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)

Int'l rating body upgrades Indonesia's rank

Friday, April08, 2011 15:21:59

JAKARTA, April 8 (Xinhua) - International rating agency Standard & Poor's Ratings (S&P) upgraded Indonesia's long term foreign debt and sovereign credit rank from BB to BB+ with positive outlook, detikcom online news reported on Friday.

S&P also maintained Indonesia's short term debt rank at "B".

The upgrade is based on improving the government's financial balance and external liquidity as well as strong economic performance and prudent fiscal management.

It said that the upgrade could sustain if inflation pressure could be curbed, debt position reduced and debt balance improved, or if fiscal and external vulnerability are reduced though reforms.

"Indonesia's positive outlook reflects some kind of upgrade if inflation could be tamed in line with further improved financial balance that are combined with successful implementation of the government's policy on fiscal, administration and structural reforms agenda," said S&P credit analyst Agost Bernard. By English.news.cn

Portugal asks for EU financial aid

Fri, April08, 2011
English.news.cn 2011-04-08 08:25:30

LISBON, April 7 (Xinhua) -- Portugal will ask Thursday for the EU financial aid, said the minister for the presidency of the council of ministers, Pedro Silva Pereira, at the end of the weekly government meeting.

However, Pereira did not specify the amount Portugal will ask for.

"This will depend on the negotiations the government will have with the European authorities. The request the Portuguese government will send to the European Commission and the dialogue we will have with them will establish the instrument and the amount that will be used," he said.

According to the minister, the European Union (EU) authorities and the European Central Bank already expressed their availability to send a joint team to Portugal to start the negotiations.

Due to the fact that Portugal will have general elections in June 5 and the government can not commit the country after that date, the solution should be a short term loan until the new government would be inaugurated. ByXinhua

Oil holds above $124 as Libya conflict hits fields

By Nia Williams | Reuters

LONDON (Reuters) - Oil hit a 32-month high above $124 on Friday after attacks on Libyan oil fields raised the prospect of long-term supply cuts, with commodities in general rising on optimism global economic recovery will fuel demand.

Ongoing unrest in the Middle East and concerns postponed elections in Nigeria could spark a new wave of militant violence and disrupt supply also contributed to the bullish mood in the market.

By 1023 GMT Brent was up $1.49 to $124.16, after earlier touching $124.45, a level last seen in August 2008. U.S. crude climbed $1.34 to $111.64, just below an intra-day peak of $111.68 last reached in September 2008.

"It looks like some of the fields in Libya are starting to be the target for military strikes which is worrisome because it means we have a risk of losing more crude for longer," said Christophe Barret, commodities analyst at Credit Agricole.

Rebels and forces loyal to embattled leader Muammar Gaddafi exchanged bitter accusations over who had attacked oilfields and infrastructure vital to both sides.

The seven-week old civil war has cut Libya's 1.6 million barrels per day output by 80 percent to between 250,000 and 300,000, a senior government official said.

It took Kuwait two years to restore oil production to pre-war levels of about 1.6 million bpd, similar to Libya's pre-conflict production, after the 1991 Gulf War, according to International Energy Agency data.

Fellow OPEC member and 1.9 million bpd producer Nigeria, whose light, sweet crude is highly prized as an alternative to lost Libyan output, postponed parliamentary elections again in some areas although polls will go ahead in most of the country on Saturday as planned.

"Besides the ongoing fighting in Libya, the elections in Nigeria this weekend are also adding to the nervousness," said Commerzbank analyst Carsten Fritsch in a note.

"Possible supply losses in Nigeria, Africa's largest oil producing country, could further tighten the supply situation for high-quality oil especially."

Futher supply worries came from Norway where a trade source said the North Sea Oseberg crude oil stream will load 118,000 barrels per day in May, significantly down from the provisional programme of 160,000 bpd in April.

COMMODITIES BOOMING

Crude prices rallied in step with gains across the commodities market where gold hit a record high, driven by a weaker dollar and positive global outlook despite Portugal's request for a bailout earlier this week.

But surging oil prices have stoked inflationary concerns for governments worldwide due to the potential adverse impact on economic growth of the rising cost of foodstuffs and raw materials, and the risk of demand destruction.

"Awash with still extremely cheap money - the leading policy approach to cope with the passed recession - the investment community is pouring record volumes into long commodity positions," said analysts at JBC Energy in a note.

"This drives not only fuel and food prices to record highs, but also raises the costs for other raw materials massively, clearly putting the economic outlook under threat."

(Additional reporting by Randy Fabi and Alejandro Barbajosa; editing by Keiron Henderson,Thomson Reuters)

U.S. general sees no military outcome in Libya

Fri, Apr 8, 2011 12:30 PM IST
By Michael Georgy

AJDABIYAH, Libya (Reuters) - Libyan rebels said five of their fighters were killed when NATO planes mistakenly bombed a rebel tank column and a top U.S. general said they were unlikely to be able to oust Muammar Gaddafi by force.

With daily skirmishes near the contested port of Brega in eastern Libya making little impact on the front line and rebels unable to end a brutal government assault on the western city of Misrata, NATO admits its mission to protect civilians is tough.

In rebel-held eastern Libya, wounded rebels being brought to a hospital Ajdabiyah said their trucks and tanks were hit on Thursday by a NATO air strike outside Brega, where fighting has dragged on for a week.

It was the second time in less than a week that rebels had blamed NATO for bombing their comrades by mistake after 13 were killed in an air strike not far from the same spot on Saturday.

At the same time, the rebels have accused NATO of being too slow to order air strikes they have come to depend on in their uprising to end more than four decades of Gaddafi rule.

NATO said it was investigating an attack by its aircraft on a tank column in the area along the Mediterranean coast on Thursday, saying the situation was "unclear and fluid".

Asked if a stalemate was emerging in the seven-week-old conflict, the head of U.S. Africa Command General Carter Ham said: "I would agree with that at present, on the ground."

He told a Senate hearing in Washington the United States should not arm the rebels without a better idea of who they were and when asked how the war would end, said: "I think it does not end militarily."

There was little likelihood that rebels would be able to fight their way to Tripoli and oust Gaddafi by force, Ham said.

Medical workers carried blood-soaked uniforms from hospital rooms in Ajdabiyah, gateway to the insurgent stronghold of Benghazi in the east, after wounded fighters were ferried back from Brega.

"It was a NATO air strike on us. We were near our vehicles near Brega," wounded fighter Younes Jumaa said from a stretcher at the hospital.

Nurse Mohamed Ali said at least five rebels were dead.

"NATO are liars. They are siding with Gaddafi," Salem Mislat, one of the rebels, said.

A rebel commander said it appeared to be a case of "friendly fire" and said it did not cause tension with NATO although the rebels wanted an explanation.

Rebels had brought about 20 tanks out of storage and were advancing with them along the coastal desert strip that divides Ajdabiyah and Brega when they were hit, he said.

"We would assume it was NATO by mistake, friendly fire," Abdel Fattah Younes told a news conference in Benghazi, speaking through an English translator.

AIR STRIKES CAUSE STALEMATE

Rebel spokesmen told Reuters Gaddafi forces killed five people and wounded 25 in an artillery bombardment of the isolated and besieged western city of Misrata on Wednesday.

The barrage forced the temporary closure of Misrata's port, a vital lifeline for supplies to besieged civilians, the spokesmen said, reporting fighting on a key road to the port as government forces tried to advance.

Libya's third city rose up with other towns against Gaddafi in mid-February and has been under siege for weeks after a violent crackdown put an end to most protests elsewhere in the west of the country.

A rebel spokesman told Reuters people in Misrata were crammed five families to a house in the few safe districts, to escape weeks of sniper and artillery fire.

U.N. Secretary-General Ban Ki-moon expressed concern about deteriorating conditions for civilians in Misrata and Zintan in the west, and Brega in the east.

He said the situation in Misrata was particularly grave with the city under heavy bombardment and shortages of food, water and medical supplies.

Turkish Prime Minister Tayyip Erdogan said Turkey was working on a "road map" to end the war in Libya which would include a ceasefire and the withdrawal of Gaddafi's forces from some cities. Turkey has held talks with envoys from Gaddafi's government and representatives of the opposition.

A rebel spokesman said later the rebels rejected talks with Gaddafi and demanded he leave power.
OIL PRODUCTION CUT

The civil war has cut Libyan oil output by 80 percent, a senior government official said on Thursday, as rebels and Gaddafi's forces traded exchanged accusations over who had attacked oil fields vital to both sides.

Supply worries stemming from the attacks helped drive U.S. and Brent crude futures to their highest in 2 1/2 years on Friday.

Rebels say government attacks on three different installations in the east have halted production of the oil they desperately need to finance the uprising against Gaddafi.

The government accused Britain of damaging an oil pipeline in a strike against the Sarir oilfield which killed three guards. NATO denied the alliance carried out any air strikes in the area and said forces loyal to Gaddafi were responsible.

Shokri Ghanem, chairman of the government National Oil Corporation, told Reuters Libya's production had fallen to 250,000 to 300,000 barrels per day compared with 1.6 million before the uprising.

Oil traders said a cargo of crude, worth around $112 million was headed for China after setting sail from the rebel-held port of Marsa el-Hariga near Tobruk on Wednesday.

The trial deal was likely to clear the way for Europe to resume badly-needed purchases of Libyan oil but traders said it could be a long time before exports reach substantial levels.

(Additional reporting by Alex Dziadosz in Benghazi, Mariam Karouny in Beirut, Hamid Ould Ahmed and Christian Lowe in Algiers and Marie-Louise Gumuchian in Tunis, Phil Stewart and David Lawder in Washington, Justina Pawlak in Brussels, Amena Bakr in Dubai and Jonathan Saul in London; Writing by Barry Moody; Editing by Jon Hemming)

Japan says economy in "severe" condition after disaster

Fri Apr 8, 2011 8:56am GMT

* Japan economy in severe condition, no quick recovery
* China says concerned over nuclear crisis
* Beijing to closely monitor Japan's actions
* No damage from aftershock reported at Fukushima plant
* Power cut in north Japan shuts factories, including at Sony

By Chizu Nomiyama and Yoko Nishikawa

TOKYO, April 8 (Reuters) - Japan's economy is in a "severe condition" with no quick recovery in sight following a triple disaster triggered by the March 11 earthquake that has sent service-sector sentiment plummeting the most on record, the government said on Friday.

While Japan confronts the economic impact of the disaster, it also faces increasing alarm from its neighbours with China expressing concern at the pumping of radioactive water into the sea from a crippled nuclear plant.

China's Foreign Ministry said it would "closely" monitor Japan's actions to end the crisis at the plant, where engineers are battling to contain radiation leaks. It demanded accurate information from Tokyo.

"As Japan's neighbour, we naturally express our concern about this," ministry spokesman Hong Lei said in a statement.

China is the first nation to publicly express its concern over a crisis that has lasted close to a month. Other countries have banned or restricted food imports from Japan over radiation fears.

"We ask that Japan reports the relevant information to the Chinese side in a swift, comprehensive and accurate way."

Power blackouts and restrictions, factory shutdowns, and a sharp drop in the number of tourists have left the world's third largest economy reeling. Many economists expect it to slip into recession this year as factory output and exports suffer.

The crippled Fukushima Daiicho nuclear power plant north of Tokyo means power shortages and supply disruptions that will leave the economy weak for some time, Japan's central bank said on Friday.

The Cabinet Office's assessment was equally bleak.

"Japan's economy is suddenly in a severe condition due to the effects of the earthquake," it said after releasing a monthly survey of hotel workers, restaurant staff and taxi drivers that showed a record fall in confidence to levels last seen during the depths of the global financial crisis.

In an obvious sign of the downturn; taxis park in long lines in central Tokyo each night, their drivers staying warm by idling the motor as they wait forlornly for a fare.

Japan is facing its worst crisis since World War Two after a 9.0 magnitude earthquake and a huge tsunami battered its northeast coast, leaving nearly 28,000 dead or missing and damaging six nuclear reactors north of Tokyo.

The Tokyo area and regions further north make up half of Japan's economy, Nomura research shows.

A strong 7.1 magnitude aftershock on Thursday night -- one of the biggest of more than 400 aftershocks above magnitude 5.0 -- shook the already ravaged northeast.

It forced two companies, including electronics giant Sony Corp , to stop production due to power cuts. At least two people were killed after the tremor.

There was a brief scare when water leaks were found on Friday at a second nuclear plant, Onagawa, in the northeast, but Japan's nuclear safety agency said it had not detected any change in radiation levels.

NO CHANGE IN RADIATION

A relieved Tokyo Electric Power Co (TEPCO) , which operates Fukushima, said Thursday's quake had not caused any more damage. It briefly evacuated workers because of a tsunami alert, although that was later withdrawn.

The U.N.'s nuclear watchdog sounded an encouraging note when one of its officials said there were signs of progress in stabilising the Fukushima plant, though the situation remained very serious.

The International Atomic Energy Agency (IAEA) said it had not detected any change in radiation levels following Thursday night's quake.

"The situation at the Fukushima Daiichi nuclear power plant remains very serious ... (but) there are early signs of recovery in some functions such as electrical power and instrumentation," the IAEA's head of nuclear safety, Denis Flory, said.

The agency said radiation in the region around the plant, as measured by gamma dose rates, had peaked in the early days of the crisis, and aside from a rise on March 22, had since fallen to "a level very close to background".

DISRUPTS BUSINESS

Japan's neighbours have grown increasingly anxious at the risk of contamination from radiation, with some schools in South Korea closing because of fears of toxic rain. Officials there said the radiation levels in the atmosphere were harmless.

China's health ministry said this week traces of radioactivity had been found in spinach in three provinces and the state news agency Xinhua reported trace levels of radioactivity detected in 22 provinces.

To cope with power shortages, Japan's government has asked major companies to cut electricity use in the peak summer months by up to a quarter and the Tokyo Stock Exchange said the power cuts meant it would have to delay plans to extend trading hours.

The impact of the quake meant both output and exports, major pillars of the economy, would remain weak, the central bank said.

"Output will hover at a low level for the time being but then start to increase as supply constraints are mitigated," the Bank of Japan said in its monthly report for April.

Companies and households will need to cut back significantly on power usage this summer when demand is at its peak, Trade Minister Banri Kaieda said after a cabinet meeting. He urged major companies to cut electricity consumption by 25 percent.

But some ministers at Friday's cabinet meeting called for an end to a campaign of "self restraint" by ordinary people that was adopted immediately after March 11 to cut fuel or electricity use and discourage stockpiling of necessities.

"Some cabinet ministers said excessive self-restraint could worsen the economy, weakening economic power for reconstruction," Chief Cabinet Secretary Yukio Edano told reporters.

PREVENTING MORE EXPLOSIONS

Utility TEPCO said it was continuing to inject nitrogen into one of its Fukushima reactors to prevent a repeat of last month's hydrogen explosions.

The plant is far from under control and engineers have been forced to pump in tonnes of water to cool down reactors, in the process making it radioactive. The water then has to be stored, though some has been released into the sea.

Officials say it could take months to bring the reactors under control and years to clear up the toxic mess left behind.

The government has set up a 20-km (12-mile) exclusion zone around the plant, banned fishing along much of the northeast coast and set up evacuation centres for the tens of thousands forced to leave their homes following the crisis. ($1=85.475 Japanese yen)

(Additional reporting by Mayumi Negishi, Chisa Fujioka, Yoko Nishikawa and Kiyoshi Takenaka in Tokyo, Ben Blanchard and Sui-lee Wee in Beijing, Jack Kim in Seoul; Writing by Jonathan Thatcher and Michael Perry; Editing by Neil Fullick, sourced Thomson Reuters)

HK, China shares hit fresh 2011 highs, more gains seen

Fri Apr 8, 2011 9:30am GMT

* Rotational buying in telecoms, China Unicom outperforms
* Hang Seng seen testing Nov '10 peaks by early May
* Shanghai hits second consecutive 2011 high
By Yixin Chen and Clement Tan

SHANGHAI/HONG KONG, April 8 (Reuters) - Hong Kong and mainland stocks rose again on Friday, reaching fresh 2011 highs, and institutional investors are expected to keep increasing their exposure next week based on attractive valuations and demand for materials.

The benchmark Hang Seng Index recorded a third weekly gain as institutional investors have turned bullish following a favorable earnings season and signs of China inflation easing.

The Shanghai Composite Index closed up 0.7 percent on the day and 2.1 percent on the week to 3,030.0, a fresh 2011 high, keeping the index above the key 3,000-point level and extending the gain on the year to 7.8 percent.

The benchmark Hang Seng Index closed up 0.5 percent on the day and 2.8 percent on the week. During Friday's trading, it reached a new high for the year of 24,468.6 before dipping to close at 24,396.1.

The next target for the Hang Seng is 25,000 -- which was tested in November 2010.

"The Hang Seng will probably top last November's peak sometime end April or early May," said Li Kwok-Suen, a fund manager with Phillip Securities Ltd in Hong Kong. "Institutional investors will mainly drive this rally, with hedge funds giving it a lift."

In Hong Kong, China Unicom (Hong Kong) Ltd led gains on the benchmark, closing up 6.5 percent on volumes that were five times its Thursday level and 2.3 times its 30-day average. The stock ended the day technically overbought, with a relative strength index (RSI) value of 77.5.

Analysts said there was some rotational buying within the telecommunications sector on Friday, with investors buying Unicom and selling its more established peer, China Mobile Ltd , down 0.3 percent on the day.

Still, several analysts expect China Mobile and HSBC Holdings , which have strong weight in the benchmark, to lead a broad rally on the Hang Seng next week, but suggest that other big banks and resource stocks might support.

HSBC, up 1.0 percent on the day, is trading in Hong Kong at a 12-month forward price-to-earnings ratio of 10.7 times, below the 10-year average valuation of 13.1 times, Thomson Reuters I/B/E/S data showed. China Mobile is trading at 10.1 times, lower than its average valuation over the past decade of 12.6 times.

A slew of IPOs in the next few weeks will likely support a rally, thanks to foreign inflows, which have increased in the last three weeks, analysts said.

SBI Holdings is expected to debut on April 14 with Hui Xian, Cheung Kong's yuan-denominated real estate investment trust, expected to debut April 15.[ID:nTOE72600K]

In its quarterly report released on Thursday, HSBC Global Research shifted to overweight on Chinese equity markets for the first time in a year, while remaining neutral on Hong Kong.

Analysts at the bank cited the effectiveness of Chinese monetary policy on keeping inflation contained. M2 growth slowed to 15.7 percent year-on-year in February, lower than the 16 percent target the Chinese central bank has set for this year. The base effect also suggests inflation will slow in the second half of 2011, HSBC said.

SHANGHAI INVESTORS BUY STEEL

China's main stock index ended up 0.7 percent on Friday as investors bought selected stocks, such as steel companies, keeping the index hovering above the key 3,000-point level.

"Generally, the index did not fall sharply after interest rate hike," said Ju Zihua, an chief analyst AVIC Securities in Jiangxi province. "But, a cautious mood is still hovering around the market, and we still need to focus on some previous hot shares and blue chips."

He said non-ferrous metal, coal, brokerage and other blue chips were in focus.

Turnover in Shanghai fell to 147 million yuan ($22.4 million) from 152 billion yuan on Thursday, reflecting investors' worries about inflation and further tightening of monetary policy.

Almost all steel makers listed on the Shanghai and Shenzhen market rose as investors were upbeat that steel demand would be large in April following the earthquake in Japan.

Inner Mongolia Baotou Steel Union , the most active share, jumped its 10 percent daily limit, while Xining Special Steel Co rose 6.1 percent.
(Editing by Kevin Plumberg and Richard Borsuk, sourced Thomson Reuters)

India's Tata Steel says no change in position on Riversdale

Fri Apr 8, 2011 9:26am GMT

NEW DELHI, April 8 (Reuters) - Tata Steel has not changed its position regarding its stake in Riversdale Mining , a senior official of the Indian steelmaker said on Friday, as global miner Rio Tinto won control over Riversdale with a $4 billion offer.

"No change," Tata Steel Vice-Chairman B. Muthuraman told reporters when asked if the company would change its stance after Rio Tinto gained control of Riversdale, in which Tata Steel is the biggest shareholder with a 27 percent stake.
(Reporting by Devidutta Tripathy; Editing by Aradhana Aravindan, sourced Thomson Reuters)

Strike looms at Teck Resources coal mine in western Canada

Strike looms at Teck coal mine in western Canada
* United Steelworkers union sets Jan 30 deadline
* Union says dispute centers on retirement benefits
* Mine produces steel-making coal
(Updates with union statement)

VANCOUVER, Jan 27, 2011 (Reuters) - Unionized workers at Teck Resources Ltd's Elkview coal mine in western Canada will walk off the Sunday evening if a contract deal is not reached, the company and union said on Thursday.

More than 700 workers at the facility, the second largest of Teck's six operating coal mines, have worked without a contract since the end of October.
The company said it will not disclose sticking points in the dispute, but the United Steelworkers union has said unresolved issues include company contributions to the workers retirement plan and retiree benefits.
"Our members are preparing to bring about an orderly shutdown and strike action will commence on Sunday," said Dan Will, a staff representative of Steelworkers Local 9346.
Teck said it remains committed to resolving the contract through the negotiations, which are underway in the ski resort town of Fernie, British Columbia.

The Jan. 30, strike notice by the United Steelworkers union comes just over a week after Teck said that adverse weather and rail traffic disruptions would hit its coal sales in the first quarter.
Teck, one of the world's top exporters of metallurgical coal, used to make steel, said it expects sales of between 5 million to 5.5 million in the quarter. That compared with sales of 5.25 million in the same quarter 2010.
Nippon Steel Corp and South Korean steelmaker Posco each own a 2.5 percent stake in the open pit mine near Sparwood, British Columbia. It has an annual production capacity of 6.5 million tonnes per year.(sourced:af.reuters)

Brazil's CSN may bid for Usiminas, Banif says

Friday, 28 Jan 2011
CSN, Brazil's largest diversified steel group, could bid formally for Usiminas, its bigger rival in the flat steel segment, according to a report by Banif analyst Juliano Navarro. CSN said on Thursday that it boosted its stake in Usiminas voting stock to 5.03 percent from 4.99 percent and could step up purchases to the equivalent of 10 percent of Usiminas' capital.

However, the company said that "it is studying strategic alternatives, including the acquisition of additional shares, more than the aforementioned amount." Navarro said CSN could bid for part of the shares owned by Usiminas' controlling shareholders, pay in cash for them or even do a share swap. (source:af.reuters)

S.Africa may ask for low-price iron ore deal: paper

Friday, 28 Jan 2011
JOHANNESBURG (Reuters) -South Africa may ask Kumba Iron Ore to enter into a preferential iron ore supply deal with politically-connected Imperial Crown Trading, Business Day reported on Friday, citing a senior government official.
Kumba lost a battle for mine rights over a stake in its Sishen mine that was previously held by ArcelorMittal's South African unit. The deal entitled the steelmaker to source ore from Kumba at a discount.

After ArcelorMittal failed to renew its rights, both Kumba and little-known ICT applied. The government granted ICT prospecting rights over the mine stake and rejected Kumba's application. The iron ore producer vowed to fight the government decision in court.
ICT has subsequently applied for a mining right.

"If this application is granted, the overwhelmingly likely result will be that (Kumba) and ICT would have to negotiate in good faith in order to procure an arrangement along the lines contained in the supply agreement," Sandile Nogxina, director general in the minerals department, was quoted as saying in court papers.

A preferential deal with ICT would pave the way for ArcelorMittal, which said last year it would buy ICT, to source discounted iron ore once more.

But it would raise further questions about the management of mining rights in South Africa.
Various disputes in 2010 tarnished the image of South Africa as a destination for international mining investment, despite it being the world's biggest platinum producer and number three gold producer.(sourced:af.reuters)

Tata Steel Europe raises UK structurals prices $151/mt again for March

Friday, 28Jan, 2011

London: Tata Steel Europe said Friday it will raise the sale prices on structural sections in the UK by GBP95/mt ($151/mt), citing higher coking coal and raw material costs affecting the business.
Effective on all deliveries from March 6, the increase follows a GBP50/mt price increase the company announced late last year for the period starting January 2.
"The recent extreme flooding in Queensland has led to spot prices in coal and other raw materials markets, which were already suffering from chronic structural supply side constraints, to rise beyond anticipated levels," Mick Maloney, Tata Steel commercial manager for sections, said in a statement. "The steel supply chain has no choice but to take robust action to recover these rapid increases in raw materials costs."

Tata Steel said in December that lower inventories led it to make its prior price increase as it took action before an expected upswing in demand in the usually more active construction season starting at the end the first quarter. (sourced:Platts)

CHINA STEEL WRAP: rebar record gains

Shanghai 28 January 2011
+ SHFE May rebar down 0.3% w-o-w at 4,936 yuan ($751)
+ SSEC April HRC up 0.9% w-o-w at 4,883 yuan ($743)
+ Spot iron ore unchanged at $188-191 cfr Shanghai rebar ended the week lower despite hitting record highs on Monday and Tuesday, as profit taking and property curbs erased earlier gains. The dominant May rebar contract closed at 4,936 yuan per tonne on Friday, up a slight 6 yuan from Thursday but down 0.3%. For information visit www.metalbulletin.com

Dry miner looks to cash in on spot prices Mathew Murphy

January 28, 2011

GLOUCESTER Coal has capitalised on its status as one of the only coal companies largely unaffected by recent heavy rainfall, posting a record quarter for coking coal sales.
The NSW-based company sold 222,000 tonnes of coking coal, used in steel-making, a 49 per cent increase on the December 2009 quarter. Thermal coal sales receded 8 per cent, from 295,000 tonnes to 272,000 tonnes as Gloucester cancelled fixed Australian dollar forward sales contracts in order to take advantage of rising prices.
Gloucester said it was hoping to cash in on soaring spot prices for coking coal, a consequence of the number of coalmines under water.

''The company continued to seek to maximise production and sale of coking coal while maximising total output by topping up with exports of thermal coal,'' it said in a statement.
''The effects of flooding in Queensland's Bowen Basin is manifesting itself in rapidly rising coking coal prices. The company is yet to agree [on] its coking coal pricing for the January-March 2011 quarter, however a substantial increase in price is expected.

''In addition, the company has an uncontracted volume of coking coal available for sale during the quarter and as such should be well-positioned to benefit from the surge in spot prices.''
The chief executive of Gloucester, Barry Tudor, said production would ramp up quickly following the approvals received at its Duralie and Stratford operations.
''[The projects] are important steps towards increasing the Gloucester Basin product coal output up to 3.5 million tonnes per annum by 2014,'' he said. Gloucester shares fell 5¢ to $12.90. (sourced:smh.com.au)

Nippon Steel, JFE Cut Profit Forecasts on Coal Cost

Friday - Jan 28, 2011
By Masumi Suga and Yasumasa Song, Reuters

Nippon Steel Corp. and JFE Holdings Inc., Japan’s two largest mills, cut their full-year profit forecasts after prices fell and record rains and floods in Australia pushed up the cost of steelmaking coal.

Net income at Nippon Steel will be about 95 billion yen ($1.15 billion) for the financial year ending March 31, missing its Oct. 27 estimate of 130 billion yen, the Tokyo-based company said today in a statement. JFE reduced its full-year profit forecast by 36 percent to 70 billion yen.
Coking coal prices may rise as much as 78 percent next quarter on disruptions from flooding in Australia, the Bank of America Merrill Lynch said. Japanese steelmakers, which rely on Australian imports for about 60 percent of their coking coal, are seeking alternative supplies from North America and Russia. Iron ore prices have more than doubled in the past two years.
“In addition to rising raw material prices, tightening coking coal supplies due to heavy rains in Australia pushes up costs,” Yoshio Ishikawa, executive vice president, told reporters today in Tokyo.

Third-quarter profit rose to 33.4 billion yen from 25.9 billion yen a year earlier, Nippon Steel said in the statement. JFE Holdings reported a 32 percent decline in quarterly profit to 18.5 billion yen, according to Bloomberg calculation based on the nine-month result released today by the Tokyo-based company.

JFE shares dropped 3.3 percent to 2,643 yen, the biggest decline since Aug. 31 as of the 3 p.m. trading close on the Tokyo Stock Exchange. Nippon Steel fell 2.1 percent to 285 yen.

Weak Prices
Nippon Steel expects the average price of steel will remain little changed at about 81,000 a metric ton in the current quarter, after a 5.8 percent decline from the previous quarter ended Dec. 31, according to its statement. The average price JFE got for its steel fell 2.8 percent to 79,300 yen in the third quarter from the previous three months and is expected to be about 79,000 yen this quarter.

While market prices are rising, the company’s contracted product prices little reflect this gain, Nippon Steel Executive Vice President Shinichi Taniguchi said today. The company plans to raise prices in April, he said, without giving details.

China’s domestic prices for hot-rolled coil, a benchmark steel product, were unchanged at 4,868 yuan a ton today, according to Beijing Antaike Information Development Co. They have risen about 25 percent in the past six months.

Posco, South Korea’s largest steelmaker, this month reported a worse-than-expected drop in quarterly profit after raw material costs gained and demand from builders and home- appliances makers waned.
Australian free-on-board coking coal prices may increase to $400 a metric ton for three-month contracts starting April 1, from $225 a ton this quarter, Merrill Lynch analysts led by Sydney-based Alex Tonks said in a report dated Jan. 25. This compares with the bank’s Jan. 11 forecast of $330 a ton for the second quarter.

Still, the weather’s “impact on coking coal won’t likely continue,” once the season changes, and the short term cut in steel output caused by the flooding will help steelmakers boost prices, according to Shinya Yamada, an analyst at Credit Suisse Securities Japan Ltd.
Flooding has inundated about three-quarters of Queensland, shutting mines, damaging crops and prompting BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, a legal clause that allows producers to miss deliveries. The region is the world’s largest exporter of seaborne coal.

Sumitomo Metal Industries Ltd. and Kobe Steel Ltd., Japan’s third- and fourth-largest steelmakers, are scheduled to report nine-month results and full-year outlook on Feb. 3. (sourced:Bloomberg)

NWR Says Quarterly Prices for Coke, Coking Coal Gain

Friday, Jan 28, 2011 By Lenka Ponikelska

New World Resources NV, a mining and coking company based in Amsterdam, said contract prices for first-quarter delivery of coke and coal increased.
The company agreed to deliver mostly semi-soft coking coal for an average price of 165 euros ($226) per metric ton, 7 percent up on the previous three months, it said today in a statement. Coke prices are up 1 percent, at 339 euros a ton.

Thermal coal prices are 13 percent higher than a year ago, at 71 euros a ton, the company said.
NWR said it fulfilled its overall coal production targets for 2010. A lower-than-expected proportion of coking coal in the sales mix affected 2010 revenue. The shortfall in coking coal production was partly offset by an increase in that of thermal coal, according to the statement.
The company expects to produce about 11 million tons of coal and 800 kilotons of coke in 2011, the company said, adding that external sales are likely to reach 10.3 million tons of coal and 720 kilotons of coke on 2011.

The company has the capacity to produce an extra 400 kilotons of coal this year, depending on market conditions, the company said.
NWR is due to publish fourth-quarter results on Feb. 24. (sourced : Bloomberg)

Indian iron ore futures may be cash-settled-source

Indian iron ore futures may be cash-settled-source
Cash-settled contract may be benchmarked to TSI
* Exporters, traders unlikely to rush in to hedge
* Chinese, overseas firms have shown interest-ICEX (Adds quotes, details, background)
By Siddesh Mayenkar

MUMBAI, Jan 28, 2011 (Reuters) - India's planned iron ore futures contracts are likely to be settled in cash initially and would be linked to internationally acceptable prices, an official said on Friday, but potential players say they would not rush in to hedge on the platform until there is ample liquidity.

Singapore is also looking at a cash-settled futures contract which the Singapore Mercantile Exchange is hoping to launch in the second quarter, in a race with India to establish the world's first futures market for the steelmaking ingredient.
"The contract would closely track acceptable benchmarks like the TSI (The Steel Index)," an official from the Indian Commodity Exchange (ICEX) told Reuters on condition of anonymity.
TSI .IO62-CNI=SI is one of three key providers of iron ore reference prices which global miners Vale , Rio Tinto and BHP Billiton use in setting quarterly contract rates.

SMX, controlled by India's Financial Technologies , was looking at benchmarking its futures contract against the iron ore index of another data provider, Metal Bulletin .IO62-CNO=MB.
India's commodity market regulator, Forward Markets Commission, on Tuesday approved plans by ICEX and the Multi Commodity Exchange (MCX) to launch four iron ore futures contracts. ICEX said it was looking at launching in a month's time.

India is the world's third-biggest iron ore exporter after Australia and Brazil, although its shipments have dropped for a sixth straight month in December because of an export ban in its southern Karnataka state. India normally exports around 100 million tonnes of iron ore annually of which around a quarter comes from Karnataka.
But India's iron ore exporters said liquidity would be a key consideration before they hedge on the futures platform.
"It's a fear that prices may not fluctuate on an intra-day basis, which may put speculators off and take away liquidity from the market and hamper corporate participation initially," said another source with ICEX.

ACCEPTABLE BENCHMARK
Futures contracts would be in addition to the existing forward swap contracts, launched in 2008, being offered by bourses from Singapore to the United States and Europe to prod steelmakers into hedging price risks after the industry moved to a more flexible quarterly pricing system last April after the collapse of a 40-year-old annual benchmark system.
"We wonder if we would hedge right away or wait to see how soon liquidity enters the market," said Rahul Baldota, executive director with iron ore exporter MSPL, which ships most of its annual output of 2.5 million tonnes to top buyer China.
"We hope liquidity would come in over a period of time after options come on board."
India is awaiting approval from the lower house of parliament to start options contracts, which are likely to lure corporate participants and boost liquidity.
"Few overseas firms have shown interest, and they plan to open a subsidiary here so that they can procure, hedge and export," said Sanjay Chandel, chief executive at ICEX.
The absence of foreign players in Indian commodity bourses is a predominant concern which could further limit liquidity, and restrain its influence as a price setter for the seaborne iron ore market worth around $100 billion in 2010.

India currently bars foreign funds from its commodity exchanges.
"India would take time, say another two years, to become a globally acceptable benchmark and could be much more easier after the entry of foreign players," said ICEX's Chandel.
Chandel said ICEX plans to start roadshows next month to promote the contracts. (souced: reuters)

China thermal coal price stable despite sea ice and int’l price hike

Jan 28, 2011

China's benchmark thermal coal price remained stable during January 19 to January 25 despite of the turbulence of sea ice and international price hike.
According to statistics released by Ocean Shipping Coal, China's benchmark thermal coal price averaged 774 yuan/tonne, up only one yuan from previous week. China's coal price remains in a downward trend which began since Dec 8 of 2010.
By January 16, the free on board (FOB) price for power coal at New Castle Port in Australia has jumped 4.9% on week to US$1 36.3/tonne, and that of coking coal up 5.7% to US$280/tonne.
Bohai has been covered by ice, which is supposed to block coal imports of China and further push up domestic coal price.
However, the international coal price hike and the bad weather seemed to pose little impact in China's domestic coal price.
The stability in coal price in China despite of international price hike is mainly attributed to smooth throughput at major ports in north China, which has effectively guaranteed stable coal supply to south China.

Experts forecast that coal supply and demand in coastal market will maintain flourish until the Chinese Spring Festival in February, and power plants would have stable coal supply if the weather will not deteriorate into a substantial hinder to disrupt coal transportation from northern coal producing provinces to major coal consumers in the south.

But considering the approaching of Chinese Spring Festival on February 3, China may have to face mounting transportation in railways, which may affect coal transportation. Therefore, insiders predicted that China's coal price is very likely to maintain at high level and grow up further in February. (sourced:Xinhua)

Steel prices may continue to go up in China - MOFCOM

Friday, 28 Jan 2011
According to survey, domestic steel prices presented three-week continuous increase with rising market transactions. By last week, domestic steel prices were up by 1%WoW including 3mm HR sheet coils, 14 I-beam and 20 1.2 welded steel pipe up by 2%, 1.8% and 1.7% respectively.

Traders and construction enterprises increased their winter-stocking, as per statistics, the social inventory of construction steel eyed a WoW increase of 6.9% by January 21 up by 23.1% from last month.
As predicted, the steel prices would be further edging up by small amounts in the later periods mainly boosted by many mills pulled up their ex-works prices.
(Sourced from MySteel.net) visit www.Mysteel.net for real time access to China steel news!

China steel product export to different countries

Friday, 28 Jan 2011
It is reported that China country wise steel product export in 2010 total 42,448,880 tonnes which South Korea topping the table

Country	Dec'10	2010	Share
Total	2,839,653	42,448,880
South Korea	621,574	8,435,661	19.98
India	154,784	3,375,084	7.99
Viet Nam	147,413	2,419,488	5.73
Brazil	84,280	1,717,227	4.07
Italy	93,125	1,310,412	3.10
Thailand	99,486	1,288,141	3.05
Philippines	72,996	1,158,088	2.74
Singapore	66,304	1,047,288	2.48
US	76,583	1,013,085	2.40
Indonesia	80,799	984,106	2.33
UAE	67,708	971,714	2.30
Hong Kong	43,294	951,744	2.25
Taiwan Region	55,063	912,674	2.16
Malaysia	59,444	886,914	2.10
Saudi Arabia	75,968	815,906	1.93
Japan	36,827	807,514	1.91
Russian Federation	42,329	794,388	1.88
Australia	73,347	766,280	1.81
Belgium	39,744	749,010	1.77
Chile	22,412	707,535	1.68
Spain	66,125	617,691	1.46
Iran	41,329	562,100	1.33
Peru	31,149	556,044	1.32
Canada	44,996	454,441	1.08
Turkey	15,198	428,567	1.01
Pakistan	23,107	417,976	0.99
Nigeria	22,396	390,212	0.92
Burma	32,579	390,062	0.92
Kuwait	38,223	328,883	0.78
UK	12,194	317,367	0.75
Colombia	19,663	297,404	0.70
Algeria	17,976	271,574	0.64
Iraq	33,382	240,280	0.57
Angola	14,464	237,425	0.56
Kazakhstan	17,827	224,544	0.53
Egypt	17,921	222,320	0.53
Bengal	15,039	221,041	0.52
South Africa	15,977	210,850	0.50
Israel	10,668	208,418	0.49
Venezuela	16,080	207,746	0.49
Sudan	9,584	192,392	0.46
Ecuador	9,759	181,272	0.43
Portugal	5,967	181,123	0.43
Mexico	18,914	177,023	0.42
Oman	2,597	168,955	0.40
Holland	8,656	159,747	0.38
Libya	10,221	152,572	0.36
Syria	3,790	118,971	0.28
Germany	12,714	118,082	0.28
Uzbekistan	9,294	109,282	0.26
Panama	14,086	98,975	0.23
Poland	5,335	97,337	0.23
Cuba	7,314	96,425	0.23
Jordan	8,064	93,729	0.22
North Korea	5,365	92,485	0.22
Turkmenistan	5,957	88,657	0.21
Greece	3,887	84,485	0.20
Ethiopia	7,208	82,799	0.20
Others	171,137	2,237,336	5.30

In tonne (Sourced from MySteel.net)

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