volumes for the former stood at 56,000 tonnes while the latter clocked sales volumes of 5,400 tonnes. Hot metal production is not comparable as VSL undertook a shutdown for maintenance purposes.

VSL has suffered losses of INR 24 million due to foreign exchange fluctuations which are reflected in other income. Interest and depreciation rose due to capitalization of the ferrochrome facilities to INR 54 million and INR 59 million.

Visa Steel presently manufactures pig iron, ferrochrome and coke and once the steel plant is commissioned the products will be utilized for captive consumption. It is also setting up a 300,000 tonnes per annum DRI plant and 75 MW captive power plant which are expected to go on stream in first quarter of 2009.

TATA Agrico in tie up with TATA BP Solar

TATA Steel’s subsidiary TATA Agrico has entered into an agreement with TATA BP Solar for distributing solar products of in the rural hinterland of India. This initiative is primarily aimed at targeting consumers who are deprived of regular electricity supplies owing to poor infrastructure.

TATA Agrico would be leveraging its extensive distribution network in the country to promote the solar products of TATA BP. Both the companies would primarily focus on products such as solar lanterns, street lights and water heating systems.

The companies see a huge potential in both rural and semi urban markets and have decided to start this partnership from Bihar in June 2008, which will be followed by a nation wide roll out.

TN government hopes to end NLC workers strike soon

PTI reported that, as the strike by about 13,000 Neyveli Lignite Corporation contract workers entered the 10th day, Mr N Veerasamy electricity minister of Tamil Nadu has exuded confidence that the stir would come to an end soon following talks between the centre and the union representatives at Delhi on June 13th 2008.

Mr Veerasamy said that following chief minister Mr M Karunanidhi's request, Dr Manmohan Singh and union coal ministry officials will be holding talks with trade union representatives on June 13th 2008 at Delhi.

He added that "Through the discussions a suitable solution is expected to be arrived at and we are hoping that the strike called by the workers will be withdrawn and the production of electricity resumed."

Jain Group to set up 1000 MW thermal power project in MP

It is reported that a MoU was inked between Mr Mannoj Kumar Jain CMD of Jain Group of Industries and Madhya Pradesh government for the implementation of a 1000 MW thermal power project. Jain Energy Limited will be executing the project which is likely to be commissioned in 2012.

Mr Jain said that "We are happy to announce our latest project in the power sector and we are thankful to the government of Madhya Pradesh for the cooperation extended. Developing this project and commissioning it within the agreed time period will be our primary focus now. We have set a target of setting up 5,000 MW power plants all over India in the next 5 years."

As per report, the 1000 MW coal based power unit will be coming up at Shadol district of Madhya Pradesh and will be spread over 1000 acres of land. The estimated investment in this project will be to the tune of INR 5000 crore and work on the project will commence from early 2009.

Jain Energy Limited is also setting up a 1000 MW coal based power plant in Chhattisgarh. The plant would be set up at Balpur of Janjgir Champa district. Additionally it is also in talks with governments of Orissa, Jharkhand and West Bengal for setting up similar projects in these states. Jain Energy has also given expression of interest for hydro power projects in Arunachal Pradesh and Bhutan.

Pipavav Shipyard keen to build patrol vessels for Indian Navy

Exim News Service reported that Pipavav Shipyard is registering with Indian Navy so that it can obtain orders to build offshore patrol vessels and other naval vessels.

While the Mumbai based Mazagon Dock builds submarines for Indian Navy in association with France, Larsen & Toubro proposes to build naval vessels at its proposed shipyard in Tamil Nadu.

An official at Pipavav Shipyard said that "We are looking at producing offshore patrol vessels for Indian Navy, which are less complex and less weapon oriented. As we gain experience in these things, we will look at more complex vessels."

A couple of months ago, Pipavav Shipyard had bagged an order to build 22 Panamax tankers, taking its order book to USD 1 billion. It is also eyeing sub contract deals for building rigs. It plans to collaborate with one of its stake holders Sembcorp Marine, which is a global marine, engineering and shipyard group.

Pipavav Shipyard proposes to bid for some projects in the offshore sector and hopes to get some subcontracting work from it and build up experience.

BHEL places first commercial order to BHPV

Livemint.com reported that, after formally taking over Bharat Heavy Plate & Vessels in May 2008, Bharat Heavy Electricals Limited has placed the first commercial order to BHPV. The order includes manufacture and supply of 680 million tonnes of boiler components such as drums, headers, riser tubes, panels, coils and piping products.

Considering BHPV's working capital condition, BHEL has issued raw material for the above order free of cost and the first batch of raw material has already reached the place of work.

BHPV is being developed as a dedicated centre for industrial boilers, ensuring better delivery. The current cost structure of BHPV is similar to BHEL but is expected to come down due to factors like increased volumes, better financial capability leading to lower working capital borrowing costs, etc.

BHPV's turnover is expected to cross INR 1,000 crore in 5 years and it plans a capital expenditure of INR 236 crore in 3 years.

Electricity generation from NLC set to increase

BL reported that, even as the non permanent workers’ strike continues, electricity generation at Neyveli Lignite Corporation is likely to inch up to near normalcy levels, thanks to the corporation’s mobilizing workforce from outside.

On a normal day, NLC will produce 48.8 million units of electricity. However, after the casual workers struck work, demanding to be made permanent staff, generation has been coming down steadily. On June 1st 2008, generation was 39 million units, which steadily kept declining day after day to reach only 19 million units on June 10th 2008.

However, a senior source in NLC explained that on the third day of the strike, a conveyor belt carrying lignite to the boilers developed a snag and there were no workers to repair it. NLC has since brought in some workers from the neighboring villages and the belt has been repaired. Generation therefore is set to rise.

However, the source said that electricity production may to up to only around 35 million units. To raise it further, more people are being mobilized. The source said that if NLC could get another 800 odd workers, the corporation would function to full capacity.

NLC has on its rolls 19,000 permanent staff and another 12,000 contract laborers. It needs no more than 14,000 of the permanent staff and about 2,000 of the casual laborers. Operating to full capacity with thin strength of casual workers would starkly slow the surplus.

As regards the surplus permanent staff, sources said that there was ample scope for deploying them at NLC’s upcoming projects, particularly those coming in the neighboring areas of Tuticorin and Jayamkondan.

SCI announces 2007-08 results

Shipping Corporation of India has reported a nearly 13% YoY drop in net profit for January to March 2008 quarter at INR 248.69 crore as against INR 284.65 crore for January to March 2007 quarter. Total income stood at INR 1,177.44 crore up by 8.9% YoY as against INR 1,080.56 crore.

For the year ended March 31st 2008, its net profit stood at INR 813.90 crore down by 19.7% YoY as against INR 1,014.58 crore in the year ended March 31st 2007. Income was INR 4,084.36 crore down by 2.9% YoY as against INR 4,210.36 crore.

Kochi Port forms panel to study and improve competitiveness

BL reported that Kochi Port has constituted a committee to study and compare the rates including overhead charges prevailing at the neighboring ports in Tuticorin and New Mangalore ports. The committee comprising Trustees and port officials will also offer recommendations to improve the competitiveness of the port.

The formation of the committee comes in the wake of a comprehensive study, which pointed out that the port did not enjoy a competitive advantage vis a vis other south Indian major ports on cost or service parameters.

The board of trustees, which met recently, pointed out those critical deficiencies such as storage constraints, poor quality of services should be addressed and corrective measures initiated to regain competitive advantage for the port. The board also resolved to implement the proposal for reduction of 30% on wharfage of coal and iron ore pellets, and reduction of 40% on wharfage on iron & steel scrap, gypsum and limestone on an experimental basis for a period of 3 months.

The board members were of the view that the port should go for aggressive marketing strategies to make competitive advantage among other ports and it should ensure that the benefits of tariff reduction should reach the targeted customers. Besides, the enhancement of storage area should be given priority by the port administration.

The members pointed out that the port should also improve its infrastructure substantially to enhance the cargo throughput, as high cost is one of the major components that resulted in exorbitant transportation cost incurred for movement of cargo from the port.

Police recovers 100 cannon shells from scrap in TN

PTI reported that Tamil Nadu Police has unearthed 100 cannon shells from the compound of a scrap melting unit in the campus of state owned State Industries Promotion Corporation of Tamil Nadu Limited at Gummidipoondi and arrested two persons, including its owner. However, police ruled out any extremist link to the ammunition which has been seized in the last 3 days.

The cannon shells, totally weighing 750 kilograms, were recovered from the compound of Vinayaga Alloys Private Limited during continuing searches in the campus launched after two Sri Lankan Tamil refugees were injured in a minor explosion on June 7th 2008.

Meanwhile, state police headquarters in a release said that all the ammunition so far recovered dated back to 1917 to 1967 and were not made in the country. It said since investigations showed that the ammunition was only scrap having been used several years back, there was no scope for linking the seizure to any extremists.

It was found during investigations that 14 steel units in the SIPCOT campus were involved in procuring iron scrap materials from foreign countries for recycling into iron rods and one of them would have dumped the used ammunition as these could not be recycled.

Subhkam Ventures increases stake in Shakti Pumps to 12.05%

Private equity player Subhkam Ventures has increased its stake in Shakti Pumps (India) Limited to 12.05%. The mode of increase in holding is by way conversion of warrants allotted to Subhkam Ventures on preferential basis.

Subhkam Ventures has 2 state of the art facilities in Indore. Based on its superior quality, Shakti Pumps has been able to successfully compete with world leader Grundfos in the major international markets. The pumps of the company are almost 30% more energy efficient than other pumps in the market. The efficiency of Shakti Pumps has been certified by various state agencies in India.

Mr Manu Punnoose director & CEO of Subhkam Ventures said that "Shakti Pumps (India) Limited has demonstrated its products' superiority and credentials and is successfully competing with the world largest player Grundfos in the export market. This is quite evident from the fact that its sales predominantly comes from exports. Backed by a range of quality products, it is poised to improve its performance substantially in the years ahead. The most striking feature of its product line is its energy efficiency of over 30 per cent over other competing products."

Subhkam Ventures follows its accounting year ending on June 30th 2008 and it is expected to close 2007-08 fiscal with turnover of over INR 100 crore. It caters to both the domestic as well as export market. Lately, it has increased its production capacity substantially and is set to increase its turnover significantly in the near future. Buoyed by the success of its pumps in the market, the Company has major plans to ramp up its distribution network in India ands across the world.

EU service centers resist surcharges by flat product steel mills

Platts reported that steel service centers across Northern Europe have been complaining about attempts by European Union mills to renegotiate long term contracts and impose raw materials surcharges. A German SSC executive told Platts that "We will not pay this. Mills are expecting record profits this year; they do not need this money."

A group of Germany and Benelux based buyers compared the surcharges they had been asked to pay and found that several North European mills wanted an additional EUR 120 to EUR 180 per tonne on yearly contracts to recoup raw material costs. The first producer to announce such a fee was ArcelorMittal which has asked EU customers to pay EUR 160 per tonne extra from July 1st 2008.

Mr Juergen Nusser president of European steel service centers said that such renegotiations would not be necessary if flat product mills included raw materials price variability mechanisms in their contracts. He added that "For long products, scrap surcharges are applied monthly and there are no problems.”

He added that difficulties had also arisen because of the timing of these annual agreements. It doesn't make sense to negotiate these annual deals in January, when raw material agreements are made in Q1. July would be a more suitable time.

When asked whether all European mills had asked to renegotiate contracts, a German service center executive said that "Italian mills have behaved differently and we have so far not received any demand for surcharges from them.” He added that they appear to have instead increased their base prices faster than other EU competitors, asking for EUR 850 per tonne for Q3 rolled HRC and EUR 800 per tonne for Q4.

Mills said that they have been forced into revisiting existing contracts because of rapidly changing market conditions. Many steelmakers are, for example, selling HRC as part of contracts agreed in late 2007 at rates similar to current scrap prices.

LME nickel price jumps by 6%

Reuters reported that nickel prices on London Metal Exchange surged by 6% after BHP Billiton said it would close a 100,000 tonne per year nickel operation for four months for repairs.

LME nickel hit USD 24,585 a tonne in electronic trading, it’s highest since May 22nd 2008 and nickel for delivery in three months was quoted at USD 23,900.

A trader said that "This will be very significant. We will lose 25,000 tonnes of metal because of the shutdown. We already estimate the refined nickel market will be in deficit by 80,000 tonnes this year and this will just deepen the shortfall. It is time to forget about the stainless steel glut and falling demand."

The Kalgoorlie smelter produces around 100,000 tonnes of nickel in matte a year which is fed into the Kwinana nickel refinery and also exported to other customers. BHP estimated the shutdown of the operations in Western Australia would reduce its nickel sales by 28,000 tonnes cutting world nickel supplies by almost 2%.

Brazil fines 60 steel companies on environmental issues

AP reported that Brazil is imposing USD 250 million in fines on steel companies caught using charcoal made from illegally logged forests.

Mr Carlos Minc the environment minister of Brazil said that 60 steel companies in three states face BRR 414 million (USD 250 million) in fines and must replant about 27,181 acres of forest for using the illegal coal. He added that charcoal companies would be fined a total of BRR 70 million (USD 43 million).

Brazil has very few coal mines and demand for wood based charcoal for use in steel mills is a major driver of deforestation in the Amazon and other regions. In this case, the illegal charcoal came from the Cerrado a savanna like ecosystem that occupies much of central Brazil and the Pantanal huge wetlands that extends into Bolivia.

Mr Minc said that "I am amazed at the creativity of these people when it comes to environmental crimes. If we don't open our eyes, the Cerrado and the Pantanal will be converted into charcoal.”

He added that Brazilian law requires that wood for charcoal come from planted forests devoted to the sustainable production of coal and prohibits the destruction of native forests.

The highest fines were imposed on Siderugica Alterosa, Siderugica Alamo, Sicafe Produtos Siderugica, Vetorial Siderugica and MMX Metalicos Corubma.

MMX was fined earlier this year for using illegal charcoal but continues to operate under a court injunction. No one at MMX was immediately available to comment on the fines.

Mitsui to spend USD 670 million to keep up stake in Valepar

Reuters reported that Japan's second biggest trading company Mitsui & Co would spend about JPY 75 billion (USD 670 million) to maintain its 15% ownership in Valepar SA a holding company of Vale.

Vale the world's biggest iron ore producer recently said that it would sell up to USD 15 billion in shares to help finance growth in its existing businesses and potential acquisitions.

A Mitsui spokeswoman said that Mitsui's stake in Vale will stay at 5% as a result.

German steel output seen constant in 2009 - Federation

According to the head of the Germany’s steel federation, German crude steel output should hold steady at around 48.5 million tonnes in 2008 and next.

Mr Hans Juergen Kerkhoff told Reuters in an interview that "In terms of crude steel production, we expect output to be almost unchanged at some 48.5 million tonnes in 2008.”

He added that output in 2009 would likely remain constant at this year's level.

Mr Kerkhoff said that “Surging oil prices were only having a limited direct impact on steel firms in Germany. But there are significant indirect effects, such as via the coupling of gas prices to oil prices.”

Mr Kerkhoff added that "The steel industry uses significant quantities of natural gas in hot rolling mills. And the rising cost of acquiring oil and gas is also having the effect of pushing up prices on other areas and services like transport.”

Mr Kerkhoff noted that the price of scrap steel in Germany had nearly doubled since the end of last year to over EUR 400 per tonne closely mirroring developments abroad. He said that "Market observers are skeptical about whether we've already reached a peak in scrap prices.”

SDI raises Q2 earnings guidance

Steel Dynamics Inc announced that it now expects second quarter 2008 earnings to be within a range of USD 0.90 to USD 0.95 per diluted share. The increase in expectations is based primarily on stronger than anticipated shipping volume and selling values for flat rolled steel products and stronger volume and margins in recycling. The company's initial guidance for the second quarter, provided on April 21st 3008 was USD 0.80 to USD 0.90 per diluted share.

Mr Keith Busse chairman & CEO of Steel Dynamics said that "We continue to experience strong market conditions for our steel and recycled metals businesses. In addition to the improving performance of the Flat Rolled Division and The Techs, our long products divisions continue to perform well, with continued strong order activity and backlogs. Strong shipping volumes and profit margins of our OmniSource Corporation subsidiary are expected to continue in the third quarter as well, as both internal and external demand for recycled metals remain strong."

South Korean import prices of plat and rebar rise

Chinese carbon steel plate and rebar prices continue to rise.

As per report Tianjin Steel has offered its heavy plate price at USD 1,165 per tonne for August shipment to South Korea. Meanwhile, the quote price of ship plate has smashed over USD 1,300 per tonne.

In addition, the import price of rebar has broken a barrier of USD 1,000 per tonne. It is expected that the price in September will soar higher due to a combination of tight supply and strong demand.

(Sourced from YIEH.com)

CAP submits EIS for 300MW power plant in region IV - Report

BNamericas reported that Chilean integrated iron and steel group CAP submitted an EIS to environmental authorities for a USD 460 million project to build a 300MW thermoelectric plant in region IV.

CAP in a report to environmental regulator Conama statement said that the plant is to be located in the community of La Higuera and will be connected to Chile's central grid. CAP also said the plant would have two turbine generators each with a 150MW capacity.

The group's iron ore division, CMP has assets in region IV. The division supplies CAP's steelmaking and sold 1.67 million tonne of iron ore in this year's first quarter up by 21% YoY

CAP's steel sales, from the Huachipato plant in region VIII, totaled 352,656 tonnes in Q1 for up by 17.2% YoY. As a group CAP generated USD 61.3 million in profit for Q1.

US DOC completes AD review on HR from Thailand

The Department of Commerce has conducted an administrative review of the antidumping duty order on certain hot rolled carbon steel flat products from Thailand produced and or exported by G Steel Public Company Limited. The period of review is November 1st 2005 through October 31st 2006.

The Commerce department said that based on our analysis of comments received, we have made certain adjustments and clerical error corrections for these final results which change the margin. This administrative review also covers Nakornthai Strip Mill Public Co Ltd an exporter that did not have any US sales or shipments during the period of review and for which the Department is rescinding this review.

The products covered by this antidumping duty order are certain hot rolled carbon steel flat products of a rectangular shape, of a width of 0.5 inch or greater, neither clad, plated, nor coated with metal and whether or not painted, varnished or coated with plastics or other non metallic substances, in coils (whether or not in successively superimposed layers), regardless of thickness, and in straight lengths, of a thickness of less than 4.75 mm and of a width measuring at least 10 times the thickness. Universal mill plate (ie flat rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm, but not exceeding 1250 mm and of a thickness of not less than 4.0 mm not in coils and without patterns in relief) of a thickness not less than 4.0 mm is not included within the scope of this order.

Tung Ho Steel pays more for Japan H2 scrap

Taiwan Tung Ho Steel has purchased Japan H2 scrap priced at USD 682 per tonne CNF for 5,000 tonnes for June to July shipments.

The FOB price for this order is JPY 67,000 per tonne and the shipping cost is about USD 50 per tonne. Comparing this order price with Japan’s exporting H2 scrap price to South Korea, Tung Ho's purchasing price has risen by about JPY 1,000 per tonne.

Under the circumstances of a weakening exchange rate between the Japanese Yen and the US dollar, Japan scrap traders have continued dealing with Taiwan mills for H2 scrap business.

(Sourced from YIEH.com)

Higher ferrous scrap price in Osaka

JMB reported that ferrous scrap market price increases again around Osaka after the slump due to flat purchase price by Tokyo Steel Manufacturing.

The demand is expected to keep firm in June and electric furnace steel makers increase purchase price.

Grupo Mexico offers plans to pay off Asarco claims

Reuters reported that Grupo Mexico would put forward up to USD 4.1 billion to payoff claims against its bankrupt copper mining subsidiary Asarco LLC.

Under the proposal made by a Grupo Mexico attorney in federal bankruptcy court at Corpus Christi in Texas, the company would put up USD 2.7 billion, use USD 1 billion Asarco has on hand and then put in a further USD 440 million, if needed.

An Asarco board member said that he would ask the full board to evaluate the new proposal. The proposal puts numbers on what Grupo Mexico's promises for a full recovery for environmental and creditor claims against its indirect subsidiary Asarco.

The proposal could exceed by USD 500 million the USD 2.6 billion winning bid placed on May 30 by Sterlite Industries Ltd an affiliate of London listed Vedanta Resources Plc for Asarco's working assets.

Asarco board member Mr H Malcolm Lovett Jr said the directors needed to evaluate Grupo Mexico's proposal. He said that "I think it is important we have a board meeting and have our advisers discuss this.”

Mr Richard Schmidt federal bankruptcy Judge said that it is considering whether to authorize a USD 52 million breakup fee Sterlite wants available before it spends up to seven months hammering out a buyout of Asarco's assets.

Grupo Mexico opposes the breakup fee as it battles to win control of it subsidiary, which it lost board control over when the copper miner filed for bankruptcy in 2005.

Brazilian slab exports in 5 months up by 62% YoY

According to the Brazilian ministry of foreign trade data, Brazilian slab exports rose by 62% YoY to 2 million tonnes in January to May 2008 as compared to January to May 2007

The foreign trade data showed that Brazil exported around 352,000 tonnes in May 2008. Thailand is the first biggest destination with around 72,000 tonnes and shipments to South Korea were some 70,000 tonnes.

(Sourced from YIEH.com)

Maersk to acquire Teekay Corporation

Teekay Corporation and AP Møller Maersk announced an agreement whereby AP Moller Maersk has agreed to acquire Teekay Corporation's 50% share in Swift Tankers Management. This includes taking over Teekay Corporation's portfolio of 13 intermediate vessels all of which are time chartered from a number of owners and thereby taking over Teekay Corporation's activities in the Intermediates market.

Swift Tankers operates 24 intermediate product and chemical tankers, from its primary location in Copenhagen as well as a subsidiary office at Stavanger in Norway.

Mr Kristian V Morch group senior vice president of A P Moller Maersk said that "In the day to day operations there will be no changes to our customers and we look forward to continuing to service the markets with attention on a safe and reliable performance."

Mr Bruce Chan president of Teekay Tanker Services said that 'We are pleased to see that Swift Tankers has got off to a good start. We have however decided to move our focus away from the intermediate segment to fully concentrate on Teekay's core activities within the larger products and crude tanker markets.”

The transaction, which is subject to regulatory approvals will be effective as of July 1st 2008.

Barge recovery operations begin on Ohio River

Business First of Louisville reported that representatives of River Salvage Co Inc have begun the process of recovering two Ingram barges that sank last Friday in the Ohio River near downtown Louisville.

As per report about 7 AM Thursday, the Crescent based company initiated efforts to raise the barges, which were carrying iron ore. They sank to the bottom of the river after breaking loose from their rigging.

Coast Guard Lt General John Adkins said that the Coast Guard is continuing to investigate the cause of the wreck. Mr Adkins added that the Ohio River near Louisville will remain open during the recovery process although it might be necessary to halt river traffic at different intervals.

Mr W Scott Noble senior vice president of shore based operations and service for Nashville in Tennessee based Ingram Barge Co said that the depth of the water and speed the barges were traveling might have been factors in the accident.

SSAB completes transaction of IPSCO Tubulars

All closing conditions with respect to SSAB's sale of Division IPSCO's tubular operations have been fulfilled. The closing of the tubular operations sale has thereby occurred, effective upon June 12th 2008.

In connection therewith, Mr David Britten will take over as head of the North America Division, while Mr John Tulloch leaves the company upon retirement.

South African bank suggests 6% power tariff rise

Reuters cited Mr Tito Mboweni central bank governor of South Africa's as saying that a 6% rise in electricity tariffs would be reasonable and anything above that would stoke inflation.

Mr Mboweni told CNBC Africa in an interview that "Our view is that whatever level of increase in the tariffs is granted should not put undue pressure on inflation. My preference obviously might not make business sense to Eskom but electricity prices must not be adjusted more than 6 percent per annum.”

He added that "Six percent would be reasonable. Clearly what they are asking is so far removed from 6% that the impact on inflation would be great."

The National Energy Regulator of South Africa is considering a proposal by state run power utility Eskom to sharply raise electricity tariffs to fund a ZAR 350 billion (USD 43.56 billion) expansion.

South Africa is facing an electricity shortage and needs new power plants to come on line to boost supply.

Japanese merchant bar shipments to drop

According to the Non Integrated Steel Producers Association, Japanese merchant bar shipments are expected to reach 8.53 million tonnes in 2008 down by 18.6% YoY.

The Association said that for the usage of construction, the output is expected to be 6.55 million tonnes down by 21.8% YoY. It added that for public projects usage, the output is expected to total 1.50 million tonnes down by 4% YoY.

(Sourced from YIEH.com)

Global crude oil production dropped in 2007 - BP Plc

BP Plc in its annual Statistical Review of World Energy said that global oil production fell for the first time in five years in 2007 and reserves also declined as prices rose to records.

BP Plc said that production of crude oil dropped 0.2% to 81.533 million barrels a day last year from 81.659 million barrels a day in 2006. Proved reserves were 1,237.9 billion barrels at the end of 2007 compared with a revised total of 1,239.5 billion barrels for 2006.

It said that crude oil prices have doubled in the last year as demand from China and India jumped and global production stagnated. That's fanning inflation and slowing global economic growth as manufacturers pass on higher costs and consumers are forced to spend more on fuel.

Mr Tony Hayward CEO of BP Plc said that “The defining feature of global energy markets remains high and volatile prices, reflecting a tight balance of supply and demand. These have put issues such as energy security and alternative energies at the forefront of the political agenda worldwide.''

According to BP data, oil reached a record USD 139.12 on June 6 in New York and prices have been rising for more than six years, the longest period on record.

Flagging supply from regions including the North Sea and Mexico has lent support to the theory that world oil output has peaked, a view held by analysts including Mr Matthew Simmons chairman of investment bank Simmons & Co International and investor Boone Pickens of Dallas based BP Capital LLC. Others, including BP's Hayward have said production will keep rising.

BP's review said that global oil consumption rose by 1.1% to 85.22 million barrels a day last year. In China, the world's second largest consumer, demand rose 4.1% to 7.855 million barrels a day.

Pakistan calls for expansion of Pakistan Steel Mills

APP quoted Mr Mian Manzoor Ahmad Wattoo advisor to Prime Minister and minister for industries & production as saying that expansion in capacity is required to make Pakistan Steel Mills more economic and financially viable and to meet the increasing demand of steel in Pakistan.

Mr Wattoo said that an expansion plan was underway and by the end of current year the capacity would increase to 1.3 million tonnes per annum from the current 1 million tonnes per annum.

He added that "Under the second phase of the expansion plan by end of 2010, the capacity will increase to 1.5 million tonnes per annum. After the completion of third phase in 2012, the total capacity of PSM will reach to the figure of 3 million tonnes per annum."

Mr Wattoo instructed the management of PSM to increase its dependence on the local ran material in its expansion plans and other routine operations. He further said that there were many iron ore and coal reserves in different parts of the country which should be utilized to save the foreign exchange and decrease dependence on imported raw material.

Union Cement considering using coal as fuel

Khaleej Times reported that UAE based Union Cement Company is considering using coal to fire one of its kilns instead of natural gas or heavy fuel.

Union Cement confirmed that its board had approved presenting a feasibility study on the switch of one of its kilns.

It may be noted that cement makers in UAE are turning to imported coal as gas is scarce and demand for cement remains high as the building boom continues.

Pakistan Workers Union wins PS referendum

The News reported that Pakistan People’s Party backed Pakistan Steel People’s Workers Union, also known as Pakistan Workers Union, has scored a clear victory in the referendum for the Pakistan Steel’s collective bargaining agent. The referendum was held on June 12th 2008 for the first time in 11 years.

As per report, the contest for collective bargaining agent referendum between the Muttahida Qaumi Movement backed United Workers Front and the PWU was one sided because the latter had the support of all other labor unions registered for the referendum.

The winning union bagged approximately 4,065 votes whereas their only opponent could garner only 654 votes out of a total of 5,321 registered votes. Some 64 votes were cast for other candidates, who did not step down in time in favor of PWU leader Mr Shamshad Qureshi.

The referendum was held peacefully and candidates belonging to different unions raised slogans in favor of their respective candidates. The supporters of PASLU, who had won 2 referenda in the past, also rallied for the PWU and their workers were present at the PWU camps.

Interestingly, the charter of demands of both the PWU and UWF was quite similar and both unions focused on increments in basic salary, sons’ quota, post retirement medical facilities, pension schemes, promotion of employees, residential settlements of employees, and the appointment of daily wage employees as part of the permanent workforce. The PWU additionally demanded plant maintenance, and taking the employees directly under the PS payroll system rather than paying them through third party agents. The PWU demanded that the third party agent, the Al Hadeed Trust, be discontinued permanently.

UAE cement firms expected to perform well in 2008 and 2009

MEED reported that cement firms in United Arab Emirates are expected to perform well in 2008 and 2009 because of the number of infrastructure and real estate projects that are under way or have been announced. As per report, the building boom in the emirates, particularly in Dubai and Ras Al Khaimah, will ensure a sustained growth in future revenues.

Going forward, it is expected that demand for cement will increase by 2011 as firms and governments utilize their capital to fund construction projects.

In UAE, cement prices have risen on account of the real estate boom and the ministry of economy has signed an agreement with the cement factories and producers group to increase production and cap the price of cement in an attempt to control domestic inflation.

Fosun and Aoxin merging with Tianjin Steel

It is reported that Shanghai Fosun High Technology Company Ltd and Tianjin Auxin Investment Co have joined Tianjin Iron & Steel Company Ltd in regrouping and building up a new state controlled steel group with multiple investors. The cooperation and regrouping will play an important role in promoting growth of Tianjin's steel industry.

The regrouped Tianjin Steel Group boasts of CNY 8 billion registered capital, with former Tianjin Iron & Steel accounting for CNY 3.88 billion up by 48.5%, Fosun for CNY 3.8 billion up by 47.5% and Tianjin Auxin for CNY 320 million up by 4% respectively. This is the largest industrial regrouping project in Tianjin this year.

Shanghai Fosun High Technology Company Ltd is one of China's largest and fastest growing private groups, Tianjin Iron & Steel Co an old state owned enterprise with iron, steel and product productions of over 4 million tonnes respectively and Tianjin Auxin is also private owned with strong competitiveness in marketing.

WISCO investing in Pingdingshan Coal

It is reported that WISCO will invest CNY 1.5 billion in Pingdingshan Coal Company and Pingdingshan Coal Company will also invest almost CNY 1.5 billion in Wuhan Steel Group Coking Company which is a subsidiary company of WISCO.

After the investment, WISCO will account for 11.55% among the total registered capital of Pingdingshan Coal Company. The registered capital of Pingdingshan Coal will reach CNY 7.8 billion after the capital increasing.

Pingdingshan Coal will hold 50% among the total capitals in Wuhan Steel Group Coking after the investment finishing.

Pingdingshan Coal can submit the written payment notice to WISCO within 3 workdays after the agreement took effective according to the agreement they signed. WISCO will be asked to pay one-off to Pingdingshan Coal according to the requirements.

Steel mills in North China to halt production during Olympics

It is reported that Chinese steel prices rally would gain further strength from the possible production halts in provinces surrounding Beijing in addition to spiking raw materials costs in the months ahead.

China is likely to implement strict environmental protection policy during the Olympics, therefore steel mills in North China might be required to halt or slash production.

About 23 steel mills in Tangshan, Hebei province have been ordered to control air and water pollution by June 15th 2008 prior to the start of the Olympic Games in August. Failure to do so could result in closure the mills has been warned.

Executive from a Hangzhou based steel mill told Securities Daily that the company is upbeat about HRC and medium plate price outlook on back of production halt at mills along Beijing-Shenyang Railway during the session of the Games. That would lead to tight supply in the market.

Some market analysts said steel output disruption due to Beijing Olympics may be more of an excuse for market speculation since the real impact may not be as severe as expected.

Pansteel maintains production in May despite earthquake

According to the related statistics, although suffering a great loss because of Wenchuan Earthquake, Pangang Group remained keeping stable and balance production in May. Pangang Group headquarter units overcame the impact of the earthquake, the main products production was completed well.

The statistics shows that in May, Pangang Group totally produced 665,600 tonnes of pig iron, 649,500 tonnes of converter steel, 243,500 tonnes of hot rolled plate, 110,700 tonnes of cold rolled coil, 156,600 tonnes of rail girder material, 118 tonnes of V2O5, 3,511 tonnes of titanium whiting.

At present, the company’s production is stable, the New vanadium Steel Company, Mining Company, Titanium Company which were under Pangang Group keep good production situation, some other companies also resumed production, Panchanggang which was affected most serious also actively resume production.

Billet price weakens in Tangshan

It is reported that billet market appears to be slack amid mixed offer prices in Tangshan. And mainstream transaction price falls back with dull demand since traders are mainly sitting on the fence.

As per report the CNY 200 per tonne to CNY 300 per tonne coke price rally at the month start has helped underpin billet price that still failed to drive it up.

Industry insiders noted that steel mills intend to increase billet price in light of the continuous rising coke and pig iron price, but the weakening down stream finished products market like construction steel, strip and sections are weighing on the price rise.

Billet steel price has dropped by CNY 50 per tonne leaving latest price at CNY 5400 per tonne for common carbon 150 billet, CNY 5450 per tonne for rectangle 165 billet and CNY 5550 per tonne for low alloy billet.

(Sourced from MySteel.net)

Jinxi Steel to build coking plant by CNY 1.34 billion

China Eastern Group announced that its unit Jinxi Steel Company will invest CNY 1.34 billion to build coking plant with production capacity of 2.2 million tonnes.

The company said that it had signed the general contract with China Metallurgical Construction Corporation on May 21st and the construction period is 26 months.

China Eastern Group expressed that Jinxi Steel currently sources coke from external procurement and captive coke plant would reduce the steel production costs.

It is also learned that on June 5th, Mr Shen Xiaoling the board chairman of China Eastern Group and Jinxi Steel signed a joint venture agreement; Jinxi Steel will transfer 49% stock right to Shen Xiaoling, and also award related mining assets to Jinxi Mining. At present, China Eastern Group holds 97.6% stock rights of Jinxi Steel.

Baosteel update on alloy plate strip project

It is reported that Baosteel held the first preparatory and promoting meeting for alloy plate and strip project recently, requiring all departments strengthening cooperation and strongly pushing forward the production preparations. Mr Cui Jian deputy GM of Baosteel and Mr Pang yuan took part in the conference.

Special metal and alloy plate strip is one significant construction project of Baosteel’s “11th five plan”. At present, the main project of Special Steel Branch and research institute have confirmed 32 scientific researches as for independent technical integration and products development of alloy plate and strip project. The first group of technology, equipments and workshop practice of stall are in the process.

In the next phase, Baosteel will send more managers and technical experts and provide all around support for the information management system, professional skill preparation and working scheme detailing of the project so as to endure it to put into production on schedule.

Chinese H beam prices remain stable

It is reported that China's market price of H beam and channel beam prices remained stable.

The price of H beam with 400*200 from Laisteel is currently at CNY 6,550 per tonne and that of H beam with 450*200 from Masteel is at CNY 6,400 per tonne.

Regarding the channel beam, price of 8 to 16# from Liusteel is at CNY 5,800 per tonne and the 20# from Masteel is at CNY 5,760 per tonne.

Baosteel to construct PPGI houses in Dujiangyan

According to the arrangement by local government of Dujiangyan, the project of constructing 10,000 square meters of buildings of color coated steel sheet in Dujiangyan for Bureau 10 by SinoHydro Corporation began recently and the project is donated by Baosteel.

To help the company recover from the disaster, Baosteel decided to construct 10,000 square meters of buildings of color coated steel sheet for Bureau 10. When the project began, Baosteel has been working on the design according the general plan of Dujiangyan. Now the project is moving on smoothly.

As the largest hydropower Construction Company in China, Sinohydro Corporation ranks the 89th among the top 500 companies in China, and the 51st among the world’s major contactors of large projects. The earthquake in Wenchuan severely damaged the subsidiaries of Sinohydro Corporation in Sichuan Province, in particular the Bureau 10.

Shandong Province raises power prices for peak hours

Bloomberg reported that China's eastern province of Shandong increased power prices for industrial customers during periods of peak demand to reduce use at these times and avert shortages.

The Shandong government said that industrial users will be charged 70% more than the provincial benchmark for power between 10:30 AM and 11:30 AM and between 7 PM and 9 PM. The power price increases don't apply to residential or agricultural users.

Mr Donovan Huang an analyst at Nomura Securities Ltd said China is forecast to have its sixth year of power shortages because producers don't have capacity to meet demand at peak times. Shandong's higher prices may mean customers switch to consuming electricity at alternative times rather than a boost to producers' earnings.

He said “This is more a demand-side management move, and won't facilitate on grid tariff increment for the independent power producers. It could help to reduce peak load and shift some demand to the low and normal periods.''

The Shandong government said in the statement the policy took effect on June 10th 2008. The province has eight peak hours when prices are 60% above the central government set benchmark. The new high peak periods when prices are 70% above the benchmark fall within these hours.

The provincial government said during off peak periods power prices are 60% below the benchmark.

Sinosteel plan to launch Shanghai IPO

China Knowledge reported that Sinosteel Corp, one of the largest steelmakers in China plans to launch an initial public offering in Shanghai by the end of this year.

According to the senior official the steel maker expects to raise CNY 10 billion to CNY 20 billion through the share offering, adding that the company has established a holding company for the IPO.


The official said the proceeds from this share sale will not be used as investment fund to acquire Australia's iron ore manufacturer Midwest Corp Ltd.

Earlier reports said the Chinese metal trader raised its stake in Midwest close to 45%.

COSCO shares sink by more than 7%

Reuters reported that shares in China COSCO, the country's largest shipping firm sank more than 7% after the global benchmark freight index plunged its most ever in a single day hit by expectations of slowing Chinese demand.

Analysts said expectations were mounting that China, the world's largest importer of iron ore could need less of the material this year as its economy slows prompting Beijing to try to curtail bulging inventories.

Recently Beijing ordered excess iron ore stocks cleared from ports across the country. The nation's economic planner said inventories on May 15 hit a record 79.22 million tonnes against slightly more than half of that in December. Its shares had recovered slightly by late morning to stand 6.5% lower.

JP Morgan's Mr Johnson Leung said "We expect stronger volatility in the physical market this summer because high iron ore stockpiles in China are due for a correction and some Chinese steel mills may be closed for the Olympics."

China COSCO operates the world's fifth largest container fleet but it bought its state parent's giant dry bulk shipping business for USD 5 billion in 2007.

Jiangsu Golden Horse Steel Ball reports Q1 results of 2008

China Jiangsu Golden Horse Steel Ball Inc a leading Chinese manufacturer and supplier of ball bearings, has announced unaudited consolidated operating results for the three month period ended March 31st 2008.

Highlights for Q1 2008:
1. The Company recorded revenues of $6.30 million in Q1 2008 or approximately 48.79% of the revenues recorded in the year ended December 31st 2007.
2. The Company recorded a gross profit of USD 1.15 million in Q1 2008 and the Gross Profit Margin increased by 39.72% from 13.04% during FY 2007 to 18.22% in Q1 2008.
3. The Company recorded an operating profit of USD 0.894 million in Q1 2008 and the Operating Profit Margin increased by 121.53% from 6.41% during FY 2007 to 14.20% in Q1 2008.
7. The Company recorded net income after taxes of USD 0.609 million in Q1 2008 and the Return on Assets increased by 13.10 % from 8.55% during FY 2007 to 9.67% in Q1 2008.
8. During FY 2007, the Company recorded revenues of USD 12.91 million, gross margin of USD 1.68 million, operating income of USD 0.827 million and net income after taxes of USD 1.1 million.

The released added that the increase in revenue is attributable to growing global demand for steel bearings as the Company had positive growth in sales from its existing customer base and was able to obtain new contracts. The Company increased prices of the steel bearings to offset the higher direct material costs of steel as the price for raw material steel products continues to increase as a result of higher global demand. In addition, the Company has started to realize the dramatic increase in gross profit margin as the result of the capital investments made in 2007 to improve its offering of bearing products and modernization of equipment and machinery, including the opening on the new plant in Xuyi.

Golden Horse along with its affiliates and controlled entities is one of the top five manufacturers of steel ball bearings in China. The Company produces over three billion ball bearings annually of various specifications along with its development of over 15 new products, such as stainless steel balls, aluminum balls, and ceramics balls. In addition, the Company continues to export its products to over twenty countries worldwide including the USA, Japan, Brazil, India and Germany.

Magang plans 16 key projects for 2008

It is reported that Magang has planned 16 key projects with an investment totaled CNY 8.47 billion for 2008.

As per report, it has finished investment of CNY 4.343 billion from January to May 2008 which is 51.28% of the planned CAPEX for the year.

Among these projects, silicon steel production line now has been completed and commenced operation whereas the Heshangqiao Iron Mine project is underway.

Jinan profit in 2008 to go up by more than 50% YoY

It is reported that Jinan Iron and Steel Company issued the 2008 metaphase outstanding achievements announcement on June 12th, through preliminary estimation, the net profit of the first half of 2008 is expected to up by more than 50% YoY.

As per report Jinan Iron and Steel Company 2007 net profit was CNY 672143517.4 or CNY 0.5 per share.

The release added that the increase of the guidance is based on two factors. The first is the company vigorously promoted the energy saving and emission reduction and the second is the steel products prices have gone up substantially in the first half of the year.

Power plants in China may increase tariff

It is reported that the relentless rise in energy prices, particularly coal, is pushing domestic power companies to a corner with no obvious way out other than an increase in electricity charges which are controlled by the government.

Some economists have predicted a power tariff rise will have a marginal impact on inflation but nobody expects any changes before the consumer price index shows signs of leveling off or decline. To be sure, the major power companies are still operating in the black but they say their profit margins have been squeezed to uncomfortable levels.

These economic realities look particularly harsh to many domestic power enterprises used to operating at profit margins that were considerably wider than the international averages, largely because of the plentiful supply of coal at stable prices. Electricity rates on the mainland have always been on the low side compared with other emerging economies in Asia.

The jump in coal prices in recent months has put mounting pressure on power companies. The FOB price quoted at Qinhuangdao port, one of the seven major ports for coal delivery was CNY 670 per tonne up by 21.8% from December and 34% from the beginning of 2007.

Experts and analysts say there is still plenty of room for domestic coal prices to rise in the coming months as the demand is increasing much faster than supply. Coal output is estimated to rise by 200 million tons this year, or only about 8 percent of the aggregate consumption in 2007.

Mr Wang Shuai an analyst at Orient Securities on coal industry in Shanghai said "To ensure production safety, local governments have closed quite a number of small illegal mines, which has also brought down the output, widened the demand-supply gap and pushed up the prices. Output of small local mines accounted for some 40 percent of the total."

0fficials from the National Development and Reform Commission have denied the suggestion that the closure of small mines has contributed to the coal price surge.

JRay forms JV in China

It is reported that Houston based energy infrastructure engineering and construction company, J Ray McDermott has formed McDermott Wuchuan a joint venture with a subsidiary of state owned China Shipbuilding Industry Corporation.

J Ray McDermott said Qingdao McDermott Wuchuan Offshore Engineering Company plans to establish a new 111 acre fabrication facility at HaiXiWan in Qingdao, Shandong. McDermott Wuchuan’s new facility is initially expected to permit annual throughput of approximately 33,000 tonnes, expending approximately 6 million man hours per year. The facility will include structural and pipe shops, blasting and painting facilities, module assembly buildings, covered warehousing and lay down areas.

Mr Bob Deason president & CEO of J Ray’s said FPSOs represent one of the fastest growing offshore construction segments in our industry today. China already commands a significant share of the FPSO market and has developed a proven project track record. Establishing this new joint venture focusing on FPSOs will add a critical component to J. Ray’s comprehensive business strategy seafloor to shore.

The company said in a statement highlighting safety, standards and experience that McDermott Wuchuan is planned to complement each partner’s respective strengths. J. Ray’s integrated Engineering, Procurement, Construction and Installation capabilities. According to the company, CSIC’s extensive market penetration, ability to obtain hulls and access to a large, skilled workforce will position McDermott Wuchuan in the FPSO fabrication market worldwide.

Mr Asan Sofian GM of McDermott Wuchuan said that “The primary focus of McDermott Wuchuan will be on FPSO projects, from concept to commissioning. Our initial pursuit will be FPSO topside-module fabrication, and as we develop the infrastructure at the yard we will be able to carry out topsides to hull integration and commissioning at the quayside. Our secondary focus will be on constructing integrated decks, jackets, Spar hulls, and modules for the onshore and offshore energy industry.”

Chinese PPI accelerates to 8.2% YoY in May

It is reported that China producer price inflation rose at the fastest pace in more than three years last month. The National Bureau of Statistics said the Producer Price Index, the main gauge of factory gate inflation rose 8.2% YoY in May from a year earlier up by 8.1% in April and 8% in March.

Crude oil factory gate prices were the fastest growing sector with 30.9% last month slower than April's 37.9% followed by steel prices at 26.7% and coal prices at 24.1%.

Reconstruction work after the May 12 earthquake in Sichuan may stoke price rises for raw materials, adding to increased oil and wage costs.

Bureau said for the first five months, producer prices climbed 7.4% from a year earlier.

China is trying to cool inflation while avoiding a slump in the world's fastest-growing major economy as global demand for its products fade. Surging raw material prices and a new labor law have added to company costs that may be passed on to consumers.

Italian terminals trying to lure China investment

According to an Italian trade delegation, which recently visited the China Transpo 2008 conference organized by the Ministry of Transport in Beijing, several China companies have expressed an interest in investing in port projects in Italy.

Mr Giancarlo Gabetto MD of Slala which promotes the logistics industry in northwest Italy said on his return to Genoa from the conference said that "Sinotrans is just one of the shipping companies interested in investing in the Italian port and logistics sector.''

Mr Luigi Merlo recently appointed president of the Genoa Port Authority said the port is wooing investment from overseas to expand its terminals. He said that "My plan is to encourage integration between domestic operators and global shipping players. Investment from China port operators and shipping lines is welcome."

Mr Merlo called for consolidation of port authorities to help streamline operations at Italian ports. He said "There are too many port authorities in our country. The North Tyrrhenian ports Genoa, Savona, La Spezia and Leghorn and the North Adriatic ports Trieste, Venice and Monfalcone should co ordinate to have efficient transshipment hubs in the country. Reforms are needed specifying the role of port authorities, to prevent haphazard port development.''

He added that last year, Genoa and Gioia Tauro the leader among Mediterranean transshipments hubs showed good performance, but still growth was much slower in comparison, for instance, with Spanish ports. Mr Merlo said "Italian ports should aim at financial autonomy. Revenues and taxes should take into account more the needs of terminals and infrastructural requirements."

Chinese rebar and wire rod export prices further increase

It is reported that Chinese construction steel prices are still in a dull period and downward correction continue.

On Shanghai market, HRB335 20mm rebar is being quoted at CNY 5340 per tonne to CNY 5350 per tonne, HRB400 at CNY 5630 per tonne to CNY 5660 per tonne down by CNY 70 per tonne to CNY 100 per tonne from last week. Price for commercial wire rod is at CNY 5750 per tonne that for hi speed material is tagged at CNY 6080 per tonne to CNY 6090 per tonne down by CNY 20 per tonne to CNY 30 per tonne

Export price for low carbon wire rod has reached USD 120 per tonne to USD 1130 per tonne FOB and that for high carbon goes at around USD 1170 per tonne FOB.

Export offer for rebar with boron is being quoted at around USD 1000 per tonne FOB and that for rebar without boron is at USD 1070 per tonne to USD1100 per tonne FOB. But there is said to be not much transaction at the updated levels, especially for shipments to South East Asia

East China based trader said "The hot destination for Chinese construction steel exports is Middle East, where enjoy the highest market price in the world. Rebar price has reached about USD 1350 per tonne CFR in local market in Dubai, where only certified products are allowed to get in. As far as our knowledge only Shagang's rebar could enter the local market of Dubai."

China HRC export prices stay firm

It is reported that Chinese HRC exports price is at the current high level although prices on international market are still on the rise.

Domestic HRC prices are largely unchanged despite remarkable increase in ex works price by major producers. On Shanghai market, price for commercial 4.75mm to 12mm*1500mm HRC is at CNY 5850 per tonne and that for 1800mm wide material remains at CNY 6200 per tonne. Q235 2.5mm HRC goes at CNY 6050 per tonne.

Taking Shanghai price for commodity grade 4.75mm to 12mm HRC in 1500mm width as benchmark, there would not be room for further increase until it exceeds CNY 6000 per tonne. Export offers for commercial 4.75mm to 12mm HRC are prevailing at USD 1020 per tonne to USD 1030 per tonne FOB this week. There is an extra of USD 10 per tonne for S235JR and another USD 20 per tonne to USD 30 per tonne for those with required silicon content

By comparison, a North East China based tier one steel producers has shot up quotation to USD 1100 per tonne FOB for commodity grade HRC. Most exporters are hesitant on further business since there is not much margin over that of Chinese HRC when delivered to overseas countries.

Evraz completes acquisition of IPSCO Canada

Evraz Group S.A has announced that it has completed its acquisition of IPSCO’s Canadian plate and pipe business.

Evraz announced the acquisition of the IPSCO Tubulars business from SSAB in March 2008. After a back to back transaction with OAO TMK that consisted of an on sale of the acquired IPSCO’s US businesses to TMK for USD 1.25 billion, the total cash consideration paid by Evraz for the assets amounted approximately to USD 2.9 billion. The original amount was adjusted to include the acquisition of a cut to length facility in Surrey, BC as well as certain IPSCO Canada working capital adjustment.

In addition, Evraz expects to sell the remaining acquired US businesses of IPSCO Tubulars to TMK for approximately USD 0.5 billion in 2009. As a result of these transactions, the net cost of the acquisition for Evraz will make up USD 2.4 billion.

Former IPSCO’s Canadian assets including the Regina Steel mill as well as plate and pipe production capacities in Regina, Calgary and Red Deer are now part of Evraz’s North American operations.

The transaction was financed in part out of the proceeds of the recent Eurobond issue.

Mechel announces new appointments

Mechel OAO, one of the leading Russian mining and metals companies, announced three appointments to executive positions at its subsidiaries.

Mr Vladimir Dronov was appointed GD of Mechel's Yakutugol OJSHC coal mining subsidiary succeeding Mr Igor Khafizov, who has become the CEO of Mechel Mining OAO a new Mechel’s subsidiary founded in April 2008.

Mr Dronov was director for Technical Policy at Yakutugol OJSHC since 2007. From 2006 to 2007 he was deputy GD for Long Term Business Development and Technical Policy of Yakutugol OJSHC. He was director of Yakutugol’s Neryungri Open Pit Mine from 2001 to 2006 and the Head of the Production Directorate of Yakutugol State Unitary Enterprise’s Office from 1997 to 2001. From 1979 to 1997 Mr Dronov held various positions at Yakutugol SUE’s Neryungri Open Pit Mine, his most recent position there being Deputy Director for Production. He was overman of Excavation Special Constriction Directorate No 16 of the Yakutuglestroy complex of enterprises in 1978-1979 and engineer of Rosdorstroymaterialy complex of enterprises in Tula, Russia in 1977 to 1978.

Prior to his appointment as CEO of Mechel Mining OAO, Mr. Khafizov was General Director at Yakutugol OJSH since December 2007. Previously, Mr Khafizov held positions in Mechel’s Southern Kuzbass OAO coal mining subsidiary as Managing Director from February 2006 to May 2008; Mechel’s Korshunov Mining Plant OAO iron ore mining subsidiary as Managing Director from January 2006 to February 2006 and Mechel’s Korshunov Mining Plant OAO iron ore mining subsidiary as its General Director from 2003 to 2006. From 1992 to 2003, he held various positions at Mechel’s Korshunov Mining Plant. Mr Khafizov graduated from Urals Mining Institute with a degree in Mining Engineer. He is a recipient of the “Miner of Russia” gold badge.

On May 28th 2008, Mechel OAO registered its newly founded Mechel Ferroalloys Management Company OOO subsidiary, which will be engaged in the operational management of Mechel’s ferroalloy assets. Mechel’s Chief Operating Officer, Mr Alexey Ivanushkin was appointed Chief Executive Officer of this subsidiary.

Mr Ivanushkin has been Mechel’s Chief Operating Officer since 2004. From March 2003 to January 2004, he was Chief Executive Officer of Mechel Steel Group OAO. He has been Chairman of the Board of Directors at Mechel’s Chelyabinsk Metallurgical Plant OAO’s subsidiary since 2002. From 1999 to 2002, Mr. Ivanushkin served as General Director of the Chelyabinsk Metallurgical Plant. From 1993 to 1999, he was Director of the ferrous metals and ferroalloy department of the Moscow office at Glencore International AG. From 1984 to 1992, he worked as an economist with various import-export organizations under the Ministry of Foreign Commerce and the Ministry of Foreign Economic Relations of the Soviet Union.

Zaporizhstal to postpone income distribution issues

It is reported that shareholders of Zaporizhstal decided to postpone income redistribution issues to the EGM of July 30th 2008.Changes to the Board of Directors and Audit Committee were approved. Shareholders also approved a new management structure which will fit new production conditions to be brought in 2008 to 2012 by the USD 1.7 billion to 2 billion modernization and reconstruction program of ZPST. The plant intends to attract bank loans and conclude contracts with Siemens to buy all needed equipment.

Currently, ZPST produces 100% of its steel through the open hearth method which is inefficient, resource and energy intensive. The modernization program aims at a principal change of this old steel making and rolling methods. Two new basic oxygen shops with two continuous casting machines will replace open heart furnaces. ZPST’s steel making capacities will grow to 5.5 million tonnes up by 20% by 2012 and no drop of output is expected when new facilities will replace the old ones.

Gas consumption will be reduced by 200 million square meters per year and iron consumption by 110 kilogram per tonne of steel. Moreover, new continuous casting hot rolling mill will allow ZPST substantially expanding its product line and improving the quality of its rolled products. We believe the news is positive for the plant.

(Sourced Millennium capital)

Ukraine gas price hikes still under discussion

RIA Novosti quoted Ukraine's national oil and Gas Company Naftogaz as saying that plans to raise the price of natural gas deliveries to Ukraine are still under discussion.

Mr Valentin Zemlyansky Company spokesman said "It is too early to draw conclusions because talks between Gazprom and Ukraine's Naftogaz are ongoing. The statement by the Russian Foreign Ministry cannot be currently considered as anything but political."

Mr Zemlyansky said the price would depend on many factors, including tariffs for the transit of Russian gas through Ukraine to Europe. He said that "Therefore, a final decision will be made during the final round of talks which started several weeks ago."

Under a contract signed with Gazprom in March, the Russian energy giant committed itself to supplying Ukraine with at least 49.8 billion cubic meters of Central Asian gas at USD 179.5 per 1,000 cubic meters from March until December 2008.

Maire Tecnimont wins Russia refinery contract

Reuters reported that Italian engineering group Maire Tecnimont SpA has signed an oil refinery construction contract with Russia's Tatneft OAO.

An industrial source said the value of the deal for the first phase of the plant at Nizhnekamsk, Republic of Tatarstan will be determined at the end of construction. However plants of this type are worth about EUR 1 billion.

Mr Fabrizio Di Amato chairman & CEO of Maire Tecnimont SpA said the contract "is a confirmation of Maire Tecnimont's historic presence" in Russia and its interest in growing in the oil and gas sector. He said that "We are finding ourselves facing a wide energy gap that will lead to a massive investment cycle."

He said that his company was involved in building three other plants for Tatneft. He added that first half results have been in line with targets, even slightly better than expected.

Maire Tecnimont had net income last year of EUR 73 million on revenues of EUR 1.98 billion.

Kherson shipyard likely to bag ship repair dock from Libyan firm

Ukrinform reported that a Libyan company, whose name is not disclosed for business reasons, is interested in a speediest signing of a contract for the construction of a ship repair dock at Kherson's Palada state run enterprise.

According to company director Mr Mykola Slutskyi, in the course of the recent talks the Libyans expressed the wish to order at Palada a dock with a capacity of 3,000 tonnes to 5,000 tonnes. The construction of such a facility takes a year and a half.

Agreement on building a repair dock for Libyan customers in Kherson was reached in October 2003 in the course of the visit to Libya by Mr Leonid Kuchma President of Ukraine. Yet, it has not been put into practice so far. Due to this, Libya again raised the question in April 2008 during the visit of President Mr Viktor Yushchenko.

The Palada plant produces ferroconcrete and special docks, pontoons for the construction of hotels and restaurants as well as bays, breakwaters and other floating devices for different purposes. The docks built at Palada are used in Russia, Japan, Korea, Finland, Croatia, Latvia, Estonia, Angola, Vietnam, Nigeria, Algeria and other countries.

Russia to increase oil output after tax cuts-Mr Putin

Reuters cited Mr Vladimir Putin Prime Minister of Russia as saying that Russia, the world’s second largest oil exporter will raise its oil output in the next few years as new tax cuts will allow oil firms to invest more in exploration and production. Mr Putin said “We are sure, in the next few years Russia’s oil output will increase.”

Mr Putin told a news conference in Paris that global markets decided the price of oil and then joked “If Russia could decide on the price of oil we would have given you a good deal.”

France, which hosted Mr Putin on his first foreign visit since becoming prime minister has called on the Group of Eight industrialized nations to act together to restore oil prices to a more “bearable” level. Mr Christine Lagarde French Economy Minister called on oil producing nations to increase their output while Mr Francois Fillon Prime Minister said energy will be at the heart of the agenda of France’s rotating EU presidency, which starts in July.

In its first major policy decision, Mr Putin’s government has approved a number of tax breaks for the oil industry including cuts in the mineral extraction tax and tax holidays for remote Siberian regions where oil is hard and costly to extract.

International oil and gas exhibition opened in Turkmenistan

Kazakhstan Today reported that International exhibition Exploration and Production of Oil Deposits, Extraction, Oil Refining and Petrochemistry has opened recently with participation of the representatives of more than 70 companies from almost 30 countries in the capital of Turkmenistan.

The expositions, located on two floors will tell about achievements of Turkmen oil and gas complex presenting the foreign companies, successfully carrying out development of deposits on Turkmen shelf of the Caspian Sea and carrying out delivery and adjustment and repair works of the equipment.

According to the report thousands of citizens of Turkmenistan, experts and visitors of the country will view the exhibits for three days.

Kazakhstan companies to have export customs duties

Kazakhstan Today cited Mr Askar Balzhanov General Director of JSC Exploration Production KazMunaiGas as saying that the companies delivering oil to domestic market should have export customs duties privileges. He stated his opinion during the session of the council of KazEnergy Association.

Mr A Balzhanov said "We consider that with introduction of export customs duties privileges, the companies should be differentiated and oil companies delivering oil to domestic market should have export customs duties privileges."

He said that "The government needs to hold direct negotiations with subsoil users that at present do not fall under export customs duties privilege category, to increase their royalty rate."

Azovstal to implement new environmental program

It is reported that following the initiative of senior management of Azovstal Plant, a new updated environment protection and improvement program in Mariupol was approved.

As per report following the initiative of Azovstal, the city program was reviewed to take into account cutting-edge practice of modernizing production facilities and improving purification equipment. The new version of the document was approved during a regular session of the city council. Investment projects of Azovstal that make a part of the comprehensive program for modernization and reconstruction of production facilities and provide for a huge environmental effect won a positive feedback from conference delegates.

In 2008, 25 units of Azovstal will implement projects to reduce man caused footprint on the environment. The projects to be realized in the blast furnace workshop alone will cut dust emissions by 700 tonnes per year, CO by 1045.7 tonnes per year and waste generation by 43,300 tonnes per year. The comprehensive program to modernize and reconstruct Azovstal includes installing the latest purification equipment at all metal machines. So called “environmental investments” total around 20% of the overall investments allocated on modernization of production cycles.

The conference was attended by representatives of national ministries and agencies, environmental and R&D institutions, mining and metal businesses of Ukraine, Mariupol city authorities and such well known western companies as ION Blast, TURBOFILTER and Siemens. They all said the conference was held just on time for the domestic mining and metal business.

Gazprom subsidiaries withdrawing petitions to FAS for SUEK

It is reported that Gazprom’s subsidiaries are withdrawing the petitions to the Federal Antimonopoly Service with regard to the acquisition of above 50% one share stake in SUEK.

The uncertainty about the behavior of the electric power and capacity market, the scope of investment programs in the power sector and the development of network infrastructure makes it difficult to provide a precise and consistent evaluation of the company’s market potential. At the same time, the fulfillment of the proposed structural and behavioral requirements for Gazprom and SUEK would considerably hinder the implementation of the company’s projected strategy.

Gazprom and SUEK’s shareholders decided to stop the talks about the power and coal asset merger based on SUEK and to focus on their own strategies in power generation. At the same time, the joint work done to structure the deal and develop the strategy confirms the potential for a coal fired power generation development program to be implemented in Russia.

Taking into account the importance of the tasks in relation to the fuel balance optimization in Russia’s power sector, Gazprom and SUEK entered into a Strategic Partnership Agreement stipulating the coordination of the companies’ actions in the power industry. The Agreement identifies the directions for long term cooperation between the companies including upgrading and construction of new modern coal fired power generating capacity joint investments in coal fired generation, gas substitution and increased coal consumption at power plants, development of innovative projects in coal fired generation and a range of other joint projects.

BP accuses of corporate raid attempt on TNK-BP

RIA Novosti reported that British oil major BP the Russian tycoons owning half of oil ventures TNK-BP are attempting a corporate raid on the company and that the Kremlin is failing to stop them.

Earlier in the day the Russian shareholders in TNK-BP, Russia's third largest oil company said they would start legal proceedings against BP, reportedly over management and strategy issues.

Mr Peter Sutherland chairman of BP said "It is unfortunately a much simpler dispute over control, and perhaps ultimately ownership of the company. He said that this is just a return to the corporate raiding activities that were prevalent in Russia in the 1990s.”

Mr Sutherland said the Russian leadership is standing by and allowing the tycoons to push forward with their takeover attempt. He said that "Prime Minister Mr Putin has referred to such tactics as relics of the 1990s, but unfortunately our partners continue to use them, and the leaders of the country seem unwilling or unable to step in and stop them."

Analysts have suggested the dispute could result in Russia's third-largest oil company being bought up by state-controlled Gazprom or Rosneft as part of the Kremlin's campaign to toughen its grip on the oil and gas sector.

SASSDA proposes standard levy for imports and exports

The Southern African Stainless Steel Development association has proposed to standardize the SASSDA Development Levy on domestic and imported grades at 11c/kg with effect from September 1. Currently, the levy on all domestic grades is 13c/kg except for 3CR12 steel at 10c/kg, and all imported grades, which attract a 13c/kg levy.

Mr Mike Campbell chairperson of SASSDA said that the proposal to change the levy was motivated by SASSDA 's members and was taken on the basis that a further levy would be requested from the importers section of SASSDA.

Mr Michael Campbell MD of SASSDA said that the association now has a procedure for members who do not obey the letter of the law on the import sector, those who cannot follow payment of the levy. Any dispute regarding nonpayment of the levy will be referred to the main committee, which will take the necessary disciplinary steps.

Mr Mike Campbell said that “SASSDA has experienced a volatile year from the 2007 AGM to this year's AGM, held last month, with the nickel price reaching a record high of over USD 53,000 per tonne before crashing to 28,000 per tonne. This led to a massive and unprecedented stainless steel stock crash, with the ultimate effect that growth and apparent consumption was only up 1.1%.”

He said that some materials, such as iron, rose rapidly and that there were also steep price increases for chrome and manganese. He said that the skills dearth has reached critical levels, in areas such as stainless steel welders, pipe fitters and boilermakers. Against this backdrop, SASSDA has appointed a dedicated skills development manager.

PT Inco gains as nickel price rises to three week high

Bloomberg Indonesia’s PT International Nickel Indonesia advanced in Jakarta trading after the price of nickel surged to a three week high, potentially boosting earnings.

International Nickel or Inco said that it added IDR 600 or 10% to IDR 6,600 as of 3:31 PM local time and is set for its highest close since May 22.

Import price of Chrome ore at Tianjin port

It is reported that import price of chrome in Tianjn port is as under

Price in CNY per MTU

Zhejiang Taili added new 200 series production line

It is reported that in order to response to the market demand, Zhejiang Taili Stainless Steel Company added four 200 series production lines on the basis of 15 production lines with an annual output of about 20,000 tonnes.

The new production line can produce stainless seamless steel pipe with diameter of 12mm to 273mm and thickness of 2mm to 6mm.

It will increased rolling mill in Songyang to produce high quality stainless precision steel pipes and provide better service to the customers.

India imposes 15% export tax on iron ore

Indian government has carried out certain changes in the rates of export duty on Friday. Notification Nos 77 to 80/2008-Cus and Nos 39 and 40/2008-CE all dated June13th 2008 have been issued to implement these changes. They shall come into force with immediate effect.

A government release said that “In order to further strengthen a policy regime that enables conservation of good quality ore and ensures its availability to domestic industry at a reasonable price, the effective rate of duty on iron ore has been enhanced to a uniform rate of 15% ad valorem, irrespective of iron content.”

Export duty on iron ore was so far being levied at specific rates. Lumps and fines having iron content exceeding 62% were charged to duty of INR 300 per tonne, while the duty leviable on fines with iron content up to 62% was INR 50 per tonne.

Explosion kills 27 and 7 trapped in coal mine in Shanxi

Xinhua News Agency reported that an explosion on Friday at a Chinese coal mine has killed 27 and left 7 miners trapped below ground. As per report, explosives went off accidentally deep in the pit of the mine located on the outskirts of Xiaoyi city in the northern province of Shanxi.

It said 15 workers made it to the surface alive following the blast, which ripped through the mine's main shaft shortly after 1:00 PM. Nine of the trapped miners were later lifted from the pit.

Rescuers this morning found 27 people dead.

A state television report that aired four hours later said the condition of those trapped below was still unknown.

The mine, operated by the Anxin Coal Mining Corp., had passed a recent safety inspection test.

JPMorgan raises 2009 international coal price forecast

JPMorgan has raised its forecast for internationally traded coal prices for 2009 citing infrastructure constraints on supply and the potential for higher demand from Brazil, Russia, India and China and also changed ratings on two coal companies.

Mr John Bridges analyst of JPMorgan said that they raised the 2009 price estimate for traded coal to USD 300 per tonne from USD 240 per tonne and for traded thermal coal to USD 150 per tonne from USD 100 per tonne.

Mr Bridges cited lack of sufficient shipping capacity as one of the prime reasons for coal supply constraint, adding that installed coal industry infrastructure is likely to prove insufficient for the growing demands of the over 2 billion people of emerging countries like India and China.

Indian iron ore prices drop on lower China shipments

Reuters reported that India's iron ore prices have dropped by 8% to 11% due to a rise in stockpile at Chinese ports and slowdown in demand.

Mr Rahul Baldota president of Federation of Indian Mineral Industries said that "There is a demand, but the interest for Indian cargo has been weak."

He added that the export price of ore has dropped by USD 10 to USD 15 a tonne to USD 115 to USD 120 in the past month and a half.

Mr Baldota further added that "Australian cargo is available in the spot market. Secondly, stocks are lying at various ports in China and prices were also very high, which cumulatively led to this."

Protesters block Brazil mining railroad

Reuters reported that hundreds of protesters blocked a railway line used by Brazilian mining giant Vale to transport iron ore on Thursday, blocking dozens of trains.

Ms Patricia Malavez a Vale spokeswoman said that "It started around 6 AM this morning. Up to now around 30 trains are waiting to get through but can't.”

He added that trains on the line in Minas Gerais state each carry around 14,000 tonnes of ore but Vale could not immediately confirm how many of them were transporting the commodity. Some of the ore belonged to other mining firms.

The Via Campesina peasant movement said about 1,500 people was occupying the railway to pressure Vale to negotiate with 500 families who will be dislodged by the construction of a hydro electric dam.

The movement staged a series of protests against multinational firms in Brazil this week. On Wednesday it occupied properties of industrial conglomerate Votorantim and a supermarket belonging to the Wal Mart.

Freight costs hike scar Indian iron ore exporters – Report

ET reported that a steep increase in the cost of transporting iron ore by rail is damaging India’s export competitiveness and miners complain that this may result in country ceding ground to rivals from Brazil and Australia.

Mr Basant Poddar VC of southern regional unit of Federation of Indian Mineral Industries said that the decision by Indian Railways to reclassify the freight category of iron ore meant for export has resulted in the cost of transporting the mineral rising by 45% in two months. He added that "The rising freight costs are destroying our competitiveness even as we tackle the challenges posed by Brazilian and Australian iron ore exporters who are aggressively targeting China."

Mr Shantesh Gureddi chairman of FIMI’s southern regional office said that export in 2008-09 fiscal would be severely hit if the centre goes ahead with a plan to tax export of iron ore. He added that "Exports can easily slip by 15% to 20% if the duty is levied. Australian and Brazilian suppliers are buying large vessels to meet the Chinese demand."

Mr Gureddi said that the decision to hike fuel prices would not impact the movement of iron ore. He added that "Currently, bulk of the movement happens by road, which is easily 20% to 30% cheaper than rail. Also transporting by rail is dependent on the availability of rakes as well as the presence of rail sidings near mines. The fuel price hike is unlikely to result in a shift in movement from road to rail."

Further, agencies such as the New Mangalore Port Trust are proposing the introduction of a daily quota system to regulate the arrival of trucks carrying iron ore into the port.

Global demand for mining machinery & equipment to exceed USD 33 billion

A new study from the Freedonia Group Inc outlined that global demand for specialized mining machinery and equipment including separately sold parts and attachments is projected to increase 5.9% per year through 2011 to USD 33.6 billion.

The research firm said that “Advances will be fueled by continued demand for commodities such as iron ore and copper. In addition, the ongoing global thirst for energy will boost global coal output. China and India will be leading sources of mining equipment demand. However, just as importantly, these nations will continue to fuel demand for mined products throughout the world, thereby providing opportunities for machinery producers. These and other trends are presented in World Mining Equipment.”

The firm said that “China has shown strong growth in mining equipment demand, a direct result of investment in its local mining industry. For example, coal output nearly doubled from 2001 to 2006, reflecting the nation's intense need for energy. China is also a major source of commodities such as iron ore and bauxite. Other major Asia/Pacific markets for mining equipment include Australia and India.”

It added that “Demand for mining equipment in Asia is expected to post strong gains, as the region's rising population and industrial output will lead to increased energy and raw material needs. Africa will post healthy gains, benefiting from rising demand for precious metals and copper. Growth in demand for mining equipment in Latin America will reflect increased mining investment in nations like Peru and Chile. Eastern Europe will also post gains, benefiting from gains in the large Russian market.”

The firm said that “Growth in North America and Western Europe will lag the industry average, reflecting in the maturity of these markets. However, the largest producers of mining equipment are generally found in the United States and the industrialized nations of Western Europe. Such countries have a long history and extensive expertise in the development of capital equipment industries of all types, which may have leveraged in mining machinery. China has quickly emerged as a major producer, due in large part to the nation's growing mining industry. China has become a net exporter of mining equipment, shipping products to both developing nations and mature markets such as the US.”

Bolivian government backs Huanuni expansion - ABI

Bolivia state news agency ABI reported that Bolivia’s government has guaranteed a USD 84 million investment to upgrade the country’s largest tin mine.

The paper said that management of Empresa Minera Huanuni part of the state mining company Comibol are required to present final details of the project for congressional approval in the next 30 days.

The Huanuni mine produced 7,669 tonnes of tin in concentrate last year and Comibol is targeting an increase in capacity to 13,500 tonne per year from 2010. The project will involve increased mechanization of the lower levels of the mine and a trebling of mill capacity to 3,000 tonnes per day.

Excess iron ore stocks to be cleared - NDRC

According to National Development and Reform Commission, China's government ordered excess iron ore stocks to be cleared from the nation's ports. The circular said "An increase of iron ore stocks at ports has been adding pressure to port operations and railway transportation and created the illusion that there was booming demand for iron ore in our country."

NDRC in a statement said China's port authorities are required to submit detailed reports of iron ore stocks including information about their owners and time of arrival as well as the clearance plan, to the central government by June 20th 2008.

The circular said some companies imported large amounts, because they expect prices to rise. Meanwhile, limited railway transportation capacity has slowed the outflow of iron ore, since priority has been given to thermal coal, food and quake aid. It also said the tightening monetary policy, together with surging prices of iron ore and coke has cut production by some small steel mills, affecting traders iron ore sales.

NDRC said by May 15th 2008 iron ore stocks at ports had hit a record high of 79.22 million tonnes up from 44.73 million tonnes at the end of last December.

Mr Zou Jian chairman of China Metallurgical Mines Association said the supply surplus in the first four months of the year amounted to 20 million tonnes to 25 million tonnes of iron ore. He said China's iron ore consumption would grow less than 10% in 2008 with imports increasing 35 million tonnes to around 420 million tonnes to 430 million tonnes.

He expected the spot CIF price for iron ore to be USD 110 per tonne to USD 130 per tonne on average in 2008, higher than the average of USD 85 in 2007 but lower than prices at the end of 2007. He said the rise in iron ore imports and restrictions on Chinese steel exports would help depress prices.

Mr Zou said he expected the talks to end on the June 30th 2008 deadline and noted the two sides were getting closer. But he said he did not have detailed knowledge of the talks.

Grange is not in talks with PT Krakatau Steel over stake

Grange Resources Ltd which wants to develop a USD 1.4 billion iron ore pellet venture said that it has not had talks with PT Krakatau Steel about selling part of the project or a stake in the company, countering a June 10 press report.

Bisnis Indonesia reported earlier this week said that Krakatau Steel a state owned steelmaker may buy a 20% to 30% stake in Grange to secure iron ore supplies. The report added that Mr Alexander Rusli commissioner had confirmed the potential purchase.

Grange in a statement said that “Grange is continuing to progress discussions regarding the company's Southdown project with a number of significant international companies. But still, it has not had any communication with Krakatau about the company or the project.

Grange is developing an iron ore mine in Western Australia that will produce 6.6 million tonnes a year of magnetite concentrate, a type of iron ore. The product will be shipped to Kemaman in Malaysia where it will be processed into pellets. It raised the cost of the project by 16 percent to USD 1.4 billion in Octob