Indian Steel: The Emerging Reality

‘Indian Steel: The emerging Reality’ authored by prominent author Dr AS Firoz provides you the valuable information on Indian steel market and is scenario. The report covers the reviews of the developments in Indian steel industry.

This report critically looks at the current situation in the industry, potential of the steel market growth in the medium term, growth plans of the individual major companies, demand and supply issues related to raw materials like coal and iron ore, competitive positioning of steel production in the country, socio economic and political factors which may have direct and indirect impact on the growth dreams of the Indian steel makers, etc among a large number of other relevant issues of strategic importance.

This report is the product of extensive and in depth analysis with incredible amount of time spent to put the numbers in perspective. There are neutral and frank expert views on matters which have drawn attention of the industry in the recent period.

Publish Date: January 2008
No. of Pages: 178
Price: INR 40,000 for Indian buyers
USD 1000 for others
Delivery Format: PDF Format

You can order your copy to reports@steelguru.com, who will send you an invoice of INR 40,000 for the report

Indian government reviews steel prices with major producers

Indian primary steel producers have assured the government that they will take a series of steps to check the prices of steel at the retail level.

Mr RS Pandey secretary to the ministry of steel impressed upon the producers that despite an assurance given by them at a meeting with the Prime Minister to hold the price line for three months, prices have gone up at the retail level.

He strongly emphasized upon the need to hold the price of steel items at a time when the government is fighting inflationary pressure. He said the government is responsive to the needs of the industry and waived the export duty on steel and imposed a 15% duty on the export of iron ore.

Mr SK Roongta chairman of SAIL said that the primary steel producers are deeply distressed by reports of higher prices being charged. He said that “Only 5% of the HR products are marketed through retailers. While they have been supplying the products at April price level, price distortion have taken place at the retail points.”

Mr Roongta said the producers will review the trading arrangement and may opt for MRP type arrangement. They also said that individual producers may put up advertisements announcing the price and also facility for small consumers to place their orders through the internet.

Mr Sajjan Jindal vice CMD of JSW was emphatic that the primary steel producers are with the government on the issue of containing steel prices at the difficult time and wanted to dispel the impression that steel prices will be hiked in August after the expiry of three months moratorium. He described reports that prices will be hiked in August as undue speculation.

Mr Jindal said that they will take steps to contain direct and indirect exports through secondary producers so that availability increases in the domestic market. It was noted that steel exports during April to June’08 has declined to 0.9 million tonnes as against 1.3 million tonnes during the same period last year.

(Sourced from www.steelprices-india.com)

Indian pipe makers to reduce prices by 10%

Indian pipes and tubes manufacturers have assured Indian government that they will also bring down the prices of pipes and tubes by about 10% with immediate effect to around INR 48,000.

These assurances were given at a meeting of primary steel producers and pipes and tubes manufactures convened by the ministry of steel.

Mr RS Pandey secretary to the ministry of steel took a serious view of the rise in the prices of pipes and tubes since they receive 80% of their raw material requirement from the Steel Authority of India Limited at a fixed price of INR 42,000 per tonne and with an explicit understanding that they will market their product at a price10% higher than the procurement price.

Mr IP Jain from the Federation of Industries of India representing the tubes and pipes manufactures said that they will bring down the price to a ceiling price of INR 48,000 per tonne. He said their members will be advised to reduce the price by 10% and the revised price will come into force with immediate effect.

(Sourced from www.steelprices-india.com)

NHRC probing human rights violations at POSCO site

SNS reported that National Human Right Commission has initiated a preliminary probe into alleged violation of human rights of people living within the proposed POSCO steel plant site.

Mr Damodar Sarangi a special official of the NHRC visited the district yesterday and interacted with officials and few villagers. During his visit, he had a discussion with Jagatsinghpur district collector Mr Pramoda Kumar Meherda, SP Mr RK Sharma, additional district magistrate of Paradip Mr Dillip Mohanty, district rehabilitation officer Mr Surjeet Das, special land acquisition official Mr Nrusingh Swain. He also visited a few villages like Dhinikia, Govindpur, Nuagaon and Gadkujang and interacted with people belonging to both the pro and anti POSCO factions.

It is learnt that a Delhi based NGO had moved the NHRC in this regard while the Kujan Bar Association had also submitted a memorandum to the State Human Rights Commission.

Over the last 2 years resistance movements have resulted in innumerable clashes, ostracisation of villagers and abduction. Schools have been used as camps for policemen and also to hold meetings at the cost of education. Many have allegedly fled their village to safer places and are staying with relatives due to intermittent clashes between pro and anti POSCO groups.

JSW Steel Q1 2008 crude steel output up by 22% YoY

JSW Steel Limited has posted crude steel production of 976,000 tonnes in April to June 2008 quarter up by 22% YoY but flat rolled products output fell by 12% YoY.

The hot rolled coil and plate output fell as its hot strip mill was shut for 17 days in June 2008 for modernization.

PSL plans USD 60 million CAPEX plan

BL reported that PSL Limited has lined up a capital expenditure program of USD 60 million to ramp up its production capacities of its units both in India and overseas over the next 12 months to 18 months.

1. As part of its expansion, it is increasing the capacity of its Sharjah manufacturing unit from the present level of 75,000 tonnes a year to 300,000 tonnes a year. It is taking up the expansion of the Sharjah unit in the wake of a sharp rise in demand for pipeline transportation of oil and gas, with crude prices touching the USD 140 a barrel mark.

2. PSL is currently setting up a 300,000 tonne plant near Mississippi in through its subsidiary PSL North America LLC. The PSL plant near Mississippi is being set up at a cost of USD 103 million, out of which USD 25 million is equity and the rest is being funded through local municipal bonds that carry a 30 year repayment period. It expects the plant to be operational in the second quarter of the current fiscal.

3. In India, PSL is expanding its Visakhapatnam unit from the present 75,000 tonnes to 300,000 tonnes at a cost of about USD 20 million. This is in the wake of GAIL (India) announcing two major cross country pipeline projects from Kakinada, near Visakhapatnam.

Mr Ashok Punj MD of PSL said that the expansion is being taken up at a cost of about USD 30 million and was expected to be completed by the middle of 2009. The unit primarily caters to West Asia and North African markets, but with the expanded capacity it would look for new markets in Iran and Iraq.

He added that "The high crude prices have led to the resumption of operations of a string of marginal fields that were closed down in the past when crude prices were at USD 40 mark. Now these fields were being re-opened and hence there is a sharp rise in demand for transportation of oil and gas."

RINL Q1 sales turnover up by 36% YoY

It is reported that Rashtriya Ispat Nigam Limited’s sales turnover during April to June 2008 quarter was INR 2,744 crore as against INR 2,023 crore, registering a growth of 36% YoY.

It is continuing its thrust on value added steels during the current financial year as in 2007-08 fiscal. During April to June 2008 quarter, it produced 503,000 tonnes of value added steel, which is 72% of its production of saleable steel of 700,000 tonnes. There is a sales growth of 43% YoY.

SAIL 5th largest corporate taxpayers in India

It is reported that, with a slowdown in the economy, rising inflation and eroding profits, there is tremendous pressure on companies across sectors. The worst hit is the oil companies as crude prices are zooming to record highs.

But there is a silver lining amidst the gloom, especially for the government. With the tax coffers filling up like never before, thanks to more taxes being paid by India’s top performing companies, the government can breathe at least a little easier.

Despite incurring heavy losses, India's oil companies are the top taxpayers. The top 10 corporate taxpayers in India are

In INR Crore

Steel Authority of India Limited was the 5th top taxpayer in India. It contributed INR 3,509 crore during 2007-08 fiscal as against INR 3,429 crore in 2006-07 fiscal.

TATA Steel is the 10th highest taxpayer, paying INR 1,889 crore in 2007-08 fiscal as against INR 1,938 crore during 2006-07 fiscal.

Shree Precoated 2007-08 profit up by 16.7% YoY

Shree Precoated has posted a net profit of INR 2455.20 million for the year ended March 31st 2008 up by 16.7% YoY as compared to INR 2102.90 million for the year ended March 31st 2007. Total income has increased from INR 16787.20 million to INR 19641 million, up by 16.9% YoY.

The release added that “Shree Precoated Steels Limited has now informed BSE that since Jolly Brothers Private Limited Company, yet to commence the operation and no separate profit & loss account is prepared. Therefore the above consolidated result is treated as a stand alone.”

Essar nets INR 200 crore from Esmark bid

BS reported that Essar Steel has been compensated with USD 45.3 million for withdrawing its bid for US steel maker Esmark.

Russian metal giant Severstal, the successful suitor, paid Essar USD 25 million as a termination fee and a loan cancellation charge of USD 20.3 million.

The Essar sources said this is the amount received by the company as a break up fee and exercise of warrants attached to the loan provided to Esmark, which is now being bought by Severstal.

TATA Steel team completes Mt Kilimanjaro expedition

TATA Steel has announced that its nine member expedition team, led by legendary Ms Bachendri Pal, successfully climbed the World's tallest free standing mountain Mount Kilimanjaro. As a part of TATA Steel's centenary celebrations, the team created history when they completed 19335 feet climb on June 29th 2008.

The Indian team had left for Tanzania on June 23rd 2008 and after four days of training in which they were informed about the challenges of taking up the Machame route for the expedition, they began their journey on June 28th 2008 and completed it within 24 hours.

On the team’s arrival in Tanzania, they were informed about the challenges of taking up the Machame route for the Expedition. They were discouraged from taking that path. However, the determination of the all women team led by an equally steadfast and courageous leader, Ms Bachendri Pal was unaltered and the team did not falter to take up the route decided earlier. A brilliant display of resilience and tenacity inspite of facing high altitude sickness and acclimatization problems because of low oxygen, the team stuck together. A felicitation was organized for the team on behalf of The African Government to acknowledge their spirit of adventure.

The team members are as follows
Ms Bachendri Pal, leader and chief of TATA Steel Adventure Foundation, Ms Lovely Das, Ms Rajal Patel, Ms Sushma Bissa, Ms Parul Sah, Ms L Annapurna, Ms Premlata Agarwal, Ms Chetna Sahoo, Ms Anita Soren.
Ms Christina John Mlowe joined the team in Tanzania. She is a Tanzanian National working in TATA Africa sales unit.

New Mangalore Port workers to join nationwide strike

BL reported that port and dock workers in New Mangalore will join the nationwide indefinite strike of port and dock workers, which is scheduled to begin on July 16th 2008.

Mr Ramachandra Gowda joint secretary of All India Port & Dock Workers’ Federation said that the representatives of the 5 recognized federations of port and dock workers, who met in Mumbai on June 26th 2008, have decided to serve a notice of strike on the port authorities concerned seeking the implementation of understanding reached at the level of Bipartite Wage Negotiating Committee.

He said that "The management of Indian Ports Association had agreed in the meeting with the recognized federations to extend benefits of the amendment made by the central government in the Bonus Act liberalizing the eligibility limit and definition of pay for calculation of bonus to port and dock workers." He added that the shipping ministry has not taken any decision in this matter even after 6 months.

Mr Gowda said that several other issues such as merger of 50% of dearness allowance with basic pay with effect from January 1st 2005; filling up of vacant posts and implementation of consensus report of the sub committee constituted by the ministry to look into the grievances of the federations on the cadre restructuring report of the officers are also pending with the ministry for several months.

It may be noted that, on March 29th 2008, Bipartite Wage Negotiating Committee took a decision to pay 13.5% of the basic pay as interim relief to port and dock workers with effect from January 1st 2007. Though this was submitted to the ministry in April 2008 for its approval, it is still pending with the ministry.

Umicore to spend USD 10 million on India zinc firm

Belgian metals and specialty materials maker Umicore has announced that it will spend USD 10 million to buy and make investments in Anandeya Zinc Oxides Private Limited in India.

Umicore, in a press statement, said that "The transaction is subject to certain standard closing conditions and is expected to be completed by early August 2008."

Emco to set up 600 MW thermal plant in Chhattisgarh

ET reported that Emco is planning to build a 600 MW coal fired power generating plant in Chhattisgarh as surging demand for electricity attracts large global funds and foreign power majors to India.

Mr Rajesh Jain chairman of Emco said that it has already signed an agreement with the Chhattisgarh government to build the INR 2,400 crore project through an equal JV with a Kolkata based steel trading firm. He added that "We are talking to the state government for fuel linkage and will then work out the structure of the JV."

Emco is already building a 270 MW, INR 1,240 crore power plant at Varora near Nagpur, for which the financial closure has been completed. Typically, financial closure of a power project is termed complete once lenders are convinced of the bank ability of the project; that includes vital clearances such as power purchase agreement, coal linkage agreement, water availability, land acquisition and equipment supplies. A contract with equipment suppliers is the last stage.

Emco’s wholly owned subsidiary Emco Energy builds the group’s power plants. While Emco Energy would build the Nagpur project, the promoters are yet to decide on which company would build the Chhattisgarh power plant and other future power projects.

Mangalore port stake in SEZ

BS reported that New Mangalore Port Trust has evinced interest in picking up around 10% stake in Mangalore Special Economic Zone Limited in an effort to become a partner in the project.

MSEZ Limited has an equity capital of INR 50 crore. While, ONGC has 26% stake in the project, KIADB has 23%, IL&FS holds 49% and the remaining 2% is held by KCCI.

Mr ISN Prasad MD & CEO of MSEZ Limited said that "NMPT approached us recently and expressed interest in picking up stake in MSEZ. Among the existing equity holders, KIADB, which holds 23% stake, has agreed to divest 10% of their stake to NMPT. While, there is no objection by other equity holders in the company, NMPT needs to take an approval from the Union ministry of shipping."

He said NMPT has already received an in principle approval by the union ministry of shipping. However, the ministry has asked NMPT to furnish the details of the project and the exact involvement of NMPT in the SEZ before giving the final approval. He added that "Once the ministry gives its final consent, the proposal will be placed before the Union cabinet for further approval. The whole exercise is expected to be completed very soon."

MSEZ is a special purpose vehicle floated by Oil & Natural Gas Corporation, Karnataka Industrial Area Development Board, Infrastructure Leasing & Financial Services and Kanara Chamber of Commerce & Industry to develop a multi product SEZ at Mangalore.

Mangalore SEZ project is the first such project being developed on the coastline of Karnataka, wherein it is expected that at least INR 50,000 crore will be invested in the next 5 years. The project is being developed in an area of 4,000 acres, of which already 1,900 acres have been acquired. Presently, 450 acres land has been allotted to Mangalore Petrochemicals Limited. Another 85 acres land has been given to Indian Strategic Petroleum Reserves for building an underground reservoir for storing crude oil at an investment of INR 1,500 crore.

Track domestic pricing trends in India

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-india.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

www.steelprices-india.com is developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Elango Industries to setup power plant in Gummudipoondi

Elango Industries Limited has announced that the company shifted its focus from Steel Industry to Power Generation and Distribution.

At the moment, the Company is planning to setup an 80 megawatt coal based Power Plant at Gummudipoondi near Chennai, Tamil Nadu. It has considerably progressed to implement the power plant and expecting the financial closure before December 2008.

In 2006 it commissioned a Gas based Power Plant at Mayiladuthurai Tamil Nadu, through a SPV viz. Kaveri Gas Power Limited. The Group Captive Plant completed 2 years of successful operation and declared dividend to their investors.

Ennore Port shortlists 6 firms for container terminal

BS reported that Ennore Port Limited has short listed 5 consortiums and 1 individual company to build its proposed container terminal at an estimated cost of INR 1,300 crore.

As per report, around 40 companies had shown interest but only 5 consortiums and 1 company were short listed for request for qualification. These companies will now go to the next stage, which is request for proposal. The consortium companies are

1. NYK Line, Evergreen Marine, Hyundai Marine with ZIM Port

2. Group Maritime JCBSL with Obrascon Huarte Lain SA, GE Mauritius International Holdings and Eredene Holding Capital

3. Sterlite Industries along with Eurogate and KG Mota Engle

4. Gammon Infrastructure Projects with Dragados Servicious, Portuarilou Logistics and Leighton Contract India Limited

5. Larsen & Toubro with John Keels Holdings

The only company to bid for the terminal on its own is APM Terminals BV.

Some of the international bidders who are out of the race include Dubai government owned DP World, PSA International of Singapore, Mundra Port and SEZ with Neptune Orient Lines and GVK Power and Infrastructure along with Mitsui and Company.

Mr S Velumani CMD of Ennore Port said that "Work on the project would commence in the next 6 months. The terminal is likely to start operations by mid 2011. The project will be built on the public private partnership model. "He added that it is also planning to build a four lane road linking the new terminal with NH-V. The National Highways Authority of India has prepared the project report and is awaiting the shipping ministry's clearance. The new terminal will come with 125 acres of container yard adjoining the kilometer wide berth.

Mr Velumani said that once the terminal starts operations, it will be able to simultaneously handle three mainline vessels with capacities of 8,000 TEUs each, as well as four feeder vessels. He added that the terminal is expected to handle around 1.5 million TEUs in its first year of operations.

GVK ups stake in Gautami Power to 51%

GVK Power & Infrastructure Limited has informed BSE that its subsidiary Gautami Power Limited has allotted 10,60,09,912 equity shares of INR 10 each at par to GVKPIL against the share application money already invested by the company.

As a result, the equity stake of the GVKPIL in GPL has been increased from 44.97% to 51%. With this development, GPL has become a subsidiary of the company with effect from July 1st 2008.

Mr Ravi Khetarpal new CMD of Bharat Dynamics

Bharat Dynamics Limited has a new man at the helm of affairs with Mr Ravi Khetarpal taking over as new CMD.

Mundra Port - Updates

Mundra Port & Special Economic Zone Limited, in a recent press release, said that "We understand from media reports that an exparte stay has been granted by Supreme Court against carrying out construction activities in SEZ at Mundra.”

The release added that “We are awaiting the papers from Supreme Court. We have complied with various procedures and formalities for setting up SEZ at Mundra and will submit the details to the Supreme Court shortly with a request to vacate the exparte stay. The port at Mundra is operating normally."

Godawari Power inks MoU with Chhattisgarh for cement plant

It is reported that Godawari Power & Ispat Limited has signed a MoU with Chhattisgarh government for setting up of a cement plant comprising of 2 million tonnes per annum capacity of cement and 1 million tonnes per annum capacity of clinker along with power plant of 50 MW capacity. The total cost of the project is envisaged at INR 628 crores.

The project shall be implemented through a special purpose vehicle to be incorporated in due course after allotment of limestone mines by the state government.

Mr Sudhir Srivastava appointed as senior VP of Metso Minerals

Metso Minerals announced that it has appointed Mr Sudhir Srivastava as senior VP of Metso Minerals India, with immediate effect. He will also continue to be a member of Metso’s construction business line management team and be responsible for the construction Asia market area.

Mr Srivastava will be in charge of developing Metso Minerals’ business in India, implementing strategy in current lines of business and preparing the ground for new ones to be launched. He will represent the company in all business and social forums and would also be responsible for the growth and expansion of manufacturing units, supply chain, quality assurance and human resources.

Mr Srivastava said that "India is a priority market for Metso and our business has grown rapidly in the past 5 years. Metso stands in the thick of India’s exciting infrastructure development and we wish to be part of this growth by offering our technological expertise, extensive service support, world class manufacturing facilities and strong after market support."

Recently, Metso announced it has bagged new orders worth INR 112 crore to supply an iron ore induration machine to Global Steel Limited, another order worth INR 73 crore to supply an iron ore induration machine to JSW Steel Limited and an order of INR 45 crore to supply equipment and basic engineering to Bharat Mines & Minerals Ispat, respectively.

Subash Project ties up CH Karnchang for airport projects

Subhash Projects & Marketing Limited has tied up with Thailand's CH Karnchang to bid for airport projects in Indore and Raipur.

The up gradation cost of both the airport is estimated to be around INR 300 crore each. The final bid is expected to be in place by September 2008.

Ineos and Mitsui in eying stake in Dahej project of ONGC

BS reported that at least a dozen companies, including foreign firms, have expressed interest to pick up a stake in ONGC Petro Additions Limited, ONGC's mega petrochemical complex in Dahej.

Ineos, Mitsubishi Chemicals and Japan's Mitsui Chemicals are among the multinational companies in the fray for a stake in the INR 12,500 crore OPaL, which is considering an equity tie up with Petronet LNG.

ONGC holds a controlling 26% equity share in OPaL, which is evaluating a number of partners and the proportion of the equity tie up will be less than 26%. The upcoming petrochemical complex is an anchor tenant in the upcoming Dahej Special Economic Zone, which is spread over 1,700 hectares.

The petrochemical complex will come up on 500 hectares with a 55 acre ethane and heavier hydrocarbons extraction unit adjacent to it. Over 90% of the work on ONGC's C2+ extraction plant is expected to be commissioned by this year. The unit will act as a feedstock provider to the petrochemical complex.

FOB prices for India iron ore fines dip in Orissa

It is reported that the FOB levels on Eastern Coast of India have seen a correction today.

In USD per tonne
FOB Haldia

But the Ex mines levels for domestic sales for iron ore fines on spot basis are reported to have remain unchanged

And on July 1st 2008, domestic prices iron ore in Burwil area of Orissa had gone up by INR 500 per tonne.

1. Rates are in INR per tonne
2. Rates are Ex mines but include loading into rakes
3. VAT or CST is in addition
4. Royalty is INR 19 per tonne for Fe content of 63 and INR 27 per tonne for Fe content of 65%

(Sourced from www.steelprices-india.com)

ArcelorMittal announces investment in Industeel in France

ArcelorMittal and AREVA sign an industrial partnership in the village of Le Creusot. The EUR 70 million investment aimed at increasing production at the Industeel steel plant regarding its steel products for the nuclear industry.

The investment, which will be staggered between 2008 and 2010, will increase ingot production capacity significantly from 35,000 tonne to 50,000 tonne a year. In addition, the two companies will implement a joint 3 year metallurgy research and development program which will be conducted at the Creusot Materials Research Center.

The release said that “This strategic partnership once again underlines ArcelorMittal’s commitment to France. It is part of multi year steel plant development programs, implemented notably in Dunkirk, Fos and Florange which represent a total investment of EUR 1 billion. This MOU also illustrates the Group’s ability to develop innovative solutions adapted to the specific needs of its industrial customers.”

At a time when the nuclear industry is experiencing strong growth worldwide, this partnership will secure the supply of forged nuclear parts for AREVA, via its subsidiary Creusot Forge and allow it to continue to develop the French nuclear industry. This investment will therefore benefit all the Burgundy region’s nuclear players who have joined forces in a competitiveness cluster known as The Burgundy Nuclear Partnership.

Stemcor acquires US pig iron and scrap distributor Ferrosource

The world’s largest independent steel trader Stemcor announced that it has purchased the assets and business of Ferrosource in the USA. Ferrosource is engaged in pig iron distribution and ferrous scrap brokerage to North American steelmakers and iron makers.

Stemcor said that effective July 1st 2008, the business will operate as a division of Stemcor USA and the previous owner, Mr Stephen Miller will continue as MD of the new division.

Mr Steve Graf director of Stemcor USA said that “We are very pleased that Ferrosource, a company we have worked closely with over the past three years, has officially joined forces with Stemcor. The acquisition reinforces Stemcor’s strategy of developing our raw materials business and adding downstream distribution activities.”

OCTG prices have increased by 80% in 2008

Purchasing.com reported that steel pipe distributors and oil industry buyers are facing continued higher prices this month for oil country tubular goods. Overall, OCTG grade tubing costs 80% more now than in December 2007.

According to buyers, purchases of down hole seamless tubing transaction sales opened July at USD 2,640 per ton up from about USD 2,100 in June. This is close to the USD 2,654 per tonne mill price being reported by Pipe Logix, the market research firm that tracks the OCTG market.

US Steel and other OCTG producers actually announced higher posted prices by USD 550 this month in light of increasing raw material, energy and transportation costs. This is on top of a USD 250 per ton surcharge that US Steel and other mills implemented in May.

Mr Kurt Minnich manager of the Santa Fesaid that spot prices for seamless and electric-resistance welded tubing and casing already have been under upward pressure from an earlier series of mill price hike announcements and sales now being made in the Oil Patch at price in effect at delivery terms. That’s a marketplace issue because delivery lead times for both foreign and domestic mills are four to five months out.

The American Metal Market newspaper is quoting pipe and tube distributors as saying that oil drilling activity is so active that further price hikes are possible this summer, much to the dismay of the service centers and the drilling rig operators.

(Sourced from Purchasing.com)

Japanese steel industry outlook stable - Moody

Moody's Investors Services said that the outlook for the Japanese integrated steel industry is stable, based on its expectations for the industry's fundamental credit conditions over the next 12 to 18 months.

Moody's said that its view is based primarily on the industry's solid operating franchises, ongoing developments in technological strategies, and improved financial profiles. However, these are offset by uncertainty regarding both the surging cost of raw materials and potential investment opportunities.

Moody's said that “Successful management of product pricing, combined with extensive cost cutting programs, is likely to sustain fundamental profitability, although margins may be pressured.”

It also noted that free cash flow will be constrained by growing capital expenditures and business investments over the next few years, possibly resulting in higher debt.

Moody's said that an ever evolving global landscape the changing geographical structure of supply and demand, surging raw material costs, and industry consolidation will affect Japanese integrated steelmakers' strategies, leading in particular to increased investments.

In addition, Moody's expects the management teams of the rated companies to maintain conservative financial policies and properly manage their capital structures despite investment needs and shareholder return expectations.

Japan revises standards on ferrous scrap

TEX reported that Japan Ferrous Raw Materials Association recently revised its uniform standards on ferrous scrap for the first time in 11 years since April 1997.

The association describes the revision as what complies with the actual conditions of ferrous scrap distribution at home.

Among other things, the new standards have three main changes.

First, the variety of Press gives three definitions of A Press for pressed auto scrap, C Press for pressed beverage cans and B Press for other than A Press and C Press. Under the previous standards, the variety of Press came under three definitions.

Second, the variety of Shredder gives two definitions of A Shredder for shredded auto scrap and B Shredder for other grades of shredded scrap. Under the previous standards, the variety of Shredder came under four definitions.

Third, the variety of Steel Sheet Clipping has a fifth definition of Steel Sheet Clipping Shredder as additional to the four definitions under the previous standards.

The new standards have no changes as to the varieties of Heavy, Turning, Cast Iron, and Iron Boring.

(Sourced from TEX Report)

Acquisition of 60% interest in Leavitt Tube Company

Maruichi Steel Tube Ltd announced that the basic agreement have been reached with representatives of Leavitt Tube Company, LLC an American limited liability company established in Illinois for the acquisition of 60% interest in LTC by investing USD 90 million through Maruichi Steel’s special purpose company and make LTC one of affiliated companies of Maruichi Steel after acquisition.

Maruichi Steel Tube Ltd was founded in 1926 and is headquartered at Kitahorie Nishi-ku in Osaka Japan. It reported sales of JPY 123,542 million n the term ended March 2007 on consolidated basis.

Doha talk worries US auto and steel groups

It is reported that US automakers, now facing their worst sales slump in 15 years are nervously eyeing world trade talks they fear could open the US market to more imports without giving their exports a boost.

The automakers' anxiety is matched by concerns in the US textile and steel industry as world trade negotiators prepare to take what many believe is a high stakes gamble to bring the nearly seven year old trade round to a successful close.

US Trade Representative Susan Schwab and top trade officials from Europe, India, Brazil and other leading World Trade Organization members will gather in Geneva the week of July 20 to try to strike a deal. If they fail, it could be the death blow for the long struggling round or at least knock it out for years.

The United States which has a 2.5% tariff on passenger cars and a 25% duty on light trucks, imported USD 245.8 billion of autos and auto parts last year but exported only about half that amount or USD 124.3 billion.

Mr Steve Collins president of the Automotive Trade Policy Council, which represents General Motors Corp, Ford Motor Co and Chrysler LCC in an interview said that "We are worried about the direction it's taking. We wish our negotiators the best, but we are worried.”

Mr Collins said that he feared the Bush administration could agree to a Doha deal that slashes remaining auto tariffs in the United States and other developed country markets, while letting big developing countries like India, Brazil and China exempt their own auto sectors from tariff cuts. He added that US automakers are also disappointed that WTO negotiations on reducing foreign tax and regulatory barriers to US auto exports have gone nowhere.

Mr Scott Paul executive director of the Alliance for American Manufacturing said that “US steelworkers and many small to medium sized manufacturers fear an agreement could weaken the United States' ability to impose anti dumping or countervailing duties on imports it believes are unfairly priced.”

He added that "Every successful round of WTO negotiations has further weakened US trade remedy laws and we know, based on the submission of many trading partners, that there is a strong desire to further scale those back.”

ThyssenKrupp drops to 4 month low on price concerns

Bloomberg reported that ThyssenKrupp AG dropped to the lowest in more than four months in Frankfurt trading on concern a slowing global economy will depress demand for steel and put pressure on earnings.

As per report ThyssenKrupp fell as much as 4.9% to EUR 33.42 the lowest since February 15.

Mr Lars Hettche an analyst at Bankhaus Metzler in Frankfurt said that “Many analysts see the demand for steel in the United States weakening. Also other steel companies could be affected and it could limit their scope to pass on higher raw material costs.

Brazilians ink support agreement for steel industry in Venezuela

ABN reported that delegates from Venezuela's ministry of basic industries and mining and the Brazilian embassy in the country have signed a memorandum of understanding to develop Venezuela's steelmaking industry.

The agreement involves cooperation in several processes like steelmaking, continuous casting and rolling.

The report added that both countries also plan to carry out studies to update and expand steelmaking infrastructure and operations.

The report further said that the agreement also includes technical assistance where Brazilian experts and technicians will train Venezuelan personnel in different steelmaking processes.

Usiminas to start Rio port construction within a month

Mr Marco Antonio Castelo Branco president of Brazilian steelmaker Usiminas announced that the company will begin construction of a port terminal at Sepetiba bay in Rio de Janeiro state within a month.

Mr Branco said that the company plans to use the port to export part of the iron ore produced in deposits it acquired in February by taking over mining company J Mendes.

The port will also be used to export products from steelmaker Cosipa, which belongs to the Usiminas group.

According to Mr Castelo Branco, the contract to carry out port construction has already been signed but the start of works depends on a court decision because the 850,000 square meters plot was purchased for below minimum price.

Mississippi governor approves incentive bill for rebar mill

AP reported that a new state law allows the northeast Mississippi city of Amory to issue USD 5 million in bonds to help a company develop a steel rebar minimill.

Gov Haley Barbour signed the bill into law Wednesday. Legislators passed it last week.

EcoSteel Recycling LLC said that its mill will create at least 150 jobs. Rebar is a steel reinforcing product used in most major concrete projects, especially bridge and highway construction.

Officials said the state will not spend any money. EcoSteel Recycling will repay the city. The official added that the company's target market will be Hurricane Katrina reconstruction and other projects within a 350-mile radius.

US rebar imports up in June

According to the US Census Bureau, US rebar imports increased to some 64,000 tons in June.

The figure of application in May was 46,800 tons and the actual imports volume in May was 50,700 tons.

Among them, Japanese import was increased to 1,770 tons in the month.

Steel demand likely to remain strong in Asia

According to Aseambankers, demand for steel is expected to remain strong, given the tight global supply and firm demand from Asia and the Middle East.

Aseambankers said in a report that “This was only a marginal downgrade from an earlier forecast, which is positive, considering that expectations were for steel consumption to decline considerably as a US led slowdown spreads to the rest of the world. It said that with a perceived shortage in steel supply over the near term and we expect steel prices to at least be supported until early 2009.”

Aseambankers said “Nonetheless, we believe the increase in utility costs may still result in some profit margin contraction over the next two quarters for some steel producers unless effective cost minimization strategies are in place. It added that earnings reported over the next two quarters were still expected to be strong YoY.”

The research house said “In view of the challenges facing the industry, particularly with rising material costs, we prefer exposure to selected stocks such as Ann Joo Resources Bhd, for its prudent procurement of scrap and its progression towards becoming an integrated steel player once its mini blast furnace is operational in early 2009.”

Aseambankers also picked Kinsteel Bhd, which apart from benefiting from the high prices of bars and billets, stood to gain from the export of direct reduced iron where prices trailed the strong trends of scrap prices.

Constructional steel output in 2009 to fall by 5% in UK

Construction Journal reported that constructional steel output is expected to fall by 5% in 2009, as rising materials prices and the credit crunch start to affect the sector.

Mr Richard Barrett president of British Constructional Steel Association's during the annual lunch said that the underlying demand for steel construction remains sound.

Mr Barrett said that output hit a high of 1.462 million tonnes in 2007, although this was expected to fall slightly in 2008 to around 1.4 million tonnes before dropping by about 5% to below that figure in 2009.

Mr Barrett added that "Steel is in good shape and looks forward to the future with confidence.”

American domestic HDG prices slide on weak demand

American hot dipped galvanized steel prices have dropped slightly. As per report the requirement for HGI has weakened in the past few weeks and the orders were not able to occupy the full production line. Current domestic price of 0.019" to 48"G90 are being offered at USD 1,521 to USD 1,565 per ton.

On the other hand, the import prices from Taiwan were offered by higher levels but it was not accepted by some buyers. Besides, India import price are rising, continuing its upward trend.

(Sourced from YIEH.com)

Japanese iron and steel exports total 3.1 million tonnes in May

According to Japan’s preliminary trade statistics from the ministry of finance, Japan's customs cleared exports of iron and steel products totaled 3,189,000 tonnes in May 2008 up by 0.4% YoY.

Volume in tonnes
Change is YoY

Meanwhile, Japan's customs cleared imports of iron and steel products totaled 696,000 tonnes in May 2008 down by 12.9% YoY when they fell by 13.2% MoM.

EU orders Greece to recover aid from Hellenic shipyard

AFP reported that the European Commission told Greece to recover more than EUR 230 million in what it considered to be illegal state aid from Hellenic Shipyards.

The commission said that some loans, guarantees and capital injections granted to the shipyard between 1996 and 2002 when it was in dire straits failed to meet EU state aid rules.

Ms Neelie Kroes EU Competition Commissioner said that "Greece has repeatedly provided unlawful and incompatible financing to the loss making civil activities of the yard until 2002. The illegal aid must now be recovered.”

The shipyard was privatized in 2002 and has since become part of German steel group ThyssenKrupp.

As Europe's top competition watchdog, the commission is responsible for policing state aid in the European Union, which must respect the bloc's tough rules.

MHI Delivers 300th ship to Mitsui OSK Lines

Mitsubishi Heavy Industries, Ltd has delivered the MOL COMPETENCE a large size container ship to Mitsui OSK Lines, Ltd at the Koyagi Plant of MHI's Nagasaki Shipyard and Machinery Works. The container ship marks the 300th vessel delivered from MHI to MOL.

The 8,100 TEU, MOL COMPETENCE is the largest container ship built by MHI. It is one of a series of ships targeting reduced weight and improved transportation efficiency through features including the world's first adoption of higher tensile strength steel with yield stress of 47 kgf/mm2 for longitudinal strength members, the most important parts of a container ship's hull. The HTSS was jointly developed by MHI and Nippon Steel Corporation.

MHI believes that the customer's high appraisal of the company's technological expertise in shipbuilding and the reliability of the ships it has delivered resulted in the delivery of 300 vessels to MOL, which includes many historic ships with their innovativeness.

The 300 ships delivered to MOL are vessels of various types, ranging from oil tankers to passenger ships and cargo ships. As a front runner in respective industries maritime and shipbuilding, MOL and MHI have built many ships that are famed in maritime and shipbuilding history, titled as Japan's first, the largest and the fastest.

Track domestic steel price trends in India, China and MEA

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

In order to provide such information 3 web sites have been launched
1. www.steelprices-india.com
2. www.steelprices-china.com
3. www.steelprices-middleeast.com
These portals provide domestic pricing information for benchmark steel products in each category at select location in India, China and Middle East on a regular basis 5 days a week. Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available to give a sense of alternates.

The prices are displayed on daily, weekly and monthly basis. They also have search facilities to access old data from the archives. Graphical representation of trends and comparison of price movement 2 or more products is also available. A calculator to convert domestic prices into comparative CNF and vice versa is also provided, which takes into account all duties and expenses. In addition, you can monitor currency exchange rates, metal prices, BDI for the day as well as access their archives for past data. Other features include converters for weight, length etc, glossary and advanced search functions. The benchmark product price information is supplemented by global pricing news.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

These portals are developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Gerdau Ameristeel approval expansion of Jacksonville Steel Mill

Gerdau Ameristeel Corporation announced that it has approved the first two phases of the previously announced expansion of its Jacksonville, Florida steel mill. The total expansion project is planned to result in a melting and rolling capacity in excess of 1.0 million tons per year in rebar products.

Mr Jim Kerkvliet VP sales & marketing of Gerdau Ameristeel said that "With this expansion, our Jacksonville facility will be positioned to serve needs not only in Florida but also in the greater Southeast and Southern regions of the United States. Engineering, equipment procurement and subsequent construction will begin immediately.

Mr Terry Sutter COO of Gerdau Ameristeel said that "This expansion is part of the total capital strategy Gerdau Ameristeel has developed for our core products such as rebar, structural, merchants and wire rod. We are leaders in these products and we are committed to becoming the 'Supplier of Choice' for our customers. We have to earn our customers' business each and every day and that means leading with world class quality, on time delivery and capacity to meet their growth needs.”

US steel import permit in June up by 1% MoM

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis data, the American Iron and Steel Institute reported that steel import permit applications for the month of June totaled 2,533,000 net tons. This was a 1% increase from the 2,514,000 permit tons recorded in May 2008 and a 3% increase from the May preliminary imports total of 2,451,000 net tons.

Import permit tonnage for finished steel in June was 2,075,000 net tons an increase of 4% from the preliminary imports total of 1,998,000 net tons in May.

For the first six months of 2008 including June SIMA and May preliminary, total steel imports were 15,684,000 net tons down 12% from the 17,822,000 net tons imported in the first half of last year. Total steel imports for 2008 would annualize at 31.4 million net tons or 6% below the 2007 12-month total.

For June 2008, the largest finished steel import permit applications for offshore countries were
1. China 359,000 net tonne
2. Korea 196,000 net tons
3. Japan 130,000 net tons
4. Germany 107,000 net tons
5. Taiwan

Finished steel import permit applications for China increased 25 percent in June compared to May preliminary imports and were the highest monthly total since August of 2007.

Product categories that increased in June vs. May preliminary include:
1. Wire Rods up by 48%
2. Hot Rolled Bars up by 40%
3. Standard Pipe up by 41%
4. Oil Country Goods up by 21%
5. Line Pipe up by 16%.

Products that showed a significant year to date increase vs. 2007 include:
1. Oil Country Goods up by 25%
2. Line Pipe up by 16%

Mr Andrew G Sharkey, III president & CEO of AISI said that “Concerns remain about dumped and subsidized imports of certain products from certain countries, notwithstanding the decline in overall imports through June. One such concern is tubular products from China, which are continuing at high levels in the U.S. market and still receiving export tax rebates from the government of China.”

POSCO takes 20% of Sandfire

Business Spectator reported that South Korea's POSCO has taken a 19.9% stake in local diversified minerals explorer Sandfire Resources NL.

Sandfire said that it has received USD 7.23 million, before costs of the issue, for the placement of 16.5 million ordinary fully paid shares and 2.5 million ordinary contributing shares. The deal was well received by the market with Sandfire rising as much as 4%, despite the benchmark index falling 2.4%.

Sandfire said that it would use the funds to extend its drilling program at its Doolgunna iron ore project, 140 kilometres north of Meekatharra in Western Australia. It added that the funds would also be used to continue exploration activities at the Groote Eylandt Manganese Mine, located off the coast of the Northern Territory.

Sandfire also said that it would use some of the funds to conduct further exploration at its Borroloola lead zinc project, which is located near the Macarther River base metals project in the Northern Territory.

TÜVRheinland acquires UTS in Alabama

TÜVRheinland, the world leader in independent testing and certification services, has acquired Unified Testing Services, Inc, a full service testing and consulting engineering firm based at Woodstock in Alabama. The acquisition folds a variety of new services into TÜVRheinland’s portfolio and makes UTS a standalone member of TUV Rheinland of North America Group.

Founded in 1993, the privately based UTS generates USD 8 million in annual revenues and has 70 employees. UTS offers a wide variety of testing and inspection services focused on materials, construction, transportation, facilities and environmental engineering. Overall, services include: environmental consulting and testing, destructive and nondestructive materials testing,\ and shop fabrication inspection of structural steel bridges.

Mr Stephan Schmitt president & CEO of TUV Rheinland of North America said that “Acquiring Unified Testing Services will extend our capabilities to include a broad spectrum of new industries, allowing TÜVRheinland to deliver a more comprehensive portfolio of services to our clients throughout the US, Canada and Mexico.”

UTS features five service groups that will become part of TUVRheinland’s wide range of testing, inspection and certification services for global clients.

Dongkuk Steel to hike price of galvanized steel

South Korea Dongkuk Steel said it has settled the export price negotiation. Consequently the export prices of hot dipped galvanized sheet and color coated sheet are at USD 1,300 per tonne and USD 1,450 to USD 1,500 per tonne respectively.

It is expected that export prices of Hyundai Hysco and Union Steel will be similar to this price range. Mills were forced to raise galvanized steel prices in order to offset climbing costs of hot rolled coil.

(Sourced from YIEH.com)

AISI joins American scrap coalition

The American Iron and Steel Institute announced that it has joined the American Scrap Coalition, which is urging strong, immediate government action to eliminate the taxes and other market access barriers that numerous offshore governments maintain on their exports of steel scrap.

Mr Keith E Busse chairman of AISI said that “The widespread use of steel scrap export taxes and other barriers initiated by foreign governments is one more important example of the uneven international playing field for steel and US manufacturing in general. These export restrictions by governments act as a significant subsidy for their domestic steel and steel using industries in those countries that restrict scrap exports. At the same time, they have the opposite, and very damaging, effect of limiting availability and driving up costs for steel and steel-using industries outside of those countries.”

In noting the importance of steel scrap and of trade policies that support free and fair trade in critical raw materials and minerals, Mr Andrew G Sharkey III president & CEO of AISI said that “All of AISI’s producer member companies whether EAF or integrated use scrap in varying degrees in the steelmaking process. On policy grounds, AISI strongly agrees with the U.S. government view that foreign government export barriers are a major market access problem of growing importance to US manufacturers not only for steel, but for our domestic customers as well. We therefore support vigorous US and NAFTA government efforts, in the WTO and in bilateral discussions, to eliminate these foreign government export barriers whether on scrap, coke, iron ore or ferroalloys.”

Kremikovtsi ink an agreement with ArcelorMittal

FOCUS News Agency reported that Kremikovtsi AD, Global Steel Holding Limited property signed an agreement with Arcelor Mittal Kremokovtsi.

According to the agreement Kremikovtsi will manufacture into steel all raw materials, delivered by Arcelor Mittal. Kremikovtsi, as part of the contract, will make the production. The production will remain up to standard 60 000 tones per month and will increase until the condition of the units become better.

ArcelorMittal update on strategy in Turkey - Report

Turkish business daily Referans quoted Mr LN Mittal CEO & president of ArcelorMittal as saying that the Turkish steel market is valuable for ArcelorMittal. He said that "ArcelorMittal is aware of the Turkish steel sector's growth potential, therefore, we have no plans to sell the shares we own in Erdemir."

It may be noted that ArcelorMittal had increased its stake in Erdemir to slightly 24.9% from 13.62% in mid June 2008. In increasing its shares in Erdemir to 24.9%, ArcelorMittal is not seeking to have right of representation on the administrative board. It currently is not looking to increase its shares in Erdemir to above 25%.

Revealing ArcelorMittal's other investment plans in the region, Mr Mittal said that "Besides its investment in Erdemir, ArcelorMittal is also in a partnership with Borusan, one of Turkey's leading steel producers. In 2007, ArcelorMittal and Borusan had announced a 50:50 JV partnership, which would see a USD 500 million investment in the construction of a new hot strip mill in Turkey. This also shows the importance we attach to Turkey."

He added that the mill, located next to ArcelorMittal and Borusan's jointly operated Borçelik plant in Gemlik, on the Marmara Sea coast, is scheduled to come online in first half of 2010 with a capacity of 4.8 million tonnes. The new facility, which plans to employ 450 people, is foreseen to provide USD 3 billion turnover annually, once it begins to operate at full capacity.

Al Ezz Steel increases rebar prices for July

Daily Star Egypt reported that Egypt’s giant steel producer Al Ezz Steel Rebars has increased its July 2008 market prices by EGP 570 per tonne. It revealed its new pricing scheme for the entire month. Consumer prices mounted from the previous EGP 5,990 per tonne to the current EGP 6,560 per tonne.

This is Al Ezz’s fifth price increase since beginning of the year. It has been steadily raising prices since October 2007. Al Ezz Steel Rebars has been increasing prices since 2008 in order to absorb a 70% increase in global prices of iron ore, which it estimates will soar an additional 20% in 2008.

Al Ezz Steel Rebars is able to further hike prices each month without adversely affecting its sales because steel market in emerging economies remains very tight in favor of steelmakers.

Meanwhile, Al Ezz Steel officials have repeatedly justified domestic upsurges in their prices to leaps in international markets and rises in prices of raw material, which directly affected production costs.

Al Ezz Steel Rebars is one of the largest steel producers in the region. It also sells to international markets including the US, Canada, China and a number of European countries.

(Sourced from www.steelprices-middleast.com)

Ezz Steel Q1 2008 net profit up by 56% YoY

Ezz Steel has posted net profit of EGP 436 million in first quarter of 2008 up by 56% YoY as against EGP 279 million in first quarter of 2007 on higher global steel prices. EBITDA in the first quarter increased to EGP 1.3 billion up by 32% YoY and net sales were up by 35% YoY to EGP 5 billion.

Mr Paul Chekaiban MD of Ezz Steel said that "Growth was driven by the global increase in steel prices as well as our own strong operating performance."

Ezz Steel has said it was seeking to boost steel production to about 5.3 million tonnes by the end of 2009. Production in 2007 was about 4.8 million tonnes.

Gulf shipping firms fuelling global vessel shortages

Gulf News reported that Gulf shipping firms are on an historic buying spree for new ships that is raising fears of a looming glut on the high seas. Encouraged by the growth of regional ports such as Jebel Ali, and the oil boom that has brought prosperity throughout the region shipping firms based in the UAE have opened their wallets in record numbers.

The latest this week was a USD 1.5 billion AED 5.5 billion order from United Arab Shipping Company, which is jointly owned by several Gulf countries, for nine large container vessels. The order is reportedly the fourth largest ever made in the shipping industry. UASC’s new ships are due to be delivered in late 2011 and used between Asia and Europe, where strong growth helped global container trade rise 20% in 2007.

UASC said its order was motivated by the need to cut fuel costs and match the investments of its rivals in the cut throat container ship business. Mr Jorn Hinge deputy CEO of UASC said that “There is always a risk for overcapacity. But if you don’t participate with the same assets, it is difficult to compete in the long run.”

Eships’s investment profile is much lower, with USD 175 million worth of orders for a converted transshipment vessel and small liquefied petroleum gas tankers. The record orders have created an extraordinary backlog. New dry bulk carriers are on order for an overall capacity of 253 million DWT or 60% of the current capacity on the water. Mr Scott Jones CEO of Emirates Ship Investment Company said that “There are probably about 3 or 4 shipping companies that have placed billion dollar orders in the last 12 months alone. Shipping is often when you buy and when you sell ships. If you go and buy a ship today, you will pay a huge price. At today’s charter rates, you don’t make that much money, but if the rates come down, you’re in big trouble.”

Surging global trade and intense demand for commodities such as iron ore, coal and grains is straining the current fleet of container and dry bulk ships worldwide. The global commodity boom has sent daily hire rates for ships to record highs, pushing orders for new ships to unprecedented levels. The record orders have created concerns in an industry that has long suffered from boom and bust business cycles. Some worry that the newly built vessels will flood the market and send daily charter rates crashing.

Track steel prices in Middle East Asia

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-middleeast.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

www.steelprices-middleeast.com is developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Turkey and Iran discuss gas pipeline project for Europe

Today’s Zaman reported that Turkey and Iran have launched a new round of negotiations on a project to build an additional pipeline to carry natural gas to Europe.

Iranian oil minister Mr Qolam Hosain Nozari said that the new pipeline would reach Iran's border province of Bazargan from the country's South Pars oil fields. He added that Turkey and Iran have also been holding separate talks for the construction and operation of two natural gas extraction facilities in the South Pars region.

It may be noted that Iran had to stop gas delivery to Turkey in the last two winters, saying domestic consumption had skyrocketed due to harsh winter conditions. This has led Turkey to find alternative suppliers, like Algeria, to ensure that the flow of gas in the middle of winter remains uninterrupted. Turkey has been a consumer of Iranian gas since 2001.

Sinotrans enters into engineering logistics market in Saudi Arabia

It is reported that logistics services provider Sinotrans Limited is foraying into the Saudi Arabian engineering logistics market in partnership with local ALMAJDOUIE Group. It signed an agreement with ALMAJDOUIE in Beijing on June 24th 2008, planning to set up an engineering logistics joint venture in Saudi Arabia.

A senior executive of Sinotrans Limited revealed that the venture with ALMAJDOUIE will be the company's first venture in the overseas market, which is an important step towards globalization of its engineering logistics business. He added that "The two parties hope to further extend their cooperation. It will be 50:50 owned by Sinotrans Limited and ALMAJDOUIE."

ALMAJDOUIE has grown into a group company with diversified operations in logistics, real estate, automotive sales, steel, and food. As the largest inland transport services provider within the territories of Saudi Arabia, it has cooperated with Sinotrans Limited since 2005.

In the past 3 years, both sides completed the customs clearance and 500,000 freight tonne inland transport of 5 cement production lines owned by Sinoma International Engineering Company Limited in the country. ALMAJDOUIE also provided quality services for a cement plant built in Saudi Arabia by Sinoma International, under the aegis of China National Materials Group Corporation.

Sinotrans Limited's businesses include freight forwarding, express services and shipping agency, storage and terminal services, marine transport and other trucking transportation- based services. Its market cap reaches HKD 3.43 billion. Sinotrans Group previously released that it would focus on two flagship businesses in the future, namely, shipping business of Sinotrans Shipping Limited and integrated logistics of Sinotrans Limited.

Tamouh invites bids for ski dome project on Jebel Hafeet

MEED reported that Tamouh Investment has invited contractors to pre qualify for the first phase construction works for a proposed ski resort on the highest peak in Abu Dhabi emirate.

The project involves the construction of a 337,000 square meter ski dome, two hotels and a retail area. The total built up area is 459,000 square meters. The contract will be awarded using a two stage tender process. Contractors will submit preliminary prices and rates as part of the first stage. In the second stage the client will select a bidder to join a project team that will then choose subcontractors and suppliers ahead of a formal award.

Work is expected to start on the site in February 2009.

The client is understood to be in negotiations over a contract for the enabling and piling works. The ski resort is part of Tamouh's Jebel Hafeet Glacier development of residential buildings at the base of the slope.

The lead consultant is Germany's Wenzel & Wenzel. The project manager is UK based EC Harris.

WISCO sets world record in BF productivity

It reported that the daily output of No 6 blast furnace in WISCO for June 2008 reached 9,600 tonnes and the blast furnace utilization coefficient was 3.0, which broke the world record.

As per report, utilization coefficient of WISCO’s No 7 blast furnace in April last year reached to 2.887 and seven months later, it broke the world’s record to 2.940.

Iron output of No 6 blast furnace in WISCO reached to 276,500 tonnes in June and the average daily output reached to 9,617 tonnes. Utilization coefficient was above 3.0, far more than the designed 2.3.

China cast steel output in 2007 up by 0.41%YoY

International Iron and Steel Institute, in a recent report has unveiled the production of cast steel in China with a total of 96.9 million tonnes up by 0.41 YoY as compared to 96.5 million tonnes in 2006.

(In million tonnes)

Sourced from IISI

Steel prices in China to move up further in future - Analyst

According to Mr Xiao Ping an analyst with Mysteel, domestic steel prices in China would not fall for long but still bear an uptrend for the future.

Mr Xiao put the price movements into the context of ceaseless inflation in China which has given a push to the offers. US subprime mortgage crisis and quick depreciation of the dollar both boosted oil price onto new highs and intensified worldwide inflation, thus leading to soaring prices of the resource products.

According to Mr Xiao the global steel prices nearly gained 60% from the start of the year. But the prices in China have not yet peaked. He said that people concern about possible economic decline and strained financing for the downstream users. But even if it slows down, the speed would be quite limited, given the internality of China's economic development stage and the government's will.

He added that as to capital strain and the phenomenon of the compressing demand, regulations will be able to change, while all enterprises would tend to pass on the additional cost to downstream industries in midst of the inflations.

Mr Xiao said as seen from supply, further shortfall of electricity availability due to the hot summer and Olympics Games would consequentially impact steel production. Before new export curb policy is released, if any, domestic supply of steel products will be tight and the prices be fairly firm.

(Sourced from MySteel.net)

Laiwu Steel to overhaul H beam line in July

It is reported that Shandong Laiwu Steel plans to have a ten day overhaul of the large specification H beam production line.

The maintenance is expected to result in 30,000 tonnes of production loss.

As per report, the plant has made its plan of producing 170,000 tons sections and 40,000 tonnes of I-beam and channel, in which 60,000 tonnes for export.

Liugang No 2 converter put into production

It is reported that Guangxi Liuzhou Iron and Steel Group 150 tonnes converter No 2 furnace formally put into production.

As per report, general manager and chief engineer of Liuzhou Iron and Steel Group and some other leaders attended the commissioning ceremony.

The No.2 converter is another important engineering project after its No 1 converter. The No.3 converter is expected to be put into operation in mid August 2008.

Chengdu Baosteel Can starts production

Chengdu Business Daily reported that Chengdu Baosteel Can Making Corporation Limited is put into operation at Xindu district in Chengdu. This is the first can making plant in the region.

According to the report, Baosteel poured CNY 330 million on the can making plant aiming to receive CNY 300 million in output value by yielding 460 million of pop cans each year.

Insider discloses that Baosteel will invest CNY 25 million to advance the technology. After technology update, the plant's annual capacity can reach 600 million.

The can making plant supplies beverage cans for famous beverage enterprises, such as Coco Cola, Pepsi, Snow Beer etc. It will have a vast developing space given that the food packing industry is springing up when more and more beverage enterprises enter Xindu industrial district.

ChongQing ZongShen eying iron ore mining and steel plant in Vietnam

Chongqing Economic Times reported that ChongQing ZongShen Group is discussing with Vietnam for building 300,000 tonnes per year of pig iron smelting plant in a province of the Southeast Asian country with an estimated investment of CNY 800 million.

President of ChongQing ZongShen said that “He would win a big iron mine with a scale of about 100 million tonnes in Vietnam and open a developing and mining company there.”

He added that “Meanwhile, a 300,000 tonnes per year pig iron smelting plant will be set up along with a 3 million tonnes per year iron concentrate mill in another province of the country.”

According to the report, these projects are reportedly to be clinched soon and start construction as soon as fixed.

Pig iron remains stable in Harbin

It is reported that pig iron market in Harbin run stable recently and the mainstream quotation rose up and the turnover was good.

Quotation of conversion pig iron was CNY 4850 per tonne to CNY 4900 per tonne and reached to CNY 5100 per tonne of some manufacturers. The mainstream quotation of 18# foundry pig iron was CNY 5150 per tonne to CNY 5200 per tonne acceptance price of some manufacturers reached to CNY 5400 per tonne and CNY 5450 per tonne for 22# foundry pig iron.

As per report, pig iron market turnover in Harbin was good recently. Spot pig iron resources were in slight shortage. The cost of pig iron began to increase pulled by the coke price rising earlier. Pig iron plants transferred the cost to downstream by raising prices. Some merchants said it is difficult for pig iron price to rise later due to downstream steel market in Beijing will be restricted and the resources inventory pressure of its surrounding areas will be increased.

Chinese HDG price remain firm

It is reported that Chinese domestic hot dipped galvanized steel price is still stable.

According to MySteel, on Shanghai market price for 1.0mm HDG by Anshan steel goes at CNY 7580 per tonne, 0.5mm HDG by private producer remain stable at CNY 7800 per tonne. There would be no room for further increase if it could not exceed CNY 7600 per tonne.

Export Quotation for 1.0mm HDG Z120 remained at USD 1140 per tonne to USD 1150 per tonne with transaction price at USD 1120 per tonne to USD 1130 per tonne FOB. In comparison with tier one steel offer are at around USD 1200 per tonne FOB for 1.0 HDG Z120. Wuhan steel is exporting 0.8mm to 1.0mm HDG Z120 at USD 1150 per tonne FOB to USD 1160 per tonne FOB.

Export tonnage for May shipment is about 300,000 tonnes, 40,000 tonnes higher than that of April. The volume for June delivery is set to see further increase.

(Sourced from MySteel.net)

Plate output of Sangang to break through 500,000 tonnes

It is reported that the monthly production of medium plate of Sangang reached 53,400 tonnes and the annual output will broke through 500,000 tonnes.

As per reports, the total production of different plates in these five and a half months reached 505,991 tonnes completed 63.25% of the whole year goal.

As per report, in these six months the various economic indicators of Sangang continue to make record high with the daily output of 4,076 tonnes and the products passing rate reaches 92.59%. At the same time, the company adhere to the production as the basis, constantly to optimize the production structure, the rate of low alloy plate, shipbuilding plate etc gradually rise.

Xinjiang Bayi Steel expect sure in H1 net profit

It is reported that Xinjiang Bayi Iron & Steel Co Ltd H1 net profit is expected to have risen by over 200% YoY mainly due to surging steel prices and marketing initiatives.

As per report, Xinjiang Bayi Iron & Steel Co Ltd had a net profit of CNY 134.53 million in H1 of 2007 with earnings per share of CNY 0.23.

Xinjiang Bayi Iron & Steel is indirectly controlled by Baosteel Group, parent of Baoshan Iron and Steel Co Ltd.

Chinese domestic prices influencing global trends

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-china.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

This would assist persons, including steel makers, traders, users and others, who are connected with industry in some way to asses the steel pricing trends and utilize in their day to day working to take considered decisions.

Benchmark products at select locations cover the entire basket of garden variety of steel products including input material for steel making and processing.

All these features are accessible only to registered user who is provided with a login id and password after payment is received. To know more about the service, please logon to the web site and click on “Features”, “Subscription” and if you like the service on “Registration”.

www.steelprices-china.com is developed and run by none other that www.steelguru.com, which has become the largest English based steel portal in the world, with more than 1 million page hits per month in just 3 years of operations.

Panzhihua New Steel to sell CNY 800 million of Short term debt

It is reported that Panzhihua New Steel & Vanadium Co plans to sell CNY 800 million of short term debt to institutional investors.

Panzhihua New Steel & Vanadium Co said in a statement to the Shenzhen stock exchange, without giving a reason for the sale or an interest rate that the bonds with a maturity of as long as one year, will be sold through China's inter bank market.

China in 2005 allowed companies to sell short term bills to boost working capital and reduce reliance on bank borrowings.

Sinotrans ink agreement with FFDAX for bulk cargo carriers

Sinotrans Shipping Corporation Limited announced that it has sign an agreement with FFDAX Inc to buy two bulk cargo carriers of 176,000 DWT each for USD 194 million. The purchase will be funded by internal resources and bank loans

According to the released, the two bulk cargo ships to be built by Zhoushan Jinhaiwan Shipyard Company are expected to be delivered at the end of 2009. Sinotrans Shipping can then increase its share in the market for imported iron ore in China.

As of December 31st 2007, Sinotrans Shipping had a fleet of 26 dry bulk cargo ships, including two multipurpose vessels, 13 Handymax vessels and 11 Panamax vessels being used for transportation of dry bulk cargos, such as iron ore, coal, cereals, steel and other commodities along major trading routes in the world.

WISCO Engineering and Rockwell Automation ink cooperation pact

It is reported that Mr Gu Liping assistant GM of WISCO and the president of Rockwell Automation has signed the cooperation agreement recently.

Rockwell Automation Company has leading position for industrial automation power, control and information technology in the world it had good cooperation with WISCO in the fields of steel making, coking, sintering etc technical transformation.

WISCO Engineering Technology Group was founded six years ago, now it has formed technology innovation and technology industry, it has domestic first class integrated innovation capacity in metallurgical industrial automation, telecommunications, instrumentation, network information etc fields.

Hyundai Heavy to invest USD 2 billion in China

Reuters reported that South Korea's Hyundai Heavy Industries Co Ltd plans to invest up to USD 2 billion in China in the next five years.

Mr Kang Chul-ho GM of Hyundai Heavy Industries Investment Co said Hyundai Heavy intends to invest CNY 50 million in a loader plant in the coastal province of Shandong. The company is also considering increasing investment in new energy, construction machines, ocean logistics and passenger planes.

China to shut factories ahead of Olympics - Sources

Reuters quoted government and industry sources said that authorities in Tangshan, an industrial city in Hebei province north of Beijing have ordered 267 firms to shut down operations by July 8 to improve air quality ahead of the Olympics.

Government and industry sources said the firms include 66 steelmakers. Hebei accounts for about 20% of China's steel production capacity. The source said the firms would have to undergo strict environmental protection checks in order to resume production at an unspecified date.

Russian cast steel output in 2007 up by 4.0% YoY

International Iron and Steel Institute, in a recent report has unveiled the production of cast steel in Russia total 71.2 million tonnes in 2007 up by 4.0% YoY as compared to 68.4 million tones in 2006. Ukraine produces 34.3 million tonnes in 2007 up by 2.3% YoY as compared to 33.5 million tonnes in 2006.

(In million tonnes)

Sourced from IISI

Gazprom sees USD 500 levels for Russian gas to Europe

Itar-Tass reported that Russia's natural gas monopoly Gazprom forecasts that the Russian gas price will reach USD 500 in Europe by the end of the year.

Mr Alexei Miller CEO of Gazprom said “We forecast for the end of the year that the Russian gas will be sold to Europe at over 500 dollars.”

He added that “Moreover, if the oil price exceeds in the future 250 dollars a barrel then the gas price will grow to 1,000 dollars per one cubic meter.”

Mechel to raise USD 2.5 billion in share placement -source

Interfax reported that Mechel OAO plans to raise USD 2.3 billion to USD 2.5 billion through its preferred share placement.

A banking industry source told Interfax that the road show for the share sale will begin on July 7 and that final pricing will take place on July 22nd or July 23rd.

As per report, the Russian coal, steel and energy group on June 24 announced plans to place up to 11.67% of its post-offering share capital by issuing up to 55 million preferred shares.

Russia ready to buy Turkmen gas at market prices

RIA Novosti reported that Russia is prepared to buy Turkmen natural gas at market prices and there is no need for Turkmenistan to implement energy projects with other countries.

Mr Sergei Prikhodko Deputy Head of the Administration of the President of Russia told a briefing on the eve of Mr Dmitry Medvedev's president of Russia visit to the energy rich Central Asian state that "After gradual transition to world prices, which are inevitable, the issue of orienting these flows to other countries will be taken off the agenda. If Turkmenistan raises the price, the profitability of gas supplies to Russia or through Russia increases."

In November 2007, Russian energy giant Gazprom and Turkmenistan signed a supplement to their contract on natural gas supplies from the Central Asian state. Under the document, natural gas from Turkmenistan will be supplied at USD 130 per 1,000 cubic meters in the first half of 2008 and at USD 150 per 1,000 cubic meters in the second half.

Gazprom to begin talks with Azerbaijani suppliers on gas sales

It is reported that Russian gas monopoly Gazprom and Azerbaijani gas companies have agreed to start talks on sales of Azerbaijani natural gas to Gazprom.

Mr Alexei Miller CEO of Gazprom said who accompanied Russian Mr Dmitry Medvedev president to Azerbaijan that "Azerbaijan could become one of the countries selling natural gas to Gazprom."

Mr Rovnag Abdullayev president of the State Oil Company of Azerbaijan said earlier that the South Caucasus Republic was studying Gazprom's offer to buy Azerbaijani gas at market prices along with proposals to supply natural gas for the Nabucco and Trans-Adriatic gas pipeline projects.

National electricity regulatory commission to review gas tariffs

Ukrinform cited Mr Valeriy Kalchenko chairman of NERC as saying that the National Electricity Regulatory Commission plans to review natural gas tariffs for citizens by August 2008.

He said that as soon as the Cabinet of Ministers submits to the commission official recommendations on limit prices for the public, the NERC would send its calculations to the Economy Ministry and the Finance Ministry.

The Ukrainian government earlier suggested increasing on July 1st gas prices for citizens by 8% to 13.3% or UAH 28 to UAH 156 per 1,000 cubic meters to UAH 367 to UAH 1,329 per 1,000 cubic meters.

On January 1st 2007, gas tariffs for the public were differentiated according to the annual consumption of gas and the presence of gas counters at the level of UAH 0.315 to UAH 1.290 per 1,000 cubic meters of gas.

Mr Abramovich quits as governor of Chukotka

Bloomberg reported that Mr Roman Abramovich, Russia's second richest man with a fortune valued by Forbes at USD 24.3 billion quit as governor of the Chukotka region across the Baring Strait from Alaska. His resignation was accepted by Mr Dmitry Medvedev President of Russia.

Mr John Mann a spokesman for Millhouse LLC said that “His departure as governor does not mean he is pulling out of the region. He said that Millhouse still has projects there.''

Mr Mann said “Mr Roman Arkadievich came to Chukotka when the region was in a state of crisis, adding that he has substantially improved the standard of living and infrastructure since then. The crisis manager can step down.''

Mr Mann said that Mr Putin refused to accept his resignation in 2006, because the administration had just approved a new medium to long term strategic development plan and several investment projects are now coming to fruition, making it a logical time to leave.

He aldded that although Mr Abramovich has homes and business interests abroad, Russia will continue to be his primary residence. He declined to speculate on whether Abramovich may seek another role in public life.

Russian papermakers reject Chinese bid for import quota deal

It is reported that several rounds of meetings between Chinese and Russian pipemakers have failed to agree on a formula for repricing imports of Chinese pipes into the Russian market, and for introducing voluntary quota limits on Chinese pipe exports.

Carpenter Technology to spend USD 115 million for expansion

Carpenter Technology Corporation announced plans to expand its steel mill with an investment of USD 115 million. Less than a year later, they began the expansion.

Carpenter said that the goal was to expand the premium melt capacity by as much as 40% providing new production rates of around 500,000 tonnes per year.

Terra Nostra sees strong demand for stainless steel in China

Terra Nostra Resources Corporation, a majority owner of two joint venture companies in the copper and stainless steel industries in China, announced that based upon recent industry analysis, it anticipates sustained strong domestic demand for stainless steel in China.

Mr George Chua COO of Terra Nostra said that "Our focus on the production of stainless steel for domestic sale has positioned Terra Nostra to take full advantage of China's continuing strong economy and long-term plans for economic transformation and urban migration, without becoming overly exposed to the global economic turmoil that we have seen in recent months. We expect domestic prices for stainless steel to remain strong for the remainder of the year.”

He added that "The fundamental demand for steel and stainless steel products, both within the Chinese market and internationally, will allow Terra Nostra and other Chinese producers to offset the rising costs for raw materials, such as stainless steel scrap, nickel, and electricity.”

Currently, 100% of Terra Nostra's stainless steel production is sold within China and a significant portion in the local Shandong Province market.

AK Steel announces August 2008 surcharge for electrical steel

AK Steel has advised its customers that a USD 905 per ton surcharge will be added to invoices for electrical steel products shipped in August 2008.

August 2008 surcharges for the broad range of stainless steel products that AK Steel produces can be found on the company's web site at www.aksteel.com.

AK Steel's surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the June 2008 purchase cost used to determine the August 2008 surcharges.

Albidon Munali nickel project in Zambia begin production

Australian and London listed Albidon Ltd announced that its nickel sulfide project in Zambia has commenced production and is expected to produce 10,000 tonnes to 10,500 tonnes of nickel concentrate by early 2009 for Jinchuan Group Ltd, its off take partner and China's largest nickel producer.

Albidon said that it has produced its first batch of nickel concentrate from the Munali nickel project and that the concentrate is currently being stockpiled for shipment to Jinchuan. The production of the concentrate marks Albidon's official transition from being a developer to a nickel producer.

The Munali project produced its first ore in January, two months ahead of schedule and Albidon is now looking to reach full annual production of between 10,000 tonnes and 10,500 tonnes of quality nickel concentrate in early 2009.

Albidon and Jinchuan were previously in talks on a possible joint smelter for the Munali project. However, Jinchuan officials declined comment on such talks.

Mr Dale Rogers MD of Albidon told Interfax that “Jinchuan does not have a smelter in Zambia at the moment. Jinchuan has been conducting a study on the concept of building a smelter in Zambia, but is yet to progress any further in its plans.”

The Ferritic Solution from ISSF

The International Stainless Steel Forum has published several new brochures

Ferritic stainless steels share most of the mechanical and corrosion resistance properties of their more expensive cousins, austenitic stainless steels. However, unlike the austenitics, ferritic stainless steels contain no nickel. This makes them a cost-effective alternative in many applications.

The Ferritic Solution provides an overview of the properties of ferritic stainless steels, the advantages of using them and the applications where they can be used. The Ferritic Solution is a crucial reference document for stainless steel users, specifiers and producers.

Since the release of The Ferritic Solution in May 2007, the brochure has been translated into many. This brochure is available in Chinese, English, French, German, Italian, Hindi, Japanese, Korean, Portuguese, Spanish and Turkish.

Huge nickel ore stocks sitting at Chinese ports

French miner Eramet estimates nickel ore stocks amounting to 8.5 million tonnes could be found in warehouses in Chinese ports because of poor profit margins to produce the metal.

Mr Bertrand Madelin MD of Eramet's nickel division said that "At the price of today, a lot of nickel pig iron producers are not able to have good results.

He told reporters that "Today, we have more than 8.5 million tonnes of nickel ore in the harbors in China, which means we have 100,000 tonnes of nickel but it is only left in the harbor.”

Import price of Chrome ore at Tianjin port

It is reported that import price of chrome ore at Tianjin port is as under

Price in CNY per chrome

(Sourced from MySteel.net)

Iron ore price negotiation - CISA opposing index based pricing

According to China Iron and Steel Association, BHP Billiton's proposal to link annual contract prices for iron ore to a market driven supply index rather than through negotiations between miners and mills is inappropriate and unfair.

The association said in a statement that, as the three global iron ore giants BHP, Rio Tinto and Vale control over 70% of seaborne iron ore supply using an index to set a market benchmark price will negate the demand and supply principle and diverge from the present real situation. This is inappropriate and unfair.

The CISA statement said “Baosteel reached a negotiated settlement with Rio Tinto for the new contract price. This practice and system is mutually beneficial and should be preserved. It added that a price index proposal isn't good for the development of a long term and stable relationship between miners and steel mills, therefore we strongly object.”

US benchmark coal down by USD 20

Reuters reported that US benchmark coal has fallen sharply, with Big Sandy barge coal down as much as USD 20, mirroring a European sell off.

Coal & Energy Price Report said that New York Mercantile Exchange Q1 2009 Big Sandy barge coal prices traded as low USD 120 before rebounding a bit.

Railroad delivered coal on the CSX system also was reported down but not as much.

Goanese iron ore miners upset over hike export duty

BL reported that Goa’s private sector mining industry is upset over the recent increase in export duty on iron ore exports imposed by the centre.

Mr Shivanand Salgaonkar president of Goa Mineral Ore Exporters’ Association said that "The ad valorem export duty on iron ore at 15% could result in 20% to 22% decline in state’s annual iron ore exports." He added that a serious decline in iron ore exports of the state could have a negative effect on Goan economy in general and the mining industry in particular.

Mr Salgaonkar said that if the export duty was not withdrawn, it would make the exports economically unviable forcing iron ore producers to reduce or stop production and exports of low grades, leading to various socio economic and environmental problems. He added that Goan mining industry had invested heavily in facilities for beneficiation technologies to upgrade the domestic ore deposits for export, which otherwise would not have had any market. He also said that there was demand for low-grade ore, especially from China, only in recent years, which otherwise remained unconsumed.

Mr PK Mukherjee of Sesa Goa and Mr Srinivas Dempo chairman of Dempo Mining group were also present at the press conference which highlighted the need for the industry to seek relief from the increased export duty, which, according to them would amount to about INR 800 per tonne on an average.

Mr Mukherjee wondered why the iron ore industry is being singled out for taxation and burdened with additional duty every now and then. He added that regulatory atmosphere could create problems for the mining industry, which had toiled to enter into long contracts to ensure exports of otherwise rejected ore.

According to mining industry, around 12,000 people are directly employed in the industry while 30,000 others are indirectly dependent on it.

Vale announces global offering

Companhia Vale do Rio Doce announced that, subject to market conditions and receipt of final approval from the Brazilian securities regulator it plans to launch a global offering of up to 256,926,766 common shares and 164,402,799 preferred shares on or about July 4th 2008.

The global offering will consist of a registered offering in Brazil and an international offering, which will include a registered offering in the United States. Investors in the international offering may elect to receive their shares in the form of American Depositary Shares. The closings of the Brazilian offering and the international offering will be conditioned upon each other.

Existing shareholders of Vale that are resident in Brazil will have the right to subscribe for shares in the Brazilian offering on a priority basis. Our principal shareholder, Valepar, has decided to subscribe the number of common shares required to maintain its proportionate interest in our common shares following our capital increase.

As previously announced, Vale will use the net proceeds of this offering for general corporate purposes, which may include financing its program of organic growth based on its US$59 billion investment plan, strategic acquisitions and increased financial flexibility.

In connection with this offering, Vale has applied to list and trade its common and preferred ADSs on Euronext Paris. Vale’s common shares and preferred shares are listed on the São Paulo Stock Exchange, and its common ADSs and the preferred ADSs are listed on the New York Stock Exchange.

Credit Suisse Securities (USA) LLC is acting as lead underwriter.

MMX buys Bom Sucesso iron ore mine in southeastern Brazil

Reuters reported that mining company MMX Mineracao controlled by billionaire Eike Batista, has agreed to buy rights to a mine in southeastern Brazil for USD 193.3 million to expand its iron ore exports.

According to the report, MMX will pay LGA Mineracao e Siderurgia in four installments for the Bom Sucesso mine in Minas Gerais state, the final disbursement due in January 2010. The report added that the company agreed to pay LGA an additional 80 cents for each tonne above 241.6 million in the mine.

The report quoted MMX saying that the Bom Sucesso mine should begin production in 2012, with a capacity of 10 million tonnes of ore a year for the export market.

CIL to develop 7 underground mines

It is reported that Coal India Limited is planning to develop 7 underground mines with foreign technology on a turn key basis and phase out 60 manual mines that are unfit for mining and recurring losses.

Mr PS Bhattacharyya chairman of CIL said that "Almost 17 global companies have responded to our recent expression of interest for developing 7 Greenfield mines on a turn key basis. We are also contemplating to phase out 60 manual mines, as they are not fit for mining and are incurring huge losses."

He added that of the 7 mines planned, 2 each would come up in eastern coalfields and south eastern coalfields, while 1 each in Mahanad