Beijing plans to reduce the huge iron ore stocks at Chinese ports to curb soaring freight rates, which are hampering 2008 price negotiations with Australian mines, the official Shanghai Securities News said on Tuesday

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SAN FRANCISCO (Thomson Financial) - Nucor Corp. said late Monday it has launched a public offering of 25 million shares of common stock.

Nucor has also granted the underwriters an option to purchase up to an additional 3.75 million shares within 30 days following the closing date.

The offering is expected to close on or around May 29.

The Charlotte, N.C.-based steelmaker said it plans to use the net proceeds from the offering for general corporate purposes. In addition, Nucor plans to raise up to $1 billion in the debt capital markets in the near term.

Banc of America Securities LLC, Citigroup Global Markets Inc. and J.P.

Morgan Securities Inc. are acting as joint book-running managers for the offering.

Shares of Nucor closed at $81.32.

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about Nucor
Nucor Corporation is made up of approximately 20,000 teammates whose goal is to “Take Care of Our Customers.”  We are accomplishing this by being the safest, highest quality, lowest cost, most productive and most profitable steel and steel products company in the world.  We are committed to doing this while being cultural and environmental stewards in our communities where we live and work.  We are succeeding by working together. 

It is reported that export offers for Chinese hot rolled steel coil are raised again by steel producers so as to reflect the rise in domestic market. At the same time, transaction price has also seen evident increase.

On Shanghai market the quoted rates are as under
1. Commercial 4.75mm to 11.5mm HRC in 1500mm - CNY 5680 per tonne
2. Commercial 4.75mm to 11.5mm HRC in 1800mm - CNY 6100 per tonne
3. Low alloyed 7.5mm HRC in 1500mm - CNY 5950 per tonne

Mysteel forecasts that taking Shanghai price for 4.75mm to 11.5mm HRC in 1500mm width as benchmark, it is going to approach CNY 6000 per tonne in the next two months if it keeps at CNY 5500 per tonne. Otherwise, it is likely to experience downward adjustment or even peak out.

The hope for Baosteel to conclude the prolonged contract ore talks with Australian ore miners by June 2008 has dimmed as Chinese mills are moving toward more aggressive negotiating tactics, after the China Iron & Steel Association called for its members to boycott the Rio’s spot sales of iron ore.

China Securities News citing a market insider said that “Currently, the talks have come to a pause and Chinese side intends to ease the port congestion by evacuating the record high ore stockpiles and put a cap on the surging freight rates. After that has been done, the negotiations might resume again.”

Mr Xu Xiangchun a senior steel analyst said that the long term contract signed by leading Chinese mills does not include a clause that the contract would expire automatically once two sides fail to reach an agreement within first three months of the new fiscal year. He added that therefore, Baosteel is in no rush to strike a deal before June for that concern and Australian miners would breach the contract if they terminate the contract unilaterally. And some smaller mills might have been forced to accept steep price hike for Australian ore to secure supply, and that price will not be acknowledged by the leading mills.

It is for the first time that CISA call on joint action from Chinese mills to boycott Rio’s spot ore sales in public, which is considered a negotiating ploy. In a statement published on its website on CISA said that “We urge domestic mills and traders not to support or take part in Rio Tinto’s spot iron ore sales activities in China.”

However, the Australian Financial Review citing a Rio executive said that Rio Tinto rejected claims by CISA that the mining company had breached long term iron ore supply contracts. Rio said that it was entitled to sell into the spot market. For CISA to suggest joint action by the Chinese steel industry to prevent this is a very concerning development.

Rio said that the comments should be considered in the context of our ongoing price negotiations. It rejected the CISA’s claims and added it had rights under a number of contracts that include options to reduce volumes and it will continue to negotiate in good faith for a pricing outcome that reflects the continuing strong market fundamentals.”