India to become 2nd largest steel producer by 2016 – Mr Paswan

Mr Ram Vilas Paswan union steel minister said that India is set to become the world's 2nd largest producer of steel before 2015-16 and the steel sector is likely to witness an investment of INR 870,640 crore by 2020.

Mr Paswan, while addressing at the Economic Editors' Conference, said that "During 2006, India emerged as the 5th largest crude steel producing country in the world and is set to become the 2nd largest global steel producer before 2015-16. Going by the estimate of INR 4,000 crore investments per million tonne of additional capacity, the steel sector is likely to witness an investment of INR 276,880 crore by 2012 and INR 870,640 crore by 2020."

He added that as per provisional figures, crude steel output witnessed a 9.8% growth to 50.88 million tonnes in 2006-07. Total capacity increased to 56.84 million tonnes last fiscal and the utilization was 89%.

Projecting India's steel production to be nearly 124 million tonne by 2012, Mr Paswan said that India is likely to achieve an annual capacity of around 275 million tonne by 2019-20.

Indian steel sector has emerged as a key investment destination for multinational giants like ArcelorMittal and POSCO, which have promised combined investment of more than INR 130,000 crore. India’s domestic steel companies have also announced massive capacity expansions. SAIL and RINL are executing plans to increase their capacity to more than 24 million tonne and 6 million tonne respectively by 2011-12.

SAIL seeks entire iron ore Chiria deposits

The Telegraph reported that Steel Authority of India Limited will not cede control over the Chiria mines and steel ministry has written to the Prime Minister’s Office to communicate SAIL’s position to the Jharkhand government. In the letter to the PMO, the steel ministry stated that it is not possible for SAIL to give up some of its rights on Chiria because it needed the ore from the mines for its expansion plans.

SAIL is planning to ramp up capacity at its Bokaro plant and IISCO Steel Plant in Burnpur. It is also setting up a 12 million tonne Greenfield plant at Manoharpur in Jharkhand. A total of over 32.5 million tonnes of steel making capacity will come up at these 3 locations, requiring SAIL to ramp up iron ore production at Chiria alone to 25 million tonnes.

Steel ministry officials said that “SAIL had earlier thought of taking ore mining capacity at Chiria to 7.5 million tonnes at a cost of INR 1,800 crore or so. It has now indicated to take the mining capacity to 15 million tonnes in the first phase and then to 25 million tonnes in the second phase.” They added that the Jharkhand government, too, seemed to have accepted SAIL’s claim on Chiria and had refrained from trying to award any part of the mines to private players.

The Jharkhand government had earlier asked SAIL to keep with it only so much of Chiria as was necessary for IISCO and its steel plants in the state. It has granted mining rights to rival steel makers without disturbing the lease areas of Chiria.

India’s 6 core sector output growth dips in September 2007

It is reported that India's infrastructure sector has grew by a modest 6% in September 2007 as against a healthy pace of 10.6% in the September 2006. This is slower than an upwardly revised reading of 9.2% in August 2007.

Union ministry of commerce & industry said that the index for 6 key industries, which contribute 26.7% to the overall industrial growth, has increased to 225.9 in September from 213.1 in September 2006. The infrastructure index comprises 6 core industries of crude oil, petroleum refinery, steel, cement, coal and electricity and accounts for 25% of the index of industrial production.

Union government has announced that industrial output grew at the slowest pace in 11 months in September 2007. During April to September 2007, 6 core infrastructure industries registered a growth of 6.6% as against 8.7% during the April to September 2006 period.

Performances of 6 infrastructure industries are as follows:

Source: Concerned ministries, departments & organizations

Texmaco ropes in United Group Rail Services

Texmaco Limited has informed BSE that it has signed a MoA with United Group Rail Services Limited of Australia to address the many opportunities currently being planned in relation to Indian Railways development program for projects including the dedicated freight corridor, significant government policy reforms inviting private participation in rail transport and the introduction of new technologies across all areas of the Indian rail Industry.

The proposed JV between the 2 companies will cover the design, manufacture and supply of wagons, locomotive bogies & components and encompass passenger rolling stock as well. Additionally, both parties are keen to address related opportunities for rolling stock maintenance and refurbishment.

Mr R Maheshwari CEO of Texmaco Limited said that it has entered into an agreement with Australian firm United Group Rail Services for setting up a plant to manufacture new generation wagons in West Bengal. The plant would come up on 100 acres of land and the site would be selected near a port having rail connectivity. He added that "We have been given the option to select from 6 locations.''

Australia based United Group is an end to end rail technology solutions provider. Texmaco is a leading wagon manufacturer in India. It was eyeing a turnover of INR 1,000 crore during the current financial year.

JSW’s SISCOL to invest in iron ore mines in Tamil Nadu

A senior JSW official said that Southern Iron and Steel Company Limited, a unit of JSW Steel Limited, announced that it is planning to invest INR 7 to INR 8 billion in 2 iron ore mines in Tamil Nadu.

Mr JK Tandon director projects of JSW Steel said that SISCOL has received clearances for the project from the state government and clearances from the federal government are expected by March 2008. He added that "We hope to start mining within 2 years of getting the clearances."

Ore reserves in the 2 mines are estimated at 100 to 150 million tonnes and the investments will be funded out of internal accruals. JSW outlined a plan to raise USD 300 to USD 500 million through a sponsored equity issue after merging SISCOL with itself.

SISCOL currently has the capacity to produce 1 million tonnes of special steel.

Coal ministry likely to allocate 23 coal blocks in December

It is reported that union government will consider allocation of 23 coal blocks for the steel and cement sectors in December 2007.

The report cited a coal ministry official as saying that "The screening committee of the coal ministry would meet on December 7th 2007 to consider allocation of 23 coal blocks for the coal and cement sectors which have been seeking adequate raw material linkage for fructifying their expansion plans.”

He added that “Our key aim in allocating these blocks was to ensure that power generating companies were able to meet their production needs. Since the 11th Plan has set a target of additional power generation of about 78,000 Megawatts, the best way to help the power generators was to ensure them adequate linkage."

With the allocation of these blocks, the government would exhaust all the 203 blocks it had identified for providing to the power, steel, coal, cement and sponge iron sectors. Earlier, the government allocated coal blocks for power projects and captive coal blocks.

The official pointed out that coal ministry was planning to intensify efforts to increase the pace of regional and detailed explorations for finding out more blocks for further allocation. He added that "In India, the estimated coal reserves in about 257 billion tonnes of which 95 billion tonnes are proven ones."

UGSL forecasts stable domestic prices in short term

Mr Ankit Miglani director of Uttam Galva said that the hike in global iron ore prices is being offset by the strong rupee appreciation that has taken place over the last 6 months.

Mr Miglani, in an exclusive interview with CNBC TV18, said that “Prices could essentially go up by about 25% to 30%, keeping in line with how the iron ore prices are going up. There is definitely a lot of pressure on the raw material side. But I do not see that effect coming in a big way in the domestic market, at least for the next 3 to 4 months. A lot of this hike in global prices is being offset by the strong rupee appreciation that has taken place over the last 6 months. That is compensating for it in a big way.”

He said that “Volume growth is inevitable because of the strong demand for steel that is coming up in the domestic market. For galvanized alone, the growth is anywhere from 16% to 20% per year in terms of consumption. So we see a lot of strength in the volume side for all grades of products including construction, including white goods, including the auto sector in absolute terms. But I do not see any strong appreciation in pricing over the next few months, at least in the domestic market.”

JSPL steel project in Orissa hit by land acquisition delays

It is reported that Jindal Steel & Power Limited’s proposed steel project in Orissa is facing delays due to land acquisition problems. As per report, JSPL, which had signed the MoU for the INR 13,115 crore integrated steel plant with the Orissa government 2 years ago, has still a long way to go before completing the acquisition work.

The report cited Mr DK Saraogi president of the JSPL Angul project as saying that “We were scheduled to begin construction in April 2007 as per the MoU, but missed the deadline due to the delay in land acquisition.”

As per report, equipment ordered by JSPL for this project is lying idle in Mumbai and Europe over the last several months due to the delay in land acquisition. Though work was rescheduled to begin last month, it was put off again due to the sluggish pace of acquisition of both private and government land.

The main reason is the non disbursement of compensation to those affected in 10 out of the 14 villages. While JSPL had deposited INR 106 crore with the state authorities under this head last year, the payment has been slow due to the shortage of manpower for the land acquisition work.

JSPL authorities have demanded the deployment of adequate manpower under the special land acquisition officer to expedite the settlement of compensation, rehabilitation and resettlement of land losers. The government is yet to act upon the request.

Orissa farmers refuse to talk over diverting dam water

IANS reported that leaders of a farmers' body in Orissa have refused to talk with a ministerial team that had gone to meet them to discuss industrial use of water from Hirakud dam.

Mr Naveen Patnaik chief minister of Orissa had deputed Mr Manmohan Samal revenue minister, Mr Padmanav Behera steel and mines minister, Mr Jaya Narayan Mishra road and transport minister and Mr Surendra Nath Nayak agriculture minister to talk with agitating farmers in western Orissa.

Mr Lingaraj leader of Paschim Orissa Krishak Sangathan Samanwaya Samiti said that the ministers arrived in Sambalpur and contacted some of the farmer leaders for discussion. He added that "We refused to talk to them because their intention was not clear. We got a letter from the administration that says that the team wants to discuss with us about the use of dam water for industrial use. The government seems to be more concerned for industries than farmers. That is why we refused to meet the team.”

Mr Lingaraj told that Vedanta is building a USD 2.1 billion Greenfield aluminium smelter plant together with an associated 1,215 MW captive thermal power plant. It will draw at least 172 cusecs of water per day from the dam, which could provide irrigation to at least 17,200 acres. He added that "The state government is already diverting irrigation water from the dam to at least eight industries. As a result, more than 50,000 farmers in the command areas do not get water for their farms. The government had decided to divert more water from the dam for mega industries in the region in the coming days and that would deprive more farmers of water. The state government has already permitted 20 more industries to draw at least 348.755 cusec of water in the coming days. We will not allow any industry to use the dam water for industrial purposes. The wall we have built is to stop Vedanta from drawing dam water. The fight is not against Vedanta alone but also against all upcoming industries that are planning to draw water from the dam."

It is noted that hundreds of farmers have been opposing industrial use of water from the 25.8 kilometer long Hirakud dam. Farmers have been holding rallies in Orissa's western districts under the banner of POKSS. They built a 15 feet long and 5 feet high brick wall near Jamadarpali airstrip located close to the Hirakud dam. The wall has been built near the pipes Vedanta Resources Plc has constructed to draw water from the dam for its plant in Jharsuguda district.

JSW Energy to transfer power plant to JSW Steel

ET reported that JSW Energy is planning to transfer a power plant currently under its fold to group flagship JSW Steel that will reduce costs for the steel company and also give it tax benefits.

A senior JSW group executive said that JSW Energy Vijayanagar, a special purpose vehicle formed for setting up a 600 MW coal fired power project for the group at Bellary in Karnataka, will transfer a 300 MW plant to JSW Steel by March 2008. JSW Energy is setting up the 2 power projects of 300 MW each.

Since power constitutes about a third of the total cost of steelmaking, the transfer will benefit JSW Steel immensely and also improve operational efficiency as the company till now had to buy electricity. He added that “Moreover, JSW Steel will also be eligible for claiming income tax benefits under 80I (A) of the Income Tax Act.”

JSW Energy’s project will use high grade coal imported from either Australia or Indonesia. The captive power plant is also in line with JSW Steel’s plan to expand capacity. It is currently in the middle of a large expansion program and is scheduled to expand steel capacity by almost three times to 10 million tonnes by 2010 at a total cost of INR 20,000 crore. The expansion project would be completed in 2 phases of 3 million tonnes each. Apart from this, JSW Steel has also announced projects to increase value added steel production capacity.

JSW Energy has already acquired a few small mines in Indonesia worth USD 4 to USD 5 million. JSW group is currently scouting for coal mines in Indonesia and Australia that will feed its power plants. JSW Steel already has a 230 MW captive power plant at Bellary, operated and maintained by JSW Energy. JSW Energy has another 260 MW plant and sells around 60 MW to the steel company and the remaining to other utilities.

Visa Steel starts commercial operation of ferrochrome plant at Jaipur

Visa Steel Limited announced that it has started commercial operations of its 50,000 TPA Ferro Chrome Plant situated at Kalinganagar Industrial Complex in Jaipur Orissa.

Government allocates 2 coal blocks in Orissa to 6 firms

It is reported that Indian government has allotted Rampia and Dip side of Rampia coal blocks to 6 firms for captive consumption
1. Reliance Energy Limited
2. GMR Energy
3. Mittal Steel India
4. Sterlite Energy
5. Lanco Group
6. Navbharat Power

JSPL announces change in its board

Jindal Steel & Power Limited announced that ICICI Bank Ltd has withdrawn the nomination of Mr Ashok Alladi and nominated Ms Ramni Nirula senior GM of ICICI Bank Ltd as nominee director on its board wef November 1st 2007.

JSPL also announced that Mr Ashok Alladi has been appointed as additional director (Independent, Non Executive) wef November 1st 2007.

McNally receives order worth INR 34.21 crores from MSPGCL

McNally Bharat Engineering Company Limited has informed BSE that it has received an order from Maharashtra State Power Generation Company Limited for design, manufacture, supply, erection, testing and commissioning of ash handling system with all accessories for their Paras Thermal Power Station Expansion Project, Unit 2 (1 x 259 MW) valued at INR 34.21 crores including all taxes and duties.

Dredging lures many big shipping companies finally

Exim News Service reported that the dredging sector, which has been ignored for long, is now attracting companies like Essar Shipping, Reliance and Sical Logistics.

Dredging Corporation of India, which has been concentrating on maintenance dredging, has now also shifted its focus to capital dredging as it is expected to grow sharply in future. It is now engaged in capital dredging for the Sethusamudram project and will soon start undertaking similar jobs at Paradip, Visakhapatnam and several other Major Ports. The only private sector dredging company that has undertaken some dredging work in various ports is the Kolkata based Jaisu Shipping.

It is learnt that the foreign dredging majors, who have traditionally dominated capital dredging in India, are now mostly active in private ports and union government prefers Indian firms for undertaking dredging in various state owned projects. Thus, the dredging for the Sethusamudram project was given to DCI.

The dredging requirement of a number of private ports, being set up both on the East and West coasts, too will be substantial. In short, there is need for dredging in all these ports, rivers and waterways.

JSEB inks MoU with DVC for power

Ranchi Express reported that Jharkhand State Electricity Board has inked an electricity supply agreement with the Damodar Valley Cooperation for the state's largest industrial belt called Adityapur Industrial Area.

DVC currently supplies the JSEB with 50 MW of electricity but that is being used to meet the demands of the state's domestic consumers.

What however, makes the purchase controversial is that each unit supplied would cost the JSEB INR 3.07, the highest rate at which the JSEB has ever bought electricity. Mr CD Kumar chief engineer of JSEB said that each unit of the DVC electricity would cost JSEB INR 2.77. But the INR 2.77 according to the JSEB calculations would rise to INR 3.07 per unit when additional transmission charges are added to the base price.

Steel prices to follow upward iron ore price trends - BSSL

Mr Nitin Johri CFO of Bhushan Steel informed that iron ore prices have gone up substantially in the last 2 or 3 months so the steel prices are likely to go up too.

Mr Johri said that “Iron ore prices have gone up substantially in the last 2 to 3 months, so the steel prices are likely to go up and there is a lot of demand coming in.”

Mr Johari said “I see that long term iron ore prices are likely to go up by almost 25% to 30% and therefore future contracts which are likely to come for 2008 will put a pressure on all these steel making companies to pass on the price increases to the ultimate user. So that will definitely put pressure on the margins of the steel companies which does not have the linkages of raw materials but the companies which have not got the linkages of the raw material will get benefit of this thing.”

NTPC considering overseas expansion plans

Reuters quoted Mr T Sankaralingam CMD of NTPC Limited as saying that it is open to buying foreign power plants of up to 1,000 MW capacity, though its overseas expansion strategy remains focused on deals to secure long term fuel supplies.

Mr Sankaralingam, while addressing at World Energy Congress, said that "We have no problem in acquiring a plant of 1,000 MW. If there are any such small assets, we are willing to look at it. We will look at those countries where our investments are safe and we get a reasonable return and tax laws are simple. I do not ruled out Europe for the project. I just can not say anything about that at this point in time." He added that the target should be in a country with minimum political risk and friendly to India.

Mr Sankaralingam said that NTPC had identified a site in Sri Lanka for a 500 MW coal based project that needs final clearances. It is also open to partnering with international groups keen on investing in its Indian projects. He added that "One could be fuel resource, other could be capital. We are not interested in equity players who want to invest for the short term and want to get out. We would like to look at players for long term partnerships."

NTPC has gone beyond mainly coal based projects and is looking at power from gas, renewables and maybe in the future, even nuclear. It is also moving away from its focus on India to eyeing power projects in countries such as Nigeria and Sri Lanka. Soaring global prices for coal and gas have forced NTPC to explore deals overseas as a way to secure cheaper supplies.

Tilaiya UMPP attracting bidders due to coal linkage

Tilaiya project in Jharkhand is one of the toughest ultra mega power projects, with political, ecological and security challenges. However, the 13 companies that have evinced interest in the 4,000 MW project are focusing on the abundance of coal in the area.

A spokesperson of Essar Power, one of the companies vying for the project, said that, power from this project would be cost effective due to availability of better quality coal. He added that “We do not believe there is any security risk.”

The project was expected to elicit a lukewarm response from the industry as the region is Naxal infested and suffers from poor infrastructure, lawlessness and abject poverty. In addition, there are unlikely to be any rehabilitation and resettlement issues. Spread over about 4,000 acres in Hazaribagh district, Tilaiya has 137 households, of which only nine will be displaced due to the project.

However, the project is unlikely to be built in a hurry since it covers 1,480 acres forest land. Jharkhand Integrated Power Limited, the shell company created to get all clearances for the project, is still grappling with the forest clearance.

GAIL may take stake in RCF’s Talchar fertilizer plant

It is reported that Rashtriya Chemicals & Fertilizers is likely to offer 50% stake to GAIL (India) for the proposed INR 2,400 crore venture to set up a coal gas fuelled urea ammonium fertilizer plant at Talchar in Orissa.

A top level official with RCF said that “According to the in principle agreement, it could be a 50:50 JV project. We need to work out the details.”

He said that the project needs to get clearance from the Planning Commission, cabinet and other regulatory agencies. RCF had conducted techno economic feasibility studies through 2 to 3 expert agencies about 2 years ago for setting up a chemical complex based on production of gas from coal.

Arcelor Mittal Q3 net income up by 35.66% YoY

ArcelorMittal, the world’s largest and most global steel company, announced results for the July to September 2007 quarter and January to September 2007 period

The highlights of results are
1. Q3 EBITDA of USD 4.9 billion up by 12% YoY
2. Q3 net income of USD 3 billion up by 36% YoY
3. Strong cash flow from operations of USD 4.1 billion for the quarter
4. First nine months 2007 EBITDA of USD 14.6 billion up by 30% YoY

Shipments in million tonnes
Others in USD millions

Mr LN Mittal president & CEO of ArcelorMittal said that “We are pleased to report another strong set of numbers for the third quarter, with EBITDA at USD 4.9 billion. This takes EBITDA for the first nine months of the year to USD 14.6 billion, 30% higher than in 2006. We are on track to deliver a record year for the Company.”

Mr Mittal added that “The Company is making good progress with its three-dimensional growth strategy. We have announced a number of important strategic transactions in the quarter in Argentina, Canada, China, Italy and Turkey to further strengthen our market leading position. We have also identified 20mt of organic growth by 2012, taking advantage of strong growth dynamics in developing markets. We are very pleased with the overall progress of the Company.”

ArcelorMittal has given following guidance
1. Q4 of 2007 EBITDA guidance of USD 4.6 to USD 4.8 billion, as compared to USD 4.1 billion in Q4 of 2006
2. On track to deliver full year EBITDA of USD 19.2 to USD 19.4 billion as compared with pro forma 2006 full year EBITDA of USD 15.3 billion

ArcelorMittal acquires Galvex in Estonia

ArcelorMittal announced the acquisition of a 100% stake in Galvex OÜ, the Estonian privately owned steel galvanizing line based in Tallinn and located on the Baltic Sea, subject to regulatory clearances and approvals.

Mr Michel Wurth member of the group management Board of ArcelorMittal said that “We look forward to bringing our expertise to Galvex OÜ as it joins our Central and Eastern Europe portfolio, which has already proved very successful, accounting for 18% of ArcelorMittal’s steel production in 2006.”

In 2006 Galvex OÜ produced 190,000 tonnes of HDG, mainly for the construction sector, with sales totaling EUR 125 million.

CSN Q3 net doubles as domestic sales rise

Brazilian steelmaker CSN announced that its third quarter profit doubled. Its net profit increased to BRR 699 million (USD 395.6 million) up by 109.2% YoY. It s third-quarter net sales rose by 14% YoY to BRR 2.97 billion.

EBITDA in Q3 surged to BRR 1.3 billion from BRR 912 million in Q3 of 2006 which had suffered after a blast furnace was idled because of an accident.

CSN's Q3 steel output increased by 10% YoY to 1.39 million tonnes from 1.26 million tonnes in Q3 of 2006. Its iron ore unit sold 3.31 million tonnes of iron ore up by 59% QoQ.

Iron ore price negotiations –Nippon and POSCO to negotiate jointly

It is reported that Nippon Steel and POSCO plan to jointly negotiate iron ore prices for fiscal 2008 with mining companies.

A spokesman for Nippon Steel said that the two companies started negotiations with global iron ore suppliers last year and the joint initiative is continuing. He added that "We have more joint initiatives with POSCO in the area of raw material procurement."

Iron ore talks are expected to start next month.

Nippon Steel and POSCO began their partnership in 2000 based on a cross shareholding arrangement. Nippon Steel has 5% stake in POSCO, while POSCO owns 3.5% of Nippon Steel.

Rio Tinto to sell coal operations in US

Rio Tinto last week announced that it is looking to sell its US coal properties, which consist of its vast Powder River Basin coal operations and reserves.

Rio Tinto said that it has decided to explore options for the sale of some or all of Rio Tinto Energy America as part of the group wide strategic review announced at the time of the acquisition of Alcan last July.

Rio Tinto is the second largest coal producer by tonnage in the US, with production of almost 92 million tonnes of steam coal in the first nine months of 2007. Its operations include the Antelope, Cordero Rojo and Jacobs Ranch mines in Wyoming, Spring Creek in Montana and Colowyo in Colorado.

CVRD and Dongkuk to ink JV for steel plant in Ceara

Companhia Vale do Rio Doce announced that it is currently negotiating with Dongkuk Steel for construction of an integrated steel slab plant in the Industrial District of Pecém in the Brazilian State of Ceará and a MOU is expected to be signed in November 20th 2007.

The project encompasses the construction of an integrated coal based steel slab plant with an initial production capacity of 2.5 million tonnes per year, with the possibility to be expanded to 5 million tonnes per year. The investment for the first phase of this project is expected to be USD 2 billion.

CVRD release said that “This initiative is consistent with CVRD's strategy of attracting new investments in the steel industry in Brazil, through minority stakes, thereby increasing iron ore consumption in the country.”

This is the third largest steel project CVRD is undergoing in the past three years, including ThyssenKrupp CSA in the State of Rio de Janeiro, and Baosteel CSV, in the State of Espirito Santo, Brazil, increasing the country's steel production capacity by 12.5 million tonnes with investments around USD 10 billion.

US ITC decided to continue AD on SiMn from India, Kazakhstan and Venezuela

The US International Trade Commission determined that revoking the existing antidumping duty orders on silicomanganese from India, Kazakhstan and Venezuela would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.

As a result of the Commission's affirmative determination, the existing orders on imports of this product from India, Kazakhstan, and Venezuela will remain in place.

This action comes under the 5 year sunset review process required by the Uruguay Round Agreements Act, which was instituted on April 2nd 2007. On July 6th 2007, US ITC voted to conduct expedited reviews.

US steel imports permit in September up by 8% MoM

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis data, the American Iron and Steel Institute reported that steel import permit applications for the month of October 2007 totaled 2,616,000 net tons. This was a 8% increase from the 2,433,000 permit tons recorded in September 2007, a 19% increase from the September preliminary imports total of 2,196,000 net tons and 2% lower than the 2005 monthly average.

Import permit tonnage for finished steel in October 2007 was 1,844,000 net tons, 2% below the preliminary imports of 1,876,000 net tons in September. YTD finished steel imports in 2007 remain 8% higher than the same period in 2005.

For October 2007, the largest volumes of steel import permit applications for countries outside of North America were China 304,000 net tons, Brazil at 308,000 net tons and Korea at 146,000 net tons.

Finished steel import permit applications for Chinese steel 304,000 net tons were down 16% in October compared to the preliminary imports total for September. This tonnage for China, while below the monthly totals in mid 2007 and the 2006 record amounts that occurred in the second half of last year, was 58% higher than the 2005 monthly average of 192,000 net tons for China.

Mr Andrew G Sharkey III president & CEO of AISI said that “High levels of tubular imports and significant import tonnages in other long and flat rolled categories are a reminder that dumped and subsidized imports and import injury can occur in specific product categories. Therefore, domestic steel producers will continue to stay remain vigilant in closely monitoring import levels.”

Changed mechanism of SS surcharge seem to stabilize prices

Reuters reported that a recent change in calculating alloy surcharges for stainless steel could reduce speculation and bring stability to the pricing, which has fluctuated due to the volatile nickel market.

Mr Philippe Baudon an executive at ArcelorMittal told Reuters that "In stainless, a lot of the instability of the market is clearly linked to speculation and we feel, by doing that, we will reduce the speculation and stabilize the market. From January 2008, ArcelorMittal's reference period for calculating the surcharge will be based on price movements in the last 30 days ending on 22nd of the previous month.”

A spokesman of Outokumpu told Reuters that "The aim of the change is to bring more stability in the stainless steel market and to reduce the effects of the raw material price volatility. Indeed the new method is expected to reduce the element of speculation.”

Mr Cyril Sparrow marketing manager at Cashmores, a UK based stainless steel stockholder said that "It gives less visibility to the surcharge because it is based on a closer to delivery point figure, so in that sense it makes life a little more difficult. However it does add some stability to what has been a very volatile market. Then there could be compensations in that direction, but I think we have to wait and see."

Alloying elements mainly nickel, chromium and molybdenum are used to produce stainless steel. The alloy surcharge, which reflects the costs of these metals, is added to the basic price. The alloy surcharge is a fee stainless steel producers charge their customers to recoup the cost of raw materials they buy once they exceed a certain price threshold.

The surcharge previously was based on the average raw material prices two and three months prior to delivery that is, following the nickel price with a 2 to 3 month time lag. In October, leading stainless steel producers like Outokumpu and ThyssenKrupp changed their calculation method, cutting the reference time period to around 30 days.

Brazilian steel distributors 2008 sales to rise by 12% YoY

BNamericas reported that Brazilian steel distributors could see it sales rise by 10% to 12% in 2008 as compared to a forecast of 3.2 million tonnes in shipments for 2007 and 2.6 million tonnes in 2006.

Mr Christiano da Cunha Freire president of industry association Inda told BNamericas that shipments forecast for this year and 2008 do not include possible demand sparked by the federal government's economic growth acceleration plan, PAC. He added that "PAC has not yet had any real impact on our economy. When it does, the growth forecast for next year could go beyond 12%."

PAC was unveiled earlier this year and is expected to generate public and private investment of BRR 504 billion (USD 286 billion) over four years

According to Mr Freire steel demand for next year will be strong from the automobile industry, agriculture and road equipment sectors, among others. Steel distributors buy large quantities of steel from producers and resell in smaller amounts.

Inda boasts members such as Comercial Gerdau, controlled by Porto Alegre based long steelmaker Gerdau and metal products maker Mangels.

BlueScope announces results for 4 months

BlueScope Steel announced that the first four months of FY08 are in line with our expectations with strong operational performance across all businesses and a positive contribution to earnings from the sale of its Smorgon Steel shares.

Mr Graham Kraehe chairman of BlueScope Steel in his address to shareholders at the Company's Annual General Meeting held in Melbourne said that "The first four months of this year has been in line with expectation and consistent with our comments in August at the annual results presentation. We have had continued strong operational performance across our businesses.”

He added that “I am pleased to report that the established Asian businesses continue to produce stable earnings. Indonesia continues to perform well. The Thai election, scheduled for December, should see improved business sentiment and stronger construction activity in the second half in Thailand. The financial performance of our new midstream operations in China has been affected by margin squeeze and intense competition. We have identified specific opportunities to improve our downstream businesses in China. The recent organization restructure indicates the additional focus Paul O'Malley will place on Asia and, in particular, China."

Mr Paul O'Malley MD & CEO of BlueScope Steel said that "Factors that could have a bearing on our second half results are the potential for stronger global steel prices and improving domestic sales versus the continued strong Australian dollar and a return to higher zinc costs. We will provide a further market update at the time of releasing the half year results in February."

South African authorities approve Xstrata takeover of Eland Platinum

Swiss mining group Xstrata announced that it has been given the green light by South African authorities to acquire the South African firm Eland Platinum. The Order of Court sanctioning the Scheme has been registered and all conditions to the acquisition of the entire share capital of Eland Platinum have been met.

Xstrata will immediately assume full management control of Eland Platinum, including the already operational Elandsfontein mine and concentrator. In preparation for this, Xstrata Alloys has established a platinum division within Xstrata Alloys, and appointed Mr Ben Moolman as managing director.

Mr Peet Nienaber CEO of Xstrata Alloys said that “We are confident that the acquisition will serve as an ideal platform for Xstrata Alloys to further expand its presence in platinum group metals an exciting commodity for us. The PGM market outlook is positive, and as a result of the Eland acquisition, Xstrata is now ideally suited to meaningfully take part in that growth.”

Japan settles rail prices with America

It is reported that Japan’s steel mill has finished the rail price negotiation with American's National Railroad Passenger Corporation. As per the agreement, the price will be raised by 15% for September to July, 2008 shipments.

American's National Railroad Passenger Corporation had strongly requested Japan steel mill to increase the supply quantity. However, Japan has refused it because Japan has also signed the long term supply contract with Australia and Brazil. Australia and Brazil has increased their production in iron ore and coals exploitation, those countries have to improve their capacity in transportation.

According to the statistics, United State had imported about 123,650 tons of rails in 2005 and the import quantity had increased about 37.7% to 170,350 tons in 2006.

CVRD Inco tracks ore in mine and mill using RFID

It is reported that CVRD subsidiary’s CVRD Inco is testing RFID technology to track ore as its extracted, crushed and sent to production mills. By improving its visibility into the amount and grade of ore it mines daily, the company hopes to better prepare its processes for turning the ore into quality ingredients for stainless steel and other metal alloys.

CVRD Inco this month, the company completed installation of an ultrahigh frequency RFID system at its Stobie Mine at Sudbury in Ontario about 40 kilometers north of Toronto. The system incorporates customized Avery Dennison EPC Class 1 Gen 2 RFID tags and Motorola mobile and fixed UHF RFID interrogators. Tags mixed among ore are read by RFID antennas mounted over conveyors.

To develop, test and implement its RFID system, CVRD Inco enlisted assistance from Ship2Save, a Montreal based RFID services company specializing in the transportation, manufacturing, warehousing and sea-freight industries. The installation includes Ship2Save's Raw Material Tracking software, based on the vendor's Operation Management System RFID platform. The tracking software includes a dashboard, or graphical visual interface, that offers a real time view of ore extractions. It can provide alerts and reporting tools to inform end users about specific events, such as how much ore has surfaced within a given time, and it can also be configured to transmit the alerts via audible, visual or electronic means.

Mr Mark Palkovits a senior geological technologist at CVRD Inco said that "Mainly, we want to use RFID to be able to monitor the quality of ore from the underground. By knowing the value or grade of the ore, as well as maintaining accurate yields, CVRD Inco can make sure it has the proper chemical mixes at the mills to produce. We blend the chemicals much like you blend ingredients in a recipe to make a cake. With optimized information and upstream visibility of what and how much is going into the mills, we can optimize the chemicals needed in the mixing processes."

CVRD Inco expects to run the RFID trial at its Stobie mine for the next 90 to 100 days. When this is complete and if results are successful the mining company hopes to expand the RFID system.

In addition, the firm intends to use RFID to track the railcars moving the ore to the mills. It currently moves about 16,000 railcars a month and right tracks that manually.

Tycoons plans to invest in EAF based billet plant in Thailand

YIEH reported that Taiwan’s Tycoons Worldwide Group has planned to invest an electric furnace to produce steel billet in Thailand for stable billet availabilities.

Tycoons Thailand needs 500,000 tons of billets per year. It predicted the investment for the project will be about NTD 2 billion to NTD 3 billion. Tycoons said although Thailand has already had 10 electric furnaces now, but its billet output is still limited.

E United Group will operate with Tycoons Worldwide Steel Ltd a JV between Thailand's Tycoons Worldwide Group.

IISI denies a sponsored report on US steel Industry

In response to a new study said to have been released by the American Institute for International Steel, Mr Andrew G Sharkey III president & CEO of AISI said that “What we have here is a rehash of a seven year old discredited and erroneous report. A key point to keep in mind is that the authors of this latest so called report, sponsored by the American Institute for International Steel are registered foreign agent representatives of the government of China.”

He said that “To explain just how bogus this so called study is of the USD 17 billion in alleged subsidies to the US steel industry during the years 2000-2007, nearly USD 15 billion are attributed to ’subsidies’ that are clearly not subsidies for example, the legitimate use of US trade laws against dumped and subsidized, injurious imports (USD 7 billion) and insurance reimbursements by the Pension Benefits Guarantee Corporation (USD 7.8 billion).”

The release added that “This is a case in which the apologists for Chinese subsidies, currency manipulation and mercantilism are attempting to divert attention away from China’s own protectionism and non-market behavior, which continue to be the subject of growing worldwide criticism. It is ironic that while the Chinese steel industry benefits from over USD 50 billion in subsidies, artificial currency undervaluation, lax environmental enforcement and manipulation of border adjustable taxes the AIIS is once again attacking the use of trade remedy laws and rules based free trade.”

AISI serves as the voice of the North American steel industry in the public policy arena and advances the case for steel in the marketplace as the preferred material of choice. AISI is comprised of 31 member companies, including integrated and electric furnace steelmakers, and 130 associate and affiliate members who are suppliers to our customers of the steel industry.

French steel output in October down by 12.5% YoY

According to French Steel Federation trade association output of raw steel in France on October 2007, totaled 1.412 million tonnes, down by 12.5% YoY from the same period a year earlier.

French Steel Federation trade association in a statement said that output over the first 10 months of the year totaled 16.46 million tonnes, down by 1.5% YoY.

Water leakage hits Yallourn coal mine capacity

AAP reported that water from the Latrobe River has leaked into the Yallourn coal mine that supplies electricity to Victoria, reducing its generating capacity.

Under normal operating conditions, the Yallourn power station operates four generating units with the capacity to produce a total of up to 1480 MW of power.

A spokeswoman for TRUenergy said there was a sufficient supply of mined coal stockpiled in the Yallourn power station bunker for continued reduced operation until early Thursday. She added that "In the early hours of this morning, TRUenergy's Yallourn coal mine experienced a major subsidence due to leakage from the Latrobe River, damaging conveyor equipment and temporarily halting coal production."

She said more coal supplies would be in place to extend operation by the end of Wednesday. The spokeswoman said as a result of the subsidence, TRUenergy was operating two units with a total output of 440 MW, while another unit was currently under scheduled maintenance.

Nucor Decatur streamlines business processes with Oracle Fusion

Nucor Steel Decatur, LLC, a division of Nucor Corporation announced that it is using Oracle(R) BPEL Process Manager, a component of Oracle Fusion Middleware, to build a Service Oriented Architecture that enables streamlined invoice processing and help desk automation across heterogeneous applications.

Nucor Steel wanted to improve business agility and deliver outstanding customer service with automated, repeatable processes. Through its use of Oracle BPEL Process Manager, Nucor Steel Decatur integrated its IFS Application with Microsoft's Great Plains Financials. Within the SOA environment, the system uses Web services to send XML based vouchers from IFS to Great Plains. Once the vouchers are transmitted to Great Plains, the business application automatically generates an invoice. The automated process has improved customer service and streamlined the company's order to cash cycle.

To make it easier for users to submit and track the status of help desk tickets, Nucor Steel Decatur designed its SOA to automate help desk processes. During this phase of the project, the company generated business process flows, via Oracle BPEL Process Manager, that connect its Microsoft SharePoint Portal with IFS Applications. The automated process now allows users to submit a help desk ticket request and receive a confirmation receipt along with a help desk ticket number a process that previously took hours now takes seconds. Additionally, the SOA-based process requires less intervention from the IT team.

Nucor Steel Decatur worked with BIAS Corporation, a Certified Advantage Partner in the Oracle Partner Network to architect and implement the SOA based project in five weeks. Utilizing Oracle BPEL Process Manager's hot pluggable architecture, BIAS Corporation created business processes that integrate Nucor Steel Decatur's non Oracle business applications.

Mr Bert Wilkes IT supervisor of Nucor Steel Decatur said that "As a result of our diverse IT environment, performance, scalability and interoperability were of paramount importance. Oracle Fusion Middleware's BPEL Process Manager met these requirements and serves as the backbone for our enterprise wide SOA by integrating more than seven various applications and processes."

Diana Shipping charters new Capesize to BHPB

Diana Shipping Inc, a global shipping transportation company specializing in dry bulk cargos announced that it has taken delivery of the newly built MV Boston, a 177,828 DWT Capesize dry bulk carrier built by Shanghai Waigaoqiao Shipbuilding Co Ltd. As previously announced, the Boston was purchased at the price of USD 110 million.

MV Boston is chartered to BHP Billiton Marketing AG for a four year period with a one year extension at the charterer's option. The charter contract provides for an approximately 47 months to 49 month period at a fixed gross rate of USD 52,000 per day. The charterer has the option to employ the vessel for a further 11 months to 13 month period at the same daily gross charter rate.

Diana Ship said that during the minimum period of approximately 47 months, this employment is expected to generate gross revenues of approximately USD 75 million. If the charterer exercises its option for the fifth year, the charter is expected to generate gross revenues of approximately USD 93 million over the entire period.

Mr Simeon Palios chairman & CEO of Diana Shipping said that "Today, we announced the delivery of our new Capesize vessel and the immediate commencement of the four year time charter with BHP Billiton showing once again management's ability to provide consistent growth through a combination of long term and short term employment.”

Diana Shipping Inc is a global provider of shipping transportation services. Including the newly delivered Boston, the Diana Shipping Inc. fleet currently consists of 17 dry bulk carriers consisting of 13 Panamax and 4 Capesize. It specializes in transporting dry bulk cargoes, including such commodities as iron ore, coal, grain and other materials along worldwide shipping routes.

US scrap prices on downward trend

YIEH reported US scrap prices had been on a downward trend last week. The average price of No1 scrap was at USD 259 per ton, down by USD 1.67 per ton compared to the two weeks ago. However, it is predicted that the scrap prices in the US will increase, bolstered by higher sea freight.

The average price of scrap in Japan’s three regions also decreased, as Japan’s No 2 scrap average price was at JPY 35,874 per ton, reducing by JPY 701 per ton than the previous week. Currently the quoted price is influenced by the movement of exchange rate and ocean freight.

SeverCorr's order book for flat products full till December

Platts reported that Mississippi based steelmaker SeverCorr's order books are sold out for November and December 2007. The report quoted Mr John Correnti president & CEO of SeverCorr at the annual dinner of the American Institute for International Steel as saying that "We have not yet opened our books for January orders. Mr Correnti said that "We have to keep steel competitively priced."

Mr Correnti said the mill rolled about 31,000 short tons in September; nearly 60,000 short tons in October and more than 80,000 short tons in November adding that it should average about 100,000 short tons per month in the first quarter of 2008. He added that the Mississippi mill should be on pace to produce 1.7 million short tons per year by the second quarter of 2008, but flat rolled steel for exposed automotive applications would probably not debut until June or Q3 of next year.

According to several steel buyers, SeverCorr which started up its melt shop and hot strip mill in late August has been selling considerable tonnage mostly into the hot rolled coil spot market.

Nucor to keep December prices unchanged

Nucor has announced to remain its prices of rebar, small section and other structural profiles unchanged for December deliveries.

Nucor said it will reduce the scrap surcharges by USD 15 per short ton to USD 118 per short ton. Meanwhile, base prices will be hiked by USD 15 per short ton.

It expected that other domestic mills will follow Nucor’s lead on a transactional basis. According to a trader current rebar prices in the domestic market have slipped from USD 580 per ton to USD 570 per ton.

South Korea import of scrap from 1998 to 2006

A glance at South Korea’s scrap import during 1998 to 2006 revealed that the import volume peaked in 2004 with 7.54 million tons and followed by 7.22 million tons in 2002. On the other hand, the lowest volume appeared in 1998 with only 5.56 million tons.

The import volume for scrap in each year from 1998 to 2006

In million tonnes

South Korea imported scrap mainly from these following countries in 2006

In million tonnes

Atradius payment barometer rates UK steel companies as best paymasters

According to a research by Atradius, a global leader in credit insurance and collections, companies in the UK steel and metal processing sector pay more quickly than their counterparts across Europe.

According to Atradius’s annual Payment Practices Barometer, which analyses the payment behavior of 1,200 businesses within sixteen sectors across European, UK based firms in the steel and metal sector pay their invoices in an average of 48 days. This compares to a European sector average of 53 days. Italian steel and metal companies were found to be the slowest payers at 67.

Mr Shaun Purrington regional director of Atradius UK and Ireland commented that “The fact that UK companies in the steel and metal processing sector pay more quickly than their European counterparts is good news for domestic suppliers, but it highlights potential payment delays for exporters in the sector.”

The Atradius Payment Practices Barometer contains detailed information on payment practices in the sixteen most important European industries as well as country specific analyses for Great Britain, Germany, France, Italy, Belgium and the Netherlands.

LEFCO and Worthington form JV

Worthington Industries announced that its subsidiary, Worthington Steelpac Systems LLC, has acquired a 49% interest in LEFCO Industries, LLC a minority business enterprise. The resulting JV will become LEFCO Worthington, LLC. In addition to continuing LEFCO’s existing products, the JV will manufacture steel rack systems for a variety of industries, including automotive and trucking.

LEFCO Industries is a leading manufacturer of wooden crates, specialty pallets and other custom material handling products. It also provides value added services such as design, assembly and flexible packaging solutions, offering superior cargo protection. It operates a manufacturing facility at Cleveland in Ohio.

Worthington Steelpac and LEFCO have been working in a strategic alliance for the past two years to assess opportunities for an MBE supplier in the steel rack fabrication market. With Steelpac on board, the JV will now purchase tubular steel and fabricate metal racks to facilitate the movement of equipment and parts in manufacturing facilities.

Mr Don Pulver vice president of Worthington Steelpac said that “This investment gives us the opportunity to expand our customer base and our rack business. LEFCO will give Steelpac the potential to participate more broadly in the rack business by giving customers the option to purchase from an MBE certified rack supplier.”

Worthington Steelpac, a Worthington Industries company operates a manufacturing facility in Pennsylvania which designs and manufactures reusable custom platforms, racks and pallets made of steel for supporting, protecting and handling products throughout the shipping process for industries such as automotive, lawn and garden and recreational vehicles. Steelpac is preparing to roll out its new metal distribution pallet for handling and logistics after the first of the year.

TIER forecasts 4.39% growth for Taiwanese economy in 2008

Taiwan Institute of Economic Research predicted that Taiwan’s economic growth in 2008 will reach 4.39% lower than 2007’s 4.41%, but pressure from soaring international oil and raw material prices will be alleviated next year.

Taiwan Institute of Economic Research revised upward its forecast for Taiwan’s economic growth in 2007 to 4.41%, up from original 4.21%, citing increase of private investment growth to 4.5%, due to steady international and domestic economic expansion, as well as continuing capacity expansion among domestic manufacturers.

Taiwan Institute of Economic Research forecasts that wholesale price index growth next year will drop to 1.03%, down from 2007’s 5.35%, although consumer price index growth will advance to 1.9%, higher than 2007’s 1.6%, but will under the 2% mark.

According to Taiwan Institute of Economic Research, Taiwan’s exports will advance 9.38% in 2008, when imports will grow 10.33%, resulting in a trade surplus of USD 25.87 billion.

Siemens to supply cooling system to Japanese plate mill

Siemens Metals Technologies announced that it has received an order from a Japanese Steel producer for the supply of the first Mulpic system to be installed in a plate mill in Japan.

The Mulpic plate cooling system will be installed on the plate mill of a leading steel producer and is part of wider investment aimed at increasing production of high value added plate products for line pipe and ship building applications.

Siemens’s scope of supply includes all equipment and the complete automation of the plate cooling system. The Mulpic system incorporates the advanced actuators and automation required for precise control of the cooling processes used in the production of modern steel grades. Its high turn down ratio enables both the on line accelerated and directs quenches cooling of plates. The plate cooling system allows for precipitation strengthening and grain refinement techniques to be developed and ensures uniform properties along the plate length and across the plate width.

Fire at Corus steelworks

It is reported that coal dust caused a fire at the Corus steelworks in the early hours of yesterday morning.

As per report three fire engines were called out to the fire, at 6.15 AM which had damaged a conveyor belt. The fire was dealt with by Corus staff that used a water jet to put out the flames.

Ms Rachel Cox a spokeswoman of Corus said that "A small amount of coal dust caught fire at the Dawes Lane coal handling plant this morning. The fire was extinguished by steelworks fire personnel. Humberside Fire and Rescue Service assisted with transportation of water. There was no plant damage and operations were not affected."

Pakistan should exploit coal for power generation - Experts

Speakers at the recent international symposium and open house discussion on “Sindh Coal Lignite Mining Challenges and Success” said that Pakistan should utilize its indigenous resources of coal for power generation and in other projects for longer run rather than rely on short term projects.

They said that affordability and profitability are the 2 main areas which should be put forward in any project in which coal is used. Pakistan must curb its dependence at present and start thinking its own which could be a very tough test but this will give the country strong foundation to envisage its future.

Mr Siddique Sheikh of Federation of Pakistan Chambers of Commerce and Industry said that “We have been very late in realizing our mistakes and while emphasizing on the importance of the symposium he said we did all these efforts 20 years back. These symposiums should have been organized in 1987 to avoid this current energy crisis. We go on to ruminate about their pattern which is not well in any case.” He added that more and more companies come to Pakistan with their plans to use the coal reserves of Sindh using their technologies and professional skills.

Dr Arbab Ghulam Rahim chief minister of Sindh said that for over 13 years the people of Pakistan and Thar have waited for the Sindh coal reserves in general and the Thar coal reserves in particular to bring energy and prosperity to people of the country. He added that “From the time Mr John T Boyd’s team reported one of the richest coal reserves in Sindh, people have been told that these reserves will change the economic conditions of Sindh, provide energy to Pakistan, reduce the burden of Pakistan’s foreign exchange spent on oil, which is now being sold at above USD 80 a barrel and completely industrialize Thar and Pakistan.”

Update on DGCX rebar futures contracts

It is reported that, commenting on highs of USD 632 per tonne and settlement price of USD 628.50 for the DGCX Steel Rebar Futures contract for February 2008, local rebar stockiest and traders were collectively of the opinion that a downward correction was called fall.

The February 2008 contract traded in the low USD 620 per tonne, a level from which some low volume speculative long positions seemed to nudge the market along during the day into the mid USD 620 per tonne. Two afternoon highs breaking USD 628 per tonne were followed by sell offs, yielding a settlement of USD 625.20 per tonne. The March 2007 settlement price was USD 626 per tonne after a quiet day.

Thus, for the first time since DGCX Steel Rebar Futures trading began, ties into the February futures contract’s physical delivery period of February 11th to 14th inclusive. Both despite of and because of the DGCX market’s limited start up liquidity and relatively low open interest, screen pricing duly responded to the sentiment from the physical market and a sell off their short positions and some decent profits secured as a result, by a couple of increasingly futures-savvy and DGCX trade-enabled steel traders. The opening price of this 3rd week of Steel Rebar Futures trading was a full USD 10 per tonne.

Pakistan and Malaysia signs FTA

Pakistan’s Daily Times reported that Pakistan and Malaysia have signed a comprehensive Free Trade Agreement in Kuala Lumpur, which would lead to major increase in imports and minor increase in exports. The agreement, which will kick off in January, will help Pakistan secure market for its export products in Malaysia and deepen the economic and trade relationship with an important member of the region.

In regard to trade in goods, Pakistan will eliminate tariff on 23% of the current imports from Malaysia. On the other hand, Malaysia will eliminate tariff on 78% of imports from Pakistan.

Pakistan will provide market access to Malaysia on basic raw materials, intermediate goods and machinery. Pakistan has obtained market access for its core export products like fruits and vegetables, seafood, beverages, confectionery, biscuits, gems & jewellery, cotton yarn, cotton fabric, blankets, bed linen, other home textile products and tents and tarpaulins, medicaments and surgical instruments.

In regard to trade in services, both countries will provide WTO plus market accesses to each other.

Dolphin issued tenders for Taweelah Fujairah gas pipeline

MEED reported that Abu Dhabi based Dolphin Energy has issued tenders for the design and build contract covering its Taweelah Fujairah gas pipeline. 9 local and international contractors have been pre qualified to submit technical and commercial bids by January 31st for the contract.

The pre qualified contractors are
1) Al Jaber Energy Services of UAE
2) Consolidated Contractors International Company of Greece
3) China Petroleum Engineering Construction Company of China
4) Dodsal of Dubai
5) Petrojet of Egypt
6) Snamprogetti of Italy
7) Stroytransgaz of Russia
8) Techint of Italy
9) Technip of Paris

The project covers the engineering and installation of a 240 kilometer long, 48 inch diameter gas pipeline between Taweelah in Abu Dhabi and Qidfa in Fujairah. The contract is due to be awarded in summer 2008, with work due to start soon after.

The pipe itself will be procured by the client. The gas, which originates in Qatar, will serve the Fujairah II independent water and power project at Qidfa.

Turkish index reflects minor growth in manufacturing

Turkish Daily News reported that ABN Amro Turkey purchasing managers' index, which provides an overall view of activity in the manufacturing sector, indicated minor improvement in business conditions in the Turkish manufacturing economy in October 2007. The index increased from 49.9 to 50.4 over the month.

The purchasing managers' index of October 2007 was supported by modest rises in output and new order volumes. Output increased from 49.8 to 51.3 and new orders from 49.2 to 50.9. However, the rates of expansion were below their averages for 2007 to date. Companies that reported an increase in production volume pointed to a minor increase in market demand and a corresponding improvement in new orders.

On the other hand, October 2007 data indicated that expansion of new export business reached its weakest point in the survey history, which was first made in June 2005. Whereas in May 2007, the export order index stood at 57, in October it declined to 50.3. According to ABN Amro, a number of Turkish manufacturers suggested that exchange rate appreciation against the US dollar and a general moderation in global demand had reduced new export order growth.

Meanwhile, the pace of job creation in the Turkish manufacturing sector remained only modest. Moreover, the latest rise in employment was the weakest in the current 20 month period of expansion. Companies reported that increased labor costs and higher oil related prices led to a further sharp rise in their average cost burdens. At 50.2, down from 51.6 in September, the seasonally adjusted employment index indicated the weakest increase in staffing levels in the current 20 month period of expansion.

The indicator is calculated on the basis of individual diffusion indices which measure changes in output, new orders, employment, suppliers' delivery times and stocks of goods purchased. A reading of the purchasing managers' index below 50 indicates that the manufacturing sector is generally declining, above 50 that it is generally expanding.

IPIC and OMV sign MoU to take upstream projects in MEA

Khaleej Times recently reported that International Petroleum Investment Company and OMV Aktiengesellschaft, the leading oil and gas group in Central Europe, has signed a MoU to pursue upstream projects in the Middle East, North Africa and elsewhere.

Mr Khadem Al Qubaisi MD of IPIC said that “We have discussed ideas to form a JV company, which will explore exploration and production business across the three key regions where OMV already has strong presence. IPIC and OMV believe that this is a natural step in the development of their deepening partnership and cooperation. Both companies are in a position to complement each other, IPIC with its regional relationships and OMV with its technical and geological know how. With this agreement IPIC will, in addition to downstream and petrochemicals expand its investment activities to exploration and production with a world class partner.”

He added that both companies agreed to share their expertise and knowledge relevant to assessing future projects. In the future IPIC will also increase cooperation with other UAE based companies and help them add value to their enterprises.

Mr Helmut Langanger executive board member for exploration and production of OMV said that “This MoU is another important step for strengthening the excellent cooperation with one of our major shareholders and helps us in our plans to further grow in our core E&P regions.”

OMV opened an office in Abu Dhabi in May 2007 to improve the screening of business opportunities and the coordination of existing activities in the region. OMV holds a balanced international E&P portfolio in 19 countries structured around 6 core regions, namely North Africa, Northwestern Europe, the Middle East, Australia, New Zealand and Russia, Caspian region. OMV’s daily production volume is approximately 322,000 billion oil equivalent per day and its reserves at the end of 2006 are approximately 1.3 billion oil equivalent.

Maritime Industrial Services to build new jack up rig

Pipeline Dubai recently reported that Maritime Industrial Services held the official steel cutting ceremony on October 25th 2007 for the construction start of MIS' third new build jack up drilling rig called Hull 107.

Hull 107 is another Freide & Goldman Design Super M2 for client KSAM2 Petrodrill Offshore Inc and has a contract delivery in the first quarter of 2010. Original contract sum is USD 148 million and has since been increased to USD 152 million with the execution of a contract variation order for additional equipment.

Client representatives, officials from ABS Middle East and senior Maritime Industrial Service management, attended the steel cutting ceremony. MIS will shortly be launching their first new build rig called Hull 104, which will be completed and commissioned at the MIS quayside for delivery scheduled in August 2008.

Snamprogetti and Hyundai JV wins fertilizer work in Qatar

MEED reported that the Italian Korean JV of Snamprogetti and Hyundai Engineering & Construction Company have received a letter of intent from Qatar Fertilizer Company for its ammonia and urea expansion project at Mesaieed.

Under the terms of the USD 3.2 billion lump sum, engineering, procurement and construction contract for Qatar Fertilizer 5, the 2 contractors will build two ammonia plants with a total capacity of 4,600 tonnes a day and a urea plant with a capacity of 3,850 tonnes a day.

The work also includes a 167 MW captive power plant, ship loading facilities, an air separation facility, a desalination plant and an effluent water treatment unit. The contract is due to last for 38 months, with commissioning set for January 2011.

The JV was widely expected to win the contract after entering into exclusive negotiations with Qatar Fertilizer earlier in 2007. The project was originally awarded in 2006 as 2 separate contracts to Germany’s Uhde and the US’ CB&I. However issues over the conversion of the 2 contracts to lump sum deals saw both of them cancelled.

Baosteel eying acquisition of Handan Steel

It is reported that Baosteel is moving slowly toward its target of achieving 50 million tonnes pear year of capacity by 2012 through mergers and acquisitions with other Chinese mills. It successfully acquired Bayi Steel, located in far northern Xinjiang Uyghur Autonomous Region early this year and rumors last year suggested it may be looking at acquiring a greater stake in Handan Steel.

Mr Li Pohai its general secretary told Securities Daily that "Handan currently focus on flat products including medium plate, HRC and CRC, which altogether contributes to 80% of its core business. And the company is stepping up efforts in developing new steel plates."

Market analysts commented that but BaoSteel’s emphasis is on high value ended steel plates especially carbon steel. Therefore, the merger of the two would enhance the diversity of the product mix and boost the sales.

Handan Steel has signed an agreement in May with Baosteel to set up a 50:50 owned 4.6 million tonnes pear year integrated mill. The mill's new installations will include two 3,200 cubic meter blast furnaces, two 200 tonnes converters, two slab casters, a 4.5 million tonnes per year 2,250mm HRC line, and a 1.7 million tonnes per year 2,030mm CRC line. Construction began on April 18th 2006 and an official with Handan Steel tells that the blast furnace will be brought on stream by the end of this year. The converters, casters and HRC line will be finished by June 2008.

Sinotrans Shipping to quadruple dry bulk shipping capacity

It is reported that Sinotrans Shipping Ltd is aiming to almost quadruple its dry-bulk shipping fleet in the next five years because of China's rising commodities imports.

Sinotrans Shipping Ltd said that its plans to raise its dry bulk capacity to as much as 5 million DWT from the present 1.3 million DWT by buying new vessels. It also plans to increase its oil tanker fleet to as much as 1.8 million DWT from 832,000 DWT over five years.

Sinotrans Shipping plans to expand its fleet as China's imports of coal and iron ore have helped because dry bulk shipping rates to surge. The Baltic Dry Index, a measure of chartering rates for different sized vessels, has gained about 160% in the past 12 months.

Sinotrans Shipping has a fleet of 34 ships, comprising 26 dry bulk vessels, three oil tankers and five container vessels as of June 30th2 007.

More consolidation in Chinese coal industry suggested

The Shanghai Securities News reported that more merger and acquisitions in China's coal industry are expected following recent policy guidance from the government.

The document, named the Guidance on Accelerating the Restructuring of Coal Enterprises, was co released by the following departments and ministries
1. The National Development and Reform Commission
2. Ministry of Finance, Ministry of Land and Resources
3. State owned Assets Supervision Council
4. Administration Commission of the State Council
5. State Administration of Work Safety

According to the guidance, by the end of 2010, the nation should form six to eight coal groups with an annual output over 100 million tonnes, and eight to ten companies yielding 50 million tonnes. The combined output of these groups should surpass half of the nation's total. In addition, the government will promote diversified development of the coal industry based on major coal enterprises. These coal groups also should take the lead in constructing large coal bases and may work with smaller coal mines or take them in as an affiliate company in large scale mining projects.

As early as 2005, the State Council issued the Advice on Improving the Healthy Development of China's Coal Industry, vowing to construct large coal mining bases and form large coal enterprise groups. Since then, a series of integrations occurred in provinces like Shaanxi, Jiangxi, Ningxia and Sichuan. And several coal groups in these provinces have taken shape. Meanwhile, 13 large coal bases have been established to better utilize the nation's abundant coal reserves.

According to statistics in 2005, there are 80,000 coal enterprises scattered nationwide, a large part of which are not highly yielded. The top 100 coal producers account for nearly half of the nation's annual output. The top 10, in particular, account for only 25% leaving huge room for further industry integration.

Freight costs likely to rise further – Report

It is reported that the shipping cost on Brazil to China iron ore route has reached an all-time high of USD 90.19 per tonnes recently, a staggering rise of 186.32% or USD 58.69 per tonnes from same time of last year.

The freight rates have been hovering over USD 85 per tonnes since October and come close to USD 89 per tonnes for a couple of times. It has taken over one month to break over the benchmark line of USD 90 per tonnes, indicating strong growth momentum in the shipping market.

The freight cost has been spurred to record high due to a host of factors such as soaring demand, supply shortfall of vessels, longer voyage distances and capacity bottlenecks at global major ports.

Surging oil price has also lent support to the freight rates rally. Currently, crude oil price has already roared up to historical high of USD 97.89 per tonnes on November 7th 2007. Moreover, China has shifted to a net coal importer this year, boosting demand for vessels to moving coal to China.

Iron ore freight cost is expected to post further rise in days to come as the tight supply of vessels and booming demand are set to persist in the marketplace in near future.

Chinese coal exports in October up by 17.4% YoY

It is reported that China's October coal exports climbed 17.4% from September, the second highest level so far this year despite bad weather disrupting loading during the month. October coal exports stood at 5.25 million tonnes, the highest since 5.73 million tonnes in July.

The total for the first 10 months stood at 43.26 million tonnes, down 17.6% compared with the same period last year.

A coal industry insider said that "The exports volume has gone up in the second half. Miners are shipping more spot and term cargoes. Exporters have managed to raise the prices. This helps them increase volume.”

He added that “Chinese miners and South Korean buyers had agreed to settle 2007 prices at a higher level than expected. Prices were higher than those agreed with Japanese buyers.”

High domestic prices helped China emerge a net importer of coal for the first time in January. It remained so on a monthly basis during the first half of the year.

Large coalfield discovered in Inner Mongolia

Interfax China reported that a large coalfield with approximately 20 billion tons of coal reserves has been discovered in northern China's Inner Mongolia Autonomous Region.

According to Shanghai Securities News, a survey of the field has found that it contains high-quality steam coal with a high heat value and low sulfur content. Experts believe that the field's known reserves may significantly increase in the next two to three years as further survey work is carried out.

The report noted that the survey of the coalfield took over 2,000 geological surveyors more than half a year to complete.

Chinese HR price to Taiwanese market heading north

It is reported that China’s price for hot rolled steel products has kept increasing in the recent period of time. It is quoted as USD 625 per tonne to USD 640 per tonnes to on CNF Taiwan basis, which is higher than the acceptable market price level.

Facing this high price of China’s HR products, buyers are holding back and considering a suitable timing to place orders. It is understandable that the raised price of Chinese products has brought the pressure of higher material cost in production to Taiwan’s mills.

Shenhua wants to diversify earnings

It is reported that China Shenhua Energy Co, the world's second largest coal seller is seeking global acquisitions to diversify earnings.

Mr Ling Wen president of Shenhua Energy Co said at a forum that “The board of our company is working on plans. He declined to give details of potential acquisitions outside coal.”

Mr Ling said “The takeover deal between BHP and Rio will trigger a new round of mining acquisitions, and that will be a challenge to all Chinese mining companies. He said Shenhua is looking to invest in coal mine projects in countries including Australia and Mongolia.”

It raised CNY 66.6 billion in an initial public offering in Shanghai last month to fund mini acquisitions and meet demand in the world's fastest-growing major economy.

China's October PPI up by 3.2%

According to a report issued by China’s National Bureau of Statistics the October Producer Price Index for China rose 3.2% over the previous year. For the period January to October 2007, the PPI was up 2.8% over the corresponding period a year ago.

The figure represents an increase of 0.1% over both the September 2007 figure and the 2006 year to September.

According to the bureau, procurement prices for raw materials, fuel and power increased 4.5% in October, while prices for production materials increased 3.1% and mining and exploration costs rose 5.4%. For the year through October, procurement prices for raw materials, fuel and power increased 3.9%.

Baotou steel posts increase in output in 10 months of 2007

It is reported that the production of iron and steel in Baogang Group continued to grow during 2007.

From January to October 2007, the group produced 7,468,500 tonnes of iron, 7,315,100 tonnes of steel and 6,962,700 tonnes of steel products, all of which registered solid YoY growth.

Shougang's gear steel passes authentication tests

It is reported that, Shougang's gear products passed authentication in the annual conference of China Gear Manufacturers Association.

As per report, series of CrMnTiH gear steel obtained quality authentication for acceptable quality.

Hanggang announces price increase

It is reported that Hangzhou Iron & Steel Co based in Zhejiang province in East of China has adjusted prices of all steel products on November 13th 2007 as under.

1. It increased EXW prices of all carbon steel products by CNY 50 per tonnes. And prices of 16 to 59 and 60 to 85 are CNY 4,480 per tonnes and CNY 4,500 per tonnes respectively.
2. It increased the EXW price of alloyed steel up by CNY 50 per tonnes and now the price is CNY 4,760 per tonnes.
3. It increased the EXW price of all kinds of round steel products up by CNY 50 per tonnes and prices of 16 to 59 and 60 to 85 are CNY 4,360 per tonnes and CNY 4,410 per tonnes respectively.
4. It increased EXW prices of gear steel and chrome molybdenum steel up by CNY 50 per tonnes and the price of 20CrMo is CNY 5,750 per tonnes.
5. It increased the price of general HC wire up by CNY 120 per tonnes while raise prices of cold forging wire and 72B up by CNY 50 per tonnes. The price of Q195 and ML35 are CNY 4,370 per tonnes and CNY 4,400 per tonnes respectively.
6. It increased the price of spring steel up by CNY 50 per tonne and the price of φ16-59mm60SI2Mn is CNY 4,850 per tonnes.

All prices above include 17% VAT and are carried out since November 13th 2007.

Update on recent Chinese overseas JVs

1. On September 18th 2006, Jinan Steel and Tycoons Group Enterprise Co obtained business license concerning their jointly invested project of setting up steel mill in Vietnam. The project costs USD 20 million with production capacity from its initial 2 million tonnes to 10 million tons and the final investment might total USD 0.5 billion.

2. In February 2007, the newly established companies co invested by Vietnam Steel Corporation and Kunming Steel commenced its iron ore exploring in iron ore zone of Quy Sa of Vietnam. The iron ore zone is listed second largest zone in Vietnam with 0.12 billion tons potential capacity. It is estimated that the project total investment may amount to 0.175 billion USD. The first phase would be commenced from 2008-2009, the second project phase in 2012 will be aim to establish steelmaking enterprise, moreover, the third phase in 2015 primarily will be used to set up steel rolling production line.

3. In May 2007, Sinosteel corporations said that it will inject USD 4 billion in the following 8 to 10 years in establishing steel mill with 5 million tons production capacity in India. However, the mill will be put into operation before the end of 2008. During the first phase of the plan, Sinosteel will invest 0.8 billion USD with production capacity of 1.5 million tonnes.

4. In August 2007, the inauguration ceremony of Baosteel CSV Steel Corporation was commenced in Victoria, the capital city of Espirito Santo, Brazil. This jointly invested companies by Baosteel and CVRD will be infused with USD 0.35 billion in its first phase, higher than that in the second phase. It is forecasted that 5 million tonnes and 10 million tonnes billet would be produced in the first and second phases. In addition, the fist project phase is scheduled to start construction in the first half of 2008 and put into working in end 2011.

5. In the middle of August 2007, Baosteel and an Indian corporation entered into a cooperative contract in Shanghai concerning that they would establish a firm with 1.5 million tonnes special steel and stainless steel production capacity. The project will put into operation in 2010.

6. In September 2007, Baosteel and a Pakistan steel corporation reached a agreement, concerning that they will co invest in a steel mill, in Pakistan with 0.3 million tonnes CR production capacity.

7. In October 2007, Tangshan Steel and some organization of The Democratic Peoples Republic of Korea came into a letter of intent, concerning a project with 1.5 million tonnes steel production capacity in The Democratic Peoples Republic of Korea.

Liugang increases rebar prices

It is reported that Liuzhou Iron & Steel Co based in Guangxi province in South China has announced price changes for rebars on November 13th 2007.

1. Raise prices of 12mm and 18mm rebar up by CNY 30 per tonnes.

2. Keep the price of HC wire unchanged.

All prices above include 17% VAT and are carried out since November 13th.2007.

Baogang LZ50 axle billet gets quality approval

It is reported that Baogang LZ50 axle billet production quality certification accreditation was held in Baotou.

The experts of Ministry of Railways Organization group unanimously agreed Baogang LZ50 axle billet passed production quality certification.

Ba Yi improves yield in oil extraction rod steel in October

It is reported that Ba Yi stock company profile factory is strengthening quality control and process control on the basis of in summing up the development and production of early varieties steel.

In October 2007, it produced oil extraction rod steel 7,372 tonnes in 7 specifications and achieved yield of 93.99%.

For production of the spring flat steel, it improved on the hole type and made optimization, it simplifies the adjustment difficult, raising the product’s quality.

Taigang held steel client symposium in Sanya

It is reported that on November 12th 2007, stainless mill of Taigang held a client symposium in Sanya city and the meeting will last for four days and end on November 15th 2007.

During the meeting, representatives of clients are discussing stainless steel scenario and Taigang's development and plans in 2008.

It is forecasted that Taigang's stainless steel output will reach 2.08 million tons in 2007 and will further increase in 2008

Tungsten output value in Ganzhou to exceed CNY 20 billion by 2011

It is reported that Ganzhou in Jiangxi Province is to see the annual output value of its tungsten industry exceed CNY 20 billion in 2011 and itself become China's prospecting, exploitation, processing, scientific research and distribution center of tungsten resources.

Metinvest buys two mills in Europe

It is reported that, Mr Rinat Akhmetov controlled Metinvest Holding has signed agreements to buy steel factories in the UK and Italy, marking the continued expansion of Ukraine's steel groups in Europe.

Metinvest announced recently that a subsidiary had signed agreements to purchase Italy's Trametal and Spartan UK from the Malacalza family for an undisclosed amount. The deal is thought to be worth more than EUR 500 million. Regulatory approval is expected within 60 days.

Trametal and Spartan UK are plate rolling facilities located at San Giorgio de Nogaro in Italy and at Newcastle in UK respectively. Last year, both companies boasted sales over USD 544 million and together produced more than 536,000 tonnes of plate.

It plans to combine these two steel rolling factories with its existing Italian steel rolling company, Ferriera Valsider SpA, resulting in a newly created company with a 1 million tonne plate rolling capacity in the EU. Ferriera Valsider had sales of more than USD 387 million and produced 515,000 tonnes of rolled steel products.

Mr Igor Syry GD of Metinvest said that "We believe that Trametal and Spartan perfectly fit our long term strategy of producing more value added products and improving the company industrial balance as Italy is a key market for the group. Trametal and Spartan will make excellent additions to our company.”

Metinvest is a vertically integrated steel holding with assets in coal and iron ore mining, coke production, iron ore enrichment, and steel and steel product production. The group produces about 6 million tonnes of coking coal, more than 7 million tonnes of coke, more than 40 million tonnes of iron ore products and more than 11 million tonnes of crude steel per year.

Evraz raises 2007 steel production forecast

Interfax reported that Evraz Group has raised its 2007 steel production forecast.

Evraz said in a statement that it expected rolled steel production to grow 5% compared with 2006. It said it planned this year to produce 16 million tonnes to 16.2 million tonnes of crude steel and 15.1 million tonnes to 15.3 million tonnes of rolled products, including 1.8 million tonnes in the United States and 500,000 tonnes in South Africa.

Evraz said in April that it expected to produce 15.5 million tonnes to 16 million tonnes of steel and 14.2 million tonnes to 14.8 million tonnes of roll, including 1.6 million tonnes to 1.7 million tonnes in the United States.

Evraz produced 16.1 million tonnes of crude steel and 14.46 million tonnes of rolled products in 2006.

Mechel gets new equipment at its Korshunov mining plant

Mechel announced that its iron ore mining subsidiary, Korshunov Mining Plant OAO, received new high tech equipment including a bridge grabbing transshipment crane for its concentration plant and a Liebherr excavator for its Rudnogorsk mine.

Installation of the bridge grabbing crane with 16 tonne lifting capacity is being completed at the plant’s concentration facilities. The new crane will be used to transship iron ore concentrate from storage to conveyor and deliver iron ore concentrate to a drying and shipment section. Commissioning of this unit will enable the plant to significantly reduce costs and enhance the smoothness of iron ore concentrate shipments. The total cost of the project including the equipment installation is over RUB 15 million.

Rudnogorsk open pit mine of Korshunov Mining Plant received a Liebherr excavator with a bucket capacity of 15.3 cubic meters. The excavator’s productivity exceeds almost twice that of any excavator currently operating at the Korshunov Mining Plant. The excavator is diesel hydraulic therefore it can operate without the need for high-voltage power lines following technological explosions. The excavator will be used to mine rock from upper horizons of the open pit mine and costs over RUB 116.0 million.

Mr Vladimir Polin CEO of Mechel Management OOO said “Mechel’s technical re-equipment program for iron ore concentrate production enables the plant to maintain iron ore mining volumes at a level of 5.0 million tonnes, which is in line with the Korshunov Mining Plant’s production capacity, while reducing iron ore mining and concentrating costs. We plan to continue the modernization of mining and transportation equipment at the plant and in line with Mechel’s plans for 2007 to 2011, approximately US$90.0 is expected to be invested in the development of the Korshunov Mining Plant.”

The commissioning of the new mining equipment is in line with Mechel’s long term technical re equipment program for its subsidiaries operating in its mining segment, in which Mechel plans to invest approximately USD 1.2 billion during the next five years. The commissioning of the equipment is aimed at improving the segment’s performance and will allow Mechel to significantly reduce production costs, increase productivity, and improve working conditions for miners.

Palmary increases offer for ConsMin

Mr Gennadiy Bogolyubov’s investment vehicle Palmary Enterprises Limited has raised its offer from AUD 4.5 per share to AUD 4.7 per share in the ongoing battle for control of Australian manganese producer Consolidated Minerals beating an offer by Pallinghurst Resources.

The bid values ConsMin at AUD 1.08 billion and has been recommended by its board.

Mr Bogolyubov said “"It is time to accept. Consolidated Minerals shareholders should not wait for any further developments."

Pallinghurst on November 13th 2007 extended its AUD 4.5 a share offer after Australia’s Takeovers Panel ruled a top-up payment component of its proposal was unacceptable. Its bid now closes November 27th 2007. The revised offer from Palmary, which closes November 23rd 2007 is the second time it has raised its bid.

At the heart of this long running battle for control of ConsMin are its Woodie Woodie manganese operations. Mr Bogolyubov is seeking control of supply to the Nikopol alloys plant in Ukraine, in which he holds a significant stake. ConsMin produces about 900,000 tonnes per year of manganese ore from its Woodie Woodie mine in the Pilbara region of Western Australia at a grade of more than 48% and accounts for about 10% of the global production. About 90% of manganese supply is used to make steel and the material is a non substitutable input in steel making.

ChTPZ renews its Transcert certificate

It is reported that ChTPZ Complex Pipe Systems had its Transcert certificate renewed.

The certificate is part of the facultative certification system and was given to the company in 2006 by the National Institute of Transport Standardization, Expertise and Certification.

In fact, these certificates had earlier been given to all the member enterprises of ChTPZ-Complex Pipe Systems to a pipe plant in Chelyabinsk, MSA as based in the Czech Republic and an enterprise located in Magnitogorsk.

Having this certificate as a proof of the quality of services rendered by Russia’s major oil transportation company is an important part of an overall strategy targeted at meeting the need for pipeline fittings and other components.

TMK could pay RUB 3.63 a share for 9 months - Report

Interfax reported that directors of TMK have recommended an interim dividend of 3.63 rubles a share for the period ended September 30th 2007 to be approved in extraordinary meeting on December 25th 2007.

The board of directors in February 2007 approved an adjusted dividend policy, stating that the company's goal is to pay at least 25% of annual consolidated net profit audited to International Financial Reporting Standards to shareholders. TMK paid RUB 4.3 a share or a total of RUB 3.754 billion in dividends for 2006.

TMK is one of the world's top three steel pipe producers and second biggest producer of oil and gas industry pipes. TMK includes the Taganrog Seversky, Volzhsky and Sinara pipe mills and Orsk Machine Building Plant in Russia, and the TMK-Artrom and TMK-Resita plants in Romania. Mr Dmitry Pumpyansky TMK's non executive board chairman controls the company and the free float is about 23%.

EBRD to invest USD 10 billion in Russian economy in 2007

Interfax cited Mr Alain Pilloux Director for Russia, Central Europe and Specialized Industries of EBRD's, while speaking at the Moscow Business Dialogue international investment forum organized by the Interfax News Agency, as saying that the European Bank for Reconstruction and Development will invest a total of USD 10 billion in the Russian economy in 2007.

Mr Pilloux said "The EBRD plans to invest USD 10 billion in the Russian economy in 2007 and 75% of the amount will be invested jointly with Russian companies."

FDI in Russia to reach USD 50 billion in 2007

RIA Novosti citied Mr Yaroslav Lisovolik the chief economist of Deutsche Bank in Russia as saying that foreign direct investment in Russia could almost double, YoY in 2007 to USD 50 billion.

Mr Yaroslav Lisovolik told an international investment forum in Moscow that Russia's accession to the World Trade Organization would contribute to larger foreign direct investment in the country. According to his estimate, Russia could join the world's trade club already by the end of the first half of 2008.

Mr Igor Shuvalov an aide to the Russian president, earlier said that foreign direct investment in Russia, which was reaping benefits from high world oil prices, exceeded USD 40 billion in the first nine months of the year.

According to Russia's Finance Ministry, foreign direct investment in Russia totaled USD 26.2 billion in 2006. The ministry's initial forecast projects foreign direct investment to reach USD 30 billion in 2007 and USD 39 billion in 2008.

Black Sea oil spill contamination to last six months

Experts said it will take six months for oil products spilled into the Black Sea and the Sea of Azov at the weekend to dissolve or be washed ashore.

Mr Vitaly Spiridonov of World Wildlife Fund Russia said that "Most of the fuel oil will settle on the bottom and will be thrown ashore gradually, adding that the seabed's fauna and flora would suffer the most.”

Mr Alexander Minin a senior academician at the Institute of Global Climate and Ecology said that “Oil products usually stay in the water for no more than six months. He also said the cyclone that had caused the storm in the Kerch Strait affected the area every year. However, he noted that it was moving further and further north, a phenomenon he put down to climate change.”

The Environmental Watch on North Caucasus has said the accident was particularly devastating for the environment in the area as the Kerch Strait is the passage route for fish migration between the Black Sea and the Sea of Azov, including for many endangered fish species.

About 2,000 metric tons of oil and almost 7,000 tons of sulfur in containers were spilt into the sea amid a powerful storm recently that killed at least 6 sailors, sank 4 ships and split open an oil tanker.

Italian ENI interested in Baltic LNG project

RIA Novosti reported that Italian oil and gas company Eni Spa. is interested in a project to build a liquefied natural gas plant on the coast of the Baltic Sea.

Mr Carlo Meriggi told an Italian Russian business forum held as part of the World Energy Congress in Rome that "We would be very much interested in joining this project."

Mr Meriggi also said Gazprom and Eni were jointly preparing feasibility studies for building a gas pipeline to run under the Black Sea directly from Russia to the European Union.

The Baltic LNG project, developed by Russian energy giant Gazprom stipulates the construction of a liquefied natural gas plant in Primorsk in northwestern Russia with a capacity of 5 million tonnes to 7.2 million tons of liquefied natural gas a year.

Gazprom and Eni agreed in June to build the South Stream pipeline, which will deliver 30 billion cubic meters of gas annually via Bulgaria to Austria, Slovenia and Italy.