TATA Steel operating performance in Q1 for Indian operations

TATA Steel announces that it has completed the first quarter of FY09 on a buoyant note with a significant increase in its production. Hot metal production at 1.387 million tonnes and crude steel production at 1.253 million tonnes was higher by 3.2% & 8.6% respectively as compared to volumes in the first quarter in 2007. The saleable steel production at 1.187 million tonnes registered an impressive increase of 11.5%.

Highlights

1. The first quarter sales by 1.081 million tonnes have recorded an increase of 11 % as compared to that of the corresponding period of 2007. The revenue from sales of branded products during the period has increased by 47% as compared to 2007.

2. The sales to automotive sector increased to 0.216 million tonnes corresponding to a market share of 42% as against a market share of 38 % in first quarter of FY08.

3. The sales of skin panels for the current quarter at 7477 tonnes as was significantly higher compared to 4248 tonnes for the corresponding quarter in 2007. This was achieved mainly because many new approvals for commercial supplies were obtained during the period after meeting the stringent requirement of the auto manufacturers.

4. There was significant reduction in the working capital due to better operating management and working capital financing initiatives. As part of the Company’s strategy to Enhance Unique Offerings, a new TISCON grade Fe500 was launched in the Retail Channel and Super Ductile Rebars were introduced for earth quake prone zones.

5. Asia’s largest Blast Furnace, the H Blast furnace was blown in. It was commissioned in a record time. The hot metal of correct quality from the new furnace was cast in steel making shops within 36 hours of blowing in which is a record in itself.

6. The commissioning of 3rd caster and the Vessel upgrade at LD Shop #1 is as per schedule and will be completed by end of September 2008. With the completion of this, the steel making capacity at Jamshedpur Works will increase to 6.8 million tonnes as compared to the current capacity of 5 million tonnes.

7. Though continuous improvement has been inherent in TATA Steel culture, it is the main theme for current year. Some very remarkable achievements have been witnessed in first quarter as a result of special focus and attention to the improvement initiatives. The yield at HSM has increased to 98.19% as compared to 97.87% in 2007, WRM yield has increased to 97.19 as against 96.4% in 2008. The substitution of Jhama coal in place of the expensive raw petroleum coal has resulted in major cost avoidance and has also found an innovative use of the otherwise not usable coal from our own coal mines.

8. The work on the synergy realization benefits with cross learning from Corus under way. Among the major initiatives, significant work was done in the Cold Rolling area which has the potential to significantly enhance the value added CR production. A new technique of Blast Furnace throat repair learned from Corus has avoided a major shutdown in the F Blast Furnace originally planned in the current year.

Mr Paswan outlines Indian steel pricing scenario

Mr Ram Vilas Paswan minister for Steel recently delivered the inaugural address at the India Steel Enclave organized by the ministry of Steel & the Federation of Indian Chambers of Commerce and Industries.

Mr Paswan said “Recently, Indian steel sector has received a lot of attention on account of rising steel prices in the domestic market, since February 2008. The prices rose as much as 40% to 50% between January and May 2008, when Government had to step in for inflation management in the steel sector. But, I am happy to note that the Indian major steel producers have kept up with their assurance given to Prime Minister on 5th May and have maintained their prices until now. I hope the major steel producers will continue to support the Government in its effort in managing the ongoing inflationary trend in the country.”

Mr Paswan said “Until the Government stepped in, Indian steel prices used to be determined by the International Price, based on the landed cost of import. A sudden demand of steel in the international market combined with the sharp rise in crude oil prices caused Indian steel prices to skyrocket.”

He said that “When the situation became a matter of concern Government had to resort to fiscal measures by way of imposition of export duty on certain steel products. Government also took certain other measures in last week of April, such as reduction of import duty to NIL on all non alloy steel products and certain key raw materials such as zinc, ferroalloys and met coke as well as reduction of CVD to NIL on TMT Rods and Bars.”

Mr Paswan said “At the same time my ministry had a series of meetings with major steel producers, secondary steel producers and various steel consumers discussing out the issues and problems. All this has led to dramatic effect in making steel prices stable in the domestic market. The difference between the landed cost of import and domestic prices now stands at INR 13,000 to INR 15,000 per tonne of steel. Had my Government not taken the right steps in time, the domestic steel price would have been higher by at least INR 10,000 per tonne, over the current prices.”

Mr Paswan said “I again express my sincere thanks to the Indian steel industry and hope they would continue to support the efforts of Government in future. I and the Secretary Steel will also continue to listening to your problems and take appropriate actions in helping the industry in solving their various problems. I have also noted with concern that, certain dealers and traders have sold the flat steel products at higher than market price, taking advantage of the high demand in the retail market.”

Mr Paswan said “We will take up very severely with such market manipulations. We have already directed the PSU steel companies to keep a strict watch on such malpractices. I request the other producers to keep a similar watch on their retail and distribution network. Transparent price information combined with frequent publication in Press and TV media will go on a long way in eliminating the market manipulations by a handful of traders.”

Indian crude steel production in April to June 2008

It is reported that India’s crude steel production in April to June 2008 totaled 12.898 million tonne up by 1.8% YoY as compared to 12.664 million tonne in April to June 2007.

While the production by main producers dipped by 2.2% YoY, the production from secondary steel producers totaled 7.700 million tonne up by 4.8% YoY as compared to 7.350 million tonne in April to June 2007.

In million tonnes
Source - JPC

Main producers

In million tonnes
Source - JPC

Secondary producers

In million tonnes
Source - JPC

SAIL Units

In million tonnes
Source - JPC

SAIL unhappy over delays by Jharkhand

ET reported that Steel Authority of India Limited is unhappy about the way the Jharkhand government is dragging its feet over the renewal of iron ore mining leases to SAIL.

As per report Mr Kiran Kapoor ED Raw Materail Division recently met chief secretary of Jharkhand to discuss these issues as well as SAIL's expansion plans in the state.

The report cited Mr Kapoor, after the meeting, as saying that "There are 11 mining related issues pending with the state government.”

He said that “We also discussed with government officials our expansion plans and land acquisition for our proposed Greenfield project."

SAIL is also unhappy that the state government is "not responding positively" to its upcoming projects, company officials said on condition of anonymity. They pointed out that

SAIL is worried as most of the iron ore mining leases are set to expire in the next two to three years. The mining leases of Chiria, Kiriburu and other iron ore mines are expiring in 2010 and 2011. While SAIL and the Jharkhand government are fighting a legal battle over mining rights for the Chiria mines, the issue of lease renewal for the other mines is still hanging fire.

SAIL is looking for land, water, iron ore and other infrastructure facilities for setting up a 12 million tonne Greenfield project with an investment of Rs.470 billion. SAIL is also expanding the Bokaro Steel Plant's capacity from 4.8 million tonnes to 7.7 million tonnes. SAIL plans to produce 29 million tonnes of steel from Jharkhand alone by 2020.

Adhunik Metaliks to supply long products to auto sector

BL reported that Adhunik Metaliks Limited has achieved a very high level of perfection in quality of its products and soon it will have brand equity of one of the best in the world.

Mr Manoj Agarwalla MD of Adhunik Metaliks Limited said that “Its long products in alloy steel are going to the very demanding auto industries and now the name of Adhunik Metaliks is taken along with the best in the business.”

Mr Agarwalla said that companies like Honda, Dana Spicer, Meritor are in touch for business. He informed that “The products are being exported to Nepal, South East Asia & Middle East countries.”

He said that while competing with reputed companies, Adhunik which started production by 0.24 million tonnes will increase its capacity to 1 million tonnes while maintaining quality. He said that 3 year old company is one of the fastest growing company in the country with modern technology and systems.

RIL completes laying of East to West gas pipeline

It is reported that Reliance Industries has completed laying of the East to West pipeline that will ship gas from its eastern offshore fields to consumption centers in the west, but commissioning of the 1,386 kilometer line is not likely before August end.

According to Reliance Industries, the physical laying of the pipeline from Kakinada in Andhra Pradesh to Bharuch in Gujarat has been completed. After mechanical completion, the pipeline is tested first by water flooding and then filling it with gas to check for leaks and other parameters. Water flooding in the most of the pipeline sections is complete but gas in has been done only in one of the 10 compressor intersections.

Reliance said that the entire process will take between 20 days to 25 days and the pipeline will be commissioned not before second half of August. Reliance added that it bought about 5 million standard cubic meters per day of gas from GAIL India for gas in. About 1,000 kilometer of the pipeline length is ready for gas in or gas testing.

Reliance had awarded contract for laying of the pipeline to Chinese and Russian firms. 6 of the 8 sections were given to Chinese company and 2 to OAO Stroytransgaz, a unit of Russian natural gas company OAO Gazprom.

The East to West pipeline was scheduled for commissioning by July end but it now looks it would not be ready before third week of August.

Pennar Industries posts INR 9.66 crore net profit in Q1

It is reported that Pennar Industries Limited has registered gross sales of INR 200 crore with a net profit of INR 9.66 crore for the first quarter ending June 30 2008 as against sales of INR 147.05 crore and net profit of INR 5.5 crore for the corresponding quarter in 2007.

Mr Nrupender Rao vice chairman of Pennar Industries said its sales spurted with the addition of a new plant in Chennai and a much diversified portfolio. He added that “The new plant is likely to add sales volumes of about INR 150 crore this fiscal of the overall revenue projection of INR 900 crore.”

Mr Ch Anantha Reddy ED and Mr R. Ravi CFO of Pennar Industries Limited while addressing a press conference said that the company is in the process of investing about INR 45 crore in the Chennai facility and at Hyderabad to create a base to serve the new generation railway coaches. Mr Reddy said that “We are in the process of creating additional facility in the site located on Chennai to Tirupathi road, where we have a 38 acre site.”

Pennar now has 5 manufacturing units, 2 near Hyderabad, two in Chennai and another at Hosur. It recorded revenues of INR 641.12 crore and net profit of INR 30.8 crore for 2007-08.

Cement makers likely to slash capacity by 8% in 2008

According to market analysts, Indian cement majors may cut capacity utilization by as much as 8% in the financial year ending March 2008 as demand slows and new capacities are added. Industry experts said that in a changing economic scenario with GDP growth rate being seen at 7.5% or below, cement firms will be in trouble with excess of capacities and relatively lesser demand.

Cement Manufacturers' Association in its latest report has said that the industry added 30.34 million tonnes of additional capacities during the last financial year instead of 22.24 million tonnes as estimated earlier. This made the industry meet the target set by the report of the working group on cement industry for the 11 five year plan from the Ministry of Commerce and Industry.

Mr HM Bangur president of the Cement Manufacturers' Association & MD of Shree Cement said that "Demand growth will not be as much as it was earlier as core sectors are registering a slowdown. In FY2009, the average capacity utilization of the domestic cement industry will slip to 87% from 95% during the last year. Industry's capacity is enough now.''

Mr Bangur said that "The June quarter this year saw demand growth of less than 6%, however, in the long term perspective we see an average growth of 8% to 9%. This suggests that the industry's growth will now be in line with the low growth demand scenario where the report of the working group puts GDP at 8% and subsequently the cement demand at 10%.

However, industry experts said that scenario could be worse than this as they expect a lower GDP growth. They ruled out the possibility of industry coming back on track even till 2010-2011.

SCI likely to get Navratna status

BL reported that state owned Shipping Corporation of India is all set to join the coveted Navratna club.

As per report, its inclusion in the list of Navratna PSUs has been cleared by the apex committee and is likely to be unveiled in the next few weeks.

For SCI, graduating from a mini Navratna to a Navratna company will give it the required fuel to speed up its ambitious ship acquisition program lined up for the next 4 years. The up gradation in status will give it additional room to order ships without having to go through the cumbersome process of having to get the prior approval of the Government.

MMTC and India Bull commodity exchange JV approved

MMTC Limited has informed BSE that pursuant to provisions of Section 372 of Companies Act, 1956, shareholders of MMTC had approved in February 2008, MMTC's investment in a JV Company to be created for setting up of a Commodity Exchange.

MMTC had submitted an application to Forward Markets Commission, department of Consumer Affairs and Government of India seeking permission to set up a National Commodities Exchange in partnership with India Bulls Financial Services Limited.

MMTC informed that, Forward Markets Commission, Department of Consumer Affairs, Government of India vide their communication dated July 17th 2008, have conveyed the in principle approval of the Government on MMTC's proposal for setting up of a nationwide multi commodity exchange to be set up in NCR in partnership with India Bulls Financial Services Limited.

McNally Bharat receives order from Vedanta

McNally Bharat Engineering Company Limited has informed BSE that the Company have received an Order from Vedanta Alumina Limited for design, detailed engineering, manufacture & supply of equipment, erection and commissioning of 3 Units Green Mode Plant at Jharsuguda in Orissa valued at INR 246 crores exclusive of all taxes and duties.

Sagardighi power plant to begin generation by August 2008

It is reported that West Bengal Power Development Corporation's 2x300 MW Sagardighi coal based power plant in Murshidabad district is likely to begin power generation for commercial use by end August 2008.

As per the report, a trial run is on for the first unit after the breakdown and is running at a PLF of 80% to 100% and commercial generation by end of July 2008, while the second unit's synchronization is expected to begin shortly.

Chinese EPC contractor, Dongfang Electric Corporation had won the contract to develop the project at a cost of INR 2,750 crore.

Panipat flyover inaugurated

Project today reported that Mr TR Baalu union minister for Shipping, Road Transport & Highways inaugurated 3.6 kilometer long flyover including an elevated stretch on NH 1 at Panipat in Haryana.

The proposed flyover, a part of the 10 kilometer Panipat Elevated Expressway Project involved widening the existing 4 lane to 6 lanes for a 10 kilometer stretch from 86 kilometer to 96 kilometer passing through Panipat. The elevated portion of this expressway is 3.6 kilometer long and this passes over the central built up Panipat section covering Gohana Road, Sanuli Road, Assandh Road Crossings, city bus stand and Skylark Tourist Complex in the city.

As per the report, a separate 2 lane peripheral road with paved shoulders has also been provided on either side of the access controlled 6 lane highway for the local Panipat traffic, which will not use the elevated structure. In addition, the construction involved 3 underpasses to accommodate 4 lane divided carriageway, 2 minor bridges and widening, construction or re construction of culverts, drains, ducts etc for services.

IBM Daksh to acquire 1.2% stakes in KLG Power

BL reported that IBM Daksh Business Process Services has decided to acquire almost 1.2% stake in KLG Power Limited a subsidiary of KLG Systel for about INR 12 crore. KLG Power currently focuses on 3 technology products Vidushi, SG61 and Connect Gaya.com.

Mr Kumud Goel MD of KLG Systel said that “KLG has 2 lines of business are lifecycle solutions and the power solutions. The power solutions operation is being spun off into a subsidiary. While IBM Daksh will have 1.2% stake in KLG Power, Texas Pacific will hold 20% and the balance will be with KLG Systel. Texas Pacific has acquired the 20% stake for USD 50 million. He added Morgan Stanley was the advisor for the deal.”

KLG Systel Limited said that it had signed an investment agreement with IBM Daksh Business Process Services for investment of INR 12 crore in its subsidiary KLG Power Limited. The deal values KLG Power at almost INR 1,000 crore.

An IBM spokesperson, when contacted however, declined to comment on the specifics of the investment.

Anglos Scaw Steel to assist in steel cartel probe in South Africa

South African mining Anglo American Plc said that its Scaw South Africa Ltd steel unit will assist antitrust regulators in a probe into alleged price fixing.

Anglo American in a statement said that Scaw was granted so called conditional leniency by the Competition Commission. That means the unit was offered immunity from prosecution in return for cooperating with the investigation.

The commission said that “A major producer of long steel products confirmed the existence of an alleged cartel for products including reinforcing bar.”

The commission said that on June 23 it was investigating 10 steel companies and the South African Iron and Steel Institute for possible price fixing. The investigation is separate from one in which ArcelorMittal South Africa Ltd. It said that Africa's biggest steelmaker was found guilty last year of excessive pricing.

According to the producer assisting in the investigation, Discussions and meetings took place between the parties where agreements were reached to fix prices, exchange price lists and fix discounts.

The regulator said that unfair prices may damp manufacturing activity in South Africa, as steel products are a major contributor to costs in industries such as construction.

US to impose on AD duty on light walled rectangular pipe

The United States International Trade Commission determined that US industry is materially injured by reason of imports of light walled rectangular pipe and tube from China that are the US Department of Commerce has determined are subsidized and imports of those products from China, Korea and Mexico that the US Department of Commerce has determined are sold in the United States at less than fair value.

As a result of the Commission's affirmative determinations, the Department of Commerce will issue a countervailing duty order on imports of these products from China and antidumping duty orders on imports of these products from China, Korea and Mexico.

The Commerce Department previously made affirmative critical circumstances determinations with regard to certain imports of this product from China. Therefore, the Commissioners who made an affirmative injury determination are required to find whether these imports are likely to undermine seriously the remedial effect of the countervailing duty and antidumping duty orders Commerce will issue. All five participating Commissioners made negative findings with regard to critical circumstances in this investigation. As a result, the countervailing duty and antidumping duty orders concerning these imports will not apply to goods that entered the United States from China prior to January 30th 2008, the date of the Department of Commerce's affirmative preliminary determination.

The Commission's public report Light Walled Rectangular Pipe and Tube form China, Korea, and Mexico will contain the views of the Commission and information developed during the investigations. The product covered by these investigations is certain welded carbon quality light walled steel pipe and tube of rectangular including square cross section, having a wall thickness of less than 4 mm. The subject merchandise is provided for in subheading 7306.61 of the Harmonized Tariff Schedule of the United States.

ZISCO gets 3 bids for a stake - Herald

The Herald citing an unidentified person familiar with the process, reported that Zimbabwe Iron & Steel Co got three bids for a stake in the company.

The newspaper said that China Metallurgical Construction Group, Sunflag Iron & Steel Co of India and Reclamation Group of South Africa have bid for ZISCO.

The paper said that Zimbabwean government owns 88% of the company and has yet to say how much it is selling.

Vallourec and Sumitomo JV places orders for the construction of BF

Vallourec & Sumitomo Tubos do Brasil Ltda, the seamless pipe joint venture of Vallourec and Sumitomo Metals, announced that they placed orders of plant and equipment for the Greenfield project at Jeceaba in Minas Gerais of Brazil.

The centerpieces of the hot metal base of this plant will be two modern blast furnaces seized at 4.8 m hearth diameter each, they will jointly deliver 600,000 tonnes of hot metal per year to the steelmaking shop.

Vallourec & Sumitomo awarded the contract for the construction of these blast furnaces and important sub plants to a consortium of the Paul Wurth Group led by Paul Wurth do Brasil Ltda, Belo Horizonte, MG.

The order contains: the blast furnaces’ proper with cooling system, refractories and the Single Bell Pressure Top charging system, the stockhouse, cast houses with tapping equipment, hot blast stoves plants, gas cleaning systems as well as slag granulation and dewatering facilities. Stockhouse, blast furnace tops and the casthouse areas are provided with pollution reducing de-dusting and filtering systems. Electric equipment, instrumentation and automation for all mentioned systems are part of the order to the Paul Wurth Group. Further, the application of pulverized coal injection technology is foreseen.

Paul Wurth will provide advisory services for erection of the plants and perform supervision of commissioning of all production units under its supply.

A demanding overall project schedule foresees both blast furnaces to be commissioned by early 2010.

South Africa steel sales in Q2 up by 11.3% YoY

According to South African Iron and Steel Institute, South African domestic carbon steel sales rose to 1.52 million tonnes in the second quarter of 2008 up by 11.3% YoY and 3.6% QoQ.

According to the industry body's figures, sales of carbon steel flat products increased by 3,2% during the first half of the year, while sales of profile products increased by 10.6% YoY as compared with the first half of 2007, resulting in a total increase of 6.6% for the period.

It said that imports during the first quarter of 2008 increased by 14.7% compared with imports during the fourth quarter of 2007. Imported finished carbon and alloy steel products totaled 124 199 tonne during the first quarter of 2008, which represented 7.8% of the total apparent domestic carbon and alloy steel consumption, a decline from 8.2% in 2007.

It added that exports of primary carbon steel products, meanwhile, decreased by 54.2% YoY in the second quarter, to 217 300 tonne.

POSCO to sell USD 463 million bonds to refinance debt

Reuters reported that POSCO would issue KRW 468.8 billion (USD 463.2 million) in overseas debt to refinance maturing exchangeable bonds.

POSCO said that the bonds were exchangeable into SK Telecom shares at KRW 304,890 apiece, far above the current share price of KRW 178,000. The new 5 year bond offering worth KRW 49.3 billion would be made to investors in Asia and Europe.

Analysts expect that POSCO to sell more bonds later this year, as the steelmaker has said it is interested in bidding for Daewoo Shipbuilding and Marine Engineering which will be put up for sale by its top shareholders in the second half.

The planned sale of a 50.4% stake in the world's third-largest shipbuilder could be the country's biggest M&A transaction this year, fetching around USD 3.6 billion, based on the Daewoo's market value of KRW 7.3 trillion.

5 injured in BF accident at ArcelorMittal Zenica

The Earth Times reported that five people were injured in an explosion at the blast furnace of a steelworks in the central Bosnian town of Zenica.

According to the official report the explosion occurred late Thursday night at one of blast furnaces of ArcelorMittal company.

Officials of Zenica's hospital confirmed five workers were admitted to the hospital with burns, none of them being critical. An investigation was launched to find out what caused the accident.

ArcelorMittal took over majority control of the Zenica steelworks company, one of the biggest steel outfits in the Balkans in 2004.

Imarex announce the launch of a new BDI options contract

International Maritime Exchange, a part of the Imarex Group of companies announce the launch of a new BDI Options contract to complement the BDI Futures contract launched last month. BDI Options are cleared at NOS Clearing along with Imarex Freight Options on most tanker routes and dry bulk indices.

The release said that

1. BDI options will be available for trading and clearing for all NOS members and clients of General Clearing Members GCMs set up with NOS Clearing.
2. BDI options will be structured as monthly Call and Put options for the term of rolling 48 months.
3. BDI options will be Asian style with automatic exercise by NOS. All freight options will be settled against the arithmetic average of the Baltic Dry Index over the number of Index Days in the month.
4. The minimum contract size for BDI options will be 1 lot per month.
5. The clearing fee for BDI options will be USD 15 per lot including execution/clearing.
6. All strikes may be cleared with a minimum 100 point price fluctuation.
7. All option contracts will be registered on the member's and GCM's ordinary clearing account with NOS.
8. Option premiums will be settled in cash between the member and NOS on the trading day. At expiration, all in the money options will be automatically settled against the average spot index or delivery period.
9. The settlement amount the positive difference between the average index value and the option strike, will be booked the last business day of the month.

PT Krakatau likely to buy overseas iron ore mines

The Jakarta Post reported Indonesian largest state owned steelmaker PT Krakatau Steel planned to buy stakes in overseas iron ore producers to secure supplies.

The newspaper quoted Mr Fazwar Bujang president of Krakatau as saying that "Prices of iron pellets from Brazil, Chile, India and Bahrain have almost doubled this year.”

During a preparation of an initial public offering, Krakatau recognized the necessity of mine acquisitions and has been in talks with potential targets and an early finding shows mines in Australia.

Nucor Yamato Steel raises wide flange beam prices

Nucor said its Nucor Yamato JV will increase net transaction price on wide flange beam for August shipments, by about USD 72 per tonne.

Nucor will also raise its raw material surcharge by USD 488 per tonne for August deliveries, a USD 72 per tonne higher than that in the previous month. Meanwhile, the company will keep its based price level unchanged in July.

Ferrous scrap price peaking in Tokyo

Ferrous scrap market price experiences temporally peak around Tokyo. Some local electric furnace steel makers reduced the scrap purchase price in the week when they can get material enough to the operation under slower export. They pay JPY 69,000 per tonne to JPY 71,500 yen per tonne for H2 grade.

POSCO coated steel sales volume surges in H1 of 2008

It is reported that POSCO’s sales volumes of cold rolled coils, pickled plates and hot dip galvanized steel coils in H1 of 2008 increased by more than 10%.

The POSCO’s total domestic sales volumes during the first 6 months are 3,027,600 tonnes up by 12.5% to those of the same period of last year. Meanwhile, the total exports rose by 15% to 2,327,400 tonnes.

The reasons for booms in sales volumes are the fact that POSCO resumed the cold rolled production in the early of 2008 and the other local mills including Union Steel and Hysco reduced the outputs.

Japan June crude steel output in June up by 3.9% YoY

According to Japan Iron and Steel Federation, Japan's production of crude steel rose 3.9% YoY in June 2008 from a year earlier to 10.37 million tonnes. The group also said that output in June fell 1.7% MoM from May 2008.

The federation said that of the total, production by converters rose 4.1% on year to 7.57 million tonnes and that by electric furnaces increased 3.6% to 2.80 million tonnes.

Production of ordinary steel rose 3.3% YoY to 8.09 million tonnes, while specialty steel output grew 6.3% YoY to 2.28 million tones.

Praxair to raise capacity of industrial gases in Germany

Praxair Deutschland GmbH & Co KG, an industrial gases company in Germany and a subsidiary of Praxair Inc said that the company will increase the production of its industrial gases in the Rhineland area of Germany in order to meet increasing customer demand.

Praxair announced that it will construct a new, energy efficient air separation unit capable of producing 1,800 tons of gases per day when it comes on stream in 2010 at Hurth in southwest of Cologne.

The new plant will supply gaseous oxygen and nitrogen to large customers in the refining, chemical and steel industries through Praxair's extensive Rhineland pipeline system. Also, an integrated liquefier will supply liquid oxygen, nitrogen, argon and rare gases to a variety of other customers in the local market.

In conjunction, Praxair stated that Westfalen AG, an industrial gas producer based at Muenster in Germany, has entered into a long term contract for the purchase of liquid argon, nitrogen and oxygen from the new plant.

Sandvik sees firm demand in Q3 also

Reuters quoted Mr Per Nordberg CFO of Sandvik as saying that demand remain firm so far in the third quarter.

Mr Nordberg told Reuters that "Through to today demand from the market still looks stable and good after the company issued its second-quarter results.

Earlier on Friday the engineering group reported a smaller than expected rise in second quarter order bookings, as well as weaker than expected earnings, sending its shares down by as much as 8%.

SEA produces 26 million tonnes of steel products in 2007

According to the South East Asia Iron & Steel Institute, Southeast Asia produced 25.87 million tonnes of steel products in 2007.

Steel imports from the area totaled 27.58 million tonnes and the exports were 9.11 million tonnes.

The apparent steel consumption was 44.34 million tonnes in the previous year and is expected to reach 47.7 million tonnes in 2008. Then the steel import will be higher than its own production. South East Asia has been a typical steel import area.

(Sourced from YIEH.com)

Aim Resources suspends West Africa zinc project

Platts reported that Australia's Aim Resources has suspended its Perkoa zinc project at Burkina Faso in West Africa, citing falling zinc prices and the financial and equity markets' downturn.

Aim said that it has faced difficulty raising equity for the project due tightened debt markets and the weak equity environment. Zinc prices have also fallen well below the price required to provide adequate return on investment for the project.

Aim said that it will restart the project when zinc prices are more favorable and funding options improve. It added that in the meantime, it will implement a AUD 15 million care and maintenance program for the project, including assessing the feasibility of silver extraction and continuing exploration activities in Burkina Faso, Zambia and South Africa.

Gerdau Ameristeel appoints Mr Mills to Board of Directors

Gerdau Ameristeel announced the appointment of Mr Rick J Mills former corporate vice president of Cummins Inc to its Board of Directors.

Mr Mills with more than 30 years of experience in global business development within the manufacturing industry, Mills' broad experience in corporate finance, accounting and global management will provide strategic depth to Gerdau Ameristeel's Board of Directors, which now consists of eleven members.

Mr Mills joined Cummins, Inc in 1970 and has served in various senior executive positions most recently as a corporate vice president for Cummins, Inc from 1996 until his retirement in May of this year. He also serves on the Boards of Directors of Rohm and Haas Company and Flowserve Inc.

Mr Mario Longhi president & CEO of Gerdau Ameristeel said that "As Gerdau Ameristeel continues to expand and consolidate the North American steel industry, Rick Mills' extensive experience will provide valuable insight to the continued growth of our company.”

Taiwanese scrap imports in 4 months total 2.09 million tones

According to Taiwanese customs statistics, Taiwan's ferrous scrap imports totaled 2,090,000 tonnes in January to April 2008, up by 30.3% YoY hitting an annualized 6,270,000 tonnes.

In the breakdown by main sources, the USA accounted for the largest quantity of 1,084,000 tonnes or 51.8% of the total, up by 102.4% YoY. Hong Kong ranked second at 218,000 tonnes or 10.4%, up by 5.7% YoY and Japan third at 103,000 tonnes or 4.9% down by 60.3% YoY.

Riverside acquires MekoTeknik

The Riverside Company, via Riverside Europe Fund III, announced that it has acquired MekoTeknik, a Swedish precision steel machining company for a total consideration of between EUR 5 million and EUR 10 million. A mezzanine tranche was provided by Eqvitec Mezzanine to support the deal.

Founded in 1917, MekoTeknik is based in Halmstad and specializes in steel cast components that require high precision and repeatable quality due to product applications in severe environments. The company have machined for Keycast, a Riverside portfolio company for a number of years and is seen as a strategic add-on to the steel casting company.

Oil prices drop by USD 4

It is reported that oil prices dropped by USD 4 on July 17 adding to a decline of more than 10% from last week’s record on worries over US demand and easing political tensions between Iran and the West over its nuclear program.

As per report, losses were limited by fresh supply disruptions in Nigeria and Canada that together pulled nearly 200,000 barrels per day off the market the equivalent of a large oil field in the Gulf of Mexico. An attack on an oil pipeline in Nigeria, the world’s eighth biggest oil exporter, led Italian oil company Eni to temporarily shut down production of 47,000 bpd in Nigeria because of loss of pressure in the lines. In Canada, Suncor Energy Inc said a leak at a pipeline carrying synthetic crude and diesel from its oil sands fields in Alberta forced a halt of about 140,000 bpd of shipments.

Oil’s slide marks the biggest three-day loss in the market in percentage terms since December 2004, a boon to world stock markets that have been hard-hit in recent months by mounting fears over inflation and the health of the banking sector.

Despite the losses, oil prices remain up about 30% in 2008 and up more than sixfold since 2002, driven in part by surging demand from developing economies in Asia and worries that world production growth won’t be able to keep pace. Dealers said that the bulk of the downward push on crude oil in recent days has been concern that economic trouble in the United States was cutting deeply into demand for fuel in the world’s biggest energy consumer.

Punj Lloyd gets USD 108 million Abu Dhabi order

Indian construction and engineering firm Punj Lloyd said that it got a contract worth USD 108 million from Spain's Tecnicas Reunidas to carry out mechanical works for a project in an Abu Dhabi based company.

Punj Lloyd in a filing to the Bombay Stock Exchange said that it has received the order on two off sites and utilities project at Abu Dhabi Polymers Company and the work involves piping fabrication, steel and equipment erection.

Abu Dhabi Polymers Co is a joint venture between Abu Dhabi National Oil Co and Vienna based Borealis. In 2007, the company had signed a contract with Spain's Tecnicas Reunidas SA to build off-site and utility facilities.

Aluminum supply in Persian Gulf may be affected

It is reported that Aluminum supply in Persian Gulf may be affected due to the intense political situation. Besides, a concern of electricity supply and higher operating costs will aggravate the aluminum development in the area.

The traditional aluminum industry production area is deeply influenced by the soaring electricity price. Therefore, several main aluminum producers in Europe and America have constructed their new factories in Middle East to reduce costs.

The Middle East produced 1.75 million tonnes of aluminum last year which was about 3.5% of total world production. An analyst has warned of a tight aluminum supply in the global market by shortfalls in production in the Middle East.

USD 10 oil price hike gives USD 55 billion per year to GCC

Bloomberg reported Merrill Lynch & Company as saying that the six Gulf Arab states together earn a further USD 55 billion per year each time the oil price jumps USD 10 a barrel.

Mr Turker Hamzaoglu an analyst at Merrill Lynch said that higher oil revenue combined with prudent spending by Gulf governments has created a solid macro story, which cushions the storms in global markets and paints a bright medium term picture.

Merrill said in a report that the Gulf Co operation Council’s current account surplus, the broadest measure of its trade with the rest of the world, is almost USD 1 billion per day with oil at USD 140 per barrel.

Iran to help set up cement plant in Algeria

It is reported that Iran and Algeria signed a document and two memoranda of understanding on the expansion of economic cooperation between the two countries. According to the report, the documents were signed by Mr Mohammad Saeedi Kia, Iran's Minister of Housing & Urban Development and Mr Rachid Harraoubia the Algerian Minister of Higher Education & co chairman of Iran Algeria Joint Economic Commission at the end of the 3rd session of the commission in Algiers recently.

As per the report Iran and Algeria agreed on the construction by Iran of a cement plant in Algeria with the production capacity of 1 million tonnes per year. Iran would have a 51 % stake in the plant, while the remaining 49 % would be held by Algeria.

Mr Brahim Bendjaber head of the Algerian Chamber of Commerce and Industry was quoted as saying that the cement plant would be built at a cost of EUR 220 million in the North African country.

The report added that Iran and Algeria also agreed to boost cooperation in the railway sector.

Mr Saeedi Kia, who is the Iranian head of the joint commission, said that the two countries should establish strong bilateral ties in line with mutual interests. He expressed the willingness of Iranian companies to make investments in Algeria, saying that JVs would contribute to further strengthening of economic cooperation.

Egypt and Libya join hands for energy projects

Libyan authorities announced a cooperative plan with Egypt to build an oil refinery and a natural gas pipeline on Egypt’s north coast which is a move that signals the increasingly close relations between the two countries.

Libya, which has made significant strides in recent years to regain international legitimacy, says it hopes to boost dramatically its investment in Egypt from USD 2 billion to USD 10 billion over the next two years.

The refinery, paid for in full by the Libyans, will be built west of Alexandria and will be used to process Libyan crude oil. Libyan authorities anticipate the refinery will have the capacity to process 250,000 barrels per day. The natural gas pipeline will stretch from Alexandria in the east to Tobruk, Libya in the west, though authorities did not discuss whether Egypt would be importing or exporting the gas.

Mr Mohamad Zayed assistant minister for Arab affairs said that “We have very strong ties between Egypt and Libya. First, we are neighboring countries. And this is a very important point. We are also African countries and Mediterranean countries.

Libya’s decision to increase its refining capacity comes at a time when its demand for oil is forecasted to increase in the coming years. Business Monitor International expects Libyan demand for oil to increase from 246,000 barrels per day in 2008 to 285,000 barrels per day in 2010, a 3 % annual growth rate.

Similarly in Egypt, demand for oil is expected to rise in the years to come, though the country’s production levels are likely to decline over the same period. Business Monitor International predicts that the demand for oil will rise from 616,000 barrels per day in 2007 to 696,000 barrels per day in 2010. Output, by contrast is expected to decline from 696,000 barrels per day to 610,000 barrels per day.

Emaar looks at USD 150 million investments in India

PTI reported that UAE based Emaar Properties is set to inject USD 150 million for a 20 to 25% stake each in three real estate developments in India, to boost funds in its Indian joint venture.

Emaar and MGF Developments of India, which set up a joint venture in 2005 called Emaar MGF, currently holds India's largest foreign direct investment in real estate through projects, with a combined development value of USD 1 billion.

As per report Emaar now considers picking three separate special purpose vehicles which will then develop two retail properties and one office property in Gurgaon and Mohali.

An Emaar spokesperson said that “Emaar is evaluating the options of private equity investment in special purpose vehicles in India. Due diligence on potential investments are on and details have not yet been finalized.”

Iran needs to generate 20,000 MW nuclear electricity

IRNA reported that Iran plans to generate 20,000 MW electricity from 20 nuclear power plants in next 20 years.

The report quoted Mr Gholamreza Ansari Iran's Ambassador to Russia as saying that Iranian experts are working on the plan to meet the national need to electricity. Addressing the Caspian Energy Forum on July 15-16 in Russia, he added that Iran's nuclear program is for peaceful purpose in the context of Non Proliferation Treaty.

Qatar launches delayed production facility for LNG exports

Bahrain Tribune reported Qatargas which is the world's largest liquefied natural gas exporter, is launching a delayed production facility that will export gas to Britain.

The gas facility which is also known in the industry as a train was delayed as the number of simultaneous energy projects under construction in the Gulf Arab state led to labor and equipment shortages.

The report quoted a spokeswoman as saying that the new gas facility will take Qatar's annual production capacity of liquefied natural gas to around 38 million tonnes, from approximately 31 million tonnes. She further concluded that the next train was due online in 2009. Each train has capacity to produce 7.8 million tonnes per year of LNG.

Qatar sits on the world's third largest gas reserves and aims to raise LNG capacity to 77 million tonnes in 2010. LNG production in Qatar is split between two companies, Qatargas and Rasgas. Both are majority owned by Qatar Petroleum.

Iran and Switzerland review economic ties

Tehran Times Economic reported that Iran and Switzerland recently reviewed economic and trade relations. As per report in a meeting between Iran’s Deputy Foreign Minister for Europe Mehdi Safari and the Swiss Secretary of State for Foreign Affairs Michael Ambühl current economic and trade relations between Tehran and Bern were reviewed.

Mr Safari in this meeting referred to the existing potentials for future bilateral ties and stated that “We hope to witness a boost in relations via cooperation in the private sectors.”

Mr Ambühl for his part noted that with the initiation of the Iran to Europe gas transfer project relations between the two countries will step into a new stage. He added that “Of course we are currently seeing a growth in our bilateral ties, but I’m sure that this will become stronger with the gas transfer project.”

Both officials also discussed international and regional issues such as Iraq, Afghanistan, Lebanon and Palestine.

NIOC and Gazprom workgroup start activity in 2 weeks

MNA reported that the joint workgroup of National Iranian Oil Company and Russia’s Gazprom will start its work in two weeks to finalize the contents of the memorandum of understanding which was signed a few days earlier.

Iranian oil minister said that “Selecting South Pars’ phases, technical and engineering studies in Neka-Jask pipeline and deciding about each side’s responsibilities are among the assigned tasks for this workgroup.”

The ministry added that “Iran and Russia’s cooperation in the energy section will help supply the world’s need for energy much better.”

Chinese billet export prices fall

It is reported that billet exports from China have become slow since early this month and export prices have also seen evident drop on account of less overseas demand.

On Tangshan market, Q235 150mm billet remains at CNY 5380 per tonne, 20MnSi grade products at CNY 5530 per tonne, flat with last week. Prices are expected to keep fluctuating for weeks before another round of increase.

Export offers for Q235 billet are about USD 1080 per tonne FOB and there is an extra of USD 10 per tonne to USD 15 per tonne for 20MnSi grade product. There has been a decrease of USD 30 per tonne to USD 40 per tonne from USD 1120 per tonne to USD 1125 per tonne FOB in end June and early July.

Chinese billet is being offered to Middle East at USD 1260 per tonne to USD 1270 per tonne CFR, which is USD 90 per tonne to USD 100 per tonne lower than that of Turkish material. The highest transaction price for imported billet in Middle East has reached USD 1370 per tonne CFR in the past two weeks.

(Sourced from MySteel.net)

Chinese steel output to fall by 7 million tonnes due to Olympics

China's steel production is forecast to fall by a total of 6,000,000 tonnes to 7,000,000 tonnes in crude steel equivalent in the next three months as Shoudu Iron & Steel Co and other steelmakers in Hebei province have taken a system of reducing iron and steel production each since July 8th for three months before an August 8th opening of the Olympics Games in Beijing, according to information made available in Tokyo.

At the beginning of July, the municipal government of Tangshan city, Hebei province requested a total of 270 local companies to stop operations of their plants by July 8th for an improved atmospheric environment toward the opening of the Beijing Olympics. Among the companies concerned are 70 small and midsize steelmakers. It is uncertain whether the steelmakers stopped their operations, but they are thought to have entered a system of decreased production each.

As per report, if Shoudu Iron & Steel Co and other steelmakers in Hebei province stop their operations, lost production will amount to nearly 2,500,000 tonnes per month, hitting a maximum 7,500,000 tonnes in three months of July to September.

China's crude steel production totaled 489.24 million tonnes in 2007, averaging 40.77 million tonnes per month. In this connection, production cuts in Hebei province this time will amount in crude steel equivalent to 5% of China's nationwide steel production.

China's monthly crude steel production has topped 44 million tonnes since March. It remains to be seen how the nation's monthly crude steel production will turn out in July, given production cuts in Hebei province.

Sector wise performance in China in H1

According to latest releases by China’s National Bureau of Statistics, following is the performance of various sectors.

1. Crude oil output - Up by 1.7% YoY to 94.33 million tonnes

2. Coal production – Up by14.8% YoY to 1.26 billion tonnes

3. Electricity generation – Up by 12.9% YoY to 1.6803 trillion kilowatt hours

4. Hot metal - Up by 7.9% YoY to 246.42 million tonnes

5. Crude steel - Up by 9.6% YoY to 263.20 million tonnes

6. Steel products - Up by 12.5% YoY to 299.97 million tonnes

7. Cement - Up by 8.7% YoY to 650 million tonnes.

8. Auto production – Up by 17.6 % YoY to 5.35 million units

Xinxing Pipe purchases Hubei Xinye Steel Pipe Plant

Xinxing Steel Pipe announced that its share holding subsidiary Xinxing Steel Pipe International Development Company and Hubei Xinye Steel signed the stock transfer agreement in Hubei Huangshi. It purchased 60% stock right of Huangshi Xinxing Pipe Company which is established by Xinye Steel and its Steel Pipe Plant.

After the acquisition, the company will add 200,000 tonnes production capacity every year and casting pipe production capacity will increase to 1.55 million tonne from 1.35 million tonnes.

Xinxing Pipe expressed that this purchase will help the company form rational layout of the casting pipe industry and integrates the casting pipe market in the middle and southern region.

Xinye Steel’s former is Yegang Group, in 2004, CITIC Pacific Investment Company acquired the company’s steel main assets, and established Hubei Xinye Steel Company. In 2005, Xinye Steel held Daye Special Steel by purchase way.

Angang announces listed prices for August

China's steelmaker Angang Group has announced the list price for August order.

According to the release cold rolled carbon steel, price of the normal carbon CR will be soared by CNY 120 per tonne while prices remain unchanged for ST13, 08AL and SPCD.

The release added that price of ST16/DC06 and STY17 will be lifted by CNY 100 per tonne and CNY 50 per tonne respectively. For hot rolled carbon steel, price of normal carbon will be up by CNY 200 per tonne as well as for ship plate up by CNY 100 per tonne. Prices of GI and silicon steel remain same level.

Baotou Steel H1 profit more than tripled from 2007

Bloomberg reported that Baotou Steel Rare Earth Hi Tech Co profit more than tripled in H1 of 2008 from a year earlier.

Inner Mongolia based Baotou did not give profit details in a statement to the Shanghai stock exchange. It had a profit of CNY 77.5 million in the first six months of last year as a one time loss dragged down earnings.

19 BF to shut down in Tangshan

It is reported that 19 blast furnaces with a combined monthly output of 450,000 tonnes, representing over 1% of Chinese output have already been requested to shut down at Tangshan in Hebei Province, which produced 47.86 million tonnes of pig iron in the first five months of 2008.

Analyst with a securities company said that “The Olympics steel output disruption inflicted on steel mills in Tangshan has just started, and Beijing is to release tougher measures in late July. However, most analysts believe the production cutback due to Olympics would have a mild impact on the market fundamentals.”

Leading mills in North China also send large amount of steel products to other provinces in addition to local supply, while smaller mills concentrate on local shipment. Therefore, large mills could balance their shipment to mitigate the impact of reduced supply from smaller mills.

The China Securities Journal reported in late June, Tangshan identified 66 steel mills and 12 coking plants that would have to shut before July 8th.

Zinc price unlikely to drop greatly in near future - MOC

According to Ministry of Commerce of China observation, zinc is expected to spiral down in near future upon the weak market, but the range will be limited. The observation shows that during last week, domestic zinc price down by 2.6% and 20.4% from the previous week and the start of this year respectively.

Surplus capacity serves as the key factor for the continuous low price level, analyzed the authority. In January to April 2008 there is about an excess of 780,000 tonnes of refined zinc in domestic market, 430,000 tonnes more than the same time of last year. In addition, overseas resources have arrived at Chinese ports, aiming to earn from domestic market where price is now higher than international market. That partly pushes down the zinc price.

On July 12th 2007 domestic lead and zinc miners and smelting enterprises plan to join hands to cut down production with a range of 10%, which help uphold the zinc price to some extent. Therefore, price of this resource will not likely dip largely in short time.

Qinggang high value added products account for 79%

It is reported that in H1 2008 Qinggang Group totally produced1.5872 million tonnes of iron, 1.5933 million tonnes of steel, 1.5563 million tonnes of steel materials, sales revenue was up by 62.9% YoY and the net profit up by 85.26% YoY. In the H1, Qinggang’s high value added products had accounted for 79% of its total production.

The official of Qinggang Group expressed that 2008 is the challenge year for Qinggang, not only the prices of coke, coal, oil, iron ore, and transportation continue to rise, the production cost is increasing, but also the competition in iron and steel industry is increasing. Qinggang started the largest system equipment overhaul in the first half year.

For this, Qinggang carefully organized and strengthened the production and completed the overhaul work of coking plant, No.3 blast furnace, the first high speed wire rod plant etc, made solid foundation for its safe production.

Scrap steel stays stable in Lanzhou market

It is reported that scrap steel market runs steadily in Lanzhou, Gansu province. 6.0mm heavy scrap is traded at CNY 3650 per tonne to CNY 3750 per tonne at present, and quality heavy scrap about CNY 3800 per tonne; 4.0mm medium scrap is offered at CNY 3500 per tonne to CNY 3600 per tonne; 2.0mm to 4.0mm gradeless materials stand at CNY 3250 per tonne to CNY 3350 per tonne, trimmings scraps is at about CNY 3500 per tonne to CNY 3650 per tonne.

In Lanzhou, the market stands still at a high level but businesses are likely to progress slower in short term, mainly because of the weak steel market and partly due to some market players who only rely on their previous experience and are unable to made correct judgment about the market behavior.

Scrap will not likely to fall down and will remain running steadily due to the insufficient supply as well as the great pressure for the market to climb up reflecting the financial strain of producers and increasing cost concerns.

(Sourced from MySteel.net)

Russian Steelmakers offer best industry investment

Bloomberg reported that Russian steelmakers including Evraz Group SA and OAO Novolipetsk Steel offer some of the best investment opportunities in the global steel industry.

Mr Paul Cliff an analyst at Nomura in London said most Russian steel producers have captive coal and iron ore suppliers, shielding them from record global prices for the key raw materials used to forge the metal. He said that Nomura also forecast Russian steel demand to grow faster than in any other major economy between 2007 and 2010.

He added that “Russia's leading steel producers are out-maneuvering their global peers in the consolidation game. Evraz and Novolipetsk, Russia's second and fourth largest producers are Nomura's top picks.''

Mr Cliff said ”Although we believe steel spot prices are close to a short-term peak, global inventories remain low and prices are likely to remain sticky at high levels. Nomura does not see China's plans to boost steel exports as inflating supply and forecasts a global shortage of steel in the next three years.”

Russia's six largest steel companies plan to invest more than USD 26 billion through 2011 as the nation embarks on record infrastructure spending supported by high energy prices. Russia intends to spend USD 845 billion on new power lines and generation by 2020 to maintain economic growth, which is in its 10th consecutive year.

Ural Steel setting up new vacuum degasser

Metalloinvest Holding announced that the new vacuum degasser construction will allow Ural Steel to increase the quality of steel production.

The construction of this unit with a design capacity of 1.2 million tonnes per year began at 2008 within a large scale modernization project implemented at Ural Steel. The detail design and the equipment supplies is provided by German a subsidiary of SMS Group, Ural Steel’s partner in implementing the investment program.

The launch of the new vacuum degasser is an important step for improving the quality of the Ural Steel’s cast billets and plates. The vacuum degasser is designed to refine liquid steel produced in EAF, thus contributing to decrease the tenor in gas, reduce the percentage of impurities and decarbonise the final production.

The released added that with putting the vacuum degasser into operation Ural steel will launch the production of X-80 and X-100 strips with improved strength characteristics.

The construction of the vacuum degasser is a part of the large scale investment program implemented by Metalloinvest Holding with the aim to modernize the Ural Steel production facilities and increase the production volume.

Global Steel seeks legal review of Vorskla accord with Kremikovtzi

Bloomberg reported that Global Steel Holdings Ltd, owner of Bulgaria's biggest steel mill Kremikovtzi, wants Sofia's prosecutor to examine whether a supply contract with Vorskla Steel is legal.

As per report, Global Steel an e mail said that “Members of the management board were subjected to humiliating mental pressure to sign the proposed agreement. The competent authorities should take the necessary steps to clarify whether and to what extent the said events are in line with the legislation of the Republic of Bulgaria.''

However, Mr Max Prasolov head of Credit Group's press office, which owns Vorskla Steel, said that “The allegations of coercion are unrealistic' because Kremikovtzi management confirmed the agreement. The agreement was reconfirmed and signed by three members of Kremikovtzi's management board this morning.”

The accord was signed at midnight and a similar agreement with ArcelorMittal was dissolved. Workers protesting at two months of unpaid wages had stopped the management from leaving the mill's headquarters near Sofia until they signed Mr Zhevago's contract.

IUD gets USD 40 million bank loan to cut emissions

Bloomberg reported that Industrial Union of Donbass got a USD 40 million loan from the Nordic Investment Bank to cut greenhouse gas emissions.

The bank said in a statement that the seven year loan will finance the installation of a combined cycle gas turbine in a cogeneration power plant at the Alchevsk steelworks in eastern Ukraine. It said Donbass's steelworks will become self sufficient in electricity supply once the new turbine is in place. The use of waste gases from steel production will enable Donbass to cut emissions by 3.5 million tonnes a year.

The government figures show, under the terms of the United Nations managed 1997 Kyoto Protocol, Ukraine is allowed to emit 921 million tonnes of greenhouse gases annually in the five years through 2012. The country currently releases about 400 million tonnes a year.

A World Bank report in May forecast Ukraine may find buyers for about 1.2 billion tonnes of credits in the period by pledging to spend the money on emission reduction projects. The government plans to decide by the end of this year how it will sell the credits.

Metalloinvest Holding gets USD 1.3 billion syndicated loan

Metalloinvest Holding announced that it gets USD 1.3 billion syndicated loan with the possibility to increase it to USD 2 billion.

The credit period is 60 months; the loan pays a margin of 2% over LIBOR. The syndicated loan is aimed at refinancing the existing loans and financing current corporate purposes except mergers and acquisitions.

Among 13 mandated lead arrangers are such banks as ABN AMRO Bank N.V., BTMU Limited, Bayerische Hypo- und Vereinsbank AG, BNP Paribas SA, Calyon, Commerzbank Aktiengesellschaft, Cooperative Central Raiffeisen-Boerenleenbank B.A., Deutsche Bank AG, Amsterdam Branch, ING Bank NV, JSB “ORGRESBANK”, Natixis Socit Gnrale, Sumitomo Mitsui Banking Corporation Europe Limited.

BNP Paribas SA and ING Wholesale Banking are acting as coordinating arrangers, while Commerzbank, Natixis,Orgres Unicredit are acting as passport banks. The agent by contract is Deutsche Bank.

MMK proposes 9% H1 dividend cut

Reuters reported that Russian steel maker MMK is proposing to cut its interim dividend for the first half of 2008 to RUB 0.382 per share from RUB 0.418 in the same period last year. It did not give reasons for the proposal.

The company's board called an extraordinary shareholders meeting to vote on the dividend on August 29th.

In the first half of 2007, the dividend was also almost halved from the first six months of 2006.

Update on Mechel Q1 2008 power segment results

Mechel in recent released announced its Q1 2008 power segment result

(In USD thousand)

Q1 2007 results for the power segment were previously reported as part of the mining and steel segments.

2. Revenue from Mechel’s power segment in the first quarter of 2008 totaled USD 193.4 million, or 8.3% of consolidated net revenue up by 912.4% YoY compared to revenue from sales to external customers of USD 19.1 million or 1.3% of consolidated net revenue in the first quarter of 2007.

3. Operating income for the power segment in the first quarter of 2008 was USD 27.6 million, or 9.4% of total segment revenues up by 688.6% YoY compared to operating income of USD 3.5 million, or 8.7% of total segment revenues, in the first quarter of 2007.

4. EBITDA for the power segment in the first quarter of 2008 increased by 813.8% to USD 33.5 million, compared to EBITDA of USD 3.7 million in the first quarter of 2007.

MMK's board holds an extraordinary shareholders meeting

OJSC MMK has announced that its Board of Directors took a decision on calling an extraordinary shareholders' meeting on August 29th approved its agenda and determined the format of the meeting, absentee voting. It also approved the list of information to be made available to persons entitled to participation in the meeting. The date of making the list of persons entitled to participation in the meeting is set on July 21st 2008.

The released added that the Board recommended to the Extraordinary Shareholders' Meeting to adopt a resolution on payment of dividends for the 1st half of the 2008 financial year in the amount of RUB 0.382.

Transneft approves 2007 dividends

Russia's Federal Property Agency, which owns 100% of the voting stock in pipeline operator Transneft approved the distribution of the 4.018 billion rubles in net profit the company earned in 2007.

Transneft will spend RUB 1.152 billion or 28.7% of net profit on dividends for 2007 including RUB 135.22 per common share for a total of RUB 750.045 million and RUB 258.45 per preferred share for a total of RUB 401.857 million. Transneft paid RUB 822.7 million in dividends for 2006. It paid RUB 225.42 on preferred shares and RUB 101.23 on common shares.

The 2007 payments will thus be 40% higher than in 2006. The company increased net profit 14.7% in 2007. In addition, the shareholders decided to contribute RUB 75 million or 1.9% of net profit for 2007, to the charter capital of the St Petersburg Raw Commodities Exchange. They also voted to spend RUB 45.564 million up by 1.1% the charter capital of the Burgas-Alexandroupolis Pipeline Consortium as well as RUB 2.746 billion on the development of production and other measures to create new property.

PricewaterhouseCoopers Audit was selected as the company's auditor for 2008.

TISCO to raise spot prices for 400 series stainless steel

Taiyuan Iron and Steel Group is planning to raise spot prices for its 400-series stainless steel by between CNY 300 (USD 44) and CNY 500 (USD 73).

Currently the spot price for TISCO's 430 series cold rolled stainless steel stands at approximately CNY 12,500 (USD 1,833) per tonne lower than the ex works price of between CNY 14,800 (USD 2,170) and CNY 15,000 (USD 2,199).

An official with TISCO's sales department said that "The rise in spot price may take effect soon to reflect recent hikes in the price of ferrochrome, as well as to facilitate our distributors' sales by narrowing the gap between spot prices and ex-works prices.”

The official mentioned that spot sales, which are sourced from the surplus left over from various production orders, only account for a small proportion of TISCO's sales. The majority of TISCO sales are from contracts in which ex-works prices are set on a monthly basis. He added that "The rise in production costs is also making it necessary for the company to look at raising ex works prices for 400 series steel in August, though as yet we have not settled the amount extra we will charge.”

Mr Hou said that "The ex works prices for 400 series steel have not changed in months, despite drops in spot prices, as agreed by China's major stainless steel producers in order to help stabilize the 400 series stainless steel market.”

The report added that the convention in the Chinese steel industry is for the major stainless steel mills to agree on ex works prices for the next month at the end of each month. At the end of June, the big mills decided not to change ex-works prices for 300 series and 400 series stainless steel products in July, so as to boost market confidence despite falling spot prices on the back of tumbling nickel prices.

Nickel rises in London on lower stockpiles

It is reported that Nickel climbed in London as withdrawals from stockpiles signaled demand may be strengthening. Nickel for delivery in three months rose USD 300 or 1.5% to USD 20,700 a tonne.

According to the London Metal Exchange's daily inventory report, stockpiles of nickel dropped by 2.1%, the biggest decline since February 1st 2007.

Mr Stephen Hardcastle of UK Sucden Ltd said that a European stainless steel production may be improving, indicating more demand.

Mr Randy North a metals trader at RBC Capital Markets in London said that “The only evidence we see of a rebound is steady outflows of LME stocks. Our contacts in the physical markets tell us that consumer activity is healthy. However, material is easy to come by.''

Berong seeks to double nickel supply to BHP

Reuters reported that the Philippines' Berong Nickel Corp is in talks to double its long term annual supply deal with BHP Billiton to 1 million tonnes of laterite nickel ore beginning March.

Berong Nickel, in which Toledo Mining and Atlas Consolidated Mining Corp have stakes, currently has an agreement to supply BHP Billiton with 500,000 tonnes of laterite nickel ore per year for five years, which can be extended by another five years.

Mr George Bujtor CEO of Berong Nickel "We are now looking at increasing that to a million tonnes a year and that tides us away from relying on the Chinese market. We want to start March next year for the supply of 1 million tonnes to BHP.”

Apart from BHP Billiton, the Berong project, potentially the world's fourth largest nickel laterite resource, is shipping ore with an average grade of around 1.5% to Chinese clients.

Norilsk Nickel selects Tenova Pyromet for upgrading nickel slag furnaces

Tenova Pyromet announced that it has been selected by Norilsk Nickel for the upgrade of two of their nickel slag cleaning furnaces located on the Far North behind 69 parallel northerly Siberia.

Tenova Pyromet recently finalized the contract to supply Project Documentation for two Nickel slag cleaning furnaces, including Gas Cleaning Plant documentation for each furnace and set of equipment within the limits of the Project.

Abreast of developments and Tenova Pyromet’s furnace design know how will be utilized in the Project. The diameter and power input of the furnaces will be increased to allow processing of approximately 2,400 tonnes of flash furnace and converter slag per day per furnace. The purpose of the furnaces is to recover nickel, cobalt and copper from the flash furnace and converter slag streams. The furnace power rating will be increased to 30 MVA with a maximum power input of 25 MW achievable depending on process requirements and conditions. Tenova Pyromet will supply the furnace proper, including the hearth cooling system, the steel shell and refractory lining, its MAXICOOL® sidewall copper cooling system, the furnace refractory roof with support structure and its patented Söderberg electrode column.

In addition it will supply the gas cleaning plant, the secondary electrical supply system, the furnace control system, lining management system and PLC, as well as key components of the furnace feed system. Supervision during installation and commissioning is also included for in the contract. Tenova Pyromet is providing projected performance for each furnace and equipment guarantees.

The first furnace is expected to come on line during the last quarter of 2010 and the second furnace during the third quarter of 2011. With projects coming in from across the globe, Tenova Pyromet is taking advantage of its expertise and reputation for projects completed on schedule or early, meeting and exceeding emission control requirements and, above all, the supply of reliable and efficient technology and equipment.

Tenova Pyromet has extensive experience in the design and construction of smelting plants and furnaces, both in South Africa and internationally. It designs and supplies advanced technologies, products and services for the metal and mining industries.

PT Bumi wins battle for Herald Resources

It is reported that Indonesia’s PT Bumi Resources has emerged triumphant in the battle for Australia’s Herald Resources with a bid that values the company at AUD 563.45 million.

The final bid translates to a per share price of AUD 2.85 and is 27% higher than Bumi’s original offer.

PT Bumi in a statement to Australian Securities Exchange said that it has cornered 51.34% of Herald’s shares. The value of the controlling stake is AUD 295 million.

The announcement ends a takeover battle that has been waging since December last year when Bumi first made a move to buy Herald, offering AUD 2.25 per share. At the time, Bumi’s move was described by Herald’s board of directors as hostile and unsolicited.

PT Bumi has been advised by Credit Suisse on the transaction.

Vale prices global offering

Companhia Vale do Rio Doce announced that it has priced its global offering of 256,926,766 common shares, including 80,079,223 common shares in the form of American Depositary Shares and 164,402,799 preferred shares, including 63,506,751 preferred shares in the form of ADSs not including any exercise of the underwriters’ over-allotment option.

Vale said that “The common shares are being offered to the public in Brazil at a price of BRR 46.28 per share and the preferred shares are being offered to the public in Brazil at a price of BRR 39.90 per share. Common shares in the form of ADSs are being offered to the public internationally at a price of USD 29.00 or EUR 18.25 per common ADS, and preferred shares in the form of ADSs are being offered to the public internationally at a price of USD 25.00 or EUR 15.74 per preferred ADS. The aggregate proceeds of the global offering to Vale, after underwriting discounts and commissions, will be equivalent to approximately USD 11.45 billion.

The global offering consists of a registered offering in Brazil and an international offering, which includes a registered offering in the United States. The global offering is scheduled to close on July 22nd 2008, subject to satisfaction of customary conditions.

Existing shareholders of Vale that are resident in Brazil were given the right to subscribe for shares in the Brazilian offering on a priority basis.

Vale has granted Banco de Investimentos Credit Suisse SA an option for a period of up to 30 days from the date of the final prospectus supplement to purchase up to 24,660,419 additional preferred shares to cover over-allotments, if any.

Chinese coal sector still positive on price rises - Citigroup

XFN-Asia reported that Citigroup continues to have a positive outlook on China's coal sector, with spot prices still experiencing an unabated surge.

Citigroup said in a note that the price of thermal coal in the key port of Qinhuangdao has risen to CNY 1,015 per tonne highlighting shortages and bottlenecks in the Chinese market.

It said that it favors China Coal and Yanzhou Coal over Shenhua Energy, the country's biggest coal producer. Shenhua's power generation assets mean that it is more exposed to cost problems.

Citigroup said if all coal prices are frozen at current levels, China Coal is still expected to be the best performer of the year with around a 12% increase in earnings. The company is better positioned to take advantage of spot price rises than its peers.

Citigroup said that it expects prices to have risen by an average of 55%YoY in 2008, and also predicts that contract prices will rise by a further 10% for 2009.

Drummond Colombia coal mine workers go on strike

Reuters reported that workers at US coal company Drummond's Pribbenow mine located in northern Colombia have gone on strike after a breakdown in contract talks.

A union official said that the open pit mine produces about 2 million tonnes of coal per month, according to privately owned Drummond, which confirmed that operations have been shut down by the work stoppage.

Mr Joaquin Romero president of the Funtraenergetica labor organization which represents Pribbenow's 3,500 workers said that "The mine is paralyzed and we hope to restart talks in the days to come.”

According to Mr Romero, the union is negotiating a two year contract. Talks have bogged down over miners' demands for higher pay and better employment security.

Drummond is a family run business based at Birmingham in Alabama headed by Mr Garry Neil Drummond.

Sinosteel extends offer for Midwest shares

Sinosteel extended its takeover offer for Australian iron ore miner Midwest for an extra week, even though it has already acquired a controlling stake.

Midwest told the Australian stock exchange that Sinosteel extended its AUD 1.36 billion dollar takeover until July 25th 2008.

The offer had been scheduled to close at 0800 GMT Friday.

Sinosteel has already built up 54% stake in Midwest with its offer of AUD 6.38 per share.

TATA Power seeks overseas coal mines to boost supply

Bloomberg reported that TATA Power Limited, India's biggest electricity generator outside state control, may invest in 2 coal mines overseas to supply as much as 4 million tonnes of the fuel as record prices curb expansion.

Mr S Ramakrishnan ED of TATA Power Limited said that mines in Australia, Indonesia or Mozambique would meet half the additional 8 million tonnes of coal that TATA Power needs by 2013 to fuel a fivefold increase in generating capacity.

He said that “With coal prices flaring up no trader, even we as owners of 2 coal mines wants to make long term commitments. If such a situation prevails, we may be forced to take equity positions to secure supplies.''

Mr Ramakrishnan said that coal prices will likely stay near record levels for the next 3 years. The imported coal will help TATA Power increase capacity more than fivefold to 12,861 MW by March 2013.

He said that “We have taken a conscious decision that we will not look at any more projects set up with imported coal till the long term coal scenario improves. It is too much of a risk to take.''

TATA Power will import 12 million tonnes from Indonesia to fire its planned 4,000 MW project at Mundra in the western state of Gujarat and a 25 MW unit in Mumbai. The company has long term contracts with Indonesian suppliers for buying another 2 million tonnes.

Chinese Coal production in H1 up by 11% YoY

It is reported that China, the world's largest coal producer, increased production of the fuel by 11% in the 6 months to meet increased demand from power generators.

Mr Wang Zhanjun VPof China Coal Transportation and Distribution Association said that coal production reached 1.24 billion tonnes. Sales of the fuel rose 10.7% to 1.2 billion tonnes during the period.

He said that “Coal market will remain in tight balance' and regional shortages may worsen in the second half. China faces pressure to ensure thermal coal supplies.''

Mr Wang said coal stockpiles fell 2.9% to 145 million tonnes at the end of June. The nation's coal consumption increased 6.8% to 1.12 billion tonnes in the first five months with the average price of the fuel jumping 19% to CNY 307.66.

FirstEnergy in venture to acquire coal mine

FirstEnergy Corp. and a coal firm based in Ohio said that they will spend USD 450 million to acquire a controlling interest in a central Montana coal mine.

Boich Cos of Columbus said it and FirstEnergy have acquired 80% of the Bull Mountain mine. The partners also acquired 100% of rights of way for a planned railroad.

FirstEnergy, parent firm of Toledo Edison said that it expects the joint venture to result in a 50 fold increase in coal production, to at least 13 million tons a year within the next several years.

Hunan discovers world class tin deposit

As most state owned mines in South Lingnan areas are facing severe shortages for reserved resources at the moment, prospecting work for deep mines thus becomes inevitable to reverse the resource crisis in the near future.

As per report, only half of the current mines can sustain 5 years operation, and 38 mines have been closed down due to resources exhaustion in recent years. But recent exploration work has reaped desirable achievements so far.

1. Guangxi Dantongkeng discovered new reserves of 1.73 million tonnes of zinc and 70,000 tonnes of copper

2. Guangdong Dabaoshan detected new molybdenum resource of 50,000 tonnes

3. Hunan Yaogangxian increased reserve of 30,000 tonnes of tungsten trioxide

4. Chaling Xitian discovered a metal deposit with estimated reserves of over 600,000 tonnes of tin and over 300,000 tonnes of tungsten trioxide.

5. Hunan Qianlishan Qitianling discovered a world class tin deposit, with forecasted reserves of more than 1 million tonnes.

Metso to supply grinding equipment to Minera Petaquilla in Panama

Metso Minerals will supply grinding equipment to Minera Petaquilla, S.A. in Panama for its Petaquilla copper mine, located approximately 100 kilometers west of the Panama Canal.

The delivery will be completed by the middle of 2011. The value of the order is approximately EUR 48 million. The order is included in Metso's second quarter order backlog.

The order comprises two SAG mills of 38 feet in diameter by 24.8 feet in length and four ball mills of 24 feet in diameter and 40.5 feet in length. The order also includes auxiliary equipment and spare parts.

Minera Petaquilla, S.A. is a joint venture company developing its deposit in the Republic of Panama. The company is owned by Inmet Mining Corporation, Petaquilla Copper Ltd. and Teck Cominco Ltd.

Cape Lambert update on Merrill Lynch and Evraz meeting

Cape Lambert Iron Ore Ltd confirmed that it met with representatives of Merrill Lynch & Co Inc and Evraz Group SA in Singapore, but said it has no information from the meeting 'that needs to be advised to shareholders at this time'.

Merrill Lynch on Tuesday exercised 56 million options for consideration of AUD 15.53 million, taking its stake in the ASX and AIM listed company to 60.7 million shares or 16%

Central African Mining announces plans to divest coal assets

Central African Mining & Exploration announced that it is planning to divest its coal assets into a separately listed company called 'NewCo."

Central African Mining & Exploration said it is envisaged that it would retain about 70% interest in NewCo, while existing company shareholders would receive an in specie distribution of the remaining about 30% of NewCo's equity.

The company indicated that its Board has decided to divest these assets to enable the market to recognize fully the value of company's coal assets.

Metso to supply grinding equipment to Worsley in Australia

Metso Minerals will supply grinding equipment to Worsley Alumina in Western Australia. The start up for the equipment is during the first half of 2011 and the value of the order is approximately EUR 5 million. The order is included in Metso's second quarter order backlog.

The order comprises one rod mill of 14’ in diameter and 20’ in length, one ball mill of 14’ in diameter 23.5 in length. The grinding mills are an integral part of Worsley Alumina’s Efficiency and Growth expansion project.

The project will increase annual capacity of the Worsley refinery from 3.5 to 4.6 million tonnes per annum. At the refinery, alumina is extracted from bauxite. The refined alumina is transported by rail to port in Bunbury, where it is loaded for export.

Worsley Alumina is a joint venture partnership between BHP Billiton, Japan Alumina Associates and Sojitz Alumina.

Shenhua Group Qingshuiying 1st stage project approved

It is reported that Shenhua Ningxia Coal Industry Group has lately obtained approval from National Development and Reform Commission for the first stage construction of its Qingshuiying coal mine.

As per report, the coal mine will be constructed in two-stages, and the annual capacity would reach 5 million tonnes per year in the first stage and will expand to 10 million tonnes per year in the second stage. First stage construction will cost CNY 2.006 billion and a coal dressing plant will be built by then.

Qingshuiying coal mine is the keynote coal project at Yuanyang Lank mining area of Ningxia, and the construction of the mine would be favorable in accelerating local coal resources' development.

India and Ecuador possibility of cooperation in mining sectors

It is reported that Mr H E Jose Valencia vice minister of Foreign Affairs of Ecuador met Mr BK Handique minister of State for Mines where both the countries explored possibility of cooperation in mining sector between India & Ecuador.

As per report, this meeting assumes importance in the view of the fact that Ecuador is endowed with varieties of minerals which include gold bearing quartz veins and placers, silver, copper, lead, manganese and various industrial minerals like: barite, clays, feldspar, gypsum, limestone, marble, etc. Oil and natural gas are the main mineral resources. Small quantities of gold, silver, copper and zinc are produced.

The country is known to have deposits of uranium, iron ore, lead and coal. The gold exploration and production is mainly being continued in the Nambija, the Ponce, Enriquez and the Zaruma Portovelo gold districts of Ecuador. The area for the copper are Mirador property lies in the region called Corriente copper belt which was first explored by BHP Biliton PLC. Foreign Direct Investment is allowed in Ecuador for exploration in Gold Silver, Molybdenum, Zinc, and Lead. Major operating companies in Ecuador are organized in cement, gold petroleum crude, petroleum refinery products, sand & gravel and crude steel.

A new mining mandate has been adopted by the Ecuador on April 18th 2008. Some of the major features of the new Mining Mandate are that new Mining Mandate limits mining companies to holding a maximum of 3 concessions. The new Mining Mandate invokes an immediate 180 days suspension of activities on virtually all mining concessions in Ecuador while a new Mining Law is drafted and adopted.

Mr Handique said that the Ecuadorian delegation about the liberalization in the Indian economy leading to rapid changes in mining sector and the New Mineral Policy announced by the Government in March 2008. He also informed about the change in the Indian FDI policy in the mining sector allowing foreign equity holding up to 100% on the automatic route for all non fuel and non atomic minerals including diamonds and precious stones. Thus, he added that India looks forward to opportunities for bi lateral cooperation in the mining sector with Ecuador

PT United Tractors may sell new shares in September

Bloomberg reported that PT United Tractors, Indonesia's biggest seller of heavy equipment, plans to sell new shares in September to fund the expansion of its coal mining business to benefit from high prices of the fuel.

Ms Sara Loebis corporate secretary said that the plan is subject to approval from shareholders and the capital market regulator. But she declined to say how much money the company will raise and how many shares will be sold.

United Tractors may get USD 300 million from the share sale, Kontan reported yesterday, citing a banker it didn't name. The company's stock dropped as much as 8.6% the most since April 3, to IDR 10,150 rupiah before closing at 10,400 yesterday.

Ms Loebis said that United Tractors will use the proceeds from the rights offer to buy more equipment for unit PT Pamapersada Nusantara, which mines coal for clients including PT Adaro Energy, Indonesia's second-biggest producer of the fuel. She added that “We may also use the funds to buy a coal mine but declining to elaborate.”

Quest receives pending increase to USD 8 million coal contact

Kentucky based Quest Minerals & Mining Corp announced that it’s wholly owned subsidiary Gwenco Inc has verbally accepted a higher strike price per ton on coal with Logan & Kanawha Co LLC a West Virginia company. This increase would amend their continuing purchase order for up to USD 8 million of coal through December 2008.

Mr Eugene Chiaramonte Jr president of Quest said that “We are very excited about this new commitment as the company stands to realize an additional 10% in revenues, and we fully anticipate being able to fulfill the entire order during the course of 2008. We expect to announce initial progress reports on operations next quarter.''

Meigang new coke oven heating model put into use

It is reported that recently, Meigang’s new coke oven heating model formally put into use through 2 months on line debugging.

It is the first mathematical model to participate into the production control for Meigang.

This model realizes the program mode based on the complete database, firstly realized the coke oven heating control on L2 system. After the operation of this model, it can significantly optimize the coke oven heating way, realize the switching for manual, automatic, and bunch three heating ways.