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I am writing this piece from Delhi while attending the 'Steel Summit 2007' organised by the Ministry of Steel & CII.

If one recalls, the National Steel Policy, which was framed in 2005, projected a steel production figure of 110 mt by the year 2020. Recently, this figure was revised and it was claimed that the production would be between 175 and 200 mt by the year 2020. Why this change in perception ? One of the reason for attending the above event was to understand from the policy makers why this upward revision.

I also recall that in one of the 'Asian Steel Conference' organised by 'Steelworld', there was a big debate about this projection and everybody in the hall laughed when Mr.R.K.Markan argued that Indian consumption would cross 200 mt by 2020. Three years back this figure was considered to be borne out of the most optimistic minds. What happened in these three years ?

Firstly, India's GDP growth rate which was earlier pegged at 7.3% is now projected to grow at around the 9% mark. The steel industry is moving ahead with a growth of more than 10% annually. Also, there is a general consensus amongst global steel industry experts that the industry has entered growth path of no return. Today, India's per capita income is around US$850 and soon it will cross US$1000. Once it surpasses this mark, it is observed elsewhere in the world that this economy enters a phase of fast track growth.

All these arguments surely lead us to a figure of higher growth in the coming years provided we solve the crucial issues like logistics, power availability, price and above all the issue of iron ore exports !!

 D.A.Chandekar
Editor & CEO

 

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Steel firms buckle under pressure, revoke hike

Under intense pressure from the government, steel companies recently decided to roll back the price hike announced from March 1. The rollback, which came after quick rounds of meetings over held recently with steel ministry officials in Delhi, is 100 per cent in case of mass consumption products like TMT bars and corrugated galvanised products and 50 per cent in case of hot rolled coils (HRC). This means that prices of TMT bars and corrugated products have been brought back to the pre hike level. HRC prices will be Rs 350-600 a tonne higher than the pre-Budget levels. The ruling price of HRC is around Rs 26,000 a tonne, that of TMT bars nearly Rs 23,000 a tonne and of corrugated galvanised products, Rs 36,000 a tonne. R S Pandey, steel secretary, confirmed the rollback and said it was done voluntarily by the companies after the steel ministry brought to their notice the government's concern over inflation.

Steel Authority of India Ltd (SAIL), Tata Steel, Ispat Industries, and Essar Steel had hiked hot rolled coil prices by Rs 700-1,500 per tonne from March 1. SAIL had increased prices of all flat products by Rs 700-1,000 per tonne. Tata Steel had increased spot prices of HRC by Rs 1,000 per tonne, while Ispat Industries increased HRC prices by Rs 1,000-1,500 a tonne. Essar Industries raised prices by Rs 1,000-1,200 a tonne. In long products, Rashtriya Ispat Nigam Ltd (RIRL) had hiked prices by Rs 300-500 per tonne, while SAIL had increased them by Rs 500 a tonne. The varying extent of the rollback was due to the diverse nature of the end-customers. TMT bars and galvanised steel are used mostly by common people and hence the rollback in their case would be complete. Pandey did not give a timeframe for the freeze on prices, but said they would be reviewed periodically and that a price monitoring committee had been activated. Analysts, however, were not sure whether the government's intervention would be able to keep steel prices under control.

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Tata Steel buys Vietnam mills for Rs 184 cr

A day after receiving Corus shareholders' approval to acquire the Anglo-Dutch steel company, Tata Steel recently announced that it would take over two rolling mills in Vietnam for an enterprise value of $41 million (Rs 184 crore). Tata Steel's wholly owned subsidiary, NatSteel Asia, will be the investment vehicle for the acquisition which is expected to be completed by June. According to the agreement, NatSteel will acquire 100 per cent equity in a 250,000 tonne bar/wire rod mill in SSE Steel and 70 per cent equity in Vinausteel, which produces 180,000 tonne reinforcing bar. A Tata Steel spokesperson said the buyout was part of the company's strategy to deintegrate its production. The strategy entails setting up primary steel-making facilities closer to the countries rich in iron ore, coal, natural gas and finishing facilities in growing markets. The acquisition would provide Tata Steel with a larger footprint in South-East Asian region, including Vietnam. SSE Steel has one of the most modern rolling mills in Vietnam and the Vinausteel brand is the leading name in the country.

The company currently operates a 100,000 tonne reinforcing bar / wire rod mill in a joint venture with VSC in Thai Nguyen, about 70 Km north of Hanoi. With the Vietnam acquisitions, Tata Steel's rolling capacity outside India stands at 4.1 million tonne, which includes 1.7 million tonne of Millennium Steel and two million tonne of NatSteel. This is the fourth acquisition from the Tata Steel stable in the last two months. Apart from the big ticket Corus group acquisition, which catapulted Tata Steel to the fifth largest steelmaker in the world, the company entered into an agreement for the Kolkata-based Rawmet Industries in January. Rawmet has a ferro alloy plant near Cuttack.

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Steel ministry revises steel target to 175 mln tonnes by 2020

The steel ministry has revised the target for steel production from 65 mln tons (mt) to 80 mt by 2011-12, steel minister Ram Vilas Paswan, said recently. The government asserted that the country would produce 175 mln tons of steel by 2020 against 110 MT envisaged in the National Steel Policy.

He also added that private as well as public sector steel companies had signed as many as 156 memorandum of understandings with various state governments. "As the average consumption of steel in India is only 38 kg compared with world average of 170 kg, there is a huge scope for increasing steel production in India. We are confident of 80 mt production by 2011-12," Paswan said. “Our National Steel Policy envisages a production level of 110 MT by 2020, but we are likely to achieve a production of 175 MT by the same period,” steel minister, Mr Ram Vilas Paswan said and asked the steel industry to gear up their production needs. As a part of this initiative, the Institute of Steel Development and Growth formed by Steel ministry, SAIL, Tata Steel, Ispat Industries, Essar steel, JSW and JSPL will spend Rs 20 crore to promote usage of steel. On the issue of iron-ore export, Paswan said, "We are not against mining companies neither are we against iron-ore export, but one will have to keep the interest of domestic steel industry in mind". Paswan also added that the New Mineral Policy 2007 was under consideration.

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Rourkela hot metal output to exceed capacity

Rourkela Steel Plant (RSP), a unit of Steel Authority of India, is all set to cross its rated hot metal capacity during the current fiscal-a feat it will be achieving for the first time since inception. By February end, the company's hot metal production in last 11 months stood at 1.97 million tones. Besides, it produced 2.82 million tonnes of Sinter, 1.84 million tonnes of Crude Steel and 1.79 million tonnes of saleable steel, which was best ever April-February performance by the company. Overall the company registered 24 per cent growth over the corresponding period of the previous year. The plant dispatched 1.77 million tones of steel during the same period, which again besides being the best for any April-February resulted in a growth of more than 27 per cent over the previous corresponding figure.

During the first eleven months of the current fiscal, the finishing units of RSP came up with a sterling performance registering highest ever performance in Total Hot Rolled Coils output (14,,08,032 tonnes), Plate Mill Plates (4,25,991 tonnes), Hot Rolled Coils for Sale (6,66,935 tonnes), Hot Rolled Plates (2,69,656 tonnes), and CRNO from silicon Steel Mill (70,351 tonnes) with growth ranging from about 9 per cent to a whopping 42 per cent over last fiscal. RSP had commenced the financial year with a strategy to maximize its volume of production by operating its units and facilities at over 100 per cent of annual rated capacity and improve various process parameters to bring down the cost so as to earn maximum profit. In just eleven months the steel plant has nearly achieved its rated capacity in the areas of Hot Metal (2 million tonnes) and Crude Steel (1.9 million tonnes) while already surpassing rated capacity in the output of Saleable Steel. In the process parameters too, the steel plant has made significant progress by substantially bringing down its Coke Rate per tonne of Hot Metal, Specific Energy per tonne of Crude Steel while significantly increasing the LD Converter Lining Life in Steel making besides improving other process parameters. RSP's endeavour to improve equipment health, for sustaining high levels of production, is continuing. Blast Furnace No. 3 has been taken down from March 1 for major repairs. Also to follow are shut downs in Plate Mill and Hot Strip Mill.

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JSW Steel posts 30 pct growth in Feb. 07

JSW Steel Ltd has announced that the Company has registered a growth of 30% in crude steel production in February 2007 despite shutdown of one of the furnaces due to accidental fire on February 15, 2007. The volume growth is achieved across all products excepting Galvanising products. The 1.3 MTPA expansion project commissioned in Nov'06 is operating above 80% capacity. The work on re-commissioning the furnace, shut down in Feb.'07 for repairs, is in full swing and is expected to be on stream in April'07.

The JSW group, part of the USD4 bln OP Jindal Group, is one of the lowest cost steel producers in the world. The group has diversified interest in mining, carbon steel, power, industrial gases and port facilities. The Company is engaged primarily in manufacture of flat products viz. HR Coils, CR Coils, Galvanised products and auto grade / white goods grade CRCA Steel. Incorporated in 1994, it has grown to USD1.6 bln in little over a decade. The Company has the largest galvanizing production capacity in the country and is the largest exporter of galvanized products with presence in over 74 countries across five continents.

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SAIL to set up SEZ at Salem

Even as Posco's ambitious SEZ plan is in limbo following controversy over land acquisition, its public sector rival SAIL has decided to set up a SEZ at its existing stainless steel facility in Salem. The proposal is unlikely to face any political hurdles due to the land issue as Sail owns about 3,500 acres of land at Salem Steel Plant. Only a portion of that would be used for setting up a specialised steel SEZ. “Sail owns 1,50,000 acres of land across the country and some of this could easily be utilised to develop the SEZ. To begin with, we are looking at developing a stainless steel-based SEZ at spare land near our Salem Steel Plant,” SAIL chairman S K Roongta told the media recently. The PSU is likely to apply for clearance of its SEZ proposal once the Centre lifts the present freeze on fresh applications. It is understood that the proposed facility would come on 250 acres of land that is unutilised by the SAIL plant.

The PSU would invite investments from several downstream stainless steel-based industries in its proposed SEZ. Special steel producers and other vendors may also be permitted to set their shop in the zone. Dedicated port facilities for the SEZ may also be considered. Though SEZ proposal requires that promoters have a minimum of 1,000 hectares of land, product-specific port-based SEZ are not bound by this restriction. SAIL's proposal is unlikely to meet any hurdle as the PSU already owns land at the site and there is no requirement of any fresh acquisition. SEZ proposal of several companies including that of Posco is in limbo as entire land does not belong to the promoters or the state governments and acquisition is yet to be completed. The Centre has put a freeze on clearing all SEZ proposals until a rehabilitation and resettlement (R&R) policy is finalised by it. The freeze has been imposed after Tata Groups investment in Singur and Salim groups proposed SEZ in West Bengal ran into controversy over land acquisition. If Sail's SEZ proposal is cleared, it would become the first PSUs that is looking at this route for expanding business. After Posco several other steel companies are also looking at getting SEZ status for their capital intensive steel projects.

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JSW arm buys Indonesian coal mine rights

JSW Energy, the unlisted subsidiary of the Sajjan Jindal-led JSW Steel, has acquired exploration and mining rights of a coal mine in Jambi, Indonesia, which has reserves of 300 million tonnes. According to sources, JSW Energy has joined hands with a local company that owns the mining licence JSW has the option to take a significant equity stake in the firm. JSW Energy will invest in developing the mines and can use the coal from the mine for its projects in India.

Indonesian regulations stipulate that mining licences should remain with the local company. However, foreign companies are permitted to invest in the exploration and development of the mines. The mines that JSW Energy will develop are valued at $1.1 billion, sources added. JSW Energy CEO Raaj Kumar confirmed the development. “With our power projects coming up in different parts of India, we want to be assured of fuel supply. The Indonesian foray will take care of our requirements,” he added. Mr Kumar declined to give further details of the transaction. Although market estimates put the value of the high-grade, low sulphur-content mines at about $1.1 billion, mining experts contend that JSW Energy will have to initially invest at least $200 million to develop the mines. “The mines are spread over 5,500 hectares in the Jambi province. At present, 500 hectares are being developed and the company will be able to ship coal to India within two months,” said sources.

The company is also in the process to conclude a similar transaction in Indonesia within a fortnight. “The reserves will be of a similar size as in the first case,” said sources. The development might fuel the resource-chase among various Indian groups, including the Tatas and the Birlas, who have been scouting the South East Asian country for coal mines but with little success.The Jindal unit is also planning to set up power projects in Gujarat and West Bengal and is said to be looking at opportunities in the hydro power segment. Among options to raise funds for the projects, the company is also mulling to dilute stake in the market.

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India seventh largest steel producer in the world

International Iron and Steel Institute (IISI) has ranked India as the seventh largest steel producer in the world with an overall production of about 40 million tonnes in 2006, Lok Sabha was informed recently. Replying to a written question, Minister of State for Steel Akhilesh Das informed the House that India's ranking in terms of annual steel production increased from ninth in 2004 to seventh in 2006. He said the government is not taking any direct steps to push India's global ranking but considering the importance of the sector, it is aiming at achieving production level of 110 million tonnes by 2019-20. Replying to another question the minister said, IISCO plant of SAIL has incurred a loss of Rs 407 crore since 2005-06 due to obsolete technology of production. "The government would invest Rs 9,592 crore in the next three years to revive IISCO. The modernisation and upgradation plan has been approved by SAILs board," Das said.

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Posco set to remain in India

South Korean steel giant Posco in a statement clarified that it has no immediate plans to drop a planned 12-billion-dollar plant in India even as deadly protests against other projects cast doubt on their future.This after the local media reported that Posco is set to desert the project in India & relocate it to Vietnam.

“As of now, we don't have any intention to withdraw from India. We are definitely determined to continue with this project," a senior POSCO official, who did not wish to be identified, said to the local media. “We don't have any plan to withdraw in the near future," the official said. While repeating that the company intended to press ahead, the official also said, without specifying a time frame that, ‘‘If we have to wait for much longer than we expected in India (on the project) then we might think of terminating at some point in the future."The statement came after local reports recently that Posco was considering shifting its focus to another low-cost Asian country such as Vietnam. "With too many problems dogging the POSCO project in the state, the South Korean steel major is reportedly planning to shift its focus to Vietnam, where it has proposed a steel plant," a report in the Times of India had said recently. The official said, Posco was very much concerned about an incident recently where police in the eastern state of West Bengal shot dead 14 villagers opposing the forced sale of their land for a special economic zone (SEZ) which would be home to a huge petrochemicals project built by an Indonesian firm.

The government later said that it would refine the controversial policy. Posco signed an agreement with neighbouring Orissa state that granted it almost 4,000 acres (1,600 hectares) for its largest overseas investment in 2005 -- the same year India launched its Chinese-style SEZs which offers modern infrastructure and other benefits, are intended to drive the economy forward. The official said the company was relying on the state government to complete the land acquisition while POSCO was trying to appeal to locals as well to get them on side with the project. "We have opened several health camps. We already set up training camps for jobs for locals," he said. "We are doing everything we can do to change the mind of the locals.

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Corus EGM approves takeover by Tata Steel

Shareholders of the Corus group agreed to Tata Steel's 6.2 billion pound ($12 billion) takeover of the UK steelmaker, sealing the largest foreign acquisition by an Indian company. Investors representing 97 per cent of the shares backed the purchase, the London-based company said following an extraordinary general meeting in London recently. The acquisition will be effective from April 2 and Corus shares will stop trading on exchanges on March 29. “The intention of this acquisition is about growth, not about job losses,” Corus Chief Executive Officer Philippine Varin said. Tata offered 608 pence a share in January for Corus, the former British Steel, beating a competing proposal from Brazil's Cia. Siderurgica Nacional SA following a bidding contest that lasted three months. The purchase is the second biggest in the industry, behind Mittal Steel Company's $38.3 billion takeover of Arcelor SA last year. “Tata Steel is pleased with the outcome of the EGM held in London on March 7. It stands committed to work along with Corus to create a vibrant and value creating enterprise,” said B Muthuraman, Managing Director, Tata Steel.

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Jindals wrap up Bolivia deal

After eight months of negotiations with the Bolivian government, Jindal Steel & Power Ltd (JSPL), part of the Rs 20,000 crore Jindal Group, today finalised a historic agreement to invest $2.1 billion (Rs 9,500 crore) to exploit the famed El Mutun iron ore mines and set up a new 1.7 million tonne steel plant. Under the agreement, JSPL will also set up a six million tonne sponge iron plant and a 10 million tonne pellet plant. The El Mutun iron mines have 40 billion tonnes of medium-grade ore, making them one of the largest reserves in the world. Bolivian President Evo Morales and the Jindals' senior management have agreed on the tax rate and natural gas prices for the iron and steel project and will sign a definitive contract within 45 days. The final agreement was repeatedly delayed over the price to be paid by JSPL for the natural gas that will be used for steel making. “The debt equity ratio would be 60:40 and the other financial modalities are being worked out. The agreement would help us as the Jindals wanted a subsidised price for fuel and better tax conditions,” said a report quoting Sushil Maroo, director, finance, JSPL. Bolivia has agreed to sell JSPL natural gas at $3.91 per million BTUs (British thermal units) for steel making, which represents 70 per cent of the project's energy needs. JSPL will pay $1.955 per BTU for gas for power generation, which accounts for 30 per cent of the energy needs. JSPL had originally offered $2.1 per BTU for the natural gas it would need at El Mutun. To produce at least 1.5 million tonnes of steel a year, JSPL will build a 450 MW power plant near the El Mutun deposits. JSPL, which won the bid in June last year, will be allowed to exploit 50 per cent of the El Mutun reserves. JSPL said it would create 4,600 direct jobs at the facilities, which are to be located in the south east of Bolivia, about 50 km from the Brazilian border. The Bolivian government expects to receive some $200 million a year in profit sharing and taxes from the 40 year concession agreement allowing JSPL to exploit the El Mutun mines.

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Iron ore prices set to fall

With China announcing no future contracts, the industry foresees a glut in the market, which would impact domestic prices. Ever since the duty was announced in the Budget, China ore traders have stopped imports from India. Chinese traders are insisting on the agreed price for all contracts signed before March 1 and have rejected price increase under force majeure clause. According to the mining industry, of the 100 mln ton of iron ore exports, around 85 mln ton is iron ore fines, which has little domestic utilisation. Moreover, if the miners agree to sell the ore at earlier prices, it is unlikely that steelmakers would pay a higher price for it. Anticipating the impact and fallout of that, both mining and steel companies have resorted to frantic lobbying. The mining association has taken up the matter with the finance minister on a war-footing. The Eastern Zone Mining Association has written to Chidambaram saying that duty be levied only on lumps and not fines. Bipin Kumar Vohra of the association said, in the eastern cost, iron ore fines was the single largest export cargo accounting for more than 70 per cent of the total export earnings. Haldia, Paradip and Vizag ports handle around 40 mln ton of iron ore fines with dedicated berths for iron ore fines handling. “Five new berths are being developed for Rs 1,000 crore for dedicated iron ore fines loading activities,” said Vohra. Indian Steel Alliance (ISA), the apex body for steel producers, feel that just levying duty is not enough and is planning to approach the Group of Ministers looking into the recommendations of the Hoda committee on the National Mineral Policy. While miners are right in saying that domestic utilisation for fines is low, steelmakers point out that in recent times, the companies had resorted to using fines for their projects since allocation of captive iron ore mines was virtually impossible.

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Uttam Galva to start operations in Ghana

Galvanised steel manufacturer Uttam Galva announced recently that it has entered into a joint venture with UK-based trading company, Liberty Commodities, to build two new steel re-roller mills in Ghana at an investment of $60 million (about Rs 270 crore). The joint venture company, Ghana Iron and Steel company (Gisco), would invest $20 million in a 70,000 tonnes per annum hot-dip galvanising line and $40 million in a 2,00,000-2,50,000 tonne per annum cold reversing mill. "Investment in Ghana would be made through a special purpose vehicle. Debt equity ratio for investment in Ghana would be 2:1," Uttam Galva Director Commercial Ankit Miglani told the media recently. He said while the hot-dip mill is expected to be operational by the end of this year, the cold-reversing mill is planned for 2008. Majority of the hot-dip steel produced would be sold in the local market with some exports in small quantities to other West African states. The two companies are also discussing the possibility of setting up a galvalume (aluminium, zinc) coating line, he said. "There are good synergies in the project. Uttam Galva has the required expertise in the production process and Liberty has strength in Africa," he added.

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Steel Authority of India to build 6 mln ton greenfield steel plant in Jharkhand

State owned steel major, Steel Authority of India Ltd (SAIL) has decided to set up a six mln ton greenfield steel plant in Jharkhand costing around Rs 18,000 crore. SAIL Chairman S K Roongta told reporters that the company has already taken in-principal decision and communicated it to the Jharkhand government. The project was in lieu of renewal of the mining lease for the Chiria mines, Roongta said. Chiria mines is considered to have the finest iron-ore deposit in the country. "The Jharkhand government wanted value-addition of the iron-ore sourced from the state and we are willing to meet their aspirations," he said. Consultant Mecon had been given the mandate to carry out the preliminary study for a possible site for the six-mln steel plant, Roongta said. "The finer details of the project is yet to be worked out including investment. But, according to standard cost for a six-mln plant would be around Rs 18,000 crore, but could change depending upon the final product mix," he said. The company is likely to finish the current fiscal selling 14.5 mln ton. SAIL will add two mln ton hot metal to its capacity by the next financial year 2007-08.

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Essar Steel gets approval for 2.5 MT plant in Trinidad & Tobago

Essar Steel has received a nod from the government of Trinidad and Tobago for its proposed USD 1.76 bln (about Rs 79 bln) plant in the Caribbean and will start construction by July this year, reported the Economic Times. The plant would have an annual production capacity of 2.5 mln tons and would be operational by 2010. The plant will be operational in the next two and half to three years or by 2010. Essar is setting up the new plant primarily to meet the needs of the US market and also of the Caribbean. This would be Essar`s first plant in the Caribbean but the company may look for more such plants in the future.

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Steel industry seeks cap on export of iron ore

The steel industry recently demanded that the government place a quantitative restriction on iron ore export at 90 million tonnes for the current year, in a move to keep more raw material at home.“Iron ore export needs to be limited because there is a shortage in the supply of iron ore to the domestic steel industry,” Moosa Raza, president, Indian Steel Alliance, said at a press conference organised by industry body Assocham. The industry has also asked for a 15 per cent reduction in the cap on iron ore export every year until the exports are brought down to zero per cent. India currently exports close to 100 million tonne iron ore, mostly to China. Restricting exports is a long standing demand of the steel industry which feels that iron ore needs to be preserved to meet the capacity expansion plans of the indigenous steel sector. “When the steel industry reaches a capacity of 200 million tonnes by 2020, it will need 350 million tonne ore. We should restrict exports to attract long-term investments in the steel sector,” Raza said. The government had tried to address this issue by levying a duty of Rs 300 per tonne on iron ore exports. “Imposing a levy of Rs 300 per tonne will not have a significant impact on restricting exports. It should impose a minimum levy of Rs 500 per tonne until exports are completely phased out,” Raza said.

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Stemcor plans iron pelletisation complex in Orissa

Britain's Stemcor group plans to invest 14.85 bln rupees for an iron pelletisation complex in Orissa, a top official of its Indian unit said. Stemcor's Indian arm, Brahmani River Pellets Ltd., signed an initial agreement with the government of the eastern Indian state on recently to set up the facilities in the Keonjhar and Jajpur districts. "The project consists of 4-mln-tonnes-a-year iron ore beneficiation plant, a 4-mln-tonne-a-year ore pelletisation plant and laying 200-km-pipeline to carry beneficiated iron ore in slurry form," Brahmani's Managing Director K. V. Rao told reporters. Commercial production would start in four years, he said. Ore pellets are used in blast furnaces as well as in the production of direct reduced iron. The pellet plant would convert low-grade ultra fines into value-added pellets for steel mills. The company will source its requirement of fines from existing iron ore lessees and traders on its own, he said.

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Sinosteel plans 5-mt steel plant in Jharkhand

Sinosteel India Pvt Ltd, a wholly owned subsidiary of Sinosteel Corporation, is likely to set up a 5-million tonnes steel plant in Jharkand. The company expects to sign a memorandum of understanding (MoU) with Jharkhand by May-end.“We have already discussed our plans with Jharkhand chief minister and the state chief secretary. We are likely to sign an MoU within the next two months,” Hongsen Wang, MD, Sinosteel India told the media. The production capacity of the plant will be 1.5 million tones initially, which will be increased to 3 million tonnes within 3 years and to 5 million tones within 5 years, once the plant starts functioning, he added. The plant is likely to come up around Jamshedpur.

However, the company is likely to set up the plant any where in Jharkhand depending upon the allocation of land by the Jharkhand government. The company will initially invest $500 million. Sinosteel India is also in talks with the West Bengal government to set up a metallurgical and engineering equipment plant in Haldia, West Bengal. “We want to set up a metallurgical and engineering equipment plant in India and are in advance stages of talks with the West Bengal government,” Wang said. For the Haldia project, the company will invest $30 million. Asked about its iron-ore business, Wang said, “In 2006, we bought 8 million tonnes and plan to purchase 10 million tonnes in 2007. However, with the recent levy on iron-ore export, the actual volume may go down.” Wang also questioned the government's decision to impose a levy as India has sufficient amount of iron-ore reserves. However, he said that imposition of levy on Chrome-ore export is understandable as it is scarce in India.

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Zamil Steel to upgrade RAK capacity by 5,000 tonne

The Emirate of Ras Al Khaimah (RAK) will witness the inauguration of Saudi Arabia-based Zamil steel's new plant next month. Zamil, a prominent player in the steel industry, proposes to upgrade its capacity to 20,000 tonnes per month, including the 5,000 tonnes from RAK.

Jamil H.Fayad, sales manager Dubai and Northern Emirates, said: "The new plant at RAK is under the sponsorship of Shaikh Saud bin Saqr Al Qasimi, Crown Prince of Ras Al Khaimah, and has a total investment of $50 million. The plant will do value addition to steel products which are widely used in building and construction industry. The expansion plans have come through as the steel sector is witnessing a rise in demand from the construction sector.”

"The steel sector in the Middle East will register a further increase of 5- 10 per cent in prices as other international markets like Europe and China have witnessed a rise in new plants and high demand from Middle East." The Zamil group's Saudi Arabia plant contributes 10,000 tonnes, followed by the new RAK with 5,000 tonnes, Vietnam 3,000 tonnes and Egypt at 2,000 tonnes.

Zamil Steel was established in 1977 in Saudi Arabia as a company specialised in the design, manufacture and supply of pre-engineered steel buildings (PEB).The Pre-Engineered Buildings Division is the oldest and largest of the company's three divisions. With a monthly production capacity of 6,500 metric tonnes, Dammam-based PEB factory, is the largest single PEB factory in the world. In 1999, the group commissioned two more factories for manufacture of pre-engineered buildings in Vietnam and Egypt, expanding the PEB production capacity to 12,500 metric tonnes per month.

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Qatar Strands to build steel wire plant in Jebel Ali

Qatar Strands, a company formed by a group of Gulf investors, is building a steel plant in Jebel Ali with an investment of Dh250 mln. It is in the process of installing machines on a 13,000-square-metre factory site purchased recently. The plant will become operational in the beginning of 2008, said Lorenzo Facchinelli, managing director of Italian firm GCR Eurodraw, which is supplying machinery worth more than Dh100 mln to Qatar Strands. At a capacity of producing 100,000 tonnes of steel wire per year, it will be the biggest facility of its kind in the Gulf, the project's promoters said. UAE-based private equity firm Evolvence Capital facilitated the project transaction. "The idea was in development for two years. We were finally able to get a group of Gulf investors together for this venture," Evolvence director Ezzaldeen Al Araj told the media recently. "There is big demand for pre-stressed concrete strand in the UAE because of large-scale construction work going on everywhere," Facchinelli said. Most steel cables being used in the Gulf are imported from China, Malaysia and countries in Europe. Demand for steel wires in Arab countries is estimated to be 750,000 tonnes annually with the UAE accounting for about one-third of the market. Imports of steel wires are growing at 20 per cent per year. Qatar Strands will target the domestic market for steel wires, which are used with concrete in infrastructure-type projects like bridges.

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Shadeed Iron & Steel to produce 3.5mtpy by 2010-11

Shadeed Iron & Steel aims to expand the total capacity of its giant Sohar complex to 3.5 mln tonnes per year (mtpy) by 2010-11, a top company official said. Ali Hamil al Ghaith, General Manager of the UAE-based Al Ghaith Holding PJSC, the majority shareholder of Shadeed, said the increase is proposed to be achieved through capacity expansion and product diversification. Addressing the Arab Steel Summit 2007, which concluded in Muscat recently, Al Ghaith said: “We have already set our sights towards our future plans and we look forward to developing a fully integrated state-of-the-art steel complex at our site in Oman, so as to achieve the vital edge in terms of product diversification and also to maximise the production capacity to 3.5 mtpy by 2010-2011.

” Shadeed is currently building the Sultanate's first steel-making unit comprising a 1.5 mtpy Direct Reduction Iron (DRI) plant with a 1 mtpy Steel Melt Shop at a site within the industrial Port of Sohar. Total investment in this project is estimated at USD700 mln. Work on the DRI unit, which is being built by Japan's Kobe Steel on an engineering-procurement-construction (EPC) basis, is now 38 per cent complete, said Al Ghaith, who is also Chairman of Shadeed Iron & Steel. “The foundation of the shaft furnace area has been duly executed and the furnace structure is currently under erection. As you may note, progress on the DRI unit is very aggressive as we are planning to start commercial production at the DRI unit by the end of 2008.” Last month, the Al Ghaith Group announced plans to set up a major seamless tubes plant at Sohar at an estimated cost of USD4 bln in joint venture with India's Jindal Saw. Envisioned as part of the new project, Al Ghaith said, is a 0.5 mtpy capacity seamless pipes manufacturing facility along with the production of 1 mtpy of billets. “We at Shadeed strongly believe that such product diversification would definitely enhance the competitive abilities of our plant and would support our future expansion programmes and strategies,” he said. Emphasising the robust credentials of the project, he said the company had already concluded all the relevant strategic contracts with the Omani government, covering the supply of gas, power and seawater, as well as the construction of a quay wall of 19-metres draft. In addition, agreements linked to the supply of raw materials have also been inked with Samarco, LKAB, GIIC and CVRD.

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Al-Rajhi Steel starts operation of 850.000-tpy plant

At the end of January 2007 first heats were successfully performed at Al Rajhi Steel new meltshop, marking the start of one of the most modern plants of this type in the region. The state-of-the art plant supplied by Danieli on a complete turn-key basis and located in the Jeddah Industrial area (KSA), has an 850,000-tpy nominal capacity of 100 to 160-mm billets and is designed to feed the Rajhi Steel merchant long products hot rolling mill division. The new steelmaking and casting plant is basically made up of a 100-ton full-platform EAF equipped with Danarc modules; a ladle furnace and a 5/6-strand FastCastâ billet caster, as well as additives, ferroalloys and DRI handling system, fume treatment plant, scrap yard, casting and charging EOT cranes and an advanced automation system for process and equipment control. The turnkey supply was completed by all other auxiliary plants and equipments such as MV/LV distribution system (with SVC and saturable reactor on MV line to EAF), LPG and CFO storage and distribution systems, HVAC system, fire fighting system, DRI dedusting plant, compressed air production plant, water treatment plant as well as all piping, cabling and related structures. The factory, which is ISO 14000 certified, applies very stringent environmental standards to ensure a healthy environment.

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Posco to setup units in UAE, Iran and Saudi Arabia

South Korean giant Posco is finalising the construction details of two steel plants in Abu Dhabi and Iran with a combined investment of around USD657 mln. "One of them, the USD400 mln minimil, will be located in Abu Dhabi Industrial City (ICAD) with an annual capacity to produce 300.000 tons of reinforce bars for the building construction," Chan-Woo Lee, executive vice-president of Posco E&C told the media in an interview. "The industry will be built on a 200,000 square metres plot of land and the project will take 30 months to complete." Construction works are expected to begin next month. He said, his company has finalised an engineering, procurement and construction (EPC) contract for a second steel plant to be constructed in Esfahan, Iran. The project will cost USD257 mln. Besides this, the company is also going to complete a 0.12 mln tonnes capacity colour coating line in Saudi Arabia in April this year. Posco Engineering & Construction (Posco E&C) is also in negotiations with a major developer to build a multi-billion dollar township in the UAE. "We are in close negotiations with the owners and this could be a multi-billion dollar project," he said.

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POSCO positioning itself to ward off likely hostile takeover by Arcelor-Mittal

Steel tycoon LN Mittal is planning a hostile takeover bid for South Korea's Posco, even as the Korean giant is looking to build up its defence against any such move by raising friendly shareholding in the company, media reports said. The Korea Economic Daily reported that the world's largest steel maker Arcelor-Mittal was mulling hostile takeover of Pohang Steel Company (POSCO) and a message about Arcelor-Mittal's interest was conveyed to the Korean major last month. The paper said that Roland Junck, an adviser to Arcelor- Mittal CEO Lakshmi Mittal had in February asked POSCO specific questions about its merger and acquisition strategies in Asia. Junck also asked if POSCO, the world's sixth largest steel producer, was interested in collaborations for its Orissa steel project in India, the report said.

Meanwhile, POSCO has denied newspaper report that a senior Acrelor Mittal executive expressed interest in Posco's M&A strategy when he visited South Korea last month. Junck met POSCO chief executive Lee Ku-taek last month, but M&A issues were not discussed, the South Korean firm said at the time. "The Arcelor Mittal executive and POSCO CEO talked about the consolidation in the global steel industry at that time but the executive did not mention POSCO's M&A strategy," a Posco official said. However, the top management is pondering how to react to a potential hostile takeover bid, the paper quoted the official as saying, who also added that Posco was looking to raise the number of friendly investors to ensure a stable management and avoid any hostile takeover. Posco is believed to be focusing on alliances with Asian steel makers through cross-shareholding to head off potential hostile takeover bids, as part of which Nippon Steel recently raised its holding in Posco by 2% to 5%.

The company has been cited as a ripe takeover target by the analysts due to its diversified shareholder base. The company is 60% owned by overseas investors, with Nippon Steel holding 60% stake as its biggest shareholder and ally. Warren Buffett's Berkshire Hathaway Inc also owns about 4% in POSCO, which it had acquired for USD572 bln and its value rose to USD1.16 bln at the end of last year, Buffet said in an annual letter to shareholders.

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Nippon Steel Rises to 17-Year High on Profit Estimate

Nippon Steel Corp., the world's second-largest steelmaker, rose raised its full-year profit forecast to a record amid rising demand for vehicles and ships in Asia and North America. The company increased its profit forecast to 345 billion yen ($3 billion) for the year ending March 31, 2007, from its October estimate of 310 billion yen, it said on March 1. Rising demand for steel products helped push export prices up as Japan's production heads for the second-highest on record. ``Steel companies have lots of factors to justify buying them including strong corporate earnings, high dividends and the M&A theme,'' said Soichiro Monji, who helps oversee about $47 billion at Daiwa SB Investments Ltd. in Tokyo. ``In a market with quite a lot of uncertainties, investors are attracted to steel companies.''

Shares of Nippon Steel rose as much as 38 yen, or 4.4 percent, to 900 yen recently, the highest since May 31, 1989. Investors were buying shares, which have a positive outlook, as global equity markets rebounded after recent sell- offs,'' said Takashi Murata, an analyst at Daiwa Institute of Research in Tokyo. The outlook for the company would remain bright on brisk demand for high grade steel sheet in China, the world's second- largest automobile market, Murata said.

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Hyundai Steel to spend USD5.52 bln on integrated steel mill project

Hyundai Steel Co., South Korea's No. 2 steelmaker, said recently that it plans to spend a total of 5.24 trillion won (US$5.52 billion) in building an integrated steel mill. The steelmaker started building the steel mill, the nation's third one, in Danjin, about 123 kilometers southwest of Seoul, in October last year. The steel mill, once its construction is completed by 2011, will have an annual output capacity of 8 million tons, and will help Hyundai Steel become the world's sixth-largest steelmaker. Hyundai Steel is the steelmaking arm of Hyundai Motor Group, which owns the country's two largest carmakers -- Hyundai Motor Co. and Kia Motors Corp. Hyundai Steel said it is in talks with ThyssenKrupp, Germany's leading steelmaker, to boost business cooperation.Hyundai Steel, now only equipped with electric furnaces, produces 3.8 million tons of hot coils with iron scrap. It took over the facility from now-defunct Hanbo Iron & Steel Co. in 2004.

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BHP, Rio halt WA iron ore production

BHP Billiton Ltd and Rio Tinto Ltd have halted production at their respective iron ore operations in the Pilbara region of Western Australia after cyclone George crossed the coast. BHP said all of its operations in the Newman region had ceased and staff had been sent home from the remote sites, including Area C, Yarrie and Yandi. "We can confirm that production at all of our operations in the Newman region has been stopped in preparation for Cyclone George," BHP spokesperson Emma Meade said. "All assets remain on yellow alert with the exception of Port Hedland. Port Hedland remains on red alert." BHP said staff were being evacuated at its Orebody 25, Jimblebar and Orebody 18 iron ore operations but a small number of staff remain on-site at Whaleback. BHP said its Nelson Point and Finucane Island port facilities remain closed. "We don't have an indication of damage to Nelson Point or Finucane Island at this stage," Ms Meade said. Rio Tinto spokesperson Gervase Greene said production had been halted at all its iron ore operations in the Pilbara, with the exception of the Pannawonica mine. Operations that were closed include the Brockman, Marandoo, Tom Price, Paraburdoo, Yandicoogina, Channar and Eastern Range mines. Mr Greene said Rio had reopened its coastal operations - port and rail - and was yet to make decision on bringing the ships back in. Cyclone George crossed the coast east of Port Hedland about 1000 WDT recently, tearing off roofs, mangling fences, downing trees over power lines and cutting off power and phone services to most local towns. The severe tropical cyclone gusted with destructive winds of up to 275 kilometres per hour, according to the Bureau of Meteorology), affecting Port Hedland, South Hedland, Wedgefield and some outlying towns. The cyclone has claimed the life of a worker at a construction camp operated by Fortescue Metals Group located about 100km south of Port Hedland. A number of oil and gas producing facilities off the WA coast operated by Woodside Petroleum Ltd, Santos Ltd and BHP still remain closed.

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Arcelor Mittal, Baotou JV talks collapse

Steel magnate Lakshmi Mittal's demand for a 50 per cent stake in China's Baotou Iron and Steel Group has led to collapse of talks for a joint venture as Beijing will not allow foreign steel giants to take a controlling stake. Confirming the failure of striking a deal with Arcelor Mittal, the world's largest steel maker, Baotou Iron and Steel Chairman Lin Donglu said his company had ended talks and is now scouting for local partners. "We are not talking about any actual cooperation anymore," Lin was quoted as saying by 'China Daily'. China's steel industry regulations bar overseas steelmakers from taking a controlling stake in a joint venture. "Because Arcelor Mittal wants to take a stake of 50 per cent or so in the venture, we failed to negotiate a deal," Lin. At the same time, China, the world's largest steel maker as well as consumer, has adopted a cautious approach to foreign giants like Arcelor Mittal's ambitious plans in the huge market, industry sources said. For example, senior Chinese lawmakers have urged the government to accelerate its improvement of laws and regulations on mergers and acquisitions of domestic companies by foreign capitals, which, if not cautiously handled, might jeopardise the nation's industry security. China needs improved regulations and laws to guide and manage foreign mergers and acquisitions to ward off monopoly by overseas companies and ensure national industry's security, said Ma Jinquan, a deputy to the National People's Congress, China's top legislature. Ma, a director of the Anshan Iron and Steel Group Corporation in northeast Liaoning Province, suggested the country to enact such regulations as early as possible to encourage fair competition, standardise mergers and prevent industry monopoly.

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World Crude Steel Production stands at 99 mln tonnes in February

World crude steel production for the 66 countries reporting to the International Iron and Steel Institute was 99.0 mln metric tons (mmt) in February. This is 8.6% higher than for the same month of 2006.

China produced 36.1 mmt of crude steel in February. This is 20.1% higher than February 2006. Japan produced 9.2 mmt of crude steel, an increase of 3.6% year-on-year (y-o-y). Crude steel production in South Korea was 3.7 mmt, an increase of 0.2% compared to the same month last year.

Germany produced 3.8 mmt of crude steel in February 2007, an increase of 3.1% y-o-y. France produced 1.7 mmt, a rise of 0.2% compared to the same month in 2006. Production in the UK was 1.2 mmt, 9.3% higher than February 2006. Brazil produced 2.5 mmt of crude steel in February, an increase of 17.6% compared to February 2006.

Turkey's crude steel production rose by 14.6% y-o-y to 1.9 mmt in February. Total production in the Other Europe region was 2.3 mmt, an increase of 14.8%. Bosnia-Herzegovina and Macedonia now report their monthly production to IISI and have been added to this region.

Crude steel production in the United States was 7.1 mmt, a decline of -8.0% y-o-y. *From 1 January 2007, Bosnia-Herzegovina and Macedonia have begun to report their crude steel production figures to IISI. This brings the total number of reporting countries to 66. These countries represented more than 98% of world crude steel production in 2006.

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