July 02, 2008

Indian domestic iron ore spot prices surge by 10%
We had reported on June 29th 2008, that after Orissa Mining Corporation’s latest quarterly tender on for sale of iron ore during July to September 2008, the market prices of iron ore in Orissa are expected to surge by INR 500 per tonne

As per reports received this morning, the prices of iron ore in Burwil area of Orissa have gone up by INR 500 per tonne.

Product Grade Size 30-Jun 1-Jul Change %

Iron ore - BF Fe 65% 10-40 5000 5500 500 10.0%

Iron ore - Sponge Fe 63% 5-18 6100 6600 500 8.2%

1. Rates are in INR per tonne
2. Rates are Ex mines but include loading into rakes
3. VAT or CST is in addition
4. Royalty is INR 19 per tonne for Fe content of 63 and INR 27 per tonne for Fe content of 65%

It is reported that two Chinese steel companies Tangshan Iron & Steel Group and Handan Iron & Steel Group combined recently to form the world’s fifth largest producer.

As per report, the new state owned company was called Hebei Iron and Steel Group Co and replaces Baosteel Group Co as China’s biggest steel company.

Mr Wang Yanjun a Tangsteel spokesman said that “The new group is officially set up and it would be based in the northern city of Shijiazhuang in Hebei province, which encircles Beijing.”

According to the Chinese financial press Tangsteel’s steel output last year was 22.75 million tonnes while that of Hansteel was 9 million. Their combined total would rank fifth worldwide after South Korea’s POSCO which produced 32.8 million tonnes.

RIA Novosti reported that Mosenergo, Russia’s largest regional electricity generator has signed a EUR 70 million contract with Siemens to re-equip one of its heat and power plants.

Mr Dietrich Meller president of Siemens Russia said “Yesterday we signed a corresponding contract for delivery of a facility with a capacity of 400 MW.”

According to the report, the contract is expected to be followed by three more with the aggregated cost of facilities to be purchased and launched by 2011 to total EUR 300 million.

Mosenergo supplies 80% of Moscow’s heating requirements and 85% of power demand in the capital and the surrounding Moscow Region. The company brings together 17 electric power plants with electricity generating capacity of 10,600 MW and thermal generation capacity of 39,000 MW.

Chinese Ministry of Commerce has strongly opposed US DOC’s recent decision to levy anti dumping and countervailing duty on light walled rectangular pipe and tube from China.

MOC claimed that the use of anti subsidy measures infringes US rules and the tradition of not adopting anti subsidy measures against non market economies, which has been practiced since 1984. MOC said this move is contradictory to the World Trade Organization Agreement on Subsidies and Countervailing Measures.

It added that US Department of Commerce’s false determination and calculation of the subsidies, and consecutive anti subsidy measures against Chinese steel products, greatly hurt the interests of Chinese industry and is not acceptable to China. It said China is studying the US determination and will act actively.

It added that the frequent requests for anti subsidy probes into Chinese exports made by US industries are not conducive to the normal development of the bilateral trade relations.

US Department of Commerce initiated antidumping duty and countervailing duty investigations on imports of light walled rectangular pipe and tube from China on July 17th 2007 and US International Trade Commission made affirmative determination that the product from China materially injured US industry on August 10th 2007. US Department of Commerce made final determination on June 13th 2008. Commerce determined that Chinese producers/exporters have sold rectangular pipe in the United States at 249.12% to 264.64% less than normal value. Commerce also determined that Chinese producers/exporters received net countervailable subsidies ranging from 2.17% to 200.58%.