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As everybody knows, Indian steel industry was decontrolled in 1992. Previously, the government used to control the prices and also the production. One would need government's approval to set up a steel plant. All this was abolished with an objective to boost the steel production and also to let market forces decide the pricing. Many experts put forward a very bright picture of the expected growth in user industries like auto, construction, white goods and engineering. As a result of this, many mega steel projects were initiated after the decontrol and by the year 1996, the steel production of the country increased substantially.

The sad part of the whole story is that the user industries did expand but not at the pace projected by the experts. This resulted in overcapacity followed by steep decline in price. Most of the steel companies started bleeding and eroding their capital in next few years. Financial institutions had a huge stake in this industry and naturally they were worried. As the steel industry performance reflected in share prices also, the investing community also divorced from this industry.

One would naturally ask why am I digging out the past memories. Yes, there is a reason for doing this. Today also, there is a tremendous rush to set up a steel plant, a rolling mill, expand the melting capacity and so on.

If we take into account even the realistic greenfield and brownfield expansions, I am clearly seeing a over capacity scenario in this country by 2010. One would argue that India, owing to availability of iron ore and cheap technical manpower, can produce cheapest steel and it will have vast export potential. I would like to differ. China is turning to be a net exporter from its position of net importer of steel. Experts feel that a substantial over capacity will be created in China in coming years. This extra material can flood the industries of the other countries, especially the neighbouring ones.

Sir, I only mean that we should not repeat the mistakes of the past. The steel production projections should be based on realistic growth projections of the user industries and not on expansion plans of the steel industry. Also the option with the user industries to import the steel should be considered.

D.A.Chandekar
Editor & CEO

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Mittal likely to sign Orissa pact in Nov

Mittal Steel Jharkhand Pvt, the subsidiary of Mittal-Arcelor is likely to sign a memorandum of understanding (MoU) with the Orissa government to set up a steel plant in the state within two months. “The MoU would be through once Mittal Steel acquires the 8,000 acres of land it has sought from the Orissa government,” Orissa minister for steel and mines Padmanabha Behara said on the sidelines of a minerals and metals conference in Ranchi.

However, Mittal Steel Jharkhand chief executive Sanak Mishra refused to confirm a date for the actual signing of the MoU saying that the background work was still going on. Indicating that Mittal Steel may not use the Bhambra port as was earlier reporter, Behera said the company is likely to use the upcoming port in Gopalpur being built by the Orissa government. Arcelor-Mittal Steel board president LN Mittal had announced a 12 million tonne project in Orissa after visiting Bhubaneshwar and meeting Orissa chief minister Naveen Patnaik in July this year with an investment of between Rs 40,000-45000 crore. He had announced similar plans for Jharkhand in October last year. The Orissa government had showed seven sites to the company to set up its prospective plant. Sources said that of these, four were shortlisted and aerial surveys have already been carried out. The possible sites are Khallikot in Ganjam, Basudevpur in Bhadrak, Balgopalpur in Balasore and Patna in Keonjhar. An expert team from the company was presently engaged in ground surveys in Orissa and would submit its findings in eight weeks. The steelmaker has already entrusted the Ranchi-based consultant Mecon the job of selecting the site for the project.

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VSP launches site-levelling works

The Visakhapatnam Steel Plant has embarked on its capacity expansion by inaugurating the works on site-levelling for the rolling mills. The total area to be covered is 10.63 lakh square metres and the quantity of earthwork is likely to be more than 22 lakh cubic metres.

The entire work will be completed in four months as per the schedule, according to a press release. Once the work on site-levelling for the four rolling mills is complete, VSP will take up piling, civil and structural work. The work on the first stage of rolling mills, ie wire rod mill-2 and seamless tube mill, will begin within one-and-a-half months. The second stage work, which includes light structural mill and special bar mills, will be taken up subsequently. VSP has got the government's nod to expand its capacity to 6.3 million tonnes from the existing 3 million tonnes. For this, the steel plant is spending about Rs 8,600 crore over the next three years. About 50 per cent of the investment will be generated through internal accruals and the remaining will be raised through financial institutions. About 40 banks, including some foreign ones, have already evinced interest in funding the expansion project. Y Siva Sagar Rao, chairman and managing director of VSP, inaugurated the site-levelling works recently. Visakhapatnam Steel Plant achieved a sales turnover of Rs 679.5 crore during August 2006. VSP produced 3.33 lakh tonnes of hot metal, 2.78 lakh tonnes of liquid steel and 2.37 lakh tonnes of saleable steel during August 2006. The cumulative sales for April-August 2006 stood at Rs 3,205 crore. The above turnover includes domestic sales of Rs 3,015 crore and export sales of Rs 190 crore. According to a press release, on the production front, VSP achieved a production of 16. 88 lakh tonnes of hot metal, 14.8 lakh tonnes of liquid steel and 13.07 lakh tonnes of saleable steel during April-August 2006.

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Rourkela Steel looks to top 2mn.t.

Continuing its growth momentum during the current fiscal, Rourkela Steel Plant (RSP) has posted its best ever August performance in several production areas last month. The mood of employees was upbeat as RSP was poised to go beyond 2 million tonnes of hot metal production during this fiscal for the first time.

While production of sinter touched 2,64,206 tonnes, hot metal output stood at 1,76,846 tonnes, total crude steel reached 1,64,121 tonnes and total saleable steel production was 1,56,782 tonnes registering impressive growth of 69 per cent, 50 per cent, 51 per cent and 38 per cent over August 2005. Similarly, best-ever August production was also achieved in hot rolled coils at 1,21,716 tonnes, plates (from plate mill) at 40,884 tonnes, hot rolled plates at 27,046 tonnes, ERW Pipes at 5,837 tonnes and silicon steel at 7,127 tonnes registering growth as compared to August 2005. Based on its August performance, RSP surpassed all earlier production levels for the first five months of this fiscal in all major areas. It is noteworthy that production of sinter, hot metal, crude steel, saleable steel and even despatches of saleable steel were not only the best for any April-August since inception but also registered growth of between 40 per cent and 43 per cent as compared to the corresponding period of last year. Meanwhile, a lot of improvement has been achieved in process as well as techno-economic parameters such as significant enhancement in converter lining life in SMS I & II, reduction of total metallic input in steel making, decrease in coke rate at blast furnaces and reduction in specific energy consumption per tonne of crude steel.

The steel plant has also achieved 100 per cent capacity utilisation in all major areas like hot metal, crude steel and total saleable steel production consistently throughout this fiscal. Further, during August 06, a new electrostatic precipitator was commissioned in sinter plant-I, which besides taking care of the environment has also helped in enhancing the quality and quantity of sinter.

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Tatas set sail into uncharted waters

Close on the heels of getting into the enhanced water business, the Tata group is all set to enter water management which is being opened up for private players. The group is expected to make a splash in the business in Bangalore where two bids are expected to be announced shortly, if not next week. The vehicle for the proposed entry into water management will be Jamshedpur Utility & Services Company (Jusco), a wholly-owned subsidiary of the group's steel entity Tata Steel.

Confirming this, sources in the group said Jusco had put in two bids for participating in two projects in Bangalore. The Bangalore Water & Sewage Board, a state government undertaking, had invited bids for two projects and would announce the successful bidders next week. Jusco, the country's first and only privately managed utility services company, is keen on participating in water management projects in Mumbai. However, Brihanmumbai Municipal Corporation, the civic body of the state government, has not yet decided to launch tender for any project.

"In fact, we are open to participate in water management in any city where the sector is opening up, " they said. Industry sources said the scope for water management in Bangalore where availability of water was less than national average was huge. Bangalore gets water for 2.5 hours a day against the national average of 5.6 hours a day. Chennai is at the bottom of the list with water availability of 1.5 hours a day, then comes Ahmedabad (2 hours a day). Delhi has availability of four hours a day, less than Mumbai's five hours a day. Tata Steel had formed its town division into separate entity called Jusco in August 2003. Tata Steel has been into providing municipal services through its town division since it was set up in 1907. In Jamshedpur, Jusco's services include water and waste water management, power supply, public health, horticulture services, planning, engineering and construction. However, it will restrict its activities in water management only in other cities.

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Steel prices shoot up by Rs 500-1000 per tonne

Most of the major steel players have announced increase in galvanised steel prices by Rs 500-1,000 per tonne. JSW Steel and Ispat Industries have hiked galvanised steel prices by Rs 500-750 per tonne, on the back of rising zinc prices. Uttam Galva has increased prices in the range of Rs 500-1,000 per tonne.

The price increase primarily accounts for the steep increase of the zinc prices, a key input material for galvanising. Industry sources said zinc prices have increased by almost 10 per cent over the last couple of days, putting pressure on the bottomline. For every tonne of galvanised steel, 40 kg of zinc is required. "Zinc prices were now at a premium of $300 per tonne," they said. Zinc prices on the London Metal Exchange (LME), which were hovering around $3,100 per tonne a couple of weeks back were now at $3,750 per tonne. Ankit Miglani, director (commercial) Uttam Galva said, this increase in spot prices was with immediate effect but the company anticipates another hike in the middle of the month.

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Essar faces green scare in Trinidad

Essar Steel is facing serious environmental challenges in its bid to construct $1.2 billion steel plant in Central Trinidad. Members of the Pranz Village Development Community are protesting the steel major's decision to construct the plant citing environmental, health and social issues. The community plans to go to court on the matter. Local Government representative, Councillor Shaffmoon Taj said whilst she was not opposed to the plant, which "will surely disrupt the lives and health of the community.”

Member of Parliament for the area, Kelvin Ramnath has been criticised for not supporting the residents in their quest to shift the project away. The Essar Steel, in response, has proposed a green belt with trees as high as 30 feet. "The plant would have gas extraction mechanisms to collect and recycle gases back into the processing system," the company said in a statement. The company also said that it would also import iron ore which will be transported from the Point Lisas Port, adding that the company was subject to a Certificate of Environmental Clearance.

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The new high efficiency, low energy and more environmentally friendly linear compressor, developed by LG Electronics (LG) for refrigeration applications, utilizes the enhanced material properties of Sandvik HiflexTM stainless strip steel from Sandvik Materials Technology.

After several years of pioneering R & D and considerable investment, LG was the world's first company to commercialize linear compressors. Unlike existing compressors based on circular motor principles, the new compressor moves linearly and cuts down dramatically on power consumption.

In order to achieve these benefits, LG needed particular properties from the strip steel used in the suction valves particularly a higher fatigue resistance on impact and bending. A more environmentally friendly cooling media incorporated into the design, also means higher pressures and temperatures, placing further demand on the valve material. Meeting these challenges is Sandvik Hiflex-a martensitic, stainless, chromium steel alloyed with molybdenum. Sandvik Hiflex provides increased tensile strength and improved toughness. It has more than 10% greater bending fatigue strength and 25% improvement in impact fatigue resistance compared with conventional stainless steel strip for valves. Sandvik Hiflex has a bending fatigue strength of +/- 750MPA and a maximum allowable impact velocity of 12.5m/s (41ft/s)

As well as meeting LG's requirements, Sandvik Hiflex offers design advantages in conventional compressor applications. It enables designers to reduce the size of valves of compressors by using shorter valve tongues to achieve the same valve lift. In addition, it allows increased valve lift in order to reduce pressure drop across the valve and boost compressor efficiency. Thinner valve flaps can reduce mechanical losses. Sandvik Hiflex can equally be used to improve the reliability of existing valves prone to fatigue failures. Now proven in product testing and commercial application with LG, the fatigue resistant properties of Sandvik Hiflex have also been proved in reliability of exhaust valves in automotive air conditioning systems.

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Steel Authority of India Ltd. (SAIL) once again achieved record-breaking performance in the first quarter of the current financial year. The unaudited financial results for April June 2006, taken on record by the company's Board of Directors at New Delhi on 28th July, 2006, showed a profit after tax (PAT) of Rs. 1,386 crore, a 23% increase over the same period last year. This is the highest PAT achieved by SAIL in any Q1. At Rs. 8,412 crore, the sales turnover of the company was also 29% higher than that of the first three months of 2005-2006. The improved financial performance was achieved despite a 27% increase in price of imported despite a 27% increase in price of imported coking coal in Q1 of the current financial year over corresponding period last year (CPLY). Prices of other metallic inputs like zinc and aluminium, too, were very high.

Strong market pull, however, led to record saleable steel production of 3.1 million tonnes (9% growth) and sales of 2.45 million tonnes (30% growth). Continuing with its status as a virtual debt-free company, SAIL reduced its borrowings from Rs. 4,298 crore as on 31.03.06 to Rs. 4,000 crore on 30.06.06. The company's interest outgo during Q1 this year, too, was substantially lower at Rs. 94 crore.

Projects worth nearly Rs. 6,000 crore are currently being executed in the SAIL plants and mines. The company has laid a thrust on capex in order to achieve its new target of producing 22.5 million tonnes of hot metal in about 4 years.

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Morgan Construction Company has received a significant MORGOIL Bearing order from Hyundai Steel, an operating company in Korea. The contract is for multiple sets of MORGOIL KL Bearings in bearing assemblies. These MORGOIL Bearings will be spares for the Mitsubishi Hot Strip Mill at Hyundai.

“The Morgoil bearing technology offers Hyundai the combination of excellent long-term performance with cost-effective reliability for their hot strip mill,” said Gabriel F. Royo, Vice President and General Manager of MORGOIL Bearing Division and the Rolling Mill Spares, Installations and Services Division.

Delivery of the first sets of bearings is scheduled for June 2007 and the balance in 2008. The MORGOIL Bearing Division provides a wide range of oil film bearing solutions for the most demanding applications in the metal rolling industries worldwide. Its parent firm, Morgan Construction Company, is a designer and producer of high-quality rolling mill products and services for the metal industry worldwide.

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The first consignment of a prestigious order for converter bricks from Durgapur Steel Plant, was flagged off by Mr. A. K. Bhandari, Executive Director (Works), Rourkela Steel Plant from Lime Dolomite & Brick Plant (LDBP). The order worth Rupees 2.5 crores, was for the supply of bricks for the relining of LD Converters in the Steel Melting Shop of Durgapur Steel Plant. The first consignment comprised 15.7 tonnes, while the total consignment consists of around 381 tonnes of bricks. The entire quantity of bricks meets the stringent quality parameters specified by Durgapur Steel Plant. These include bulk density, cold crushing strength and retained carbon.

It may be mentioned that the LDBP collective of Rourkela Steel Plant have already supplied 305 tonnes of bricks to Bokaro Steel Plant worth about Rs. 2 crores only recently in the month of March this year. The present order from Durgapur Steel Plant has further added to their confidence. Now talks are underway for supply of bricks for Visvesvaraya Iron and Steel Plant at Bhadravati, another unit of SAIL in the near future.

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ABB, the leading power and automation technology group, announced today that it has won an order from Hazira Plate Ltd, part of India's Essar Group, to support construction of the largest plate mill in South Asia. ABB' scope of supply for the hot rolling mill includes plant design, dimensioning, supply and commissioning of low-voltage and medium-voltage motors and drive systems.

“With our knowledge of power and automation solutions we are helping Asian customers to achieve new levels of productivity and energy efficiency”, said Veli-Matti Reinikkala, head of ABB's Process Automation division. “By combining standard ABB products with specialized expertise and in-depth understanding of the very high demands in Rolling Mill application, we have gained a strong position in the market”, said Vice President Thomas Johansson, responsible for ABB's Center of Excellence (CoE) for Hot Rolling Mills based in Sweden.

The new Hazira hot rolling mill, scheduled to begin operation in early 2008, will be the largest of its type in India and the South Asia region. ABB orders for hot rolling mill applications in India have exceeded $25 million so far in 2006, thanks to the cooperation between the company's center of excellence in Sweden and its local organization in India. ABB (www.abb.com) is a leader in power and automation technologies that enable utility and industry customers to improve their performance while lowering environmental impact. The ABB Group of companies operates in around 100 countries and employs about 107,000 people.

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Domestic steelmakers saw their weekly output rise from the previous seven days, according to data released Monday by an industry group. Production among domestic steelmakers was about 2.06 million net tons for the week ended Sept. 9. That was up about 0.6 percent from the 2.05 million net tons produced for the week ending Sept. 2, according to the American Iron and Steel Institute.

Year to date production, as of Sept. 9, was 74.6 million net tons. In the Pittsburgh/Youngstown, Ohio, district, steel companies produced 189,000 net tons for the week ended Sept. 9, down from the 191,000 net tons the previous week, AISI data shows. AISI is a Washington, D.C.-based nonprofit association of North American companies involved in the iron and steel industry. The organization's data is based on reports from companies representing about 75 percent of the domestic industry's raw steel capacity.

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Indian steel giant TATA Steel is considering diversifying into pipe manufacturing for oil and gas segment, which is witnessing a boom in demand in India and overseas. It is also expanding its capacity in structural and precision tubes to make the most of the construction boom. Mr Vivek Kamra executive in charge of tubes on the sidelines of a conference organized by the Confederation of Indian Industry said “We are looking at financials for undertaking the manufacture of pipes for oil and gas. The proposal has not been finalized yet.” Mr Kamra said “In tubes we are focusing on three segments precision tubes, structural tubes and oil and gas tubes. In precision tubes we currently have capacity for 50,000 tonnes. TATA Steel, which will have a total capacity of 350,000 tonne in tubular products by end of 2006-07, will hike up its capacity to 0.5 million tonnes by 2008-09. The tubes business yielded a top line of Rs 1,020 crore for Tata Steel last year and is expected to go up to Rs 1,400 crore in the present year.

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Middle East attracts large investors

US-based offshore fabricator J Ray McDermott has reason to feel proud of its work in the Gulf. In the past 12 months, two of its Middle East subsidiaries, Jebel Ali-based J Ray McDermott (Middle East) and Al-Khobar-based McDermott (Arabia), created a little piece of history by winning several contracts totalling about $2,000 million giving it one of the biggest order books of any offshore contractor in the region.

McDermott made its mark by bagging contracts in both the world's single largest gas field Qatar's North field and the world's largest offshore oil field Safaniya in Saudi Arabia. Starting with the award of the offshore potential maintenance project in Saudi Arabia last August, McDermott signed the following month for the platforms and pipelines package to serve the integrated RasGas III project in Ras Laffan. “[Safaniya] is a significant contract and we are pleased to have the opportunity to further expand our strong working relationship with Saudi Aramco, which dates back to the 1960s,” said Bob Deason, president and chief operating officer of the parent company J Ray. McDermott is not the only contractor looking to expand in the region. “The Middle East is becoming increasingly important and we will look to engage ourselves in new projects,” says Jong Do Kim, business development director for the offshore and engineering division at Hyundai Heavy Industries Company (HHI).

“Our eyes are on Qatar, Saudi Arabia and the UAE, where we will look at bidding actively.” The statement represents a significant change in HHI's global strategy. Barring a few exceptions, the South Korean fabricator has stayed away from the Gulf. Its primary markets have been Nigeria, the Far East and the Gulf of Mexico. “The shallow waters in the Gulf do not allow us to be competitive. Our focus is predominantly on floating production facilities, which are ideally suited for deepwater developments,” says Kim. The average water depth in the Gulf is 10-50 metres. The raft of new offshore projects to be tendered over the coming few years has attracted the attention of not just the traditional players McDermott, HHI, Italy's Saipem and the UAE's National Petroleum Construction Company (NPCC) but some newcomers: Sime Darby Engineering and Ramunia Fabricators, both of Malaysia, the Egyptian duo of Engineering for the Petroleum & Process Industries (Enppi) and Petrojet, the US' Global Offshore and India's Larsen & Toubro. A few veterans, including Spain's Dragados, are also weighing up a return to the Gulf market.

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Steel imports from Japan increases

Japan reported total imports from UAE from January to April 2006 amounting to AED 38 billion, representing a growth of 65 percent over the corresponding value for the same period in 2005. Japan's imports from UAE had been primarily mineral products, consisting mainly of petroleum oil. From a share of 98.5 percent to the total imports in January to April 2005, the share of the product group increased to 99 percent in 2006. Japan's exports to UAE, on the other hand, remained well below the value of imports, reaching AED 7 billion for the first 4 months of 2006, leading to a 72 percent increase in trade deficit for Japan. Machinery, electrical and electronic products constituted the second largest group in terms of contribution to total exports, with export value of AD two billion, or 26 percent of the total.

Largest export growth of 110 percent was recorded for base metals and articles thereof, with export value increasing from AED 318 million to AED 668 million. Largest contributors to the group were construction materials of iron and steel. The UAE ranks fourth among the largest suppliers of Japan's imports, accounting for more than five percent of total imports of Japan. Largest supplier was China, with a share of more than 20 percent of the import market, followed by USA, with nearly 12 percent. While imports from Saudi Arabia and UAE were primarily petroleum oils and products thereof, top imports from China were automatic data processing machines, peripherals and parts. Top imports from USA were aircrafts and parts.

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Dar to study 115-km-long New Arabia oil pipeline

Saudi Arabia's Dar al-Riyadh has been awarded a six-month contract by Saudi Aramco to carry out a pre-front-end engineering and design (FEED) contract for the new Saudi Arabia-Bahrain crude pipeline project. Dar will be assisted by: JP Kenny, part of the UK's Wood Group, for the hydraulic study of the complete pipeline; Dhahran-based King Fahd University of Petroleum & Minerals (KFUPM) for the environmental impact assessment study; the local Jatco for the onshore survey; and Osaimi Engineering for the offshore survey, including a geotechnical study.

The 115-kilometre-long, 24-30-inch-diameter pipeline, will run from the Abqaiq processing facility in Saudi Arabia to Quarriyah and then offshore to Al-Jazayir beach and finally Sitra in Bahrain. Nearly 60 kilometres of the pipeline will be onshore, while the remaining 45 kilometres will be offshore. Called the New Arabia pipeline, it will have a design capacity of 350,000 barrels a day (b/d), with a provision to increase throughput to 450,000 b/d at a later stage. Crude feedstock will be sourced from the Abqaiq field. The project will serve future expansions of the Sitra refinery operated by Bahrain Petroleum Company (Bapco).

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Azarbaijan steel mill to produce 550,000 tons rebars in 2006

Azarbaijan steel mill (AZCO), is an Iranian state steel mill, located in the west north of Iran, 5km to the city of Miyaneh. Mill started production in 2001 with a production capacity of 550,000 metric tons per year (mt/y). According to the equipments which were supplied by Danieli, initial assumed potential for the mill is a production capacity of 275,000 mt/y for rebars, 110,000 mt/y for round bars, 55,000 mt/y for c channels, 55,000 mt/y for angles and 55,000 mt/y for flat bars while mill is taking total capacity of 550,000 mt/y, for rebars production at present. According to a research and analysis made by Middle East steel (MEsteel.com), Main reasons that mill is taking total capacity for rebars production are:

* Low local demand of the other products which are more profitable for the smaller private mills than big mills like AZCO
* Higher profits for the mill at present
* Shortage of the rolls and equipments which are needed to produce different sizes of long products other than rebars
* Try to decrease selling prices and aim to be able to export rebars to Afghanistan and Iraq which have become good markets for Iranian steel mills now
* Not to be able to compete to other local mill's selling prices like Esfahan steel for some of the products as such as channels.

Most of the equipments of the mill have been supplied by Danieli while some of the bending and counting Rebars - machines have been supplied by Sund-Birsta from Sweden.

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New melting shop in Miyane by 2010

New melting shop with a capacity of 730,000 metric tons a year (mt/y) will come up in Miyane by 2010. Following to the expansion and developing plans of the Iranian government in the steel industry, a new melting shop is expected to produce billets at Azarbaijan steel mill (AZCO) by 2010.

Azarbaijan steel mill has a production capacity of 550,000 mt/y and is consuming around 570,000 to 600,000 tons of billets in a year. The mill has imported 85% its consumption (billets) from Russia, Ukraine, Kazakhstan and the rest of 15% has been supplied by local Khouzestan Steel Mill. In the present scenario, the mill should still import its raw material (steel billets) from the international sources especially from the CIS billets producers till 2010 until which time the mill becomes self sustained and produce its own billets.

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Rebar price difference widens between Iranian and Intl market

Big difference has been occurred between Iranian steel rebars prices and International steel prices over the past days and apparently this can make a good opportunity for the local traders to get a valuable profit by converting their importing billets to rebars through Iranian steel mills. Current steel rebars price in Iranian market is 670 to 720 USD per ton, depending on the sizes range and grade (A1, A2, A3) while the price for Turkey's rebars is 530USD per ton, China is offering cheaper and billets from CIS market has been offered for USD 440, CNF, Anzali Port (Northern Port of Iran) over the past days. Theoretically only 55 to 65 USD per ton is the conversion fees to make rebars out of billets in Iranian market which some of the local mills charge the clients to convert their imported billets to the rebars and both sides get profits into this way. “We have to pay 4 % of the total amount of the importing billets as the import duty plus 3 % of the total amount of the importing billets as production tax as well as transportation fees from the port to the mill which is in fact different and depends on the destinations. “ ,manager of one Iranian steel mill said to MEsteel.com. Importing billets price (including costs) in addition to the conversion fees would not exceed 540 USD per ton while the current price for steel rebars in Iranian market is 670 to 720 USD per ton. UN discussions for privation of Iran against their nuclear plan and eventual sanction on Iran also is playing as an other major roll increasing demands for billets in Iranian market at present.

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United Gulf Steel to reach 380KT steel long products production this year

United Gulf Steel in Jubail, is expected to reach a total production of 370-380 KT steel beams, angles, rounds and channels this year. About 70% of their products are sold to Saudi, abt 25% to UAE and the remaining quantities are exported to Sudan, Jordan, and some other Middle Eastern countries.

In spite of recent strong competition from China, a.o. in angles, UGS sales have done very well this year, and production reaches close to full capacity. In IPEAA, one of the strong items of UGS, China has recently started to offer / export some lighter sizes to the Middle East, but traditional suppliers of for these light I beams, such as south Africa and Mittal Steel (Poland - Czech Republic) have been quasi absent in the M.E. area over the past 12 months.

Meanwhile, a planned expansion by UGS for production of DRI, billets and expansion of finished products capacity has till now not received approval from the Saudi government.

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Steelmaker IPSCO to buy NS Group for $1.49bn

Steelmaker Ipsco Inc. (IPS) has agreed to buy steel-tube maker NS Group Inc. (NSS) for about $1.49 billion, forming a larger company with a focus on the booming oil and natural-gas industries. Under the terms of the deal, Ipsco will pay $66 a share in cash, a 43% premium to the NS Group's closing share price Friday. NS Group shares jumped 40% to $64.60 in premarket trading Monday.

The companies put the purchase price at about $1.46 billion net of NS Group's cash on hand. NS Group shareholders must approve the deal, which is expected to close this year. Ipsco will finance the purchase with cash on hand and debt from a committed bank-credit line. NS Group, of Newport, Ky., makes steel tubes and pipes for the petroleum industry, where such products are needed to transport liquids through pipelines, around refineries, and through local storage depots. The deal would increase Ipsco's production capacity to about 4.5 million tons a year, up from about 3.5 million tons at present, and would bring together two firms with combined revenue of about $4 billion. The deal could help Ipsco gain market share in and around North America. Ipsco said the transaction will add to its earnings per share in 2007 and will lead to $50 million in annual savings within three years. Ipsco, of Lisle, Ill., produces steel plate as well as steel tubing, and has become one of North America's most profitable steelmakers. Ipsco has enjoyed record revenue and profit of late, reporting $3.03 billion in sales and $585.8 million in net income last year.

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Baosteel seeks to buy, hold stakes in zinc smelters

Baoshan Iron & Steel Co., China's largest steelmaker by output, is seeking to acquire or at least hold stakes in domestic zinc smelters to help meet its growing demand for zinc amid a volatile market, a company official said. "We're considering to buy smelters whose own mining resources make up at least 50% of its total raw material usage, and with annual production capacity reaching 50,000 tons," the official, who declined to be named, said recently. The official didn't say whether the company is already targeting specific smelters. He also didn't indicate whether the listed company or its parent, Shanghai Baosteel Group Corp., will undertake the acquisition.

“Our demand (for zinc) is expected to grow steadily in the next few years, and it's important to secure the raw material supply amid volatile prices," the official said. Baosteel's production of galvanized sheet accounts for one-tenth of the country's total output, according to the official. Galvanized steel, which is coated with zinc, is widely used in automotive manufacturing. Shanghai Baosteel Group Corp., Baosteel's parent, raised its stake in Jinchuan Group Ltd. to 10% earlier this year to ensure the supply of nickel, which is used in stainless steel production. Jinchuan's nickel production accounts for 90% of the country's total output.

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Nippon Steel chief hopes to deepen ties with Posco

Nippon Steel Corp. President Akio Mimura indicated that the company intends to expand its partnership with South Korean steelmaker Posco (PKX), reports said. "It's true that we're working hard to deepen" the relationship, he told reporters. It was reported earlier this week that Nippon Steel, the world's second-largest steelmaker, and Posco, the No. 3 producer, are considering expanding their capital and business ties.

The firms had formed a partnership in 2000, which includes holding each other's shares and exchanging technologies. A mutual-supply setup for semi-finished products called slabs would provide big cost savings by allowing them to keep smaller stockpiles when facilities are shut down for maintenance, according to Mimura. The steelmakers are believed to be discussing cooperation in other areas as well, such as co-developing mines. Nippon Steel currently has a stake of slightly more than 3% in Posco, while the latter owns just over 2% of the former's stock. Mimura indicated that raising these stakes would be weighed after the partners study what benefits they can reap from an operational alliance. Mimura added that he hopes to enter talks soon with Mittal Steel Co. (MT) of the Netherlands, the world's largest steelmaker, on expanding joint operations in North America.

Nippon Steel, which has been running with Mittal an automotive steel sheet joint venture in North America, has been looking into expanding this project for the past two years. But expansion plans were suspended when Mittal announced in January that it will make a hostile takeover bid for Arcelor SA of Luxembourg, with which the Japanese firm has a comprehensive partnership deal.

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Big River zinc plant to run only on steel waste for now

A global shortage of zinc concentrate expected through 2008 will see the Big River Zinc smelter in the U.S. rely only on recycling steel waste as feedstock for the foreseeable future , ZincOx Resources Plc Chairman Andrew Woollett said. It plans to produce an initial 30,000 metric tons of zinc metal per year when the plant restarts in the fourth quarter of 2007. The smelter has a total capacity of 100,000 tons. But it's not clear, given the shortage, when output can reach 100,000 tons.

A severe zinc-concentrate shortage over the past two years forced the closure of Big River Zinc in 2005 and led to output reductions at other smelters. But advances in technology are making plants like Big River viable. ZinOx will start output at the smelter by installing technology that recycles zinc from steel mill waste from U.S. steel mills, known as electric arc furnace dust (EAFD). "Unless treatment charges become more attractive, it'll be difficult to source concentrate," Woollett said. Zinc from steel mill waste produces equally good metal. ZincOx currently has access to 240,000 tons of EAFD, enough to produce 30,000 tons of zinc per year. Zinc traded on the London Metal Exchange hit a record $4,000/ton in May this year and traded at $3,715/ton recently.

Slow new-mine supply and falling global inventories are expected to keep the market for concentrates tight into 2007, while demand from China will likely keep prices above historical levels in the longer-term, analysts say. "Once supply in the concentrate market improves we could start producing from concentrates again," Woollett said. Big River Zinc used to rely on feedstock from mines in its home state of Tennessee. But those closed during the zinc price depression of 2001-2003. ZinOx is working to secure further supplies of EAFD, aiming to start up two further recycling plants by 2008 alongside Big River Zinc and its EAFD recycler in Aliaga, Turkey, where production will start in 2007, Woollett said.

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China Sinosteel mulls steel, engineering invest In India

China's Sinosteel has evinced interest in investing in the steel and engineering sectors in the eastern Indian state of Orissa, a senior state government official said. "We will seriously support them," said L.N.Gupta, Secretary (Mines & Steel), Orissa government said at a steel industry conference, without elaborating. Gupta said that the state government will try to approve Sinosteel's proposal through a "single window clearance." "Single window clearance" usually means a simplified process to apply for approvals from different government departments. He said that Orissa has iron ore reserves of 5.4 billion metric tons, about 31% of India's total iron ore reserves, making the state an attractive investment destination. The Orissa government is committed to supporting projects that involve value addition to the state's economy, Gupta said. If Sinosteel goes ahead with the investment, it will join South Korea's Posco, which has started preliminary work to build a $12 billion plant that can produce 12 million metric tons of steel a year in the state.

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Russia's Magnitogorsk Jan-Aug steel output up 9.3%

Russia's largest steel smelter, the Magnitogorsk Iron & Steel Works produced 8.096 million metric tons of steel in January to August, an increase of 9.3% compared with the corresponding period last year, the company announced. Magnitogorsk's steel roll output by increased by 11.2% to 7.479 million tons, iron output increased by 5.7% to 6.608 million tons. Magnitogorsk exported 47% of its output in January-August, compared with 51.6% in January-July, due to increased domestic sales. This year the smelter plans to produce 10.6 million tons of steel. The smelter is carrying out a five-year $2.6 billion investment program that started last year, with the target of 13.5 million tons of steel and over 12 million tons of steel products a year to be reached by 2013.

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SAIL, RINL exploring technological tie-ups with Corus

Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd are exploring technological tie-ups for their combined modernisation and expansion programme. The steel delegation now touring London and Luxembourg led by Union steel minister Ram Vilas Paswan held discussions on a possible technological tie-up.

S K Roongta, chairman SAIL and Y S Sagar Rao, chairman and managing director RINL are also part of the delegation. The delegation visited Ijmuiden plant of Corus Steel, supposed to be one of the best in the world with blast furnace productivity. According to sources close to development, discussions on tie-up were held with Corus Consultancy and Danieli Corus. Jatinder Mehra, managing director, Essar Steel, T Mukherjee, deputy managing director (steel) Tata Steel were part of the delegation.

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Stainless steelmakers increase prices rise as nickel demand surge ever high

Manufacturers are raising the prices of stainless steel because the price of nickel, used in the production process, is increasing sharply. Global demand for stainless steel is growing on the basis of strong sales of end products. Some speculative funds have also flowed into nickel trading, industry officials said. The spot price for nickel on the London Metal Exchange, which is an international benchmark, has risen above $30,000 per ton, compared with less than $6,000 in early 2002.

Aichi Steel Corp., an affiliate of Toyota Motor Corp. based in Tokai, Aichi Prefecture, announced that it will raise by 15 percent the prices of stainless steel products used in computer chips and chemical plants. The increase, which will apply from shipments in November, will be the third this year. The three price increases will total about 40 percent. The prices will be raised from shipments in October. The special steel maker has already raised prices twice this year, but it says that it is unable to absorb rising costs. The company will also increase by about 10 percent from October the prices of tools used for production of die and molds for automobiles.

In anticipation of further increases of nickel prices, the company has established a study group to consider the introduction of a system that would link product prices to nickel prices. Demand for stainless steel, which does not rust as easily as steel, is increasing in China, the Middle East, Russia and other places, where corporate investment is increasing for energy facilities and desalination plants, where operators want to prevent corrosion. Nickel production is not keeping up with demand partly because of strikes and accidents at mines.

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During the first six months of 2006 TMK shipped about 700.000 tons of oil and gas pipes to customers globally. 30 percent of these drilling, casing and oil well pipes were exported. Compared to the same period of the previous year oil well tubing and casing piping supplies to Russian oil and gas companies grew by 51.6%, drilling pipes supply rose by13.5%.

The share of new high-technological pipes in the total volume of shipped drilling pipes amounted to circa 60%. In general, supply of high-strength drilling pipes increased by 15%. The overall growth in volume of pipe shipment to oil & gas companies is up 26% on last year. Improvement of quality and enlargement of the range of seamless pipes for the oil &gas industry has become possible with highly hermetical close-coupled thread connections for casing pipes TMK-GF, TMK-FM, TMK-FMC, TMK-TTL-01, TMK-CS, TMK-1, as well as the new highly hermetical connection for oilwell tubing TMK-FMT.

They Signed a long-term supply contract with the oil company Salym Petroleum Development N.V., and started a programme of scientific and technical cooperation with Gazprom (effective until 2009).

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The new chief executive officer of South Africa's Mittal Steel SA, a unit of top global steel maker Mittal Steel, said on Monday he expects output by the company to rise modestly in the third quarter. Enrico Mario Reato, who took up his new role on Friday as the head of Africa's biggest steel maker, also said he expected third quarter earnings to be strong, provided the rand does not strengthen significantly.

He forecast’s steady international and local steel prices until December. "My focus at this point would be to meet local demand, which we are not meeting fully," he told Reuters in an interview. Production problems during the first half to end-June reduced liquid steel output at its Vanderbijlpark plant and Saldanha plants by 6 percent and 7 percent respectively.

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Siemens Strip cooling model to be used in hot-strip rolling mill of ThyssenKrupp

New process automation for modern steel grades - Strip cooling model from Siemens to be utilized in hot-strip rolling mill of ThyssenKrupp Siemens is to equip hot-strip rolling mill No. II of ThyssenKrupp Steel AG in Duisburg-Beeckerwerth with a new process and basic automation. The heart of the automation solution is a strip cooling model enabling precise control of the phase transitions during cooling of hot-rolled strip steel.

The hot strip mill No. II of Thyssen Krupp Steel in Duisburg-Beeckerwerth is one of the most productive worldwide, producing 5.4 million metric tons a year. As part of the modernization, Siemens is supplying new process and basic automation systems for the laminar cooling section of the hot strip mill. The heart of the automation solution is a strip cooling model which is based on a physical description of the thermodynamic processes during cooling. The strip cooling process can thus be controlled along the line and not only the coiler temperature as is the case with other methods. The new automation solution will be installed without any interruption of ongoing plant operations. The final commissioning procedure will be carried out without any interference in the production process.

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BlueScope Steel is set to expand its New Zealand steel output despite having splashed out around $320 million to ensure it had say in the Australian steel industry's rationalisation plans. The plans for NZ, yet to be confirmed, would add another significant capital expenditure program onto BlueScope's balance sheet as it pushes ahead with several expansion plans across Asia. In the aftermath of BlueScope's surprise sharemarket raid on Thursday, Smorgon Steel's shares dropped of 7¢ to $1.70 - 6¢ below OneSteel's proposed takeover offer.

This indicated that some investors believe the BlueScope intervention may kill off the OneSteel proposal completely. This would be bad news for BlueScope as it would be left with a large stake in a long products company, a hefty loss on that investment and none of the assets it covets. The damage would not be too bad if Smorgon's price stayed at $1.70 a share, but if Smorgon shares returned to their pre-bid level $1.30, BlueScope's losses could mount to $80 million or more, with little prospect of finding a keen buyer.

Smorgon Steel shares led the whole steel sector down yesterday, although the other falls were negligible. BlueScope eased 3¢ to $6.79 and OneSteel lost 1¢ to $3.99.Analysts were certain BlueScope wanted to buy some competitive distribution assets, not just offcuts that might be assembled for a sale. But opinions were divided as to whether BlueScope had larger plans. BlueScope need to protect annual sales of about 500,000 tonnes of hot rolled coil to Smorgon each year, while simultaneously preventing OneSteel from becoming an even more powerful BlueScope customer than it already is.

There was also speculation BlueScope may be interested in acquiring long-term supplies of iron ore from OneSteel's South Australian mines, giving BlueScope some security of supply in a tight world market. OneSteel is planning to sell 3 million tonnes of hematite ore a year through BHP Billiton after its Project Magnet is completed. Where BlueScope has its own iron ore supplies in New Zealand, the company is close to committing $NZ300 million ($A250 million) to expand its Glenbrook steelworks from 625,000 tonnes to 805,000 tonnes, according to NZ research company Covec Ltd. A second stage would add a further 180,000 tonnes a year, Covec said, at a cost of $A208 million.

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Japan's steel exports increased 11.1 pct from a year before to 3,376,000 tons, rising for the second consecutive month, the Japan Iron and Steel Federation said Wednesday. The value of overall exports grew 3.3 pct to 2,860 million dollars, the first increase in three moths. In yen terms, exports were up 7.9 pct at 322.4 billion yen, the 31st consecutive month of growth.

Shipments to South Korea rose 18.6 pct to 891,000 tons, while those to China climbed only 0.1 pct to 573,000 tons. Taiwan bound shipments rose 4.4 pct to 339,000 tons. Exports to the United States jumped 69.8 pct to 222,000 tons, but those to Thailand dropped 22.7 pct to 326,000 tons.

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Shareholders of Kinsteel Bhd (Kinsteel) have approved the company's proposed strategic alliance with Maju Holdings Sdn Bhd (Maju) from whom it is acquiring a 51 percent equity in Perwaja Steel Sdn Bhd (Perwaja Steel). They also gave approval for Kinsteel's acquisition of Gurun Plants at an extraordinary general meeting held in Kuantan today.

In a statement here today, Kinsteel said the alliance will enable Kinsteel to be a fully integrated steel player. It said the group's annual production capacity will increase from 800,000 tonnes to combined total of 4.6 million tones. “Kinsteel's product range will also expand to include Direct Reduced Iron (DRI), billets produced by Perwaja Steel, beam and sections, bar and wire rods, wire mesh and nails by Gurun Plants,” it said.

Meanwhile Kinsteel also plans to expand its export market base in Southeast Asia for wire rods, beams and sections. “I am pleased to have the support of the shareholders because the acquisition of Perwaja Steel and Gurun Plants is a reflection of Kinsteel's desire to move up the value chain and provide higher value-added products to our customers,” said Kinsteel's group managing director, Pheng Yin Huah. The strategic alliance is expected to enhance earnings to shareholders, Pheng said. The Securities Commission (SC) recently approved the Perwaja Steel acquisition and Gurun Plants, through Perfect Channel Sdn Bhd, for a combined value of RM297.6 million.

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BRC Asia Limited, which is listed on the Singapore stock exchange, saw a 5.7 percent fall in pre-tax profit in the first half of 2006 after a decline in prices, according to a statement submitted to the Alternative Investment Market (AIM) in London.

The rebar fabricator and mesh maker, which is 73.3 percent owned by AIM listed Acertec Plc, made S$4.8 million ($3.5 million) in the first half of 2006, compared with S$5.1 million in the same period last year. Despite an increase in sales of 18.3 percent to reach S$44.5 million, the company came under pressure from aggressive competition in the local market and falling sales prices. “Gross margins fell from 14 percent to 11 percent as selling prices fell more than the reduction in steel prices because of competition and the volatility of regional steel prices,” it said in the issuance.

But the company said its outlook is positive, given that the construction sector declined at a slower rate of 0.3 percent in the second quarter compared with the 0.8 percent decline in the previous quarter. In 2005, the sector declined by 1.1 percent, the company said. “The buoyant state of the company (and) the strong recovery of the real estate sector are expected to give a boost to the construction industry,” BRC Asia said in a statement. “We will continue to develop our Total Prefabricated Reinforcing Solutions business to capitalize on this recovery.” The fabricator also identified market potential after the exit of two smaller competing mesh makers, which had an approximate market share of 20 percent, in the second quarter of 2006.

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China announced another record trade surplus on Thursday, even as tensions between China and many of its trading partners have cooled somewhat. Chinese exports exceeded imports by $14.61 billion in July, topping the previous record of $14.5 billion, set in June. Exports grew at a slightly slower pace in July, a possible sign of cooling demand in the United States and other Western markets. But exports still rose faster than imports, and many specialists are predicting that the trade surplus could widen further if the Chinese government is successful in efforts to ratchet down economic growth to forestall inflation.

“If they're successful in slowing down the economy through all these measures they've announced, the risks are on the upside because imports would slow,” Nicholas R. Lardy, a senior fellow at the Institute for International Economics in Washington, said. The data released by China's customs administration was a snapshot of overall trade, and did not include a breakdown by country. But the United States has accounted for more of the surplus than any other country, and is expected to continue doing so. Trade tensions have nonetheless lessened considerably. Congress is out of session for most of the rest of the year because of midterm elections ; the American economy is still growing fairly strongly ; Treasury Secretary Henry M. Paulson Jr. has taken a less confrontational approach to China ; and the European Union and Japan have been reluctant to take the lead in addressing China's trade surpluses.

Producer prices were 3.6 percent higher in July than a year earlier, compared with a 3.5 percent increase reported in June, the Chinese government also announced on Thursday. High prices for oil, copper and other raw materials are raising costs for Chinese companies. But massive investments in new factories, especially steel mills, are producing a glut of output in some sectors that has held down inflation in consumer prices, while fueling exports. Chinese steel exports rose 39.5 percent in the first seven months of this year compared with the same period last year, while Chinese steel imports fell 25.5 percent as more companies in China relied on local suppliers.

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Chinese steel exports in June at 5.2m tonnes were equivalent to 14% of crude production compared with 6% in January 2006, according to figure from London based Iron & Steel Statistics Bureau (ISSB). The average for 2005 was around 7%.

Export volumes have risen steadily during the January to June period from 1.9m tonnes in January to over 5m tonnes in June, a record. The July export number was down to 4.4mt, as previously reported, putting the month's exports at just over 12% of crude steel production, based on preliminary data, SBB calculates.

For the first six months of this year semis exports were 3.1mt, long product exports were 5.6mt, flat product exports were 7.9mt and tube exports were 2.3mt, according to ISSB data.While over 60% of Chinese exports in the first six months went to nearby Asian markets, the proportion going to North America and Europe gained ground. For example, says Steve Mackrell of ISSB, in June 2006 some 800,000t of steel mill products went to the EU-25, and nearly 600,000t to the USA.

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