Further to Macarthur Coal’s announcement of May 21st 2008, the company advises that discussions with ArcelorMittal have ended.

Macarthur Coal in a statement to the Australian Securities Exchange, said that “Discussions with ArcelorMittal did not result in any proposal for a transaction being made by ArcelorMittal to the board of Macarthur Coal.”

Mr Keith De Lacy chairman of Macarthur Coal said that the company welcomed ArcelorMittal as a substantial shareholder looked forward to a long relationship with the steel company as a customer. He said that the talks with ArcelorMittal had no impact on the day to day operations of Macarthur Coal. We will continue to focus on running and growing the business and delivering value to our shareholders.”

The Board continues to advise shareholders that they should have no regard to speculation in the media or any other uninformed comment.

South Korea’s POSCO said that it would cut stainless steel output by 25,000 tonnes in July due to inventory build-up as buyers delay purchases on expectations of lower prices.

A POSCO spokeswoman said that “We have decided to cut output in July in an attempt to normalize market conditions and will keep our production schedule flexible.

POSCO produces between 150,000 and 160,000 tonnes of stainless steel per month.

It reported that Baosteel has raised steel price for August recently and the price growth rate is CNY 200 per tonne to CNY 400 per tonne.

Baosteel raised the price of general CR steel products up by CNY 200 per tonne for August and the price of SPCC 1.0×1250 steel coil after the adjustment is CNY 6,496 per tonne. HR steel price increases by CNY 300 per tonne and the price of SS400 5.5×1500 is CNY 5,292 per tonne after the price rise. Meanwhile, the price of pickling steel products rises up by CNY 200 per tonne while wire price comes up by CNY 400 per tonne. All prices above exclude 17% VAT.

An analyst said Baosteel has not reported the information publicly by now, and the price rise was probably made according to the price policy for July. There are two reasons for Baosteel to increase steel prices.

1. The expanding price gap between domestic and international steel market. HRC export price is approaching to USD 1,100 per tonne, but domestic price is USD 860 per tonne which will stimulate the hike of Chinese steel export.
2. The sustaining increase of domestic steel production cost, due to the further increase of coking coal and coke prices.

Analysts believed that Baosteel will raise prices of some steel products again in the future, which may bring effects to domestic steel market.

Anshan Iron and Steel Group (Ansteel) completed capital increase and share expansion in Tiantie Steel Sheet Co Ltd yesterday afternoon, which was equally held by Ansteel and Tiantie Group. Ansteel is the world’s largest supplier of container steel and one of the domestic producer of high-grade auto panel with a premium steel capacity of 25 million tons per year after a 60-year-plus of development while 40-year-old Tiantie is a large state-owned steel producer with an annual steel capacity of 8 million tons.