Iron Ore-Shanghai rebar rises after Fed's pledge, iron ore weaker

Wed Aug 10, 2011

* China July iron ore imports up 6.8 pct to 54.55 mln T
* Steel mills slow down purchases as worries on economy linger
* SMX plans to launch iron ore futures on Friday

By Ruby Lian and Jacqueline Wong, Reuters

SHANGHAI, Aug 10 (Reuters) - Shanghai rebar futures rose on Wednesday after the U.S. Federal Reserve pledged to keep interest rates near zero for at least two years, stemming a global equity rout, but gains were limited as investors remain wary on the long-term outlook.

The most active rebar futures for January on the Shanghai Futures Exchange SRBc6 rebounded to a high of 4,819 yuan ($749) per tonne, up 1.1 percent from the previous close, after hitting its weakest since March 24 on Tuesday. The contract ended 0.52 percent higher at 4,790 yuan per tonne.

"The panic is calming down after the Fed promised to maintain low interest rates until 2013, but the extent of the rebound will still need to be watched as investors remain concerned on the U.S. and European economic outlook," said Jay Zhang, an analyst with Everbright Futures in Shanghai.

Global stock and commodities markets had been on a downward spiral starting late last week triggered by fears about the U.S. economy and Europe's debt crisis compounded by the shock of an historic downgrade of the U.S. credit rating.

Analysts said there was still a lot of uncertainty regarding the Fed's power to stimulate the economy with rates already so low, while China's top economic planner expecting the United States to launch a new round of quantitative monetary easing, which may fuel global price pressures.

IRON ORE DEALS SLOW

Spot prices of iron ore fell $1 a tonne on Wednesday after steelmakers in China, the world's top iron ore buyer, slowed down purchases.

"Transactions have been weaker since early August after iron ore prices rose quickly, and the worries over the gloomy global economy have also slowed down buying," said an iron ore trader in coastal Shandong province.

"At least our company has managed to minimise stocks except for bookings with long-term suppliers."

Quotes for Indian 63.5/63 iron ore fell $1 to $184-$186 per tonne, including freight, on Wednesday, while offers for 62-grade Newman fines from Australia posted a similar fall to $180-182 per tonne, industry consultancy Umetal said.

China's imports of iron ore rose 6.8 percent to 54.55 million tonnes in July, with steelmakers' purchases taking the figure to its highest point in four months, customs data showed on Wednesday.

China's daily crude steel output fell 4.3 percent to 1.913 million tonnes in July from the record hit in the previous month, as flat steel producers contracted output in the face of weaker demand over the summer.

Total steel output in the world's top steel-producing country for the first seven months rose 10.3 percent to 410.36 tonnes from a year earlier, suggesting demand for iron ore remains strong.

Key global iron ore indexes, used by global miners to settle contract prices, fell on Tuesday, reflecting weaker spot deals in China.

The Steel Index's 62-percent iron ore reference price .IO62-CNI=SI slipped 30 cents to $177.8 per tonne, while Metal Bulletin's Iron Ore Index dipped 18 cents to $177.59 per tonne.

The Platts 62-percent index IODBZ00-PLT stood unchanged at $177.5 per tonne.

Singapore Exchange-cleared iron ore swaps <0#SGXIOS:> fell across the board on Tuesday, reflecting investors' continued worries over the European and U.S. downturn.

The volume of iron ore swaps cleared globally rose to an all-time high of more than 4 million tonnes in July, valued at more than $700 million. The bulk of that, or 3.92 million tonnes, was cleared by the Singapore Exchange.

The Singapore Mercantile Exchange will launch its iron ore futures contract on Friday, the second in the world after India launched the world's first in January, providing another tool for steel mills and iron ore producers to hedge the steelmaking raw material.

The contract, open to global investors and settled in U.S. dollars, will be cash-settled against Metal Bulletin's iron ore index .IO62-CNO=MB. ($1 = 6.431 Chinese yuan)

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.

WEATHER ISSUES

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)

TNPL CALLS FOR 160KT OF NON-COKING COAL

Wed, April06, 2011

Tamil Nadu Newsprint and Papers Limited (TNPL), is seeking to procure another 160,000 MT +/- 5 percent of Non-Coking imported Coal with Gross Calorific Value (ADB) 6000 Kcal/Kg, on delivered at TNPL factory siding at Pugalur basis, according to the tender MM/SP/TENDER 201195059 released today.

Total tendered quantity to be delivered in four shipments starting from July 2011. The price should be quoted on C&F Tuticorin basis inclusive of all port charges.

Bidders are request to offer price based on C&F Tuticorin basis inclusive of all port charges and arrange delivery of such Coal to TNPL site by wagons (all activities of stevedoring, handling, arranging railway rakes, loading, transportation etc are in supplier’s scope), the tender terms said.

According to the tender issued on 2nd April 2011, the quality of coal should be Gross Calorific Value (adb) 6000 Kcal/Kg basis and will be rejected if GCV is below 5600 kcal/kg. The Inherent Moisture (adb) of around 10 pct, Total Moisture (arb) 15 pct basis and above 23 pct will be rejected. The Ash content (adb) 8 pct max , Sulphur (ADB) 0.8pct max and Volatile Matter (adb) 25 to 45 pct and above 45 pct will be rejected.

TNPL is a traditional consumer of Indonesian coal, for its paper factory in Karur district, India. TNPL has closed its latest tender at US$ 97.10 PMT.

Probably TNPL got their comfortable numbers in its latest tender and encouraged by the response they rushed back to procure one more batch.

The reference price (HPB) set by Indonesia for coal grade of 5,667 GAR kcal/kg heating value was at a US$ 103.50 a ton based on March 2011 HBA. However, TNPL's last coal purchased price was much lesser than Indonesian declared price for 5667 GAR coal.

Suppliers are requested to submit offers by April 16, 2011.(cs)

If you believe an article violates your rights or the rights of others, please contact us.

Unemployment still top worry in Spain

Wed, April06, 2011 23:15:29 |English.news.cn

MADRID, April 6 (Xinhua) -- Unemployment remains the main worry in Spain, an official report published on Wednesday indicates.

A survey by the Center for Sociological Investigation (CIS) shows a total of 81.8 percent of respondents said unemployment was the country's main problem, a slight fall from the end of 2010 when 83.9 percent nominated it but still high.

Speaking on Punto Radio, Employment Minister Valariano Gomez said Wednesday he was confident that March would be the end of rises in unemployment and that things would begin to improve during April. However, the majority of his countrymen clearly do not share the optimism.

The CIS said more than 3.3 million Spaniards were out of work in March, following earlier government figures that said 34,406 people lost their jobs in the month. And more than 50 percent of the jobless believed it would be "difficult" or "impossible" to find a new job, the CIS study said.

Besides unemployment, the overall economic situation in Spain was also a public worry, with 79.5 percent of citizens responding that the current state of the economy was either "bad" or "very bad." Only 18.8 percent believed the economy would improve over the next 12 months.

Spaniards also showed a deep distrust in the country's political leaders, with 67.2 percent considering the political situation "bad" or "very bad;" and 74.1 percent fearing a poorer situation in 2012 when the country holds its general election.

Interestingly, only 5.7 percent of Spaniards were concerned about the threat of terrorism, thanks to the ceasefire called by Basque separatist group ETA and its current incapacity to carry out major attacks in the face of concerted police pressure. Terrorism used to be the principal worry of most Spaniards.

Meanwhile, the government's decision to raise the retirement age from 65 to 67 by 2027 is deeply unpopular, with 79.4 percent against the move, despite Prime Minister Jose Luis Zapatero's assurance that, economically, there was no other alternative. Editor: yan xinhua

Russia suspends seafood imports from Japan amid radiation fears

Wednesday, April06, 2011 22:42:53 |English.news.cn

MOSCOW, April 6 (Xinhua) -- Russia had suspended seafood imports from 242 Japanese companies due to fears of radiation contamination, Russia's food safety and sanitary watchdog, Rosselkhoznadzor, said in a Wednesday statement.

"The restrictions were introduced after an analysis of threats and risks which arose after the accident at the Fukushima-1 nuclear power plant," the statement said.

However, Rosselkhoznadzor didn't say how long the ban would last.

According to local reports, Russia imported 57,000 tons of seafood from Japan last year.

Earlier this month, Japan called for calm over radiation concerns, but is itself considering imposing radioactivity restrictions on seafood for the first time after contaminated fish were found.

Also on Wednesday, the Fukushima plant's operator, Tokyo Electric Power Co., said it had stopped highly radioactive water from flowing into the Pacific Ocean from the crippled plant by injecting a chemical compound. Editor: yan sourced: xinhua

Libya says ready for reforms, Gaddafi won't step down

Wednesday, April06, 2011 22:55:24 |English.news.cn

TRIPOLI, April 5 (Xinhua) -- The Libyan government said Tuesday it was ready to negotiate reforms, but refused any talk of Muammar Gaddafi stepping down, according to Al-Arabiya TV.

"What kind of political system is implemented in the country? This is negotiable, we can talk about it," said Information Minister Moussa Ibrahim.

"We can have anything, elections, referendums," he said, adding that "Gaddafi's future was non-negotiable," he stressed.

"We think he (Gaddafi) is very important to lead any transition to a democratic and transparent model," Ibrahim said.

Ibrahim also brushed aside allegations that Gaddafi's forces were committing atrocities on civilians.

"We are fighting armed militia and you are not civilian if you take up arms against the state," he said.

Fierce fighting continued in Libya and opposition fighters launched a new attempt to recapture the oil refinery town of Brega.

A coalition strike destroyed at least two military vehicles of Gaddafi in Brega, helping rebels surge toward the town.

The town has a great significant as it along with the eastern town of Ras Lanuf make up the lion's share of Libya's 1.5 million barrels of daily exports, which have been radically affected by the uprising that began on Feb. 15.

Cargill trades first steel scrap swap

Wed Apr 6, 2011 4:24pm GMT

* Interest in steel swaps increases - FIS
* CME launches new steel swaps
* LME also considers new steel contract
By Silvia Antonioli

LONDON, April 6 (Reuters) - Cargill traded the first over-the-counter steel scrap swap on Wednesday, as interest in steel derivatives soars, said Freight Investor Services (FIS), which brokered the deal.

Privately held food producer Cargill CARGIL.UL CARG.UL traded a steel scrap swap tied to May delivery of 1,000 tonnes of material to Turkish ports at $422 a tonne.

Its counterparty was a European metals trading company which refused to be named.

"We are starting to see a lot of people getting involved," said Sam Mehew, steel derivatives broker at FIS.

To cash in on increasing interest from industry participants and financial investors in steel derivatives, the Chicago Mercantile Exchange Group launched three steel swap contracts on Tuesday.

The London Metals Exchange said it was also considering launching some new steel contracts.
(sourced:Thomson Reuters)

Japan stops radioactive water leak

Wed, April06, 2011 20:31:23 |English.news.cn

A Japan Maritime Self-Defense Force (JMSDF) personnel officer, wearing a protective suit, stands on a U.S. military barge before it is refilled with pure water while it approaches JMSDF support vessel Tokiwa near the Tokyo Electric Power Co.'s Fukushima Daiichi Nuclear Power Plant in Fukushima Prefecture, northeastern Japan, in this photo taken April 5 and released by the Japan Maritime Self-Defense Force April 6, 2011. Japan stopped highly radioactive water leaking into the sea on Wednesday from the crippled nuclear plant and acknowledged it could have given more information to neighbouring countries about contamination in the ocean. Nuclear experts said the damaged reactors were far from being under control almost a month after they were hit by a massive earthquake and tsunami on March 11.(Xinhua/Reuters Photo)

Outflow of highly radioactive water into Pacific stopped: nuke operator

Wednesday, April06, 2011 09:03:51 |English.news.cn

The combo photo from Tokyo Electric Powershows adioactive contaminated water from the crippled Fukushima Daiichi Nuclear Power Plant No. 2 reactor leaks through a crack in a concrete pit and drains into the ocean in Fukushima prefecture, northern Japan April 2, 2011 (Top) and the water leak halts on April 6, 2011 (Bottom). Operator of Japan's crippled Fukushima Daiichi nuclear complex said on Wednesday it had stopped leaks of contaminated water with high levels of radiation into the ocean. (Xinhua/AFP Photo)

TOKYO, April 6 (Xinhua) -- The outflow of highly radioactive water into the Pacific Ocean from the crippled Fukushima Daiichi nuclear power plant has stopped after the injection of a chemical agent, Tokyo Electric Power Co. (TEPCO) said Wednesday.

TEPCO, the nuclear plant operator, injected sodium silicate, also known as "water glass," and another agent near a seaside pit where the highly radioactive water had been seeping through to stem the leakage.

The nuclear plant has been severely damaged by the March 11 mega earthquake and ensuing tsunami.

China to raise gasoline, diesel prices from Thursday

Wed April06, 2011 21:08:17 |English.news.cn

BEIJING, April 6 (Xinhua) -- China will raise the retail prices for gasoline by 500 yuan (76.34 U.S. dollars) per tonne and diesel by 400 yuan per tonne starting Thursday, the country's top economic planner said on Wednesday.

After the implementation of the increase, which is the second price rise this year, the benchmark retail price of gasoline will be raised by 0.37 yuan per liter and diesel by 0.34 yuan per liter, the National Development and Reform Commission (NDRC) said.

Due to rising international crude oil prices and mounting domestic inflation pressures, the NDRC has "properly postponed" the timing of the rise in prices and has limited the increase, the statement said.

The agency said the government would provide subsidies to farmers, fishermen and public transportation systems in cities and offer temporary subsidies to taxi drivers to offset higher prices.

The Chinese government adopted an oil pricing mechanism at the start of 2009 which allows the NDRC to adjust retail fuel prices when international crude oil prices change by more than 4 percent over 22 straight working days.

As of Tuesday, the moving average crude oil prices of Brent, Dubai and Cinta have climbed 14.31 percent since China's last fuel price rise on Feb20, according to data from www.oilgas.com.cn, an online oil and gas market monitoring service.Editor: Wang Guanqun, Xinhua

China's Wuhan to explore for iron in Madagascar

Wed Apr 6, 2011 9:13am GMT

* Exploration to take 6-8 months
* WISCO paid $100 million for exploration permit

ANTANANARIVO, April 6 (Reuters) - Wuhan Iron & Steel Co (WISCO), China's third-largest steelmaker, plans to start exploratory drilling for iron ore in Madagascar's Soalala region at the end of May, officials said.

WISCO Madagascar -- one of many foreign firms keen to develop the Indian Ocean island's mineral resources -- paid $100 million for exploration permits in 2010.

"Our investments are made in stages, depending on the results of the survey. The investment decision is expected in six to eight months, then will come the construction phase, which will last four years," said WISCO Madagascar's chief executive, Jun Yuan Lou.

"The actual operation should start in five years," he told a news conference late on Tuesday, when signing an environmental impact study and exploratory drilling agreement with the National Environment Office (ONE).

Exploration in Madagascar, which has oil, cobalt, nickel, gold and uranium deposits, has been hampered by a political crisis since incumbent President Andry Rajoelina seized power in March 2009.

As this project proceeds, "Environmental assessment studies, including the various public consultations will begin this week," said ONE's chief executive, Jean Chrysostome Rakotoary.

An environmental permit will be issued at the conclusion of the studies, which will take at least 45 days, and after the company pays ONE $350,000, he said.

The island's political crisis forced Madagascar Oil last month to declare force majeure on four of its oil blocks to safeguard its exploration rights after failing to reverse a state directive to acquire them. (Reporting by Alain Iloniaina; Editing by Helen Nyambura and Jane Baird)

Rio Tinto secures 49.49 pct stake in $4 bln bid for Riversdale

Wed Apr 6, 2011 8:54am GMT

MELBOURNE, April 7 (Reuters) - Global miner Rio Tinto beat its target to secure a 47 percent stake in Riversdale Mining with its A$3.9 billion ($4 billion) takeover offer, and will pay its sweetened offer.

The offer of A$16.50 a share depended on it getting to at least a 47 percent holding in Riversdale by late on April 6. Otherwise it was set to pay A$16 a share.

Riversdale's two other key shareholders, India's Tata Steel and Brazil's CSN , have held on to their combined 47 percent stake. ($1 = 0.965 Australian Dollars) (Reporting by Sonali Paul and Ed Davies, sourced Thomson Reuters)

Rio Tinto holds over 49 percent of Riversdale

Wed Apr 6, 2011 9:14am GMT

LONDON, April 6 (Reuters) - Global miner Rio Tinto (RIO.AX: Quote) (RIO.L: Quote) holds over 49 percent of Riversdale Mining (RIV.AX: Quote), beating its target 47 percent holding ahead of a deadline on its A$3.9 billion ($4 billion) takeover offer.

The offer of A$16.50 a share depended on Rio getting to at least a 47 percent stake in Riversdale by late on April 6, otherwise it would have paid A$16 a share.

Rio said in a statement on Wednesday that it now holds 49.49 percent of Riversdale. Earlier in the day, it announced a 46.78 percent holding.

The offer price increase has also triggered an extension of the offer period until April 20. Rio Tinto said last week it would go ahead with its takeover offer for Riversdale even if it ended up with a minority stake in the Mozambique-focused coal miner.

The offer, announced in December, was originally conditional on at least 50 percent acceptances.

(Reporting by Clara Ferreira-Marques; Editing by Julie Crust, reuters)

Asia Coal-Australia thermal coal prices up over $127/tonne

By Rebekah Kebede
PERTH Wed Feb 2, 2011 1:35pm IST
(Reuters) - Australia's thermal coal prices, a benchmark for Asia, climbed to more than $127 a tonne week to date, supported by the ongoing impact of floods in Queensland state on coal supplies.
Thermal coal on the globalCOAL Newcastle index for the week to date was $127.88 per tonne on Tuesday, up from $124.44 a week earlier and up more than $5 from $122.98 on Friday.
"It's definitely very tight. The floods have had their impact, no doubt about it. It's tight on the ground and most people feel it," one trade source said.
"It seems to be tight everywhere - I don't think there are any coal-producing basins globally that are not tight and it's obviously reflected in the price," the source said.
With supplies scarce and the start of the Chinese New Year, however, traders said that actual deals done were few and far between.

"I'm not actually sure how much physical has been done out of there," a Sydney based trader said. "There aren't that many physical tonnes to be traded."
The market was also keeping a close eye on Cyclone Yasi, which was barreling toward Queensland's northern coast and expected to land on early Thursday.
Floods in Queensland have already caused about 5.5 million tonnes of Australian production to be lost, according to a Reuters poll conducted last week.
Although Queensland produces mostly coking coal used for steelmaking, it does produce some thermal coal and any more severe weather could cause further production losses and reduce supplies.

Xstrata has already shut its 6 million tonne per annum (mtpa) Collinsville mine, which produces both coking and thermal coal, ahead of the cyclone. The company is also considering shutting its Newlands mine, which produces 11 mtpa of thermal and coking coal for export.
Supplies from neighboring Indonesia are also expected to be restricted with some Indonesian coal traders have declared force majeure after a trade rule change, with around 60-70 vessels stuck in various ports and 3.5 million tonnes unable to be shipped.
WEEK AHEAD
The market will continue to monitor Cyclone Yasi and watch for impacts to both coal mines and infrastructure. Any further coal disruptions could spark another price rally in thermal coal.
In the wake of the Queensland floods, thermal coal prices climbed nearly 30 percent to over $140 per tonne in mid-January from about $110 per tonne at the beginning of the year.
With supplies tight, market players will be looking for Japanese, South Korean, and Taiwanese utilities to begin looking for supplies later on in the year. (sourced:reuters)

Xstrata's thermal coal down, but coking up

Reported by AAP
Wednesday, February 2, 2011

Anglo-Swiss mining giant Xstrata has attributed a dip in Australian thermal coal production in 2010 to the Queensland floods and the planned closure of a mine in NSW.
Xstrata, the world's largest exporter of thermal coal, which is used to generate steam for electricity, produced 37.8 million tonnes (Mt) of the commodity in Australia in calendar 2010, down from 41.1 Mt in 2009.

"Australian thermal coal production for 2010, including semi-soft, was 2.9 million tonnes, or six per cent, below 2009 production," Xstrata said late on Tuesday.
The output fall was primarily due to the planned closure of the United underground colliery in NSW and the impact of severe weather during the first quarter and in December on the Queensland open-cut operations.
However, volumes of coking coal - used in blast furnaces in the production of iron - from Xstrata's Australian mines rose substantially to 7.7 Mt, from 6.4 Mt previously.
"Australian coking coal volumes increased by 20 per cent, or 1.3 million tonnes, as a result of a full year of production from Oaky number one (in Queensland) and high productivity from Oaky North," Xstrata said.
That increase would have been greater if not for industrial action at the Tahmoor mine in NSW in the second half of the year, when workers led by the Construction Forestry, Mining and Energy Union went on strike, calling for wage increases.
The company also announced it had completed construction of a magnetite base plant at Ernest Henry mine, in central Queensland, as part of a $589 million undertaking to transform the project into a major underground copper-gold operation.
The plant had produced its first magnetite iron ore concentrate, an important by-product of the copper-gold concentrating process, Xstrata said.

Magnetite output is expected to be at a rate of about 1.2 Mt per annum, with exports expected to start from Townsville port in the first half of this year.
Ernest HenryMining general manager Myles Johnston said the plant would play a major role in extending the life of the project to at least 2024.
"The transformation of open pit mining operations to a major shaft underground mine is on budget with the shaft scheduled to be commissioned in the first quarter of 2013," Mr Johnston said.
Xstrata mined 74,595 tonnes of copper at Ernest Henry in 2010, up from 35,562 tonnes previously.
The mine also yielded 91,259 tonnes of gold, up from 45,227 in 2009.
Xstrata said a four per cent lift in its total global gold production in 2010 was due to a strong recovery in gold production at Ernest Henry.
Xstrata has activated preliminary emergency procedures as powerful Cyclone Yasi hits Queensland, with nickel production suspended from the 30,000 tonnes per year Yabulu nickel refinery.

Global steel prices continue their upward surge

February 2, 2011
Transaction prices are moving relentlessly upwards worldwide as steelmakers address their escalating raw material costs.
The MEPS Global Composite Steel Price increased by 10.5 percent in January 2011, compared to December 2010.
In the US, the pace of flat product price increases is described as "fast and furious". The shortage of scrap and surging costs of other raw materials have pushed the mills into a frenzy of announcements regarding transaction numbers. As is usual, actual market prices are lagging behind the proposals. In the meantime, real demand is only just satisfactory.

Transaction values continue to head up in Canada at an alarming rate, with more increases to be applied through February and into March. Raw material costs are climbing rapidly and rising scrap prices are expected to generate further pressure. Steelmakers report that order books are strong as customers buy before transaction figures go higher and also to fulfil their needs to replenish and build inventories.
In China, steelmakers are facing sharply higher costs for iron ore and coking coal, which they must pass on to their clients, both at home and abroad. Purchasing by end-users has started to slow ahead of the upcoming Chinese New Year in early February. However, there is speculation that prices will continue to climb after the holidays, especially as many leading producers have elected to lift their official February ex-works figures.

Despite a slow recovery in consumption in many Japanese end-user sectors, market activity is improving. A very positive price revival is underway, as a result of an upsurge in steelmaking costs. In South Korea, demand from downstream industry remains lacklustre, making it quite difficult for the mills to implement increases. Posco is reluctant to try to cover rising raw material costs by means of domestic hikes in the first quarter.
Consumption in western Europe has changed very little during the last four weeks. Nevertheless, domestic producers are poised to lift second quarter offers because of raw material price developments and energy cost increases. Steel output has been curbed and restocking is expected to get underway shortly.

Source: MEPS

Australian cyclone risks to commodities trade

Wed Feb 2, 2011 2:34am EST
SYDNEY (Reuters) - A massive cyclone due to slam into Australia's northeast coast on Wednesday could prove costly for major producers of commodities such as sugar, coal, nickel, copper and gold.
Cyclone Yasi, now closing in on the central coast of Queensland state, is forecast to generate winds of up to around 300 kph (180 mph) by the time it comes ashore late on Wednesday.
Here are the main risks to commodity markets.
SUGAR
The cyclone threatens to flatten sugar cane in an area accounting for roughly a third of Queensland state's production, which in turn makes up more than 90 percent of national sugar production.
Crop damage could further pressure world raw-sugar prices, already at three-decade highs.
Australia ranks among the top-three raw-sugar exporters alongside Brazil and Thailand, shipping more than 3.0 million metric tons in a normal year, or about 10 percent of the world export market.
In 2006, a weaker cyclone, named Larry, slashed national raw sugar output by almost 8 percent to 4.7 million metric tons.
The abnormally wet start to the Australian summer this year caused the country's worst harvest in 20 years.
Raw sugar exports for 2010/11 are forecast to fall to around 2.4 million metric tons from the previous 3.2 million metric tons, after recent heavy rains and floods cut sugar content, says leading sugar exporter Queensland Sugar Ltd.
Queensland-based Cane growers Association had hoped for a modest recovery in sugarcane production to around 29 million metric tons in 2011/12 from 27.3 million metric tons in 2010/11.
A normal harvest is around 33 million metric tons.
Harvesting usually starts mid-year and can finish as late as December. The current crop threatened by Yasi is in its early growing phase.
Global sugar supply will just cover demand this year and prices will fall by end-2011, a Reuters poll in January showed, although that fine balance could easily be upset by dire weather or logjams at ports in Brazil, the world's top sugar producer.
Also in the path of the cyclone are the two biggest Australian sugar ports: Mackay, which can handle 3 million metric tons a year, and Townsville (2 million metric tons).
COTTON & GRAINS
About five million tonnes was left uncut because of rain disruption and is most at risk being smashed by the cyclone because it is standing taller than the new 2011 crop.
COAL MINES, GRAZIERS ON ALERT
Yasi, one of the world's most powerful cyclones, is so large that it is expected to travel as far inland as the Mt Isa mining region, about 1,000 km inland, before finally breaking up.
Xstrata said it was bracing for high winds at its Mount Isa Copper mining and smelting unit and also at its Ernest Henry copper mining operations even further inland.
Most of Queensland's coal mines lie south of the cyclone's predicted march west across the state, but the northerly mines, such as Rio Tinto's Hail Creek mine and Xstrata Coal's Collinsville mine, have been closed. Xstrata was considering shutting its Newlands mine as well.
The Pajingo gold mine, south of the historic gold mining town of Charters Towers and yielding around 2,200 ounces a month, is well within the forecast path of Yasi, and the owner said on Wednesday that work had been suspended.
Queensland state's large livestock industry also prepared on Wednesday for heavy loses from Cyclone Yasi.
Australia's National Farmers Federation estimates that the cyclone could affect a fifth of Queensland's A$3.3 billion ($3.34 billion) herd if it barrels through prime grazing areas.
Queensland, with about 12 million head of cattle, accounts for about 44 percent of the national herd.
Australia's banana growers also face major losses, with the crop now in full swing. In 2006, local banana prices quadrupled after Cyclone Larry destroyed 80 percent of the national crop.
"Losses will likely be catastrophic again," the National Farmers Federation said in an email to Reuters. ($1 = 0.988 Australian Dollars)
(Additional reporting by Rebekah Kebede in PERTH and Lewa Pardomuan in SINGAPORE; Editing by Mark Bendeich, Yoko Nishikawa and Sanjeev Miglani, sourced :Reuters)

When will China regain its appetite for thermal coal?

SHANGHAI, Wed Feb 2, 2011, By Fayen Wong
(Reuters) - A steep discount for Chinese versus international thermal coal prices could persist through the first half of the year, as global values are bolstered by rain-led output disruptions and Chinese demand enters a seasonal lullChina has become the motor of the world coal market in the past two years after the closure of many of its own mines forced it to import. But in the past few months local prices have been relatively subdued, thanks to government crackdowns on power usage, inflation and -- so far -- the absence of a supply crisis triggered by winter.
At the same time, Australian miners are struggling to get back to normal after devastating floods decimated production, put a premium on their supplies and lifted the world market. The flood premium could linger into the second quarter, meaning a grim outlook for trading firms focused on spot sales into China.

"Thermal prices in Australia and South Africa will make it prohibitive for China to import large volumes from those countries in the first half. So we'll be seeing pretty sluggish imports over the next few months," said Bonnie Liu, a Shanghai-based analyst for Macquarie Bank.
For China's coal-hungry southern provinces, the price gap between Chinese and Australian supplies widened to $30 a tonne in mid-January - the highest in eight months -- when the worst flooding in Queensland since 1974 wreaked havoc on shipments.
Although the discount has since narrowed to about $19 a tonne, forward prices for both Australia's Newcastle and South Africa's Richard's Bay coal futures suggest the arbitrage will stay closed at least until May.

Should this be the case, trading houses such as Trafigura, EDF Trading, Glencore and Gunvor -- which thrived in 2010 selling millions of tonnes of Australian, South African or Colombian coal into China -- would have to work harder to make their dollars.
Thermal coal prices in Australia, a benchmark for Asia, are hovering at about $151.80 per tonne on a landed basis into southern China and imports from South Africa cost $148, after adjustments for coal quality. But shipping coal from China's Qinhuangdao to the south costs only $133 a tonne based on coal with heating value of 5,800 kcal/kg, net as received.
Australia and South Africa are China's second and third largest thermal coal suppliers after Indonesia. Thermal coal shipments from the two nations were 22.2 million tonnes in 2010, or about a quarter of China's total steam coal imports.

Some analysts reckon China's thermal coal imports, which averaged 7 million tonnes per month in 2010, could fall to just around 5 million tonnes from as soon as February.
"As China cuts Australian and South African imports, the only other Asian supplier China could turn to would be Indonesia. But the wet season is only expected to end in March and forecasts show rains may drag beyond June," Macquarie's Liu said.
Most Indonesian miners are also still struggling to ramp up output after unusually long rains in 2010 slowed mining and prompted some coal companies, including PT Bayan Resources (BYAN.JK), to declare force majeure on shipments.

But hopes of drier weather returning are dampened by forecasts by the country's weather bureau, which predicted the current wet season would stretch on until June.
"Chinese prices may briefly rebound as utilities rebuild their stocks, but the gap won't close. Besides, the Chinese market typically enters a seasonal demand lull after February and that means domestic prices would either stay flat or move lower," said Andrew Driscoll, an analyst at CLSA Asia-Pacific Markets, who is forecasting Shanxi blend coal to fall by 10 yuan to 765 yuan in the second quarter.

"Improved weather in the coming months would lift domestic coal production and increased hydropower could also put downward pressure on China's coal prices."
With Beijing vowing to combat inflation, trade sources said Chinese state-owned coal miners, which make up about half of coal production, are under pressure to keep down spot prices, with the government having ordered producers to keep 2011 contract prices unchanged from 2010.

RAIN, RAIN EVERWHERE
Australia's floods are expected to cut coal exports by 15 million tonnes in the period from December to March, but mining kingpin BHP Billiton (BHP.AX) (BLT.L) has warned operations could be hit for at least six more months -- suggesting that total tonnage lost could be greater.
Although the flooding has mostly affected coking coal mines, it would offer support for thermal coal prices for months to come, as miners in both Queensland and New South Wales change their production mix to sell more higher-priced coking coal, with lower grade semi-soft and PCI coal fetching more than $100 a tonne compared to thermal coal.

Although Australia's spot thermal coal prices have shed 8 percent since mid-January to $127 a tonne, analysts reckon prices may have reached a floor.
"We don't see much more downside than this, with the slow recovery in (Queensland's) Bowen Basin and high PCI and semi-soft coking coal prices keeping thermal coal supply tight for a good part of 2011," said Mark Pervan, an analyst at ANZ Bank.
In Indonesia, the world's largest thermal coal exporter, some suppliers said they have received more enquiries for shipments in the second quarter, but few have extra cargoes to offer and traders complain that maximum offers from Chinese buyers were at least $10 a tonne lower than market rates.

South African coal prices have received support from Asia's supply tightness, with heavy rainfall also slowing output. Severe rains across Colombia have caused damage to mining and transport infrastructure.
"The government meteorological bureau has forecast the rains to last until March, and possibly even until May. So we expect Colombia's export growth to be subdued this year," said Raymond Chan, a thermal coal analyst at Standard Chartered.
(Additional reporting by Fitri Wulandari and Michael Taylor in JAKARTA; Editing by Clarence Fernandez, sourced:reuters)

Aperam to cut costs by USD 250 million through 2012 - CEO

Tuesday, 01 Feb 2011

Bloomberg reported that Aperam, the stainless steel unit spun off from ArcelorMittal last week, aims to cut costs by USD 250 million over two years, more than the USD 110 million still left to make under a previous plan.
Mr Bernard Fontana CEO of Aperam said that the company, already present in 32 countries, was open to making acquisitions in Asia, though it doesn't have anything specific to talk about at the moment.(sourced:bloomberg.net)

Revyakino Metal Rolling Plant commissions new continuous reheating furnace

Wednesday, 02 Feb 2011

It is reported that the Russian long steel producer Revyakino Metal-Rolling Plant has commissioned its new continuous reheating furnace which will allow the plant to increase its long steel product output from an average of 24,000 tonnes to 35,000 tonnes per month and also to reduce production costs. This output volume is planned to be reached in May this year.
Revyakino supplies about 50% of its products to construction sites in Russia's Central Federal District with about 90 percent of product supplies directed to the Moscow region.
Igor Shischuk plant general director said "Russian rebar market capacity in 2010 amounted to 13.1 million tonnes. This year a growth of 7% to 10% is expected. The speed of delivery and increase of capacities will allow us to grow with the market."
As a result of the continuous reheating furnace commissioning, Revyakino intends to claim a share of about 40% of the Moscow rebar market.
For the first two stages of modernization which began in 2007, Revyakino invested RUB 2 billion. The further implementation of its planned investment projects will allow Revyakino to increase its output of long steel products to 500,000 tonnes per year by 2015.(sourced: steelorbis)