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Now a days, many 'event management' companies have mushroomed in Indian metros and after preaching 'latest management techniques' and 'emerging opportunities in IT' they have set their eyes on our industry. Some of them have collaborations with global giants and pose as if they are the ultimate gurus in the subject. I keep on receiving such invitations to address the delegates which I politely regret. With due respect to their business aptitude and professional approach, I do feel that metallurgical industry is quite different from other industries in many ways and an outside agency cannot understand it in a short span of time. Needless to mention that such events, conferences and exhibitions, are futile and are sheer waste of time, money and energy. In short one must choose these platforms very carefully and ensure that you are with the experts within the industry.

By now, I have memorised some common statements in such gatherings.
l    Shift of manufacturing industries to Asia.
l China has emerged as clear leader with highest steel    production and consumption
l   The boom in iron & steel industry will continue till Chinese steel industry keeps on expanding.
l   Indian iron & steel industry has a great future because it has   vast reserves of iron ore and can hire cheap technical manpower.

To a steel professional, it is like saying 'India got independence on 15th August 1947 and her first prime minister was Mr. Jawaharlal Nehru.' 'Yes, it is a fact, we all know it and moreover it is history. Say something new!!!’

We all know about growing Chinese as well as gulf and SE Asian markets, flattening US and EU markets but how many know about the emerging markets in our neighboring countries? May I tell you something? Countries like Pakistan, Bangladesh, Sri Lanka, Myanmar, and Nepal are also on growth track (if not fast) and their appetite for steel is also growing.

While their immediate requirement can be met by steel import, they would surely think in terms of increasing their steel making as well as processing capacity. Thus, these regions would offer opportunities for not only finished steel trading but also for technology companies, equipment suppliers, industrial fabricators, raw material suppliers etc.

Let the big ones eye on China for export or for technology transfer but a small or medium scale operator should definitely explore the opportunities in these countries. For everybody's information, these countries are also called as SAARC Countries!!!

D.A.Chandekar
Editor & CEO

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H & K India

Tata Steel targets Orissa plant output by 2009

Tata Steel Ltd. has completed the land acquisition process for its 6-million-ton-a-year steel plant in the eastern state of Orissa and expects the first phase of production to be onstream by 2009, the company's Managing Director, B. Muthuraman said. "We will be in a position to place equipment orders by June-July this year. “ Tata Steel, India's largest private sector steel maker by revenue, acquired about 3,000 acres of land for the Orissa project at a cost of around Rs. 700 million. Under the first phase of the project, the company plans to produce 3 million tons of steel a year. Land for a third greenfield project at Jharkhand in eastern India has also been earmarked, he said. The Jharkhand project, a 12-million-ton steel plant, will be set up at a cost of Rs. 400 billion. The first phase of the plant - 6 million tons a year is expected to be operational by 2011. A capacity expansion of 1.8 million tons at the existing Jamshedpur facility in eastern India is expected to be completed by the middle of 2008. The expansion will raise the capacity to 7 million tons a year.

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Posco may exclude big villages at its steel project site

This was indicated by POSCO India Managing Director Soung Sik Cho while .addressing the newsmen at Paradip. Cho said, the company was firmly committed to the welfare of local people by implementing an ideal rehabilitation and resettlement policy. But if the people still did not want to shift, the company was open to redraw its site map to exclude some of the thickly villages, he added It may be noted that the land acquisition for Posco's 12 million tonne project had run into rough weather with the local people, led by some NGOs and Left organisations, launching agitations against their displacement. Sensing the urgency of the situation, Posco had earlier scaled down its land requirement from 5,000 acres to 4000 acres to make room for leaving out some thickly populated areas, if necessary. Assuring that 98 per cent of the workforce in the plant would comprise locals, Cho said, the company would invest in construction of railway line connecting the port and other infrastructure facilities. Thousands of people would be directly employed and the total job creation would be around 48,000, he observed. He said, the company proposed to start its plant construction work from next January.

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Maha Seamless to import steel billets

Maharashtra Seamless, flagship company of the Rs 2,000 crore D P Jindal Group, is in talks with Chinese steel companies including Baosteel and Tianjin Steel for the import of round steel billets, which are used in making seamless pipes and tubes. “We want to import semi-finished steel products and complete them here, and sell them to the East Asian and US markets,” said D P Jindal, chairman, D P Jindal Group. The agreement would be worth about Rs 200 crore, and the company will save up to 10 per cent by importing from China. The company plans to source about one-third of its annual requirement of billets from China. “Due to scarcity in the domestic market, we import half the annual requirement of 1,50,000 tonne of billets,” said Anil Jain, vice president, finance. “Till now we have been importing from countries like Ukraine, Russia and Germany. But after the talks in China comes through, almost 30 per cent of would be sourced from Chinese players,” he added. Maharashtra Seamless has a capacity of 2,25,000 tonne of pipes and tubes per annum. At present, the company spends around Rs 25,000 per tonne importing the raw material. In the domestic market the price is higher by about Rs 1,000 per tonne. The company saw its sales crossing the Rs 1,000 crore mark in the FY06.

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Rourkela Steel sets output records for April

After concluding 2005-06 with a robust performance, Rourkela Steel Plant has commenced the current fiscal with best ever April record in the production of sinter, hot metal, crude steel and saleable steel as well as despatches of saleable steel since inception. The highlights are sinter production at almost 2,34,500 tonnes registering a growth of nearly 30 per cent compared to April 2005. Hot metal production surpassed 1,46,000 tonnes registering a growth of about 12 per cent compared to April 2005. Total crude steel production stood at nearly 1,39,000 tonnes, registering a growth of more than 13 per cent over April 2005 while total saleable steel production at about 1,36,500 tonnes recorded a growth of more than 14 per cent compared to April 2005. Despatches of saleable steel surpassed 1,28,500 tonnes thereby growing by more than 13 per cent over April '05. The growth in saleable steel production was backed up by sterling performance in the production of plates from the plate mill, hot rolled coils and hot rolled plates from the hot strip mill which also registered the best-ever April month performance since inception of the steel plant and growth over last year of nearly 44 per cent, 21 per cent and 2 per cent respectively. Besides, growth over last year was recorded in the niche products of Rourkela Steel Plant like tin plates, electric resistance weld pipes, spiral weld pipes, galvanised sheets, hot rolled coils for sale and CRNO steel. After achieving production performance during 2005-06 according to targets in the SAIL corporate plan, the steel plant's April 2006 performance represented the RSP's collective effort to achieve the challenging production growth plan envisaged during 2006-07.

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Uttam Galva plans new product line

Uttam Galva Steels, the country's second largest galvanised steel manufacturer, will add a new galvanising line with a capacity of 3,50,000 tonne per annum. This is part of the Rs 350 crore expansion plan that the company has lined up. “The new line will come on stream within this financial year and the total capacity will increase to 7,00,000 tonne per annum,” said Ankit Miglani, director. As part of the Rs 350 crore expansion, Uttam Galva is also doubling the production of cold rolled steel from existing 5,00,000 tonne per annum to 1 million tonne.
To facilitate this expansion, Uttam Galva shut one of the cold rolling plants for 45 days. This will have an impact on production and the company's output of cold-rolled steel will come down by 20 per cent in the quarter ending June 2006. The company is also investing Rs 100 crore to expand capacities in its service centre for steel processing and distribution. At present, the centre has installed capacity of 5,000 tonne a month. In the first phase of expansion, additional capacity of 25,000 tonne will be added.

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SAIL plans JVs with cement companies

Steel Authority of India Ltd (SAIL), India's largest steel company, is planning to tie up with leading cement producers like ACC, Birla Corporation and Jaiprakash Associates for setting up cement plants. The public sector steel major has invited expressions of interest for setting up two cement plants, one each in Bhilai and Bokaro, the location for two of its biggest steel units. SAIL will have a 24 per cent stake in the joint ventures. Sources close to the development said SAIL was in the final stages of partner selection for Bhilai, while the tendering process was on for the Bokaro plant. Among the shortlisted bidders for the Bokaro plant are ACC, Birla Corporation and Jaiprakash Industries. ”For the Bhilai plant, the sources said, Shree Cements and Jaiprakash Industries were in the fray. HM Bangur, Managing Director of Shree Cements, confirmed the development.
The main purpose of the joint venture is to utilise the huge amount of slag generated from the steel plants.” SAIL will bring its limestone mines to the table in the projects, apart from some proportionate investment as a joint venture partner. Given the existing steel capacity of the two plants, the joint ventures could hope to produce about 1.5 million tonne of cement. But the capacity could go up once the ongoing expansion at Bhilai and Bokaro is completed. 

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Tata Metaliks, Pawan Ruia, Bhushan Steel and Ruchi group (Indore) have expressed interest in acquiring Kulti Works of IISCO Steel Plant. According to sources close to the development, the four parties have submitted expressions of interest (EOI) for the acquisition, which would be evaluated by SBI Capital Markets. If the bidders meet the qualification parameters, the parties would sign a confidential information memorandum for due diligence after which the price bids would be submitted. The last date for submitting EOI was April 26.
Apart from the plant and machinery the bid also includes factory land of 218.5 acres. The exact location of the land is 22 km from Burnpur and about 100 km from Kolkata. Industry sources said the land and casting facilities were the main attraction in the bid. With the availability of pig iron from the IISCO plant, any company would have a clear margin of Rs 3,000 a tonne. Pawan Ruia, who recently bagged Dunlop India and was on an expansion spree, said that there were synergies with the defunct foundry unit acquired from Mukund. The IISCO bid includes Kulti Works (Main), light casting works (located adjacent to main works), a 33 kw power sub-station and a Monberia water pumping station. This was not the first time that bids were invited for Kulti Works. Shut since April 1, 2003, EOIs were invited in the middle of 2004 and three parties responded. However, what happened to the earlier bids was not known. According to the terms of the bid, the buyer would not have any liabilities with respect to employees, ongoing legal cases, prospective legal claims or loans.

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Essar Steel has commissioned India's most modern slab caster at its Hazira steel plant with an annual capacity of 1.8 million tones. This caster will augment Essar Steel's annual capacity to 4.6million tonnes and is part of the expansion of capacity of the steel plant from 2.4 mmtpa to 4.6 mmtpa.The Caster has been designed by SMS-Demag who are a world renowned equipment supplier in this field. They have also supplied basic engineering and the critical equipments, Level II automation and provided support in commissioning. Essar Constructions, an Essar group company undertook complete engineering, civil, structural, construction, equipment erection, piping, electrical and automation jobs on single point responsibility basis in record time of months. The caster is designed to cast slabs of upto 2000 mm width, 220/260 mm thickness and cut length from 4.6 metres to 10.2 metres.
With the commissioning of the third caster, Essar Steel will be able to offer more sophisticated grades of steel required for specialized requirements like Interstitial Free (IF) Steel, Ultra Low Carbon (ULC)Steel, plate grade upto API x 80 line steel and many more critical applications.The Caster is equipped with the latest technologies such as Vertical Mould of special copper alloy, Hydraulic Mould Oscillator with dynamic control, Mould width adjustment, Automatic Mould Level Controller, Sticker Detection System, Segments with Dynamic soft reduction etc.
It is also equipped with the latest state-of-the-art electrical and automation system, some of which is being introduced for the first time in any Caster in India. These are designed to ensure precise control of grain structure, surface quality, internal soundness and defect free slabs
Essar Steel expects to complete the expansion of the steel plant capacity during the current year at an estimated cost of Rs. 2000 crores. The expansion also involves raising capacity of its sponge iron, steel making, casting and rolling units along with connected utilities.

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Prakash Industries Ltd.'s net profit quadrupled in the fiscal year 2005-06 to Rs 70.32 crore as compared to Rs 16.14 crore in the last year. The company reported such a phenomenal increase in net profit on a turnover of Rs 903 crore during the year under consideration as compared to Rs 800 crore in the last year. Prakash Industries Ltd. has an Integrated Power and Steel Plant in Chattisgarh for manufacture of Sponge Iron, Steel, Ferro Alloys, Heavy Structural and Power generation. EBITA during the year ended 31st March, 2006 increased to Rs.153.46 crores as against Rs.102.65 crores during the previous year.
Prakash has successfully commissioned a new power plant, which operated at full capacity during the current year, resulting in higher output and lower cost of production of steel operations. The marked improvement in the financial results is largely attributed to the power plant operations. Prakash has achieved landmark by selling power to Chhattisgarh State Electricity Board. During the year, Prakash also set up a Wire Rod Rolling Mill, which is another step towards forward integration with higher value addition and better product mix. As further cost reduction measures, to meet the requirement of key raw materials like coal and iron ore captively, coal mining operations have commenced at Chotia Coal Block, which shall result in substantial cost saving in steel making. Also, Prospecting Licenses for Iron Ore Mines in Chhattisgarh and Orissa have been granted to Prakash, which is another feather in its cap. Necessary steps to obtain various government clearances are in the offing.
The Rigid PVC Pipe Division of the company has witnessed phenomenal growth during the year and its production increase by more than 40% over the previous year. In view of the growing demand of PVC Pipes, the division is expected to further improve in the current year adding to Prakash's profitability.

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UGS develops 275-300mm flat bars

United Gulf Steel, the leading medium section products manufacturer in the GCC region has successfully launched 275 & 300 mm flat bars for its customers in the Pre-Engineered Building segment. Flat Bars in 275 mm & 300 mm in ASTM A36 & ASTM A572 Gr 50 in thicknesses from 10 mm to 22 mm would provide tremendous advantages to PEB manufacturers in term of ready availability and help minimize efforts & lossess from cutting from HR plates. With entire flat bar size range from 60 mm to 300 mm made available to PEB industry, UGS has successfully demonstrated its leadership position as a reliable & preferred supplier of steel.

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Arab Steel Production  exceeds 19 MT in 2005

Production of the Arab companies of iron and steel products reached a new record figure in 2005. It exceeded 19 million tons compared to 15 million tons in 2004, i.e., up by 4 million tons, or 26.5%. This is the first time at which steel production at the Arab level reaches such a figure. This was included in the report of the Secretary General of the Arab Iron and Steel Union, Mr. Mohammad Laid Lachgar, to the Board of Directors of the Union in its Ordinary Meeting No. 90 held in Algeria in the period 8 10 May 2006 on the occasion of the 35th anniversary of the establishment of the Union. The report indicated substantial changes on the map of the steel production at the Arab level. The figures show that the Arabian Gulf countries in 2005 occupied the first rank in terms of production at the Arab level after the Arab Maghreb countries used to occupy this rank for twenty years. Production of the Arabian Gulf countries reached 7.8 million tons in 2005. Production of the Saudi companies amounted to 5.2 million tons in 2005, that is, nearly 67% of the total production of the countries of this region.

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Punj Lloyd to operate EPC project with SA

Engineering construction major, Punj Lloyd (PLL) has announced a joint venture with His Royal Highness Prince Khalid Bin Bandar Bin Sultan (KBS), Kingdom of Saudi Arabia . The jointly owned company with the share capital of 2 million Saudi Riyals would be named 'Dayim-Punj Lloyd Engineering Limited' in which PLL would hold 49%, while latter 51% stake. Dayim-Punj Lloyd Engineering Ltd will operate in engineering, procurement, construction, commissioning of onshore and offshore projects for the hydrocarbon sector, power, chemical, water and sewage sector, civil infrastructure and industrial projects in the Kingdom of Saudi Arabia. HRH Prince Khalid Bin Bandar Bin Sultan will be the Chairman of Dayim-Punj Lloyd. PLL would provide engineering, design, construction and project management expertise, apart from selecting, hiring the requisite manpower and assisting the JV in identifying and selecting suppliers for equipment. KBS role would be to identify commercial opportunities for the JV in Saudi Arabia and to liaise with various governmental and regulatory authorities besides organizing banking facilities for the JV.

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Zamil Group to set up shipyard in Sharjah

Saudi Arabia's Zamil Group has said it was in talks with Sharjah authorities to set up a shipyard there. It plans to set up facilities to build and repair vessels, Zamil's marine business development consultant Hassan Abouraya said. "The UAE is an important market. We want to have a presence here." Zamil's marine business division owns 39 vessels and most of them are on long-term charter with Saudi Aramco. Abouraya said Zamil is building and buying vessels because there is a shortage of vessels. "Oil companies are expanding exploration activities because of high oil prices. They cannot find enough offshore vessels for charter," he said. Aramco has signed contracts with local suppliers for 28 vessels in 2006 and Zamil has got an order for nine vessels, Abouraya added. The company sees demand for its 64-metre Zamil Class anchoring handling tug supply vessels. Zamil's almost entire fleet is supporting Aramco's operations, but the company is keen to grow its business globally. "We want to expand outside Saudi Arabia and provide vessels for charter in India, Iran and other places in the Gulf.”

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EUR 50 M new EAF orders to Siemens VAI

Siemens has further strengthened its leading market position in the field of electric steelmaking with four new orders worth over 50 Mio. EUR. The VAI Fuichs GmbH, Legelshurt/Germany, a company of the Siemens Group Industrial Solutions and Services (I&S), received new contracts totaling over EUR 50 million from steel producers in the UK, Saudi Arabia, Spain and Pakistan. "The reasons for the awarding of the new contracts were the innovative solutions offered for improved operating efficiency in electric steelmaking," stated Werner Auer, Managing Director and Spokesman of VAI Fuchs. The long-product steel producer Thamesteel Ltd., Sheerness, U.K., a subsidiary of Saudi Arabia's Al-Tuwairqi Group, placed an order for the supply of a new 95-t AC EAF (Ultimate Type*), including scrap buckets, hot-gas line, electrics and automation systems. The furnace will replace the existing shaft-type EAF. The long-product-steel producer National Iron and Steel Factory (Al-Tuwairqi Group) signed a contract for the upgrading of the existing VAI-Fuchs-supplied 80-t EAF to a 100-t AC EAF, including the installation of the Refining Combined Burners (RCB) system, at Dammam, Saudi Arabia. With the RCB system the energy input into the EAF can be boosted for shorter tap-to-tap times. The upgraded EAF will be able to be charged with 100% DRI (direct-reduced iron). An order was received from the Spanish steel producer Aceralia Perfiles Zaragoza SA (Arcelor) for the installation of the fin-type-anode system and the RCB system in the company's 140-t DC EAF. The patented fin-type anode system offers the advantages of a longer anode lifetime and reduced maintenance requirements. Together with the Italian I&S company VAI Pomini, VAI Fuchs supplies for the newly founded company Integrated Steel Mill Limited a new green-field 1,000,000 t/a steel melt shop near Karachi, Pakistan. The project includes the installation of the process equipment for a 90-t Ultimate EAF, ladle furnace, vacuum-oxygen degassing unit, dedusting equipment and a 6-strand billet caster for the production of pipe-steel grades.

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Marubeni to study trading house in Abu Dhabi

Marubeni Corp. said it has agreed with Abu Dhabi, one of the seven United Arab Emirates, to set up a joint venture to conduct a feasibility study on a plan to form a comprehensive Japanese-style trading house in Abu Dhabi. Under the deal with Abu Dhabi's Department of Planning and Economy, Marubeni will arrange for the venture to carry out feasibility studies on plans to export and import cement, process and sell steel products, introduce environmentally friendly technologies, handle Middle Eastern-tapped petroleum products and expedite e-commerce for used cars, it said. Abu Dhabi seeks to introduce the business model for Japanese trading houses, whose business sectors span a range of industries, in order to limit its economy's heavy dependence on sales of energy-related natural resources, it said. If the studies conclude a trading house can be run profitably from Abu Dhabi, the two parties will establish a full-fledged venture, Abu Dhabi Trading House. The trading house, to be capitalized at $15 million, would be owned 40 percent by Marubeni and 60 percent by the Abu Dhabi side, it said. It would tap the markets in the six other emirates.

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OCI Construction Group receives $40M steel structures order

Orascom Construction Industries announced that it was awarded a US$ 40 million subcontract by F.L.Smidth of Denmark, a leading global equipment supplier, for the supply of steel structures and plate work in addition to mechanical, steel structure and electrical installation works on a 5,000 tpd greenfield cement production line in Libya. Earlier this year, OCI completed work on a similar production line at the same cement plant for a total value of US$ 30 million. OCI Chief Executive Officer, Nassef Sawiris commented " During 2004, OCI announced its return to the Libyan construction market to capitalize on various construction opportunities in this relatively underserved market. We continue to believe that the Libyan market may become an important engine of growth for our north African operations in the next few years. Demand for construction services will continue to grow driven by rising investments in the petrochemical, infrastructure and tourism sectors." Orascom Construction Industries (OCI) is a leading cement producer and construction contractor active in emerging markets.

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The Siemens Industrial Solutions and Services (I&S) Group recently received an order from Voest Alpine Materials Handling, Austria, to deliver the electrical equipment for the complete ore transport systems between the plant's own port facility in Al-Jubail, eight miles away, and the Saudi Iron and Steel Company (Hadeed) steel plant. This includes ship unloaders, conveyors, stackers, and hoppers. The order is worth EUR 7.5 million. The equipment will be commissioned by February 2007. Hadeed belongs to the Saudi Sabic Holding, Riyadh, and is the Gulf Region's leading producer of steel.

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Uzbekistan's steel smelter to cut output in 2006

Uzbekistan's steel smelter, Uzmetkombinat, will produce 592,450 metric tonnes of steel this year, compared with 594,438 tonnes in 2005, and 560,000 tonnes steel roll, compared with 576,550 tonnes in 2005, according to the 2006 production plan approved by the annual general shareholders meeting, the smelter's press office announced recently. The smelter works on steel scrap, which in the past was supplied by all former soviet Central Asian republics, but now supplies have dwindled, causing a fall in steel output.

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China Steel likely to raise prices for 3Q

China Steel Corp., Taiwan's only steel mill, will likely raise the domestic prices of its steel products for the third quarter, the Commercial Times reported Monday, citing company Chairman Y.C. Chiang. Global demand for steel products is likely to rise 7.3% this year, Chiang said, noting Shanghai Baoshan Iron & Steel Co. raised its prices twice in March, and Japan and South Korea are also likely to raise their prices. To close the gap with the global market, China Steel is "very likely to raise prices" May 25, Chiang said. China Steel's price rises will vary across product categories, but the price of hot-rolled sheet is likely to rise at least 10%, the paper quoted Chiang as saying. The price of hot-rolled sheet is likely to rise by NT$1500 a metric ton, the paper quoted unnamed sources at China Steel as saying. In February, China Steel raised its second-quarter domestic prices by 1.5% on average from the previous three months.

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ThyssenKrupp to build Brazil Steel Plant, mulls US plant

German industrial conglomerate ThyssenKrupp AG said that its supervisory board has approved the building of a new steel mill in Brazil and ordered a feasibility study for a possible construction of a steel plant in the U.S. The supervisory board of ThyssenKrupp Friday approved the project to build a steel mill in Sepetiba in the Brazilian state of Rio de Janeiro. The plant, which will be operated by CSA Companhia Siderurgica do Atlantico, is scheduled to start production in early 2009. "We are pleased to have received the go-ahead for this key element of our integrated growth strategy in the Steel segment. The supply of low-cost, high-quality slabs from Brazil will allow us to harness growth opportunities in our core European market and in the North American Free Trade Area region," said Chief Executive Ekkehard Schulz. "Our objective is to position ourselves globally in the market for high-quality flat carbon steel," he added. The options for the NAFTA strategy were also presented to the supervisory board. ThyssenKrupp Steel aims to achieve a share of at least 5% of the high-value volume market in North America. In parallel with the possible acquisition of Dofasco, which would allow this objective to be reached quickly, other alternatives are being closely examined. A feasibility study is being drawn up for a "greenfield" option with rolling and coating capacities for 4.5 million metric tons of end products per year. Planning to date indicates a total investment of EUR1.8 billion. The results are to be presented to the supervisory board at its meeting in August. With global steel demand continuing to grow strongly, and the company's own requirements for its growth strategy increasing, the capacity of the Brazilian steel mill has been raised from the previously planned level of 4.4 million tons to 5.0 million tons.

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Russian Q1 steel roll, semi-finished steel exports down

In the first quarter of this year Russian exports of steel roll fell by 16.1% on the year to 2.24 million metric tonnes, the Federal Customs Service said. Steel roll exports to countries outside the Commonwealth of Independent States fell during the period by 17.1% to 2.098 million tonnes worth $813.3 million, 41.5% less than a year ago. Steel roll export to CIS states increased by 2% to 142,100 tonnes. Russia's semi-finished steel products export fell during the period by 3% to 3.397 million tonnes. Semi-finished steel products export to countries outside the CIS fell by 3.7% to 3.34 million tonnes. Semi-finished steel products export to CIS states increased by 15.8% to 61,600 tonnes, a 3.7% rise on the year.

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Brazil Steel Co CSN sees iron ore prices up at least 15%

Brazilian steelmaker Companhia Siderurgica Nacional (SID), or CSN, expects iron ore prices to rise at least 15%, and possibly higher, when 2006 contract negotiations are completed, the company's director of mining said. "Our expectation is that the price increase will be greater than 15%, and closer to 20% than 15%," said Juarez Saliba, CSN's director of mining operations. "With the evolution of the global market in the past few months, it could even be higher than 20%." Saliba noted that Brazilian mining giant Companhia Vale do Rio Doce (RIO), or CVRD, may have erred when it went public with its request for a 24% increase in 2006 price contract negotiations. "If they hadn't went public with the 24% target, I believe that the price increase could have been even higher," Saliba said. CVRD is the world's largest producer and exporter of iron ore and iron pellets. "Demand continues to be stronger with each passing month, which is adding upward pressure to price negotiations," Saliba said. Chinese steelmakers, represented by giant Baosteel, are leading the price talks, Saliba said. So far, global steelmakers are balking at a significant price increase in 2006 after miners wrangled a 71.5% price increase in 2005. If the talks extend past the end of May, they will be the longest price negotiations on record.

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Severstal out of auction for Estonian steel Plant

Russian steelmaker Severstal has opted out of the auction for the sale of Galvex, an Estonian steel galvanizing plant, a spokesman for Severstal said. Severstal was dissatisfied with some of the conditions of the auction, the spokesman said without elaborating. However, Severstal is considering increasing the capacity of its steel galvanizing facilities, the spokesman said. The auction for the sale of Galvex was held in New York City May 2. No information on the results of the auction was available. Before the auction Galvex was controlled by U.S. businessman Daniel Bain. Meanwhile, in January investment fund SPCP Group LLC initiated bankruptcy proceedings against Galvex, which owes $150 million to SPCP. Galvex's galvanized steel production capacity totals 500,000 metric tons a year. Severstal is part of Severstal Group, a large industrial holding that comprises steel makers, automobile manufacturers and mining companies.

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Ukraine Govt body slams Mittal Steel on salaries at mill

Netherlands-based Mittal Steel Co. (MT) rejected the Ukrainian government's complaint over salaries at the giant steel mill it purchased in the ex-Soviet republic last year, insisting it was fulfilling its ownership obligations. The State Property Fund, which oversaw Mittal Steel's purchase of Kryvorizhstal from the state, warned last week that it might sue the company if didn't fulfill what it called a promise to increase salaries within 30 days. Mittal Steel countered in a statement that it has fulfilled almost all of its 60 obligations and accused the property fund of misinterpreting one of its obligations. "To talk about breaking off the deal because of existing disagreements in interpreting one clause of the obligations...is illogical and wrong," plant spokesman Frank Pannira said in a letter to Valentyna Semenyuk, the head of the State Property Fund, according to the statement. Company officials refused to elaborate. Neither the property agency nor the company's letter went into details. The mill's workers had always been considered some of the best paid in Ukraine. Mittal Steel bought the Kryvorizhstal mill for 24.2 billion hryvna ($4.8 billion) in Ukraine's biggest and most profitable privatization auction ever. The sale fetched for Ukraine a price nearly six times higher than the amount it went for a year earlier, under former President Leonid Kuchma, in a sale that was later declared illegal.

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Russia's Magnitogorsk ups 4 month steel output by 6.3%

The Magnitogorsk Iron & Steel Works, Russia's largest steel smelter, produced 3.887 million metric tons of steel between January and April, an increase of 6.3% compared with the corresponding period last year, the company said. Steel roll output increased by 8.2% to 3.602 million tons. The smelter increased its iron output by 7% to 3.277 million tons, while coke output increased by 1.7% to 1.868 million tons. During the period, Magnitogorsk exported 50.8% of its output, compared with 52.7% in the corresponding period last year, in accordance with the company's strategy of increasing supplies to the domestic market.

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The Belarus Metallurgical Plant produced 719,610 metric tons of steel in January-April, a rise of 7.3% on the year, the company press service said. Steel roll output increased by 2.5% to 583,194 tons. The production of steel products increased by 13.6% to 77,630 tons. The smelter exports 90% of its output to countries outside the CIS. The smelter is investing $250 million this year in upgrading production, compared with $100 million in 2005. A new seamless steel pipe production facility is being constructed, to come on stream July 1 2007 with an annual output of 250,000 tons of pipe.

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