Platts Daily Briefing, Global Edition 
Tuesday, 17 June 08 
John Smith, status: Subscriber 
Subscription ends: 10 Apr 2009 
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Exchange rates
17 Jun 2008
currency rate  change
GBP/USD  1.9635  +0.0182
EUR/USD  1.5459  +0.0123
EUR/GBP  0.7873  -0.0010
EUR/JPY  167.2600  +1.2100
GBP/JPY  212.4480  +1.8180
USD/JPY  108.1960  -0.0790
SBB Prices & Indexes
World price change
World HRC $/t 1099 +29
World Rebar $/t 1074 +44
SBB World 383 +17
Europe Flat 230 +11
Europe Long 335 +14
Asia Flat 347 +25
Asia Long 529 +38
N.America Flat 325 +4
N.America Long 330 +13
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Firm global market trends to continue, say mills
Steel producers, consulted by Steel Business Briefing, believe global markets will remain strong, and in deficit in the second half of this year.

Even firmer prices are likely from September onwards, they say. Indeed, by the end of the year, there are forecasts - from some - that hot coil prices could increase to €800/t in Europe, and $1,200/s.t in the USA.

Others are not so sure. They say there are signs that the North American market is already slowing. This view is echoed by some local traders, and by The Steel Index, SBB’s reference price service (see separate article).

The bullish mill executives note the low level of US imports, the steady inventory levels and the high level of exports from the USA. While they accept that there is usually a summer lull in demand from the automotive sector, an ArcelorMittal executive mentioned that Dofasco is raising its August price by $30/s.t.

In Europe, the producers say the market continues to be strong, both north and south of the Alps, and that some buyers are not getting their full allocations. Prices are somewhat higher in the south, as reported in SBB. At present, most HRC is being sold in the range $700-750/t, one claims, and for September, this could rise substantially.

Meanwhile, the move to apply surcharges to contract buyers is having a mixed reception. Many are accepting it in one form or another, but this seems to depend on how easily they can pass it on, another executive commented.
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US coil prices ease down, European prices stronger
The latest prices from The Steel Index show that all US coil prices have slipped downwards during the past week. The southern European coil prices have all risen strongly again, while northern European prices are also firmer. The US HR coil reference price is $16/short ton lower at $1064/s.ton ($1173/tonne), while CRC also slipped down by $15/s.ton. The HDGalvanised coil reference price is also lower at $1214/s.ton ($1338/t). US uncoated coil delivery lead-times are slightly shorter than last week, with average HRC deliveries down to 6.1 weeks.

However, in southern Europe, the CRC ex-works price was up by €13/t to €826/t ($1,267/t), while both the other coil prices rose by even more. All lead-times are shorter than last week.

The northern Europe HRC ex-works reference price is just higher at €705/tonne ($1081/t), while the HDG price rose strongly to €840/t ($1,288/t). All lead-times are shorter than last week.

The Turkish domestic HRC reference price, ex-works, has risen to $1160/tonne. For Chinese exports to Europe and North America, the HRC reference price rose by $36/t to $1036/t fob stowed Chinese port while the CRC price is also sharply higher at $1190/t. The average delivery lead-time for CR coil is slightly longer at 13 weeks.

The Steel Index - which is owned by Steel Business Briefing - is now also collecting data for Turkish import and export prices. Companies wishing to submit data or to receive the full set of reference prices every week can apply on the website
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Plate prices continue to advance in SE Asia
Ship building plate prices have risen in south east Asia. Ship plate from China has been booked in south east Asia at $1,300-1,330/tonne cfr and Japanese origin ship plate at $1,360-1,370/t cfr recently. Ship plates were offered at $1,200-1,250/t levels two months ago.

"Chinese ship plates are now offered at $1,350-1,360/t cfr which is workable today," a trader in Hong Kong tells Steel Business Briefing. Indonesian origin ship plate was transacted recently at $1,385/t cfr Singapore and traders explain that the higher price reflects the fact that the deal includes thinner gauge material which is not being offered from China.

However, some traders in Singapore say that the ship plate market may be softening. "The market has cooled down in the past week, buyers are not so keen to book at higher prices," a local trader says. But he adds: "It is not easy for prices to come down because of higher costs of freight and raw materials including slab."

Commercial plate sales are being offered at around $1,150-1,250/t cfr but demand for commercial plate is weaker than that for ship plate, SBB is told.
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China crude steel output hits record high in May
China’s crude steel production hit a record high of 46.01m tonnes in May, a jump of 10.5% year-on-year and up by 3% on April, Steel Business Briefing learns from China’s National Bureau of Statistics.

China’s exports of finished steel hit 5.56m tonnes in May, topping the 5m t level for the first time since August 2007, as SBB has previously reported.

Domestic steel prices in May increased by about 7-10%. The robust market demand and high steel prices stimulated production in May, SBB believes.

The year-to-date crude steel production total rests at 216m t, up by 9.4% on the same 2007 period.
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CIS pig iron at $1,000/t fob is in sight
Prices of CIS pig iron for export have risen again on the back of tight global supply, and are now over $900/tonne (€587/t) fob Black Sea ports, traders tell Steel Business Briefing. While one source is unsure whether prices will go as high as $1,000/t fob, a Ukrainian trader believes they will arrive there soon, and another source indicates that they are at this level already for August production and September shipment.

Russia’s main pig iron producer is said to be booked up to and including July production, August shipment, or even to end of August production, and is out of the market at the moment. A smaller Russian player is discussing sales of July production already at the $1,000/t fob figure.

The tight supply situation is attributed in part to constraints in the supply of pig iron from Brazil and India and greater use of Russian pig iron domestically. As reported by SBB, Indian pig iron is now subject to an export duty, and Brazilian pig iron producers are suffering a shortage of charcoal. Brazil is sold out up until the fourth quarter, a Ukrainian source notes.. The CIS is the only major supplier left in the market, and its volumes are limited, the source adds.
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ArcelorMittal pays $869m to raise its stake in Erdemir
ArcelorMittal has increased its share in Turkish flat producer Erdemir to 24.989%, the company announced in a statement sent to the Istanbul stock exchange.

The world’s largest steelmaker already owned 13.68% of Erdemir. It has now paid $869m to take this to just below 25%, Steel Business Briefing learns from the stock exchange.

The company states: “We are pleased to be making this strategic investment in Erdemir, which we see as a very attractive company in a rapidly growing economy with excellent prospects for further growth.”

Analysts tell SBB that ArcelorMittal could ask for the right to have a representative on the executive board of Erdemir, and this might raise anti-trust issues. ArcelorMittal already has a joint venture cold rolling and galvanising operation with Turkey’s Borusan, and is planning to build a new hot strip mill in Turkey which would compete directly with Erdemir.

But the company tells SBB it has no plans to seek board representation.

ArcelorMittal's move to buy Erdemir shares is interpreted as an indication that the company sees the Turkish economy strong and this is also considered to be positive for Erdemir.

Some 51% of Erdemir’s shares are owned by Ataer, Oyak Group.
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ArcelorMittal buying Bayou Steel of the US
ArcelorMittal is buying Bayou Steel of the US, a structural steel producer with onsite scrap processing capabilities, for $475m. The deal is subject to regulatory approval.

"This acquisition further strengthens our long product portfolio, customer base and distribution network in North America. We look forward to … capture the synergies generated by integrating these operations," ArcelorMittal Long Carbon North America CEO Jos Jacqué says.

Bayou has two locations and shipped 510,000 short tons last year. The Louisiana facility produces billets, equal leg angles, unequal leg angles, flats, channels, standard beams and wide flange beams. Its Tennessee rolling mill produces merchant bar shapes, including angles, channels, flats, rounds and squares, as well as rebar.

The Louisiana facility also operates Mississippi River Recycling, a full service scrap processing division with auto shredding capabilities. Bayou generated $331m in sales last year and employs more than 600, Steel Business Briefing notes.

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Pakistan Steel to triple its capacity by 2012
State-owned Pakistan Steel is planning to reach 3m tonnes/year capacity by 2012. The company’s existing capacity is 1m t/y. Steel Business Briefing is told by a company executive that the first phase of expansion, which will bring the company to 1.3m t/y capacity, is planned to be completed next year. Existing production facilities will be expanded and upgraded.

Pakistan Steel will reach 1.5m t/y as the second phase of expansion is completed in 2010. Some new plants including an oxygen plant will be constructed, SBB is told.

A proposal to reach 3mt/y by 2012 was made at the company’s meeting last week. $150-200m will be invested for the expansion plans, all of which will be financed by the company’s own resources, the executive told SBB.

Pakistan Steel produces billets, slabs, flat rolled products as well as refractories, ingots and coke; and is the only integrated steel mill in Pakistan.
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Tianjin Steel adds new wire rod mill
Tianjin Iron & Steel (Group), based in northern China, is adding a wire rod mill at its new plant in Dongli district that will start operating by the end of 2008, Steel Business Briefing learns from the company.

With a capacity of 800,000 tonnes/year, the new mill will be able to produce rods with diameters of 5.5-20mm. Equipment will be supplied by Morgan Construction of the US. A company source tells SBB the new mill will produce high-end product, such as 82B grade rod for use in tyre cord.

The steelmaker operates another wire rod mill in Tianjin’s Hedong district, with a capacity of around 650,000 t/y. This mill also produces 82B grade wire rods, targeting the export market. When the new Morgan facility is brought on-stream, Tianjin Steel plans to relocate the old mill to Dongli district.

SBB has reported that two 110t EAFs will be built to provide feeds for the new mills, though construction has yet to start because more land needs to be secured. The company already has an upstream capacity of 4m t/y and plans to increase this to 10m t/y.

Tianjin Iron & Steel Co also produces rebar and plates. Previously wholly-owned by Tianjin Tiangang Group, a restructuring agreement signed on 12 June leaves the steelmaker 48.5% held by Tiangang, 47.5% owned by Fosun Technology (Tianjin), and the remaining 4% by Tianjin Aoxin Investment.
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Qinggang delays building start on first plate mill
Qingdao Iron & Steel (Qinggang), based in Shandong province, has delayed construction of its first plate mill because it has yet to secure the necessary land, Steel Business Briefing learns.

When it is eventually completed the 4,800mm wide plate mill will have a capacity of 2m tonnes/year. Output from the mill will target the booming ship building industry in the Qingdao area, says an official with the company.

This mill, when it starts, will be Qinggang’s first foray into plate manufacturing. Construction was originally scheduled to start at the end of 2007 with the mill to come on-stream by the end of 2008. However, as more time is needed for securing the land, construction may have to be delayed until the end of 2008, SBB learns.

Currently, Qinggang is a longs producer with a crude steel capacity of 4m t/y, which will be boosted to 6m t/y by adding more upstream facilities to feed the planned plate mill.

Qinggang is also planning to expand crude steel capacity to about 10m t/y in the future, but no timetable is yet known.
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Essar upgrades DRI charging at Hazira works
India’s Essar Steel is to install a new hot charging system for direct reduced iron at its Hazira steelworks in Gujarat.

The works currently operates five DR modules located at a distance from the steel mill. The total production of these modules is 5.5m tonnes/year.

The pneumatic transport system, supplied by Tenova, is designed for charging the furnace from hot DRI containers, brought in on trucks at ground level – as opposed to the current time and energy intensive method of transporting the DRI on trucks, hoisting it above the EAF and unloading it into the furnace.

Furnace loading will be faster and simpler, with lower loss of temperature and greater overall efficiency, Tenova says in a statement sent to Steel Business Briefing.
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Wisco's long rails get rail ministry approval
Wuhan Iron & Steel (Wisco), based in central China’s Hubei province, has gained approval for its 100-metre rails to be used in domestic railways networks, Steel Business Briefing learns from the company. The approval was issued jointly by the Ministry of Railways, the China Iron & Steel Association and other railway institutes.

Wisco has become the fourth Chinese mill capable of producing rails to a length of 100 metres, following Panzhihua Iron & Steel, Baotou Iron & Steel and Anshan Iron & Steel. In 2008, 100-metre rails are reported to have accounted for over 50% of the rail ministry’s demand of about 1.68m tonnes of rails.

In March, Wisco re-started a 1.05m tonnes/year universal rolling mill, converted from an old sections mill, to produce the long rails. The new mill expects to produce some 450,000-550,000 t/y when it reaches full capacity. This year’s target is 300,000 t though a company source suggests this might be too high to meet since the newly-commissioned mill requires frequent adjustments before it can run smoothly.

Some 100,000 t is required to supply the Ministry of Railways, SBB learns. Wisco has already started deliveries for ministry projects but is yet to secure orders for long rails.

Remaining output from the mill will include H-beams, I-beams and channels, as SBB has reported.
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JFE Steel lifts H-beam prices again
JFE Steel is adding ¥2,000/tonne ($18.48/t) to its domestic H-beam prices for ‘miseuri’ or spot sales for June contracts, July roll. The rise makes for the company’s fifth consecutive monthly increase, with the total since February becoming ¥37,000/t ($342/t), Steel Business Briefing learns.

JFE’s pricing policy for H-beams is in contrast with those of its counterparts. For example, Nippon Steel last month announced that it would be keeping its May and June contract prices unchanged, as SBB reported. The company has lifted its H-beam prices by ¥30,000/t so far this year.

Moreover, Sumikin Steel told its customers last Friday that it too would be holding its H-beam price this month due to low demand and rising distributor stocks.

JFE refused to comment about the reasons for its decision to hike prices though possibly the company is eyeing market leader Tokyo Steel Manufacturing and the hefty rises it has introduced this year.

Tokyo Steel lifted its H-beam prices for June by ¥5,000/t, as SBB reported, to take its total rise margin so far this year to ¥48,000/t. Tokyo Steel is expected to announce its July contract prices within this week, SBB hears.
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MMK expects Russian sales to grow by 1m t/y by 2013
Magnitogorsk Iron & Steel Works (MMK) expects to deliver over 8m tonnes of steel to its domestic customers this year. This is a significant rise compared to 2007, when domestic shipments totalled 7.3m t, and compared to 2006, when the figure was roughly 6m t, the Russian company tells Steel Business Briefing.

The dynamic growth in Russian demand for finished steel is enabling MMK to increase domestic sales by very roughly 1m t each year, adds MMK. For the period of 2005 to 2007 alone, during which MMK’s over all output grew by 20%, domestic sales jumped by 47%, the company says.

By 2013, MMK’s finished output should rise to 15m t, of which 12m t is likely to be sold at home, says Boris Dubrovsky, executive director for sales. For 2008, MMK notes that its overall production should increase to 13m t, compared to last year’s 12.2m t.

Last year’s domestic sales were split roughly 70% to end-user customers, and 30% to regional distributors, says MMK. The key buyers include pipe producers, plantmaking and engineering, automotive and the building industries.
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Germany’s BSW to invest €270m in upgrades & expansion
Germany’s Badische Stahlwerke (BSW) will invest at least €270m ($418m) in upgrades and capacity expansion over the next seven to eight years, company executives said yesterday (16 June). They were speaking at the Third International Mini-Mill Symposium, organised by BSW’s sister company Badische Stahl Engineering (BSE), and attended by Steel Business Briefing.

Rebar and wire rod producer BSW plans to increase finished output from 2.1m tonnes/year currently to 2.8m t/y. It will completely replace production line No 1, comprising electric arc furnace (EAF) No 1, a ladle furnace and continuous billet caster, and it will revamp EAF No 2.

To minimise disruption, the work will be conducted during extended, five- to six-week Christmas shutdowns over the investment period. The capacity per melt of both EAFs will be increased from 93 tonnes to 120 t, although initially they will produce 100 t per melt.

BSW will also replace a reheating furnace, modernise its two rolling mills and improve its scrap yard logistics. Its sister, BSE, will be closely involved in realising the upgrade programme.

Demand for construction steel is becoming less in Germany, BSW’s executives acknowledged, citing per capita consumption of construction steel of 45kg in Germany compared to 125kg in Greece. Focusing on strong customer service and direct distribution to end users, BSW intends to grow sales in fellow European countries, particularly those where there is a certain dependency on a single supplier.
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UK user group warns of steel price and availability problems
As steel price hikes begin to bite even more firmly in the UK steel user sectors, the British Electrotechnical & Allied Manufacturers Association (BEAMA) has warned its member companies to expect more of the same in the rest of 2008.

In a statement sent to Steel Business Briefing BEAMA says: “the implications [of the price increases] for contractors and manufacturers are serious”. It continued: “The problem is not just price - some stockholders have allowed stocks to diminish, worried by the financial risk of replacing them at current prices - this has an impact on availability.”

According to the association, prices for some grades and configurations of finished steel stock have doubled in recent months, and this is seriously affecting the companies in BEAMA’s steel product group which encompasses makers of metal cable management systems including tray and ladder, support systems, and trunking.

The latest data from the UK’s Chartered Institute of Purchasing & Supply indicated that a near three-year period of sustained expansion in UK manufacturing production ended during May, following a further decline in incoming new orders and increasing input cost pressures.
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Danieli to build new galvanising line at Eisenhüttenstadt
The construction of the new hot-dip galvanising line at ArcelorMittal’s works in Eisenhüttenstadt will be carried out by Danieli Wean United, Steel Business Briefing hears from the two companies.

The line will be designed to process 500,000 tonnes/year of cold rolled material grades, with gauges from 0.5 to 2mm and widths from 800 to 1650mm, Danieli says. The line entry is designed to process coils over 34 t. Apart from Danieli as main contractor, the construction also involves Ebner as supplier of reheating facilities, a spokesman of the works says. Following 22 months of construction, the line is projected to commence operation at the end of 2009.

It will be Eisenhüttenstadt’s third HDG line, bringing up the works’ HDG capacity to 1.5m tonnes. Eisenhüttenstadt will thus have the largest galvanising capacity amongst ArcelorMittal’s European sites.

The unit in 2007 achieved sales of €1.3 billion, with some 2,700 employees.
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Arvedi says new production facility will grow product range
Italian steelmaker Acciaierie Arvedi’s new endless strip production (ESP) will supply products with a wider range of features, the company tells Steel Business Briefing.

Thanks to the new project, Arvedi will expand not only on the international market, which currently takes 30% of its output, but also on the Italian market, a representative for the company tells SBB. “Now we only produce strips of 1300mm width, but with the new width of 1550mm we would be able to supply the domestic market in a more specific way“, the representative adds.

The new plant located between Cremona and Spinadesco will have an annual capacity of 2m tonnes of hot rolled steel, as previously reported. The total investment, including a galvanizing and a pickling line, amounts to €500m. Starting at the end of this year, the mill will produce finished strip products direct from liquid steel in a continuous process and obtain ultra-thin hot rolled coils with thicknesses reaching 0.8mm (possibly also 0..6mm) at a rate of 300 tonnes/hour and more.

Arvedi tells SBB that the new line will bring many advantages including increased productivity, improved environmental compatibility, reduced energy consumption, and improved product quality. The project will also increase the company’s capacity to over 3m tonnes/year and CO2 emissions are forecast to be reduced by more than 50%, the company adds.
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Kürüm in Albania takes steps to grow its export markets
Kürüm Holding’s Elbasan Steelworks in Albania will sign an official agreement for an €20m ($30..8m) loan with the Black Sea Trade & Development Bank tomorrow, 18 June 2008, in Tirana. “This is an important event in the development of Albania, which so far has not received major loans from the bank,” Kürüm’s local director in Albania, Zeki Kaya, tells Steel Business Briefing.

The company, which produces long products, plans to use the loan to further expand its capacity and to expand its presence in foreign markets, including part of the Italian market and Greece. Up to now neighbouring Serbia, Macedonia and Kosovo have been Elbasan’s key export markets.

The steelworks also plans to find new international scrap suppliers, as at the moment scrap in Albania is “scarce” and can satisfy only 20% of Elbasan’s requirements, SBB is told. “A good market for scrap procurement will be one from which deliveries can be done in the shortest possible time and in the least expensive way,” Kaya comments.

As previously reported by SBB, Elbasan intends to increase its steel production to 600,000 tonnes/year by 2010. It is currently installing a second EAF and has plans to open a scrap shredding plant. Kürüm Holding is a Turkish company, which also owns a 240,000 t/y mini-mill in Gebze, 50km from Istanbul.
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Turkey's Kardemir plans new sinter plant
Turkish long steel producer Kardemir has announce plans to build a new iron ore sintering plant with a capacity of 2.8m tonnes/year.

The investment will cost the equivalent of €41.5m, and it will be contracted to a Chinese company. The company is still finalising the contract, it tells Steel Business Briefing, and no more details of the project have yet been made available.
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Belgium's steel output dropped in 2007
Belgian production of crude steel fell by 8% year-on-year to 10.6m tonnes in 2007, Steel Business Briefing learns from a statement released by the Belgian steel federation Groupement de la sidérurgie (GSV).

Production of steel by the electric arc furnace route decreased by 13% year-on-year and totaled 7.1 m t, whilst basic oxygen steel output dropped by 2% and amounted to 3.5 m t. Volumes of cold rolled coils fell by 15% y-on-y (from 5.7m t to 4.8m t), hot rolled strips by 12% (from 10.7m t to 9.4m t), coated flat products by 5% (from 4.8m t to 4.5m t), plates by 3% (from 780,000t to 752,000t), and wire rod dropped just by 1% (from 983,000t to 970,000t).

“The decrease in national steel output is mainly due to technical issues, including maintenance work at different sites“, a GSV representative tells SBB. “However, we foresee a growth in production for the first half of 2008, mainly thanks to the restart of ArcelorMittal’s blast furnace at Seraing in Liège in February and of Duferco’s blast furnace and steel mills at Carsid”, the federation representative concludes.

In 2007 25% of Belgian steel products were delivered to France, 22% to Germany and 16% were delivered to the domestic market in Belgium. The same percentage (6%) went to Italy, the Netherlands and the UK. 1% of Belgian products went to the United States, 10% to other EU members and 7% into the rest of the world.
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More surface research ventures forged in Germany and Austria
A new materials research institute involving steelmakers ThyssenKrupp Steel and Salzgitter has been inaugurated in Bochum in the German state North Rhine Westphalia (NRW), whilst in Linz, Austria’s Voestalpine is undertaking a similar although smaller scale separate research exercise.

ICAMS, the Interdisciplinary Centre for Advanced Materials Simulation, has been established at Bochum’s Ruhr Universität by ThyssenKrupp Steel, Salzgitter Mannesmann Forschung, Bosch, Bayer Material Science and Bayer Technology Services. Half of the institute’s start-up budget of €24 million is provided by the industrial partners, the other half comes from the state of NRW.

Steel Business Briefing understands that ICAMS key research areas will be the properties of interfaces and layer adhesion, the processes during heavy forming operations, and the influence of alloying elements on the properties of steel.

In Austria, Voestalpine has expanded its cooperation with Johannes Keppler Universität Linz, by setting up an institute for surface and nano technology named ZONA. (Zentrum für Oberflächen- und Nanoanalytik). The budget here is €4 million, split equally between Voestalpine and the state Oberösterreich.
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ArcelorMittal USA increases plate surcharge by $50/s.ton
ArcelorMittal USA announced it will increase its noncontract raw materials surcharge for A36 plate by $50 a short ton.

The increase, effective June 29, brings its surcharge to $200/s.t and the fob mill price to $1,370/s.t, a company official confirmed to Steel Business Briefing.

The official attributed the surcharge increase to rising energy, transportation and materials costs.
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Allegheny introduces new armor steel
US specialty metals producer Allegheny Technologies Inc (ATI) has introduced a new, high-hard armor steel, ATI 500-MIL, for such uses as tactical vehicles, armored patrol cars, above-deck structures on ships and aboard aircraft.

ATI says the new steel is qualified for Nato and other international standards. Some advantages of the new product include having improved flatness over other high-hard steels, better hardness consistency, minimal distortion when cut, and the ability to use hot- or cold-forming processes.

"The market introduction of ATI 500-MIL armor steel comes at a time when demand for high-hard specialty metals is strong," says ATI president Pat Hassey. "Lead times are long for military contractors and fabricators. ATI has the capacity to meet immediate and near-term demand with the production capacity for future demand that the product is expected to generate."

The new steel is available in plate form, with sheet product currently in development by the company, Steel Business Briefing understands.
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Taubensee raises wire prices $70/s.ton
Taubensee Steel & Wire of the US is raising its wire products prices by $70 a short ton, effective with June 30 shipments, Steel Business Briefing understands.

The Illinois wire maker says the increase is due to increased raw material costs. This latest move will push its prices up by $560/s.t total since January 1 and also marks the eighth increase this year for the carbon wire and cold drawn carbon and alloy bar producer.
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April US wire exports nearly flat, but up y-o-y
US wire rod and drawn wire exports were down slightly in April, but both products were up when compared to the year-ago period, Steel Business Briefing learns from US Department of Commerce data.

Wire rod exports in April totaled 11,620 tonnes, compared to 11,730 t in March, but that was 64% higher than April 2007 shipments, which totaled 7,070 t.

Drawn wire exports totaled 15,590 t in April, compared to 15,700 t in March, and were up 8% over 14,400 t in April 2007. Canada and Mexico accounted for more than 10,000 t of the April shipments.
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SDI raises wide flange beam prices by $30/s.ton
Steel Dynamics Inc has increased net transaction prices on its beam products by $30 a short ton, effective with July 1 deliveries, a company official told Steel Business Briefing.

The move is in step with increases last week by both Nucor and Gerdau Ameristeel - North America's two other major WF beam producers.

Those moves took fob mill prices for medium-size WF beams to around $1,087/s.t. It was unclear whether SDI's increase would bring its beam products to the same price level.
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CMC follows lead and increases July rebar prices
Commercial Metals Co of the US is matching Nucor’s $35 a short ton increase on rebar and merchant bar for July shipments, Steel Business Briefing learns.

An additional $30/s.t increase will be added to 20-foot rebar lengths, pushing the price for longer lengths up by $65/s.t for the month.

The latest increase puts rebar prices at $970-990/s.t fob. The updated price for merchant bar is $1,005-1,025/s.t fob.
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US rebar exports up more than 87% y-o-y
Month-on-month US rebar exports were up nearly 14% in April and almost 87.5% over the year-ago period, with nearly all of it headed for Canada, according to the latest US Department of Commerce data.

Rebar exports in April totaled 43,760 tonnes, compared to 38,500 t in March and 23,340 t in April 2007, Steel Business Briefing learns. Canadian shipments totaled 40,730 t in April.
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Brazil’s Bahia state launches iron ore bids today
The government of Brazil’s northeastern state of Bahia, through the state-owned mineral research enterprise Companhia Baiana de Pesquisa Mineral (CBPM), will launch 16 edicts for mining exploration today.

Steel Business Briefing learns some of the deposits contain iron ore.. The biggest area, in the northern part of the state, could have more than 1bn tonnes of ore containing an average Fe content of 30% to 40%, according to local news reports.

The municipalities involved in the edicts are Camacã, Nova Viçosa, Canavieiras, São Sebastião do Passé, Itanagra, Belmonte, Casa Nova, Remanso, Sento Sé and Pilão Arcado.

See related article: Votorantim signs contracts for zinc, nickel exploration
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Gerdau studying 1m t/y greenfield rebar mill in Spain
Brazilian steelmaking group Gerdau confirmed it has been studying a greenfield mill in Spain. The new project is not related to the company's special steels subsidiary Sidenor and involves mostly long carbon products, specifically rebar.

Gerdau says its feasibility study indicates there is enough room to install a new mill there with up to 1m tonnes/year of capacity. The project's exact location will be disclosed in due course, SBB understands.

Markets sources tell Steel Business Briefing the new plant would go a long way toward enabling Gerdau to increase its European sales.

The company already holds a considerable stake of the Spanish steel market through its Sidenor subsidiary, which specializes in alloy and special steels. The new mill, however, would mark Gerdau's entry into the Spanish long carbon market, currently dominated by local groups such as Celsa, Alfonso Gallardo and Ros Casares, as well as ArcelorMittal.
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Vale sees difficulty in delivering new iron mine on time
Although it has not even received approval yet from the company’s board, Vale’s proposed development of an iron ore mine in Brazil’s northern region of Carajás might already be delayed.

In a meeting for analysts monitored by Steel Business Briefing, Vale’s financial director Fábio Barbosa said the iron ore giant faces several problems in developing the Serra Sul mine. Among them, receipt of environmental permits and possible delays in the delivery of equipment.

The Serra Sul project was announced by Vale late last year. It will ultimately have capacity to produce 90m tonnes/year of iron ore, but initially it will produce around 60-70m t/y. The project was expected to cost more than US$10bn at the time of the announcement, and startup was scheduled for the first half of 2012.

The project is a key component in Vale's plan to achieve 450m t/y output by the end of 2012, as previously reported by SBB.
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ThyssenKrupp replaces CEO in Brazil
ThyssenKrupp has replaced the CEO of its Brazilian slab plant, ThyssenKrupp CSA (TKCSA), located in the state of Rio de Janeiro.

According to a statement sent by TKCSA to Steel Business Briefing, the new CEO is Erich Heine, a member of ThyssenKrupp Steel’s board since February 2006 and head of its steelmaking business unit.

Heine replaces Aristides Corbellini, who will take over the role of executive VP of ThyssenKrupp Steel, relinquishing his executive functions at TKCSA.. Nevertheless, Corbellini "will remain as TKCSA’s president until the end of the fiscal year, on 30 September," the company says. In his new role, Corbellini will be in charge of strategic and governmental subjects for ThyssenKrupp Steel in Brazil, says TKCSA.

Queried by SBB whether the delay in commissioning the TKCSA slab plant, originally planned for March 2009, was the reason for the change, the company only said "once TKCSA will be in operation, it will be part of ThyssenKrupp Steel’s steelmaking business unit, which is under the responsibility of Erich Heine."

Born in South Africa, Heine was living in Germany, but since last week has been in Brazil.

As recently reported, the start-up of TKCSA’s new plant will be postponed by four to six months. This delay and other reasons will increase the budget for the project by €500-700m.
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Indonesia's Salim Group eyes Brazilian iron ore
Authorities from Brazil's northeastern state of Ceará are in talks with the Indonesian conglomerate Salim Group regarding new investments in iron ore concentrates.

Salim is interested in Ceará's iron ore deposits in Sobral and Cratéus. Ceará officials say the Asian group would initially invest about R$50m (US$30.7m) to develop two concentration plants, Steel Business Briefing notes.

Authorities say local deposits could initially produce 1m tonnes/year of iron ore concentrates and ramp up to more than 20m t/y, once coal and iron conveying belts are installed at the Pecém port, SBB understands.
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Chile's Gerdau AZA aims for 800,000 t/y capacity by 2011
While Chilean steelmaker Gerdau AZA moves forward with an expansion project that would lift the group's crude steel capacity from its current 400,000 tonnes/year to 520,000 t/y by October, it also has been working on a plan to reach 800,000 t/y by 2011.

Local reports reviewed by Steel Business Briefing show that Gerdau AZA could invest an additional US$200m to expand its EAF capacity by another 50% and be ready to commission that project by the beginning of 2011.

The initial surplus generated by the major expansion would be exported to neighboring countries, as well as the Ecuadorian market. Ecuador's distributors used to import long-rolled steel from AZA in Chile, but since the beginning of this year Ecuadorian traders have been reporting some lack of Chilean offers, SBB notes.
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Cosipa increasing its own power generation
Brazilian flats producer Cosipa plans to use gas from its blast furnace to increase its own power generation, Steel Business Briefing learns from a supplier.

Construction of the power project should start this year, and will produce around 12 megawatts of energy per hour. The company will then have the capacity to produce almost 30 MW/h of its roughly 200 MW/h total requirement.

Currently, Cosipa generates around 18 MW/h - about 9% of its energy needs. Cosipa's steel plant is located in Cubatão city, in São Paulo state.
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Qatar Steel freezes local prices for another three months
State owned Qatar Steel is extending its fixed rebar price of QAR 3,250-3,300/tonne ($ 901-915/t) until the end of September.

Steel Business Briefing is told by a company executive that this price freeze is only for local sales, and the export price for July has not been announced yet. Qatar Steel’s rebar export price for June is QAR 4,100/t ($1,137/t) including delivery to UAE.

The price difference between Qatar and other Gulf countries exceeds QR 2,500/t, according to Ali Bin Hassan Al Muraikhi, manager of Qatar Steel’s commercial division.

He stressed in announcing the price freeze that priority is given to the local market at all times.

Qatar’s prime minister had announced that prices for steel and other construction materials would be frozen for three years, in order to support the construction industry and suppress inflation, as reported.

Qatar Steel produced over 1.5 million tonnes of rebar and wire rod in 2007. The company meets about 95% of the local demand. Rebar and wire rod imports to the country are expected to stop if the domestic price remains far below international prices, market sources told SBB.
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Iran strip producer aims for higher export prices
Mobarakeh export prices ©SBB 2008
$/tonne fob Iran
  Jun 08 Jul 08 Aug 08
HRC 1090 1090  
CRC 1110 1110 1126
HDG 1200 1200 1227
Pre-painted 1310 1300 1300
Iran’s biggest flats producer Mobarakeh Steel’s tenders for export prices are going to be finalized next week. Steel Business Briefing is told by a company executive that export prices did not change much in June but some more increase is expected in the future.
Mobarakeh’s HRC price for July was unchanged at $1,090/t fob Iran. Its CRC price increased to $1,126/t fob for August, up from July’s $1,110/t. HDG reached $1,227/t fob August, also slightly up from July’s $1200/t. Pre-painted coils export price did not change for July, staying at $1,300/t fob for August. See table

Mobarakeh exports mainly to Middle East, Far East and Europe.
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Acepar reaches deal with charcoal producers
Paraguayan steelmaker Acepar has reached an agreement with charcoal suppliers to pay US$145/tonne for the input material..

Notwithstanding, charcoal producers say this is a temporary deal, as they soon will try to hike the price to US$175/t - the going market price - during negotiations in the coming days.

As previously reported by Steel Business Briefing, disagreements regarding the price led Acepar to switch from charcoal to mineral coal earlier this month. However, charcoal suppliers resumed deliveries to the mill last Wednesday.
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BlackRock raises stake in Vale
US-based global investment firm BlackRock has acquired a 10.5% stake in Brazil’s Bradespar SA group, a major stakeholder in Valepar SA, which controls iron ore giant Vale, Steel Business Briefing learns.

According to news reports, BlackRock bought 23.9m preferred shares in Bradespar, giving it 10.5% of the non-voting capital of Bradespar.

Last September, BlackRock bought 5.7% of Vale’s non-voting preferred shares.
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Another US scrap price increase is on the way
US scrap prices across the board are headed up again next month, sources tell Steel Business Briefing, but the amounts of the increases are still unknown.

At the moment, shredded scrap is selling for $565 a long ton fob. Bundles are selling for $753/l.t fob, or $780/l.t delivered, and busheling is selling for $775/l.t fob, or $787/l.t delivered to the mill.

In June 2007, shredded scrap was selling for $265/l.t and bundles and busheling were selling for $280/l.t.

The American Axle strike is settled, increasing scrap availability, but replenished supply will not be enough to offset the seasonal automotive scrap deficit about to take place as carmakers prepare for their annual model changeover.

Mill demand for the raw material is the main price driver. One mill faced a 17,000 l.t scrap deficit this month and integrated mills are apparently using more scrap than normal to increase production.

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Zinc recycling facility for EAF dust being built in Ohio
After securing $120m for construction and related costs, UK-based Zincox Resources has broken ground for a 200,000 tonnes per year rotary hearth furnace in Fulton County, Ohio to recover zinc oxide concentrate and pig iron from electric arc furnace dust.

The zinc oxide will be treated at the company’s Big River Zinc smelter in Illinois, and the pig iron will be used by Ohio steelmakers.

Funding for the US greenfield project includes a three-year $48m bond facility and $72m in private equity placement. Production is expected to commence in the latter part of 2009, an executive tells Steel Business Briefing.

In December, Horsehead Holdings of the US announced its plans to build an EAF dust recycling facility near Nucor's North and South Carolina mills.
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Votorantim Metais signs nickel/zinc exploration contracts
Brazilian mining and metals group Votorantim Metais will sign today new contracts with Companhia Baiana de Pesquisa Mineral (CBPM), regarding the exploration of zinc deposits in Irecê and Mundo Novo, as well as a nickel reserve in Pedras Altas, Steel Business Briefing learns from the company.

The non-ferrous assets are located in Brazil's northeastern state of Bahia. Details regarding the contracts and the deposits were not disclosed.

Votorantim already produces refined nickel and zinc in Brazil and has significant zinc ore production in Peru, SBB notes.
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Freight market sees record plunge
One of the most dramatic falls that market-watchers can remember hit the ocean shipping market late last week. The Baltic Exchange’s index of rates paid to charter Capesize vessels plunged by 26% in two days and ended the week at a seven-week low. Large Capesize vessels are used to ship iron ore, coal and other commodities.

Freight analysts had several reasons to explain the drop. Port congestion has eased, notably in China and Australia, bringing more vessels into the market. And China’s efforts to clear its stocks of imported iron ore could mean a reduction in short-term import buying, and hence demand for vessels.

The Baltic Capesize Index had surged to an all-time high in the first week of this month. But on 12 June it recorded its biggest ever one-day fall – dropping 2,855 points or 16%. This was followed by the loss of another 1,200 points or 8% the next day. As a result, charterers are holding off from concluding new business, in the expectation of rates weakening further.

Despite the fall, freight rates are still more than double what they were a year ago. Dampier-Qingdao was fixed at $48.00/tonne for 150,000 tonnes of iron ore, Steel Business Briefing learns from Baltic Exchange reports.
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Shouqin builds new pellet plant
Qinghuangdao Shouqin Metal Materials, a Shougang subsidiary based in Qinghuangdao city in China's Hebei province, has secured more local iron ore resources in Qinghuangdao city, Steel Business Briefing learns from a municipal government source.

Earlier this month, Shouqin held a ceremony in Qinglong county, Qinghuangdao, to celebrate the building of a pellet plant and matching iron ore concentrator. The project is expected to be finished within three years, and subsequently produce about 2m tonnes/year of pellet and 2m t/y of iron ore concentrates for Shouqin. The project will depend on local iron ore resources, SBB learns.

Qinglong county is estimated to have at least 1 bn t of iron ore reserves, with Fe grading about 30%. Shouqin has an iron capacity of about 3m t/y. It mainly produces plates including ship plates and pressure vessel plates.
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China miner-smelter invests in Australia nickel miner
China’s Yunnan Metallurgical Group (YMG) and Chihong Zinc & Germanium Mining Co have invested A$2m (US$1.9m) in the initial public offering of Australia’s Condor Nickel Limited, Steel Business Briefing learns from a Condor Nickel announcement.

The investment, which involves purchasing 10m shares at A$0.20 each, is carried out through Chihong International Mining Limited, an unlisted Australia public company whose principal shareholders are YMG and Chihong Zinc.

Condor Nickel is a spin-off of the nickel and base-metals assets of Australia-listed gold miner Carrick Gold. Condor Nickel is offering 40m shares in its IPO at A$0.20 per share, representing 57% of Condor Nickel’s shareholdings. Carrick Gold and its shareholders will hold a combined 43% stake in the company. Condor Nickel is set to list on the Australian bourse on 19 June. Condor Nickel has 10m t of resources at 0.7% Ni with its tenements located in the Kulnalpi and Gindalbie regions of Western Australia.

State-owned Yunnan Metallurgical Group is the parent company of Shanghai-listed Chihong Zinc, a zinc and lead miner and smelter in China’s southwest Yunnan province.
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Rio needs China investment, CEO says
Rio Tinto chief executive Tom Albanese believes global demand for resources will lead his company’s key markets doubling in size over the next 15 years but says achieving this will require investment from countries such as China.

Speaking at an Australia-Israel Chamber Of Commerce lunch in Sydney on 16 June, Albanese said the China Banking Regulatory Commission’s recent decision to make Australia an approved destination for Chinese capital is positive for Rio’s long-term business.

“Unlocking the full force of Australia’s mineral business potential will require direct foreign investment,” he said.

“While I agree there is a case for prudence, I don’t think that Australia would want to miss out on this substantial opportunity by not taking advantage of the full breadth of global capital and global relationships that might be on offer in its own region,” Albanese said.

He said meeting the forecast demand for Rio’s iron ore over the next 15 years will require “additional production equivalent to five of our current Pilbara iron ore businesses.”

Albanese said that Rio will spend A$46 million ($43.2m) on greenfield exploration this year, Steel Business Briefing learns.
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High stocks soften impact of Indian iron ore tax on China
India's new 15% export tax on iron ore did not affect prices on the first trading day since it was announced, with high stocks of ore currently sitting in Chinese ports appearing to soften the impact, industry sources tell Steel Business Briefing.

Several traders say that the market has so far reacted calmly to news of the export tax in India.

"Maybe it'll take a couple more weeks to see how the market reacts, when the first Indian iron ore shipments after the new tax arrive in China," one Shanghai-based trader says, suggesting Indian iron ore exporters would have to shoulder part of the tax in light of the high stocks at Chinese ports.

A Beijing-based iron ore trader believes the tax will not affect the spot market, agreeing with his Shanghai peer that stocks at ports are likely to limit the impact. He also says the unsteady domestic steel market and mills' lack of funds will not allow them to accept a large price increase.

The Beijing trader also suggests imports from India may stop for a period because mills generally have sufficient stocks of ore. "It is not necessary for us to import now," he says.

Ocean freight rates for iron ore have also dropped since last week, undermining confidence in the high spot price, SBB learns. Freight cost for a 50,000dwt vessel to carry iron ore from eastern India to China is about $38-40/t, down from about $45/t earlier this month (see separate report).
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Atlas Iron's Pardoo project gets environmental approval
Atlas Iron has cleared a major hurdle following the decision of Western Australia’s Environmental Protection Authority (EPA) to recommend government approval of the junior miner’s Pardoo iron ore project.

Atlas requires just ministerial approval before it can begin mining at the Pilbara project in August, with the first ore shipment expected to leave Port Hedland in October.

The company is targeting initial export volume of 1m tonnes/year until additional tonnage from its other Pilbara project, Abydos, comes on-stream in 2009, boosting overall production to 6m t/y by 2010 and 12m t/y by 2012, as Steel Business Briefing has reported.

Atlas managing director David Flanagan described the EPA’s endorsement as a “milestone” and the “culmination of two years of hard work.”

In May, Atlas told SBB that 50% to 70% of its ore was destined for the spot market and that Chinese steel mills were “highly likely” to be the end customers of the inaugural shipment.
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Rio to spend $350m on driverless trains
Rio Tinto is to spend US$350m over the next five years automating its iron ore railway in Western Australia to help boost ore production to 320m tonnes/year by 2012.

Rio chief executive Tom Albanese said the new “driverless” technology was aimed at delivering greater volumes of ore more quickly to meet the “continuing surge” in demand for iron ore from China and other developing nations.

The miner said the automated trains – which have been successfully trialled on a section of Rio’s 1,300km railway track in the Pilbara – formed part of a wider project to upgrade its railway infrastructure. This will also include 40 new locomotives, 2,400 new ore cars, as well as investment in rolling stock and re-railing.

Announcing the investment, Rio said the technology has been used on metropolitan passenger railways around the world but that this was the first time it will be used in a heavy haul railway of this scale. It should improve efficiency by reducing delays and increasing scheduling flexibility.

Rio said one of its loaded trains typically weighs about 30,000t, is 2.4km long, and can travel up to 75km per hour. There are 320 train journeys using the network each week, taking 33 hours on average to complete a cycle with a train movement occurring along the line roughly every 25 minutes, Steel Business Briefing learns.
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Vale studying its image in Brazil
Vale has been preparing an image survey amongst specialized media to support a communications strategy aimed at maintaining its Brazilian identity, Steel Business Briefing learns from a São Paulo consultant.

The main objective is to gauge the perception of Vale as a leading global mining company with expansion goals that has not lost it national identity. This is because some of its shares belong to the Brazilian government, which has at times reacted against its international strategy.

Some other questions involve the miner's environmental and social responsibilities compared to other industrial sectors with similar societal issues, like energy, chemical and pulp/paper industries.

The company also wants to know if people perceive that its internationalization strategy could reduce its investment in the domestic market. Another question is whether the company has become more, or less, Brazilian after becoming a global player.
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Otelinox, Romania to treble precision strip capacity by 2010
Romanian stainless producer, Otelinox says it will expand its precision strip operations three-fold by 2010. At the groundbreaking ceremony, the company announced plans to add a new 30,000 tonnes/year line, which will be commissioned in December 2009.

“At present, Otelinox produces 15,000t of 0.05-0.8mm thick, 5-625mm wide stainless steel cold rolled precision strip. The new standard-width rolling mill will have an increased product range of 0.1-1.5mm thick with widths of up to 1,250mm,” the company tells Steel Business Briefing. The main product will be wide precision strip, it adds.

Together with Otelinox’s regular wide-strip production line, this will take the company’s total capacity for CR stainless strip and coil production to 90,000t, it says. Otelinox mainly supplies ultra-fine precision strip for use in the automotive, aerospace and electronic industries – mainly in Europe.

Samsung Deutschland, a subsidiary of Samsung C&T Corp in Seoul, has owned Otelinox since 1997. The Koreans increased their holding to 94% in 2006, noting that their investment programme for Otelinox has included adding a “state-of-the-art precision strip line” in 2002, plus upgrading existing lines.
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Tsingshan Jinhui adding stainless slab caster
Henan Tsingshan Jinhui Stainless Steel Co has started constructing a 400,000 tonnes/year slab caster at its Changge works in China’s central Henan province.

Commissioning is expected in the first quarter of 2009, a senior executive of Tsingshan Holding Group, the majority shareholder of Tsingshan Jinhui, tells Steel Business Briefing.

Tsingshan Jinhui’s steelmaking capacity will remain unchanged at 600,000 t/y. The company will decrease production of stainless billets with the start-up of the slab caster, the facility itself a first for Tsingshan Jinhui, the official says.

Zhejiang-based Tsingshan Holding is a private stainless steelmaker whose products include bars, pipes, wire rods and strips. Its targeted production for 2008 is 750,000-800,000 t of stainless steel, as SBB previously reported
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Alloy surcharges may rise as nickel reacts to lost output
Nickel prices look set to continue rising as a result of recent production difficulties, according to analysts at Macquarie Research. As a result, raw material surcharges on stainless steel and other alloy steels could return to an upward trend.

Last Friday the LME cash nickel price rose 5.4% to the equivalent of $11.131/pound. In its latest report sent to Steel Business Briefing, Macquarie says a move back up to $13-14/lb “appears to be realistic for the short term”. This is equivalent to about $30,000/tonne from some $24,250/t at present.

After coming under heavy downward pressure in the past month as a result of production cuts by some stainless steel producers, nickel prices have bounced back strongly. The nickel production losses in Australia as a result of the Apache gas explosion look to be large enough to eliminate virtually all of the previously anticipated surplus, the analysts say.

In May and early June the nickel market appeared to be heading into a large surplus. But it now looks as if it will be “extremely close to balance,” the analysts add.
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Tubemaker Schoeller-Bleckmann expands into umbilicals
Austria’s Schoeller-Bleckmann Edelstahlrohr (SBER) will upgrade its production facilities in order to extend its range to products for the oil processing industry, Steel Business Briefing hears from the company.

SBER will invest €33m at its site in Ternitz to allow for the production of umbilicals, - speciality pipes for underwater control lines. Such pipes have a diameter of 55mm, lengths of up to 38 metres, and coil weights of up to 10 tonnes, SBER says. A new workshop to house the necessary production equipment is presently being built in Ternitz as an extension of the existing facility. Production is due to commence in early 2009.

The new production technology “will for the first time enable us to serve the mineral oil processing industry”, says the company’s managing director, Erich Hertner. SBER, a subsidiary of Spain’s Tubacex, produces approximately 16,000t of seamless speciality steel pipes and achieves annual sales of around €140 million.
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Russia’s TMK buys Kaztrubprom
Russia’s Tube Metallurgical Co (TMK) has bought 100% of Kaztrubprom in Uralsk, Kazakhstan, which specialises in threading and finishing tubing and casing pipes used in the oil and gas industry. TMK aims to expand the plant’s product mix and increase efficiency by 2011, mainly by developing “proprietary TMK premium connections”, it says.

“At present, Kaztrubprom is able to produce 60,000 tonnes of pipes per year,” but TMK tells Steel Business Briefing that it plans to “raise Kaztrubprom’s efficiency through production synergies. These include shipping Russian-produced seamless unfinished pipes for subsequent threading and finishing in Kazakhstan”.

“This latest acquisition is part of our strategy to develop TMK’s high-tech, premium-class product segments, increase sales volumes, and further expand the company’s presence on the global oil and gas markets,” according to TMK chief executive officer Konstantin Semerikov.

Demand in this segment is high: Kaztrubprom will “help strengthen TMK’s position on the promising Kazakh market and in other CIS member states, including Uzbekistan, Turkmenistan and Azerbaijan,” TMK says.
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World oil/gas rig activity continues to outstrip 2007 levels
Global oil/gas exploration and development activity is running at higher levels than in the first half of last year, judging by the latest international rotary rig count. Numbers have been higher than in 2007 for each of the first five months of 2008, according to data published by oil/gas industry specialist Baker Hughes.

With crude oil commanding unprecedented high prices, rig activity in the coming months, and with it the demand for OCTG products, could very likely continue to outstrip prior year levels.

A month-on-month comparison shows that compared to April 2008, the world rig count was up by 2% in May, Steel Business Briefing calculates. The biggest gain was in Canada, but numbers slipped in Africa and Latin America, and there was no change in the Middle East (see table).

The USA consistently has more rigs in service than the rest of the world combined, and May was no exception, when it accounted for 60% of the total. However, the Baker Hughes data do not include information on some influential oil/gas producing regions and countries – notably Russia and onshore China.
World oil/gas rotary rig count  
Excludes Russia, Sudan, onshore China
  May 08 Apr 08 Change May 07 y-o-y
Africa 66 73 -9.5% 60 +10%
Canada 135 106 +27.3% 107 +26.1%
Europe 101 93 +8.6% 88 +14.8%
Far East 263 249 +5.6% 241 +9.1%
L.America 367 380 -3.4% 350 +4.8%
Middle East 278 279 - 268 +3.7%
USA 1,863 1,829 +1.8% 1,748 +6.6%
World total 3,073 3,009 +2.1% 2,862 +7.4%
Source: Baker Hughes, SBB    
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Maruichi adding pipe capacity at Vietnam's Sunsco
Maruichi Steel Tube, Japan’s largest ERW pipe producer, says it plans to double ERW pipe capacity at its Vietnamese subsidiary, pipemaker and galvanizer Sun Steel Corp (Sunsco), Steel Business Briefing learns.

Sunsco is spending of ¥3.2bn ($29.56m) to install a 16-inch pipe mill at its Di An county plant in Binh Duong province, southern Vietnam, for commissioning by the end of 2009. Sunsco currently has seven 4-inch pipe mills with a combined capacity of 4,000 t/m.

When the new mill is installed, total pipe capacity will become 10,000 t/m. A Maruichi spokesman tells SBB the company decided to install the large dia mill to meet growing domestic Vietnamese and Southeast Asian demand. Domestic and export sales will be about 50-50, he adds.

Sunsco restarted bar production from mid-February and eventually plans to produce about 10,000 t/m though current volume is about half this. “We were aiming to produce 10,000 t/m but we can’t get sufficient billet supplies,” Maruichi’s official complained. In addition to the pipes, Sunsco currently produces about 6,000t/m of galvanized sheets, 4,000t/m of colour sheets and 5,000t/m of rebars.

At the end of March Maruichi bought 6.1% of the stock held by Taiwan’s Sun Steel Holdings in the Vietnamese firm to lift its stake to 47%, with the result that Sunsco became a Maruichi subsidiary. Sun Steel Holdings now owns 43.9% of Sunsco’s shares while the Japanese trader Toyota Tsusho holds 9.1%.
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