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Friday, April 15, 2011

NATO chief acknowledges "no pure military solution" to Libyan crisis

Fri, April15, 2011 23:56:04 |

WASHINGTON, April 15 (Xinhua) -- NATO Secretary General Anders Fogh Rasmussen acknowledged on Friday that ultimately there is no "purely military solution" to the crisis in Libya.

"That is why the international community is urgently seeking a political settlement, a settlement that ensures that the people's legitimate demands for genuine transition and a brighter future do not run into the Libyan sands," he wrote in the Washington Post.

He also lamented the fact that "it is never easy to forge a broad-based agreement to take military action."

As stalemate continues on the ground in Libya where the opposition and the government forces have been engaged in a tug-of- war, divisions have emerged within the military alliance with France and Britain, which have been spearheading the airstrikes on Libya since NATO took over control of the military mission from the United States on March 31 and grown frustrated with lack of support from allies, calling for more support from other member states, the U.S. in particular.

Of NATO's 28 members, only six are conducting air bombing on ground targets of the Libyan government forces. Some are joining the noncombat mission of policing the arms embargo against Libya. The U.S. has been resisting calls for its reasserting a stronger role in airstrikes, saying instead that NATO has the capacity to fulfill the mission and is doing well.

However, NATO was criticized by Libyan opposition for acting too slowly and ineffectively.

Rasmussen argued that the international community and NATO had to act in Libya, as Libyan leader Muammar Gaddafi "unleashed indiscriminate violence against his people as they sought change from his despotic regime," and the actions have been based on the support of the international community, including authorization by UN Security Council Resolution 1973.

He wrote: "In this broad international effort, NATO was asked to play a key part. NATO allies have taken on full responsibility for implementing all military aspects of this resolution: policing the arms embargo, patrolling the no-fly zone and protecting civilians from the threat of attack."

"We agreed to take on the UN mandate after intensive discussion and careful planning within NATO and on the basis of solidarity among all 28 member states," he added.

He argued that NATO "is doing its utmost to fully enforce the UN mandate around the clock," noting that "since we took over command of the mission in Libya on March 31, the operational tempo has not abated. We have flown more than 2,000 sorties, of which over 900 have been strike sorties."

"What has changed is the situation in Libya," he wrote.

He explained that in the early days of the operation, sorties focused on static targets while NATO is now conducting pinpoint strikes and degrading the ability of Gaddafi's forces to fight.

He wrote: "We are targeting air defenses, tanks, armored personnel carriers, ammunition dumps and fuel supplies. Gaddafi is hiding his tanks and heavy weapons in city centers, near schools and mosques, showing his utter disregard for the lives of civilians. In stark contrast, NATO pilots strike with care and precision to maximize the effect of our actions while minimizing the danger to civilians."

"We have the capabilities required, we are using them effectively and successfully," he wrote. "And we are committed to providing all necessary forces and maximum operational flexibility within our mandate. On Thursday, NATO foreign ministers meeting in Berlin made it clear that we would continue to exert this pressure on legitimate targets as long as is necessary."

He made clear NATO's three key objectives -- stopping all attacks and the threat of attacks against civilians and civilian populated areas, seeing a "credible and verifiable" withdrawal of all the government's forces back to their bases, including a withdrawal from the populated areas they have occupied, and forcing the Libyan government to allow "immediate, full, safe and unhindered" humanitarian assistance to all the people of Libya.
Editor: Mu Xuequan sourced Xinhua

Grande Cache Coal cuts 2012 sales volume view, shares dip

Fri Apr 15, 2011 4:00pm GMT

* Cuts 2012 sales view 8 pct to 2.2-2.4 mln tonnes
* Sees 2012 average cost of sales at $125-$130 per tonne
* Sees 2012 capital budget about $80 mln
* 2011 sales fell 12 pct to 1.55 mln tonnes
* Shares down as much as 9 pct

April 15 (Reuters) - Canada's Grande Cache Coal Corp cut its 2012 coal sales forecast by about 8 percent as production at one of its mines in Alberta is delayed, sending the metallurgical coal miner's shares down as much as 9 percent.

The No. 8 Pit, located in the Smoky River Coalfield, has been plagued with various problems. While the delay in the third phase of production will hurt 2012, lower-than-expected production in the first and second phases forced the company to keep lowering its outlook for 2011. [ID:nSGE70A0AK]

The company's production problems come at a time when the prices for metallurgical, or coking, coal have been driven up by strong demand from China and India and tighter supply due to floods in Queensland, Australia.

Grand Cache now expects to produce 2.2-2.4 million tonnes of coal in 2012, down from its previous forecast of 2.4-2.6 million tonnes, it said in a statement.

The average cost of sales in 2012 is expected to be $125-$130 per tonne, similar to fiscal 2011.

Sales in the fourth quarter fell 14 percent while the average sales price of met coal was about $192 per tonne. Sales in fiscal 2011 fell about 12 percent to 1.55 million tonnes.

The company, however, said it still expects to grow annual production to 3.5 million tonnes by the end of fiscal 2013.

Grand Cache said it is in the initial stages of production in the No. 8 Pit.

The company's shares, which have fallen about 6 percent since its reported results in early February, fell to a low of C$8.88. They later recovered some losses to trade down 3 percent at C$9.06 in afternoon trade on the Toronto Stock Exchange. (Reporting by Amrita Sabina in Bangalore; Editing by Pre Udayabhanu and Don Sebastian, sourced Thomson Reuters)

Turkey, Russia to start visa-free travel

Fri, April15, 2011 16:50:00 |

ANKARA, April 15 (Xinhua) -- Turkish and Russian nationals will be able to travel between the two countries without obtaining a visa starting from Saturday, the Anatolia news agency said Friday.

Turkey and Russia signed an agreement last year to lift visa requirements for their citizens traveling to the other side and the agreement will take effect as of April 16, 2011, said the report.

The move is expected to boost bilateral trade to 40 billion U.S. dollars from the current 26.2 billion dollars within one year and promote tourism as well, the report said.

Turkish and Russian citizens can travel for 30 days without visa within a 90-day period, according to the agreement.

Mehmet Buyukeksi, president of Turkish Exporters' Assembly (TIM) , said he hoped this historic step with Russia would be an example to other EU countries, added the report.

Russia was the second biggest trade partner of Turkey and considered as a target market by all exporter sectors, he said. Editor: Xiong Tong, sourced Xinhua

BRICS leaders meet in China to discuss economic issues, global challenges

April14, 2011 09:36:23 |

Chinese President Hu Jintao (C), Brazilian President Dilma Rousseff (2nd R), Russian President Dmitry Medvedev (2nd L), Indian Prime Minister Manmohan Singh (1st L) and South African President Jacob Zuma (1st R) attend a photocall in Sanya, south China's Hainan Province, April 14, 2011. The BRICS Leaders Meeting was held here Thursday morning. (Xinhua/Li Xueren)

SANYA, Hainan, April 14 (Xinhua) -- Leaders from five of the world's largest emerging economies met in China's southern resort city of Sanya Thursday morning for a summit to coordinate stance on major economic and international issues.

The leaders -- Chinese President Hu Jintao, Brazilian President Dilma Rousseff, Russian President Dmitry Medvedev, Indian Prime Minister Manmohan Singh and South African President Jacob Zuma -- started a closed-door meeting after a group photo was taken.

The meeting, chaired by President Hu, is expected to strengthen coordination and mutual cooperation among BRICS members on reform of the international currency system, commodity price fluctuations, climate change and sustainable development.

Following their talks, the leaders will jointly meet the press and issue a statement indicating their consensus on the key topics.

The term of BRIC was first coined by Goldman Sachs economist Jim O'Neil in 2001 to group four fast-growing economies -- Brazil, Russia, India and China.

The countries now seek to use the idea to forge a platform for communication and cooperation. In 2009, Russia hosted the first summit of BRIC state leaders and the second such gathering took place in Brazil last year.

South Africa was invited to join the grouping in late 2010.

The five countries' population made up 42 percent of the world's total and their combined gross domestic product (GDP) accounted for 18 percent of the global GDP in 2010. Their trade volume took up 15 percent of the world's total last year. (sourced Xinhua)

Greek crisis to be solved through restructuring of country, not debt: PM

Fri, April15, 2011 20:06:53 |

ATHENS, April 15 (Xinhua) -- The Greek debt crisis will be solved through the restructuring of the country, not its debt, Greek Prime Minister George Papandreou said at a cabinet meeting Friday.

He was presenting the outline of the next package of fiscal and reform measures to face the crisis.

Papandreou rejected the assumption that Greece would eventually resort to debt restructuring if targets set last year to avoid default and overcome the crisis by 2014 with European Union-International Monetary Fund support were not be met.

Due to a shortfall in revenue collection and an expected revision of the 2010 budget deficit to over 10 percent of gross domestic product (GDP) by Eurostat, the Greek government aims to raise 23 billion euros (33.27 billion U.S. dollars) through a medium term-fiscal policy plan for the period 2012-2015 to put its economy in order.

"This is our roadmap which will lead from the Greece in crisis to the Greece of creation and will guarantee that we will not go through a similar crisis in the future," Papandreou said.

The full plan would be discussed with social partners and other political parties and would be presented in detail after Easter holidays, before being submitted to parliament for a vote, he said.

The basic lines, he said, were fiscal discipline aiming to reduce the budget deficit from 15.4 percent of GDP in 2009 to 1 percent in 2015, and measures to boost development through attracting more investment.

At the meeting, Papandreou also expressed his government's determination to implement all the necessary policies and reforms to face the crisis. sourced Xinhua

Sumitomo Metal to book $715 mln charge due to quake

Apr 14, 2011 10:08am GMT

* Output cut to reduce 10/11 group profit by Y2 bln
* Quake has no impact on merger talks with Nippon Steel
* Kashima plant to return to normal operations by end-May

TOKYO, April 14 (Reuters) - Sumitomo Metal Industry , Japan's third-biggest steelmaker, said on Thursday in would take a 60 billion yen ($715 million) charge for the year that ended on March 31 due to damage resulting from last month's devastating earthquake and tsunami.

Its 8.3 million tonne-a-year Kashima plant was the closest of Japan's mills to the quake's epicentre and its two blast furnaces, cokes gas holders, ports and cranes were damaged.

The blast furnaces were back on line by March 26 but reduced shipments from the Kashima mill, which produces automotive steel sheets, thick plates and construction steel, cut profit by 2 billion yen in the 2010/11 year, Fumio Honbe, executive vice president, told a news conference.

The plant, which accounts for 60 percent of Sumitomo Metal's entire crude steel output, is now operating at less than 50 percent capacity, he said.

Sumitomo Metal, a world's top maker of seamless steel pipes used in gas projects, plans to merge with Nippon Steel Corp , the world's No.4 steelmaker, by October 2012.

"The quake has no impact on our merger talks," Honbe told reporters.

Before the quake, Sumitomo had planned to swing back into the black, booking 25 billion yen in net profit for the year ended March on a 12 percent rise in revenues of 1.44 trillion yen.

Sumitomo aims to return the Kashima steel works to normal operations by the end of May.

Honbe said the company had not yet decided on its year-end dividend payout for the 2010/11 business year. ($1 = 83.890 Japanese Yen)
(Reporting by Yuko Inoue; Editing by Edwina Gibbs, sourced Thomson Reuters)

Iron Ore-Spot prices steady for third day, traders cautious

Thu Apr 14, 2011 4:15am GMT

* Iron ore price stood unchanged at $188-190/T
* Shanghai rebar slipped after short-lived rebound
* Traders splitting views, still cautious
* Singapore ore swaps fell further

By Ruby Lian and Jacqueline Wong

SHANGHAI, April 14 (Reuters) - Spot offers of iron ore to top buyer China stood unchanged for a third consecutive day on Thursday after hitting $190 per tonne, with traders watching for clearer guidance on near-term market direction.

Trade in Shanghai rebar futures was volatile this week, triggering growing caution among iron ore traders.

"The market view is largely split after fast gains in iron ore prices over past few weeks, but I still expect prices to stabilise in the coming days," said an iron ore trader in coastal Shandong province.

Small and medium-sized Chinese steel mills, facing tight credit liquidity, are less keen to rebuild up stocks after prices surged 12 percent from mid-March.

"Credit liquidity is not as ample as before, and some steel mills are only purchasing small amounts to meet urgent needs," said another iron ore trader in Shanghai.

Offers of Indian ore with 63.5-percent iron content were steady at $188-190 per tonne, including freight, on Thursday, industry consultancy Mysteel said.

Major iron ore indexes, reflecting spot prices and used by global miners in determining supply contracts, stabilised on Wednesday.

The Steel Index's 62 percent benchmark .IO62-CNI=SI stayed unchanged at $181.90 per tonne after slipping 0.6 percent on Tuesday, and Platts 62 percent iron ore index IODBZ00-PLT was unchanged for a third day at $184.50.

Metal Bulletin's 62 percent index .IO62-CNO=MB eased $1.25 to $181.19 per tonne on Wednesday.


Analysts expect the supply tightness of the key steelmaking ingredient to support prices, and miners are bullish on strong demand from China in the second quarter.

"I think iron ore prices could come off near term, but they have to stay high and could easily go higher before the end of the second quarter. There is no inventory and the seaborne market is tight," said Graeme Train, analyst with Macquarie Commodities Research.

Global miner Rio Tinto's said its sales of iron ore and coal to disaster-stricken Japan are starting to recover slightly.

Traders said some miners plan to raise offers of iron ore in May in anticipation of strong demand from China.

The National Development and Reform Commission (NDRC), China's economy watchdog, warned that some Chinese steel mills have already suspended iron ore imports to mitigate cost pressure, it said on its website on Thursday.

The continued rise seen in iron ore prices has seriously squeezed the margins of Chinese steel mills, with big mills suffering a profitability ratio of only 3 percent, NDRC said.


Iron ore swaps cleared by the Singapore Exchange <0#SGXIOS:> extended losses on Wednesday.

The April contract fell $1.63 to $178.25 per tonne, May edged down $2.5 to $170.75 per tonne and June slid $1.87 to $167.63 per tonne.

Shanghai rebar futures fell modestly on Thursday after a short-lived rebound in the afternoon session on Wednesday.

The benchmark rebar futures October contract, the most-traded on the Shanghai Futures Exchange, reached 4,931 yuan ($754.7) per tonne, an about seven-week high, but eased to 4,911 yuan per tonne by midday break.

China's Dalian Commodity Exchange will start trading of the world's first coke futures on Friday, providing a financial derivative tool for steelmakers and coke producers to hedge another major steelmaking ingredient. ($1 = 6.533 Chinese yuan) (Editing by Ed Lane, sourced Thomson Reuters)

Steel scrap price down on gloomy Turkish demand

Apr 14, 2011 10:29am GMT

* Steel scrap prices at $418-447 CFR Turkey
* Prices in South East Asia fall $5-10/T in a week
* Scrap swap forward curve in backwardation

By Silvia Antonioli

LONDON, April 14 (Reuters) - Steel scrap prices fell for a fourth week in a row on weak demand from top importer Turkey and as improving weather conditions in the largest exporting countries boosted supply availability.

Steel scrap, a key ingredient for steel products such as billet and rebar, sold at $418-447 per tonne cost-and-freight (CFR) Turkey this week, down from $440-450 per tonne CFR last week.

"Recyclers will have to cut their prices if they want to sell anything," said a European scrap broker.

"The problem is finished products. The steel sale crisis is very serious, and Turkish producers are buying smaller scrap cargoes from the Black Sea at $422 CFR."

Short sea cargoes from neighbouring countries are generally a cheaper source of small volumes of scrap for Turkish producers, while recyclers in the United States and Europe offer higher volumes of material in bigger ships.

Black Sea billet prices have fallen in the past month as political unrest in key importing areas in North Africa and the Middle East has depressed investment in construction and demand for billet. Overproduction is also dogging the steel market, traders said.

Poor sales of steel scrap to Turkey weighed on domestic prices in Europe and the U.S., the main exporting areas.

European domestic prices fell on average $5-15 per tonne, and U.S. domestic prices fell by about $2-3 per tonne from last week, traders said.

Turkish steel mills are likely to come back into the market to buy some more scrap this week or next as many of them are running low on stocks, but whether they will buy volumes high enough to lift prices is not known, a Turkish producer said.

"The only other variable that may move prices up at the moment is China," said a raw materials buyer at an Italian steelmaker.

U.S. recyclers were offering heavy melting scrap (HMS) 1&2 (80:20) at about $435-440 per tonne CFR Turkey, but given the scarce demand from Turkey they turned to China for some sales.

China and South Korea bought 20 deep-sea cargoes of steel scrap at $477-480 CFR in the past two weeks, but this wasn't enough to move prices up, traders said.


Steel scrap prices in South East Asia fell by about $5-10 a tonne on average since last week as demand was weak and the earthquakes and tsunami that hit Japan weighed on sentiment, according to market players.

Japan's government has downgraded its assessment of the economy for the first time in six months to reflect the disaster.

Offers to Taiwan, a major Asian importer, were at $445-450 CFR for heavy melted scrap (HMS) 1 and 2 Taiwan this week, down by about $5-10 per tonne from last week, according to traders.

"The general feeling is that the market is soft and is not getting any stronger," said a steel scrap trader.

"I don't see any factor that could change things at the moment."

However, some were more optimistic, focusing on the fact that reconstruction will start soon in Japan and more steel will be needed.

"It is a bit surprising that the market has not fallen more with all these things going on," a second trader based in the United States said, referring to the events shaking North Africa, the Middle East and Japan.

"This makes me think that despite all, the underlying fundamentals are still sound."

In the over-the-counter steel scrap swaps market, a $10 backwardation -- premium for cash over three month material -- reflected expectations of softening prices in the next few months.

"The view moving forward is still very negative. The sellers don't want to move out of their positions, and there is a lack of conviction on the bid side," said Arthur Worsley, steel derivatives broker at Freight Investors Services.

"I think everybody knows that scrap is going down. The question is: by how much?"

(Editing by Jane Baird, sourced Thomson Reuters)

Indonesia says Coal India to invest $3 bln in coal, steel

Apr 14, 2011 12:04pm GMT

* Feasibility study is expected to be concluded in June this year
* Coal India aims to invest in Central Kalimantan Province
* Coal India is looking to buy coking coal mine, build steel plant

JAKARTA, April 14 (Reuters) - Coal India , India's biggest coal producer, plans to invest up to $3 billlion in a coking coal mine, steel plant and a seaport on Indonesia's Kalimantan island, Agustin Teras Narang, the Central Kalimantan governor, said on Thursday.

Narang told Reuters on the sidelines of an infrastructure summit in Jakarta that Coal India was expected to complete feasibility studies in June in order to know what coal reserves they could develop.

"They (Coal India) will prepare all the funds for the projects," Narang said, adding that the parties had signed a preliminary agreement earlier this year.

However, the lack of a regulatory framework on land acquisition has made a lot of Indonesian projects uncertain, analysts and investors said during the three-day summit.

Central Kalimantan province has about 4.8 billion tonnes of coal reserves and coking coal is estimated to represent around 40 percent of that.
(Reporting by Fathiya Dahrul; Writing by Janeman Latul; Editing by Alan Raybould, sourced Thomson Reuters)

Moody’s Cuts Ireland Rating Two Levels, Outlook Negative

Apr 15, 2011 1:19 PM GMT+0530
By Finbarr Flynn and Dara Doyle

Ireland’s credit rating was cut two levels by Moody’s Investors Service to the lowest investment grade as the government struggles to lower the budget deficit and restore economic growth.

Moody’s reduced the rating to Baa3 from Baa1, leaving the country’s outlook on negative, according to an e-mailed statement today. That’s the same rating as Iceland, Tunisia, Romania and Brazil. Standard & Poor’s on April 1 cut Ireland’s rating one level to BBB+ with a stable outlook.

Irish taxpayers may spend as much as 100 billion euros ($145 billion) trying to solve Europe’s worst banking crisis as the country draws funds from last year’s bailout. Ireland is trying to convince investors at home and abroad it has finally plugged the hole in its lenders after four failed attempts following the collapse of the country’s property boom in 2007.

Irish debt restructuring is not a “plausible scenario,” Dietmar Hornung, a Frankfurt-based analyst at Moody’s, said in a telephone interview today. The country has a “good track record of delivering” fiscal consolidation, while the negative outlook reflects the “unbalanced risks” facing the nation.
‘Significant Threats’

The extra yield investors demand to hold Irish rather than German 10-year bonds has narrowed to 596 basis points from 687 basis points since central bank Governor Patrick Honohan disclosed on March 31 how much additional capital the country’s lenders need.

Fitch Ratings yesterday affirmed Ireland’s BBB+ rating and removed the threat of a downgrade, calling latest efforts to resolve the banking crisis “credible.” The ratings company maintained a negative outlook, citing “significant threats to an economic recovery and fiscal consolidation.”

Ireland’s central bank yesterday forecast gross domestic product to rise 0.9 percent this year, saying consumer demand will remain “subdued” as the government cuts spending. The European Central Bank last month projected the 17-member euro- region economy will expand about 1.7 percent in 2011.

“The country’s weak economic growth prospects are driven by the fiscal consolidation process, the ongoing contraction in private-sector credit, and a more adverse interest-rate environment,” Moody’s said. “The Irish government’s financial strength could decline further if economic growth were to be weaker than currently projected, or if fiscal adjustment were to fall short of the government’s planned consolidation path.”
‘Uncomfortable’ Place

Gary Jenkins, head of credit strategy at Evolution Securities Ltd. in London, said in an e-mailed note today that Ireland is now in the “most uncomfortable of places to be on the ratings scale, one false step from junk.”

Ireland’s government has injected about 46 billion euros into banks and taken majority stakes in four of them. Honohan said on March 31 it is realistic to expect Bank of Ireland Plc and Irish Life & Permanent Plc, the two lenders not already owned by the government, to fall under state control.

Finance Minister Michael Noonan said last month Ireland can sustain mounting debt levels if it fixes its lenders and maintains economic growth.

Other euro-region governments are also seeking ways to lower budget deficits and restore investor confidence. S&P last month cut Portugal for the second time in a week to the lowest investment-grade rating of BBB-. The country last month became the third euro nation after Greece and Ireland to ask for aid.

European Union Economic and Monetary Affairs Commissioner Olli Rehn said yesterday that a debt restructuring in the euro region could cause a “chain reaction through the banking sector,” calling the environment still “fragile.”

“The downgrade is disappointing to say the least,” Bloxham Stockbrokers analysts including Dublin-based Alan McQuaid said in an e-mailed note today. “However, given the ongoing uncertainty over Ireland’s fiscal position, it is not altogether surprising.” (sourced Bloomberg)

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Dry Bulk market keeps on falling on low demand and high supply- Nikos Roussanoglou, Hellenic Shipping

Friday, 15 April 2011

The dry bulk market has kept its falling patern this week, with the industry’s benchmark, the Baltic Dry Index (BDI) retreating again yesterday to end the session down to 1,309 points, a daily slump of 1.13%. On the positive side, the Capesize market stopped tis fall, to end the session marginally higher at 0.19 percent to 1,573 points. At the same time, the constant fall of the panamax sector finally led rates lower than Capesizes. Since the beginning of the year, Panamaxes had been the top earners of the dry bulk market, in a sector’s paradox that tended to become the norm. Yesterday, the panamax segment lost further ground to end down by 2.40 percent.

In its latest weekly report, Fearnley’s said that the Panamax market continued its downward trend this week. It was some mixed views beginning week when more fresh cargoes entered the market - but this was quickly absorbed by the overwhelming supply of available ships. “The rates in both hemispheres are slowly declining and we do not see any fundamental upcoming events in the near future which will have any positive effect to the rates. Next week is Easter Holidays in most European countries and we believe this also will affect the already slow market. For Continent positions doing Fhauls the rates are in the low 20´s region. Tarv´s paying low teens while in the Pacific the rounds are fetching very low 10´s. The period market has been somewhat none existing lately with only a few fixtures reported at around 15k lvl for short/medium periods” it mentioned.

As for the Capesize market, it said that the segment is heading for another low, as newbuildings continue to pour out of yards. “Spot demand is fair, despite recent natural disasters, but simply not sufficient to fully employ a growing fleet. Pacific rounds, although not covering operating expenses, are stable at just over usd 6k/day – the reference trade WAust/China hovering in the dismal usd 7.50-75 pmt interval. Atlantic has taken a further blow, with levels for the Cont-Brazil-China fronthaul trade dropping 10% w-o-w to come in at usd 20k/day, TA rates softening by a full 35% to usd 6250/day. A few key players still book period tonnage, at levels reflecting the presently inverted forward curve more than the current spot bloodbath 180kdwt newbuilding done ex yard prompt for 11-13 months at usd 15k/day, 180kdwt/built 2010 fixed prompt for 4-6 months at usd 12500” said the shipbroker.
Regarding the smaller ship types, “the Atlantic market remains flat - very little new/fresh business and slow activity. Considerable prompt tonnage remains unfixed. The USG pays very low 20´s for petcoke runs into the EMed/EMed. Short period dely in Atl on Supramax 53kdwt stands at usd 18500 with worldwide redelivery. TA rounds are being traded in the high teens. Pacific market very quiet as Chrtrs holding back their requirements and allowing tonnage to build up. Supras in N.China get close to 12k for trips via Indo to India. Iron ore from India expected to pick up with increased cargoes and buying interest from China thereby rates remain firm around 17k WCI/China and from ECI around 15k, but few ships seen ballasting to Indo as not much cargoes ex ECI. On Rich.Bay rounds Supras see around 15k basis WCI dely. Red Sea; ferts on Hmax/Supras are fixed at very mid-high 20´s pmt on voy bss to WCI. Not too much activity on short period as market bit volatile and speculative and hear index type vsl fixed at mid-teens” concluded the report.

Meanwhile, it’s worth mentioning the latest developments regarding India’s iron ore export plans. As it turns out, the Karnataka state government is challenging the Supreme Court's decision to lift the iron ore export ban. In a note, Jeffrey Landsberg from Commodore Research & Analysis, said that, Karnataka's Chief Minister B S Yeddyurappa held on a conference stating that Karnataka will file an appeal with the Supreme Court. “According to Mr. Yeddyurappa, illegal mining and transportation of iron ore is still running rampant throughout the state and in all of India. His statement's echo similar findings from the Central Empowered Committee and Lokayukta that Commodore has published in recent reports. We will continue to monitor this development closely and will publish additional updates when more information surfaces. For now, the export ban remains set to be officially lifted on April 20. A significant increase in Indian iron ore fixtures has not yet occurred however. Only 4 Indian iron ore fixtures surfaced in the market last week, 1 less than the previous week and on par with the trailing four week average” said Landsberg.

Source: Nikos Roussanoglou, Hellenic Shipping

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Supras in N.China get close to $12000 for trips via Indonesia to India - FearnBulk

April14, 2011

The Atlantic market remains flat - very little new/fresh business and slow activity. Considerable prompt tonnage remains unfixed. The USG pays very low 20´s for petcoke runs into the EMed/EMed. Short period dely in Atl on Supramax 53kdwt stands at usd 18500 with worldwide redelivery. TA rounds are being traded in the high teens. Pacific market very quiet as Chrtrs holding back their requirements and allowing tonnage to build up. Supras in N.China get close to 12k for trips via Indo to India. Iron ore from India expected to pick up with increased cargoes and buying interest from China thereby rates remain firm around 17k WCI/China and from ECI around 15k, but few ships seen ballasting to Indo as not much cargoes ex ECI. On Rich.Bay rounds Supras see around 15k basis WCI dely. Red Sea; ferts on Hmax/Supras are fixed at very mid-high 20´s pmt on voy bss to WCI. Not too much activity on short period as market bit volatile and speculative and hear index type vsl fixed at mid-teens.

The Panamax market continued its downward trend this week. It was some mixed views beginning week when more fresh cargoes entered the market but this was quickly absorbed by the overwhelming supply of available ships. The rates in both hemispheres are slowly declining and we do not see any fundamental upcoming events in the near future which will have any positive effect to the rates. Next week is Easter Holidays in most European countries and we believe this also will affect the already slow market. For Continent positions doing Fhauls the rates are in the low 20´s region. Tarv´s paying low teens while in the Pacific the rounds are fetching very low 10´s. The period market has been somewhat none existing lately with only a few fixtures reported at around 15k lvl for short/medium periods.
The segment is heading for another low, as newbuildings continue to pour out of yards. Spot demand is fair, despite recent natural disasters, but simply not sufficient to fully employ a growing fleet. Pacific rounds, although not covering operating expenses, are stable at just over usd 6k/day - the reference trade WAust/China hovering in the dismal usd 7.50-75 pmt interval. Atlantic has taken a further blow, with levels for the Cont-Brazil-China fronthaul trade dropping 10% w-o-w to come in at usd 20k/day, TA rates softening by a full 35% to usd 6250/day. A few key players still book period tonnage, at levels reflecting the presently inverted forward curve more than the current spot bloodbath 180kdwt newbuilding done ex yard prompt for 11-13 months at usd 15k/day, 180kdwt/built 2010 fixed prompt for 4-6 months at usd 12500.

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Rio tinto says iron ore market to remain tight

Apr 14, 2011 10:50pm GMT

SYDNEY, April 15 (Reuters) - The global market for iron ore will remain tight in the near to medium term, with demand running strongly and new supply coming on slowly, miner Rio Tinto said.

"We believe that the market for iron ore will remain tight in the short to medium term with delays to new supply and strong demand driving prices," the world's second-largest producer of the steel-making raw material said in a statement released to the Australian stock exchange on Friday.

(Reporting by Mark Bendeich; Editing by Balazs Koranyi, Thomson Reuters)

Dalian coke up more than 5 pct on debut

Fri Apr 15, 2011 7:55am GMT

* September contract opened at day's high of 2,300 yuan/T
* Copper, silver, gold launched on SMX, volumes thin

By Nick Trevethan and Manolo Serapio Jr

SYDNEY/SINGAPORE, April 15 (Reuters) - Coke futures on China's Dalian Commodity Exchange rose more than 5 percent on their debut on Friday on brisk volumes, reflecting strong interest in the world's first futures market for the steelmaking ingredient.

The most-active September coke contract opened at the day's high of 2,300 yuan per tonne, up 5.5 percent from the base price set at 2,180 yuan.

Copper, silver and gold contracts launched on the Singapore Mercantile Exchange also traded on their first day, but volumes were thin.

Coke ended at 2,247 yuan, trading 57,134 lots, equivalent to around 2.86 million tonnes.

Other contracts <0#DCJ:> traded as high as 2,395 yuan.

"Chinese contracts invariably fly off the shelf when they launch. We saw the same in lead, there is huge pent up demand for investment products," said a trader in Hong Kong.

"Like lead, it looks like the authorities are trying to keep the widows and orphans (retail investors) out of the market with the larger lot size. That has proved pretty successful with lead volume around a quarter of aluminium's trade."

China is the world's biggest producer, consumer and exporter of coke, a key steelmaking material.

Analysts and traders say China's coke futures may be considered a global benchmark in the long run, although coke producers said they will wait and see how the contract develops.

"We would rather wait to know how it goes, especially how to account for the different qualities of coke for physical delivery," a coke trader in Beijing said ahead of the launch.

Crude steel output in China, the world's No. 1 steel producer and consumer, is likely to hit a record 700 million tonnes this year, supported by strong demand.

But in a sign Chinese steel mills may be taking it slow in building product inventories with demand just trickling in as construction activity picks up, the country's daily crude steel output dropped 1 percent in March after hitting a record high in February.

SMX copper for July SMCEc1 last traded at $9,486 a tonne, while its equivalent on the London Metal Exchange, the benchmark three month contract, which falls due in three months from the current day last traded at $9,404.

The five-tonne LME-SGX mini copper contract for July SDCUc4 which matches the SMX product in lot size and is also cash settled, traded at $9,445.

Two lots of SMX silver SMSRc1 traded, with the deal done at $42.345 an ounce and one lot of gold SMGOc1 traded at $1,475 and ounce.

"New contracts will take quite a while to get up and running. But people will certainly pay attention to it. If there is enough liquidity, people will certainly become involved," said a Sydney-based trader.

"It will primarily be for speculators. What you really want for a proper contract is to have producer and consumer play the curve. In general, when a new contract starts, producers and consumers tend to be pretty standoff-ish until they can ensure the liquidity is there and will be sustained." (Editing by Himani Sarkar, sourced Thomson Reuters)

Iron Ore-Shanghai rebar at 1-week low on tightening fears

Fri Apr 15, 2011 7:49am GMT

* China March inflation quickens to 5.4 pct
* High-grade iron ore quoted below $190/T-traders
* China 2011 steel output seen at 700 mln tonnes
By Manolo Serapio Jr

SYDNEY, April 15 (Reuters) - Chinese steel futures fell more than 1.5 percent to one-week lows on Friday, reflecting investor concerns that accelerating inflation may prompt Beijing to tighten credit further, hitting steel demand in the world's top consumer and producer.

China's economy grew an annual 9.7 percent in the first quarter versus a 9.8 percent clip in the previous quarter, while consumer inflation hit a 32-month high of 5.4 percent in March, government data showed on Friday.[ID:nB9E7C00M]

"It is possible the Chinese central bank will raise the bank reserve requirement again or interest rates," said an iron ore trader in Shanghai.

"This will have an impact on the steel market because a lot of steel purchases are supported by bank loans."

China's central bank has raised cash reserve requirement for banks six times since October, with the latest increase on March 18 taking the reserve ratio to a record 20 percent for the country's big banks.

The most-active steel rebar futures on the Shanghai Futures Exchange fell 1.6 percent to 4,827 yuan a tonne by the close GMT, down 1.6 percent for the week. It dropped to 4,819 yuan earlier, lowest in around week.

Lower steel prices mean demand for key raw material iron ore may also weaken.

Offers for high-grade ore in China slipped to below $190 a tonne, including freight, on Friday, traders said.

Recent deals for 62-63 percent Pilbara iron ore fines were at $181-$183 a tonne, traders said.


"In my opinion steel demand will not increase dramatically at least in this quarter because the local governments are more interested in building commercial real estate than low-cost housing units but there are limitations to buying condominium units," said another trader in Shanghai.

Still, China's economy watchdog said the country's crude steel output may hit 700 million tonnes this year on expectations of strong demand.

China made 59.42 million tonnes of crude steel in March, up 9 percent from holiday-shortened February. [

Iron ore indexes, which global miners use to calculate prices for supply contracts, ended mixed on Thursday, highlighting split views among market players on the near-term direction of the market.

The Steel Index's 62 percent benchmark .IO62-CNI=SI rose $1.40 to $183.30 a tonne while a similar index by Platts IODBZ00-PLT fell $1.50 to $183.

Metal Bulletin's 62 percent .IO62-CNO=MB was almost flat at $181.14.

Rio Tinto , the world's No. 2 iron ore miner, said on Friday it expects the global market for iron ore to remain tight in the near to medium term, with delays to new supply and strong demand driving prices.

Iron ore forward swaps <0#SGXIOS:> lost more ground on Thursday, reflecting market expectations spot prices may drift lower in the near term.

The Singapore Exchange-cleared April swap contract eased 25 cents to $178 a tonne, May lost $1.25 to $169.50 and June slipped 78 cents to $166.85.
(Additional reporting by Ruby Lian in Shanghai; Editing by Ed Lane, sourced Thomson Reuters)

Thursday, April 14, 2011

Asian stocks edge up; China, Singapore data cheer

Thu Apr 14, 2011 6:31am GMT

* Asian stocks reverse losses, Nikkei ends up 0.1 pct
* China retail sales, industrial output up - HK media
* Singapore has surprisingly strong Q1 growth

By Ian Chua

SYDNEY, April 14 (Reuters) - Asian stocks reversed losses on Thursday after Hong Kong media reported upbeat Chinese economic data a day ahead of the official release, and surprisingly strong growth figures from Singapore underscored investor confidence in the region.

Gold edged closer to a record high of $1.476.21 as the U.S. dollar fell to fresh 16-month lows versus a basket of major currencies, while U.S. crude CLc1 firmed to $107.45 a barrel, helped by a sharp fall in U.S. gasoline stocks.

Hong Kong's Phoenix TV, citing an unnamed source, reported higher-than-expected increases in Chinese retail sales and industrial output, but also said inflation in the world's second biggest economy had accelerated. [ID:nL3E7FE0EO]

Singapore impressed after reporting its economy grew 23.5 percent in the first quarter on an seasonally-adjusted annualised basis, blowing past even the most bullish forecast in a Reuters poll.

Singapore's central bank also allowed an immediate rise in the value of its currency to help tackle inflation, which it said would likely stay elevated.

The Singapore dollar -- the world's 12th most actively traded currency -- rose to an all-time high of S$1.2477 per U.S. dollar before slipping back slightly.

The upbeat data helped Asian stocks regain ground with Japan's Nikkei ending 0.1 percent higher, having earlier fallen as much as 0.9 percent. Stocks elsewhere in Asia put on 0.08 percent, keeping in sight a three-year peak set on Monday.

U.S. stock index futures SPc1DJc1 traded modestly higher, suggesting a positive start for Wall Street.

Australia's S&P/ASX 200 index was one of the weakest performers in the region, closing down 0.6 percent, led by a 12 percent plunge in contractor Leighton Holdings , which flagged a big year loss.

"We've had a fantastic run in the previous three weeks. We're easing back a bit now and that's probably the way we'll glide into Easter," said Austock Securities senior client adviser, Michael Heffernan.


By allowing its currency to rise, Singapore could encourage other Asian central banks to let their currencies appreciate further to contain imported inflation.

"The monetary policy is a little more aggressive than we expected, so I think it's a realisation that inflation is going to be a bigger problem in the months ahead," said Wai Ho Leong, economist at Barclays Capital.

"The recent crisis in Japan is probably adding to inflation pressure, rather than subtracting from growth in the near term."

Still, last month's devastating earthquake and tsunami in Japan's northeast saw Japanese corporate confidence plunge by a record amount in April, a Reuters survey showed.

The U.S. dollar, already under pressure, slipped further in the wake of Singapore's action.

Chinese Premier Wen Jiabao, in remarks published by the official Xinhua news agency on Thursday, said China should make its currency more flexible to help rein in price rises.

The dollar index , which tracks its performance against a basket of major currencies, plumbed a fresh 16-month trough of 74.642.

There was little market reaction to U.S. President Barack Obama's freshly announced goal of cutting the U.S. budget deficit by $4 trillion over 12 years through spending cuts and tax increases on the rich.

"The move to fiscal discipline is not likely to weigh materially on growth in 2011," BNP Paribas analysts wrote in a client note, adding it was unlikely to hit 2012 hard as well given it is an election year.

"But efforts to address the longer-term fiscal picture would indeed be encouraging." (Additional reporting by Miranda Maxwell in Melbourne; Editing by Richard Borsuk and Sugita Katyal)

Sumitomo Metal to book $715 mln charge due to quake

Thu Apr 14, 2011 7:15am GMT

TOKYO, April 14 (Reuters) - Japanese steelmaker Sumitomo Metal Industry said on Thursday that it would take a 60 billion yen ($715 million)charge for the year that ended on March 31 related to last month's devastating earthquake and tsunami.

The steelmaker added that it had not yet decided on its year-end dividend payout for the 2010/11 business year.

It said a reduction of output at its Kashima steel works following the disaster would cut its group profit for 2010/11 by about 2 billion yen. ($1 = 83.890 Japanese Yen) (Reporting by Yuko Inoue; Editing by Nathan Layne, sourced Thomson Reuters)

Wednesday, April 13, 2011

Iron ore exports: Karnataka to appeal against Supreme Court order

Wed, Apr 13, 2011, By Team DNA

Bangalore : The Karnataka government will file an appeal in the Supreme Court in two days, challenging its order revoking the ban on export of iron ore.

Confirming this to the media, chief minister, BS Yeddyurappa said, “We have already discussed the issue with law experts and have directed them to prepare an appeal against the apex court’s order dated April 5. We will file the appeal within two days and ask the Supreme Court to revoke the stay granted against the banning of export of iron ore,” he said.

In its appeal, the state will outline the reasons that prompted the government to impose the ban to check illegal mining and export of iron ore.

The government will also bring to the notice of the apex court about the prevailing situation on illegal mining in the state.

On April 5, the Supreme Court ordered lifting of the ban imposed by the Yeddyurappa government in July 2010, on export of iron and directed the state to put in place within 15 days, the required infrastructure to enforce rules to prevent illegal mining and transportation of iron ore.

The court also asked the state to consider the suggestion made by the Karnataka Lokayukta in its report to curb illegal mining. The bench observed: “There shall be an interim stay of the operation of the government orders dated July 26, 2010 and July 28, 2010 with effect from April 20, as the Karnataka government has made the rules with a view to achieve the object of preventing illegal mining, transportation and storage.”

The bench said the Karnataka Lokayukta had in its report of December 18, 2008 given certain suggestions and the state had said that these were engaging the attention of the government.

Dissidence returns
Meanwhile, dissident activities in the ruling BJP are brewing again, as expected.A section of the rebel ministers and MLAs are planning to meet in a couple of days, and put their demand before the party high command to sack Yeddyurappa.

In March, when the dissidents appealed to the party high command to dismiss Yeddyurappa, it asked them to wait till the by-elections are over. They decided to wait so that the party chances are not ruined. But now, they are equipped with details of some more alleged scams against the chief minister.

However, Yeddyurappa rubbished allegations that there were dissident activities in the party.

He announced that after by-election results are declared on May 13, the cabinet would be expanded as per the directions of party national president Nitin Gadkari. In the meantime, agriculture minister Umesh Katti held a meeting of some Lingayat MLAs and ministers in Belgaum, and appealed to them to extend full support to Yeddyurappa. Excise minister, MP Renukacharya also said there was no dissidence in the party and Yeddyurappa would continue as CM for the next two years. (sourced DNA)

Motjoli seeks partners in new $1.6 bln mine

Wed Apr 13, 2011 2:49pm GMT

* Motjoli looks to develop into major iron ore producer

CAPE TOWN, April 13 (Reuters) - South African junior explorer Motjoli Resources said Wednesday that global steel makers and miners have expressed interest in developing a new 11 billion rand ($1.63 billion) iron ore project with the company.

Chairman Nchakha Moloi told Reuters the Cascades project in Mpumalanga province had a measured and indicated resource of one billion tonnes, with another one billion tonnes inferred.

"We are selecting a technical partner from a range of interested parties at the moment," Moloi said.

"There are a number of companies interested, including mines and steel-making companies. They are South African, some Indian and Chinese, as well as U.S. and European companies," he said.

Motjoli Resources already has a 28 percent equity stake with Australia's Aquila Resources (AQA.AX: Quote) in the Avontuur manganese mine in the Northern Cape.

It holds shares in another manganese project with mining giant BHP Billiton (BHP.AX: Quote), in coal miner Exxaro (EXXJ.J: Quote) as well as in Lafarge South Africa, a unit of the world's largest cement maker (LAFP.PA: Quote).

Moloi said construction at Cascades would hopefully commence in 2015. Initial production is set at six million tonnes a year, eventually ramping up to 20 million tonnes at full production.

South Africa is the world's top platinum producer and a major chrome and gold exporter. "The life of mine is expected to be 60 years and the final cost depend on how much the mine and a processing plant will cost," Moloi said.

(Reporting by Wendell Roelf, editing by Ed Stoddard, sourced Thomson Reuters)

China's 2011 coking coal imports to decline

Wednesday, 13 Apr 2011 |Reuters

BEIJING - China's coking coal imports are likely to reach 44 million tonnes this year, Jin Zhixin, general manager of Shanxi Coking Coal Group, said today.

The volume compares with China's imports last year at about 47.3 million tonnes as reported by the official customs data .

Fortescue to Reduce Debt Funding on Strong Cash Flow, CFO Says

Apr 13, 2011 By Elisabeth Behrmann

Fortescue Metals Group Ltd. (FMG), Australia’s third-biggest producer of iron ore, said cash flow from high prices will reduce the amount of debt funding the company needs for its $8.4 billion expansion.

Fortescue in November approved the expansion of its operations in the Pilbara region to triple output to 155 million metric tons as demand from China grows, adding mines, rail and port facilities. It had planned to raise about $4 billion in debt and the remainder through cash flow and reserves.

“Cash flows have continued to remain very strong given the high iron ore price, so we’re likely to raise less than those $4 billion,” Chief Financial Officer Stephen Pearce of the Perth- based company said on a media call.

Fortescue was the seventh-biggest issuer of high-yield bonds in the U.S. last year, raising $2.04 billion to repay debt and $1.5 billion to fund the expansion. The total bond sale of $3.54 billion made the fundraising the biggest sale of high- yield dollar bonds by an Australian company, according to data compiled by Bloomberg.

Fortescue said Jan. 21 it may sell a further $2.5 billion in bonds this year. Strong cash flows are likely to reduce this amount, Pearce said.
Alternative Opportunities

“In terms of alternatives and timing, we have a number of varying initiatives, opportunities out of Asia, the U.S., Australia and out of Europe,” said Pearce. “Given that we have such a large amount of cash on hand, we can crystallize a time when we think it’s right.”

Fortescue’s cash balance stood at $2.14 billion at the end of March, according to its third-quarter production statement filed with the Australian stock exchange.

Ore shipped fell 11.5 percent to 8.36 million tons in the three months ended March 31, from 9.45 million tons a year earlier because of heavy rain.

Fortescue fell 3.1 percent to A$6.58 at 1:57 p.m. in Sydney trading, trimming gains since the start of the year to 0.6 percent.

Steel consumption is forecast to jump 5.3 percent to a record this year, according to the World Steel Association. The price of 62 percent iron ore arriving at China’s Tianjin port hit $191.90 a ton on Feb. 16, the Steel Index said, the highest level since data became available in November 2008. It was $183 a ton on April 11, the Steel Index said.

Growth in global steel output and China’s increasing dependence on imported ore will underpin iron ore demand to 2014, Royal Bank of Scotland Group Plc analysts led by Head of Commodity Strategy Nick Moore said in a March 17 note. (sourced Bloomberg)

Whitehaven Coal Says It Received Formal Takeover Proposals

Apr 13, 2011 11:47 AM GMT+053 By Elisabeth Behrmann

Whitehaven Coal Ltd. (WHC), the Australian coal miner that put itself up for sale in October as demand for the commodity boosted mergers and acquisitions, said a number of parties have submitted formal proposals.

“Whitehaven is now in discussions with a number of these parties to determine which proposal, if any, will be recommended by the board,” the Sydney-based company said in a filing.

Whitehaven, which has a market value of A$3.5 billion ($3.7 billion), on Oct. 29 said it allowed interested parties to study its books and submit proposals for a takeover. Purchasing Whitehaven would give the buyer four mines and projects in New South Wales’ Gunnedah basin that produce pulverized coal for steelmaking as well as energy coal.

Demand for coal from steel and power producers has spurred global mining companies to add coal assets, triggering more than $10 billion of takeovers during the first quarter, the strongest start to the year in at least five years, according to data compiled by Bloomberg.

Whitehaven rose 0.7 percent to close at A$7.15 in Sydney trading. It has gained 6.4 percent since the start of the year.

The company also owns 11 percent of Newcastle Coal Infrastructure Group, a port developer that commissioned 30 million metric tons of export shipping capacity last March. A further 23 million tons are due to become available in mid-2012.
Best Start

There have been a total $28 billion of mining mergers and acquisitions during the first quarter, the best start to the year since 2008. In the most expensive deal in the coal industry’s history, Alpha Natural Resources Inc. agreed Jan. 29 to buy Massey Energy Co. for $7.1 billion in cash and stock.

Coal producers in Australia, the biggest exporter, are being targeted as prices gain, prompting companies to spend more on acquisitions to secure reserves as consumption in China and the developing world drives up prices.

Record rains in Australia are likely to push contracts for both thermal and coking coal to record highs, Royal Bank of Scotland Group Plc analysts, led by Head of Commodity Strategy Nick Moore, said in a March 16 report. “We forecast robust demand for imported thermal coal from China, South Korea and Japan to drive global growth,” Moore said. (sourced Bloomberg)

Rio Tinto lashed by extreme weather

April 14, 2011 By Barry Fitzgerald, Business Day

PROFIT projections for Rio Tinto have been trimmed after the Anglo-Australian miner surprised the market by revealing the impact of extreme weather on its Pilbara iron ore operations was worse than expected.

Rio was expected to report a slump in March quarter production in the Pilbara, as Fortescue did on Tuesday, and as BHP Billiton will next week. But once the extent of the slump became known at 3pm its shares were promptly sold.

Rio shares ended the day down $1.29 at $85.71, with most of the fall recorded after the report was released. Rio's 1.5 per cent fall was more severe than that for BHP, which was off 31¢ at $48.58, in line with general commodity price weakness.
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Rio's Pilbara-dominated iron ore production was a good 5 million tonnes short of market expectations. At current spot prices for the key steel-making raw material, the production shortfall would cost Rio as much as $900 million in revenue.

Again, like Fortescue, Rio is expecting a recovery from the rain, flood and cyclone affected March quarter, one that also took its toll on Rio's coal production in the Queensland coalfields, and at the Ranger uranium operations, Rio's listed uranium subsidiary, Energy Resources of Australia, in the Northern Territory.

Rio's chief executive, Tom Albanese, said that ''most'' of the weather-affected operations were recovering and benefiting from continuing strong prices. Rio does not report iron ore cash operating costs and averaged realised selling prices in its quarterly report.

Fortescue does, and said that while its cash cost of production ballooned to $US44.96 a tonne in the March quarter, its average realised sales price for the quarter was $US162 a tonne.

Rio is a lower-cost producer than Fortescue and its iron ore commands higher prices. So its margins are as fat as ever and will underpin a forecast profit surge in 2011 - even after the first quarter weather impacts - to more than $US18 billion, up from the $US13.9 billion profit in 2010.

Rio's attributable share of Pilbara and Canadian iron ore production for the March quarter was 42 million tonnes. That was down 3 per cent on the first quarter of 2010 and down 16 per cent on the fourth quarter of 2010. It was well short of the 47 million tonnes the market had been expecting.

Capacity of Rio's Pilbara ''system'' has been increased to 225 million tonnes a year and is on its way to an annual rate of 283 million tonnes.

The Queensland floods cut Rio's coking coal production by 12 per cent on the previous corresponding period to 1.62 million tonnes. March quarter output was down by 29 per cent on the 2.27 million tonnes in the preceding December 2010 quarter. (sourced

Libyan frozen assets fund must be legal -Germany

Wed Apr 13, 2011 10:28am GMT

DOHA, April 13 (Reuters) - A plan to create a fund from frozen assets to aid rebels trying to overthrow Libyan leader Muammar Gaddafi must be legal, Germany's foreign minister said at a meeting in Qatar to discuss the future of Libya. "The question is, is it legal? The answer is we don't know. We need to see who the owners of the money are and it's something we have to discuss," German Foreign Minister Guido Westerwelle told reporters.

Earlier, an Italian official said foreign ministers in Doha were looking at creating a fund from frozen assets linked to Gaddafi to aid rebels.

Earlier a rebel representative said they would ask Western governments to provide $1.5 billion in aid to help meet the needs of civilians in rebel-controlled areas and would like to receive humanitarian aid in return for oil shipments. (Reporting by John Irish; Writing by Reed Stevenson; Editing by Erica Billingham, sourced Thomson Reuters)

European Council president rejects Greek debt restructure scenarios

Wednesday April13, 2011 |

ATHENS, April 12 (Xinhua) -- European Council President Herman van Rompuy on Tuesday turned down Greek debt restructure scenarios, strongly supporting the Greek government's exit plan from the crisis through austerity and structural reform measures.

"The prospect of a restructure of the Greek debt is out of question,"stressed van Rompuy during a joint press conference after talks with Greek Prime Minister George Papandreou during his visit here.

Greece should focus on efforts to slash a budget deficit which stood at 15.4 percent of GDP in 2009 to less than three percent of GDP in 2013 through the pledged "courageous" policies and bold privatization program, he added.

There is only a one way painful, but necessary road to overcome the current debt crisis and return to growth was the common message sent by the European Council head and the Greek premier who repeated confidence to continue on this path until success. "Greek peoples' sacrifices bear fruit," stressed Papandreou, expressing determination to step up efforts.

Greece narrowly escaped default last May aided by a multi- billion support package of European Union and International Monetary Fund in exchange of harsh measures.

After a positive start, the Greek Stability and Growth program lags in revenue collection mainly due to widespread tax evasion and some targets have not been fully met.

Therefore, this Friday the government is expected to announce the framework of a new package of measures through more cutbacks on public expenses and tax hikes.

The aim is to raise 23 billion euros (about 33.19 billion U.S. dollars) during 2012-2014, Greek Finance Minister George Papaconstantinou said Tuesday in a Greek parliamentary committee.

Greece seeks a further 50 billion euros (about 72.14 billion U. S. dollars) through a privatization of state-run companies and better management of real estates plan. The government is due to give more details regarding this program also Friday.

The austerity drive and reforms have been met with strong reactions by a part of Greek society over the past year which argues that the burden is unbearable for the weaker social groups.

During talks with Greek President Karolos Papoulias van Rompuy acknowledged the potential impact on social cohesion, while Papoulias thanked him for his support to Greece.

Amidst the upheaval in Arab countries of the Mediterranean Sea, the European Council president and the Greek premier also called on European partners to promote advanced cooperation with these neighboring countries to face the influx of illegal migrants.
Editor: Mu Xuequan By Xinhua

Fortescue iron ore shipments fall on weather problems, sees rebound

Tue Apr 12, 2011 4:11am GMT

* New mine, dry season to boost Fortescue's iron ore output
* Sees June quarter output at 12 million tonnes
* Sees 55-million-tonnes-per-year run rate by June 30
* Says global supply-demand balance favours strong prices

SYDNEY, April 12 (Reuters) - Fortescue Metals , Australia's no. 3 iron ore producer, expects to raise output to 12 million tonnes in the current quarter after heavy rains slashed March quarter shipments by 16 percent to 8.37 million tonnes.

The additional tonnage would come as the dry season in Australia's Pilbara iron belt sets in and a second iron ore mining project, named Christmas Creek nears completion, Fortescue said on Tuesday.

The Jan-March tally was at the low end of guidance given by Fortescue on March 25, when it warned heavy rains in the Pilbara continued to impact its operations. December quarter shipments were 9.93 million tonnes.

Fortescue also said it sold its iron ore for an average price of $162 a tonne CFR during the quarter versus $150 a tonne in the previous quarter and reiterated its plans to run at an annualised production rate of 55 million tonnes by June 30.

Analysts forecast Rio Tinto and BHP Billiton Ltd lost about 5 percent of their iron ore production during the quarter due to disruptions caused by wet weather.

Rio Tinto will report quarterly production figures on Wednesday and BHP on April 20.

Fortescue Chief Financial Officer Stephen Pearce dismissed mounting concerns that iron ore prices could recoil in the third quarter as restocking of raw materials by Chinese steelmakers -- Fortescue's main customers -- winds down, as some analysts expect.

"There is not a lot of new supply coming on stream at this point in time, so it is hard to see too many supply and demand factors that will change the balance," Pearce told a media conference.

"I think it (iron ore price) is likely to remain reasonably strong... Definitely over the next one to two years," he said.

Fortescue's shipments were affected by the closure of the company's port operations on two occasions as cyclones cut across the Pilbara coastline, Pearce said.

Iron ore contract prices had been tipped to rise by 20 percent to an all-time high of $179.2 per tonne in the second quarter, including freight, based on Platts 62 percent price index which is widely used by global miners in setting rates.

Strong demand from top steel producer and iron ore consumer China and tight supplies had pushed up spot iron ore prices IODBZ00-PLT .IO62-CNI=SI to record highs nearing $200 a tonne in mid-February. (Reporting by James Regan, sourced Thomson Reuters)

SAIL gets environmental clearance for biggest iron ore mining project

Wed, April13, 2011

Kolkata: Steel Authority of India Ltd has finally obtained environmental clearance for the McLellan Iron Ore Mining Project, exclusively for Budhaburu lease, having the largest reserves (1,166.14 million tonnes) among the Chiria group of mines in Jharkhand.

According to the SAIL proposal, the capital cost of the project is Rs 1,243.33 crore and environmental protection measures are to cost Rs 41.30 crore. The annual recurring expenditure for environment protection is put at Rs 4.91 crore.

The Union Ministry of Environment and Forests on March 23 issued the clearance, with specific and general riders, based on a revised proposal for an open-cast mechanised iron ore mining with a targeted capacity of 4.2 million tonnes a year.

The project is crucial for SAIL's long-term raw material security as the reserves are expected to last at least 150 years.

The project proposal went through a revision as the Environment Ministry had asked SAIL to resubmit the proposal without clubbing all Chiria lease renewals in one. SAIL had earlier placed a combined proposal for three leases — McLellan (Budhaburu), Ajitaburu and Sukri-Latur — as Monoharpur Ore Mining Project.
Large reserves

The Chiria group of mines, a legacy of IISCO, merged with SAIL since April 2005, remains largely untapped and has over 2 billion tonnes of reserves, considered the largest single hill iron deposit in Asia. The mine lease has since been transferred to SAIL.

The proposed McLellan mine area falls in the in the core area of Saranda teak forest and Singhbhum Elephant Reserve of Jharkhand.

The clearance letter notes that according to the Principal Chief Conservator of Forests, Biodiversity Conservation-cum-Chief Wildlife Warden of Jharkhand, elephant corridors are reported to be beyond the safe limits of 10 km from the lease area.

The Ministry's letter says: “The mine is reported to be closed since December 2005. The total mine lease area of the project is 823.63 ha, which is a forestland falling under Ankua Reserved Forest of Sranda Forest Division”.

The area proposed for excavation is 288 hectares (ha). According to the SAIL proposal, 21.036 ha has been kept for over burden dumps, 5.6 ha for infrastructure, 6.4 ha for roads, 25.87 ha for afforestation and 476.78 ha for other purposes (32.38 ha area with primary vegetation and 444.40 ha is unutilised area).

The McLellan proposal states that the backfilling of ore-exhausted craters is to start after first 15 years. It said that mine working will not intersect the ground water table of the area. The proposal did not envisage any rehabilitation and resettlement as “there is no population in the core zone of the project”.

The approval letter says: “The Ministry of Environment and Forests has examined the application in accordance with the EIA notification, 2006, and hereby accords environmental clearance under the provisions thereof” to McLellan Iron Ore Mining Project of SAIL, subject to implementation of specific and general conditions and environmental safeguards.

It is also stipulated that a detailed hydro-geological study should be prepared by SAIL before seeking permission for mining operation. The letter further states that environmental clearance from the Standing Committee of the National Board for Wildlife is mandatory before starting any activity at the site. (Sourced Business Line)

Tags: Environment, clearance, Mining Project, Iron ore

Iron Ore-Key indexes mixed; Shanghai rebar gains

Wed Apr 13, 2011 9:02am GMT

* Indian 63.5 pct ore offers steady at $188-$190/T
* Iron ore swaps down, sentiment mixed
* Rio Tinto sees 2011 ore output at 191 mln T

By Jacqueline Wong and Ruby Lian

SHANGHAI, April 13 (Reuters) - Spot offers of iron ore to China were steady on Wednesday while global price indexes were mixed, reflecting market concerns that Chinese steel mills may be slowing down their purchases given the recent rapid rise in spot prices.

Most Chinese steelmakers, the biggest consumers of iron ore, have cut steel prices for May bookings, suggesting a stockpiling-fueled rush for iron ore may soon lose steam.

"Iron ore prices are likely to fall in the near future, mainly due to margin constraints," said Cameron Hunt, head of Metal Bulletin's Iron Ore Index.

"The spring construction increase has already been factored into the iron ore demand levels, so any slippage from that will impact steel prices and then iron ore prices."

Indian ore with 63.5 percent iron content was quoted at $188-190 a tonne, including freight, on Wednesday, unchanged for a second day, Chinese consultancy Mysteel said.

A few Chinese traders are still upbeat iron ore prices will stay firm in coming weeks on hopes that steelmakers are producing at utilization rates of up to 90 percent as construction activity picks up.

Major iron ore indexes, reflecting spot prices and used by global miners in determining supply contracts, were mixed on Tuesday.

The Steel Index's 62 percent benchmark .IO62-CNI=SI fell $1.10 to $181.90 per tonne, after hitting a six-week high on Monday.

Metal Bulletin's 62 percent index .IO62-CNO=MB rose 99 cents to $182.44, its highest since Feb. 24. Platts 62 percent iron ore index IODBZ00-PLT was unchanged at $184.50.


Shanghai steel rebar futures gained on Wednesday, tracking firmer equities, after losses in the previous session.

The most briskly traded rebar contract for October delivery on the Shanghai Futures Exchange closed up 0.4 percent at 4,922 yuan ($752.5) a tonne.

"Shanghai rebar rallied on rising equities and investors are expecting no negative news right now and remain positive on the overall market outlook," said Jiang Zhiwei, an analyst with BOC International Futures.

The benchmark Shanghai Composite Index rose nearly 1 percent on a technical correction, following two days of declines.

Rio Tinto , the world's second-biggest iron ore producer, forecast its 2011 iron ore output at 191 million tonnes, roughly meeting market estimates despite cyclones and rains denting its output by 3 percent for the March quarter.

Chief Executive Tom Albanese expected commodity prices to continue to power higher this year, echoing Fortescue Metals 's forecast that iron ore prices will likely remain reasonably strong.

Iron ore swaps cleared by the Singapore Exchange <0#SGXIOS:> fell on Tuesday. The April contract dropped $2.07 to $179.88 a tonne, May fell $2.55 to $173.25 and June slipped $2.60 to $169.50. ($1 = 6.541 Chinese yuan)(Editing by Manolo Serapio Jr., Himani Sarkar,sourced:Thomson Reuters)

Rio Tinto shrugs off weak Q1, iron ore guidance on

Wed Apr 13, 2011 9:36am GMT

* Floods, cyclones dent Rio Tinto Q1 production
* Rio Tinto sees recovery over rest of year
By James Regan

SYDNEY, April 13 (Reuters) - Global miner Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) on Wednesday forecast iron ore production to roughly meet market expectations for the full year, despite rain and cyclones denting output of its most valuable commodity in the first quarter.

The world's second-largest producer of the steel-making raw material reported a 3 percent fall in production for the March quarter, after cyclones battered its Pilbara operations in northwest Australia early this year.

Rio, the first of the large miners operating in this area to report production, is widely seen as a barometer for a sector operating at full tilt, as miners try to satisfy insatiable demand for industrial metals from China and other emerging markets, and take advantage of record prices.

Rio's production of hard coking coal, also used in steel-making, tumbled 12 percent in the first quarter from a year earlier, though this had been expected after major flooding in the country's main coking-coal region of northeast Australia.

"Our Australian coal, iron ore, uranium and alumina operations were affected by the extreme weather in the first quarter, but most are recovering and are benefiting from continued strong prices," Chief Executive Tom Albanese said in the company's quarterly production report.

But the company is still not completely recovered, with the last of four of the hardest-hit coal operations, its Hail Creek mine, still under a declaration of force majeure.

Close rival BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) flagged in January that the Queensland floods will hit sales and production of its coal mining operations through the first half. BHP reports quarterly production figures April 20.


Analysts said Rio's numbers were disappointing, but broadly in line with expectations after weather-related disruption.

"We are all aware of the weather issues and no one was really expecting production to be in line with the fourth quarter," analyst Richard Knights at Liberum in London said.

"Iron ore was probably a mild disappointment, but there is certainly still scope for them to make that up through the rest of the year and beat their current guidance."

Rio Tinto forecast its iron ore production for 2011 to total 191 million tonnes, roughly in line with market expectations.

Taking into account shares of production from joint venture partners, the total for 2011 rises to 244 million tonnes.

"They're obviously going to be operating Q2, Q3 and Q4 at much higher levels than last year, and they need to given tight market conditions," said ANZ Bank analyst Mark Pervan. "Particularly with China again being the key story."

Albanese also said he expects commodities prices to continue to power higher this year, which would help soften the impact of lost first quarter production.

In iron ore, quarterly contract prices increased by 20 percent from the March to the June quarter of 2011, following an increase in spot market prices.

The Steel Index's 62 percent benchmark .IO62-CNI=SI fell $1.1 to $181.9 per tonne, $10 off the record high hit in February.

Prices of coking coal have risen sharply since the floods, while copper CMCU3 is just 5 percent off the record hit in February.

Mined copper was down 14 per cent on the first quarter of 2010, reflecting lower grades at Escondida and Grasberg that had been flagged previously

Rio Tinto holds minority stakes in Escondida and Grasberg, operated by BHP Billiton (BHP.AX: Quote) (BLT.L: Quote) and Freeport McMoran FCM.AX respectively.

Alumina production was down 4 percent in the first quarter primarily due to heavy rains in Queensland, while bauxite and aluminium production were broadly flat.

The aluminium supply and demand balance is increasingly swinging in favour of producers, which is being reflected in rising prices for metal -- up around 8 percent this year.

In coal, Rio forecast its Australian hard coking, semi-soft coking and thermal coal output for 2011 at 9.3 million tonnes, 3.2 million tonnes and 18.2 million tonnes, respectively.

The production report did not make a major impact on Rio Tinto's Australian shares, which were already underperforming the market before the release of the production data. Its stock closed down 1.3 percent at A$85.71.

London-listed stock was up 0.3 percent by 0934 GMT at 4,414 pence, underperforming marginally stronger rises at its rivals. (Additional reporting by Manolo Serapio Jr. in Sydney and Clara Ferreira-Marques in London; Editing by Michael Urquhart and Mike Nesbit,sourced:Reuters)

Tuesday, April 12, 2011

India's Punj Lloyd unit buys 50 pct in Indonesia coal mine

Mon Apr 11, 2011 6:16am GMT

MUMBAI, April 11 (Reuters) - Indian engineering and construction firm Punj Lloyd said on Monday its unit, Sembawang Development, had acquired a 50 percent stake in a thermal coal mine company in central Kalimantan, Indonesia.

The mining firm holds reserves currently estimated at 134 million tonnes, it said in a statement.

Punj did not disclose financial details of the transaction. (Reporting by Prashant Mehra,sourced Thomson Reuters)

Palabora Mining says Q1 ore output down 8 pct

Tue Apr 12, 2011 2:56pm GMT

JOHANNESBURG (Reuters) - Palabora Mining said on Tuesday its iron ore output in the first quarter to the end of March fell eight percent hit by equipment slowdowns.

"Daily ore hoisted from the underground mine averaged 28,903 tonnes for the quarter ended 31 March 2011, 8 percent lower than the previous quarter and the corresponding period in 2010," the company, part of Rio Tinto's global stable, said in a statement.

It said ore hoisting rates or output were expected to improve in May when one of its winder drums is replaced and commissioned. Hoists or winders are generally used to raise and lower conveyances within mine shafts.

It said Q1 copper production fell 10 percent to 58.4 kt (thousand tonnes).

"Refined copper production was 14.8kt and in line with anode supply but 15 percent lower than the previous quarter due to utilisation of inventory in the previous quarter," it said.

Shares in the company were down 2.38 percent at 143.50 rand by 1438GMT, lagging behind the JSE All-share index, which was down 1.68 percent.(sourced:Thomson Reuters)

Monday, April 11, 2011

NATO chief says military action will not solve Libya crisis

BRUSSELS, April 11 (Xinhua) -- NATO Secretary General Anders Fogh Rasmussen said on Monday that military action alone won't solve the crisis in Libya.

"I have taken note of an African Union ceasefire proposal ... I want to be clear: there can be no solely military solution to the crisis in Libya." he told a press conference.

South African President Jacob Zuma said on Sunday after his talks with Gaddafi in Tripoli that the Libyan leader had accepted the "roadmap" presented by the AU to end conflicts and open political dialogues with rebels.

The NATO chief stressed "any ceasefire must be credible and verifiable," saying Libyan leader Muammar Gaddafi announced ceasefire in past but failed to keep his promises.

However, he said it was too early to talk about how to establish a kind of mechanism to monitor the ceasefire.

The military alliance has stepped up its attacks against Libyan government forces since Saturday, mainly near Misrata and Ajdabyia, where pro-Gaddafi forces are fighting fiercely with rebel fighters.

"Since Saturday morning, NATO aircraft have flown almost 300 sorties. We have destroyed 49 tanks, 9 armored personnel carriers, 3 anti-aircraft guns and 4 large ammunition bunkers," Rasmussen said, adding "our operational tempo will be determined by this clear goal to protect civilians against any attack.

He said that NATO had not considered "more robust measures" in Libya, denying suggestions by some Western countries, including arming rebel fighters or sending ground forces.

"We have no consideration as to taking more robust measures. We are focused on the implementing the United Nations Security Council's resolution fully. At this stage, we don't see any needs for strengthened measures," the NATO chief said.

Foreign ministers from 28 NATO countries, along with its partners, are scheduled to meet in Berlin on Thursday and Friday to discuss the Libyan crisis. sourced :

M 7 quake jolts Japan, tsunami alert lifted

TOKYO, April 11 (Xinhua) -- Japan on Monday revised down the magnitude of a strong earthquake from 7.1 on the Richter scale to 7, Japan Meteorological Agency said.

The quake triggered the agency to issue a tsunami warning, which had later been lifted.

The quake struck eastern, northeastern parts of Japan at 5:16 p. m. local time (0816 GMT). And tsunami alert was issued, according to Japan Meteorological Agency.

The agency considered the quake as an aftershock of the March 11 magnitude-9.0 massive earthquake.

The epicenter, with depth of 10 km, was near Hamadori of Fukushima Prefecture. Swaying was strongly felt in buildings in Tokyo, some 200 km south of Hamadori.

The quakes caused the external power supplies at three reactors at the Fukushima Daiichi nuclear power plant, already crippled by the March 11 quake and tsunami disaster, to be cut temporarily, halting operations to spray water onto the spent nuclear fuel pool at the reactors for a while, the plant's operator Tokyo Electric Power Co. said.

There were no reports of damage to nuclear power facilities in Ibaraki, Niigata, Miyagi and Aomori prefectures, according to prefectural governments and plant operators.

Police had received some reports of injuries, public broadcaster NHK said. About 180,000 households suffered blackout after the quake.

The temblor was followed by another earthquake in the same area a minute later with a preliminary magnitude of 6.0. (sourced :Xinhua)

China resells S.Africa coal into Europe: sources

Mon Apr 11, 2011 4:00pm GMT

By Jackie Cowhig

LONDON (Reuters) - At least four capesize cargoes of South African coal have been sold back to the original sellers by Chinese buyers during the past month and all are coming to Europe, said sources familiar with the deals.

The South African coal is being stockpiled in Amsterdam-Rotterdam-Antwerp and at power plants either for sale into Europe or to be burned at the main buyer's own power plants.

This comes at a time when Australian coal is for the first time in years being offered into the European market and will increase the downward pressure on DES ARA prices, which have been resilient at $125-$130 a tonne this year, traders and utilities said.

"We've been buying South African coal at prices equivalent to flat to the API2 index," said one source who has bought back South African cargoes intended for China.

"We haven't bought back any South African from China ourselves because we've only done spot deals there but I am aware that this reselling is going on and it is coming to Europe," another Europe-based trader active in the Asian market said.

It comes as no surprise to the coal market that China is re-selling coal previously bought as term deals but what is interesting now is that this coal is headed for Europe rather than being absorbed in Asia, the sources said.

Chinese coal prices have been below international levels for several months, making domestic coal the preferred option and prompting re-selling .

China's state planning agency earlier this month called on regions and enterprises to adopt effective measures to keep coal prices stable .

A large trading utility last year signed a multi-year deal with several Chinese utilities and buying agents to supply a mix of mostly South African and some other origins to China.

A few other traders followed suit with smaller scale term deals and it is these term deals which are being unwound, the sources said.

"There's more South African and who knows what else being re-sold by the Chinese on an FOB basis and we don't know where that's going once it's loaded at Richards Bay if we haven't bought it," another utility source said. (sourced Thomson Reuters)