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Dear Readers,

As the things stand today, Indian government has decided to put export tax on steel to keep the domestic price and the availability under control. Few steel makers have also announced that they will not raise the price atleast for the next few months. In my last month’s piece, I had expressed that levying tax on export would not really help to lower the domestic price and improve the availability. At the cost of repetition, I would again like to emphasize that putting export tax is not the solution of this issue. First of all, in this era of globalization and free economic model, steel price cannot be controlled by any single country and is decided by the market forces of demand and supply. Secondly, as everybody knows, the raw materials prices have increased phenomenally which has compelled steel producers to hike their price in order to protect their bottom line. Iron ore, coking coal, ferro alloys, scrap… you name the commodity and its price has almost doubled in last few months. How can steel producers survive without rising the price? There is no point blaming steel producers and accusing them of a cartail in this tight situation.
At the same time, I do appreciate the plight of steel user industry. For no fault of theirs, they are also drawn into sufferer’s list and are finding it difficult to keep their old price levels. Infact I would say that the drastic price increase of oil, steel and cement is extremely harmful for growing Asian economies. Such a situation is sure to reduce the pace of the economic growth and can ultimately lead to slowdown and depression.
In my opinion, the correct way to fight this out is to evolve and develop alternative processes which can reduce the production cost. I know many entrepreneurs and consultants are trying to develop a mini module for iron ore beneficiation and pelletization but to my knowledge, so far, not a single plant has come up. I also remember Ministry of Steel had organized a seminar on this subject but frankly, not much has happened after that. I strongly feel that somebody should put up a pilot plant to study and finetune these technologies. This will be of tremendous benefit to the industry. Does anybody remember that RDCIS & HEC (Ranchi) and Mr. O. P. Jindal had put up pilot sponge iron plants which laid the foundation of today’s flourishing mini sponge iron industry in India ?

 D.A.Chandekar
Editor & CEO

 

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SAIL plans to set up third unit in Bihar   

After setting up two units in Bihar's East Champaran and Vaishali districts, the Steel Authority of India Ltd plans to construct a steel processing unit in naxalite-affected Gaya district. SAIL is prepared to invest in a big way in Bihar and it has sought the state government's cooperation in setting up a steel plant in Gaya district, Steel Minister Ramvilas Paswan told reporters in Patna. Referring to closed pyrites and phosphate industry in Rohtas district, Paswan said that the ministry is at advanced stage of striking a deal with a private company to make the closed unit operational. He said Jharkhand has abundant iron ore reserves and the ministry is in constant touch with the Madhu Koda government to set up steel plants in the state which would provide the sites for setting up mineral prospecting and allied industries.

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Monnet Ispat's Q4 net jumps 34 per cent 

Domestic steel and power company Monnet Ispat Energy Ltd has registered a 34 per cent increase in net profit at Rs 57.20 crore in the quarter ended March against Rs 42.79 crore in the corresponding period of 2006-07. The company achieved a 104 per cent jump in net sales to Rs 380.64 crore from Rs 186.45 crore in fiscal 2006-07. "In the coming years, the company will be focused more on the energy business rather than steel. In the future, 55 per cent of the revenues will come from the energy business and rest from steel," its executive vice-chairman and managing director Sandeep Jajodia Jajodia said in a statement. The company has increased its captive power generation capacity to 150 MW. The company's board of directors has declared interim dividend of 25 per cent (Rs 2.50 per share of Rs 10 each). It has completed the projects to set up 0.50 million tonne sponge iron plant and 90 MW power plant at Raigarh, becoming the second largest coal-based sponge iron producer in the country.

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Steel cost hits Commonwealth Games projects

With less than two years to go before Delhi hosts the 2010 Commonwealth Games, at least four infrastructure projects worth Rs 300 crore have not found any contractors due to the steep rise in prices of steel, cement and other raw materials. The Central Public Works Department (CPWD), responsible for awarding these projects, which include construction of stadiums, a media centre and a hostel, among others, has failed to get contractors for these projects due to the government's inability to address their concerns over the unprecedented rise in prices of key raw materials. The projects include a Rs 100-crore wrestling stadium, a Rs 25-crore hostel, a media centre at Indira Gandhi Stadium, a space planning project costing Rs 100 crore at Jawaharlal Nehru Stadium and a Rs 70-crore project to refurbish Karni Singh Stadium in Tughlakabad. The last day for submitting the tender for these projects was April 24, which has been postponed to May 6. This is the sixth postponement due to lack of bidders. Besides, seven-eight projects being implemented at Indira Gandhi Stadium, Jawaharlal Nehru Stadium and Dr.Shyam Prasad Mukherjee Stadium are progressing at a slow pace due to delay in the procurement of key raw materials. Builders say steel and cement, which together constitute around 60 per cent of the total input cost of any stadium project, have become substantially more expensive. It will be difficult to go ahead with these projects without a suitable compensation mechanism, they say. Arun Sahay, chairman, Builders Association of India, Delhi unit, and CEO of Ahluwalia Contractors, which is constructing a swimming pool complex at the Talkatora stadium, said, "Builders have decided to boycott all future projects related to the Commonwealth Games on the ground that existing cost escalation norms, linked to the Wholesale Price Index, are not commensurate with the actual increase in prices of raw materials. So we have demanded that the CPWD and the Ministry of Urban Development rework the cost escalation norms and link them to the base prices of commodities published every month by the CPWD, which we think are more realistic". An official of the CPWD said the Directorate of CPWD studied the matter and recommended a change in the central contract conditions to address these issues raised by the builders.

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Sesa Goa Q4 net up

Mining firm Sesa Goa announced a consolidated net profit of Rs 811.58 crore for the quarter ended March 31, 2008, an over three-fold growth over the corresponding period a year-ago. The group had a net profit of Rs 263.34 crore in the fourth quarter of the fiscal ended March 31, 2007, Sesa Goa said. The consolidated total income rose to Rs 1,732.34 crore in the latest quarter, from Rs 832.16 crore in the year-ago period. The firm posted a stand-alone net profit of Rs 798.3 crore for the fourth quarter of the financial year ended March 31, an over three-fold growth over the corresponding period a year-ago. The firm had a net profit of Rs 252.33 crore in the fourth quarter last financial year. The total income rose to Rs 1,669.97 crore in the latest quarter, from Rs 772.38 crore in the year-ago period. The board of the directors has approved the issue of a bonus share, of Re 1 each, for every equity share held in the company, the filing said. For the financial year ended March 31, the group announced a consolidated net profit of Rs 1,541.58 crore, an over two-fold growth over the corresponding period a year-ago. The group had a net profit of Rs 646.12 crore for the financial year ended March 31, 2007. The total income of the group rose to Rs 3,897.06 crore in the fiscal ended March 31, from Rs 2,263.03 crore in the year-ago period.

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India scrap import tax on steel products levy export duty  

PTI reported that Indian pig iron maker TATA Metaliks is planning to invest around INR 1,000 crore to build a 0.8 million tonne plant for manufacturing long products in Karnataka and has begun scouting for around 500 acres of land in the state The report cited a company official as saying that "On an invitation from the Karnataka Udyog Mitra, TATA Metaliks is seeking to establish a 0.8 million tonne plant in the state at an estimated investment of about INR 1,000 crore. The state government has indicated to us that it will take care of our raw material needs and we feel encouraged.”
However, it is likely to take another 3 months to 4 months to finalize the blueprint for the plant. TATA Metaliks Ltd is engaged in the business of manufacturing and selling pig iron and its plants at Kharagpur in West Bengal and at Redi in Maharashtra with captive power plants.

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No clarity on export duty on steel supply to SEZs   

Mr RS Gujral director general of foreign trade said that there is no clarity on whether steel supplied by domestic units to special economic zones will be subject to export duty.
Responding to an issue raised by exporters at an open house organized, Mr Gujral said that it was not clear whether such supplies to SEZs by domestic manufacturers would be eligible for Duty Entitlement Pass Book and other such concessions.Federation of Indian Export Promotion Organizations, Pharmaceutical Export promotion Council and Engineering Export Promotion Council have jointly organized the open house with the director general of foreign trade.EEPC expressed doubt if automobile components and parts constituted part of engineering products as commercial banks excluded them from this category whereas Reserve Bank of India brought them under engineering products.

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TATA Metaliks to set up long product plant in Karnataka     

PTI reported that Indian pig iron maker TATA Metaliks is planning to invest around INR 1,000 crore to build a 0.8 million tonne plant for manufacturing long products in Karnataka and has begun scouting for around 500 acres of land in the state The report cited a company official as saying that "On an invitation from the Karnataka Udyog Mitra, TATA Metaliks is seeking to establish a 0.8 million tonne plant in the state at an estimated investment of about INR 1,000 crore. The state government has indicated to us that it will take care of our raw material needs and we feel encouraged.”
However, it is likely to take another 3 months to 4 months to finalize the blueprint for the plant. TATA Metaliks Ltd is engaged in the business of manufacturing and selling pig iron and its plants at Kharagpur in West Bengal and at Redi in Maharashtra with captive power plants.

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ACC freezes cement prices for next 3 months  

ACC Cement said that it is freezing the rates for next 2 to 3 months, mirroring steps taken by steelmakers to complement government's efforts to fight inflation.A senior official of ACC Cement said that "We have frozen the price for next 2 to 3 months. We have taken the decision in response to government concern about the cement price situation. We are the leading cement company of India and therefore we have assured that we will hold the cement prices at existing rate." He added that it would like to have duologue with government as it is concerned about higher input costs which affect the margins.The decision to reduce prices by steelmakers and now ACC Cement is expected to soothe the government's concerns on inflation that is at 42 month high of 7.57%.

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SAIL inks MoU with BEML for crucial equipment supply

Steel Authority of India Limited has signed a MoU with Bangalore based Bharat Earth Movers Limited for supply of crucial equipment required for the company's present operations as well as for its ongoing modernization & expansion program.Mr VK Gulhati director (technical) of SAIL and Mr M Poongavanam director (mining & construction) of BEML signed the MoU in the presence of Mr VS Natrajan CMD of BEML.
Under the MoU, BEML will supply the required equipment at a mutually agreed price for the next 3 years. The agreement will also enable SAIL to contain maintenance cost, as BEML will undertake maintenance of the equipment for their entire economic life with guaranteed equipment availability.SAIL's growth plan, which envisages its hot metal production capacity rising to over 26 million tonnes by the year 2010, will call for a quantum increase in raw material requirement. This is planned to be sourced not only from the company's existing mines but also from new mining blocks. As a result, the requirement for crucial equipment like dumpers, shovels, dozers, etc, will rise substantially, both in SAIL mines and plants.

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TATA urges uninterrupted gas supply for steel mill in Bangladesh

The Nation reported that TATA would not go for any investments in steel without guarantee from the Bangladesh government on uninterrupted gas supply. It made it clear as the Bangladeshi government reopened formal negotiations with it on its record USD 3 billion investment plan. Mr Allan Rosling executive director of TATA Sons said that "It is as simple as that, if gas is not supplied on a secured basis then we would not go for steel in Bangladesh. There are a lot of other countries who have gas. Bangladesh's current gas situation is not as we wished it to be."He, however, did not dismiss other investment opportunities. But he said that "The new coal policy, once published, would open up new avenues for further discussions. At this stage, the meeting was useful and effective."It may be noted that senior TATA officials led by Mr Alan Rosling met Mr Kamaluddin Ahmed executive chairman of Board of Investment nearly two years after the conglomerate postponed what would be the biggest single foreign investment in Bangladesh.Meanwhile, Bangladesh government is yet to reply positive or negatively, as TATA said that if the government was unable to provide gas then it would not invest in steel in Bangladesh.
Mr Kamaluddin Ahmed said that they discussed the resource position of Bangladesh. He added that "We informed TATA about our demand supply situation of gas and discussed the upcoming coal policy. We neither agreed nor disagreed to provide them gas."In 2006 TATA offered to build a steel plant, two power plants, a fertilizer plant and a coal mine, after upgrading a 2004 plan.Mr Syed Manzer Hossain TATA's Bangladesh chief said that it is encouraged by positive indications from the Bangladesh government. He added that "Yes, there is an intention to move it forward. It is a positive development that we formally resumed discussion after two years. Lot of developments took place on both sides and we have to look at those developments.”
TATA submitted a USD 2.5 billion investment proposal way back in 2005 and revised it later to around USD 3 billion to set up a 1000 MW power plant, a steel mill with an annual production capacity of 420,000 tonnes and a one million tonne fertilizer unit in Bangladesh.Although the negotiations came to a standstill in 2006, significant progress had been made. TATA wanted a guaranteed supply of 1.25 trillion cubic feet of gas for a 15 year period and around 3 million tonnes of coal supply to TATA per annum and upgrading of gas pipeline from the current 24 inch diameter to 30 inch diameter. But the government of Bangladesh found some of the demands made by TATA were impossible to be fulfilled and the talks faced a setback.

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Bhavnagar Energy to set up power plant  

It is reported that Bhavnagar Energy Company Limited has initiated steps to set up a 500 MW to 600 MW lignite based pithead power project, based on circulating fluidized bed technology at Padva in Gujarat.Mr Mehul Danait finance director of Bhavnagar Energy said that the project would entail an investment of INR 2,000 to INR 2,200 crore depending on the final picture emerging from the bid process. He added that "It is in the process of seeking bids for general civil and structural works.
The response for the bidding process for supply of steam generator units and steam turbine generator units, both with associated auxiliaries, has been encouraging. Power generated from the plant will be exported to the state grid."BECL is a JV company formed by 7 state PSUs, namely Gujarat Power Corporation Limited, Gujarat State Investments Limited, Gujarat Mineral Development Corporation Limited, Gujarat Industries Power Company Limited, Gujarat Alkalies & Chemicals Limited, Gujarat Narmada Valley Fertilizers Company Limited and Gujarat State Fertilizers & Chemicals Limited.

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Erdemir Steel announces HR and CR% price hike

Turkish steel major Erdemir Steel has announced to increase its hot rolled coil price by USD 150 per tonne to USD 1200 per tonne and its cold rolled coil price by USD 120 per tonne to USD 1235 per tonne respectively.

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EEW to supply 18 kilometers of SS pipes to Qatar using Outokumpu plates     

It is reported that German pipe manufacturer Erndtebrücker Eisenwerk and Outokumpu have joined forces to supply 18 kilometer of LNG pipe for a dock loading facility Qatar Gas Berth 6 in Qatar Gas project. The delivery of the Qatar Gas Berth 6 pipes is scheduled for completion by mid summer of 2008.Berth 6 is a new docking facility at Ras Laffan. To do its share of loading the Port's projected 1,120,000 cubic meters of LNG per year, Berth 6 needs 18 kilometers of pipe running in several parallel lines between the storage tanks and loading points.
To manufacture the pipes at its Erndtebrück plant in Germany, EEW takes more than 4,600 tonnes of Outokumpu plate of grade 1.4301/1.4307 (304/304L) and 12.7mm thick plates. Outokumpu can produce this plate thickness both using the coil process and at its plate mills. In this case, EEW reaps benefit in production welding the pipes mainly from coil process plate, while producing a small volume of the pipes from quarto plates.
Pipe dimensions
1. 914.4mm x 12.7mm
2. 863.6mm x 7.92mm
3. 711.2mm x 12.7mm from quarto plate
4. 762mm x 12.7mm from quarto plate
18 kilometers of pipe, close to 16 kilometers from one size
914.4mm x 12.7mm
Pipe plate materials
1. 4591 tonnes of grade 1.4301/1.4307 (304/304L) CPP, 12.7mm
thick
2. 42 tonnes of quarto plates of the same grade and thickness,
2.2m and 2.36m wide
Total 4633 tonnes
Mr James Heather sales director of EEW said “With Outokumpu, we have one partner for both CPP and quarto plates. We have been very successful together in subsea pipelines.”
Erndtebrücker Eisenwerk Group is a major producer of carbon steel SAW pipes and is the world's largest producer of heavy wall large-diameter stainless steel SAW pipes.

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Kuwait to launch USD 19 billion refinery upgrade tender    

Kuwaiti news agency Kuna reported that Kuwait National Petroleum Company is planning to upgrade its Mina Abdullah and Mina Al Ahmadi refineries with up to KWD 5 billion.Mr Saad Al Saad deputy chairman of KNPC said that the tender would be launched in August 2008 after winning approval from Kuwaiti authorities. He added that KNPC wanted to upgrade the capacity of its Mina Abdullah and Al Ahmadi refineries to 800,000 barrels per day from 600,000 barrels per day by adding new units or improving existing ones. The project's cost would range between KWD 4 billion and KWD 5 billion, up from an initial estimate of KWD 1 billion in 2003.
The refinery upgrade, which is due to take effect after closure of the ageing Shuaiba refinery in 2011, is part of plans by the major OPEC producer to raise refinery capacity to 1.415 million barrels per day from 930,000 barrels per day. KNPC is also due to announce the winners for a tender to build a 615,000 barrels per day refinery.KNPC has delayed the tender several times and more than doubled the budget to USD 14 billion amid spiraling costs in the oil industry.

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Construction material prices hit contractors in Pakistan    

Pakobserver.net reported that the prices of construction material have hit an all time high in Pakistan leaving the contractors in a fix whether to continue with their on going projects. As per report, the worst hit province is Punjab where housing and other development projects worth PKR 250 billion are lying incomplete.
Experts believe that there has been a rise of almost 22% in overall cost of construction from July 2007 to April 2008. Although there has been a reduction in mild bar prices and presently prices came to around PKR 70,000 per tonne from PKR 82,000 per tonne but extraordinary effort is required to ease the burden on construction industry.The prices of billet has witnessed a 20% increase in recent days, similarly iron ore prices are also soaring, resulting in unprecedented increase in steel prices. Once a project is started the builders are left with no choice but to complete it within shortest possible time which is not the case with public contractors. Sometimes circumstances force us to halt our activities because of soaring prices.
Besides steel prices, cement prices have also increased manifold. A recent survey indicates that its prices shoot up to more than 18 percent, badly affecting the pace of projects. Business boom in construction industry and the subsequent failure of interim government to check the prices have encouraged the manufacturers to increase prices regularly. There has been an increase of PKR 10 to PKR 15 every week for the last few months but high ups seem least bothered.

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Tin price boosts Abu Dabbab project    

Gippsland Limited said that the recent rise in tin prices has added about USD 15 million a year to expected revenues from its Abu Dabbab tantalum tin project in Egypt.The mine is expected to produce 1,530 tonnes of tin in concentrate a year over a 20 year mine life. Two German banks are currently completing due diligence work on financing arrangements for the USD 125 million project, which has a resource of 40 million tones of ore grading 243 g/t Ta2O5 and 0.09% Sn.Gippsland also has a 40% stake in the Zeehan tin project in Tasmania, the majority share in which was recently purchased by Stellar Resources.

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China keen to join IPI pipeline project Report    

It is reported that China has expressed its keenness again to participate in the USD 7.5 billion Iran Pakistan India gas pipeline project. Mr Yong Jiechi Chinese foreign minister said that "We are seriously studying Pakistans proposal to participate in the IPI gas pipeline project."Mr Yong Jiechi said Pakistan had the right to peaceful use of nuclear energy and China would continue to explore possibilities of cooperation in the peaceful use of nuclear energy. He added that Beijing would provide Pakistan CNY 70 million as technical and economic assistance and CNY 500,000 for equipment for the foreign office.
He said China is looking forward toward very constructive working relationship with Pakistan and purpose of his visit was to push forward relations between the two countries in various fields. He thanked Pakistan for its firm support with regard to Chinese position on the issues of Taiwan and Tibet.Pakistani foreign minister Mr Makhdoom Shah Mahmood Qureshi said that the two sides discussed in detail host of things from defense cooperation to strategic partnership and the economic linkages that existed between the two countries and agreed to build our relations to a greater height. He added that they discussed how to incorporate China into Iran-Pakistan-India pipeline project.He said that China had expressed its support to Pakistan for full membership of Shanghai Cooperation Organization. He added that China was a time tested and all weather friend of Pakistan.

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MEED launches Middle East Steel 2008 report     

It is reported that MEED has launched an in depth report on Middle East Steel 2008 which forecasts dramatic growth for the industry in the region.The report investigates the activities and plans of the region's leading raw steel producers and their place in the global market, as well as looking at price and demand trends.MEED's Middle East Steel 2008 report reveals that, despite only accounting for 2% of the global steel trade, the Middle East steel industry is undergoing rapid expansion to meet the needs of the fast expanding construction sector. It said that Middle East produced 21.1 million tonnes of raw steel in 2006 and consumed 41.6 million tonnes of finished goods and is forecast to rise to 35 million tonnes of production and 60 million tonnes of finished goods by 2010.
The report said that "According to MEED Projects, projects worth USD 2 trillion are planned or under way in the Gulf, with less than one quarter already awarded. The regional steel trade stands to make about USD 50 billion from projects currently under way and an additional USD 150 billion in the coming years from new schemes in the pipeline."Further key insights from the report reveal that "Rebar prices went through the USD 1000 a tonne barrier in late March 2008. They shot up from USD 600 a tonne to well above USD 800 a tonne in the three months to end January 2008, reflecting the huge demand for long products from the booming construction industry. Traders report that regional market conditions remain highly volatile and unpredictable, in keeping with global commodities markets.”
With Iran troubled by tension with the West, Saudi Arabia is the only country in the region in a position to substantially ramp up production to meet the strong regional demand. Egypt is the region's other major player, but exports little to the GCC.Mr Peter Shaw Smith senior writer at Research & Information of MEED writes "High oil incomes, coupled with major changes to real estate and mortgage laws, have fuelled a construction boom, with developers scrambling to bring on fresh supply. This is causing a backlog in the projects market, where strains are being placed on contractor capacity and building materials supplies. Unsurprisingly against this backdrop, steel prices have been volatile.

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Oman undertaking expansion project at Port of Shinas     

It is reported that Oman is undertaking a massive expansion of the country's port facilities as part of a larger program aimed at boosting its transport infrastructure to support trade and tourism. On April 27th 2008, the Omani government invited bids from engineering consultants for a feasibility study on the planned development of the Port of Shinas in the Batinah region.Though preliminary work has already been carried out at Shinas, with a dredging project in 2002 deepening the harbor's basin to 4 meters, existing infrastructure precluded the loading and unloading of larger ships, thus limiting the port's usefulness. The contract for the provision of consultancy services, which is being overseen by the ministry of transport & communication, is ultimately linked to the design and construction of a new port, with the aim of developing Shinas as a trade gateway for the north of the country, as well as serving to encourage investment in the region.
Envisaged at Shinas is the development of warehousing facilities and either a free trade zone or a special trade zone to help stimulate industry in the region. Having a direct shipping outlet in the area will assist the copper mines of Shinas and nearby Hatta, which between them have an estimated 4 million to 6 million tonnes of extractable ore with 2% copper content. As one of the few Gulf States with extensive mineral resources other than oil and gas, Oman has also seen the need to build ports for the specific needs of the industries in various areas.In this regard, there are plans for the port of Shinas to serve as a terminal for high speed ferries running to Khasab, the Omani enclave on the Musandam Peninsula. The port will also be linked by a new coastal highway running from the Port of Barka further down the Batinah coast, through the industrial Port of Sohar and on to the border with the United Arab Emirates. The Port of Barka has been earmarked for development into a logistics hub, with facilities large enough to handle container shipping and customs services.

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Saudi Arabia plans USD 426 million dockyard at Jeddah     

Khaleej Times reported that Saudi Arabia is planning to build a third major dockyard in the Kingdom at a cost of USD 426 million at the Jeddah Islamic Port.Dr Jabara Al Seraisry Saudi minister of transport said that the dockyard will be built on a build, operate and transfer basis under a Saudi Malaysian pact. The construction work is expected to begin soon and the dockyard will have capacity to store 2 million containers. He added that it would be larger than the others and would have better loading and unloading facilities.
Dr Al Seraisry said that a Chinese specialized company is currently studying the design and construction of the Kingdom's 9th port at Ras Azzur in the Eastern province at a cost of USD 586 million. He added that "It will be a great priority for the government since it would facilitate the mining industry in the region. There will be plenty of more opportunities for foreign companies that have the expertise in the relevant field." He further added that under the proposed land bridge project, which will link the east and the west coast via Riyadh, trains would carry 8 million tonnes of goods by the end of 2015. He said "A total of 700,000 compartments will be built for the trains that would commute in the 1150 kilometer long rail line.

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Liberum BHP-Rio analysis

RIO Tinto's effort to regain momentum in its battle to fend off BHP Billiton's $160 billion takeover bid has received a boost courtesy of British brokerage Liberum Capital, refloating the prospect of BHP adding a cash sweetener to its offer. The theory from Liberum is that BHP could “bump” up its offer ahead of submitting its competition application at the end of this month to the European Union. The idea is that BHP is hoping a higher bid would win over Rio's board, and allow it to present a united front to the regulators.However, despite gaining on its predator, Rio shares remained at a slight discount to BHP's 3.4-for-1 share offer, with its close at $138.30 equivalent to 3.3 BHP shares.
ABN AMRO said that there was still room for BHP to raise its bid, but noted it believed the pressure remained on Rio to justify its rejection of the bid and prove its stand-alone value argument. Rio lost traction after BHP shares were boosted by a massive rise in coking coal prices and reports that China is planning a possible share raid on BHP. Soundings from the BHP camp are that the mining giant is focused on submitting its application to the EU by the end of this month. It has already signalled a willingness to go it alone on the application when it decided to go hostile on Rio.BHP is also planning to up its efforts to sell its bid when its petroleum chief Michael Yeager investor briefing. In a research note Liberum also speculated that BHP could move to raise its bid to scare off a counterbidder, with the Chinese the most obvious candidates.

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Indonesian steelmaker set to launch IPO 

Privatization of the state-owned steel maker PT Krakatau Steel (KS) scheduled later this year will be through initial public offering (IPO) rather than strategic sales, an official said. Sales of 30% worth around Rp1 trillion (US$111 million) of the country's largest steel maker were originally
scheduled for last year, but poor financial performance in 2006 resulted in the postponement of the plan. The State Minister for State Enterprises, Sofyan Djalil, however, said that implementation of the IPO plan would depend on market conditions.

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Arcelor Mittal plans $3b investment 

The world’s largest steelmaker Arcelor Mittal plans to team up with state-owned PT Aneka Tambang (Antam) and PT Krakatau Steel to develop mines and a steel plant at a total investment of at least US$3 billion. The plan was announced by the Investment Coordinating Board (BKPM) following a visit by CEO Lakshmi Mittal to the State Palace to discuss the investment plan with President Susilo Bambang Yudhoyono. Mittal, called by Forbes magazine in March the world’s fourth-richest person with an estimated wealth of $45 billion up one place from a year ago owns 44 percent shares in Arcelor Mittal. After the meeting, Lutfi said, BKPM would facilitate cooperation between the company and Antam for securingthe supply of minerals, particularly iron ore, nickel and manganese, and with Krakatau Steel for a feasibility study for establishing a steel plant. Among locations considered appropriate for the steel plant, he said, was Kalimantan considering the proximity to mineral reserves.
Present during the meeting with the President, the Industry Ministry’s Fahmi Idris said the President was very “positive” on Mittal’s proposal and had ordered the Coordinating Minister for the Economy to issue a detailed formal response. “The response will include, among other things, a requirement for the company to utilize environmentally friendly technology in its operations,” Fahmi said According to a statement sent to the Post, the President said he hoped the country would be able to learn from the success of Arcelor Mittal, which currently controls 10 percent of the world’s steel supply for automotive, household and other industrial sectors. The Mittal family started their global empire by establishing PT Ispat Indo in Sidoarjo, East Java, in 1976, already in the steelmaking business with an initial production capacity of 60,000 tons a year.
The company currently produces approximately 700,000 tons a year. Arcelor Mittal was founded in 2006 when Europe-based Arcelor merged with Mittal Steel, which was formed after Ispat International and LNM Holdings, both controlled by Lakshmi Mittal, merged with International Steel Group in 2004. “I ask BKPM and the two state-owned firms to waste no time. This opportunity must be seized through a joint investment.

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Japan overtakes China as largest steel exporter   

Japan overtook China to become the world’s largest steel exporter in February. Japan reclaimed the top spot for the first time since losing it to China in April 2006. Data from the London-based Iron & Steel Statistics Bureau show that Japan’s exports in February were 3.44m tonnes, against China’s 2.85m t. China’s exports that
month were their lowest for two years. In the first two months of this year, China’s exports were down 27% on the same 2007 period to 6.7m tonnes. Japan’s exports rose by 16% to 6.4m t in the same comparison. Latest available figures for other major exporters, Ukraine, Russia and the European Union show monthly export volumes close to or exceeding the Chinese February level of 2.85mt, the ISSB reports.

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POSCO eyeing stakes in Chinese steel makers 

POSCO is considering buying a stake in a Chinese steel maker to expand its presence in the world largest but most fragmented steel market. The report cited POSCO as saying that “We are closely monitoring progress in China's steel industry shakeout and possible changes in the Chinese government's policy on foreign investment with a view to buy a stake in a Chinese steel company.” POSCO, the world's fourth largest steel maker by output, already operates BX Steel POSCO Cold Rolled Sheet in China a joint venture set up with Benxi Iron and Steel in 2003 and said in January it would spend USD 2.5 million to form a car parts plant in China.

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Nippon Steel, ArcelorMittal to expand joint U.S. output 

Nippon Steel Corp. and ArcelorMittal said Wednesday that they have reached a final agreement to strengthen their ties by constructing an automotive steelworks in the U.S. state of Indiana. This new facility will be built on the premises of their 50-50 joint venture, I/N Kote LP, doubling output capacity to about 1 million tons a year in 2010. The investment is estimated to total US$240 million, or about 24 billion yen. Nippon Steel will pay half of this. Although I/N Kote's capital base will be increased, Nippon Steel's and ArcelorMittal's relative stakes will remain the same.

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Korean steel capacity to reach almost 60m t/y in 2008 

Korea's crude steel capacity will climb by 4.5% or 2.59m tonnes/year in 2008 as several producers invest in additional capacity, Steel Business Briefing learns. According to a survey by The Korea Iron & Steel Association (Kosa), installed capacity will reach a record 59.82m t this year, up from 57.23m t in 2007. Kosa had earlier predicted that the country's crude steel output would grow by over 6% in 2008 to reach 54.6m t, as previously reported. The remodelling of a converter will lift Posco's capacity by 610,000 t/y to 31.5m t this year, and EAF producers Hyundai Steel, Korea Shape Steel and Daehan Steel also intend to either restart idled EAF capacity or commission new units Kosa says. For example, Daehan Steel's new 80t EAF at its Noksan plant is scheduled to commission by the middle of May, lifting the mini-mill's capacity by 700,000t/y; Korea Shape's 100t EAF will start in November at its new Chilsuh works, adding 800,000 t/y; and SeAH Besteel will rationalise its Gunsan works to help lift capacity by 200,000t/y. At the same time, Kosa says rebar maker Korea Iron & Steel (Kisco) will add a 70t EAF but scrap a 20t unit to give a net increase of 280,000 t/y.

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Lion Group plans steel plant in Vietnam  

Malaysia's Lion Group, which has recently announced its RM4.2 billion investments in its steel operations in the country, is now planning to build a USD 7 billion (RM 22.26 billion) steel mill in Vietnam. The Project, which is pending the Vietnamese Government's approval which could take a year, would be developed in four phases over a 12-year period, according to Lion Group Chief Executive Officer and Chairman, Tan Sri William Cheng, during an interview in Hong Kong. The plant, with an initial planned production of 3.5 million tonnes of steel products a year, could be expanded to 14 million tonnes a year, Tan Sri said. Tan Sri Cheng expects demand for steel products to rise to nine million tonnes this year from one million tonnes a decade ago due to Vietnam's booming construction sector and the increased production of appliances and machinery. Currently, Vietnam produces only two million tonnes of steel a year.

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China aiming for 100,000MW wind power capacity by 2020 

It is reported that China is looking to expand wind power generating capacity to 100,000 megawatts by 2020 or fivefold the previous target.Mr Shi Pengfei vice president of Chinese Wind Energy Association said referring to the National Development and Reform Commission China's top industry planning body that "The NDRC has just recently completed an internal meeting to discuss the possibility of increasing wind power capacity to 100,000MW. It's not 20,000MW or 30,000MW as previously targeted.”
Mr Shi said at a wind equipment show in Shanghai that China aims to get 15 percent of its power consumption from renewable sources by 2020, though the majority of the capacity will be contributed by hydropower projects. To meet this binding target, besides hydropower, wind has to play a major role as others like solar and bio energy will only generate small amounts out of the total.
According to the electricity regulator and industry association China has 5,600MW of installed wind capacity at the end of last year, though nearly a quarter of them are not connected to grids. Distributors in China are not keen on wind power as they have to secure back up energy during times when the wind is not strong enough and wind power costs more than coal-fired electricity.

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Sandvik to build new plants in China  

It is reported that Swedish based Sandvik group one of the world's largest engineering equipment producers plans to expand its manufacturing production bases on the Chinese mainland this year to tap the nation's mining and construction boom.Sandvik group said the factories will start construction in October. In addition it also plans to expand its production lines for mining equipment crushers in Jiading of Shanghai this year. The three factories, operated by the company's three business sectors and Sandvik Mining & Construction, Walter, and Sandvik Hard Materials will respectively produce Cemented carbide tools for mining equipment, Design and produce cutting tools and special tools, Produce cemented carbide wear parts.
Mr Svante Lindholm president of Sandvik China Holding Co said Sandvik China is set to build three new factories in Wuxi, Jiangsu province to enhance its production capacity. Mr Svante said "The new production lines will mainly serve the Chinese market and the secondary purpose is to serve Asian market and exports." Sandvik notched up CNY 3.8 billion sales revenue in China last year up by 20%YoY. While sales from mining equipment business grew the fastest among all its three business sectors.

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WISCO gets zero tax status for HR export to Indonesia   

WISCO recently have received the final judgment from Indonesian anti dumping Committee, under which WISCO gets the zero tax rate for hot rolled coil exporting to Indonesian.
On June 28th 2006, Indonesian Anti dumping Committee initiated anti dumping investigations on hot rolled coil whose width is longer than 600mm from China, Taiwan, Russia and Thailand.
WISCO is included in one of that export enterprises, WISCO organized nearly 60 people to work in Indonesian's anti dumping investigations and verification.As per reports, WISCO is the only one enterprise that gained the zero tax rate.

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Wuhan Steel's output to go up by 20% in 2008   

It is reported that Wuhan Steel's output will gain at least 20% in 2008 on account of the Beijing Olympics. The growth is expected to top domestic steel industry.Statistics show that total output of the three major steelmakers, Baosteel, Wuhan Steel and Anshan Steel, is likely to increase 11.79% in 2008. Wuhan Steel takes the lead by a possible growth of 21.87% with Anshan Steel following by 14.1%. Analysts believe that steel industry will growth minimum 30% in 2008 against the backdrop of increased outputs and climbed prices. Wuhan Steel's growth is expected to exceed the average figure.

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Upward trend for Chinese HRC price continues in May 2008  

Hot rolled steel coil prices will continue to move up on in China and the increase is expected to maintain for at least 4 weeks.On Shanghai market, commercial 4.75 to 11.5mm1500mm HRC is being offered at CNY 5650 to CNY 5680 per tonne, 1800mm wide material at CNY 5900 per tonne. Low alloyed 7.5mm HRC goes at CNY 5750 per tonne, while 11.5mm thick HRC has jumped to CNY 6000 per tonne.
Mysteel forecasts that taking Shanghai price for commodity grade 4.75 to 11.5mm1500mm HRC as benchmark, it is going to approach CNY 6000 per tonne as long as it remains above CNY 5500 per tonne.Export prices are also bullish at moment. Prevailing offers for commercial thick gauge hot rolled steel coil are at USD 930 to USD 950 per tonne FOB and some even have jumped to USD 960 to CNY 980 per tonne FOB. There is strong likelihood that quotations are going to reach about USD 1000 per tonne FOB if domestic price rise to CNY 6000 per tonne. Despite high export offers, transaction prices only see small increases. Most SS400 or Q235 HRC exports are being concluded at around USD 900 per tonne FOB for shipments to South Korea, Japan and South East Asia.
While delivery to the EU normally requires higher price, Italy is said to be the hot destination in Europe for Chinese HRC exports. A North West China based steel makers tells Mysteel that it has just concluded 15000 tonnes to 20000 tonnes S275JR HRC exports to Italy at USD 920 to USD 930 per tonne FOB, July 2008 shipment.Trading sources said that there have been fewer shipments to South East Asia following dramatic imports. Some traders are transferring the former signed HRC to other areas by quoting FOB South East Asian ports. It is noticeable that whether South Korea and the EU would continue to purchase Chinese HRC at updated prices. If transactions start to decrease sharply since May 2008, the upward trend of HRC export price probably would pause in the near future.

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Baosteel supplies SBQ plates for LNG carrier   

It is reported that Baosteel has completed steel supply for fourth and fifth liquefied natural gas vessels in China. This is the first time for Baosteel to provide whole vessel of cargoes to LNG with a total volume of 530,000 tonnes, reflecting that Baosteel has broken the monopolization of overseas SBQplate in the field. Following the bulk supply fir the Antarctic scientific expedition ship Xue Long, Baosteel succeed in offering steel products for the manufacture of whole ships of large scale and great difficulties such as 300,000 tonnes FPSO, which was the first one of such kind boat in China and the fourth one in the world and the instrumentation ocean-going vessel of Yuan Wang 5.
It is said the LNG is liquid fuel made from natural gas cooled to minus 163 degree, with the gaseous volume narrowed about 620 times, which has the advantages of fewer impurities, high efficiency in transportation, and good economic returns etc. LNG transportation carries are of the top grade in transportation ships with the highest technical content and difficulties, so only a few countries developed in building ships, such as Japan and Korea, could make them. After seven years of difficult studies, China started to build LNG carriers from the end of 2004, but as Baosteel has not put thick plate into production, the right to supply materials for the first and second LNG carriers had to be left to foreign enterprise.

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Yakutia sells coal property for RUB 6.4 billion   

Interfax reported that the rights to the Malo-Elginskoye section of the Elga coal deposit in Yakutia have been auctioned for RUB 6.44 billion ways above the starting price of RUB 40 million to the Sakha-Ugol Holding Company.Mr Gennady Naumov head of local subsurface resources agency Yakutnedra told Interfax that the auction lasted four hours and ended after the price was raised 1,600 times. He said there were three other bidders: Yakutugol Holding Company, OJSC Tula Inkom and CJSC Kolmar Proyekt.
The report added that the winner will receive a 25 year license to explore and mine the deposit, which contained probable P1 reserves of 37.18 million tonnes of bituminous coal and P2 reserves of 11.433 million tonnes as of January 1st 2007.

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Biomass power plant settles in Changchun    

It is reported that Huaneng Changchun Biomass Power Plant, Huaneng's first biomass power plant, settled at Changchun in Jilin province on April 26th 2008.The first power plant is expected to be operational by August 2009 the plant has an installed capacity of 50,000 KW and has received a total investment of CNY 300 million. It is designed to generate as much as 180 million KWH of electricity annually after its completion.
The biomass-fired power uses crop straw as the main fuel for generation. It will consume 200,000 tonnes of straw annually, equivalent to savings of 85,000 tonnes of coal every year. Meanwhile, the heat produced by burning straw will provide heat for 1.8 million square meters. The energy efficiency rate could be as high as 90%.

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Global steel price on top 

Sky-high production costs, strong demand and tight supplies have pushed global steel prices to new highs so far this year, but a correction may be on the way towards the end of this year, analysts say. Global steel prices have risen by 40 percent so far in 2008 as an export tax in China has halted supplies out of the country, squeezing the world market. Production costs have more than doubled, with the price of key steel making ingredients such as coking coal and iron ore ore having risen by 300 percent and at least 65 percent respectively. Major steel producers have managed to pass on their rising costs to their customers. ArcelorMittal for example has raised its prices several times in the last four months. Analysts say there's still room for prices to climb higher, but then a bumpy rise might be at the door. "At the moment most indicators we track are suggesting tight fundamentals and possibly higher prices," said Neil Buxton, analyst at industry consultants GFMS. Buxton explained the reasons for higher prices as "cost pressures, lower exports for some products from China as well as surprisingly strong demand conditions". Citi has recently raised its 2008 average hot rolled coil (HRC) and rebar benchmark price estimates both by more than 14 percent to reflect the cost increases of iron ore, coking coal and scrap prices. "Underlying steel demand is expected to remain solid for at least H1 2008," the Bank said. "However, we believe current steel demand is partly driven by inventory re-stocking, as distributors and other consumers anticipate higher prices related to raw material cost increases." Despite the short-term upbeat outlook, analysts say the honeymoon could soon be over.

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Exports tax drives steel producers out of market  

A tax on steel billet exports has driven Chinese producers away from the market and has so far discouraged them from signing up for London's steel futures, the London Metal Exchange (LME) has said. But LME commercial director Liz Milan says Chinese interest will revive if the tax is reduced or abolished. "We don't have any Chinese brands listed because there are no Chinese (billet) exports and the producers are not in the market effectively," she said. "China has a record of putting on taxes and taking them off. So there's a likelihood that at some point in the future that tax is going to be removed ... I'm sure as the contract develops we'll get more interest from the Chinese producers." China, the world's biggest producer and consumer of steel, has raised its export tax for steel billets to 25 percent since the start of the year and exports have virtually ground to a halt. "Consumers looking for billet have had to go to further afield to try to source their requirements. The trade flows have somewhat shifted since we originally looked at the regions," she said. "But nevertheless they are still valid because the consumption is still in the areas that we've identified." Traders and merchants say due to the shift in trade flows and lack of exports there has been very little Chinese participation in the LME's billet contracts, which started open outcry trading on the floor of the Exchange on Monday. Milan says interest is coming from elsewhere in Asia. "Just because the Chinese have imposed a tax does not mean the trade in the Far East has stopped," she said. Interest from the rest of Far East, including Taiwan, Malaysia and Korea has been strong and half a dozen producers have already registered as approved brands, she said. "The fact that Chinese are not exporting does not mean the consumption and the end use has gone away in the region. In fact it is still extremely strong," she said. Steel demand from Asia and Oceania is expected to rise 8.6 percent this year, accounting for more than half world demand, according to industry body International Iron and Steel Institute (IISI). Chinese consumption alone, is forecast to grow by 11.5 percent in 2008, accounting for 35 percent of the global demand.

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Russian steel makers raise funds in London    

London was the venue of choice for Russia's top four steel makers when attracting billions of dollars in investment through initial public share offerings. But as the London Metal Exchange (LME) launched floor trading in steel futures on Monday, the owners of Soviet-era mills were more focused on booming demand in their domestic market, driven by economic growth in excess of 7 percent a year. Russian mills directly supply every second tonne of steel in the world's fourth-largest producing country. Like many of their counterparts worldwide, they do not want to surrender pricing power by committing to a futures market in steel. "It's difficult to say that steel is a commodity. That's why it doesn't make sense to treat it as one," a trader who exports steel from a Russian mill said on condition of anonymity. "It's not reliable. It can crash. We can do the trading ourselves." The LME's regional billet contracts aim to provide a hedging tool and possibly a benchmark price for the $800 billion steel industry. Billets are semi-finished products accounting for about half of world steel production. Billets are re-rolled into bars and other products used in construction -- a sector that is booming in Russia as the government and private companies prepare to spend $1 trillion overhauling ageing infrastructure. Vladimir Lisin, Russia's fourth-richest man and owner of Novolipetsk Steel, forecasts steel use will rise by between 60 percent and 65 percent by 2015. "Demand in the domestic market rose 14 percent last year. This trend will continue," Serafim Afonin, president of the Russian Union of Metal Exporters, said. "There's no price volatility in the domestic market. Prices are rising," said Afonin, whose union represents almost all Russia's steel makers. The LME began open outcry trading in steel billet futures recently. Trading on its telephone market and electronic platform had begun on Feb. 25, since when volumes have been light.

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ArcelorMittal signs accord with CVRD  

  Brazilian firm to supply iron ore and pellets to its plants. ArcelorMittal said the contracts were the largest ever signed between a steel company and an iron ore supplier. Vale will supply about 480 million tons of iron ore and pellets to ArcelorMittal plants over the next 10 years. "This is an important agreement for ArcelorMittal as it ensures that we have the required levels of iron ore to operate our steel plants fully in line with current global demand," Davinder Chugh of the group's management board said in a statement. ArcelorMittal has 45 percent iron ore self-sufficiency and plans to increase that to 75 percent.

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Midwest Corp revises offers 

Australia's Midwest Corp Ltd said it was recommending a revised offer of A$6.38 a share from Chinese steel trader Sinosteel, conditional on a minimum 50.1 percent acceptance level. Midwest, which is proposing to dig iron ore mines in Australia, said the offer provided its shareholders with certainty amid market volatility.

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China denies freight premium inclusion in iron ore price  

China strongly rejects including any freight premium in iron ore price talks with Australian miners, Luo Bingsheng, vice president of the China Iron and Steel Association (CISA), said. Chinese steel mills' negotiations with the miners on annual term-contracted iron ore supplies have stalled in a disagreement over pricing, including the possible inclusion of a freight premium sought by the miners.

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LME begins steel futures  

Steel futures began open outcry trading on the floor of the London Metal Exchange (LME) on April 28, taking the conservative $800 billion industry into what many traders hope will be a new era. Trading in steel billets started almost as soon as LME Commercial Director Liz Milan rang the bell to start the session on Europe's last open outcry trading floor. The Mediterranean steel contract saw trades at $995 and $1,005 a tonne and was last at $990/1,000, while the Far East contract was last traded at $995. "It is a big day," said Martin Abbott, the Chief Executive of the LME. The first trades took place between AMT and Natexis. Other ring dealers including Barclays, Metdist and Sucden also took part in the trading. The regional contracts, covering the Far East and the Mediterranean regions, have been trading electronically and by telephone since Feb. 25 and almost 500 lots -- equivalent to 32,500 tonnes -- of trade has gone through. But several big producers, who have been enjoying pricing power amid sky-high global steel prices have repeatedly dismissed the idea of a futures market for steel. Still, many dealers say the industry needs steel futures and that the contract should thrive over time. Several market participants draw similarities with aluminium futures, which were dismissed when they were first launched 30 years ago.

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Baoshan Iron and Steel Q1 earning rises 16 per cent  

China's Baoshan Iron and Steel Co reported a 16 percent rise in first-quarter earnings, beating analysts' forecasts, after rising steel prices offset a surge in raw material costs. Baosteel, which competes with Japan's Nippon Steel Corp and South Korea's POSCO to supply China's market, posted a net profit of 4.26 billion yuan ($609 million), against 3.68 billion yuan a year earlier. Five analysts from brokerages and fund management firms polled by Reuters had given a median forecast of 3.68 billion yuan. Profits rebounded sharply from the October-December quarter, when earnings shrank to about 2.17 billion yuan because of weakness in the stainless steel market following a plunge in nickel prices. Baosteel raised its major steel product prices as much as 8 percent for the first quarter of 2008, and then lifted second-quarter prices a further 17 to 20 percent.

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Haniel profit rises on higher sales  

Franz Haniel & Cie. GmbH, the closely held majority owner of Europe's biggest drug wholesaler Celesio AG, said 2007 profit rose 6.1 percent on demand from the stainless steel industry and higher sales at other units. Net income rose to 922 million euros ($1.45 billion) from 869 million euros, the company, based in Duisburg, Germany, said in a statement. Sales climbed 5 percent to 29.2 billion euros. Haniel plans to focus on retail and services in future, the company said. Headed by former Daimler AG board member Eckhard Cordes, Haniel last year bought joint control of Metro AG, Germany's largest retailer, with the Schmidt-Ruthenbeck family and installed Cordes as chief executive officer. Haniel is owned by about 550 members of the Haniel family. Sales at the ELG division, which recycles and sells metals for the stainless steel industry, jumped 17 percent to 3.76 billion euros. The pretax profit of the unit added 47 percent to 266 million euros. Sales at Celesio, the largest in the Haniel group, rose 4 percent to 22.4 billion euros, helped by the acquisition of DocMorris, Europe's largest mail-order pharmacy. “Theoretically it would be possible to start DocMorris retail activities through Metro's retail chains,'' Cordes said in an interview. “But it is up to DocMorris to decide what is best for them.” The CEO declined to give a precise forecast on Haniel's revenue and profit growth this year. The company forecast a ``further positive business development in the coming years,'' according to the statement.

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Tangshan Steel Q1 profit rises 57 per cent  

Tangshan Iron & Steel Co., the publicly traded unit of China's second-biggest steelmaker, said first-quarter profit rose 57 percent on higher prices. Net income climbed to 729.8 million yuan ($104 million), or 0.32 yuan a share, for the three months ended March 31, from 464.7 million yuan, or 0.21 yuan, a year earlier, the Hebei province-based company said in a statement to the Shenzhen stock exchange. Sales rose to 13.8 billion yuan from 9.6 billion yuan. Tangshan's new plant, making as much as 1.5 million tons of plates used in ships and pipes, is helping it sell higher-priced products and cover rising material costs. Demand from shipyards in China and South Korea will result in a shortage of steel plates until 2010, Mirae Asset Securities Co. said in February. The announcement came after the market closed. Tangshan Steel fell 1.1 percent to close at 17.68 yuan, compared with a 1.9 percent decline in the benchmark CSI 300 Index. The company plans to produce 550,000 metric tons of ship plates in 2008, up from 128,500 tons last year, it said.

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UBS raises U.S., European steel price forecasts  

UBS AG raised its price forecasts for European and U.S. steel for 2008 and 2009 as producers pass on higher costs for raw materials to customers. Benchmark prices for European Union steel exports in 2008 will be 43 percent higher than previously forecast and 32 percent higher for 2009, analysts including Andrew Snowdowne, based in London, wrote in a research note. EU steel exports will reach $952 a metric ton by the fourth quarter of 2008 before declining to $790 a year later. U.S. domestic steel prices will be 31 percent higher than previously forecast for 2008 and 24 percent higher for 2009, UBS said. Prices will reach $992 a ton in the fourth quarter of 2008 and $840 a ton in the final quarter of 2009. UBS also raised its share price estimate for ArcelorMittal, the world's biggest steelmaker, to 67 euros from 60 euros, and for U.S. Steel Corp. to $172 from $160.

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