Update on ArcelorMittal’s steel plant in Orissa

Kalinga Times reported that top officials of ArcelorMittal met Mr Naveen Patnaik chief minister of Orissa on the weekend to discuss about the company's proposed 12 million tonne capacity steel project in Keonjhar district. The issues discussed include land acquisition, water requirement, mining lease and preparation of rehabilitation and resettlement package.

After the meeting, Mr Malay Mukherjee member of group management board at ArcelorMittal said that the project was progressing faster. He added that "We are pretty satisfied with the progress we have made. Processes of land acquisition are moving faster considering the fact that we signed MoU in December 2006. The detailed project report of the project will be ready by June 2008 and it expects to commission the first phase of the plant by 2011-12. We started a detailed survey to finalize the R&R policy for the people who would lose their land and homes to make space for the mega steel plant.”

During their meeting with the chief minister, Mr Mukherjee and his colleagues informed Orissa government that they had already set up an office in Bhubaneswar and soon they will have an office in Keonjhar. They also agreed to the government's proposal to set up an Industrial Training Institute in Keonjhar for the benefit of the local youths.

Navayuga submits proposal for 12 million tonne steel plant in Orissa

It is reported that Hyderabad based Navayuga Group has submitted a proposal to the government of Orissa for establish 12 million tonne per annum steel plant in Orissa.

Mr U P Singh state secretary for steel & mines of Orissa said that “We have received a proposal from Navayuga group for a 12 million tonne per annum capacity unit.” He added that Navayuga group is interested to set up a port based steel facility, preferably at Astaranga in Puri district of Orissa.

A state government official said that “Navayuga group’s proposal for developing a port is in the final stages of getting approval, but the state government is yet to examine its application for setting up a mega steel plant. The land and water requirements as well as raw material linkage have to be studied. The proposal will be placed before the single window clearance authority headed by the chief secretary before a decision is taken.”

Mr CV Rao chairman of Navayuga Engineering Company Limited had earlier made a presentation before Mr Naveen Patnaik chief minister of the state about the groups plans to develop a port at Astaranga on a build own operate share transfer basis with an investment of INR 6000 crore. A source said that Navayuga group had earlier requested the state government for 5000 acres of land for its port complex and other projects, including a 1320 MW captive power plant, fly ash brick unit and desalinization facility. It had also suggested the government for construction of a 50 kilometer long railway link between Khurda Road to Astaranga via Sakhigopal at an investment of INR 400 crore through the public private partnership mode.

TATA Steel bags DSIR Award 2007

TATA Steel has won the Department of Scientific & Industrial Research Award 2007 for its R&D effort in implementing an indigenous technology for removing hexavalent chromium from chrome ore concentrates.

Dr Debashish Bhattacharjee chief of R&D and scientific services at TATA Steel received the award. He said that “With innovative research and tenacious implementation, the hexavalent chromium level has been brought down from 0.4 parts per million to 0.001 parts per million in our chromium ore concentrate. The cut off set by WHO is 0.05 parts per million. This is indeed a huge achievement for us and we are very proud to have received this prestigious award.”

Apart from environmental benefits, this technology will help save 250 liters of water per tonne of concentrate thus saving about 125 million liters of water per annum at TATA Steel’s mines.

RBI to circulate new INR 1 ferritic SS coins shortly

The Reserve Bank of India has announced that it would shortly put into circulation new ferritic stainless steel coins of INR 1 with the theme 'Nritya Mudra'. The coins will be circular in shape and 25 millimeters in diameter and steel will have 17% chromium.

The release said that the face of the coin is divided into 3 portions with 2 horizontal lines. The centre portion will bear the lion capitol of Ashoka Pillar with the legend 'Satyameva Jayate' inscribed below. The top portion contains the word 'Bharat' in Hindi and 'India' in English while the bottom portion contains the year in international numerals. The reverse side of the coin contains visuals showing one of the 'Mudras' of India's most famous classical dance, the Bharat Natyam, in the centre right periphery and in the centre left periphery the denomination value '1' in international numerals. Below that, there will be the words 'Rupye' in Hindi and the word 'Rupee' in English.

RBI said that the existing INR 1 coins will continue to be legal tender.

SAIL RSP employees honored with Viswakarma Rashtriya Puraskar

SNS reported that the ministry of labor and employment, government of India has awarded the coveted Viswakarma Rashtriya Puraskar 2006 to 11 employees of Steel Authority of India Limited’s Rourkela Steel Plant. For the first time for RSP this year, 2 awards have come in category B which carries a cash award of INR 25,000. Mr Oscar Fernandes presented the prestigious award to the winners.

This is for the first time in the history of RSP that so many employees have been selected to get this prestigious award in a single year. Since the inception of the award in 1965 so far only 8 employees have bagged the honor that is presented every year to workmen employed in factories throughout India in recognition of their innovative suggestions resulting in higher efficiency, productivity, quality, safety and working conditions, housekeeping and import substitution at the enterprise level.

Mr BN Singh MD of Rourkela Steel Plant, while addressing award winners, said that “Every employee has to think up new ideas daily which will help him to do different things or do things differently. This would enable the organization scale new peaks of excellence on a continuous basis. You must emulate the divine architect Viswakarma who was always exploring new vistas of creativity.” He added that happiness leads to complacency thereby reducing efficiency.

Shipping ministry approves new berth at Tuticorin Port

It is reported that Mr Thiru TR Baalu union minister for shipping, road transport & highways has approved the proposal for construction of a new berth at North breakwater at the Tuticorin Port.

The construction of the new berth to be known as North Cargo Berth I would cost INR 40 crore. It will add a capacity of 2.93 million tonnes per annum to the port and would help Tuticorin Port to ease the congestion in handling bulk or dusty cargoes in the existing berths. The North Cargo Berth I would enable it to handle coal vessels of 65,000 DWT to 75,000 DWT with a maximum draft of 12.8 meters.

Mr Baalu has expressed the hope that the new berth will help meet the growing demands for handling bulk cargo in the coming years and would be especially useful for the cargo meant for the proposed thermal power plant at Tuticorin to be set up by Tamil Nadu Electricity Board and M/s Neyveli Lignite Corporation Limited.

Presently, Tuticorin Port boasts of 7 cargo berths, 1 container terminal, 1 oil jetty, 2 coal jetties and 2 shallow draft berths with a total operating capacity of 20.55 million tonnes per annum.

FACOR board approves USD 5 million raising to fund expansion

The board of directors of FACOR Steels, at its meeting held on November 16th 2007, has approved the availing of external commercial borrowing of USD 5 million for partly financing its proposed forged round bar plant project and for procuring balancing equipments for its existing steel melting shop and bright bar shop located at MIDC Industrial Estate in Nagpur, subject to regulatory approvals and compliance of applicable laws and procedures.

FACOR Steels was established in 1956. It began its operations with ferromanganese production and slowly diversified into the production of ferrochrome and charge chrome. It took over a mini stainless steel plant in 1978 for manufacturing alloy, special and stainless steels. It is now an alloy steel producer in India and has been exporting special stainless steel products all over the world with a focus on developed countries, apart from catering to requirements of automobile, railways, defense, chemical, heavy machinery and engineering sectors in the domestic market.

India to set up a coal regulator - Report

UPI recently reported that India is considering setting up a coal regulator to provide a level playing field to all players.

The report cited Mr TK Nair principal secretary to Dr Manmohan Singh having directed the coal ministry as "Bring forth a proposal to set up a regulator set year and institution wise exploration targets so that adequate blocks are available for development and move toward a modern pricing regime.”

Mr Nair said that “With private entry in captive coal mining, a regulator is needed to ensure a level field and see to it that new players do not cut corners and take care of conservation, deploy suitable technology and offer the same welfare facilities that miners get under government run operations.” He added that a regulator is also expected to ensure a fair evaluation of coal blocks being allotted to private companies for captive mining.

Kerala plans INR 4,000 crore coal based power project

It is reported that Kerala State Electricity Board is exploring the viability of setting up an INR 4,000 crore coal based power project at Cheemeni, between Payyannur and Kasargod. Since the coal based project, which is estimated to generate 1,000 MW, is likely to face strong opposition from environmentalists and the pollution control agencies, political clearance is a must for the project.

The MoU to mine the 602 million tonnes of coal from Bairany in Orissa jointly by Orissa, Gujarat and Kerala was signed the other day. Originally, the plan was to set up the plant in Orissa itself. There are different options before the KSEB on utilizing the coal to be mined from Bairany. It can even sell the coal to another player and buy power from it without committing any capital investment on its part for the plant. The centre gave permission for mining only to generate power. The mining facility itself would cost over INR 1,000 crore.

It has been calculated that drawing power from Orissa plant would be cheaper compared to generating power from Cheemeni plant after bringing coal through the Mangalore port or the proposed Ezhimala port. But, if the employment potential and its contribution to the overall economy of the state are taken into consideration, it would be a political gain for the state government.

Private shipbuilders to invest INR 18,500 crore in India

It is reported that India’s private shipbuilding companies are planning to invest about INR 18,500 crore in the next 5 to 7 years. L&T and Pipavav Shipyard lead the list with a capital expenditure program of INR 3,000 crore each, followed by Good Earth Marine Group with INR 2,000 and ABG Shipyard, Adani Group and Bharati Shipyard with INR 1,500 crore each.

L&T is poised to build a new USD 500 million shipyards fit to build very large crude carriers, with a proposed capacity of five VLCCs and 20 Panamax vessels. Similarly, ABG’s new shipyard at Dahej will build Handymax initially, but later move into the VLCC space. Bharati is building a large facility in Mangalore on a Greenfield site to complement its four existing yards. Pipavav is planning to enter the offshore fabrication market through a tie up with Punj Lloyd, which recently picked up substantial shares in the company. Even shipping companies are planning to get into shipbuilding. Shipping Corporation of India plans to set up a facility with a JV and talks are on with some Korean shipyards, while Mercator Lines has put up on its drawing board plans to build a USD 247 million yard at Palghar in Maharashtra.

A study by KPMG said that “As the industry continues to move from its existing nascent stage to a rapidly growing industry, it will yield huge benefits to the economy. The economic impact of shipbuilding is very similar to infrastructure sectors such as roads and ports rather than conventional manufacturing. With its large technical pool, one of the major potential upsides of the shipbuilding sector can be the relocation of design and engineering activities from the existing expensive locations of Europe and the US, replicating the trend witnessed in the IT sector.”

According to the KPMG report, during the last 5 years, the private sector shipyards had invested about INR 843 crore as compared to INR 43 crore between 1997 and 2002. Between 2002 and 2007, these yards have managed to bag orders worth INR 14,877 crore as against INR 816 crore in the previous 5 years. However, the industry is still far from realizing its full potential. The present boom in global shipbuilding demand presents significant opportunity for India to consolidate its presence in the global market.

TATA eying dedicated freight corridor project - Report

It is reported that TATA Group is eyeing the proposed INR 50,000 crore dedicated freight corridor project by the Indian Railways and is in talks with Japan’s Mitsubishi Corporation for a possible alliance, in which the latter would help TATA to source rail wagons, engines and other related infrastructure for the proposed project.

As per report, TATA Realty & Infrastructure Limited, a 100% subsidiary of TATA Sons, will be executing the project for the group. It focuses on long and short term infrastructure projects and has previously teamed up with Changi Airport International for developing new and non metro airports in India.

The report cited a senior TATA executive as saying that “We are keen to participate in this project. Talks with Mitsubishi are in the preliminary stage. We hope that they can help in getting rolling stocks. We are looking at offering complete solutions for rail infrastructure.”

Dedicated freight corridors are exclusive railway lines for cargo laden trains. At present, freight trains and passenger trains use the same tracks, resulting in delays and added costs. Indian railways has proposed 2 dedicated freight corridors, the eastern corridor on the New Delhi to Kolkata route of 1,279 kilometer and the western corridor of 1,483 kilometer between Mumbai and New Delhi.

Bombardier Transportation, Siemens AG, Itochu Corp, GE Transportation and France’s Alstom are also holding preliminary talks with possible Indian partners and government for this project.

HZL lowers zinc prices by 1.7%

Hindustan Zinc Limited has lowered the prices of zinc and lead to match a decline in global rates.

The price of zinc was cut by INR 2,000 or 1.7% to INR 119,000 (USD 3,026) per tonne while the price of lead was reduced by 1% to INR 153,900 per tonne.

Krishnapatnam Port phase I to be ready by June 2008

BL reported that the first phase of the Krishnapatnam port, which is being taken up with an outlay of INR 1,200 crore, would be ready by June 2008 with 4 berths, far ahead of the original December 2008 deadline.

Mr CV Rao CMD of Navayuga Group said that “The other 2 phases will be taken up simultaneously. We hope to complete the phases by 2011-12.” He added that the port would have great potential on the east coast and Chennai port could not handle the iron ore and coal after 2008, just in time when Krishnapatnam port would be ready.

Navayuga group bagged the 50 year concession from the Andhra Pradesh government to upgrade the existing minor port into a modern deep-drafted multipurpose port. When all the phases are functional, Krishnapatnam port would have a total key wall length of 11.5 kilometer, making it easy for ship traffic.

Krishnapatnam port would become a location for Tamil Nadu and Karnataka. Besides, power units, with a total generation capacities of 10, 000 to 12,000 MW would be coming up in the area. The state government sanctioned a special economic zone at Krishnapatnam, further enhancing the potential of the port. Keeping in mind the future traffic needs of the place, an INR 600 crore 114 kilometer long railway track is being laid, connecting the port with Obulavaripalli in Kadapa district.

To take care of the upcoming industries, the Navayuga group is also setting up an INR 1,000 crore desalination project with a capacity of 100 million liters a day.

No cabinet nod required for projects below INR 150 crore

It is reported that the department of expenditure under the finance ministry has increased the financial limits of projects requiring approval from various cost approving bodies in order to provide greater leeway to central government departments and ministries to finalize centrally funded projects.

A finance ministry official said that the move was necessary considering the increase in project costs due to high inflation. The financial limits for the scheme include budgetary support, internal resources, external aid and loans. The guidelines will come into effect during the 11th Plan.

According to the new guidelines, ministries and departments will no longer have to seek approval from the cabinet or the cabinet committee on economic affairs for schemes involving expenditure below INR 150 crore as against previous limit of INR 100 crore. Projects between INR 75 crore and INR 150 crore will be approved by the minister in charge and minister of finance. Schemes requiring funds below INR 75 crore will be cleared internally by the ministry.

For projects above INR 150 crore, the appraisal will be carried out by either the public investment board or the expenditure finance committee. PIB considers projects where financial returns are quantifiable. The expenditure secretary heads both the committees. Now ministries can appraise their own projects within INR 15 crore under the revised guidelines, against the previous limit of INR 5 crore.

Scania inks tipper truck marketing JV with L&T

BS reported that Sweden based EUR 7.8 billion heavy vehicle major Scania has entered the Indian construction equipment market with the launch of its multi axle tipper truck. It has entered into a distribution agreement with Larsen & Toubro Limited exclusively for the Indian market.

Mr Mikael Kyander sales director of Scania said that under the agreement, L&T will import the tipper chassis from Scania and the body will be built by Hiva, a body building company based in Mumbai. He added that it will sell its P380 CB 8X4 multi axle tipper truck for mining applications in India and later expand its product range depending on the market response.

Mr Kyander said that “In India, as in many other countries, small scale mining is expanding. Mine operators are increasingly investing in trucks instead of the larger, more capital intensive transport vehicles traditionally used.”

The tipper truck was launched at Excon 2007, the ongoing international exhibition of earthmoving and construction equipment on the outskirts of Bangalore.

Indian ECE sector can expand 5 fold by 2015 –Report

According to a report called “ECE Vision 2015: Scaling New Heights in Indian Earth Moving and Construction Equipment Industry”, prepared by McKinsey for the Confederation of Indian Industry, the earth moving and construction equipment industry has the potential to expand 5 fold from the revenues of USD 2.3 billion in 2006 to USD 12 to USD 13 billion by 2015, with a significant export contribution.

Mr Rajat Dhawan partner of McKinsey & Company, while addressing media persons, said that “ECE industry could realize its potential by 2015 buoyed by significant infrastructure investment expected. This will boost the industry to USD 8 billion and an additional growth of USD 4 to USD 5 billion could be achieved by pursuing demand accelerators in the domestic and export market.” He added that exports itself could touch USD 3 billion with 50% of it supported largely by components supply while equipment and services will add up the rest.

The report added that however, the industry needs to launch 3 transformation initiatives that would help the industry on a sustainable growth path. The potential could be realized through a concerted effort by the industry players and the government to introduce India specific products, improves cost competitiveness to face impending competition from imports from low cost countries like China and push exports in areas where India has an edge.

The McKinsey report said that various estimates indicate an investment of a USD 1 trillion over the next eight years in infrastructure. It added that “Even after discounting for delays and discontinued projects, the potential investment could approximately be USD 750 billion between 2007 and 2015, going by the historical trends and assessment of industry experts.”

SKF India plans to double revenues in 4 years

BS reported that leading bearings supplier SKF India is aiming to more than double its revenue in 4 years with the company aggressively pursuing its expansion strategies in India. It is aiming for a business in excess of INR 3,000 crore, with growth of more than 20% every year.

Mr Rakesh Makhija MD of SKF India said that "We are prepared to make further investments into our Indian operations to expand our presence in India. This is especially to keep up with the automobile and industrial boom in India. We have grown at a steady pace of about 20% per annum for the last 4 years and we will continue to excel at the same pace. We are aiming to double our revenue in the next 4 years."

SKF India will invest INR 270 crore to set up a large size industrial bearings plant in Ahmedabad for domestic and international markets. Production activities are due to begin by the first quarter of 2009. It has also evinced interest in growing inorganically especially in segments other than bearings.

Earlier this year, SKF India invested INR 150 crore to set up a Greenfield plant in Uttarakhand. The new bearing factory is likely to increase the existing ball bearing capacity by more than one third, fuelling the growing demand in the booming automotive and other key manufacturing sectors. The plant will be operational in March 2008. For the last financial year ending December 31st 2006, it recorded sales of INR 1,342 crore up by 59% YoY as against INR 781 crore.

Currently, about 90% of its total revenue arises out of the bearing business. SKF India is aiming to expand its seals, lubricants, services and mechatronics businesses and thereby bring the share of the bearing business to about 20% of its total revenue in the targeted 4 years. Meanwhile, to diversify its business initiative, SKF India is looking to reduce its focus on the bearing segments and channel more investments on other areas like housing or sleeves and accessories, seals, greases, spherical plain bearings, maintenance products, condition monitoring equipments, linear motion products, special steel and a comprehensive range of their high tech industrial components.

CESC wants 1,000 acre land for Jharkhand power plant

It is reported that CESC will shortly kick off talks with the Jharkhand government to acquire 1,000 acres in the Dumka district to set up a Greenfield 1,000 MW pithead thermal station. The decision comes after it was officially allocated the Mohuagarhi coal block in the state by the coal ministry earlier this week.

Mr Sumantra Banerjee MD of CESC said that “Since the coal block has been allocated, we can now approach the Jharkhand government for land in a specific location. And since it will be a pithead thermal station, all freight and railway logistics issues would be automatically obviated. We are yet to finalize the configuration of the 1,000 MW power stations, but the annual coal requirement would be roughly 4 million tonnes.”

CESC officials have pegged the project cost at a shade over INR 4,000 crore at roughly INR 4 crore per megawatt. Mr Banerjee said that “We will shortly start discussions with equipment suppliers, although we are yet to take a call on financing options.”

Once the project receives in principle nod from the Jharkhand government, CESC will in parallel kick off the process of securing the statutory forest and environment clearances. The Mohuagarhi block allocated by the coal ministry has total mine able reserves of 110 million tonnes over a 30 year lifespan.

Kolkata Port eying overseas port management contracts

BS recently reported that Kolkata Port Trust is looking for overseas contracts for development and management of port terminals and has offers from Nigeria and Myanmar for the purpose. As per report, KoPT has already presented the advisory business model as a concept to the government of India and is waiting for government permission, which it expects in a month.

Mr AK Chanda chairman of Kolkata Port said that “We are eyeing a significant global position particularly in the outbound port advisory and management business.”

Mr Chanda said that “It would start with project consultancy and then with experience, take up hands off management. However, it might take up management of port terminals from the start because it already had expertise in this field. For smooth operation, a standing arrangement has to be made by government of India and keeping all the pros and cons in mind, we have applied to the government. We have to take positions globally from now on if we intend to be a dominant player, otherwise others would take that position and in the advisory market, late entrants always suffer.”

He added that “There are 170 minor ports across India, out of which 45 are working at full capacity. All these ports are suffering from an acute shortage of technical expertise, so there is a huge domestic market to be tapped and I believe this model would be a very attractive source of revenue generation in the time to come for all ports across India which has the right skills.”

Kolkata Port is already running its consultancy service within the state in inland water development and hydrology, which generated revenue of INR 8 crore till date in the current fiscal.

CERC issues notices to UP and J&K power utilities

It is reported that the Central Electricity Regulatory Commission has issued show cause notices to state owned power utilities of Uttar Pradesh and Jammu & Kashmir for failing to pay the cumulative arrears of INR 988 crore on account of overdrawing from the grid.

CERC in a release said “CERC has issued show cause notices to UPPCL and Power Development Department to explain by November 25th 2007 why action should not be initiated against them for recovery of outstanding dues on account of unscheduled inter change charges.”

As per report, Uttar Pradesh Power Corporation Limited has an outstanding principal amount of INR 577.99 crore and Jammu & Kashmir’s Power Development Department has to pay INR 410.25 crore as principal for the period up to September 2nd 2007. The arrears would further increase after addition of interest at a rate of 1.5% per month on the principal amount.

BHPB bid for Rio - BHP claims support from Rio shareholders

BHP Billiton claimed that shareholders were supportive of its proposed mining mega-merger with Rio Tinto.

Mr Marius Kloppers CEO of BHPB head, while speaking in South Africa, which he is visiting as part of a global road show to sell the group’s proposed merger plans, said that the investors in both Rio and BHP he had met so far had been broadly supportive of the rationale behind the deal.

Mr Kloppers said that he had met around half of Rio’s UK shareholders and slightly less of its Australia based investors. He said “Shareholders own companies, not management and they will eventually tell management what to do.” He added that BHP would continue to seek engagement with Rio Tinto’s board.

But he added that BHPB may consider taking an offer directly to Rio's shareholders. He said that BHPB is aiming to bring Rio's board to the table by asking Rio shareholders to put pressure on management. He said "We are talking directly to shareholders; we ask shareholders to ask management to engage to deliver this."

Mr Kloppers said "We are hopeful that management will engage with us, but certainly that is one of the options that should be considered down the track, but that is simply not a decision that we have got to take today."

He stressed that BHP had not made a formal offer but had only presented a proposal to Rio's management. He said "At a certain moment in time the UK regulators will ask you to either make an offer or not, but we are only at the start of that process."

On the other hand, Rio is preparing to respond to Mr Kloppers’s investor charm offensive with a formal defense of its decision for rejecting as too low the proposed tie up. It is to use an existing iron ore seminar on November 26th 2007 to explain its rationale to shareholders. Mr Tom Albanese CEO of Riois expected to focus on hidden” assets, such as the company’s development pipeline, which are not reflected in the business’s present valuation.

ArcelorMittal upbeat on steel prospects

FT reported that Mr LN Mittal president & CEO of ArcelorMittal gave an upbeat view of the steel industry’s prospects for next year after reporting a 12% YoY increase in underlying profits for the third quarter. Mr Mittal added that “The steel industry will have a strong year in 2008.”

Mr Mittal expects that prices for many steel products would rise, partly because of strong demand and partly because of price rises already in the pipeline for raw materials such as coal and iron ore.

Mr Mittal shrugged off the impact on the steel industry of the severe strains in credit markets that have lowered the confidence of many investors in the banking sector. He told FT that “What we have seen is more a banking and subprime lending crisis with its roots in the US, rather than something that will have broader effects. In the US we have seen signs of a softening in demand for steel and this is something we take very seriously.” He added that however, even in the US, it was possible to see some positive aspects for steel companies.

Mr Mittal said that “The weaker dollar means that importing into the US is less attractive. This is good for US based producers which are then in a better position to keep prices reasonably high.”

Dongbu new plant starts on construction at Dangjin

YIEH reported that South Korea Dongbu Steel’s USD 678 million steel plant has started construction. The plant locating Dangjin in the southwest of Seoul will start to produce hot rolled steel sheet with capacity of 2.5 million tonnes through an electric arc furnace by 2009.

The new plant with furnace will help Dongbu Steel to melt iron ore and scrap into hot rolled steel plates that in turn can process into the cold rolled steel. Currently, Dongbu steel buys hot rolled steel plates from POSCO and other foreign steel producers to make cold rolled steel sheet.

The new plant will help ease shortage of hot-rolled steel plants and stabilize prices of steel products and Dongbu will become the third steelmaker in South Korea that operates electric furnaces.

ISTA urges for caution on EU AD complaints

The International Steel Trade Association, ISTA is urging the European Commission to take a pragmatic response to EUROFER’s complaints of anti dumping against, among others, China.

ISTA’s committee, comprising some of the world’s leading steel trading organizations as well as members from further down the distribution chain, asserts that any implied impact on European steel producers is likely to be outweighed by the likely consequences for the European consuming industry.

Mr Tony Ward president of International Steel Trade Association speaking on behalf of the membership committee said that “There is no evidence to suggest that, despite increased quantities of Chinese exports to the EU27, domestic producers have suffered any injury. On the contrary, the market continues to be firm and producers, already announcing quarter after quarter of increased profitability, continue to announce further price increases. Also, talk of tonnage is always misleading. Chinese exports to the EU tend to be in commodity grades whereas EU exports to Chinese are in higher more expensive grades. The balance is not as distorted as mere tonnage comparison would suggest.

Mr Ward said that “EU manufacturing needs to be competitive in the international market place and can only achieve this by being able to source its feedstock at internationally competitive prices. Failure to be able to source competitively will help make manufactured products uncompetitive too and have a far greater effect on EU employment prospects. You only have to look at the response of US manufacturers to the imposition of another trade defense instrument (201 Safeguards) to see the wider effect of knee-jerk reactions to a perceived threat which is not properly substantiated. The way forward is surely to engage the Chinese and others in meaningful dialogue to try and resolve such issues in a reasonable way. To do this, all stakeholders need to be involved in the process including, traders, importers, distributors and end users”

Mr Ian Sherwin chairman of ISTA believes that "Any attempt by the EC to block imports by imposing ill-considered anti-dumping measures would offer little benefit to European steel producers but would quickly damage downstream industry across the continent.”

Mr Sherwin added that “It should be noted that all anti dumping complaints on steel are initiated by producers. These same producers, however, only account for some 35% of all deliveries to consuming industries in the EU27. The vast majority of deliveries are through distributors and their views should carry at least the same weight as EUROFER’s views when the Commission weighs up the arguments.”

ISTA’s members represent the entire steel distribution chain, including retail stockholders, who deal with a wide range of steel consumers spanning all industries.

BHPB suspended Angola operations after chopper crash

BHP Billiton confirmed a helicopter crash in which five people have died in Angola. The crash occurred on November 16th approximately 80 kilometer from the Alto Cuilo Camp, a diamonds exploration facility in north eastern Angola. BHP said that the two helicopters struck bad weather as they were transporting personnel to the Alto Cuilo Camp.

Late yesterday afternoon on November 16th, two helicopters struck bad weather as they were transporting personnel to the Alto Cuilo Camp. Both helicopters were forced to land. When the weather cleared the helicopters took off again. Shortly thereafter communication between the two helicopters was lost. The first helicopter tried to reestablish communication with the second, and when it was not able to do so, returned to the agreed rendezvous point where they had taken off after the storm. The second helicopter remained there overnight and at daybreak this morning, the search commenced. The wreckage of the second helicopter was located.

The deceased are Mr David Hopgood COO of BHP Billiton Angola, Mr Kevin Ayre operations manager of Angola Technical Services, Mr Kottie Breedt pilot of Wild Dog Helicopters, Mr Guy Sommerfield of MMC and Mr Louwrens Prinsloo of Prinsloo Drilling.

BHPB release said that “BHP Billiton's current focus is the safety and well being of the staff at our Angolan operations and the provision of support to the families of the deceased. All operations in Angola have been suspended and an investigation has been launched. Our deepest sympathies and thoughts are with the families, loved ones and colleagues of the deceased at this time.”

BHPB bid for Rio - Merger to affect copper prices

Mr Luo Jianchuan president of Aluminum Corp of China Ltd said that BHP Billiton plan to acquire its peer Rio Tinto Company will greatly influence cooper price.

He said "China will be affected a lot, if the two mining companies successfully complete the merger. That is because both of them possess huge resources, including iron ore and cooper."

As per a research report of Lehman Brothers Inc the merged entity will have about 37%, 15%, and 13% of the international iron ore, aluminum and cooper shipping markets.

Currently, China is the largest resources consumer around the world. Thus, it is no doubt that the further centralization of global upstream resources will result in concerns over most Chinese companies.

Sumitomo Metal and Mitsui to retain 21% stake in Goro nickel

Platts reported that Japanese companies Sumitomo Metal Mining and Mitsui have decided to keep their existing stakes in the Goro nickel project on the French Pacific island of New Caledonia.

A Sumitomo official in a joint statement from the two companies said that "We have decided to keep our 11% and Mitsui 10%. CVRD Inco will also keep its 69% stake interest in the project. The remaining 10% is held by the Provinces of New Caledonia. Both Japanese companies have a combined 21% stake in the Goro project through Sumic Nickel, which is registered in the Netherlands, as company tax in Japan is very high.”

He added that “At present, the Goro project remains on schedule for commissioning and production by end 2008 and the project is expected to produce 60,000 tonnes per year of nickel metal and 4,000 to 5,000 tonnes per year of cobalt metal.

CVRD Inco is a wholly owned subsidiary of Companhia Vale do Rio Doce, is the world's leading producer of nickel and an important supplier of copper, cobalt and precious metals.

Dry bulk freight rates rise due to demand and choked Ports

Bloomberg reported that dry bulk shipping rates may extend their gains after rising the most in a month, boosted by congestion at ports and demand to transport iron ore, coal and other goods on large ships.

According to data on the London based Baltic Exchange’s Baltic Dry Index, rose by 1.1% to 10,867 on November 9th 2007. The measure advanced for the fourth straight day and is down by 1.5% from the record 11,033 reached on October 29.

According to the Baltic Exchange's data, The hiring rate for a Capesize vessel jumped by 2.8% to USD 182,965 on November 9. That was the third straight day of gains in chartering costs for such vessels. The rate has surged 12% in the past six days.

Ships waiting to load thermal coal at Australia's Newcastle, the world's biggest export harbor for the fuel, rose a third week. At Newcastle, 42 ships were waiting to load coal in the week ended this morning from 40 a week earlier, according to the Newcastle Port Corp.'s Web site. Ships waited an average 13.96 days to load the fuel from 14.77 a week before.

Dry bulk shipping rates have more than doubled in the past year, as China's switch to being a net coal importer in January prompted other Asian countries to source the fuel from further fields. That has tied up ships longer than usual and caused port bottlenecks. Anticipation of higher iron prices next year is also driving imports by steel millers and traders in China, creating more demand for sea transport.

A Hong Kong based operator of dry bulk ships said that high rates to move commodities in bulk may be sustained until 2008 because of the limited supply of new vessels in the near term, port congestion and increase in average voyage distances.

Mr Gideon Lo an analyst at DBS Vickers wrote in the report that “We expect the peak of dry bulk rates should happen in the first quarter 2008 due to the pre stocking of iron ores before the possible higher contract ore prices effective from April 2008.” He recommended that investors buy Pacific Basin stock.

ABB’s new DC drives to boost TZ steel mill performance

It is reported that TZ selected ABB’s new DCS800 drives for its billet rolling mill in the Czech Republic for increasing productivity, improving energy efficiency and cost effectiveness

After comparing ABB’s DCS800 with the DC drives of another leading manufacturer, TZ selected the DCS800 to replace all 72 DC drives at the mill. ABB is executing the project in phases between 2006 and 2010 to ensure that downtime is restricted to planned shutdowns.

The DCS800 offers the same tools and options as ABB’s market leading AC drives, and combines best in class user friendliness with unlimited scalability and the highest power to size ratio on the market. Click here to read ARC’s recent assessment of the DCS800. In addition, the DCS800 offers capabilities like uniquely user-friendly operator control and commissioning functions, direct communication between drives via ABB’s high-performance DCSLink technology, and a powerful PLC integrated with each converter. The DCS800 also enables TZ to get the full benefits of the leading drives platform and avoid the costly exercise of ripping out its installed base of DC motors.

Located at Kladno in the Czech Republic, the mill produces 300,000 tonnes of steel bars a year from one blooming stand and three billet stands that were commissioned in 1982. Productivity at the mill has suffered in recent years from downtime caused by the existing DC drives, made by a local manufacturer, which were installed 25 years ago and for which spare parts are no longer available.

Klöckner’s January to September sales up by 15.7% YoY

The Klöckner & Co Group announced that it boosted its sales in the January to September 2007 by 15.7% to EUR 4.8 billion and again generated an EBITDA of EUR 287.9 million. Even though the result was down by 11.5% YoY due to increased price pressure in the Q3, the medium term upward trend is becoming more firmly established.

The Klöckner & Co Group increased its sales volume by 4.7% YoY to 4.9 million metric tons to the end of September 2007 due to the acquisitions made and despite streamlining at various locations. Sales rose in the same period by 15.7% to EUR 4.8 billion.

Dr Thomas Ludwig CEO of Klöckner & Co AG said that "We expect our sales in full year 2007 to rise significantly and to generate a good result again. Even if the EBITDA will be down 10% year on year due to increased price pressure in the second half of the year, we will generate the second-best operating result that the company has seen in over 100 years. We are thus reaffirming the forecast that we adjusted in October."

Dr Ludwig explained that “The target of acquiring 10 to 12 profitable small and medium-sized multi metal distribution companies in 2007 was achieved ahead of schedule with the 12th acquisition in September 2007. In addition, the Group’s financing was further optimized by placing a syndicated holding facility and by issuing a convertible bond. The STAR performance program was successfully continued. “This means a large part of the measures planned for 2007 have already been implemented. We believe that the Company is still on a good and successful course and that it is well equipped for the future.”

Klöckner & Co is the largest independent producer and distributor of steel and metal products in the European and North American markets combined. The core business of the Klöckner & Co Group is the storage and distribution of steel and non-ferrous metals.

FMG applies for Pilbara rail access

It is reported that Fortescue Metals Group's battle for third party access to railway lines in Western Australia has again intensified as FMG has sought rights to a network near a massive new deposit. The application will be reviewed by the National Competition Council.

Fortescue has applied to the National Competition Council to have rail networks in the Pilbara region, operated by Rio Tinto and BHP Billiton, declared open to third parties. It’s long running 3½ year battle to gain access to BHP Billiton's Mount Newman line which Fortescue wants to allow the development of its Mindy Mindy iron ore deposit is now before the High Court.

In the latest twist, Fortescue is calling on the council to declare Rio's Hamersley Iron rail network and BHP Billiton's Goldsworthy rail network open to third parties. The Hamersley Iron network passes close to Fortescue's newly discovered Solomon deposit, which has an iron ore resource of about 1 billion tonnes.

Mr Andrew Forrest CEO of Fortescue told journalists that he hoped to set a precedent and pave the way for other mining companies in the Pilbara. He added that there was a lack of competition in infrastructure in the Pilbara and a proposed merger between BHP Billiton and Rio Tinto would only make it worse. Mr Forrest said that "This is a separate and new declaration process on Rio Tinto's railway lines and the remainder of BHP's railway lines."

Mr Forrest said that "The opportunity is available to Australia now for the ACCC to seek orders that the Pilbara should be open for all Australians and not simply multinationals. If and when BHP Billiton makes a formal offer for Rio and proceeds to seek merger clearance from the ACCC, we will ensure that the potential anti-competitive effects of this merger are clearly understood by the ACCC and are rigorously and fully assessed over time."

Mr Forrest said open access in the Pilbara was in the national interest. He added that "These are very under utilized railway lines. There are a number of stranded iron ore deposits and while the newly identified Solomon deposits have its own infrastructure solutions, like other deposits, these may not be optimal." He also said use of the Hamersley rail network and Goldsworthy rail line could be more efficient. If successful, Fortescue's Pilbara Infrastructure subsidiary will be allowed to offer a haulage service to third-party customers, including Fortescue.

Salzgitter sees record 2007 amid steel boom

Germany's second largest steelmaker Salzgitter announced that during the Q3 of 2007, demand for steel and tubes products remained lively, not only in Germany, but also throughout the rest of Europe and in most overseas markets. Against this extremely positive economic background, the Salzgitter Group set new record highs in its sales and operating profit for a nine month period.

Salzgitter in a statement said that “All divisions, especially Steel and Trading, contributed to lifting consolidated external sales by EUR 1.29 billion to EUR 7.50 billion.” It added that “Another contributing factor was the first time consolidation of Klöckner-Werke and Vallourec Précision Etirage, which were acquired at the start of the third quarter. Earnings before tax of EUR 980.4 million, generated solely through operations, outperformed the previous year’s figure of EUR 661.5 million by 48% YoY. In the period under review, profit after tax came to EUR 594.9 million; earnings per share amounted to EUR 10.38.

In the first three quarters of 2007, the combined shipments of rolled steel and processed products of the Steel Division exceeded the already outstanding level of the previous year’s period. The Division’s total sales marked a new record high at EUR 3.02 billion as the average product selling prices were considerably higher year on year. Owing to the outstanding profit performance of all its companies, the pre tax profit of the Steel Division, which came to EUR 569.5 million, surpassed the previous year’s figure by 89% YoY.

Total sales of the Tubes Division rose by 17% YoY to EUR 1.87 billion as compared to EUR 1.60 billion in 2006 on the back of firmer prices and the firs time consolidation of VPE. The gratifying trend of selling prices resulted in a vigorous rise in profit in all product segments, especially large diameter and stainless steel tubes. The pre tax profit of the consolidated tubes companies almost doubled to EUR 210.2 million.

In the Steel Division, European manufacturers’ restraint on production should have a positive impact in normalizing the situation of overstocked inventories of flat steel in the coming months. A necessary precondition is, however, that the situation concerning imports eases. The beams and plate business is likely to continue to develop well in future. The healthy demand for rolled steel and the rising price of raw materials should ensure that selling prices remain stable for the most part. Higher prices are also feasible for some products.

SKW Stahl Metallurgie announces Q3 result

SKW Stahl Metallurgie Holding AG announced that it shows a clear upward trend in all significant financial indicators after Q3 in 2007. Its January to September 2007 turnover climbed by 10% to EUR 158.5 million. EBITDA up by 40% YoY to EUR 15.8 million. In the Q3, turnover increased by 17% and operating profit improved by 25%.

SKW Metallurgie's Group turnover increased by around 17% YoY rising from EUR 44.9 million to EUR52.5 million in the Q3. On a cumulative basis, turnover for nine months increased by 10% YoY, up from EUR 144.2 million to EUR 158.5 million. Highlights
1. Nine month turnover increased by 10% to EUR 158.5 million
2. EBITDA rises by 40% to EUR 15.8 million after three quarters
3. Medium term outlook clearly lifted following ESM integration

Mr Ines Kolmsee CEO of SKW Metallurgie said that “After three quarters of 2007, SKW Metallurgie is showing clear improvements in turnover and earnings. ESM will realize full turnover and EBITDA contributions from 2008, which is why we have made an upward adjustment to our medium-term forecast for 2011.”

SKW Metallurgie is one of the world market leader for numerous chemical additives for hot metal desulphurization and for secondary metallurgy.

Japan plans to raise tinplate prices by USD 30 per tonne

YIEH reported that Japan’s steel mill is going to negotiate with its Asia users about the tinplate price for the first quarter in 2008.

It added that due to the strong demand from China, Philippines, Malaysia and other Asia countries, Japan plans to raise its tinplate price by about USD 20 to USD 30 per tonnes to cover is raising cost.

In Asia, China still have very strong demand in tinplates. Baosteel's new tinplate production line is going to start its production soon, but the total tinplate output are still not able to match the demand from China domestic in next first quarter. Therefore, there is still in a shortage situation for tinplate.

TKC Steel eyeing USD 7 million pipe supply contract

It is reported that TKC Steel Corp was eyeing USD 7 million worth of steel pipe supply contracts for a port project at Guangzhou in China and an export requirement to the Netherlands.

Mr Anthony Dizon president of TKC Steel in a statement that the USD 7 million will come from steel pipe supply contracts for the Guangzhou Port Project in China and an export requirement to the Netherlands. These two contracts would need at least 8,500 tonnes product. He added that the company has benefited from the economic gains of the Philippines and China citing an increase in infrastructure development for both countries.

Mr Dizon said that “Our operations in China give us the opportunity to ride on its bullish economy by supplying the huge domestic market. At the same time, China provides a low-cost production base for our steel pipes which we can export to nearby export markets like the Philippines."

TKC Steel through its subsidiary Zhang Zhou Stronghold Steelworks Co Ltd provided over 3,100 tonnes steel pipes to complete a number of infrastructure projects, namely the Haicang Water Project, the Xiamen Port Project and an undisclosed project at Davao City in Philippines. These recently completed contracts are additions to the previously completed shipments of pipes to support the construction of the Iloilo International Port project and a number of mining projects in Cebu. The requirements for which amounted to 3,700 tonnes.

Japanese auto and steel makers keen to invest in Thailand

Mr Kosit Panpiamras deputy prime minister & industry minister of Japan after meeting top executives of Nissan and the Nippon Steel Corporation told reporters that Japanese top carmakers and steel conglomerates are keen on investing in Thailand despite short term factors including oil price.

The minister expressed his view that the companies are long term investors who look beyond the host of short term volatilities. He said that Nippon Steel is interested in upstream activities of steel production, which is what Thailand wants.

Mr Kosit said the National Economic and Social Development Board has been assigned to prepare a detailed plan to develop the upstream steel industry in Thailand, most likely to be located along the southern seaboard development zone spanning the provinces of Chumphon in Surat Thani and Nakhon Si Thammarat. He emphasized that any detailed plan resulting from NESDB work will undergo a public hearing process involving the public, in order to avoid setbacks experienced.

Mr Kosit also emphasized the high value and long term benefits of these two potential investment projects. He indicate that "In the eco car segment, we are confident that at least two companies are prepared to put THB 15 billion into Thailand and more should follow. As for upstream steel production, the potential investment could be worth over three billion dollars.”

Top executives of Nissan Motors meanwhile inquired about incentives for investment in environment friendly vehicles, the so called eco car project.

Rio Tinto recommends rejection of TRC Capital's mini tender offer

Rio Tinto plc announced that it has been notified of a mini tender offer by TRC Capital Corporation to purchase up to 250,000 American Depositary Shares of Rio Tinto plc, each representing four ordinary shares of Rio Tinto plc, which in aggregate represents approximately 0.1 per cent of its outstanding shares.

Rio Tinto cautions holders of its ADS that TRC's unsolicited mini tender offer of USD 437.50 per ADS was approximately 2.2% below the USD 447.25 per ADS closing price of Rio Tinto's ADS on November 13th 2007, the day before the mini tender offer was commenced and approximately 0.8% below the USD 440.96 per ADS closing price of Rio Tinto's ADS on November 15th 2007.

Rio Tinto recommends against tendering shares in response to this unsolicited below market offer. Rio Tinto does not in any way recommend or endorses the TRC Capital Corporation mini tender offer, and Rio Tinto is in no way associated with TRC Capital Corporation, the mini tender offer or the offer documentation.

TRC Capital has a history of making mini tender offers for the shares of other companies for its profit. These offers are devised to seek less than 5% of a company's outstanding shares, thereby avoiding many procedural and disclosure requirements of the Securities and Exchange Commission because they are below the SEC's threshold to provide such disclosure and procedural protections for investors.

POSCO starts first waste fuel business

POSCO announced that it would kick off the Korea's first ever waste fuel conversion business, a project to bring both economic and environmental benefits. It signed a partnership agreement with Busan Metropolitan City to construct a facility in the southern port city starting the end of next year.

A POSCO official said that an estimated KRW 180 billion to be covered partially by POSCO, the central and regional government will be invested in the project by 2010. Advancing from the traditional measures of disposing of waste in landfills or by burning it, the new technology will generate about 25,000 kW of electricity from non recyclable domestic waste.

POSCO predicts annual revenue of about KRW 16.6 billion from the production of electricity. BY cutting CO2 emissions, POSCO also expects to secure about 125,000 tons of carbon credits.

Kagara Zinc gets environmental approval for Mungana zinc copper mine

Metals Insider reported tha Australian producer Kagara Zinc has received approval from the Queensland Environmental Protection Agency for its new Mungana zinc copper mine.

The construction of Mungana mine will begin in April 2008 and take around 10 months to complete with commissioning scheduled for February 2009. Total development costs are expected to be around AUD 80 million. The mine will produce around 50,000 tonnes per year of contained zinc and 8,000 tonnes per year of contained copper once fully on line.

Kagara said that “The Mungana deposit is the highest value resource in Kagara’s inventory and will produce zinc at below USD 0.30 per pound of payable met."

Dave Steel to open Chesnee plant

Staff Writer reported that a steel fabricating company, Dave Steel Co has run out of room at its Asheville headquarters plans a new plant in the Chesnee area of Spartanburg County.

Mr Jeffrey Dave president of Dave Steel Co said that his company needs additional manufacturing capacity and has run out of room in Asheville, where it employs 94. It will spend up to USD 6 million for a 180,000 square foot, three building complex where up to 85 people could be working in five years. He added that the new complex is planned near the Spartanburg/Cherokee county line between State 11 and State 221 and it will break ground at the site in February. The new jobs will include fitters, welders and equipment operators.

Mr Dave said that Dave Steel may fill 15 to 20 of the production jobs by fall. But didn’t say exactly how much the jobs would pay, but the compensation would be competitive and include a benefits package.

The 78 year old Dave Steel fabricates and coats steel used in the construction of large industrial facilities such as power, pharmaceutical, petrochemical and pulp and paper plants. Its customers include engineering and heavy construction companies with big offices in the Greenville area such as Fluor Corp, Jacobs Engineering Group, AMEC plc and CH2M Hill Cos.

Zamil inks 22 year outsourcing contract with SABIC

Zamil Industrial Investment Company through Energy Central Saudi Arabia has signed a 22 year energy performance contract with Saudi Basic Industries Corporation for the complete outsourcing of process and comfort cooling and building plant to supply up to 20,000 tonnes of refrigeration at Saudi Iron & Steel Company Hadeed, which is a wholly owned subsidiary of SABIC. The estimated annual value of this project is around SAR 42 million.

State of the art equipment and machinery will be used in the new plant which will reduce energy consumption and conserve the environment. This project will significantly reduce energy consumption, and will help Hadeed focus on its vision of becoming the leading producer of steel products in the region.

Mr Abdulla M Al Zamil COO of Zamil Industrial said “This first of its kind agreement in the Gulf region will usher a new era of utility outsourcing for large industrial and commercial players who want to focus on their own service delivery and would like to rely on specialized partners to support them in that quest.”

Pipe line blast kills 28 in Saudi Arab

It is reported that 28 people were killed and 12 others are missing after a fire broke out on Haradh to Uthmaniyah gas pipeline 30 kilometers from Aramco’s Hawiyah gas plant in an oil rich desert area of Saudi Arabia. The fire broke out while workers were welding a plate on to the pipeline. As per report, most of the dead appeared to be Asian workers along with at least one Lebanese and 6 Indians.

Saudi Arabia’s national oil company Aramco said "The fire broke out while contractor workers where linking a new pipe" to the pipeline during maintenance late Saturday. 28 workers, including 5 Aramco employees, had died in the fire, which was put out on early Sunday.”

Aramco said the site was being operated by a contractor, and the incident did not affect production or distribution. However it added that a high level technical committee has been set up to probe the incident.

The Hawiyah plant is one of the major gas processing facilities in Saudi Arabia, built in the desert near the Al Ghawar oil field, the world’s largest, and south of the city of Dhahran, an oil hub. The plant, which produces 1.4 billion cubic feet of gas a day and cost USD 4 billion to build, was launched in October 2002 as the first to process only non associated gas. It produces enough natural gas to free up around 260,000 barrels per day of Arabian Light crude oil for export.

Hutchison to build new container terminal in Pakistan

It is reported that Hong Kong based global port investor and terminal operator Hutchison Port Holdings has signed an agreement with Karachi Port Trust to build and operate a new container terminal. The commissioning is scheduled for 2011.

The proposed terminal will represent the first phase of Pakistan’s deep water container port proposed to be set up at Karachi. It will be complete with four berths with a total quay length of 1,500 meters, a yard area of 85 hectares and a draft of 18 meters at Keamari Groyne.

The new JV Karachi New Port Container Terminals will build and run the facility over a concession period of 25 years, extendable for another 25 years.

Abu Dhabi's ADBIC and Rio Tinto in aluminum JV

Zawya Dow Jones reported that Abu Dhabi Basic Industries Corporation plans to raise USD 2 billion in bank loans to help finance a new aluminum smelter at Ruwais industrial area in Abu Dhabi. ADBIC plans to build the 550,000 tonnes smelter in a JV with Rio Tino.

Mr Jim White COO of ADBIC told Zawya Dow Jones "The first phase of the smelter will cost approximately USD 5 billion. The JV will need to raise about USD 2 billion to finance the smelter. The plan is to do this through long term debt, through syndicated bank loans.”

Abu Dhabi earlier this year set up ADBIC on the lines of Saudi Basic Industries Corporation to develop industries such as aluminum, steel and petrochemicals. ADBIC will act as a holding company and combine existing and new industries under its umbrella. The company earlier this year absorbed Emirates Steel Industries from the government owned General Holding Co.

Mr White added that “Although progress on the Abu Dhabi smelter project has been delayed due to Rio Tinto's recent acquisition of all shares in Alcan Inc, the project could be up and running within four years. The talks are going well. If we make the decision to start construction next year we should be producing first aluminum late 2011.”

The creation of Adbic is integral to a government initiative aimed at restructuring the Abu Dhabi economy to encourage greater private sector participation and create jobs for the emirate's young and fast-growing population.

Jaber Heavy Lift announces ownership of world’s highest capacity mobile crane

Al Jaber Heavy Lift has announced its ownership of the world’s highest capacity mobile crane with a 3200 tonne lifting capacity. The crane, produced by the German based manufacturer and funded by Al Jaber’s investment, has taken eight years to develop and will be available for heavy lift requirements anywhere in the world. The announcement was made during an exclusive hand over ceremony in Germany where various prominent industry figures were present.

The Terex® Demag CC8800-1 TWIN is an innovative modular crane system based on the multiple utilization modules of the CC8800-1. The name TWIN refers to the impressive double boom which increases the lifting capacity of the CC8800-1 by a factor of almost four in certain configurations whilst retaining the ability to pick and carry loads at the highest capacities. Similarly, the luffing fly jib and the super lift mast are also doubled up and connected by cross bracings and all winches and hook blocks are provided in pairs. Nevertheless, the new crane is extremely compact for its capacity and is designed to make dismantling, movement between projects and re assembly quick and easy.

Mr Alex Mullins MD of Al Jaber Heavy Lift said “We are pleased to announce our ownership of the world’s leading crawler crane that is designed to suit a wide range of applications including the petrochemical industry, power station, construction and major infrastructure projects. With its mobility and it’s exceptional lifting capacity, the crane represents a considerable saving of both time and space requirements in the erection of large industrial facilities when compared with ring lift cranes, sliding gantries and jacking towers.”

Al Jaber Heavy Lift & Transport LLC has about 300 cranes in their fleet including crawlers, all terrains, rough terrains and truck mounted lattice boom cranes. The new crane joins an existing fleet of large Demag lattice boom crawlers including CC 8800-1, CC 8800, CC 2800-1 and other models.

Iran to expand trade ties with Ukraine

Tehran Times cited Mr Mas’ud Mirkazemi Iran’s minister of commerce as saying that Iran wants to expand trade ties with Ukraine. He made the statement in a meeting with Oksana Slusarenko Ukraine’s deputy economic affairs minister.

Mr Mirkazemi referred to banking, customs, and transportation ties as the main infrastructures the two sides could increase bilateral trade volume. He put emphasis on getting familiar with each other’s commercial opportunities and said that “To this end, we could create joint chamber of commerce, hold exhibitions, and dispatch trade delegations.”

S&B Group to construct a betonite processing plant in Morocco

It is reported that S&B Group is planning the extension of its betonite constructing business in Morocco. The plant's production will be transported to the newly acquired facility in the port of Neuss in Germany, which have a yearly capacity of 150,000 tonnes and is expected to be completed within 2008. It will belong to the newly formed subsidiary of the Group, S&B Industrial Minerals Morocco SARL. The total investment is estimated at EUR 3 million.

Mr E Vidalis directing adviser of S&B Group has supported that Morocco in the long run will become the new big Mediterranean bentonite base, it is in a strategic point in the American continent that inspires all the ambitions of S&B Group, as it is an ideal point of access in the Atlantic.

Mr Kriton Anavlavis GM of S&B Industrial Minerals Bentonite Division said that "We are very pleased that our efforts over the past 5 years for worldwide enhancement and expansion of our bentonite reserves and processing facilities continue to bear fruit with the decision to proceed with this new investment. The new reserves and production base in Morocco adds a significant advantage to the already existing ones in Greece, Germany, Bulgaria, Hungary, Georgia and the USA. Construction of this particular plant, combined with the recent investment in Neuss, Germany, constitutes one more link to our market to mine chain and directly enhances our competitive position in the specialized growing markets of white bentonite, while it provides us with additional growth prospects."

Saudi Arab may revalue riyal - Report

Reuters reported that Saudi Arabia could consider revaluing the SAR with other Gulf oil producers but has no plans to drop its peg to the sliding dollar to track a currency basket. Any revaluation by Saudi would be very small and designed to keep plans for Gulf monetary union alive.

The report cited a source as saying that “Saudi government could consider revaluing the currency. Until now, it never said that it would review the riyal’s exchange rate, which the central bank has kept stable at 3.75 to the dollar since June 1986. We will take time to revalue. If it were to happen, it will be very small, to realign the Gulf currencies with each other. But it is not going to happen in the short term. The kingdom will not take unilateral steps towards revaluation.”

The United Arab Emirates, the second largest Arab economy after Saudi Arabia, ratcheted up those expectations this week by saying it could unshackle its dirham from the dollar and track a currency basket including the euro as Kuwait did this year.

Mr Nasser Al Suweidi Sultan of UAE said that UAE would only act with Saudi Arabia and other neighbors preparing for monetary union as early as 2010. He added that “We were taken by surprise by this statement. Saudi Arabia will definitely not shift to a basket of currencies. We have never discussed dropping the peg to the dollar, whether at meetings of finance ministers or central bank governors.”

Oman oil production rising to 1 million barrel per day

Reuters reported that non OPEC oil exporter Oman will invite international oil firms to sign production sharing deals early 2008 to help increase output to 1 million barrel a day.

Mr Nasser Al Jashmi undersecretary of oil & gas of Oman said that most of the increase would come from 3 major oil fields already in production, but declined to give a specific timeframe for the target. He added that “We see our future production rising to a million barrels per day mainly coming from Al Mukhaizna, Harweel and Qarn Alam. We will also be aggressively marketing a few blocks, especially in the south of Oman as part of our target to increase output.”

It is noted that the hydrocarbons sector accounts for 80% of Oman’s export earnings and 40% of GDP and the sultanate is trying to halt the decline in production that began in 2001. It is undertaking a number of enhanced oil recovery projects to get more oil out of existing fields as part of a USD 10 billion plan to boost oil and gas output.

Oman produced an average of 730,000 barrels per day for April to September 2007 up by 5% YoY from the same period last year. Its oil production in 2006 fell to around 720,000 barrels per day from about 774,000 barrels per day in 2005 and 780,000 barrels per day in 2004.

OPEC calls on West to fund carbon capture research

MEED reported that OPEC, in an effort to tackle climate change, has called on industrialized countries to take the lead in funding the development of carbon capture technology. It predicts that global energy use will grow by 50% by 2030, due to population growth and economic development, with fossil fuels likely to provide the majority of that energy.

Mr Abdalla El Badri secretary general of OPEC said that “The contribution of renewables will remain modest in the foreseeable future.” He added that OPEC aims to reduce its environmental footprint, with a key element being the development of cleaner fuel technologies.

He pointed to progress made to reduce gas flaring and vehicle emissions and the fact that Algeria is running 1 of the 3 carbon capture and storage demonstration projects in the world. Other member states are researching the use of carbon dioxide for enhanced oil recovery. He added that “However, we believe that, over and above our own efforts, industrialized countries should take the lead in the funding and execution of large carbon capture and storage demonstration projects.”

Iron ore price negotiations – Chinese miners warn on long term effects

Mr Wang Anjian senior analyst of Chinese Academy of Geological Sciences, at recent China Mining 2007 said that global ore miners would risk losing USD 130 billion market share in China over the next decade, if they continue to seek for USD 75 per tonnes for ore shipment to China. He suggested that USD 55 per tonnes is a price level that would benefit both sides.

Mr Wang said the average landed price of iron ore imports into China has jumped over 200% to USD 75 per tonnes in recent five years. "Such a high price would harm the long term interests of both buyers and suppliers."

Mr Wang noted that China's low grade iron ore reserve amounts to 18 billion tonnes but the expensive mining cost of USD 30 per tonnes to USD 45 per tonnes has held back investors in the past. He added that “Exploring low grade iron ore at home has become profitable again as the delivery price of imported iron ore breaks over USD 75 per tonnes. He foresees that China's iron ore import would drop by 3.5 billion tonnes in total till 2020 due to the steep import price, equivalent to market value of some USD 130 billion.”

He cautioned "Each coin has two sides. The skyrocketing iron ore price has brought windfall for big three in recent years, however, the future benefits of buyers and suppliers are at risk in the long term."

(Sourced from MySteel.net)

Rebar and wire rod price gain last week in China

As per reports, 68 Chinese rebar makers and 52 wire rod makers raised their EXW prices last week.

Market prices of Q235 high speed wire rod with a diameter of 6.5mm posted in 23 major domestic cities averaged some CNY 4203 per tonne up by CNY 150 per tonne WoW and market prices of HRB335 rebar with a diameter of 20mm posted in 23 major domestic cities averaged some CNY 4266 per tonne up by CNY 150 per tonne WoW.

Rebar price went up by CNY 200 per tonne in Shanghai, Hefei, Zhengzhou, Taiyuan, Chengdu, Kunming and Guiyang. Xiangtan Steel lifted its EXW price by CNY 300 per tonne. 12mm, 14mm and 28mm rebar were in tight supply in Shanghai and Hefe and their prices increased by over CNY 300 per tonne WoW. Price for HRB 335 rebar stood at CNY 4000 per tonne in Lanzhou and Harbin the lowest price level in domestic market and at CNY 4700 per tonne in Changsha the highest price level.

It is expected that market prices will further increase.

Analysis of steel pipe production and consumption in China

Welded pipe and seamless pipe are the two major categories of tubular products in China. As seamless pipe contains a portion of cold drawn pipe that's processed from hot rolled steel and welded pipe includes a part of the galvanized tube, statistics offered by the National Bureau of Statistics actually has double counting but the double counted part is believed small and therefore this article's analysis is still based on the NBS statistics.

Through August 2007, China's output of seamless steel pipe amounted to 12.24 million tonnes up by 24%YoY with annualized production forecast at 18.5 million tonnes; during this period, the welded pipe came to 14.93 million tonnes, up 13.4%YoY with annualized output estimated at 23 million tonnes . Over all, the domestic pipe production increases at the pace of 20% annually. Totaled output in 2007 as predicted will be fourfold of 2001 figure.

China's pipe production from 2001

In million tonnes

On the export front, China was a net pipe importer before 2003 and its export surge took place in 2005. In the first eight months of 2007, China exported 2.48 million tonnes welded pipe up by 30%YoY while imported 110,000 tonnes down by 40% YoY. Annualized welded pipe export is forecast at 3.47 million tonnes, import at 170,000 tonnes, presenting some 3.3 million tonne net import. On welded pipe, export in the first eight months reported 2.537 million tonnes up by 76.4%YoY import 368,000 tonnes down by 24%YoY and annualized export is forecast at 3.75 million tonnes & import at 550,000 tonnes.

Import & Export of Steel Pipe

Major pipe consuming industries include construction, petroleum, natural gas, chemicals, boiler, coal, electricity, automobile and mechanical engineering etc, growth of which boosted China's pipe consumption boom. The pipe consumption records higher growth rate than that of steel products. Pipe Production & Consumption 2000-2007 is as under

The ratio of steel pipe out of steel products consumption 2000-2006

China's seamless pipe enterprises began expansion from 2004. By end of 2006, the nation's capacity of these products reached 16.5 million tonnes. As the world's first producer, China has over 300 seamless steelmakers, a part of which possess first rate manufacturing technology and most advanced facilities, bringing domestic sufficiency close to 90%. Larger makers include Baosteel, Tianjin Steel Pipe, Baotou Steel, Pangang Chengdu Seamless Pipe, Valin Hengyang, Anshan Steel, Yantai Lubao etc. On production of tubular billet/slab, Tianjin Steel Pipe, Baosteel, Baotou Steel, Hengyang Pipe, Anshan Steel Panzhihua Steel, Yegang and Tonggang etc are the most important.

Domestic tight supply was eased gradually from last year thanks to increase in tubular billet/slab availability. From this year, the supply is poised to balance demand or go a little excessive.

On welded pipe, the producers are distributed more scattered, bulk of which are privately owned and have a relatively big capacity. Yet, many productions are affected by seasonal factors and actual output can be less than the total capacity of 37mt. The three major groups are ERW, LSAW and SSAW. ERW accounts for around 80% of the total welded pipe production capacity.

(Sourced from MySteel.net)

Iron ore price negotiations – High spot prices to push next year levels

Mr Lain Minjie GM of Sinosteel Mining during 2007 China International Mining Conference said that “Owing to current abnormal price of spot iron ore, global iron ore would witness further contract price rise.”

Mr Lian however stated that “Due to iron ore production capacity expansion, China would add at least 60 million tonnes of iron ore in 2009 and even after 2009, China could gain 60 million tonnes of fresh output growth each year; at 10% of pig iron shipment rise, China iron ore output will increase 7% with import up 13% to 440 million tonnes.”

Xinxing Pipe buys 55% stake in Chuanjian Pipe

It is reported that Xinxing Pipe Group signed increasing capital and recombination contract with Chuanjian Pipe Co in province Sichuan in Beijing on November 13th 2007. Xinxing Pipe Group would invest CNY 100 million in Chuanjian Pipe Co in order to recombine the market in southwest of China. After the investment, Xinxing Pipe Group will hold 55% stocks of Chuanjian Pipe Co.

Xinxing Pipe Group said that the aim of the investment is to recombine casting pipe market in southwest of China, to complete strategy position and to expand market shares in southwest of China. It is said that both the expanding ability of new products and the quality of products should be improved by enlarged capital and advanced technology.

Xinxing Pipe Group would increase the capacity of 150,000 tonnes of casting pipes and 15,000 tonnes of pipe settings, while total capacity could be increased from 1.2 million tonnes up to 1.35 million tonnes, which is favorable for the company to found a suitable industrial strategic position, to merger casting pipe products market in southwest of China and to raise ability in competition.

Phenomenon of rebar prices exceeding HRC prices

It is reported that last week, domestic construction steel price started to skyrocket in Chinese domestic market and it probably has entered another round of increase. Among others, East China market sees more substantial rises, with HRB335 20mm rebar jumping by CNY 160 per tonnes and CNY 60 per tonne CNY 100 per tonne to CNY 4220 per tonnes and CNY 4320 per tonne in Shanghai and Hangzhou respectively. Driven by the momentum in East China, rebar market price in Guangzhou has returned to CNY 4470 per tonne and that in Beijing arrive at CNY 4070 per tonne.

In East China, rebar price is calculated on the basis of theoretical weight. If based on practical weight, it is highest in China and actually has surpassed the price of HRC which is quite meaningful.

Firstly, many parts of the China are in low season for rebar consumption and there would be suspension of demand in some area of North China with temperature going down further in winter. Nevertheless, domestic construction steel prices continue to surge even under such circumstances. While HRC prices, though also on the rise, is inferior in growth rate and extent. As a matter of fact, construction steel price in East China have surpassed that of HRC for several times in 2007, which reflects the great change of their positions.

Secondly, the so called concept of high value added and low value added products is under the threat of breaking. To Chinese people, rebar is standard low end steel products, while HRC is regarded as higher in value. HRC is evidently much higher than rebar in terms of rolling cost. But the profit ability of HRC is lower than that of rebar in current market situation. Thus the traditional concept would probably alter soon.

Besides rebar, it is also the case with HR strip and HR wide coil. For some time, price for HR strip is equal with or higher than that of HRC. Such phenomenon indicates that "high value added" and "low value added" is a dynamic concept rather than a destiny. So we have to bear scientific attitude for different steel products.

According to Chinese government's view, China is still in the basic phase of socialization and it is also in the middle period of industrialization. There is a long way to go for infrastructure construction and urbanization. Hence real estate industry would continue to prosper and the demand for construction steels is set to keep robust.

Due to the fact that most investment went to flats production and a lot of construction obsolete steel facilities were dismantled, there has been great difference between their capacities, that is to say decrease in construction steel and improvement in flats. The rising flat steel capacity is leading to reliance on exports for alleviating domestic sale pressure. While the domestic HRC price is largely dependent on the international market performance. However most Chinese construction steels go to domestic market.

Since there is few newly invested construction steel capacity, the HRC output would be much higher for a long period. But the massive infrastructure construction requires more and more rebars and wire rods. In this regard construction steel price is anticipated to keep going up and would sometimes excel that of HRC.

(Sourced from MySteel.net)

China's province wise crude steel production in 10 months

It is reported that China's crude steel and pig iron output set a new record in October. Among them, crude steel output was 42.922 million tonnes up by 0.5% MoM and 13.5% YoY.

The province wise crude steel production is as under

In million tonnes

(Sourced from MySteel.net)

China Shipping plans big fleet expansion

It is reported that China Shipping plans to invest CNY 14.9 billion in building very large containers to stimulate its container shipping business in the coming years.

Mr Huang Xiaowen MD of China Shipping Container Lines Company Ltd said that the heavy investment would sharpen its competitive edge in the world market. He said that "Half of the funds will be collected from financial institutions, but that's not a problem. He added that the company's strategic development program is designed to compete with rivals at home and abroad.”

Mr Huang said with the investment, CSCL is expected to operate a fleet of more than 180 ships with a combined carrying capacity of 630,000 20-foot equivalent unit containers by 2011. He said "By then, the company is expected to occupy about 6% of the world's container market. Without large vessels, it's impossible for CSCL to sustain development. But history would not repeat itself, and we can not copy what we have done in the past. Otherwise, we will suffer losses. It is very difficult to predict when the low ebb is coming and when a shipping company should order new ships."

CSCL now has assets worth more than CNY 30 billion including 152 ships with a combined capacity of 450,000 TEU containers. Its profits grew 13 fold YoY in the first half of this year.

Hunan Nonferrous may spend CNY 5 billion on acquisitions

Bloomberg reported that China’s biggest zinc and tungsten producer Hunan Nonferrous Metals Corp may spend as much as CNY 5 billion (USD 673 million) next year buying stakes in mining companies and mines in Australia and Canada.

Mr Zeng Shaoxiong vice GM of Hunan Nonferrous in an interview in Beijing said that "We are looking at three projects, mainly on base metals and hopefully we can finalize the investments next year." He did not name the targets.

Hong Kong listed Hunan Nonferrous plans to achieve sales of CNY 120 billion by 2015, a sevenfold gain from last year’s CNY 17.8 billion by expanding its smelting and processing business. He said it is targeting a pretax profit of CNY 13 billion then.

Hunan Non ferrous c in February won regulatory approval to invest USD 116 million in copper, cobalt, lead and nickel project with Australia’s Compass Resources NL. The two partners agreed to jointly develop the Browns Oxide base metal mine in Australia’s Northern Territory.

China’s annualized zinc production rises above 4-million mark

According to the latest figures from China’s National Bureau of Statistics, China’s annualized zinc production rose above the 4 million tonnes level for the first time in October 2007.

Production in October itself rose by 23.5%YoY to 341,900 tonnes while cumulative production in the January to October 2007 period rose by 19.1% to 3,038,900 tonnes.

In annualized terms October’s production was equivalent to 4.026 million tonnes, a fresh record.

Winson to buy Jiangxi Jiangzhou Shipyard

It is reported that Wonson International Holdings Ltd, a Hong Kong metals and securities trader, will buy a Chinese shipyard for HKD 3.5 billion, aiming to broaden its revenue base on rising Asian demand for vessels.

As per report Wonson will buy Jiangxi Jiangzhou Shipyard from Million King Investments Ltd, it said in a Hong Kong Stock Exchange filing yesterday. It will pay HKD 500 million in cash and HKD 3 billion in notes convertible into shares at 15 Hong Kong cents each.

Liangang posts strong growth during January to October 2007

It is reported that Liangang has actively responded to all kinds of challenge, including bulk raw materials prices continue to rise, rail transport tension, steel market fluctuations, the increased pressure on cost etc during this year and upheld the system maximization and structural adjustment simultaneously, vigorously promoted Lean management.

From January to October 2007, Liangang’s cumulative production of steel is 3.780 million tonnes, pig iron 3.550 million tonnes and coke 1.149 million tonnes. Its sales revenue reaches CNY 14.875 billion, profits before tax CNY 1.584 billion up by 34.11% and 3.93% respectively.

Chinese exports and imports data to go online

It is reported that information on China imports and exports including quality and quarantine standards regulations and policies will be made available online in March. China’s General Administration of Quality Supervision, Inspection and Quarantine stated on its website that the move to strengthen standards and safety covers more than 4,000 kinds of goods in 14 major categories and sub categories.

The administration said "As China's economy and trade with other countries develops rapidly, the amount of imports and exports has also increased greatly, making it an urgent task for quality inspection departments to ensure the safety of commodities and to safeguard the nation's image. It said the database aims to provide a comprehensive understanding of the latest quality inspection and quarantine information worldwide, including quality and quarantine standards, regulations and administrative procedures."

To help foreign enterprises and organizations understand China's quality inspection and quarantine policies and procedures, and familiarize themselves with the country's import and export goods, an English version of the database will follow in June. By the end of next September, the database will include information on more than 140 types of food products.

Recent export quotation of H beam from China

It is reported that recent export quotation of 300mm to 450mm×300mm to 450mm×10mm×15mm H beam from China’s first class H beam mills touched USD 700 per tonnes to 750 USD per tonnes, settled by TT in advance or LC at sight and loading on December 2007 or January 2008.

Puda Coal announces Q3 results

Puda Coal, Inc a leading supplier of China's high grade metallurgical coking coal used to make coke for the purposes of steel manufacturing has announced its financial results for the quarter ended September 30th 2007.

Third Quarter 2007 Highlights
1. Third quarter revenue was USD 40.5 million, down 5% from the third quarter of 2006
2. Operating income totaled USD 5.5 million, down 23% from the third quarter of 2006
3. Net income was USD 3.4 million, or USD 0.03 per fully diluted share, up 55% from the third quarter of 2006
4. Sales of cleaned coal totaled 492,000 metric tons down 10% from the third quarter of 2006
5. Average selling price of cleaned coal was $81 per ton, unchanged from the third quarter of 2006
6. Streamlined corporate structure at recommendation of independent Audit committee
7. Enhanced corporate governance by establishing Compensation and Nominating and Corporate Governance committees
8. Signed letter of intent to acquire Jingle Muguashan coal mine in Jingle County
9. Engaged Deloitte & Touche to assist with Sarbanes-Oxley compliance

Mr Zhao Ming Chairman & CEO of Puda Coal commented that ''We achieved modest growth in revenue and operating income from the second quarter of 2007. However, we faced significant competition during the quarter, which resulted in lower tonnage sales year-over-year. This, combined with higher raw coal prices negatively impacted our margins.''

Chinese October wholesale prices up by 6.5%YoY

The People's Bank of China said that the enterprise commodity price index, which measures wholesale prices, rose by 6.5%YoY in October and was up 0.1% from September. In September, the comparative enterprise commodity price index rose by 6.2%YoY.

The central bank said that in October 2007 prices of coal, electricity and oil products on aggregate rose by 3.3%YoY and were 0.6% higher than September 2007 levels.

Baosteel starts galvanized exports to EU from new line

It is reported that Baosteel’s newly established galvanizing line, which began production of galvanized chrome sheets on September 19th 2007, has started exported to Europe.

Ukraine mine blast kills 63

It is reported that a methane explosion ripped through Zasyadko coalmine in Ukraine's Donbass area on Sunday, killing at least 63 miners and leaving 37 missing in underground shafts engulfed by fire and smoke. The blast happened more than 1,000 meters underground.

Officials said 457 miners were underground at the time of accident. Rescue teams brought more than 350 to the surface.

Mr Yuri Zayats head of Zasyadko's trade union council said that there is little hope of finding the missing alive. He said "The chances are small. They are poor.”

The Zasyadko mine, one of Ukraine's largest, produces up to 10,000 tons of coal every day. But several deadly accidents took place in the coal mine. A gas leak at the Zasyadko mine in September 2006 killed 13 miners. In 1999 an explosion there claimed 50 lives, while in 2001 another blast claimed 55 lives.

Experts say Ukr