Indian Stainless Steelmakers Directory 2008

The fast developing Indian steel industries are continuing beyond what most believed was possible.

As one of the world's fastest growing economies, India has become the most happening place among world steel market over last few years and thus is in the radar of not only Indian but most of global players associated with steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.

'Indian Stainless Steelmakers Directory 2008' is one of the top sources of information available on steel making companies in India. It is one of the most comprehensive and accurate directory of Indian steel companies that have ever been published. This powerful report is your connection to the entire Indian steel industries sector.

Published in March 2008, 'Indian Stainless Steelmakers Directory 2008' has been comprehensively researched and prepared, to bring you a fully up to date guide to India's rapidly growing steel makers. This report will be extremely useful to businesses that deal specifically with companies in the iron and steel industry, ferroalloys, consumable suppliers, raw material sellers, equipment makers and others.

Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Indian steel industries, this directory will save you time and effort in finding the information you need.

This report will enable you to profile steel makers in India, build new business prospects, generate new customers, discover who your competitors are and make vital contacts. You would save the time, money and effort of doing your own research. This directory has been especially compiled to assist with market research, strategic planning, as well as contacting prospective clients or suppliers. It is also an indispensable guide to India’s and steel industries.

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This report covers name and product details of 55 of Indian stainless steelmakers in Alphabetical as well as production wise order. Look at the information you'll get in the 'Indian Stainless Steelmakers Directory 2008'

• Company name -55 entries
• Address-55 entries
• Phone number-55 entries
• Fax number -55 entries
• Email -55 entries
• Products & Services

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Week long power blackout ends in Chhattisgarh

IANS reported that power supply has resumed in Chhattisgarh’s restive southern Bastar region, ending a week of blackout that Maoist guerrillas sparked off by destroying power transmission towers. Power supply resumed in Bastar, Bijapur, Narayanpur and Dantewada districts with Chhattisgarh State Electricity Board engineers reinstalling the towers.

Officials said that except in Konta area of Dantewada district bordering Andhra Pradesh, normal power supply had returned to the 4 districts.

It may be noted that Maoists blew up 220 KV high tension electricity towers in the forests of Dantewada on June 5th 2008, plunging the region into darkness.

Mining operations at the three deposits of the National Mineral Development Corporation at Bailadilla hills in Dantewada came to a halt in the wake of the blackout. NMDC suffered about INR 120 million of daily losses.

Essar Steel, which has an iron ore beneficiation plant at Bailadilla hills in Kirandul, was also hit. Its supply of high quality iron ore to its own pellet plant at Visakhapatnam in Andhra Pradesh suffered heavily.

India foundry exporters seek variable price deals

Indian foundry product exporters have embarked on a new market driven pricing formula by adding variable components, including energy and alloy surcharge, to the base price for contracts under negotiation. This has been due to record fuel cost and currency fluctuations. Earlier, fixed price contract was the norm.

Mr AK Anand director of Indian Institute of Foundrymen said that "Despite fuel oil not contributing significantly to foundry costs, currency fluctuations have surely hampered the profitability as realizations have declined."

Mr V Mahadevan president of IIF and MD of Hinduja Foundries said that "Coming months are likely to see more scrap, a valuable input for foundry units, being available to the sector as construction work would remain stagnant. But consumers are unlikely to get any respite due to high scrap prices globally."

Price barometer (first week of January & June 2008)

Sl no 1-4 price in INR per kg
Sl no 5-7 price USD per tonne

This is significant as exporters with long term contracts have incurred huge losses because of soaring crude oil prices and the dollar appreciating 10% in the last one year. The greenback has, however, depreciated marginally in the last fortnight, partly compensating the losses. Nearly 30 to 40 large foundries export niche products worth USD 1 billion mainly to European original equipment manufacturers.

Nearly 4,500 foundries exist in India, of which 70% are small and medium size units contributing about 30% of the total foundry output, while the remaining 30% large and technologically upgraded units provide 70 per cent output. Units with a capacity of 200 tonnes per month are categorized as tiny foundry while large units have a capacity of above 3,000 tonnes per month. There are only 35 to 40 such large units in India.

Permionics bags INR 25.89 crore order from RINL

Vadodara based Permionics Membranes Private Limited has bagged yet another order worth INR 25.89 crore from Rashtriya Ispat Nigam Limited for the sewage treatment plant and associated reverse osmosis membranes system to produce recycled and quality water at RINL’s Vizag Steel Plant.

The scope of work for this order includes designing, engineering, manufacture, supply of the plant, machinery and equipment, commissioning spares for transfer pumping stations for sewage treatment plant and associated reverse osmosis membranes system on a turnkey basis.

Permionics is a leader in the membranes segment in India and abroad. In April 2008, it bagged its first order from RINL, worth INR 36.75 crore, to supply waste water treatment and recycling plant for the Vizag Steel Plant, including recycling of the treated water using ultra filtration and reverse osmosis membrane technology.

JSPL bags Golden Peacock Environment Management Award 2008

Jindal Steel & Power Limited has won Golden Peacock Environment Management Award 2008 for outstanding achievements in the field of environment management at their Raigarh Plant.

This award has been received by Mr Suranjan Sarkar senior manager from Dr Ola Ullsten former Prime Minister of Sweden & chairman of the World Council for Corporate Governance and Mr Satguru Nirankari Baba Hardev Singh Ji Maharaj during prize distribution ceremony in Global Convention on Climate Change held at Palampur in Himachal Pradesh.

Mr AK Mukherji ED of JSPL said that achieving a sustainable balance between environmental preservation and economic growth is one of JSPL’s highest values. JSPL’s commitment to the environment will help in passing on a cleaner, greener world to the next generation.

JSPL has already taken initiatives to reduce green house gas emission by adopting waste heat recovery system in DRI, non-recovery coke oven for power generation. Blast furnace waste gas, washery rejects & fines, DRI wastes are used as alternative fuel as a part of natural resource conservation. JSPL has developed 30% green area in the complex and has planted more than 3 million trees. The survival rate of plantation is 90%.

It has executed environment management programs for continual improvement by adopting modern technologies on pollution control, massive plantation and good housekeeping practices. JSPL has done 500,000 tree plantations during 2007 in the barren hillock areas under a mass tree plantation program “Operation Oxygen” for environmental protection.

JSPL is committed for total satisfaction of customers and interested parties and achieving business excellence by producing and supplying products in eco friendly environment.

Several prestigious public as well as private industrial houses like TATA, Essar, Vedanta, ONGC, Reliance Energy, Hindustan Petroleum, Sterlite IIL, NFCL etc have participated in this award competition this year

Videocon to invest INR 6000 crore in WB

Videocon group has announced an additional investment of INR 6,000 crore in West Bengal over and above the INR 16,000 crore projects in the pipeline.

Mr Venugopal Dhoot said that 2 knowledge parks would be set up at Kalyani and Siliguri with an investment of INR 3,000 crore each. He added that the estimated cost for land acquisition is INR 200 crore for Kalyani and INR 100 crore for Siliguri.

Mr Dhoot said that construction for the steel plant would commence before the festive season and the company would have the land in possession by then. He added that the land requirement in the INR 15,000 crore project is 4,000 acres.

Videocon has applied for coal blocks for the project and is awaiting the central government's nod. Another project, the IT special economic zone at Siliguri, had also made progress. The IT SEZ would have a voice-based BPO and an in house IT service facility.

ADAG pulls out of Mumbai sea link project

BS reported that the consortium led by Anil Dhirubhai Ambani Group Company called RELINFRA has decided not to seek an extension of the bid for the INR 6,000 crore and 22 kilometers long sea link project between Sewri and Nhava Sheva citing the state government's indecisiveness over awarding the contract.

It may be noted that a consortium of RELINFRA and Hyundai had won the bid for the project in February 2008 but the state government ordered a review on grounds that the concession period or the period for which the developer collects toll to recover its costs was unrealistically low.

RELIINFRA's withdrawal effectively leaves the field free for the only other bidder namely the consortium of SeaKing Infrastructure Limited and IL&FS. The RELINFRA consortium had quoted a concession period of nine years and 11 months against the SKIL consortium's 75 years. RELINFRA submitted the bid documents in December 2008. Under the conditions of the bidding process, a bid document is valid for 6 months after this. This period lapses on June 13th 2008 but RELINFRA has decided not to apply for an extension, as the state government had requested.

A senior RELINFRA official said that "It is not correct to say we are pulling out of the project because it is not as though the project is being offered to us and we are rejecting it. In this case, we are not sure whether we will be getting the project and, if we are getting it, when."

Meanwhile, the state cabinet's committee on infrastructure postponed the decision on the project by a week. The controversy began in May 2008 when the state government asked the Maharashtra State Road Development Corporation to get both bids evaluated from a consultant owing to widely differing concession period.

TATA Motors advancing on Singur plant to meet October start

BS reported that, even as TATA Motors is racing against time to get its new Singur plant near Kolkata ready for commercial roll out of the Nano by October 2008, it may be needing an out of the box solution to overcome some delays in the integrated plant and component park structure proposed for the vehicle.

TATA Motors' plants in Pune and the new one at Pantnagar in Uttarakhand might be marked as standby options should the Singur facility not be ready by October 2008.

The possibility of a delay in getting the Singur plant ready is perceived by component suppliers who said the current orders placed by TATA Motors for parts is very small for the booking volumes envisaged at the start of production in October 2008. A company source said that "We are getting order for small lots like 50 and 100 units, when the numbers should be in thousands for a car like Nano's and it’s promised potential." It added that component suppliers would normally have their delivery schedule from the car maker 3 to 6 months ahead of the start of commercial production.

The official line TATA Motors is taking is that it is well on time to meet the October 2008 deadline. A company spokesperson refused to elaborate, but reiterated that the plant was on schedule and barring any major dislocation, the schedule would be honored.

The anticipated capacity for full year operation by TATA Motors for the Nano is 250,000 units a year and ramped up to 350,000 depending on the market response.

BHEL bags INR 1150 crore order from HPCL Mittal Energy

Projects Today reported that Bharat Heavy Electricals Limited has bagged a turnkey contract worth INR 1,150 crore from HPCL Mittal Energy for setting up a 153 MW captive power plant at the Guru Gobind Singh Refinery at Bhatinda in Punjab.

BHEL's scope of work in the project envisages design, engineering, manufacture, supply, erection and commissioning of the captive power plant, in addition to complete civil works.

The equipment for the project will be supplied by BHEL's plants at Hyderabad, Trichy, Ranipet, Bhopal, Jhansi and electronics division of Bangalore. Civil works and erection and commissioning of the captive power plant will be carried out by the company's power sector northern region.

The proposed order is the largest value single order secured by BHEL for a captive power plant and the work order is scheduled for completion within 30 months.

More freight trains between India and Pakistan to boost trade

PTI reported that, amid their keen interest to raise two way trade, India and Pakistan will discuss next week proposals for increasing the frequency of freight trains besides extending the Amritsar Lahore service.

Indian government officials said that there is a proposal for extension of the freight train operation beyond Lahore and Amritsar. They added that "We want to increase the frequency of freight trains so that more goods can be exported or imported."

As per report, at the 3 day talks from June 17th 2008, senior railways officials of the two countries will also examine various other issues related to Indo Pak train operation. The two sides will deliberate on a proposal for introduction of freight service on the Jodhpur Munnabao Kokrajhar section. At present the freight service is operated only through Wagah border.

Both the countries are keen to raise the bilateral trade and are discussing ways to do so. India imported 45,000 tonnes of cement in April and 60,000 tonnes of cement in May 2008 from Pakistan by rail.

It may be noted that the talks are held every year as part of the inter government railway meeting. Last Indo Pak meeting on train operation was held in Pakistan in 2007.

Uttarakhand says no to big hydro power projects

As the save Bhagirathi campaign gathers momentum with Mr GD Agrawal, a top environmentalist, beginning his fast unto death, the Uttarakhand government said that it is not in favor of constructing big hydel projects. A state government spokesman said that the government would permit the construction of only run of the river projects and that it was against the Tehri type dams.

Mr Agrawal's move came in the wake of a series of protests by local people, who are on the verge of being uprooted at several places following the construction of these dams. The dams include 480 MW Pala Maneri, 304 MW Maneri Bhali Phase 11, 600 MW Lohari Nagpala, 400 MW Koteshwar, 381 MW Bhairon Ghati and 200 MW Jad Ganga.

A large number of people living on the hills of Uttarakhand are paying a heavy price in the name of power generation. During the past 4 years to 5 months, they have undertaken marches and held rallies to voice their protest fearing they will become homeless. Apart from this, there are environmental concerns also.

Meanwhile, police security has been tightened in Uttarkashi town, where Mr Agrawal will protest. Significantly, nearly 20 women activists courted arrest after they showed black flags to Khanduri, who had gone to Uttarakhashi to kick start the civil work of the Pala Maneri hydel project, being built by the Uttarakhand Jal Vidyut Nigam Ltd.

L&T to invest INR 250 billion into power business

Engineering and construction giant Larsen & Toubro has announced that it will invest INR 250 billion in the power generation business, including nuclear energy, over the next 5 years.

Mr AM Naik CMD of L&T said that "Power is going to be one of our focus areas in the coming years. It is an area we are looking at in a big way. If we do go for an initial public offer, if required, I do not see it happening before March 2011."

He added that while the immediate focus will be on thermal power, it will also go for nuclear energy eventually.

L&T had also forged a tie up with Japan's Mitsubishi to make steam turbines and generators, for which it had planned a separate venture.

ABG Shipyard bags INR 127 crore vessel order

ABG Shipyard Limited recently announced that it has bagged an INR 127 crore order for the construction of a vessel of 130 tonne bollard pull AHTS for anchor handling, towing, rescue, offshore supply and other related duties. This is the first contract signed with the buyer.

Ramkrishna Forgings ranks 4th in Industry 2.0 list

Ramkrishna Forgings Limited recently announced that it has been ranked number 4 for the year 2007 based on the ranking of the top 500 manufacturers in India.

The ranking, one of the most comprehensive and respected in the manufacturing sector today, is an initiative of Industry 2.0, the monthly manufacturing technology publication.

Orissa Sponge board decisions

Orissa Sponge Iron & Steel Limited recently announced that its board of directors has considered the following

1 Passed the revenue budget for the financial year 2008-09
2 Considered the proposal for iron ore mining by a JV of TSPL & Rabisons Holdings Limited
3. Recommended to de list its shares from Kolkata Stock Exchange

Steel sector can reduce CO2 emissions by 340 million tonne - IEA

The International Energy Agency in a report published last week said that the steel industry could potentially reduce its total CO2 emissions by 340 million tonne per year if best available technologies were applied worldwide.

The report, which uses 2005 as a reference year, said that even if steel producers aim to return to current CO2 emission levels by 2050, direct emissions will have nonetheless increased by 71% above the 2005 level, partly because of a 134% increase in production during this period. However, total direct emissions will decrease by 26% by 2050 if individual producers manage to halve their emissions.

A spokesman for the International Iron and Steel Institute said that "In terms of intent, the industry is doing a lot to reduce its emissions. Innovative technology from Japan, the US and Europe will transfer to India and China, where very outdated steelmaking processes are still employed."

Vietnam government delays decision to ban steel exports

VNA reported that Vietnam government has not made a decision on banning exports of steel ingot. The report quoted Mr Le Duong Quang deputy minister of ministry of industry and trade of Vietnam as saying that the ministry wanted to find measures to limit exports of steel to ensure the demand for construction materials in the local market while ensuring steel businesses do not fall into difficult situations.

Mr Quang said that steel prices have dropped in the domestic market due to a reduction in demand. Prices are higher in other countries, so businesses have stored domestic steel for re export. He said that “It is not a big matter if the steel business exports a small volume to pay workers’ salaries and electricity costs. But if many businesses export a large volume, it will cause a shortage of steel in the country.”

According to the Vietnam Steel Association, in May there were a mere 10,000 tonnes of steel exported.

According to the Vietnam’s Customs Department more than 1,244,100 tonnes of steel were imported to Ho Chi Minh City in the first half of this year, of which 236,789 tonnes of steel had been re exported to other countries.

IMAREX launches BDI futures contract

It is reported that the Oslo based exchange for trading of maritime related derivative contracts IMAREX will launch an electronically traded and cleared futures contract on the Baltic Dry Index that will allow traders to buy and sell the entire dry bulk sector in one simple contract.

The IMAREX BDI Index Futures contract is a composite of global shipping costs for bulk commodities such as grains, ore and coal and a widely accepted measure of the state of global trade. It is aimed squarely at the cash equity and equity derivatives trading community as well as portfolio managers and commodity traders looking to increase their exposure to movements in the dry bulk shipping markets.

Mr Herman Michelet CEO of IMAREX said that "We have sat through literally hundreds of meetings in the last year with portfolio managers exposed to shipping equities who spend their time tracking the BDI as a measure of where the market is heading.”

Mr Michelet claims that by trading the BDI Futures contract, stock portfolio managers can protect the value of the shipping equities portfolio from upside and downside price risk of the broader dry bulk market as most heavily traded dry bulk shipping shares correlate to a high degree with the movement of the underlying freight market

He added that "The BDI itself is a retrospective index published once per day and it reflects market movements in the last 24 hours. It is not a gauge of what might happen next basically, you cannot trade the BDI itself. So we have launched the BDI Index Future contract which will do to the BDI what S&P500 Futures do to the S&P500 Index and that is to make it tradable.”

Votorantim increases stake in AcerBrag to 53% - Valor

Valor Economico newspaper citing Mr Joao Bosco Silva MD of Votorantim Metais reported that Votorantim Metais Ltda has raised its stake in Argentine steelmaker Aceros de Bragado to 53% from 27%.

The newspaper said that Votorantim didn't reveal the price.

The Brazilian company announced the purchase of its initial 27% stake in December.

Mr Bosco Silva said that AcerBrag's revenue is expected to increase almost 20%in 2008 to USD 160 million.

The newspaper said that AcerBrag as the Argentine company is known is the country's third biggest producer of so called long steel.

Esmark announces adoption of stockholder rights plan

Esmark Incorporated announced that its Board of Directors has adopted a Stockholders Rights Agreement that is designed to help Company stockholders receive the highest value for their shares in connection with the sale of the Company.

In connection with adoption of the Stockholders Rights Agreement, the Company also announced that its Board has declared a dividend of one preferred share purchase right for each outstanding share of Esmark common stock, payable on June 13th 2008 to the stockholders of record at the close of business on June 13th 2008. Each right will allow its holder to purchase from the Company one one hundredth of a share of Series A Junior Participating Preferred Stock for USD 60.00 once the rights become exercisable.

Under the Stockholders Rights Agreement, the rights become exercisable if a person becomes an acquiring person by acquiring 15% or more of the Esmark common stock. The Stockholders Rights Agreement will not apply to existing stockholders who own 15% or more of Esmark's existing common stock, unless and until they acquire additional shares in an amount equal to or greater than .25% of Esmark's outstanding common stock. In addition, the Stockholders' Rights Agreement will not apply to a tender offer or other acquisition proposal made by the United Steelworkers or its permitted transferee or assignee under the right to bid provisions of the collective bargaining agreement with the United Steelworkers if applicable to the Company and approved by the Board, a tender offer for which the Company has made a favorable recommendation or a tender offer which is not consummated until 21 business days after certain conditions relating to the collective bargaining agreement with the United Steelworkers have been satisfied for all pending acquisition proposals.

Mr James P Bouchard chairman & CEO of Esmark said that "We believe the adoption of the Stockholders Rights Agreement will level the playing field among bidders and help maximize shareholder value as we move forward with the current process to sell the Company.”

Malaysian domestic rebar prices cheaper

The Star Online reported that Malaysia’s top local steel mills have clarified that prices of steel bars sold in cash terms to local distributors have not exceeded MYR 4,000 per tonne and are still below the prices sold by their ASEAN counterparts.

A joint statement in this regard was issued by Lion Group subsidiary Amsteel Mills Sdn Bhd, Ann Joo Steel Bhd, Kinsteel Bhd units Kin Kee Sdn Bhd and Perwaja Steel Sdn Bhd.

They said “Since May 28, steel bars sold locally have not exceeded MYR 3,550 per tonne for the sizes Y16/20/25/32, which constitute about 70% of the market demand. The Y12 steel bars were sold at MYR 3,700 and Y10 steel bars at MYR 3,750 per tonne respectively.”

They added that “However, prices of steel bars sold by distributors to end users are based on the credit risk and payment duration. Hence, the prices are beyond the control of the steel mills.”

Local millers over the recent months had been implicated for selling steel bars locally at a price higher than the surrounding Asean countries. Effective May 12, the Government had lifted the ceiling price control and waived the requirement for approval permits and import duties for the import of steel bars and billets in Malaysia.

In 2007, top steel mills’ total production was at 2.54 million tonnes with about 85% for the local market as compared with 2.12 million tonnes produced in 2006.

SSAB changes name and appoints president for North America

SSAB Svenskt Stal AB announced that its six production sites in North America will now operate under the corporate name, SSAB.

Effective immediately, the name change from IPSCO to SSAB impacts the steel production facilities in Mobile, Alabama and Montpelier, Iowa, as well as the cut to length lines in Houston, Texas, St Paul, Minnesota and Toronto, Ontario. The headquarters for SSAB North American Division will remain at Lisle in Illinois.

In addition, SSAB also announce Mr David Britten has been appointed president of SSAB North American Division taking over from Mr John Tulloch who had previously announced his retirement effective with the close of the divesture of its North American tubular operations. In his new role, Mr Britten will also serve as an executive VP of SSAB and as a member of the company's Group Management.

US scrap prices cooling down

It is reported that on June 9, the average price of H1 scrap in Pittsburgh, Chicago and Philadelphia was at USD 498.50 per long ton down by USD 15.67 per long ton from last week.

The report added that price of bundle scrap was at USD 434.50 per long ton on average down by USD 27.50 per long ton.

The average price of H1 in Pittsburgh was at USD 499.50 per long ton; in Chicago was at 487.50 per long ton and in Philadelphia was at USD 508.50 per long ton.

In Eastern coast, the average price of H1 scrap in New York, Boston and Huston was at USD 454.50 per long ton dropped by USD 20 per long ton as compared with last week.

In western coast, the average price of H1 scrap was remained unchanged at USD 214.33 per long ton from the previous week.

Sahaviriya expects profit to gain on prices - President

Bloomberg reported that Thailand’s biggest hot rolled steelmaker Sahaviriya Steel Industries Pcl expects higher prices to boost profit this year.

The report quoted Mr Win Viriyaprapaikit president of Sahaviriya Steel as saying that “Our performance will definitely be higher. Our profitability should continue the pace we saw in the first quarter.” He added that net income from January to March rose almost eightfold to THB 877.3 million.

Taiwanese mills slab purchase price increasing

It is reported that a Thailand rolled mill’s deal price has reached as high as USD 1,025 per tonne.

The report added that global slab prices have skyrocketed recently as offers have reached USD 1,150 per tonne from the previous USD 1,000 per tonne. Besides, extreme tight availability is contributing to the soaring prices.

It seems that flat price will continue climbing in line with slab prices.

(Sourced from YIEH.com)

ZincOx secures USD 120 million for Ohio plant

Sharecast reported that UK based ZincOx has bagged itself USD 120 million from a placing and three year bond facility to help fund construction of the Ohio recycling plant, which will convert zinc bearing hazardous waste from the steel industry into pig iron, slag and an intermediate zinc-bearing product.

As per report, ZinCox has conditionally raised USD 72 million before expenses in a placing of shares at 175p each and arranged a USD 48 million three year bond facility. It said that existing cash resources and the deferred payments from the Shaimerden zinc oxide deposit in Kazakhstan will also be used to finance the plant build.

Mr Andrew Woollett chairman of ZinCox said that "We are delighted to have, subject to shareholder approval, funding for use in construction of our first recycling project.”

He added that "This should enable the company to start production before the end of next year and move the company a step closer to realising its ambition to become the largest zinc recycling company in the world."

Kasikorn Bank to increase loans to steel sector in China

The Bangkok Post reported that Thailand’s Kasikorn Bank Pcl plans to increase lending to small and medium sized companies in the auto and steel industries in China.

The newspaper citing Mr Joe Horn adviser for China at the Thai lender reported that the bank's branch in Shenzhen a venture with China Minsheng Banking Corp is seeking to raise USD 100 million from local deposits and money markets.

The report added that Minsheng will provide another USD 100 million.

Kasikorn Bank's Shenzhen branch, which has USD 100 million in outstanding loans is also seeking to advise investors on cross border trade and investment between the two nations.

Fire breaks out at Kaiser Aluminum's Welsh smelter

Reuters reported that California based Kaiser Aluminum that a fire was broke out on Friday in a power transformer at the Anglesey Aluminum smelter in Wales and the facility is currently operating at one third of its capacity.

As per report there were no injuries or environmental damage to the community as a result of the fire on Thursday, the Foothill Ranch.

Kaiser, which owns 49% of the smelter in northwestern Wales said the fire was sparked by a significant failure in the rectifier yard. The incident resulted in a loss of power and Anglesey employees are working to restore operational stability.

Kaiser said that some capacity has been taken off line for safety and operational reasons. The smelter is currently operating at one third of its total capacity of 145,000 tons and it is not clear how long it will take to restore full production.

American pipe prices rising

American ERW pipe prices have continued to rise firmly over the last few weeks as flat rolled product cost has risen due to strong demand.

The producers raised the welded tube price in June by USD 276 to USD 331 per tonne. Based on global plate price rises and limited American imported sources, the pipe price has risen.

While America DOC will collect anti dumping and anti subsidy duty on China pipe, China pipe will drop out of the American ERW pipe market for some time.

America Tex Tube also announced that they will raise welded tube price by USD 276 per tonne effective immediately. IPSCO will also add USD 331 per ton to its ERW tube price as of June 1st 2008

Hellenic Shipyards ink agreement with ABC Maritime

It is reported that an agreement has been signed between Hellenic Shipyards SA and ABC Maritime for the conversion of a VLCC tanker into a Floating Storage Unit. The vessel is owned by the Nigerian company Chalmers Shipping and is operationally managed by ABC Maritime from Switzerland. The Floating Storage Unit will be used as a storage vessel for several types of oil and fuel and will be moored, 10 miles outside the coast of West Africa.

As of March 2008, the vessel, to be called “WESTAF” after her conversion is berthed in Hellenic Shipyards SA in Skaramangas. A large amount of conversion works are to be carried out along with the necessary repair works. The conversion works include among others:
1. The installation of a mooring system
2. The installation of ballast & cargo pumps as well as full modification of ballast system piping & pump room piping, the installation of a new IG generator, new diesel generators and a boiler
3. The installation of blenders/heaters and the like as well as modifications to the switchboard
4. Full blast and tankcoating works is to be done

This is the first offshore conversion carried out by Hellenic Shipyards SA under the flag of ThyssenKrupp Marine Systems. The project, is the second conversion booked by Hellenic Shipyards in less than four months and offers a new perspective to the Marine Services of Hellenic Shipyards SA since it creates an opening in the international market of FSO’s / FPSO’s. In this way, the Marine Services Unit that has been developing since the company’s privatization in 2002 proves to be a reliable partner by providing excellent technological services, with high quality and stringent safety standards.

Mr. Jan Kees Pilaar, Director of the Marine Services Unit said that “Conversions are very demanding projects and the works carried out are very impressive and significant as they even include the fitting of additional structures. Taking advantage of the unique location of the shipyard, the know-how of the staff as well as the speed and top quality in the execution of services, we have managed to acquire this major project.”

OPEC president rules out oil output increase

The Peninsula reported that OPEC’s acting president Mr Chakib Khelil has ruled out an increase in production by the oil exporting group despite pressure on the cartel to help rein in record crude prices.

Mr Khelil said that OPEC excludes resorting to an increase in production because at the moment supply is bigger than demand and there is over production estimated at 500,000 barrels per day.

He said that OPEC would hold a planned meeting on September 9th 2008 to proceed with an evaluation of the market and to take decisions likely to assure the stability of the market. He added that "The problem is the result of the economic crisis hitting the United States which has led to the depreciation of the dollar, as well as threats to Iran which constitute a source of geopolitical uncertainty."

Mr Khelil also said that speculation by investors had played a part in higher prices. He backed a proposed meeting of consumer and producing countries in Saudi Arabia on June 22.

Meanwhile, Iranian oil minister Mr Gholamhossein Nozari said that the global oil market is saturated with crude and there are no problems with supplies. He added that "Global oil markets are currently saturated with oil. There is enough oil in the global market ... and there are no problems in supplying oil."

GE gets order to build new power plant in Algeria

It is reported that Algerian electric company Shariket Karhaba Koudiet Eddraouch Spa has awarded a EUR 635 million contract to GE and its consortium partner Iberdrola Ingenieria Construccion for the construction of the Koudiet Eddraouch power plant in El Tarf province in Algeria. GE also is in the process of signing a contractual services agreement to provide maintenance and parts over 20 years.

The new facility is expected to produce 1,200 MW of power, which would increase Algeria’s current installed generation capacity by approximately 18%. The project would help to meet Algeria’s electricity demand, which is growing at the rate of more than 7% per year. Overall, GE has supplied approximately 70% of the gas turbines operating in Algeria.

Mr Ricardo Cordoba president of GE Energy Western Europe and Northern Africa said that "We are very pleased that our technology has been selected for this project, which will play a significant role in meeting the future energy needs of Algeria."

GE plans to manufacture the F class gas turbines for the Koudiet Eddraouch at GE Energy’s facilities in Belfort in France. Previously, GE provided its F class technology for the 1,227 MW Hadjret En Nouss plant and the 800 MW Skikda project located in Algeria.

Kuwait inflation to rise further after hitting a record 10.1%

In its latest economic brief, National Bank of Kuwait reported that inflationary pressures continue to mount in Kuwait as the February 2008 consumer price index jumped by 10.1% YoY from a year ago driven by escalating housing and food prices. The latest CPI data shows inflation reaching its highest recorded rate in recent history and surpassing the rate of 9.4% posted in July 1982.

Kuwait now joins Saudi Arabia, Qatar and the UAE as the other Gulf States with double digit inflation. Over time, inflation significantly reduces the purchasing power of consumers.

According to National Bank of Kuwait, after hitting a low of 1.4% in April 2006, Kuwaiti inflation has risen almost continuously over the past two years. The rate of increase in inflation over the past six months has been particularly rapid, having more than doubled from 4.8% since August 2007.

Interestingly, despite the perception that the Gulf States including Kuwait are importing a good deal of their inflation, Kuwaiti inflation at the wholesale level has been higher for locally produced goods. In December 2007, wholesale inflation was running 6.6% and 5.8% for locally produced and imported goods, respectively.

ONGC Videsh, IOC & OIL to invest USD 3 billion in Iran gas field

It is reported that ONGC Videsh, Indian Oil Corporation and Oil India Limited have together proposed to invest USD 3 billion in developing the Farsi gas field in Iran.

An official said that the field holds recoverable gas reserve of about 12.8 trillion cubic feet. The commercially proposal has been submitted to the Iranian authorities.

World begins to back OPEC price contention

With Morgan Stanley and Goldman Sachs projecting the next oil price spike just round the corner, Riyadh was almost forced into action by announcing to hold a consumer producer summit and inviting all the stakeholders to the moot.

It’s been too long that the onus to prove innocence has been on the accused the OPEC. In convening the producer consumer summit and by inviting all the stakeholders, Saudi Arabia has underlined once again that producers cannot tame the Bull. It is beyond them. Market fundamentals are no more in control and others need to put in their weight rather than pointing fingers.

Oil prices have doubled in the past year as big funds have poured money into commodities, seeking a hedge against inflation and the weaker dollar. Iran, for instance, is storing 25 million barrels of heavy, sour crude oil because there are simply no buyers because the market has more than enough oil.

Slowly but surely, the world seem coming round to the OPEC viewpoint on this very issue. With producers and consumers almost powerless to rein in the speculators, 6 billion consumers all around the globe are paying a price and a hefty one while a few are filling up their coffers.

Qatari construction sector to reach QAR 33 billion by 2012

According to studies conducted by Business Monitor, Qatar's construction sector is set to reach QAR 33 billion by 2012 and with over 800 new towers slated to go up in Doha over the next 10 years, the market has been identified as one of the busiest construction areas in the world.

Qatar's massive oil and gas reserves act as a catalyst that drives the growth of its most important industries such as the real estate sector. As the country continues to witness outstanding growth in its gross domestic product, which is expected to reach 13.5% in 2009, massive cash flow is being channeled to large scale investments in high profile real estate developments creating high demand.

TAQA opens fourth recycling centers in UAE

Khaleej Times reported that Abu Dhabi National Energy Company has opened the fourth of its ten proposed recycling centers in the UAE in partnership with Emirates Environmental Group.

Mr Peter Barker Homek CEO of TAQA said that "TAQA’s leadership in the education of environmental issues has resulted in our support of the creation of ten recycling sites at schools, colleges and universities across the Emirates. We are proud to be involved with the reduce, reuse & recycle campaign, highlighting our active relationship with EEG and reflecting our continued dedication to protecting the environment."

Emirates Environmental Group will operate and manage the 10 proposed recycling centers. To date 3 have been opened at Al Hosn University in Abu Dhabi, American International School in Abu Dhabi and Global English High School in Al Ain, with the fourth opening at Our Own English High School in Fujairah. A further 6 centers will open in the coming months across the rest of the UAE.

Mr Habiba Al Marashi chairperson of EEG said that "It is delighted to collaborate with TAQA on this beneficial environmental project. Recycling is an important pillar in sustainable development. It is also a great tool for heightening awareness amongst the youth, to be more conscious of waste issues and the direct benefits of waste segregation on the environment. This is one of the simplest ways to get people involved in protecting the land."

The facilities will recycle paper, aluminum cans and plastic. The recyclables will be collected and transported by EEG to a factory for recycling. TAQA is an associate member of Emirates Environmental Group.

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.

Baosteel supplying plates for Three Gorges Right Bank power plant

Baosteel and Gezhouba Group recently inked the agreement for the supply of B610CF high strength heavy plate used in the spiral case of the last two water turbine generator sets in Three Gorges Right Bank Underground Power Station.

So far, the heavy plate totaling 8700 tonnes used in the key components of all the generator sets in Three Gorges Right Bank Underground Power Station penstock and spiral case will all be supplied by Baosteel, which contributes to the localized production of the steel for China's Three Gorges Hydro Project.

In the previous constructions of Three Gorges project, most of this kind of plate used to depend on import. Paying close attention to national key water conservancy projects, Baosteel actively develops high strength heavy plate. In 2005, Baosteel organized a team for the production, sales and R&D of heavy plate, and successfully developed the high strength heavy plate for hydropower projects B610CF by taking advantage of the 5m heavy plate mill that was just put into operation then.

The successful application of Baosteel's high strength heavy plate for hydropower projects in Three Gorges Right Bank Underground Power Station will not only expand the market share of this product, but also greatly accelerates the process of localized production of the steel for China's Three Gorges Hydro Project.

Since 2006, a total of 37,000 tonnes high strength heavy plate produced by Baosteel has been used in 16 large and medium sized domestic hydropower projects including Guizhou Goupitan Power Station and Guangxi Longtan Power Station, with the market share up to over 40%.

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."

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.”

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.

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."

China CR export prices still on upward trend

It is reported that Cold rolled steel coil prices are still moving up in China and export offers keep firm. On Shanghai market, price for 1.0 cold rolled sheet by Anshan steel is being offered at CNY 7450 per tonne to CNY 7480 per tonne while that for 1.0mm CR coil by Maanshan steel is at CNY 7330 per tonne up by CNY 100 per tonne and CNY 80 per tonne respectively.

Mysteel forecasts that “Shanghai price for 1.0 sheet by Anshan steel has reached our target of CNY 7400 per tonne to CNY 7500 per tonne and the next one probably will be CNY 7700 per tonne to CNY 7800 per tonne if it could go past CNY 7500 per tonne. Otherwise, we do not exclude the possibility of downward correction.”

Export offer for 1.0mm CRC is prevailing at USD 1120 per tonne to USD 1130 per tonne FOB and some are tagging at higher level. Allocation is still tight and most steel producers only set aside 10,000 to 20,000 tonnes for exports.

As a matter of fact, only a few steel makers are exporting CRC at moment. Among others, Anshan and Benxi steel, Tangshan steel, Baotou steel, Maanshan steel, Wuhan steel and Handan steel are major exporters.

(Sourced from MySteel.net)

Chinese HDG export prices is likely to go up further

It is reported that hot dipped galvanized coil price is still creeping up in China. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7650 per tonne, 0.5mm material by private steel mills is quoted at CNY 7950 per tonne up by CNY 50 per tone from last week.

As already forecast last month, Shanghai price for 1.0mm HDG by Anshan Steel has reached CNY 7600 per tonne. As long as Shanghai price for 1.0mm HDG remain above CNY 7500 per tonne ton the next target would be CNY 7800 per tonne to CNY 7900 per tonne.

Export offers remain at high level and the range is between USD 1100 per tonne and USD 1160 per tonne FOB for 1.0mm HDG Z120. Quotation for 0.5mm HDG Z120 is at about CNY 1200 per tonne to CNY 1260 per tonne FOB.

A tier two steel maker in North East China has raised its quotation for 1.0 HDG to USD 1360 per tonne CFR for shipments to eastern coast of the United States of America and the equivalent FOB price is about USD 1260 per tonne FOB.

An East China based trader said price is really high and it is mainly due to tight supply. The steel producer probably has no enough allocation for exports and it shot up offer substantially to scare away buyers.

Chinese HDG price is expected to remain strong in June as a result of a combination of robust domestic and international demand and short production.

(Sourced from MySteel.net)

Steelmakers in Jiangsu raise scrap prices

It is reported that scrap market now start to climb in East China after a period of firm operation. Some steelmakers in Jiangsu Province raise purchase prices twice within three days.

1. Xigang Group has pulled up prices by accumulatively CNY 100 per tonne with price standing at CNY 4060 per tonne delivered to mill for high quality scrap

2. Wuxi Xuefeng by CNY 100 per tonne, CNY 4050 per tonne for charging quality scraps 1

3. Suzhou Steel by CNY 100 per tonne, CNY 3950 per tonne delivered to mill for heavy scrap 1

4. Changzhou Zhongtian by CNY 110 per tonne, CNY 4040 per tonne delivered to mill for charging-quality scrap.

5. Yonggang also hikes price by CNY 100 per tonne. Latest purchase price is offered at CNY 4120 per tonne for heavy scrap.

As per report purchase price offered by Baosteel has reached CNY 4200 per tonne for quality scrap in Wuxi. Traders thus intend to raise prices for other steelmakers. Besides, buyers are now on the hip and have to pull up prices to replenish resources.

On the other hand, besides local market, scrap resources in Jiangsu also feed traders from Fujian, Hunan, Hubei and so on. As supply becomes tight and busy season for agriculture in southern regions steps near, traders are likely to scramble for resources in South China but cross-provinces shipments will stay at a low level due to high costs.

(Sourced from MySteel.net)

Tianjin Steel developing new products

It is reported that recently, Fourth Construction Electric and Instrument Company and Tianjin Steel Company cooperated to develop new products.

In order to exploit international and domestic market, Tianjin Steel Company and Hedong Wuxiajie jointly introduced into advanced high tech steel stand projects from Italy Fricepio Company.

The product has high intensity, high toughness, low relaxation, corrosion resistance and other advantages is widely used in the construction of overhead road, long span bridges and high rise buildings etc.

As per report, cooperation with Tianjin Steel to develop new products is another test for the staff of the Fourth Construction Electric and Instrument and is also the new model of embodiment for Tianjin Steel’s development.

Shanxi to eliminate 10 million tonnes steel capacity in 2008

Shanxi Province announced that it would eliminate 10 million tonnes capacity in steel industry and 14.5 million tonnes capacity in coking industry this year.

In 2007, the province eliminated 908 obsolete equipments from 600 enterprises, covering industrial output of over CNY 100 billion. It washed out 470 iron making blast furnaces with total capacity of 20.9 million tonnes, 62 coke furnaces with capacity of 11.31 million tonnes and 61 submerged arc furnaces with capacity of 429,000 tonnes.

The province has set up compensation fund to promote obsolete capacity elimination during 2007 to 2010.

PetroChina and Sinopec to expand refined oil supplies in June

Xinhua reported that PetroChina and Sinopec, China's two leading oil producer’s plans to increase the production and import of refined oil products in June, to ensure supply for wheat reaping and quake relief efforts.

PetroChina said it would keep its operation at full steam this month to jack up its oil processing by 6% over last month. The oil group would also import 600,000 tonnes of oil products. Sinopec will cut its ethylene production by 65,000 tonnes or 11% of its monthly production capacity in June to expand oil product supplies by 200,000 tonnes. It will also reduce arena production to raise oil products supplies.

Mr Wang Tianpu president of Sinopec said measures such as expanding processing, adjusting product mix and suspending exports, would betaken to ensure refined oil supplies for the disaster relief, wheat reaping and the coming Olympics.

Chalco shares mark 3 month low on earnings fears

Reuters reported that shares in Aluminum Corp of China Ltd dived by 8% t to their lowest since March as investors fled on fears of mounting costs including for electricity and dwindling margins.

Analysts this week called attention to soaring production costs, particularly for alumina Chalco's main product and falling prices as supply swells. The surprise move raised the possibility that other provinces would follow suit in relaxing state set electricity prices.

According to the report Chalco shares dived nearly 8% its biggest percentage loss since January 22nd to a low of HKD 10.88 before bouncing back to stand 6.9% lower at midday, underperforming a slightly weak market.

Investment bank CICC's Shenwei Ding said "China's alumina refineries could see their gross margins further squeezed by surging bauxite import prices, ocean freight rates, coal prices and other input prices."

Sasol and Shenhua agree for coal to oil JV

Reuters reported that South Africa's Sasol the world's largest maker of oil from coal has agreed with China's Shenhua Group to jointly produce motor fuel from coal by 2016.

Xinhua cited Mr Pat Davies CEO of Sasol CEO as saying that feasibility studies for two coals to liquid projects in Shaanxi province and in the northwestern region of Ningxia were expected to be completed by the end of 2009.

The report said each of the two projects will have a production capacity of 80,000 barrels per day, or 3.4 million tonnes annually of diesel, naphtha, liquefied petroleum gas and jet fuel.

China, the world's top coal producer and consumer is encouraging such projects to reduce its dependence on imported oil.

Chinese auto sales down for 2nd consecutive month in May

Xinhua quoted China Association of Automobile Manufacturers said China's motor vehicle sector realized a production against sales ratio of 97.82% in May. Both output and sales, however, declined MoM for the second consecutive month.

China produced 854,100 motor vehicles in May down by 12.96% from April but up 20.2% over the same month of last year. It sold 835,500 vehicles down by 9.44% MoM but up by 17.04 YoY.

The total output included 591,400 passenger vehicles down by 10.2% from the previous month but up by 20.03% over a year earlier. The output of commercial vehicles was 262,700 units down by 18.61%MoM but up by 20.58% YoY.

The monthly sales included 564,600 passenger vehicles down by 6.66% from a month ago but up by 15.59% over a year earlier. Monthly sales of commercial vehicles were 270,900 down by 14.74% MoM but up by 20.18%YoY.

According to the report May saw 434,700 cars produced and 415,200 cars sold nationwide down by 11.49% and 6.6% respectively from April.

Chinese FDI in first 5 months 2008 up by 55% YoY

Xinhua quoted China Ministry of Commerce said China used USD 42.78 billion of foreign direct investment in the first five months this year up by 54.97% YoY from the same period last year.

The report said the growth was lower than a YoY growth rate of 59.32% used in the January to April period this year. Meanwhile, the number of newly approved foreign funded enterprises shrank 20.95% to 11,915 in the first five months.

Mr Hao Hongmei an analyst with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce said "The quality of China's FDI use has improved as a raft of new measures was introduced to regulate foreign investment."

He said that foreign companies now tend to have more interest in investing in high tech and high value sectors which need vast financial input, than in labor-intensive and lower value industries.

Mr Hao said "China remained a favorite destination for overseas investment especially big investors like the top 500 multinationals."

Mr Chen Deming commerce minister said earlier in a press conference that the steadily-increasing FDI reflected the optimism of foreign companies about their returns from the Chinese market and their intention to accelerate investment in the country to profit from the appreciating Chinese currency.

Shandong to improve aluminum fabrication capacity by 2012

Interfax China reported that China's eastern Shandong Province, a major aluminum producing region plans to optimize the structure of its local aluminum industry so as to boost its capacity to produce high value added products by 2012.

Under the government's plan 70% of Shandong produced alumina and 100% of its primary aluminum output is to be processed locally by 2012. The province's capacity to produce high value added aluminum products such as aluminum plate, foil and industrial aluminum profile, is also to expand to account for more than 60% of total local aluminum fabrication capacity.

The government said technological upgrades and product development in the aluminum fabrication sector will be encouraged by government policies, while capacity expansion projects for alumina and primary aluminum will be strictly controlled.

According to the report projects that manufacture aluminum products for aviation, aerospace, transportation, packaging, home appliance and military uses will be given priority for development.

Furthermore, local alumina producers will be encouraged to develop overseas bauxite mineral deposits or sign long term supply contracts with international mining companies in order to alleviate bauxite shortages in the province. At present, more than 80% of the bauxite fed to Shandong's alumina producers each year is imported.

In 2007, Shandong produced 6.36 million tonnes of alumina 1.22 million tonnes of primary aluminum and 1.63 million tonnes of aluminum product.

Tanggang receives first iron ore shipment from FMG

Interfax China reported that Northern China's Tangshan Iron and Steel Group has received its first shipment of 170,000 tonnes of iron ore from Fortescue Metals Group.

Mr Li an official with Tanggang's iron ore import department said "We have entered into a long term agreement with FMG which will result in total shipment of about 140 million tonnes to 150 million tonnes of iron ore over 10 years."

Despite the recent merger of Tanggang and Handan Iron and Steel Group, Mr Li said that the 150 million tonne FMG iron ore contract will only supply Tanggang.

FMG is set to export 25 million tonnes of iron ore to China this year, and aims to become the world's fourth largest iron ore producer and exporter following Vale of Brazil and Australian based BHP Billiton and Rio Tinto.

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.

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."

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.

Alumil signs JV with Russian Konstrukta

It is reported that Greek aluminum manufacturer Alumil Mylonas signed a memorandum of cooperation with the Russian construction company Konstrukta to establish a joint venture within the next months. Alumil will hold 51% of the venture and the Russian company the remaining 49%. The company noted that other probable co operations with Russian companies are also examined on a close basis.

According to the terms of the contract, two logistic centers will be built in St Petersburg and in south east Russia and one in Moscow. The company also said that it considers a possible cooperation with Austrian construction group Strabag.

ALUMIL is the biggest aluminum company in Greece and one of the leading groups in its sector in Europe. The group has 26 subsidiaries, 20 of which are spread throughout Europe, Africa and the Middle East. The company is currently active in 45 markets.

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.

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.

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.

Russia will not interfere in TNK-BP conflict - Mr Sechin

RIA Novosti cited Mr Igor Sechin Russian Deputy Prime Minister said at a meeting with Mr Tony Hayward CEO of BP as saying that the state will not interfere in the conflict between Russian and British shareholders at joint oil venture TNK-BP.

A government source said "A meeting between Mr Sechin and Mr Hayward took place. During the meeting Mr Igor Sechin said that the state has no plans to interfere in the TNK-BP shareholders conflict."

Russian billionaire shareholders in the oil venture demanded last month that Mr Robert Dudley TNK-BP long time CEO steps down accusing him of putting the interests of BP first. They were reported to be seeking to replace him with Mr Viktor Vekselberg Russian tycoon and TNK-BP's executive director. BP rejected calls for Mr Dudley's dismissal.

Mr Vekselberg said at the International Economic Forum in St Petersburg that he expected TNK-BP shareholders to reach a preliminary agreement and move closer to resolving the conflict in the next few days.

The Russian-British venture TNK-BP, Russia's third largest oil producer founded in 2003 is jointly owned by BP and Russia's consortium AlfaAccessRenova. The consortium, representing Russian investors Alfa Group, Access Industries and Renova holds 50% in the energy company.

OMK Vyksa gets DNV for corrosion resistant coating

It is reported that the Norwegian company Det Norske Veritas issued the Joint metallurgical company and its member Vyksunskomu Metallurgical Plant certificate of two new lines of external corrosion resistant coating of large diameter pipes DNV requirements of international standard to the insertion of three polyethylene surface on underwater pipes for pipelines.

1219 mm diameter pipes with a wall thickness of 34.6 mm, manufactured in late January this year was tested in the presence of the DNV and final customer Nord Stream AG.

Nord Stream AG, the operator of the construction of a pipeline on the bottom of the Baltic Sea, has inked a contract with OMK under which 1219 mm pipe supplies should reach 280,000 tonnes in 2008 and 2009.

Construction and installation of two new lines of external corrosion resistant coating VMZ began in 2006 and was completed at the end of 2007. Dutch company Selmers Technology BV supplied the equipments.

The new lines can apply polyethylene and polypropylene coatings on the pipe diameter of 508 mm to 1420 with a wall thickness of up to 50 mm per year.

Det Norske Veritas is the developer of technical standards for navigation, energy and pipeline transportation. Many of its technological solutions have become an international industry standard. Certificate of Conformity of Production TBD DNV standard for underwater pipelines OMC received in April 2007.

Evraz names North American subsidiary as Evraz Inc NA

Evraz Group S.A announced that its North American subsidiary will now operate under the name Evraz Inc North America.

According to the release, effective immediately, the new name impacts the North American headquarters in Portland Oregon and all eight production facilities, including; the steel production facilities in Pueblo Colorado, Regina Saskatchewan and Claymont Delaware; the seamless pipe, rod and rail mills in Colorado, the plate mills in Claymont, Regina and Portland, Oregon; the coil processing facility in Surrey, British Columbia; the structural tubing facility in Portland; the pipe mills in Portland and Regina; as well as the Alberta pipe mills in Red Deer, Calgary and Camrose.

Mr Alexander Frolov Chairman of the Board, President and CEO of Evraz Group SA said “The addition of the former IPSCO Canadian facilities into the Evraz group enhances our presence in North America to approximately 5 million tons of rolled steel product and the time has come to operate under the Evraz brand name. As one unified company, focused on value-added steel and tubular products, we believe the best way to do business is with a consistent brand in the market place.”

Mr Jim Declusin President & CEO of Evraz Inc North America added that “For more than 50 years, the world has known us as IPSCO and Oregon Steel and our subsidiaries as Rocky Mountain Steel Mills, Claymont Steel, Columbia Structural Tubing, and OSM Tubular. While it takes time getting used to a new name, we feel strongly that our customers, employees, suppliers and the communities in which we operate will soon discover it’s business as usual under the Evraz umbrella. Under our new name, we will continue to produce the same great products and deliver with the same quality service that our customers know they can expect.”

Ukrainian cement output in 5 months 2008 up by 14.7% YoY

Ukrainian Journal Staff quoted State Statistics Committee reported that cement output in Ukraine in January to May 2008 up by 14.7% YoY to 6.225 million tonnes

According to the committee, cement production in May 2008 was 1.493 million tonnes which was down by 4.4% YoY compared to May 2007 and down by 0.2% compared to April 2008.

Eni plans to invest over USD 7 billion in Kazakhstan

Interfax-Kazakhstan cited Mr Stefano Cao CEO of Eni Exploration and Production Division as saying that Italy's Eni plans to invest over USD 7 billion in projects in Kazakhstan in four years.

He added that in 15 years Eni has become a major foreign investor in Kazakhstan.

In Kazakhstan Eni operates the pilot stage of the Kashagan oilfield and owns 18.52% in Agip consortium that implements the project. Eni also owns 32.5% in the Karachaganak Petroleum Operating BV that is developing a major gas condensate field. Karachaganak contains 1.2 billion tonnes of oil and 1.35 trillion cubic meters of gas.

ArcelorMittal Kryviy Rih low on limestone supplies

Ukrainian Journal reported that Ukraine's biggest steel producer ArcelorMittal Kryviy Rih is experiencing disruptions in supplies of metallurgical limestone that have brought the company to the verge of suspending operations.

Company spokesman said at a meeting of Ukrainian mining officials in Kiev that "The plant is on the verge of shutting down.”

He said that production and sale of metallurgical limestone is currently divided up between the Metinvest group and the company Chelsy.

China and Kazakhstan discuss on railway cooperation

Kazakhstan Today reported that Mr Askar Mamin JSC Kazakhstan temir zholy chairman met Mr Hu Yadong vice Minister of Railways of Chinese National Republic in Almaty recently.

According to the press service, the meeting took place within the fourth session of subcommittee on cooperation in the field of railway transportation of the China-Kazakhstan Cooperation Committee.

The release informed that "Mr A Mamin and Mr Hu Yadong discussed a wide range of questions. The parties brought into focus realization of volumes of transportations of cargoes through border check point Dostyk Alashankou and attraction of additional transportations by activization of marketing of transportation of cargoes.”

The report added that during the meeting the parties discussed the questions of construction on concessional basis of railway line Zhezkazgan Beyneu that will increase volumes of transportation of cargoes from China to Azerbaijan, Georgia, and Turkey and further through Bosporus to Europe.

Gazprom to hike gas prices for Ukraine

Ukrainian Journal Staff reported that Gazprom could raise prices for natural gas for Ukraine from 2009 to European levels if new principles of price formation that factor in Central Asian gas prices are used.

Mr Volodymyr Omelchenko an energy sector analyst ay the Razumkov Center said the chance that Ukraine will be forced to buy gas at much higher, European prices is 60%.

Bogdan increases car output in 5 months by 61.6% YoY

Ukrainian Journal Staff cited Mr Serhiy Krasulia Bogdan press secretary as saying that Bogdan car plant, part of the Bogdan Corporation in January to May 2008 increased car output in Lutsk and Cherkasy up by 61.6% YoY compared to January to May 2007 to 34,511 cars.

In January to May 2008, 9,840 VAZ cars were produced while Kia car output was 11,784 cars, and Hyundai car output was 12,887 cars.

SKF to build EUR 75 million bearing plant in the Tver Region

RIA Novosti reported that the Swedish firm SKF intends to build a bearing plant in the Boroblevo-2 industrial zone in the Kalininsky district in the Tver Region.

A spokesperson for the region's administration told RIA Novosti that "A protocol of intention to build a new plant worth EUR 75 million was signed today by the administration of the region and the investors' representatives. The project is to be implemented in three stages. After the plant begins working to full capacity in 2012, 450,000 bearings worth more than RUB 5 billion will be produced in Tver every year."

The Russian subsidiary of SKF was founded in 1991. Today it has branches in Moscow, St Petersburg, Krasnoyarsk, Vladivostok and Magnitogorsk.

Nickel retreats as market reviews disruption

Reuters reported that nickel prices retreated from three week highs on Friday after the market scaled back its expectations of supply disruptions in Australia.

Stainless steel raw material nickel hit USD 24,950 a tonne, the highest since May 22 and closed at USD 24,000 a tonne from USD 24,500 a tonne on Thursday when it rallied by about 6%.

Thursday's gains came after mining giant BHP Billiton said it had brought forward a four month refurbishment at its 100,000 tonne per year Kalgoorlie smelter. But news that BHP was hoping to export more nickel concentrates to other processing plants over the next four months dampened nickel market sentiment on Friday.

European steel makers pay more for ferromanganese

Reuters reported that European steel makers have agreed to pay between EUR 1,970 to EUR 2,050 a tonne for ferromanganese in the third quarter.

A European trader told Reuters that the price is above the EUR 1,400 to EUR 1,600 a tonne paid for ferromanganese in the second quarter. Contracts and spot prices for silicomanganese are also being agreed at between EUR 1,650 to EUR 1,700 a tonne from EUR 1,400 to EUR 1,600 a tonne in the second quarter.

The trader said that prices are higher because of problems with manganese supplies from South Africa, where power shortages have disrupted mining output. He said that "In general supply is still constrained and demand good. The third quarter is generally weak for steel production in Europe because some mills close for the summer, but there are there are production constraints in South Africa."

Major European steel makers including ArcelorMittal and Germany's ThyssenKrupp use manganese additives for steel.

Samsun halts spot FeMo offers due to truckers strike

Platts reported that South Korea's ferromolybdenum producer Samsun suspended spot offers for exports because of the strike planned by truck drivers to protest against high diesel prices.

A company official said that the company is facing problems in shipping out as well as receiving feedstock imports at the port of Pusan, the closest port to Gimpo City where it operates its plant.

Another industry source said that Pusan port workers seemed to have already gone on strike, delaying customs clearance.

Skyrocketing crude oil prices have pushed up diesel prices, but trucking and similar transportation companies have been unable to raise freight rates to keep up with higher fuel costs.

Ferromolybdenum production at Samsun's 250 to 300 tonne per month ferromolybdenum plant is normal currently, but if feedstock imports do not arrive, it might cut output later this month.

Japanese ferroalloy trade calming down

Platts reported that Japan's shopping spree for some ferroalloys used to make steel calmed down this week, as traders and steelmakers prepared to face the impact of the Beijing Olympics in August.

Market sources said that spot prices of ferrosilicon imported into Japan from China were up, but the trade has thinned. It said that there were only handful traders seeking massive quantities of more than 1,000 tonne rather than smaller cargoes of 500 tonne or less as they rushed to meet their final purchase requirements before July.

Traders did 1,000 tonne deals at USD 2,400 to USD 2,480 per tonne CIF Japan, but showed no interest in 500 tonnes cargoes offered at USD 2,200 per tonne CIF Japan.

Traders fear that the Chinese government may restrict shipping activities at the port of Tianjin over July to August and almost all of China's ferrosilicon exports to Japan are loaded at Tianjin, which is close to Beijing.

The loading points for silicomanganese and silicon metal are more evenly spread out throughout China. Meanwhile, Japanese traders said ferrosilicon market would be calmer next week as there were only a handful electric arc furnace operators who consume less than 500 tonne per month of ferrosilicon looking for supplies in the spot market.

MacroAsia to mine nickel in Palawan

Manila Standard Today reported that MacroAsia Corp the publicly listed holding company of Lucio Tan is investing PHP 800 million for a nickel mining project at Ipilan in Brookes Point in Palawan.

The company, which has sought incentives on the project with the Board of Investments, plans to develop the new mining site and produce an estimated output of 700,000 wet metric tonnes of beneficiated nickel ore per year.

MacroAsia’s mining project, which covers over 1,000 hectares will start commercial operations in January 2009. Beneficiated nickel ore requires minor processing to make it a higher grade of nickel. The company’s output is expected to be shipped to China as feedstock for ferronickel production, with Australia and Japan as the final market destination.

MacroAsia plans to produce a higher grade of nickel to obtain more export value. Minor processing of the nickel in Palawan, according to sources, would effectively lower the freight costs of the company.

MacroAsia, the former Infanta Minerals and Industrial Corp is a holding company with interests in mining, aviation support and logistics services. The company pushed through with the nickel mining project after the Supreme Court recently affirmed its 2007 decision to dismiss the bid of two firms to exercise their right over MacroAsia’s claims. The mining concession covers at least a 1,000 hectare property at Sitio Linao, Ipilan, Brookes Point, Palawan.

Ferrexpo to start talks on USD 5 billion partnership

It is reported that Ukrainian iron ore miner Ferrexpo poised to enter the FTSE 100 index will start formal talks with several big mining groups and steelmakers about a USD 5 billion partnership to develop new mines.

Mr Mike Oppenheimer CEO of Ferrexpo said its company aimed to raise its iron pellet production over the next five years, from 9 million tonnes to 35 million tonnes a year. He said that "These plans are well advanced we are at the stage of formal engagement in discussions with interested parties."

He said that the building of the Yeristovskoye mine would cost about USD 2 billion with the Belanovskoye mine costing USD 2.5 billion to USD 3 billion. He added that "It's a big resource."

Mr Oppenheimer said he was aiming to strike a deal with a partner before the end of the year.

Ferrexpo is due to start formal talks this week with companies including Rio Tinto and Anglo American, which are large miners of iron ore, and steelmakers including ArcelorMittal and Voestalpine, which are anxious to secure iron ore supplies at a time of strong demand. Ferrexpo has hired JPMorgan Cazenove to manage the process.

Ferrexpo already has basic designs for the mines and processing plants, but is keen to do a deal with a company that can help with the engineering and management, as well as the financing, of such a big project.

The Switzerland based company controlled by Mr Kostyantin Zhevago, the 33 year old Ukrainian billionaire businessman and politician owns the Poltava iron ore mine in central Ukraine and a plant that turns the ore into concentrated pellets. These pellets are sold to steel companies, especially those operating in central and Eastern Europe such as Voestalpine, ArcelorMittal and US Steel.

Global iron ore shortage may continue up to 2012

Merrill Lynch indicated that the iron ore price will keep rising and that the shortage of supply will continue to 2012.

Merrill Lynch said that because of China's strong demand, the contract price is expected to rise by 20% in 2009. The estimation is higher than market expectation by 5% to 40%.

It said that increasing energy, labor, and facilities costs and exchange fluctuations will become the main problems which producers will focus upon.

(Sourced from YIEH.com)

Vale Xstrata tie up - Vale sees no reason to resume talks

Mr Fabio Barbosa CFO of Cia Vale do Rio Doce said that he sees no reason to resume talks after a bid to buy Xstrata Plc failed.

Mr Barbosa during a meeting with analysts said that in Sao Paulo that neither Vale nor Xstrata have changed their positions since negotiations collapsed.

Mr Barbosa said that “We did not manage to reach, despite efforts by both parties, a solution that was mutually satisfactory. We haven't held any talks about it. The issue for us stands where it stood when we announced the end of discussions back in March. We have no reason to talk again.''

On March 26th 2008, talks between Vale and Xstrata broke down, ending a bid to create the world's largest mining company. Mr Roger Agnelli CFO of Vale said that time that negotiation failed because of the demands of Xstrata's biggest shareholder, Glencore International AG.

South African coal to Europe hit new price high

Reuters reported that prices of prompt South African coal cargoes FOB Richards Bay and coal delivered into Europe hit fresh records for the second time this week on strong demand and tight supply.

Surging API2 and API4 coal swaps values, in line with high oil and other energy markets, also boosted physical coal prices This week most days have seen close to a million tonnes of physical coal trade on globalCOAL's screen and via brokers, a significant rise in volume from a year ago, due to the entry of banks and oil trading companies into the coal market.

Most of the activity has been several months forward, for Q3, Q4 and Q1 2009. There is a strong sentiment in the market with November cargoes, for example, trading at several dollars above very prompt. A Q4 trade for a panamax a month loading of South African coal went through on globalCOAL on Thursday at a record USD 152.00 a tonne FOB Richards Bay, up from November prices of around USD 143.00 last week.

A Q1 09 DES ARA trade for a 50,000 tonne parcel a month went through globalCOAL on Thursday at USD 182.50 a tonne a fresh record for forward prices. January cargoes had been bid at around USD 180.00 recently but had not traded. A September delivery parcel traded earlier this week at USD 177.00 a tonne DES ARA. Both FOB and DES prices could still rise sharply due to continued strong demand, tight supply and the expectation of continued high oil prices, traders, utilities and producers said.

African miners urged to be ready for Chinese resources assault

Mining companies needed to look strategically and systematically at how they could benefit from opportunities that resource hungry China's increasing growth as global resources player presented, an expert on that country said on Tuesday.

Speaking at the ‘Africa Mining Congress' in Johannesburg, Bejing Access founder and MD Mr Kobus van der Wath added that Africa could expect intensified engagement with the world's third biggest economy, describing the past few years as only the beginning."

Mr Yuschenko criticizes lack of strategy for developing coal industry

Ukrainian News Agency cited Ms Iryna Vannikova spokeswoman of Mr Yuschenko's president of Ukraine announced that Ukraine has criticized the Cabinet of Ministers for lacking a strategy for developing the coal industry.

Ms Vannikova said "The president of Ukraine has repeatedly stressed the need for the government to adopt a program for developing the coal industry. The head of state is concerned by the irresponsible position of the Cabinet of Ministers on this issue because the state of the coal industry is deteriorating. The mining profession is becoming a deadly profession, and there is still no government strategy for developing the coal industry."

She said that Mr Yuschenko is insisting that a government commission should be set up to investigate the cause of the accident at the Karl Marx coal mine region and provide assistance to the victims of the accident. Ms Vannikova said "Yuschenko believes that based on the results of the investigation of the cause of the accident, those guilty should be held responsible. She said that the government should deliver a report to the government on the work that is performed during the week.

South Gobi Energy Resources opens Ovoot Tolgoi coal mine

South Gobi Energy Resources celebrated the opening of its Ovoot Tolgoi coal mine in southern Mongolia last week. More than 100 guests, including political, community leaders and employees attended the opening ceremony.

The Ovoot Tolgoi mine is 45 kilometer north of the Mongolian border with China. A Chinese steel mill has built a railway to the Ceke border point, where a coal loading facility opened last year. The Mongolian government is also transforming the Shivee Khuren (Ceke) border point into a full time crossing that will allow daily deliveries of coal to China.

Since receiving its mining license in September 2007, a workforce of 180 employees has been recruited and is now involved in all phases of mining activities. Open pit coal production began in April and the mine is now operating on a 24 hours per day basis.

Three coal products have been identified for export from the Ovoot Tolgoi mine namely thermal coal, premium thermal coal and metallurgical coal.

Anglo American to sell of Tarmac Iberia

Anglo American plc announced that it has agreed to sell Tarmac Iberia SAU to Holcim Spain a subsidiary of Holcim Ltd for a total consideration of up to EUR 148 million (USD 230 million).

Tarmac Iberia is a significant supplier of ready mix concrete and aggregates with primary markets in the Greater Madrid, Mediterranean coast and Catalonia areas and reported 2007 net sales of EUR 183 million.

Completion of the transaction is expected to take place by September 2008, subject to regulatory approval.

4 die during illegal coal mining in Jharkhand

Ranchi Express reported that at least four persons and several others were injured when a portion of the roof caved in during illegal mining at Section A mines of Rajrappa colliery. However, the CCL administration did not confirm the incident.

Mr Sanjeev Kumar DSP of Ramgarh, however, said that with the help of Rajrappa CCL, a dozer had been deployed to extricate the bodies. However, till now, no body had been recovered. He added that no FIR has been lodged so far.

Sources said that during illegal mining four miners got trapped when a portion of the roof caved in. it added that the local villagers shifted the bodies from the spot before the arrival of the police.

Queensland Government allow for further Wide Bay coal search

ABC News reported that more of the southern part of the Wide Bay will be explored for coal after a Queensland Government grant.

As per report Core Coal Queensland has gained AUD 75,000 of funding to carry out high risk exploration in an area between Maryborough and Gympie.

Mr John Loraine MD of Core Coal said that they have been doing basic exploration in the area for several years. He said that "Coal has been known in this area south of Maryborough, it's been know in this area for more than 100 years.”

He said that "There's been occasional small mining operations extracting coal in the area, what's never been demonstrated is I guess any larger occurrences of coal."

Alcoa to take 40% stake in Vietnam plant

It is reported that Vietnamese prime minister has allowed the Vietnam National Coal Mineral Industries Group to sell 40% stake in a joint venture to Alcoa of the US.

The joint venture’s capacity of alumina is 600,000 tonnes per year. The prime minister permits Vinacomin to hold 51% stocks and the other 9% will be sold to other domestic investors.

Once the joint venture is completed, the government will have a 10 percent royalty on net profit each year.

HCL slips to grade B and may lose out on Mini Ratna tag

BS reported that Hindustan Copper Limited has slipped a grade below and has been and adjusted in grade B in the records of the government of India. HCL was enjoying A status all these years but due to change in gradation structure, it found a place in grade B despite being a profit making unite.

Well placed source in Indian Copper Corporation, a unit of HCL said that "Although the government has made a declaration in this regard, we are yet to get the communication. The degradation would affect the pay structure of employees and our men might be deprived the some facilities which was earlier available to Grade A companies."

Mr Om Prakash secretary of labor union of ICC said that "We do not understand why HCL has been put in Grade B while our company is doing for last couple of years. However we feel things would be set right soon as HCL had applied for Mini Ratna citation to the central ministry of mining to become par with National Mineral Development Corporation, NALCO etc and later plant to aspire to become a Nawa Ratna Company like ONGC."

Indian government has now grades all its units into 5 categories namely A+, A, B, C and D. Earlier the gradations were restricted only to Grade A, Band C.

Dniproenergo to import 0.8 million tonnes of thermal coal

According to CEO of Dniproenergo, his company is to import 0.8 million tonnes of coal in 2008. The coal is being presently imported from Russia and it is of the semi anthracite variety.

A Millennium Capital analyst said that “DNEN started coal imports later than other GenCos this year and we believe this is one of the reasons for reduced margins in Q1 2008. The amount announced should be enough to cover any local market shortfall and assure the availability of the full 7 million tonnes needed this year, so we view the news as POSITIVE for the stock.”

(Sourced Millennium Capital)

Ukrainian government sens condolence message for Karl Max accident

Ukrainian News Agency reported that Mr Arsenii Yatseniuk Parliament speaker of Ukraine has expressed condolences to relatives and families of the miners that were killed in the June 8 mining accident at the Karl Marx coal mine.

Mr Yatseniuk expressed his condolences in a telegram sent to employees of the coal mine, a text of which Ukrainian News obtained. He said "Extend our deep condolences to relatives and families of the miners that were killed. We will never forget those who brought heat and light to the people."

He added that the parliament received news of the fatal accident at the coal mine with pain. On behalf of the parliament, he wished those injured in the accident early recovery.

Kyrgyzstan relies on plans to increase coal production

TCA Editions reported that to cope with the current energy crisis, Kyrgyzstan needs to address a number of possible remedies one of which is a broader use of coal by industries and the population at large. Experts say Kyrgyzstan has sufficient coal reserves to meet its energy needs.

Acording to Mr Gulbarchyn Asanova deputy minister of industry, energy and fuel resources of Kyrgyzstan the estimated reserves of the country 70 major coal mines amount to more than 2.2 billion tonnes with a further 1.2 billion tonnes of additional resources. He said that more than half of the coal mined in the country is produced by the open pit method. Coal mines in southern Kyrgyzstan are working quite efficiently, although the output could be certainly higher.

Mr Asanova said Kyrgyzstan now has 23 coal mining companies, which are consolidated within the Komur state owned company almost all of them are public corporations. He said that for years the coal mines were subsidized by the State and it is very difficult to get rid of this way of thinking. Today we cannot readily allocate loans and credits as almost all of the mines have been privatized. However, without the development of the coal mining industry, we will not be able to cope with our energy problems.

Karl Marx mine accident due to methane rock outburst – Mr Oleksandr

According to Mr Oleksandr Turchynov First Deputy Prime Minister of Ukraine, the accident at the Karl Marx mine at Yenakieve in Donetsk region was an outburst of methane and rock.

Mr Oleksandr Turchynov said "It is yet unknown what provoked the detonation. Because mining efforts in the coal pit were forbidden by the State Committee for Industrial Security, Labor Protection and Mine Supervision, electric equipment was used just to support operation of hydraulic tools. Meanwhile, experts noted excessive power of the explosion, when flames reached the surface and even damaged some buildings."

The first Vice Premier of Ukraine said he was planning to call an emergencies commission meeting to consider prospects for industrial gas mining in Donetsk region. He said that "Gas explosions are rather intensive and it takes serious investment to organize ventilation and industrial gas mining."

He also said criminal proceedings had been instituted into the accident. He added that the mine may be closed, but it takes expert conclusions.