POSCO SEEKS PARTNER: The CEO of POSCO, the big South Korean steelmaker, says the company favors a merger with a European or U.S. company if the right candidate can be found. Lee Ku-Taek told the U.K.'s Financial Times that a merger “would depend on the right situation.” His comments were the first from a major Asian steelmaker favorably disposed to a merger outside of Asia. Lee said he favors expansion to the U.S. or Europe because of good opportunities to sell higher-valued steel in those areas.

JAPAN-CHINA CONTEST AUSTRALIAN ORE: A contest to see who wins control of a portion of Western Australia's Mid West region iron ore has begun with Murchison Metals, backed by Mitsubishi of Japan, bidding for its rival in the area, Midwest Corporation, which is backed by China's Sinosteel and which has awarded rights to build a railroad and port facilities near Geraldton to Yilgarn Infrastructure – also backed by Chinese interests. The Australian state's Mid West region lacks adequate infrastructure to support large-scale mining, the newspaper The Australian reports, and Murchison and Midwest Corp. have been at odds over how to resolve that problem. Murchison has offered one share of its stock for every 1.08 shares of Midwest stock in a deal valued at about A$1 billion.

MORE ON ORE: Sinosteel, a player in the Western Australia maneuvering between Murchison Metals and Midwest Corp., says it expects iron ore prices to rise 25% in 2008 driven by ever-increasing demand for steel. “China's demand is unstoppable,” said Wang Hongsen, managing director of Sinosteel's Indian unit. The Shanghai Daily reports that buyers are already paying a premium to lock in supplies.

USITC EXTENDS SOME ORDERS, NOT OTHERS: The U.S. International Trade Commission has decided to keep in place existing countervailing duty orders on hot-rolled steel products from India, China, Indonesia, Taiwan, Thailand and Ukraine. But in voting this week, the commission revoked countervailing duty orders on hot-rolled steel products from Argentina, Kazakhstan, Romania and South Africa. All six commissioners found that revoking countervailing duty orders for India, China, Indonesia, Taiwan, Thailand and Ukraine “would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.” The decision was praised by producers and deplored by representatives of steel users.

RUSAL PLANS BIG PLANT: United Company RUSAL, the big Russian aluminum and alumina producer, signed an agreement with the government in Russia's Saratov region to build an energy and metals complex, including expansion of the Balakovsky nuclear power plant and construction of the “world's largest aluminum smelter.” The company's announcement didn't set a project cost, but Russian news agency Novosti said it would be about $7 billion. The smelter's capacity will be 1.05 million tons annually. Saratov is in the southern part of the Volga area.

SHIPPING COSTS SOARING AGAIN: The Baltic Exchange says that the cost of trans-ocean iron ore shipments has surged again as demand from China and other developing nations continues to outstrip shipping supply. The cost of the largest dry bulk ships, called Capesize vessels – the sort used to move iron ore from Brazil and Australia to Chinese ports – rose this week to $169,000 a day, up from $68,000 daily at the start of the year, the Financial Times reports. A mid-sized vessel's cost rose to $83,000 a day, up from $34,000 in January. Meanwhile, congestion at Brazilian and Australian ports has grown, which adds to the shortage of available ships. For example, the FT reports that at the Australian port of Newcastle, the world's largest coal terminal, 45 vessels were waiting their opportunity to load, compared with 38 vessels last week.

INDIAN DEMAND TO RISE: The state-owned Steel Authority of India said demand for steel there will rise as much as 14% this year, in part because of government infrastructure expenditures and manufacturing expansion. As previously reported, SAIL plans to nearly double its output to 26 million tons by 2010 to meet demand.

YES, WE KNOW, PART II: Baosteel Chairman Xu Lejiang says China's steel production will exceed 500 million tons this year, confirming the new, but very late, official estimate updated last week. Total exports will be as much as 60 million tons, he said. Xu also said the pace of growth will moderate during the next two years.

VIETNAM MAY CUT STEEL TAXES: The Vietnam Ministry of Finance says it may further reduce taxes on imports of finished steel because the metal will be in short supply. The import tax is now 8%, and the ministry says it may drop that to 2%. Vietnamese mills need to import as much as 300,000 tons of steel monthly to meet demand.

INDONESIA ANNOUNCES PLANT: The Indonesian government has announced plans by Nanjing Iron & Steel of China to build a steel plant in South Kalimantan province. The facility will have an initial annual capacity of 1.5 million tons.

ESSAR TO EXPAND METAL SUPERMARKETS: Published reports say Essar Steel of India plans to triple its number of distribution points for steel to small buyers – a network of “steel supermarkets” similar to mini-service centers. The company now operates 90 such small distribution points and wants to operate 300 within the next two years, says Prashant Ruia, an Essar Group director. “We want to make it as easy as possible for small businesses in India, which are extremely active as the economy expands, to buy their steel in the amounts they want rather than have to go to a conventional steel stockholder which is used to selling steel in larger quantities,” Ruia told the Financial Times.