TATA Steel has floated a 100% owned global holding company by bringing all its overseas assets, including Corus, under its fold. The creation of the holding firm, headquartered in Singapore, would help the company to raise funds as and when required to fund its upcoming projects.

TATA Steel Global’s assets would include
1. Corus
2. Tata Steel Thailand
3. NatSteel Asia
4. Ferro Chrome plant in South Africa
5. Stakes in mines in Australia, Ivory Coast, Mozambique and Oman
6. Investments in Vietnam to set up a 4.5 million tonne per annum steel plant
7. Other overseas investments

Mr Koushik Chatterjee CFO of TATA Steel said that “Tata Steel Global has come into effect on Friday. We will transfer all our existing and future overseas assets and operations into it. The enterprising value of the firm currently stands at USD 12 billion to USD 13 billion.”

He added that “Theoretically raising funds through it is possible, but we are not looking at that at the moment. It is no secret we are looking for raw material assets. Because of the size and geographical spread of the holding company, it would be easy to raise funding. We can unlock value of this company when required”

Amidst the currently prevailing volatile and speculative steel price scenario in India, SteelGuru.com has started the much needed barometer to track and measure the price movements on daily basis.

In order to provide a index for steel prices, we call it SENSEX for steel, SteelGuru.com decided to work on both long products and flat products for respective category indices as also a composite one for steel. We call them LPPI, FPPI and SPI and have started releasing these indices with effect from July 1st 2008, after taking June 30th 2008 as base.

The variation in newly developed indices for steel products in India reflects that on the whole, steel prices remained static during July 2008, although long products witnessed correction and flat product prices strengthened

LPPI – Long Product Price Index
FPPI – Flat Product Price Index
ISPI – Indian Steel Price Index

Long products

Flat products

LPPI is based on daily market prices of three benchmark products rebars, wire rod and sections in 4 metros, whereas FPPI is based on HRC, plates, CR and HDG. These indices have been built considering their respective weights in the composite categories as also in the shares of sales in the regional markets.

The pricing input is from www.steelprices-india.com, which publishes market transaction prices of benchmark products among select locations 5 days a week.

These price indices outline the way domestic steel market is moving day by day and will help producers, agents in the supply chain, steel buyers, bankers and analysts in their respective businesses.

(Sourced from www.steelprices-india.com)

PTI reported that TATA Steel indicated that it is in no hurry to raise the price of the construction material, even as the self imposed moratorium by domestic steel makers for holding prices ends next week.

The report cited Mr Koushik Chatterjee CFO of TATA Steel as saying that "The company will take a view as to what needs to be done. Surely we will look at it from all direction, but timing is not necessarily linked to the moratorium.”

Mr Chatterjee said that holding the price line did not have much impact on the company's bottom line since TATA Steel sells in excess of 70% of its total domestic production on long term contracts.

Mr Chatterjee however added that international steel prices are higher by USD 350 per tonne than the domestic rates.

Earlier last month, Mr B Muthuraman MD of TATA Steel had said there was every justification to increase the metal's prices in view of unprecedented rise in raw material costs, ocean freight rates, other inputs and a robust demand for steel.

Domestic steel makers had on May 7th 2008 promised to hold prices for three months to support the government in its fight against inflation. TATA Steel’s this announcement is likely to further cool the speculations, after the Indian government has been advised public sector units to hold the price line earlier this week.

It is reported that Delhi based PC Rathi Group’s Rathi Steel & Power, formerly known as formerly Rathi Udyog Ltd, plans to invest INR 2000 crore on to enhance the steel capacity of its Orissa plant to 1.2 million tonnes per annum.

It has recently commissioned Phase 1 of its integrated steel plant at Sambalpur comprising of sponge iron, captive power plant and steel melting shop to manufacture steel billets.

Mr Udit Rathi CEO of Rathi Steel & Power said that “We aim to be a market leader in long products of steel and foresee a strong demand in the coming years from the infrastructure and real estate sector. Our plant in Orissa is strategically located in District of Sambalpur and proximity to major raw materials like iron ore, and coal provides us with a competitive edge.”

He said that “The company has already obtained a letter of assurance and will soon be entering into a fuel supply agreement for long term linkage of coal with coal India. Further the company is also in the process of obtaining long term linkage for iron ore.”

Rathi Steel & Power is engaged in manufacturing of rebars and wire rods and is a market leader in NCR. Rathi Steel & Power’s existing operations are at Ghaziabad where it manufactures rebars, wire rods and value added stainless steel products.

Mr Pramod Kumar Rastogi on Friday took charge of Secretary to the Ministry of Steel. He replaces Mr RS Pandey, who has taken over as the Secretary to the Ministry of Petroleum and Natural Gas.

Mr Rastogi a 1974 batch IAS officer of Andhra Pradesh cadre, before taking up the present assignment was Special Secretary to the Ministry of Defense Government of India.

It is reported that Jindal Steel and Power is planning to invest close to INR 12,000 crore through a combination of debt and equity in its proposed 2,640 MW thermal power plant at Raigarh in Chhattisgarh. For the new project, which will be operational by 2013 or 2014 the firm would require coal reserves of over 400 million tonnes.

As per report, the project would be undertaken by JSPL’s subsidiary Jindal Power Limited. JPL has set up a 1,000 MW power plant at the same location in Raigarh out of which 750 MW of power has already been commissioned and the balance 250 MW would be commissioned next month.

Mr Sushil Maroo deputy MD of JPL said that “Though we own some land next to the existing power plant, we would further require significant amount of land for the proposed project. We are in talks with the state government and hope to take possession of essential coal blocks and land soon.”

Mr Maroo said that “After the appraisal work gets over, we would approach investors for funds. The debt equity ratio for the proposed plant would be 70:30.”

The report added that the equity portion of the investment will come out of internal accruals and no fresh fund raising is planned as of now. The company has roped in SBI Capital Markets for conducting financial appraisals.

For setting up adequate infrastructure, the company is in talks with various equipment suppliers across Europe and China besides India and is expected to place orders in the next 3 or 4 months. Soon, the company would also lay down dedicated transmission lines to carry power from substations to the national grid.

Mr Kamal Nath Indian minister of commerce & industry recently addressed media to reveal the outcome of the recently concluded WTO ministerial conference at Geneva.

Mr Nath stated that “The primary objective of the Doha Round is to put the development dimension of international trade on centre stage. While there would always be commercial interests guiding trade these interests cannot take primacy over the livelihood interests of billions of poor and vulnerable farmers of the developing world. In the context of the current food crisis and the abnormal rise in food prices, it has become all the more important to preserve and protect the livelihood security of poor farmers and the long term food security of developing nations.”

He said that “In view of the subsistence nature of farming in developing countries and the need to insulate the poor and vulnerable farmers of developing countries from the shock of large tariff reductions, the instruments of Special Products and Special Safeguard Mechanism were built into the Doha mandate. The July Framework and the Hong Kong Declaration built upon it. While the Special Products are designed to allow developing countries to take less than formula cuts on their vulnerable products, specially the products affecting the livelihoods of subsistence farmers and affecting the food security of a nation, the SSM is designed to protect the farmers from sudden import surges and price dips by applying an additional safeguard duty over and above the bound rate.”

He added that the lack of consensus on SSM was not an issue affecting only India and it affected more than 100 of the least developed and developing countries.

Mr Kamal Nath said it would see attempts at overcoming the current impasse. He reiterated that India stands committed to constructively engage at the WTO to move the Doha Development Round to a successful conclusion.

BS reported that Ramsarup Industries Limited the second largest producer of coated and uncoated steel wire has posted 26% increase in net profit at INR 15.78 crore in the Q1 of the current fiscal as against INR 12.54 crore in the comparative quarter in 2007.

As per the report, total income of the company surged by 8% to INR 383.05 crore from INR 354.73 crore while operating profit increased 35% to INR 41.88 crore as compared to INR 30.95 crore.

Ramsarup Industries Limited attributed the performance growth to 26% growth in export sales at INR 37.36 crore in the Q1 of the current fiscal as compared to INR 29.70 crore in the comparable quarter in 2007.

Infrastructure division of the company bags further order worth INR 82 crore for various infrastructure turnkey projects including laying of 132/ 220 KVA power transmission line from RRVPNL under JV.

As per report, Ramsarup Industries Limited is well on track with their plan to produce 0.6 million tonnes per annum of steel wires and upstream wire products from current level of 0.288 million tonne per annum. On commencement of the single line LRPC unit, scheduled for September 2008 Ramsarup will be the first company in India to produce such products. Plating Line Plant to produce hose wire to be imported from European company is under full swing of implementation at Durgapur site of the company. Plant is expected to be completed during current financial year.

Project Today reported that Arshiya International is planning to invest INR 1,600 crore into its rail business Arshiya Rail Infrastructure.

As per the report, this CAPEX will be deployed towards acquiring 3,375 wagons and also for the building of rail sidings and other necessary infrastructure across the country.

The report added that the 75 rakes will be delivered over 18 months making Arshiya Rail Infrastructure the largest private rail operator in the country by end 2009. The first rake is expected to be deployed on November 15th 2008.

It is reported that Mr Lalu Prasad Yadav railway minister laid the foundation stone for a INR 1,417 crore rail wheel factory at Bela in Chhapra district of Bihar. The project is expected to be completed by 2010.

As per report, the construction work on the project is expected to commence soon and the facility is expected to have an annual capacity of 100,000 wheels. The proposed factory will mainly use scrap iron from railway yards across the country to make wheels using technology from US based Griffin.

It is learnt that, the comprehensive contract for setting up the factory and allied structures has been awarded to Larsen & Toubro which competed with TATA Projects and Gammon India to bag the project.

Suzlon Energy the country’s biggest maker of wind-turbine generators, said that its first quarter group profit declined by 93% after currency losses and a sale reversal.

Its net profit fell to INR 1.35 crore in the three months ended June 30 from INR 18.89 crore a year earlier. Its revenue increased by 43% to INR 2,834 crore.

Suzlon Energy in a statement said that its sale of seven wind turbine generators of 2.1 MW each to the South Korean customer was accounted for in the previous year
Suzlon also made a currency loss of INR 164 crore in the quarter.

Mr Kirti Vagadia CFO of suzlon said that the company has set aside INR 590 crore to compensate customers for cracked blades.

Reversal of sales is clearly an issue.

The Associated Chambers of Commerce and Industry of India has expressed its deep disappointment over the just concluded WTO negotiations which could not be reached at logical conclusion.

Mr Sajjan Jindal president of ASSOCHAM said that Indian Inc had anticipated that the latest WTO negotiations would not reach at positive conclusion because the developed world was expecting too much from the developing nations. This is the main reason as to why the negotiations failed.

However, the ASSOCHAM chief complimented the Indian Commerce and Industry minister Mr Kamal Nath for putting up a brave front all through the negotiations process.

According to the release, ASSOCHAM hope that in future the WTO talks would be build up on a consensus agenda of all its members.

Project Today reported that Consolidated Construction Consortium bagged 2 prestigious civil works order worth INR 240 crore for the Renault Nissan automobile plant as well as the Global Automotive Centre for the National Automotive Testing and R&D Infrastructure Project in Chennai.

As per report, the Renault Nissan project includes construction of stamping, paint shop, body shop, trim and chassis, power train buildings, process foundations and security. It also includes on a design and builds basis, construction of train, data and maintenance buildings for a value of more than INR 140 crore.

The report added that the NATRIP contract for the Global Automotive Centre is valued at INR 100 crore.

Both these projects will be executed at Oragadam in Chennai.

Asia Pulse reported that Bhilwara Energy Limited would invest INR 7,500 crore to set up a 1,500 MW coal based thermal power plant in Madhya Pradesh.

As per the report, Bhilwara Energy Limited owned by the LNJ Bhilwara Group has signed a MoU with Madhya Pradesh government to set up a thermal power plant in the state which would be developed in phases.

The report added that LNJ Bhilwara Group has commissioned coal based captive power generation facilities across various locations of its companies. Its total energy generation capacity is expected to touch 5,000 MW by 2015 including hydro, thermal, solar and wind power.

The Cabinet Committee on Economic Affairs approved the proposal to continue Accelerated Power Development and Reforms Program APDRP during the XI plan with the revised terms and conditions as a Central Sector Scheme. The salient features of the restructured program worth INR 51,577 crore are as follows:

1. The focus of the program shall be on establishment of base line data and fixation of accountability and reduction of AT&C losses through strengthening & up gradation of Sub Transmission and Distribution network and adoption of Information Technology.

2. Project area shall be towns and cities with population of more than 30,000. Rural areas with heavy loads requiring feeder segregation may also be included in the project areas.

3. Projects under the scheme shall be taken up in 2 Parts. Part A shall include the projects for establishment of baseline data and IT applications for energy accounting or auditing & IT based consumer service centers. Part B shall include regular distribution strengthening projects.

4. Initially 100% funds for Part A and 25% funds for Part B projects shall be provided through loan from the Government of India. For special category States, GOI loan for Part B projects will be 90%. The balance funds for Part B projects shall be increased from financial institutions.

5. The entire amount of loan and interest for Part A projects shall be converted into grant once the establishment of the required Base line data system is achieved and verified by an independent agency.

6. Up to 50% loan and interest of Part B projects shall be converted into grant in five equal tranches on achieving the 15% AT&C loss in the project area on a sustainable basis for a period of 5 years.

7. If the utility fails to achieve or sustain the 15% AT&C loss target in a particular year that year’s tranche of conversion of loan to grant will be reduced in proportion to the shortfall in achieving 15% AT&C loss target from the starting AT&C loss figure.

8. An amount equivalent to 2% of the grant for Part B projects is proposed as incentive of utility staff in project areas where AT&C loss levels are brought below 15%.

9. Participation of the Private Utilities in APDRP would be reviewed after a period of 2 years from the date of sanction of the restructured APDRP during XI Plan by CCEA.

10. A Steering Committee under Secretary shall sanction projects and monitor the implementation of the Scheme.

11. PFC shall be the nodal agency to operationalize the program.

Bharat Forge has announced the following unaudited results for the quarter ended June 30th 2008.

According to the release, Bharat Forge has posted a net profit after tax of INR 265.60 million for the quarter ended June 30th 2008 as compared to INR 648.10 million ended June 30th 2007. Total Income is INR 6494.50 million for the quarter ended June 30th 2008 as compared to INR 5168.80 million.

The Consolidated Results are as follows
The Group has posted a net profit after tax & exceptional items of INR 409.10 million for the quarter ended June 30th 2008 as compared to INR 804.30 million for the quarter ended June 30th 2007. Total Income is INR 13238.20 million for the quarter ended June 30th 2008 as compared to INR 10819.70 million for the quarter ended June 30th 2007.

BS reported that Hindustan Zinc Limited has increased the prices of lead by more than INR 10,000 tonne in past 15 days.

As per the report, lead would now cost INR 107,800 per tonne as compared to INR 96,000 per tonne 2 weeks ago.

Increased prices of lead are likely to put pressure on rates of alloys, batteries, rubber and paint in which it is used as an input material.

It is reported that Infrastructure major Nagarjuna Construction posted a marginal 2.94% YoY increase in net profit at INR 37.09 crore for the quarter ended June 30th 2008 as compared to INR 36.03 crore in the corresponding quarter in 2007.

As per the report, turnover for the quarter increased 27.39% YoY to INR 972 crore as against INR 763 crore in the same period last year. NCCL has so far got orders aggregating INR 1,802 crore and its order book stands at INR 12,155 crore.

It is reported that suspension of construction work at 2 major hydel projects last month, GVK’s 330 MW Alaknanda hydel project is still facing stiff opposition from locals.

As per the report, government suspended construction work at the dam site several days ago, following protests from locals who alleged that GVK was disposing of the ground material into the Alaknanda River causing environmental hazards. This prompted the state government to set up a committee to look into the matter.

Mr C Bhaskar additional secretary said that “Till the committee submits its report, no construction activities would be permitted at the dam site.”

The report added that the Alaknanda project is being proposed at Srinagar in Pauri district of Uttarakhand with an investment of INR 1,600 crore to INR 2,000 crore. GVK wants to complete the project in 3 years.

Uttarakhand government had kept in abeyance the construction of its 2 major hydel projects 480 MW Pala Maneri and 400 MW Bhaironghati on the river Bhagirathi following protests by environmentalists last month.

Nucor Corporation announced that it plans to install a heat treating facility at its plate mill at Hertford County in North Carolina.

The heat treat line will have an estimated annual capacity of 120,000 tonne and will have the ability to produce heat treated plate from 3/16" through 2" thick. Total cost of the project is expected to be approximately USD 110 million.

Mr Dan DiMicco chairman, CEO & president of Nucor said that “Heat treated plate is used in applications where higher strength, abrasion resistance and toughness are required. The addition of the heat treat facility at Nucor Steel Hertford County is an important first step in enabling the Nucor plate group to expand its value added product mix.”

He added that "The addition of this facility supports our objective of providing a full range of plate products to our customers. Installation of the heat treat facility will begin after satisfactory resolution of regulatory approvals and finalization of equipment and other contracts.”

Nucor's plate mill in Hertford County, North Carolina, started operations in 2000 and has an annual capacity of approximately 1.6 million tonne. Combined with Nucor's plate mill located in Tuscaloosa, Alabama, Nucor's current annual plate production capacity is approximately 2.8 million tonne.

A spokesman for ThyssenKrupp AG denied a report that it has interested in acquiring US peer AK Steel Holding Corporation and said that no talks are being held between the two companies.

It may be noted that, dealreporter.com in a report said that AK Steel held sale talks with several companies. The report cited one source as saying that ThyssenKrupp has been taking a close look at AK Steel. It added that other potential buyers are Russia's Severstal and Evraz.

Reuters reported that Brazilian steel company Usiminas is analyzing potential acquisitions in the United States, Europe and Latin America.

Mr Marco Antonio Castello Branco CEO of Usiminas said that it is accelerating its plans to expand outside of the country, as well as planning to build a new USD 5.7 billion mill in Brazil.

He added that "We are looking at these regions but prices of assets abroad are very inflated. We aren't going to buy an asset at any price though. We have the conditions to accelerate our verticalization program but we want to maintain our investment grade. We do not want to take a bigger stride than our legs permit."

Usiminas said in a statement to the CVM market regulator that it plans to invest USD 14.1 billion through 2012 to expand steel and iron ore production. Previously, the company had planned to invest USD 9.9 billion through 2015. It budgeted USD 5.7 billion for the construction of the new mill that will be the company's third plant and will be in Santana do Paraiso in Minas Gerais state.

Thomson Financial reported that European Commission has closed its inquiry into state aid granted to Hungarian steel producer Dunaferr, after Dunaferr withdrew its application for tax relief.

The Commission said that since Dunaferr was intended to benefit from tax relief as of 2009 only and no aid has been paid out yet, the investigation has become without object.

The aid was to be granted under a scheme previously approved by the commission, which established tax incentives to ensure productive investment in the less developed regions of Hungary.

But the commission said it doubts whether the aid to Dunaferr, which owns the only integrated steel works in Hungary and is part of the IUD and Duferco group respects EU rules on specific aid for the steel industry.

Investment projects in the steel industry are prohibited under EU rules because of the structural overcapacity of this sector.

It is reported that ArcelorMittal Brazil is planning to raise its flat steel production from annual 7.5 million tonnes to 20 million tonnes in the next 10 years.

As per report, the expansion will be divided into 2 stages. The first 5 year, the expected capacity will be 10 million tonnes a year. The next 5 year, the total capacity will be 20 million tonnes. It is believed that global steel demand will be stronger, especially in Brazil and Latin America.

Recently ArcelorMittal Brazil has provided to Brazil market for 11 million tonnes of steel a year, including flat and long products. Plans also include plant expansion, construction or acquisition.

It is reported that EU's wire rod prices shifted down below rebar due to the collapse of domestic demand. In previous few months, European wire rod prices were EUR 10 to ERU 20 higher than rebar, however the buyers have avoided new purchases as the market has softened.

According to a Portugal's trader, wire rod is booked at EUR 750 per tonne from Italy's Riva while current domestic rebar price is at EUR 780 per tonne in Spain and Portugal.

'Directory of Electrical Steel Users in India' is one of the top sources of information available on electrical steel users in India. It is one of the most comprehensive and accurate directory of electrical steel users in India.

Published in May 2008, 'Directory of Electrical Steel Users in India' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian users of electrical steel. This report will be extremely useful to businesses that deal specifically with companies in the electrical steel segment.

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

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

This report covers name and product details of 340 of Indian electrical users in Alphabetical order.

Look at the information you'll get in the 'Directory of Electrical Steel Users in India'

• Company name -340 entries
• Address-340 entries
• Phone number-338 entries
• Fax number -317 entries
• Email -300 entries

Report Summary:
1. Published: May 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 190

Price: USD 625 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

ArcelorMittal South Africa said that it remained interested in possibly taking a stake in Zimbabwe Iron & Steel Company.

Ms Nonkululeko Nyembezi Heita CEO of ArcelorMittal SA said that it would be keen to take a stake. She added that "It is not currently in talks with Zisco. Any move to buy a stake in Zisco would be in line with ArcelorMittal South Africa's plans to increase its production in South Africa and other southern African countries to serve the sub Saharan market."

Mr Kobus Verster ED finance of ArcelorMittal SA said that it would be interested in more vertical integration and suggested that it would look at investing in owning or holding stakes in companies which produce steelmaking raw materials. He added that "Any aspirations AMSA may have to invest in iron ore projects are on hold until the company has resolution in its dispute with Anglo American's Kumba Iron Ore on future iron ore supplies."

As a result of a historic agreement ArcelorMittal South Africa sources 6.25 million tonnes per year of its iron ore from KIO's Sishen mine in South Africa at cost plus 3% a significant discount to market prices. ArcelorMittal South Africa also sources 2.5 million tonnes per year from KIO's Thabazimbi mine on the same terms.

ArcelorMittal South Africa wants to buy into the KIO Sishen South expansion project, gaining a supply of iron ore proportionate to its investment. AMSA argues that under the historical agreement it has the right to do this on the same cost plus 3% terms. KIO rejects this claim.

(Sourced from metal bulletin.com)

It is reported that sections prices in United Kingdom are anticipated to surge again in September 2008 after a EUR 60 price hike, announced by Corus last week. Most market players forecasted that UK price will reach European price level after this price hike.

Currently, most Section stockiest in UK are very excited about this price hike news.

However, it means that more and more section suppliers from other European countries will join in the competition in UK market within the next two months. It’s said that several South American UK exporters are ready to enter UK section market.

Olympic Steel Inc has announced its financial results for the second quarter and first half of 2008 and the declaration of a special non recurring dividend of USD 1 per share.

Net sales for the second quarter of 2008 totaled USD 363.5 million up by 31% YoY as against USD 277.4 million for the second quarter 2007. Net income totaled USD 29.6 million as compared to USD 9.4 million. Tons sold increased by 5.1% YoY to 353,000 from 336,000 in the second quarter of 2007.

Net sales for the first half of 2008 increased by 18.9% YoY to USD 638.4 million as compared to USD 536.8 million in H1 2007. Net income totaled USD 42.8 million as compared to USD 14.7 million. Tons sold in the first half increased by 3.3% YoY to 669,000 from 648,000 in the first half of 2007.

Meanwhile, Olympic Steel’s board of directors approved an increase of USD 0.01 per share on its regular quarterly cash dividend to USD 0.05 per share. The board of directors also approved a special non recurring dividend of USD 1 per share. Both dividends are for shareholders of record on September 1st 2008 and payable on September 15th 2008.

Mr Michael D Siegal Olympic Steel said that "The dividends were approved as a result of the Company’s extraordinary performance during the first half of 2008. Given the Company’s strong balance sheet and cash flows, its on going increased capital spending initiatives, and the Company’s commitment to growth, it was deemed appropriate to reward shareholders at this time."

Founded in 1954, Olympic Steel is a leading US steel service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat-rolled sheet, coil and plate steel products.

In US domestic wire market, people expected the wire price to stay firm next month. Although the demand is weak now, there are still no indications showing that the wire price will go down in September 2008. Besides, the US wire price has stopped raising in the pass few months.

On the other hand, China government may change its export duty policy on its wire products, the news said once China government has canceled its tax rebate policy on this wire product, China's exporting wire price will raise sharply in the coming future.

Nowadays, the low carbon wire price in August 2008 from US domestic mills are between USD 1235 and USD 1257 per tonne and their offer price for high carbon wires are between USD 1290 and USD 1312 per tonne.

(Sourced from yieh.com)

Mr Aditya Mittal CFO of ArcelorMittal recently said that it is operating at close to its full production capacity.

He added that "We are operating at high levels of capacity. We are close to capacity and can not produce much more steel.''

Although America’s standard pipe prices are not expected to surge in big jumps but to remain strong during the following few months. As requirements by end-users keep stable and supply tight, the pipe market will be more active than other steel products.

Despite rising raw material costs, strong demand from energy, agriculture and construction sectors are pushing North America pipe producer Northwest’s sales to hit a new record high in the second quarter.

Now, American ERW A53 BPE is around USD 2,039 per ton and some producers are reducing the price to obtain more orders. Other manufacturers indicate that they have no worries concerning order bookings.

Metalico Inc has posted sales of USD 295.1 million in April to June 2008 quarter up by 342% YoY as against USD 66.8 million in April to June 2007 quarter. Operating income increased by 383% YoY to USD 30.1 million as compared to USD 6.2 million. EBITDA increased by 328% YoY to USD 34.2 million as compared to USD 8 million.

Net income for the quarter ended June 30th 2008 was USD 8.1 million after the effects of SFAS No 150 accounting treatment described below and after a loss in discontinued operations of USD 0.4 million as compared to net income of USD 3.7 million in the second quarter of 2007.

Metalico's scrap metal segment experienced volume increases of approximately 185% QoQ for ferrous and 93% QoQ for non ferrous metals.

Mr Carlos E Agüero president & CEO of Metalico said that "We are extremely pleased with our performance and the favorable trends in the steel industry which derivatively carried over to scrap metals recycling. We are also pleased with the expanding contributions of recently acquired companies and the progress being made integrating this year's acquisitions. We benefited from strong PGM pricing and especially from record ferrous metal prices, which continued to rise throughout the second quarter, coupled with significant unit volume growth for both metals."

It is reported that, after Taiwan Chung Hung Steel has announced its August 2008 shipment price, Taiwan tubes and pipes manufacturers have also released their August 2008 tubes and pipes price that will remain at the same level as July 2008.

Due to influence on bad weather in Taiwan recently, market demand represents weak trend. Most of mills are going to follow up with Chung Hung's price to remain their August 2008 price at the same level.

Basically, the domestic black pipe and galvanized steel tube market prices for August are about USD 1195 to USD 1225 per tonne and USD 1274 to USD 1323 per tonne respectively. Also, electrical line pipe price is about USD 1520 to USD 1568 per tonne and the price for hot dip galvanized steel pipe is about USD 1437 per tonne at this moment.

(Sourced from Yieh.com)

On July 28th 2008, the average price of H1 scrap and number 2 bundle scrap in Pittsburgh and Philadelphia were USD 523.16 per long ton and USD 479.50 per long ton, which remained the same as last week.

Specifically, the average price of H1 in Pittsburgh was USD 524.50 per long ton, in Chicago was at USD 514.50 per long ton and in Philadelphia was USD 530.50 per long ton.

In the Eastern coast, the average price of H1 scrap in New York, Boston and Huston was USD 478.83 per long ton. In western coast, the average price of H1 scrap was USD 214.33 per long ton.

It is reported that, due to local Electro Galvanized demand fall, Korean EGI producers have increased the EGI export to China and Europe.

Until May of 2008, the EGI exportation to China reached 178,000 tonnes, which accounts for 50% of its total EGI exportation. Meanwhile, the exportation to Europe reached 63,000 tonnes, increasing by 152% as compared to that of the same period of previous year.

The market player predicted that because local demand is still weak, local mills will intend to raise EGI exports gradually. Other than China market, local mills aimed at East Europe market.

(Sourced from YIEH.com)

SGL Group has posted net income of EUR 54.2 million in April to June 2008 quarter up by 224.5% YoY as against EUR 16.7 million as it raised prices on increased demand from steel and aluminum customers.

It has increased prices for graphite electrodes and carbon products to pass on higher costs for materials such as needle coke, as well as energy and freight. Economic growth in markets including China and India continues to boost demand for aluminum and steel, allowing the company to keep up sales volume even as it raises prices.

Mr Robert Koehler CEO of SGL Group said that "Given our full order books and positive signals from our customer industries, the full year 2008 will be another record year for us, despite the increasingly pessimistic economic environment."

United Steelworkers Local 3523, a local union on strike against Thomas Steel Strip Corporation, said that recent negotiations did not go well and no further bargaining sessions have been set.

United Steelworkers Local 3523, whose 260 union members walked off the job July 24th 2008, said that it has not given them proposal information they need.

Mr Mike Boyle, president of Local 3523 said that ''The problem is with the company not applying the right numbers for a package we submitted. They keep giving us the numbers for their liability for 30 to 40 years down the road. We are asking what the package would cost over a 4 to 5 year contract period.''

Meanwhile, Mr Denny Wist president & COO of Thomas Steel Strip said that ''The company answered all of the union's questions concerning our costs analysis of the union's medical and retiree medical proposals. 'We also told the union that we would make our consultant available to the union's benefit experts.''

Mr Wist stated that the company's July 23rd 2008 proposal, which included lump sum payments and wage increases totaling more than USD 12,000 over the proposed agreement's 5 year lifetime, was fair and a substantial improvement from the company's October 2007 offer.

Mr John H. Goodish executive vice president & COO of United States Steel Corporation announced two management changes at the company's corporate headquarters in Pittsburgh and Research & Technology Center in Munhall with immediate effect.

Mr Frederick T Harnack has been appointed GM operational excellence. In this new role, He will reports to Mr Goodish.

In his new position, Mr Harnack is responsible for implementing the company's operational excellence initiative, which will focus on continuous improvement, technology advancement and standardization activities that will enhance efficiency and drive operational performance across the company.

Replacing Mr Harnack as general manager research is Mr Kevin L Zeik. Mr Zeik now reports to Anton Lukac, vice president-engineering & technology.

USA based Noranda Aluminum Inc together with Australia Hertwich Engineering, Austria successfully commissioned the supplied billet saw plant in April 2008.

The billet saw plant comprises two entry magazines, the billet saw line, stacking equipment for short and long billets, marking equipment, PET strapping and weighing stations. Operation is fully automated. Billets up to 406 mm in diameter can be processed.

For maximum flexibility, short and long billets can be cut out of the same log and then stacked simultaneously by two dedicated stackers. At an integrated log rotation station upstream of the saw, surface faults can be identified for the saw to automatically remove faulty log sections into scrap containers or onto a dedicated exit table (logs cut in half).

Peak short billet production is 300 billets per hour.

Argentina’s Aluar Aluminio Argentino has placed an order with Austria Hertwich Engineering a company of the SMS group for the supply and commissioning of an ultrasonic inspection station. Delivery is scheduled for the end of July 2008.

The new linear UT equipment is to be integrated into the roller table line of an existing HE continuous homogenizing plant.

The ultrasonic inspection station is designed to automatically inspect cast logs for center cracks and inclusions over the log length. Log diameters range from 144mm to 400 mm.

Aluar already successfully operates the following equipment from HE: Two continuous homogenizing and sawing plants, one ultrasonic inspection system, a universal rotary tilting furnace and two horizontal casting machines.

It is reported that Pakistan government is preparing a new policy to achieve an annual production target of 15 million tonnes of steel by 2020.

The Engineering and Development Board of the ministry of industries and production has evolved the long term 'National Steel Policy' with a view to cover the widening demand and supply gap by achieving a production target of 15 million tonnes of steel by 2020.

A meeting of all the stakeholders was held on Thursday under the chairmanship of Mr Asad Ilahi CEO of EDB. The meeting discussed the draft of national steel policy which initially aimed at achieving 10 million tonnes steel production target by 2015 and then 15 million tonnes by 2020.

The meeting formed three separate committees to finalize their recommendations within one month on three issues which included development of steel industry, mines and raw material for steel and sorting out tariff issues.

The committee on development of steel industry would deal with the issues like availability of inputs, availability of finished products, devise a mechanism to stabilize and control the prices, product standardizations, product certification, devise a mechanism to implement and monitor the quality of product. This committee would also frame a strategy for energy conservation steel sector, create linkages between industry and academia and ensure the availability of skilled manpower and establishment of factory schools.

The committee on tariff will deal with sales tax, multiple taxation, import valuation, import of raw material from neighboring countries and the facilitation of development of infrastructure and captive power generation plants.

The committee on mining, leasing and development has been entrusted with the job of completing recommendations regarding the identification of iron ore and coal deposits, suitable for manufacturing of steel under the public private partnership program. It will also propose suggestions for the development of infrastructure and logistic facilities and identify and acquire energy efficient and cost effective technologies suitable for processing of local raw material and establishment of mini steel plants at mine heads.

Mr Ilahi said that “The new national steel policy is needed because of the rising prices of iron ore, coking coal, coke and the steel products. There is a short supply of major inputs due to monopolization of resources as a result of mergers and acquisitions. There is a widening demand and supply gap and the country is faced with spiraling prices in domestic market. There is a need to make serious efforts to discover untapped resources. Dependence on imports would keep the steel sector exposed to price shocks, short supplies, long lead time, high sea-fright, logistic problems and high carrying costs.”

Mr Ilahi underlined the importance of the steel sector in the economy and said it serves as the backbone of any economy as it feeds the manufacturing sector, the infrastructure sector, construction and engineering sector. He said that the government is aware of various problems being faced by the steel industry and was trying to help it by making business friendly policies.

The other main feature of the policy are balancing modernization and replacement, technology up grdation and modernization, availability of technical and skilled manpower, testing facilities and product certification.

The policy, to be finalized by August 15th 2008, is expected to be formally approved by the Economic Coordination Committee of the Cabinet by September this year.

New Millennium Capital Corp announced the signing of a Letter of Intent for the future sale of up to 3 million tonnes per year of direct reduction grade Pellets or iron Ore lump to Al Tuwairqi Group of Companies.

Under the Letter of Intent, Al Tuwairqi would purchase 3 million tonnes per year of DR grade pellets or lump ores for ten years commencing in 2012. Based on the current price of USD 163 per tonne for DR grade pellets, these purchases would generate in excess of USD 490 million per year or about USD 4.9 billion over the life of the contract.

Al-Tuwairqi is actively pursuing expansion projects in Saudi Arabia, UAE, Bahrain, Egypt and Pakistan. It plans to achieve crude steel production of 6 million tonnes per year by 2011 in Saudi Arabia alone.

The Australian Business reported that ArcelorMittal is looking to expand its operations into Iraq, with Rio Tinto also tipped to be reviewing options in the region.

Mr Fawzi Hariri Minister of Industry and Minerals of Iraq said that ArcelorMittal has submitted a proposal to rehabilitate a steel facility in southern Iraq.

He said that the existing facility, based in Iraq's second biggest city of Basrah, will require investments of between USD 500 million and USD 1 billion to upgrade and possibly expand following widespread looting and damage in the aftermath of the US-led war in 2003.

Mr Hariri said that he held meetings this week with ArcelorMittal executives, but declined to comment on details of the discussions. He said that “There has been a proposal submitted and it’s a very interesting one adding the company's proposal was submitted recently.

Business Recorder reported that Pakistan customs has raised import trade price of three major steel products by 19% to 34%, or USD 109 per tonne to USD 186 per tonne, to USD 730 per tonne on the back of rising steel prices in world market.

The three steel products include cold rolled coils, hot rolled coils and galvanized products. Their prices have been linked with Metal Bulletin for valuation for duty imposition and the present raise also has been as per MB valuation.

HR - up by USD 179 per tonne to USD 710 per tonne from USD 531
CR - Up by USD 186 per tonne to USD 730 per tonne from USD 544
HDG - Up by USD 109 per tonne to USD 689 per tonne from USD 580

After the issuance of new ITP, the evaluation of taxation would be on the new price, which has made the steel products more costly in the market.

However, the steel importers had rejected to the new ITP and said that HR, CR and GP prices were already at highest level in the domestic market. They said that if the customs would not reduce the ITP, then prices of these products would go up by PKR 4000 to PKR 5000 per tonne in the local market.

Importers said that "There is no reason for raise in ITP of three major steel products, as the engineering industry is already facing several problems due to the high cost of raw material.”

They said that it is more interesting that customs has increased the prices without consultation and, with new changes, raw material ITP would become higher than the furnished product which never happened in the past. They added that "We have contacted officials of customs for reduction in ITP prices and dialogue on the side issue would be held soon.”

Park Tribune reported that Pakistan’s federal government has started an investigation to ascertain reasons behind the substantial increase in cement prices, which jumped up to an average of PKR 384 per bag in the domestic market.

As per report, Pakistan’s Economic Coordination Committee of the cabinet in its meeting held with Finance Minister Syed Naveed Qamar in the chair and asked the finance ministry to furnish a detailed report regarding price increase in cement, which jumped up from PKR 280 per bag to PKR 384 per bag in recent weeks.

All Pakistan Cement Manufacturers Association representatives informed the finance ministry that the input cost has witnessed an unprecedented surge in recent months, leaving no other options but to increase cement prices.

They said that the price of furnace oil went up from PKR 23,000 per tonne to PKR 52,000 per tonne registering an increase of 128%. The prices of coal, which stood at USD 74 per tonne in May 2007, have reached up to USD 202 per tonne registering an increase off 171%. The electricity prices have surged by 50% while exchange rate depreciation of 20% also increased input cost of cement manufacturers.”

The official sources questioned that “If the input cost of cement manufacturers have witnessed massive increase, how can we force them to reduce their prices.”

They added that the government cannot force the cement makers to reduce the prices without decreasing their input cost. The government has also increased taxation on the cement sector in the budget 2008-09 so it will not be feasible to reduce the price in the existing circumstances.

On other side, the Competition Commission of Pakistan is also conducting investigation of cement sector in order to determine whether this sector behaves like cartel or price increase in only showing surge in their input cost.

The UAE will join the ranks of nations generating nuclear power for peaceful purposes. As per report UAE already plans are in place to meet the economy’s surging power need by building three nuclear reactors.

Industry experts predict the UAE will cut its dependence on natural gas and oil for electricity generation by 2020, and turn instead to nuclear fuel and renewable energy to meet the increasing power needs of a fast-expanding economy. It said that of the UAE's current capacity almost 85% of the power generated is gas based, while the other plants are oil-fired. Nearly all of Dubai's electricity comes from gas-based stations. As one of the rapidly growing emirates Dubai has an increasingly high demand for electricity and this high demand looks set to continue in the future.

While coal will be an alternative fuel to meet this demand in the short-term, nuclear fuel will be the preferred option in the longer term because it's cleaner, cheaper and a safer energy source. Power from fully operational nuclear plants is four times cheaper than gas based generation.

Albawaba.com reported that production at some of SABIC’s polyethylene and polypropylene plants at Al Jubail in Saudi Arabia will return to normal within days.

SABIC confirms that its other manufacturing plants in Al-Jubail and Yanbu producing petrochemicals, other polymers, fertilizers and steel are running normally.

The paper said that this is due to an interruption in the power supply leading to power outages last week, leading to a slightly reduced rate of production.

It is reported that Shanghai based Baosteel has achieved combined business income of CNY 128 billion and profit of CNY 28.7 billion in the first six months of this year up by16.8% YoY and 28.5% YoY respectively.

BaoSteel’s crude steel during H1 of 2008 amounted to 15.03 million tonnes.

Some other highlights are as under

1. BaoSteel's Corex smelting furnace, the first one in China has achieved safety operation at the moment.

2. It also rolled out the first batch of qualified grain oriented silicon steel on May 15th 2008.

3. The preparatory work for its Zhanjiang steel base project has entered a new stage now

4. Guangdong Iron & Steel Group, in which it holds 80% shares, was also formally put into operation on June 28th.

The steel mill is ambitious to achieve annual production capacity of 80 million tonnes, edging up to the World Top 200 Companies and vaulting into the Top 3 in terms of comprehensive competitiveness.

It is reported that Datong Coalmine Group and Shougang had a meeting recently discussing about the pre feasibility study report of the 3 million tonnes per year steel project the two parties had planned to co build since 2006, indicating the project has moved on substantively.

As per report, the meeting was joined by Datong mayor Mr Geng Yanbo, who said would do the best to promote the project construction by solving land expropriation and relocation problems. The steel project is a keynote one in Shanxi province's 11th five year plan of the metallurgical industry.

As a coal rich enterprise, Datong Coalmine Group projected to eliminate present backward blast furnace facilities, improve the steel rolling and furnace gas reclaiming equipment to bring the production capacity to 1 million tonnes iron and 1.2 million tonnes steel in the existing place and then build a 3 million tonnes per year steel item in a new spot.

Shougang signed a strategic cooperation pact in December 2006 with the Datong based enterprise to co build the 3 million tonnes steel item. Shougang will enjoy preferred coal supply from Datong Coalmine while offer technical support and services to the later to show reciprocity.

It is reported that the profit margin of Chinese steelmakers is likely to be further squeezed in the second half of the year due to the possible shrinkage of market demand.

Mr Jiang Qiu an analyst at Guotai Jun'an Securities said that "The government's continuing tightened monetary measures, combined with declining steel exports are expected to dampen demand. Steel profits are expected to go downward in the fourth quarter, when market supply will increase but demand will still be at a low level."

Mr Zhao Zhicheng an analyst at Essence Securities in a report said that, China exported 5.22 million tonnes of steel in June down by 6.12% from May. He said that "The exports decline shows the decreasing demand overseas. He added that the possibility of the government increasing the steel exports duty, which would curb exports, can also not be ruled out.”

Mr Zhao Xiange an analyst at Everbright Securities said the weak market demand has triggered the fall of steel product prices in July. "The high transportation fee and natural disasters curb the demand of domestic users."

Chinese steel producer Ningbo Iron and Steel Co. has awarded Siemens a contract to engineer and supply the drive and automation systems for a new 4.3 meter plate mill. All the systems and components used are part of the Siroll PM solution which was specially developed for plate mills. Commissioning of the rolling mill is scheduled for completion by the end of 2009.

Siemens is responsible for engineering and supplying drives and automation for the rolling mill. The scope of supply also includes all the process models of the rolling mill and the hot leveler, the entire automation and instrumentation as well as a material tracking system from the furnace discharge down to the shearing section. The main motors of the mill will be powered by Sinamics SM 150 DC link converters.

Ningbo Iron and Steel Co at Ningbo in Zhejiang province, is currently building a new plate mill for manufacturing metal plates with widths of up to 4.3 meters. The products are mainly intended for use in ship building. With an annual capacity of 1.6 million tonnes of plate metal, the new plant will incorporate two walking beam furnaces, a two stand rolling mill, a hot plate leveler, cooling beds, a shearing section and a finishing shop.

China Business News reported that China's steel industry concentration rate went up in H1 of 2008 for the first time after years of decline. Shandong Steel Group, Guangdong Steel Group and Hebei Steel Group were set up in successively in the H1 which has contributed to the higher concentrate rate for the top ten steelmakers out of the nation's total.

Mr Shan Shanghua secretary general of China Iron & Steel Association said that in H1 of 2008 the top ten steelmakers' crude steel production came to 109 million tonnes accounting for 41.37% of the nation's total output up by 5.28% YoY from the same time last year.

Without considering consolidation of these three producers, the top ten in crude steel production would have a combined output of 95.2874 million tonnes presenting 36.2%.

China Iron & Steel Association said it would continue encouraging and pushing forward cross region and province and multi ownership M&A, and let the large sized enterprises to play a predominant role.

Steel concentration decline in the recent years caused fragmented capacities and irrational expansion of the industry, while lending an adverse effect over the iron ore talk every year. However, the consolidation cases mainly happened inside one region, impelled by the local governments, while the cross region and province structuring remains to face obstacles owing to interest and ownership conflicts.

It is reported that exports of hot dipped galvanized coil have seen evident drop due to less overseas demand and worry on anti-dumping charge by the EU.

Domestic market prices remain in a period of downward adjustment. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7250 per tonne to CNY 7300 per tonne that for 0.5mm HDG by private steel makers is at CNY 7500 per tonne down by CNY 150 per tonne and CNY 80 per tonne respectively from last Wednesday. The downward corrections are expected to spread into next month.

Export quotation for 1.0mm HDG Z120 by tier two steel mills is at USD 1110 per tonne to USD 1120 per tonne FOB. By comparison, down by USD 30 per tonne to USD 40 per tonne from early July. A Tangs