By | 2008-03-08 00:00:00

BEIJING -- China's largest steel manufacturer is "quite likely" to bid for mining giant Rio Tinto, Baosteel Group Chairman Xu Lejiang said recently. "The bidding plan is now under study and the chances to put forward a bid are very high," Xu was quoted as saying in the 21st Century Business Herald. Xu told the Guangzhou-based newspaper that the company had not signed any agreement with the London-based Rio Tinto. "As far as I know, Baosteel has not been in touch with us for such a move," an official with Rio Tinto's representative office in Beijing told Xinhua on condition of anonymity. Baosteel Group wouldn't comment on its chairman's remarks when Xinhua telephoned the company. Last month, Rio Tinto refused a proposal by BHP Billiton, the world's biggest diversified miner, to merge. Three of the Australian company's shares were offered for every Rio Tinto share. The share swap was equal to more than 120 billion U.S. dollars. Rio Tinto, however, regarded the offer as far from the true valuation of the company. The proposed mega-merger would have given the combined mining companies almost 40 percent of the global iron ore market. It would also have given them a bigger voice in the iron ore pricing talks. The industry's other giant is Brazil's CVRD which has a market share of more than 33 percent. When asked about the purchase price, Xu told the newspaper that the deal would probably surpass 200 billion U.S. dollars. As the world's largest iron producer, more than 50 percent of country's iron ore relies on importation at present. In addition, more than 95 percent of the iron ore consumed by Baosteel is imported, according to official figures. In the first three quarters, the country's import volume of iron ore stood at 284.04 million tons, up 14.93 percent from the same period last year, China's Iron and Steel Association said. Rio Tinto is a leading international mining group that combines Rio Tinto plc, a London-listed public company, and the Australia-listed Rio Tinto Limited with offices in Melbourne. China Investment Corporate Ltd. (CIC), the country's newly launched state foreign exchange investment company, dispelled market rumors in a statement on Nov. 26. It said that it was not involved in leading a group of Chinese steel makers to bid for RioTinto. On Tuesday, shares of Baoshan Iron and Steel, the Shanghai-listed arm of its parent Baosteel Group, rose 5.22 percent to 15.53 yuan amid the merger hearsay.

By | 2008-03-08 00:00:00

     Aluminum Corp of China (Chinalco), the nation's biggest aluminum and alumina producer, will take a 49 percent stake in Yunnan Copper Group to boost its output of the metal. Chinalco signed a purchase deal with Yunnan's provincial government on Sunday that will make it the majority shareholder, Yunnan Copper's listed subsidiary Yunnan Copper Industry Co Ltd said in a statement to the Shenzhen Stock Exchange. Chinalco will use Yunnan Copper's resources to help develop its local and overseas copper assets, the statement said. 'Chinalco's copper production is much smaller than its main aluminum business, and it's trying to expand copper manufacturing capacity,' said Shang Fushan, an analyst at the China Nonferrous Metals Industry Association. Chinalco said last week it had acquired a 91 percent stake in Peru Copper Inc for about $860 million. Peru Copper has exploration rights at Toromocho copper mine in Peru, which has estimated reserves of about 12 million tons of copper equivalent. Chinalco's quick expansion has pushed up its demand for resources, Xiao Yaqing, president of the company, said earlier. Its listed company Chalco posted a 5 percent drop in net profit to 6.4 billion yuan for the first half of the year.

By | 2008-03-08 00:00:00

In a recent news conference hold by Ministry of Commerce, Wangxinpei, spokesman of the ministry, remarked that up to now, the volume of imported steel has reached $ 800 billion, and it's expected to overpass $ 1 trillion by 2010. According to the statistics from China Steel Association, the export of steel billet during January to April reached 2.65 million tons, up by 92.2%; the exported steel reached 21.28 million tons, up by 132%; the total export of billet and steel reached 8.03 million tons. Wangxinpei estimated that after some steps like reducing export rebate tax in the first half of this year, China has been striving to improve the structure of exporting section and actively enlarge imports, which is expected to overpass $ 1 trillion by 2010. Some analysts point out the original idea of the Commerce Ministry to increase steel imports was aiming to balance the deficit of ex-import trade,  caused by the overgrowing of Chinese exported steel. If, however, the steel imports exceed $ 1 trillion, the domestic market will be not able to digest them. After the constant adjustment of steel export rebate, the export momentum has been controlled effectively, resulting in that much of the steel manufacturing capacity is bound to stay in domestic market, which would face much more pressure when the import volume is too high. Unless there will be some relating policies launched by the ministry, say, reducing the importing tax of steel, the figure( $ 1 trillion) would not come into true.

By | 2008-03-08 00:00:00

Baoshan Iron & Steel Co, China's largest steelmaker, said yesterday it would raise steel product prices from the first quarter of 2008 because of rising demand and raw material costs. According to the company's statement released yesterday, prices of benchmark hot-rolled products will be raised by as much as 300 yuan per metric ton, and that for cold-rolled steel products would increase by 200 yuan per ton. Prices of thick steel plates would rise by 500 yuan per ton. "The big price adjustment is beyond our expectations," said China International Capital Corp. After the adjustment, prices of hot-rolled and cold-rolled steel would jump 8 percent and 6.5 percent respectively. "Baosteel's prices are usually higher than other domestic steel manufacturers. The price rise is expected to push up the spot steel price," China International said. Pretax hot-rolled prices in the market rose an average 5.3 percent from the end of September to November 16. "The price of Baosteel's high-end steel products is to increase less than that of ordinary steel products because of the expected increase in output arising from previous investment in facilities," said Liu Baoyao, an analyst at Guangfa Securities. Analysts said the rise of Baosteel's prices also shows the company's confidence in the Chinese steel market in the first quarter. "From past experience, the steel price rise will continue at least until May," said Liu. "The price rise can cover the rising cost of raw materials, including iron ore and coal," Liu said, adding that iron ore prices for 2008 is set to rise because of the soaring marine transportation fee. "Even if the rise of the iron ore price range is higher than expected, Baosteel can further raise the prices, and we continue to be positive about the outlook of China's steel market next year," said the statement. Baosteel raised steel product prices in the second quarter this year and then cut prices in the fourth quarter.

By | 2008-03-08 00:00:00

Precision steel processing company China Precision Steel recently reported surging revenues, but unchanged net income for its Q1 of 2008. For the three months ended September 30th 2007, the Hong Kong based firm recorded revenue of USD 25.3 million up by 141% from USD 10.5 million in the first quarter of fiscal 2007. Revenue climbed on account of increased sales of high carbon and low carbon cold rolled steel from the company's increased capacity and the continued development of its brand in China. Its net income was USD 2.9 million as compared with net income of USD 2.9 million in the Q3 of 2006. The firm also updated its outlook, stating that its new cold-rolled mill with 150,000 metric tons of design capacity is expected to reach 50% utilization by the end of calendar year 2007. China Precision also said it has plans to commence the construction of a third mill with 150,000 metric tons of capacity in the first quarter of 2008. Additionally, China Precision said it will begin construction on a third mill in the beginning of 2008 using USD 44 million in funds raised through a registered direct financing. The company noted that it has also spearheaded several new R&D projects, including cold rolled steel used in drawer guidance rails and in double layer welded pipes for various.

By | 2008-03-08 00:00:00

BEIJING, July 14 (Xinhua) -- China's top iron and steel giant Baosteel will continue its role in 2008 to talk with major international iron ore suppliers on behalf of Chinese iron and ore producers, according to a decision made by the China Iron and Steel Association (CISA) Friday. CISA deputy chief Luo Bingsheng said next year's price talks will continue to focus on the relations of iron ore supply and market demand. He said that the international supply and demand of iron ore is seen to be basically balanced during the 2007-2008 fiscal year, and it is likely that supply will exceed demand. In 2007 China's import of iron ore will be around 367 million tons, the predicted figure of 400 million tons by overseas institutions is obviously too high, Luo said. He said that overseas suppliers have the advantage of manipulating output volume, the top three iron ore producers do have intentionally reduced their output recently to push up market price in preparation for next year's talks. In June, China's import of iron ore dropped by six percent year-on-year, and the three major suppliers have noticed Chinese enterprises to cut supply by at least five million tons in the third quarter, he said.

By | 2008-03-08 00:00:00

Pak daily reported that Pakistan will import plants and machinery from China to be used in the exploration of iron ore as the authorities in Board of Investment are working in this regard. As per report, Pakistan's Board of Investment has written a letter in this regard to the Chinese authorities. The reports cited an official as saying that "The private sector that is working in exploration of iron sector will import plants and machinery and the government has contacted Chinese authorities in this regard." The official added that iron ore has become very important with the rising demand of steel in the country. He said that Pakistan has over 780 million tonnes of iron ore spread in Punjab, North West Frontier Post and Baluchistan and private sector is working to explore the reservoirs. As per report "Pakistan iron ore contains 35% Fe similar to that in and thus the machinery and plants manufactured by China can also work in Pakistan." The official added that Pakistani private sector had also agreement with Indian privates sector to import plants worth over USD 300 million.

By | 2008-03-08 00:00:00

During the first nine months of 2007, Hebei produced 83.61 million tons of crude steel, up 21.58% year-on-year; 79.46 million tons of steel products, up 34.41%; 78.23 million tons of pig iron, up 20.87%; 28.71 million tons of coke, up 28.46% and 21.85 million tons of iron ore, up 32.5%. The growth rates of the above figures were 3.98, 10.41, 5.17, 9.06 and 9.60 percentage points higher than the average growths across the country respectively. Hebei will become the first province in China whose crude steel output will exceed 100 million tons in 2007. What should be underlined is, however, there was not a single producer in the province that was awarded the China Famous Brand Products in 2007. Profits in the steel makers in Hebei started dropping from July. Profits in 44 key steel makers declined by 12.51 percentage points year-on-year during the first three quarters despite a rise of 5.29 percentage points in main business revenue. Some medium and small producers were on the verge of being unprofitable or even losses from August, quite a few medium and large producers earned less as well. Part of mills in Handan and Tangshan has been forced to close down since the beginning of the fourth quarter. The main problems in the local industry are: low degree of centralization, lack of leading enterprises in the international market, extensive growth remains unchanged with lower ratio of premium steels, huge amount of outdated capacity, hard works to save energy and reduce emissions, increasingly tight supply of raw materials and lower degree of resources guarantee. The main tasks to deal with the steel industry in Hebei for the future are: to implement the development strategy of steel industry chain and optimize market structures, to adjust productivity deployment and optimize industrial structures, to implement merge and consolidation strategy and optimize enterprises structures, to enforce "high, premium, special and deep" strategy and optimize products structures as well as to enforce energy saving and emissions reduction strategy and optimize technology and facilities structures.

By | 2008-03-08 00:00:00

It is reported that Chinese steel maker Panzhihua Steel has put away previous export strategy focusing on primary products and would now optimizes export product mix for getting better returns. Panzhihua Steel has now laid emphasis on exports of high tech and high value-added products such as steel rail, flat products and seamless steel pipe and reduced exports of high polluting, high energy consuming and resource intensive products in line with government requirements. Export volumes of steel rail, flat products and seamless steel pipe all broke 100,000 tons during the first seven month. Panzhihua Steel earned USD 324.44 million through exports during January to July 2007 setting a new record. Its export volume of steel rail remained the largest in China. In January to June 2007 Chinese government levied a 5% to 10% export tax on a total of 83 types of steel products on June 1st 2007, followed by the cancellation of export tax rebate on the 83 types of steel product on April 15th 2007. In addition, the export tax on steel billet, steel ingot and pig iron was increased from 10% to 15% on June 1st 2007. These policies, as well as the continuous appreciation of CNY have curbed the exports of steel products.

By | 2008-03-08 00:00:00

It's reported that Russian steel majors Severstal, MMK and NLMK will prepare official anti dumping complaints to Russian authorizes on imports of color coated coil & sheet and galvanized coil & sheet. They may start to file those in January, according to one Severstal sales director. Recently there are no specific targeted countries has been revealed but current Eurofer's anti dumping measures may be the lead. The complaints may be against China, South Korea and Taiwan. Also, one Middle Eastern country may also be targeted.