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.

ICEX, Iron ore future contract on Thursday, 03, Feb 2011

Commodity............................Expirty..................LTP.................% ChangeIRONORE62FINES..............29APR 2011........7665.00............ 1.51%IRONORE62FINES..............31MAR-2011.......8046.00........... 1.35%

As On :03 Feb 2011 03:35 PM IST
(Know latest updated at :http://www.icexindia.com/)

Oman to hire consultants to develop first rail network

Thursday, 03 Feb 2011

Bloomberg reported that Oman will appoint project and design consultants in June 2011 to help create the Arabian Gulf country's first railway network.
Mr Salim Al Affani head of planning at the Supreme Committee for Town Planning said that the network's construction will take four years. Freight and passenger services are scheduled to start in 2017.

Mr Al Affani said that Oman, one of six countries that make up the Gulf Cooperation Council, is trying to improve transport links with other Middle Eastern nations. Ten companies have been shortlisted for each contract that will be awarded in June 2011. He declined to name the shortlisted companies or give a value for the project, citing government policy.
In the first phase, 1,000 kilometers of track will link Muscat with the town Sohar as well as a rail network the neighboring UAE is developing. The second phase will include an additional 600 kilometers of track connecting the capital with Salalah in Oman’s south.

Mr Al Affani said that "We have visibility on phase one and from there it depends on the government's willingness. Studies have shown that the potential is low for the second phase because of the high cost, but the government is still intending to proceed with what’s planned for now."
Mr Salim Al Affani also the head of Abu Dhabi's Union Railway Co said in November 2010 that the UAE railway line will link with a train system covering the six cooperation council countries in seven years.(sourced:bloomberg.net)

TSK and Velutsan to open a steel construction facility in Turkey

Thursday, 03 Feb 2011

German iron and steel giant Troster Systeme Und Komponenten or TSK and Turkish company Velutsan are set to open a steel construction facility later this month in Bandırma in the northwestern province of Balıkesir.
TSK, known for the brands Mero and Schmidlin and Velustan have invested EUR 7 million in the plant, which will open February 18th 2011. The 8,500 square meter steel facility is near the town of Edincik.

The statement said that "Velutsan TSK will start operating with 400 employees and plans to increase this figure to 600 by the end of the year. With its 83 years of experience, Velutsan TSK will undertake ambitious projects in Turkey as it prepares to enter the automotive supply industry with a EUR 45 million investment."
TSK has been involved with work on the Sofia Airport, the Frankfurt Stock Exchange General Management building and Ferrari World Abu Dhabi.(sourced:Hurriyet Daily News)

Zamil Steel bags major supply deal for Saudi Aramco refinery project

Thursday, 03 Feb 2011

It is reported that Zamil Steel Structural Steel Division has been awarded a USD 12.3 million contract for the fabrication and supply of steel works for the Saudi Aramco Mobil Refinery Company Clean Fuels Project located in the western region of Saudi Arabia.
It aims to reduce the sulphur levels in gasoline and diesel to 10 parts per million in order to meet the environmental regulations of the Kingdom of Saudi Arabia.
The scope of the contract calls for the fabrication and supply of structural steel requirements. Worley Parsons is responsible for the front-end engineering design and detailed engineering, procurement and construction for the project.

Zamil Steel will begin the supply of the steel structures during the third quarter of 2011, and continue through the end of the third quarter of 2012. The contract's positive impact on the company's consolidated financials will be visible upon completion of each stage.
Mr Ayman Kanaan VP of Industrial Steel Products Group at Zamil Steel said that "Zamil Steel has been extensively involved with leading multinational companies, supplying structural steel components for important industrial projects that are complex in nature. These include power plants, petrochemical, oil and gas facilities, desalination plants, and aluminum and steel factories in the Gulf region and across other continents around the world."

He added that "We have enhanced our expanded production facilities by adding highly advanced manufacturing equipment. These enhancements enable us to offer dynamic, innovative steel products and solutions to the construction sector, as well as efficient services to our many repeat clients."(sourced:Construction Week Online)

India state group submits bid for Mongolia coal asset

Thu Feb 3, 2011 8:38 am GMT
NEW DELHI(Reuters) - India's International Coal Ventures (ICVL) consortium has submitted a bid for buying a coal asset in Mongolia, an official said on Thursday, to meet rising demand for the key raw material in Asia's third-largest economy.
Ajay Mathur, nodal officer for ICVL, also told reporters the consortium was hopeful of acquiring two to three coal assets in Australia and Indonesia this year.

The state consortium comprises of utility NTPC (NTPC.BO: Quote), Steel Authority of India Ltd (SAIL.BO: Quote), iron ore miner NMDC (NMDC.BO: Quote), Coal India (COAL.BO: Quote) and Rashtriya Ispat Nigam Ltd.
Last month, it decided not to counter Rio Tinto's $3.9 billion bid for Australian coal miner Riversdale (RIV.AX: Quote). (Reporting by Ruchira Singh, sourced:Reuters)

Nanjing Steel net profits may grow by 600pct in 2010

Thursday, 03 Feb 2011

It is reported that Nanjing Iron & Steel reported a profit growth of 500% to 600% in 2010 with the nets profit which belonged to its parent company hitting at CNY 0.138 billion.
While Valin Steel disclosed a full year profit lose of CNY 2.5 billion to CNY 2.7 billion due to the bad performances of its holding company. In 2009, the company realized net profits of CNY 0.12 billion and it once predicted a full year profit lose of CNY 1.8 billion to CNY 2 billion in the third quarter of 2010.(sourced:www.cscet.com)

China GengSheng inks supply contract with Fushun New Steel

Thursday, 03 Feb 2011
Industrial materials manufacturer China GengSheng Minerals has signed a two year full service supply contract with Fushun New Steel Corp a deal from which GengSheng expects to make roughly USD 10 million in revenue.

The news sent GengSheng stock price up by more than 17% recently to trade at USD 3.13 as of 11:30am EST. Under the agreement, GengSheng will supply Fushun with refractories, materials that can retain their strength at high temperatures and which are used in linings for furnaces, kilns, reactors and incinerators. Installation and on site support services are also included.
GenhSheng said shipments under the contract began last month and are expected to continue through December 2012. The company expects to begin receiving revenue from its new client in the first quarter of this year. The amount of revenue will depend on Fushun ouput capacity.
GengSheng launched its full-service program for refractory customers, which includes installation, testing, repair and maintenance, in late 2003, as they generate stable and recurring revenue streams and have higher margins than product sales alone.

Mr Shunqing Zhang CEO of China GengSheng Minerals said "Our full service programs are an ideal solution for steel manufacturers who face an increasingly challenging market environment as they are able to adjust purchasing and implementation based on output."(sourced:proactiveinvestors.com)

Japan steel mills see output 28.4 mln T in Jan-Mar

Wed Feb 2, 2011 1:53am EST
* Plan for 2.6 pct bigger output than Oct-Dec
* Exceeds METI estimate by 5.6 pct
* Plans may not fully reflect impact of floods -METI

TOKYO, Feb 2 (Reuters) - Japanese steelmakers' buoyant production may continue into the current quarter on strong demand from Asia, despite supply disruptions of coal from Australia that have forced them to rely on the costlier spot market.
A government poll of about 60 big Japanese steelmakers released on Wednesday showed the companies plan to produce 28.40 million tonnes of crude steel in January-March, up 2.6 percent from the previous quarter.
The figure is 5.6 percent above an estimate by the Ministry of Economy, Trade and Industry revealed last month of 26.88 million tonnes.
A ministry official said the survey on output plans was conducted before the magnitude of the impact of the devastating floods in Australia became clear, and revisions of the plan were possible.

Japanese steelmakers, which rely on Australia for 60 percent of their coking coal needs, have said they have secured enough coal stocks to run until the end of March unless there are further floods or damage to infrastructure in the country.

Japanese companies are boosting coking coal purchases from alternative sources such as the United States, Canada, China and Indonesia, relying on the spot market in some cases.
Nippon Steel Corp (5401.T) and JFE Holdings Inc (5411.T) kept their 2010/11 production plans unchanged when they announced steep downward revisions in their earnings outlooks last week. (Reporting by Yuko Inoue; Editing by Michael Watson)

China 2010 steel output underreported - Macquarie

Thursday, 03 Feb 2011
According to Macquarie Research, Chinese crude steel output may have been under reported by 13 million tonnes in 2010 by failing to include small steel mills especially in the country's steel heartland of Hebei province.
Macquarie said annual production capacity of 24 million tonnes in the third quarter of last year and 27 million tonnes in the fourth quarter was excluded from full year steel production figures which should have reached 640 million tonnes.
Data from the National Bureau of Statistics showed China produced a record 627 million tonnes of steel last year.

Mr Luo Bingsheng, deputy chairman of the China Iron & Steel Association warned in late October that regional governments and enterprises could be misreporting their output figures.
Macquarie said CISA representing 77 medium and large sized Chinese steel mills said its Hebei based members produced 10.4 million tonnes of crude steel in December but the NBS put the figure at 9.2 million tonnes for the whole province.
Macquarie said "China demand for iron ore is almost 20 million tonnes higher in 2010 than what was implied using the NBS data, adding that this partly contributed to strong iron ore prices over the final quarter of last year.”

Based on its revised figures, Macquarie forecast a modest eight per cent growth in steel production this year, supported by demand from the manufacturing sector, bringing output to 690 million tonnes.(sourced:businessspectator.com.au)

Nippon Steel, Sumitomo Metal Inds say plan to merge

Thu Feb 3, 2011 2:39am EST

(Repeats to attach story to separate alert)

TOKYO Feb 3 (Reuters)
Japanese steelmakers Nippon Steel Corp (5401.T) and Sumitomo Metal Industries (5405.T) said on Thursday that they were in talks to merge their operations in October 2012.
(Reporting by Nathan Layne; Editing by Edmund Klamann)

Mineral Enterprises plans 2 steel plants in Karnataka

Thursday, 03 Feb 2011

BL reported that iron ore mining firm Mineral Enterprises Ltd plans to set up one steel plant each in Chitradurga and Hassan district.
Mr Basant Poddar MD of MEL told the press last week that the company has already started the land acquisition process, which is to be completed within six months.
Mr Poddar said that the company needs at least 150 acres in Chitradurga and about 400 acres in Hassan for the steel plant.

He said that while the company would spend around INR 200 crore in Chitradurga, INR 1,000 crore would be spent to set up the plant in Hassan.
Mr Poddar said that “We hope to complete both the projects within two years after the land acquisition.”
Mr Poddar said the steel plants would use high grade iron ore to manufacture iron while the low grade ore would be exported, if the state government were to lift the ban on export.(Sourced:BL)

Xstrata resumes some operations at Australia coal mines

PERTH, Wed Feb 2, 2011 10:11pm EST

PERTH Feb 3 (Reuters) - Xstrata said on Thursday that it has resumed operations at its Newlands coal mine, which was shut Wednesday night due to Cyclone Yasi, and is preparing to resume operations at its Collinsville coal mine where the cyclone knocked out power.
Collinsville mine will resume operations as soon as power is restored, an Xstrata spokesman said.
Abbot Point Coal Terminal, which is operated by Xstrata, was also affected by the power outage. (Reporting by Rebekah Kebede; Editing by Ed Davies,sourced:reuters)

Relief as Australia mops up from giant cyclone

By Rob TaylorINNISFAIL, Australia Wed Feb 2, 2011 11:05pm EST
(Reuters)-Australians voiced relief and surprise after one of the world's most powerful cyclones spared the nation's northeast coast from expected devastation on Thursday, with no reported deaths despite winds tearing off roofs and toppling trees.
Cyclone Yasi, roughly the size of Italy and packing winds of up to around 300 km per hour (186 miles per hour), threatened Australia with its second major natural disaster in as many months this week but ended up missing heavily populated areas.
"It's amazing no-one was killed. The wind was howling like a banshee," said farmer Nathan Fisher, speaking out the window of his four-wheel-drive vehicle as he returned to his property from a shelter in the small town of Innisfail.

Australia, a vast continent with less than three people for every square km, is one of the few countries where a storm as large and terrifying as Yasi -- with a diameter of up to around 500 km (310 miles) -- could simply miss major cities.
Even as Yasi began its 1,000 km (620 mile) inland march into the outback on Thursday, weakening all the time, tracking forecasts showed it was likely to hit only a handful of small towns in a region home to around 400,000 people.
The lack of any major damage or substantial casualties was also attributed to several days of cyclone preparation, early evacuations, laws that ensure newer homes and buildings are strong enough to survive a cyclone, and less than expected sea flooding as the cyclone missed the peak tides.

The cyclone came ashore around midnight along hundreds of km of coast in Queensland state and then drove inland,
"Early reports have given us all a great sense of relief," Queensland Premier Anna Bligh told reporters, adding the cyclone emergency was still unfolding.
"Some people in this region will be going back to their communities, going back to their neighbourhoods, and facing scenes of considerable devastation."
Yasi was rated a maximum-strength category five storm, on a par with Hurricane Katrina, which wrecked New Orleans in 2005, killing 1,500 people and causing $81 billion in damage.
It was downgraded to a category-two storm as it moved inland but its core remained very destructive, the Bureau of Meteorology said.
The biggest impact could be on the economy. Sugarcane crops had been damaged, with initial estimates suggesting around 15 percent of the national sugar crop could be lost. The industry estimated that one area, accounting for about a third of the crop, had suffered up to 50 percent losses
Australia is the world's third largest raw sugar exporter.
Some coal mines remained shut after the cyclone passed, although others were starting to resume operations. Queensland accounts for 90 percent of Australia's steelmaking coal exports.
The eye of the cyclone crossed the coast near the tourist town of Mission Beach, where devastating Cyclone Larry struck in 2006, and damaged areas around Tully and Cardwell, where many older homes, built before tougher building codes were applied, suffered severe damage.

Authorities said initial reports suggested only about 100 houses had suffered major damage. There were no initial reports of serious injuries.
Hills around Tully were covered in snapped trees and scoured almost clean of vegetation by the force of the wind. The main road into Tully was flooded and several houses had roofs torn off, with crumpled tin lying in flooded fields.
At Innisfail, Bill Biscow stood in flood waters and cleaned up roofing shredded by the storm. "It was scary, but the damage is not as bad as last time when the place got flattened. Cyclone Larry probably blew away the oldest buildings."
In the coastal hamlet of Cowley Beach, steel roofs were torn from houses and twisted around power poles.
"Ive been in the area for a long time and Ive seen many of these, but this one is the biggest Ive ever seen, said 84-year-old Robert Hurst, cleaning up his still-intact house.
Another resident, Maria Cook, returned from an emergency shelter to check on her home on the outskirts of Innisfail.
"I'm going to have to use a chainsaw to cut past trees and to get back inside my house," she said.
A weather bureau spokesman said a storm surge of two metres (six feet) above normal tides had inundated one stretch of coast but the surges were not as severe as authorities had feared.
The cyclone had cut electricity to around 200,000 homes, but main links to the power grid remained intact.
Queensland has had a cruel summer, with floods sweeping across it and other eastern states in recent months, killing 35 people and causing damage estimated at $10 billion or more.$1=0.9888 Australian dollar) (Additional reporting by Amy Pyett and Bruce Hextall in Sydney,writing by Ed Davies and James Grubel; Editing by Dean Yates, sourced:reuters)