RINL’s expansion work to start soon

It is reported that the expansion of Rashtriya Ispat Nigam Limited’s Visakhapatnam Steel Plant will start soon so as to commission the enhanced capacity within the stipulated time period.

The report cited a senior official of RINL as saying that “The ground work for the INR 8,600 crore expansion plans has been completed and MN Dustur & Co has appointed as the chief consultants for the project. However, the actual work however will start after the procurement of equipments from abroad.”

RINL plans to increase its hot metal capacity from 4.15 million tone per annum to 6.5 million tone per annum, liquid steel from 3.6 million tone per annum to 6.3 million tone per annum and saleable steel from 3.2 million tone per annum to 5.72 million tone per annum by the end of 2008-09 with an investment of INR 8,600 crore. RINL will invest around INR 4000 crore from internal resources while raising the rest funds from the financial institutes as loan.

RINL subsequently plans to enhance the capacity to 10 million tonnes per annum by the end of 2019-20 in line with the National Steel Policy which envisaged production of 110 million tonnes steel by 2020.

CVRD forecasts slow down in Indian ore exports

SBB reported that global iron ore major Companhia Vale Do Rio Roce forecasts Indian ore exports falling to 89 million tonnes by 2011 from current levels of 92 million tonnes because of high production costs, infrastructure bottlenecks and potential government restrictions on exports of high grade ores.

The report cited Mr Vicent Wright head of commercial administration for iron ore at CVRD, while addressing at Latin American Iron & Steel Institute conference, as saying that “Though more than a quarter of China's iron ore imports came from spot suppliers in 2006, mainly from India, a major part of this supply was unsustainable in the long run. This is because of high production costs, infrastructure bottlenecks and potential government restrictions on exports of high grade ores. CVRD forecasts Indian exports falling from 92 million tonnes in 2006 to 89 million tonnes in 2011."

However, Mr RK Sharma secretary general of Federation of Indian Mineral Industries recently said that India would be shipping about 100 million tonnes of iron ore by 2010 mostly to China, Japan and South Korea. He said that "We would be exporting about 100 million tonnes of iron ore by 2010. We would not be able to export beyond that owing to infrastructure problems and rising freight costs."

Siemens to supply electricals for RINL’s sinter plant No 3

Siemens Limited announced that its Industrial Solutions & Services division has bagged INR 870 million orders from McNally Bharat Engineers Private Limited for supplying electricals for Rashtriya Ispat Nigam Limited's new 400 square meter sinter plant No 3 at Vizag. This sinter plant will be commissioned by August 2009.

The scope of work for this order includes designing, engineering, supply, erection and commissioning of complete power distribution system, motors and drives, automation as well as instrumentation on a turnkey basis.

Mr J Schubert MD of Siemens said "Siemens is a world leader in the metals segment with a strong presence in India and this gives us the unique advantage of combining our global expertise with our local strengths. We are extremely happy to partner with McNally Bharat for this landmark project that involves constructing one of the largest sinter plants in India. With this order, we reaffirm our position as market leaders when it comes to technology solutions for the steel sector in India."

Scana Color changes name to Karma Ispat to enter into steel business

Scana Color India Limited has informed BSE that its board of directors at its meeting held on November 5th 2007 has taken the following decisions subject to the approval of the shareholders

1. Increase in authorized share capital from INR 3.5 crores to INR 33.25 crores.

2. Change in name of the company from Scana Color (India) Limited to Karma Ispat Limited

3. To diversify into the business of steel, chemicals, computer spare parts and hardware business and for alteration of the main objects of the company to include the above businesses.

4. Raising of capital up to INMR 45 crores for the expansion plan of the company through preferential issue of 30,000,000 equity shares of INR 10 each at a premium of INR 5 each.

The date of the Extra Ordinary General meeting of the shareholders of the Company to consider the above items has been fixed for December 10th 2007.

PSL achieves financial closure for Mississippi tube mill JV

Indian pipe major PSL Limited announced that it has achieved financial closure for the development of its integrated pipe manufacturing and coating joint venture at Bay St Louis in Mississippi State of US.

PSL has raised USD 78 million by issue of a 25 year bond by the Mississippi Business Finance Corporation. The bonds that have a tax free USD 68 million tranche would provide for substantial cost benefits. PSL said the bonds of investment grade rating required the issuance of financial guarantees from the State Bank of India and JPMorgan Chase and with these in place, they were fully subscribed.

PSL added that “By using this structure, it is able to achieve a competitive financing cost for a 25 year tenor. The loan markets would have been able to provide tenors of only up to 5 years, which would have been higher by 3% to 3.5% per annum.”

Mr Brian Vaill CEO of PSL North America said, "With funding in place, we are now well positioned to complete this project on time and on budget." He however added that “India needs to do more to lure investments in infrastructure.”

PSL is investing USD 103 million through a JV company PSL North America with Mississippi State Government through the Mississippi Business Finance Corporation. The first phase of the project entails setting up an integrated pipe facility that will manufacture, coat and internally lined large diameter API grade pipe in diameters ranging from 24 inches to 60 inches, with wall thickness of quarter inch to 1 inch and length up to 80 feet. The annual plant capacity would ultimately be 300,000 short tons depending on order mix.

CIL to E auction 38 million tonnes of coal per year

It is reported that, with the government clearing the way for the e auctioning of coal in its distribution policy, Coal India Limited is planning to e auction 38 million tonnes of coal every year and about 3.2 million tonnes may be put up for auctioning every month. For the current year, about 15 million tonnes of coal will be put up for auctioning.

Mr PS Bhattacharya chairman of CIL told DNA Money that "We will start spot auctioning in November itself. The distribution policy allows for futures auctioning. We have set up an internal committee to work out the details of futures auctioning. CIL plans to end e booking of coal as quantities are booked on a first come first serve basis, at times, leading to fake bookings and prefers e auctioning as in e booking.”

Mr PS Bhattacharya also said that quantities could be booked in advance and price might vary depending upon the time. He added that "For example, coal demand in October to April 2007 period is high in non core sector. During that period, price may be higher than in May to September 2007 period when, due to rainy season, the demand is lower."

Under the e booking scheme, buyers get their supply of coal at a fixed price to be notified in advance by coal companies. In case of e auctioning, there is an undisclosed reserve price for coal, which is offered and the auctioned price is higher than the reserve price.

E auctioning was introduced about 2 years back with the government allowing CIL to put about 10% of its production on auction but the process was suspended following a Supreme Court order on December 1st 2006.

Indian FM advise steel exporters to cut costs

Mr P Chidambaram union finance minister, in an exclusive interview with CNBC TV18, advised that Indian exporters need to increase their competitiveness and also learn to live with profits that are slightly lower.

Mr Chidambaram said that “We must learn to become competitive, to cut costs, to innovate. I agree you need more time to adjust. We fully stand by our exporters. But merely because profits are down, I don’t think we should present an alarmist picture. We must learn to live with slightly lower profits for some time.”

Mr Chidambaram added that “The steel industry went through a period of low profits. We must learn to adjust to the new situation, cut your costs and improve your competitive edge.”

Unitech promoters may buy up to 40% stake in Orissa Sponge - Report

As per media reports, Unitech promoter controlled Prakausli Investment is close to acquiring up to 40% of Orissa Sponge Iron & Steel Limited as it has already acquired 15% stake, triggering a 20% open offer to buy the shares of other shareholders. In addition, Prakausli would also convert another 2.75 million warrants into shares, accounting for an additional 4.13% stake in Orissa Sponge. As per report, Prakausli Investment is shelling out about INR 82 crore for the 19.42% stake and will have to pay extra for the open offer.

If the open offer is fully subscribed, the investment company of the Unitech promoters will own around 40% in OSISL.

Before the expansion of the company’s equity base, the majority 51% stake in Orissa Sponge was held by Torsteel Research Foundation in India and its managing director Mr BK Mahanti. In addition, Mr George Soros’ Quantum Fun and IDFC, who are both shareholders in Unitech, have each bought a 2.5% equity stake in the company.

Unitech promoter family is making a strategic investment in the loss making OSISL as a backward integration exercise for the promoters of India’s second largest real estate company. Steel and cement are the main raw materials for the construction sector. Besides being into the manufacturing and exports of iron and steel, the company is also into iron ore mining and commands a huge land bank in the states of West Bengal and Orissa.

NTPC amd Indian Railway inks JV for Nabinagar power plant in Bihar

National Thermal Power Corporation Limited has entered into a 74:26 JV agreement with Indian Railways to set up a 1,000 MW power plant in Bihar at a cost of INR 1,605 crore. It is noted that a MoU for the agreement was signed in February 2002 but the cabinet committee on economic affairs approved the JV only in February 2007.

The new JV Bharatiya Rail Bijlee Company Limited would be set up for the purpose and NTPC would put in INR 1,188 crore of capital and the Indian Railways would invest INR 417 crore. A major portion of electricity generated through the proposed plant at Nabinagar would be utilized by Indian Railways for 164 traction substations in the eastern and western regions.

Mr Sushilkumar Shinde union power minister said that "The cost of power generated from the plant would be INR 2.13 as compared to INR 4.28 usually." He added that the state electricity boards charge 2 to 3 times the rate at which they purchase power from central utilities like NTPC.

Mr T Sankaralingam CMD of NTPC said that the plant is expected to commence operations after 30 months from receipt of approval of investment by both parties, likely to come by December end 2007.

Indian Railways expects to save up to INR 600 crore annually after paying wheeling and transmission charges, reducing operating expenses by 1% to 2%. The average annual requirement of railways is 2,000 MW.

India tops in AD probes – WTO Report

A World Trade Organization report has said that India initiated the largest number of fresh anti dumping investigations and final measures.

According to the WTO report, among the 150 WTO members, India tops the chart of applications of final anti dumping measures with 16 cases, which is double the figure it reported during the corresponding period of 2006.

Even in the case of new initiations of investigations, India reported the maximum number with 13, followed by New Zealand with 6, South Korea with 5 and Brazil, China and Japan with 4 each. However, the total number of new initiations declined for all these countries. China is far below India in terms of imposing final measures, with 5 cases. In the developed world, EU reported 6 such cases and the US 3.

India, Indonesia, Korea and Thailand each were subjected to 3 new measures during the first half of 2007. Sector wise, products in the chemicals sector are the most frequent subject of fresh measures, accounting for 12 of the 57. Products in the textiles sector are in second place, with 11 new measures. The base metals sector was in third place, with 9 new measures.

Anti dumping measures are resorted to by a nation when it finds that an exporting country is dumping its goods at a price much less than a fair price, which could be injurious to the domestic industry.

17 power majors to bid for 2,000 MW power supply to GUVNL

Project Today reported that 17 companies have decided to participate in the bidding process for 2,000 MW power supply to Gujarat Urja Vikas Nigam on long term basis.

The companies, which have submitted RFQs, include
1. Torrent Power
2. Essar Power
3. Visa Power
4. Reliance Power
5. KSK Energy
6. NTPC
7. PTC
8. Mundra SEZ
9. Sanghi Industries
10. Aryan Coal
11. Electro Steel Casting
12. Patel Energy
13. Emco
14. Orissa Power Generating Co
15. JSW Energy
16. L&T
17. AES

Gujarat Urja Vikas Nigam had invited proposals from power traders and companies to procure 2,000 MW through competitive bidding under new tariff based policy in August 2007 and the last date for submitting request for qualification was November 3rd 2007.

BEML looking for JV partner to manufacture rail coaches

It is reported that Bharat Earth Movers Limited is scouting for a JV partner from overseas to manufacture hi end rail coaches and has already initiated talks with 3 to 4 overseas entities, which is likely to be finalized by February 2008.

As per report, BEML may put up a manufacturing facility for the proposed JV or will house it in any of its existing facilities in Bangalore, Kollar Gold Factory and Mysore.

BEML intends to tie up with the proposed partner to bring in technology to manufacture such hi end coaches either for co production or the JV.

Essar orders power plant equipment from Harbin Power of China

It is reported that Essar has placed a USD 1 billion order to source power generation equipment. Industry sources said that Essar group has placed an order on Harbin Power of China for supply of 4 boiler turbo generator packages and other project materials.

These will be used for Essar's 2 power projects being set up, by Essar Power Gujarat Limited at Jamnagar in Gujarat and by Essar Power MP Limited at Mahan in Madhya Pradesh. The Mahan power project is being set up closer to coal mines, which has already been allocated a coal mine jointly developed by Essar and Aditya Birla Group, while the Jamnagar power plant will use imported coal as fuel and the group is in the process of tying coal supplies.

Harbin Power is one of China's largest power plant equipment manufacturers, with a production capacity of 30,000 MW of power plant equipment per annum.

Essar Group is planning to control 6,000 MW power generation capacities over the next 5 years and has been allocated 2 coal mines for 2 projects, 1 in Madhya Pradesh and another in Jharkhand. Including the Jharkhand project, the group is planning to invest over INR 15,000 crore to set up 3 power plants of 1,200 MW each. All the power projects are expected to be completed by 2012.

Currently, the group has under development power generation capacities aggregating to 1,200 MW, which include 2 power plants in Hazira and 1 each in Vadinar and Visakhapatnam. The cost of the each project has been estimated at approximately INR 5,000 crore and is expected to be funded on the basis of a debt equity ratio of 3:1.

Jindal Drilling bags major order from ONGC

DP Jindal Group’s Jindal Drilling & Industries Limited has been awarded contract worth INR 130 crores for 3 years on firm basis for charter hire of directional drilling equipments and services by ONGC Limited. These equipments are likely to be operational by middle of January 2008.

With this total order book stands at INR 2630 crores & the financial impact of this contract would start accruing from the fourth quarter of current years itself.

Jindal Drilling & Industries Limited, which is engaged in the business of offshore oil & gas drilling activities, is now increasing its presence in this emerging segment of oil & gas by entering the horizontal and directional drilling activity.

Portview Investments to pick up 75% stake in JSW Energy - Report

It is reported that Cyprus based Portview Investments is picking 75% stake in JSW Energy from its existing shareholders for an undisclosed amount. At face value of INR 10 each, the shares being transferred would have a value of about INR 260 crore. After this transaction, JSW Energy would become a foreign owned Indian holding cum operating company. This would also mean that downstream investments to be made by JSW Energy would not be financed through domestic borrowings by the company.

JSW Energy was formed in 1994 as Jindal Tractebel Power. Tractebel had exited the venture by selling its shares to ICICI, IDBI and Jindal group companies in December 2001. Thereafter Jindal acquired 100% equity holding of the company including its investment companies. Currently, the promoters’ holding is split between domestic with 91.6% and foreign holding entities with 8.4%. While 4 domestic holding entities are transferring their combined equity stake of about 66.6% in JSW Energy to Portview Investments, the entire existing foreign holding through 2 Mauritius based firms is also being transferred to Portview.

JSW Energy has investments in various power generation projects apart from power trading and transmission companies of the group. JSW Energy owns and operates an independent power plant in Karnataka with a capacity of 260 MW and also provides operations and maintenance services to power plants of JSW Steel. This apart it has equity stakes in various power sector companies including generation firms such as Raj WestPower which is setting a 1,000 MW power project in Rajasthan, JSW Energy Vijaynagar which is setting 600 MW power plant in Karnataka and JSW Energy Ratnagiri which is setting up a 1,200 MW power project in Maharashtra. In addition, it also has substantial investments in the group’s power trading firm JSW Power Trading, power transmission company JSW PowerTranco apart from JSW Energy Investments, Indonesia based PT Parama Utama Jaya and Dubai based JSW Energy Overseas.

Newcastle coal price rises to record

Bloomberg reported that power station coal prices at Australia’s Newcastle port rose to a record on expectations of higher demand before the Northern Hemisphere winter amid supply constraints.

According to the globalCOAL NEWC Index, coal for immediate delivery at Newcastle climbed AUD 5.13 up by 6.7% to AUD 82.08 a metric ton in the week ended November 2nd 2007. The previous record was AUD 76.95 a week earlier. The index has surged by 24% since the first week of September.

It said that Suppliers are struggled to meet demand because of bottlenecks in producer countries including Australia and South Africa. Companies in Australia’s Hunter Valley shipped 6.3% less coal than targeted through Newcastle in October because of maintenance work and cargo loading constraints.

Mr Gerard Burg a minerals and energy economist at National Australia Bank Ltd in Melbourne said that "It’s a period of reasonably strong demand with all the Asian utilities that are restocking for the winter. It’s still surprising how rapidly the price has moved up over the past few weeks. The globalCOAL monthly index reached a record USD 75.19 in October.

According to a statement from Newcastle port, twenty three vessels with coal departed the port in the week ended November 3rd 2007, a. Sixteen left for Japan, four for Taiwan and one each for Saudi Arabia, Malaysia and Gladstone in Australia’s Queensland state. Coal mining companies using Newcastle had their loading allocations cut by 2.2 million tonnes in the fourth quarter to help reduce the queue of ships waiting to load at the New South Wales port. The cutback in quotas is helping drive up prices.

Some 7.4 million tons of coal were shipped through Newcastle in October, less than the targeted 7.9 million tons, the Hunter Valley Coal Chain Logistics Team, which coordinates shipments through the two terminals at the port, said on its Web site. Xstrata Plc, Rio Tinto Group and BHP Billiton Ltd are among mining companies that ship coal through Newcastle. The group said that ships with 7.82 million tons of capacity are due to arrive at Newcastle this month, keeping the line of vessels waiting to load at about 40.

Ternium's Q3 profit dips by 40% YoY

It is reported that Ternium’s third quarter net fell by 40%YoY due to higher costs and foreign exchange loss linked to its takeover of Mexico's Grupo Imsa. Its net profit for July to September 2007 is USD 214 million down from USD 354 million in July to September 2006 period although its net sales rose by 35% YoY to USD 2.34 billion.

It said "Net sales increased mainly due to the Grupo Imsa consolidation. However, higher costs for raw materials, freight and labor had reduced operating income by 15% YoY. Net income from July to September had been hit by a foreign exchange loss and higher interest expenses related to its takeover of Grupo Imsa's net debt.”

Ternium, which is controlled by Argentina's Techint conglomerate, has steel operations in Mexico, Venezuela and Argentina.

CSM construction to start in Q2 2008

BNamericas reported that construction at the steel plant project Companhia Siderúrgica do Mearim in northeast Brazil is expected to start in the second quarter of 2008. Construction will take three years.

Mr Hélio Vilaça development director of CSM told BNamericas that "We are expecting the license to be awarded between January and February. And the project in Maranhão state is due to require an investment of USD 4.5 billion and will focus on slab production.”

Mr Vilaça said that output from the unit is earmarked for export and will operate in three stages of some 3.5 million tonnes per year each. He added that “There are no plans at the moment to add a rolling mill to the project. But that doesn't mean we can't do so in the future. We have been in talks with federal development bank BNDES and other sources of financing for the project without providing further details about funding."

CSM will also include a port, to be located 8 kilometer from the steel mill, which will ship slabs mainly to the US, Europe and Asia.

CSM is a project by diversified group Aurizônia Empreendimentos a holding company that also has interests in copper mining, oil, laboratories and informatics for the industrial sector.

Gerdau Ameristeel Q3 net income up by 35% YoY

Gerdau Ameristeel Corporation announced net income of USD 123.8 million for the July to September 2007 quarter up by 35% YoY as compared to net income of USD 91.4 million for July to September 2006 quarter.

Its revenues for the July to September 2007 quarter increased by 20% to USD 1.4 billion from USD 1.2 billion for July to September 2006 quarter. For the July to September 2007 quarter, finished steel shipments increased to 1.8 million tonnes, an increase of 123,000 tons from the three months ended September 2006, primarily as a result of the acquisitions of Chaparral Steel and Pacific Coast Steel. Average mill finished steel selling prices increased 11% over the level in this same period in 2006.

For the January to September 2007 period net income is USD 396.5 million up by 29% YoY as compared to net income of USD 307.9 million for the January to September 2006 period. Its revenues were USD 4.1 billion compared to USD 3.4 billion for the January to September 2006 period.

Its finished steel shipments during the January to September 2007 period increased to 5.4 million tons, an increase of 309,000 tons from January to September 2006 period, primarily as a result of the acquisitions of Chaparral Steel, Sheffield Steel and Pacific Coast Steel. Average mill finished steel selling prices increased 11% over those in this same period in 2006.

EBITDA for the July to September 2007 quarter was USD 253.8 million as compared to EBITDA of USD 211.4 million for July to September 2006 quarter. For the January to September 2007 period EBITDA was USD 742.9 million as compared to USD 607.0 million for the January to September 2006 period.

Mr Mario Longhi president & CEO of Gerdau Ameristeel said that "Our operations have performed well during 2007 and earnings through the first nine months of 2007 have already surpassed our full year earnings from 2006. The slowdown in the North American residential construction segment has little direct impact to our demand as we primarily service the infrastructure and non-residential construction industry which remains strong. We are focused on executing on our integration strategy for Chaparral which to date has proceeded well. Employees from both organizations have been fully engaged in this process, sharing best practices to seek to ensure that synergy opportunities are realized. With the expected completion of our equity offering generating approximately USD 1.3 billion of cash, prior to any exercise of the over allotment option, to reduce our debt levels, we believe that our capital structure will be well positioned for the coming years."

Siderar Q3 net profit slips by 19.7% YoY

Argentine steelmaker Siderar announced that its third quarter net profit fell by 19.7% YoY due to increased costs for raw materials. Its quarterly net profit fell to ARS 286.5 million (USD 89.7 million) from ARS 356.9 million in Q3 of 2006.

Siderar said that “The result was affected by an increase in costs, above all the increase in the prices of raw materials and local expenses.”

Siderar's net profit during the first nine months of the year was ARS 967.3 million down from ARS 1.09 billion in January to September 2006.

Siderar is majority owned by Ternium SA and is Argentina's largest producer of flat steel products.

Sims UK acquires ER Coley (Steel)

It is reported that Sims Group’s Sims UK has acquired west midlands ferrous metal recycler ER Coley (Steel). The purchase, assisted by law consultants Eversheds, is part of Sims strategy to expand its metals business into new regions.

Mr Tom Bird MD of Sims Group UK said “The west midlands region is an area of the country where Sims Group has been keen to strengthen its foothold for some time and this acquisition presents us with a wonderful opportunity to expand our presence in the industrial heartland of the UK.”

This is the second acquisition announced this year following the purchase of South Wales Cymru Metals Recycling, which processes more than 150,000 tonnes of a year, at the beginning of 2007.

Crude oil hits record high of USD 97

It is reported that crude oil price increased by more than USD 3 a barrel to a new record high of USD 97 on Tuesday as a weak US dollar and tight fuel stocks prompted buying by investors, who see oil as a good bet, especially given tight fuel supplies in the run up to the northern hemisphere winter.

Fears of tight supplies were driven home on Tuesday as the US Energy Information Administration said world oil demand growth in the fourth quarter of 2007 and the first quarter of 2008 will be 40,000 barrels per day higher than its prior forecast.

MEPS forecast EU stainless cold rolled coil and nickel price

MEPS said that as expected, the MEPS EU Average Cold Rolled Coil type 304 transaction price moved down in October by 3%. MEPS said that this was due to further declines in alloy surcharges. Buyers remain cautious about placing forward orders. As such, mills may struggle to increase basis values significantly before early 2008.

MEPS added that its EU Average Cold Rolled Coil type 316 transaction price also reduced in October. However, the drop was higher at 6% due to the greater impact of the nickel price decline on the alloy surcharge for this product. Producers have recently recovered some of the basis premium over type 304 which fell dramatically in July. The difference at that time slumped to a ten year low of just EUR 238 per tonnes but should return to around EUR 380 over the next few months.

MEPS said that “We maintain our belief that the EU market for both products will pick up during the first quarter of 2008 as customers rebuild depleted inventories. This is expected to encourage stainless producers to lift production.”

The monthly average cash nickel price moved up in October, ending marginally lower than anticipated. Inventories continued their steep ascent, rising 13.6% since the end of September. However, the rate of increase slowed considerably over the last week of the month. In the short term, nickel values are likely to remain relatively stable due to high stock levels in LME warehouses and seasonally lower demand in the stainless market during the fourth quarter.

MEPS said that “We believe nickel values will stay above USD 30,000 per tonne during the forecast period. Prices are expected to move higher in the first half of 2008. However, meteoric rises (like those recorded since the beginning of last year) are not anticipated.”

3 hedge funds to sue ArcelorMittal – Report

Times Online reported that 3 funds intend to sue Europe's largest steelmaker over the terms merger last year of Arcelor and Mittal Steel As per report, they may sue ArcelorMittal and its investment banks, Morgan Stanley and Goldman Sachs for USD 400 million. The funds claim that they have been short changed by the steel company over the terms of merger announced last year between Mittal Steel and Arcelor.

As per report, SRM Global Fund, a Monaco fund founded and run by Jon Wood, a former head of proprietary trading at UBS, has joined forces with Trafalgar, a London based fund run by Lee Robinson, and Deminor, a Brussels based fund, to bring the claims for misrepresentation. SRM owns about 1% of ArcelorMittal shares. It has joined forces with the other funds, which together own another 1%.

As per report, they are also preparing to bring separate legal claims in the coming weeks against both Morgan Stanley, the adviser to Arcelor on the merger, and Goldman, which advised Mittal Steel. Similar lawsuits could be brought against Société Générale and Fortis, the other investment banks that were involved in the merger.

As per report, these hedge funds have hired lawyers at Mischcon de Reya to launch legal proceedings against ArcelorMittal.

SA steel industries ignoring safety rules

It is reported that preliminary findings of ongoing inspections have painted a picture of an iron and steel industry in South Africa fraught with high disregard of labor legislation countrywide. The inspections has so far confirmed the sector's reputation as being one of the South Africa’s occupational health and safety high risk industries mainly through neglect.

Out of 329 workplaces visited as of Thursday, 224 were found to be flouting the law, with inspectors recording 262 various contraventions, and instantly halting operations at 14 sites. KwaZulu Natal appears to be the worst province, with 59 of the 77 visited workplaces visited not complying, prompting law enforcement officials to recommend prosecution against at least one employer. It added that the Eastern Cape is the second worst, with only six of the 51 workplaces visited found to be conforming to the legislation.

The iron and steel sector has always been on the radar screen since it was identified together with the construction, farming, and food and beverage sectors as being among health and safety high risk industries in 2005. At the time, high risk sectors were found to be contributing to 22% of accidents and, though reductions have been recorded at some of them, experts still believe a fatality drop in the iron and steel sector would have a considerable impact on other sectors as well.

Commenting on the latest findings Mr Membathisi Mdladlana labor minister once again stressed the importance of workers playing a proactive role in ensuring their own workplace safety. He said that "Safety is the responsibility of everyone. Every year we spend billions of rands compensating injured workers through the Compensation Fund for accidents that could have been easily avoided. When injuries rise, production gets negatively affected causing profits to go down, which then results in jobs getting lost."

In a bid to curb accidents in the iron and steel industry, the Department of Labor embarked on workplace inspections throughout the country. Mr Zolisa Sigabi a spokesman said that "The focus of the inspection campaign was on major iron and steel factories checking the level of compliance with Occupational Health and Safety Act as the sector was identified as one of the high risk areas in South Africa in 1995."

Fortune Minerals proposes pipeline for Mount Klappan project

Fortune Minerals of Toronto has proposed building a slurry pipeline to move anthracite coal from its Mount Klappan project 150 kilometer northeast of Stewart.

Fortune Minerals in a statement said that a buried pipeline is seen to have fewer environmental impacts than truck or rail haulage over long distances.

It said that three separate routes will be studied for a pipeline that would handle between 1.5 and 3 million tonnes of clean coal per year.
1. One would go west from the mine along the same corridor as truck haulage to the port of Stewart, a distance of about 260 kilometer.
2. Or it may go south along the existing BC Rail right of way to a new facility at Minaret about 150 kilometers away and the coal would then be shipped by rail through Prince George to Prince Rupert.
3. The third option is to build the pipeline south from the mine to Minaret and then to New Hazelton about 350 kilometer from the mine.

The feasibility of building a briquette facility at the end of the pipeline is also being examined.

CVRD Inco increase nickel output by 11.5% in 2008

YIEH reported that Brazil CVRD subsidiary company Inco's nickel will increase its output by 11.5% to 290,000 tons next year.

Mr Roberto Castello Branco investor relations director of CVRD said that the company was increasing its global production output. He added that company's nickel supply quantity is about 260,000 tons this year and they expect the supply quantity will be much more than this number.

Baobab Resources to speed up mining operations in Tete

Thomson Financial reported that Mozambique focused base and precious metals exploration company Baobab Resources PLC intends to accelerate the exploration and re evaluation of two iron ore projects located within the Tete Complex following recent encouraging rock chip and trenching assay results.

Baobab Resources in a statement published on its website said that at the two projects, Singore 30 kilometers to the north of Tete and Chitongue 55 kilometers north of the city the continuation of areas of magnetite was detected. It added that the company will also mine for platinum and in nickel copper deposits.

Mr Ian Cullen MD of Baobab Resources said that “The two iron ore projects represent an exciting new opportunity to explore and appraise what could be a major iron ore deposit. The licenses that we have secured are proving highly prospective which bodes well for our future development.”

CSC number two in Clean and Green Enterprises in Taiwan

It is reported that Taiwan’s China Steel Corporation among Taiwan’s enterprises was elected as number two in “Clean and Green Enterprise” rankings in the 2007 Asian Corporate Governance Report through the appraisal of the Asian Corporate Governance Association and CLSA Asia Pacific Markets.

CSC said “This great honor shows that China Steel’s efforts in environmental protection and energy saving for fulfillment of social responsibility have been greatly recognized.”

CSC release added that “China Steel also believes that the green enterprise governance of energy conservation should be a long way to go. It is everyone’s responsibility to save energy. China Steel will fulfill its responsibility as a corporate citizen by promoting relevant energy-saving measures, educating its employees about methods for protecting our environment, and saving energy resources to commonly safeguard the only earth we have.”

Contractor killed at Corus Port Talbot plant

It is reported that a 46 year worker has been killed in an incident involving a vehicle at the Corus steel plant in Port Talbot. The man is reported to be a contractor who was not involved in the steelmaking process. Corus said the man died following the incident which happened at 2315 GMT on Sunday. No one else was involved.

Police and the Health and Safety Executive have both launched investigations.

The death comes days before the sixth anniversary of the explosion at the plant which killed three workers and left a dozen others seriously injured. The explosion on November 8th 2001 destroyed blast furnace number five, lifting it off its base and blasting out 200 tonnes of steel slag and hot gases.

Butler Manufacturing to move HQ to Kansas City

Business Journal reported that the owner of Butler Manufacturing Co will move its North American corporate headquarters to Kansas City by year's end.

Ms May Meere a spokeswoman of BlueScope Steel Ltd said that the 11 person office will leave suburban Dallas because it can be housed more efficiently in Butler's building in the West Bottoms.

BlueScope bought Kansas City based Butler in 2004. Butler designs, manufactures and markets pre engineered steel buildings for commercial construction.

Arcelor announces details of its exchange pool facility

The extraordinary general meeting of the shareholders of Arcelor held on November 5th 2007 has decided to restructure the share capital of Arcelor.

As a result of this restructuring, on November 6th 2007, each holder of pre restructuring Arcelor shares will receive a number of post restructuring Arcelor shares equal to
(i) The number of pre-restructuring Arcelor shares held by that person divided by 0.875
(ii) if such number is not a whole number, the immediately lower whole number of post-restructuring Arcelor shares and a number of fractions of a seventh of a post-restructuring Arcelor share equal to seven multiplied by the difference between A and B.

In accordance with applicable law, a holder of a Fraction will be entitled to dividend and other distributions on a pro rata basis, but will not be entitled to any voting rights. Fractions are transferable. However, Fractions will not be traded on the Luxembourg Stock Exchange, Euronext Amsterdam by NYSE Euronext, Euronext Brussels by NYSE Euronext, Euronext Paris by NYSE Euronext, the stock exchanges of Barcelona, Bilbao, Madrid and Valencia, and the New York Stock Exchange. A holder of Fractions who holds 7 Fractions can request their conversion into one post-restructuring Arcelor share. Finally, except for the exchange pool facility described below, Arcelor will not assist Arcelor shareholders in the sale or purchase of Fractions, or repurchase their Fractions.

Fractions will be delivered to those holders of Arcelor shares whose ownership is recorded directly in Arcelor’s shareholder registry, through an entry in that registry.

CMC board approves 5 million share purchases

Commercial Metals Company board of directors of announced that authorized to purchase of up to 5 million shares of the Company's common stock. This authorization is in addition to 558,914 shares remaining to be purchased under a previous repurchase authority, also for 5,000,000 shares, approved in July 2006.

Under the prior authorization CMC has to date purchased a total of 4,441,086 shares in open market transactions for a total price of approximately USD 115,853,648 for an average of $26.09 per share. During the current fiscal quarter ending November 30, 2007, CMC has thus far purchased 665,871 shares at an average cost of USD 29.68 per share. There are approximately 117,966,365 shares of Commercial Metals Company's common stock presently issued and outstanding.

The purchases will be made from time to time in the open market or in privately negotiated transactions at prevailing market prices. The shares will be used for general corporate purposes including various employee benefit plans and acquisitions.

Mr Murray R McClean president & CEO of CMC said that "Our view is that the stock is undervalued, apparently attributable to recent sub prime mortgage credit concerns that have impacted the entire equities market even though we do not believe they have been a significant factor in our business. This action will continue to add value for our stockholders."

Rio Tinto Offer for Alcan - additional shares acquired

Rio Tinto announced that approximately 8.54 million additional common shares of Alcan Inc have either been validly deposited and taken up under the offer by Rio Tinto Canada Holding Inc to acquire all of the shares of Alcan or are covered by notices of guaranteed delivery.

Rio Tinto said that the additional shares which represent approximately 2.27% of the outstanding shares, together with approximately 339,339,000 shares already beneficially owned by Rio Tinto Canada Holding Inc, represent approximately 92.47% of the outstanding shares of Alcan.

Rio Tinto Canada Holding Inc is now entitled to acquire all the remaining Alcan shares by way of compulsory acquisition under the Canada Business Corporations Act. Rio Tinto Canada Holding Inc will exercise these rights promptly after the expiry of the Offer.

The Offer expires on November 8th 2007.

MIDREX to build steel plant in Egypt

It is reported that Midrex Technologies Inc has been awarded a key contract to design and build an iron ore processing plant in Egypt. Midrex will build a plant for Egypt Sponge Iron & Steel Co of Cairo at its facility at Sadat City in Egypt. It will be MIDREX’s largest facility in that country when completed in 2010.

MIDREX did not disclose financials but the contract adds to nearly 2 million tons of output.

MIDREX sells technology that prepares iron ore for the steel making process. MIDRDEX already has designed more than 60 plants in 19 countries and its facilities are already operating in Saudi Arabia, Qatar, Libya and Pakistan in Middle East region. Plants using MIDREX technology produced 35.8 million tons in 2006 as compared to 32 million tons in 2003.

Qatar Steel Dubai gets UK Cares certification for its rebars

Doha Times reported that Qatar Steel’s Dubai operations has obtained a certificate of approval from UK Cares for complying with it’s rebar specifications. The certificate was recently presented to Mr Sheikh Nasser bin Hamad al-ThaniGM of Qatar Steel by Mr Ben Bowsher ED of UK Cares in a ceremony held at Dubai

Qatar Steel Dubai said that it could now use UK Cares accreditation mark on its products.

Qatar Steel Dubai FZE was set up in 2003 to meet the growing demand for high quality steel wire rod products within the GCC and international markets. It has two facilities at Dubai’s Jebel Ali free Zone. A wire rod mill of 240,000 tonnes per year capacity and a rebar mill with an annual capacity of 50,000 tonnes per annum, which is now being stepped up to 300,000 tonnes per year.

MEA infrastructure growth to push rebar demand in next 5 years

Doha Time, citing an industry executive reported that growth in steel consumption in the Middle East will outpace global growth for the next 5 to 10 years.

Mr Ali Hasan al-Muraikhi commercial division manager of Qatar Steel told a steel conference in Dubai that a construction boom in the Gulf, fuelled by increased revenue from oil exports, is likely to attract more steel producers to build steel plants in the region where more than USD 1 trillion is earmarked for infrastructure projects. He said that “The Middle east and the Gulf growth for steel and rebar will be higher than the global for the next five to 10 years.”

He added that “We are in a position to compete with any worldwide steel supplier.”

DP World aims to double worldwide capacity in next 10 years

Financial Times reported that container terminal operator DP World is planning to double worldwide capacity over the next 10 years.

Mr Mohammed Sharaf CEO of DP World told FT that part of those plans would include accelerating the expansion of its home port in Dubai, where rapid growth has led to congestion at its Jebel Ali terminal in Dubai. It had originally planned to open a new terminal in 2013 but would now do so earlier.

Iranian government to fund Tehran metro expansion project

It is reported that Iranian government has effectively admitted defeat in its efforts to find private sources of finance for expansion of the Tehran Metro and the Iranian government will now provide funding for these lines and all others. Mr Mohammad Montazeri deputy MD of the Tehran Urban & Suburban Railway Company said that efforts to bring in private finance have failed and the government will have to fund the project itself.

He added that despite this, Iranian government is committed to adding 12 new lines to the existing two by 2030 and 4 of the lines are already under construction but have been dogged by delays because of a lack of funding.

Iran’s largest charitable trust Mostazafan & Janbazan Foundation and Khatam ol Anbia, the engineering wing of the Islamic Revolutionary Guards Corp, were appointed to build lines 6 and 7 in July 2006. At the time, they agreed to provide financing for the project, but they have been unable to do so as Western banks have pulled out of Iran.

The first to open will be lines 3 and 4. Line 3 is intended to open in 3 phases between 2011 and 2012, while it is hoped that a 2.4 kilometer stretch of line 4 will open in 2008, encompassing 3 stations. The full 20 kilometer, 20 station tracks will open in March 2012.

Global credit crunch hits expansion plans of Qatar Industries

Reuters reported that the global credit squeeze, sparked by the sub prime mortgage crisis in the US in July 2007, has been felt thousands of miles away in Qatar as 2 units of Industries Qatar, the Qatar Fertilizer Company and Qatar Steel, have had to abandon major financing vehicles this autumn. Qatar Steel has also had to sideline a major borrowing initiative to take on over USD 1.3 billion worth of debt to refinance existing borrowing and to drive forward its expansion plans.

Now it is hoping to press ahead with adding an extra 1.4 million tonnes per annum capacity at its 7 million square foot site at the Mesaieed Industrial City regardless of any financing restrictions and Sheikh Nasser bin Hamad Al Thani GM revealed to Reuters that the deal may be resurrected early in 2008 if borrowing conditions improve.

The current credit squeeze is not Qatar Industries' only concern as its various units look to progress and grow. Escalating building costs, which have spiked right across the Gulf and have been fuelled by rising inflation rates, have created another hurdle to overcome. Just last week, a senior official at Qatar Petrochemical Company told Bloomberg that its intended new plant would cost 14% more than originally estimated due in part to a hike in the price of bulk materials and reactors.

Although lending is becoming harder to come by and with projected development costs rocketing, Qatar Industry is not allowing itself to be held back by its funding concerns and it was recently named as part of an Arab Gulf consortium, known as Foulth, which is teaming up with Japan's Yamato Steel Company to develop a steel plant in Bahrain. This venture will also require a bank loan of around USD 1.2 billion to get off the ground.

BJPPS secures pipeline services deal from Hyundai

It is reported that BJ Process & Pipeline Services has been awarded a multi million dollar contract by Hyundai Heavy Industries Co Limited to provide pipeline pre commissioning services in Kuwait. These services will be carried out on Kuwait Oil Company’s crude export facilities project in the Fahaheel Ahmadi region.

BJ PPS will be working on three 56 inch diameter sub sea pipelines extending 25 kilometers, 19.3 kilometers and 14.2 kilometers to the onshore terminal at the North Pier pumping station and metering station and another 24 inch diameter sub sea pipeline that measures 23.5 kilometers, which arrives onshore at the Port Mina Al Ahmadi or South Pier station. The new pipeline project is an expansion of these facilities.

BJ PPS is providing a range of pre commissioning services, including flooding, cleaning, gauging, leak testing, dewatering, hydro testing, and nitrogen purging and packing, for these new lines. It is also performing de oiling services on the existing pipelines to facilitate tie ins and replacement. Due to the large diameter of the pipelines, BJ PPS will be using a high flow pumping spread which can pump upwards of 16 meter cube per minute at pressures of up to 35.

In addition, BJ will be using its large volume high pressure pressurization units that are capable of pumping 2.5 meter cube per minute at pressures of up to 340. During the dewatering process, BJ will employ its new dewatering compressor package. This comprises five 1,100 standard cubic feet per minute at 350 pound-force per square inch gauge air compressors to deliver a total air supply capability of 5,500 standard cubic feet per minute.

This will be the first time BJ PPS has provided pre commissioning services on 56 inch offshore pipelines, having previously worked on such large lines only onshore.

Pakistan allows petroleum firms to outsource 70% of technical service

The Dawn reported that Pakistan government has allowed local petroleum companies to outsource up to 70% of technical services to foreign firms for becoming operators of oil and gas fields for exploration and development.

This is one of the many relaxations allowed to the domestic companies on the instructions of Mr Pervez Musharraf president of Pakistan a few days ago followed by formal approval of the economic coordination committee of the cabinet.

Under the new policy, the domestic companies would now be allowed to form JV among themselves by putting together resources of 2 or more companies and show contract with foreign services companies for drilling, surveys and seismic activities. Likewise, the domestic companies would also be allowed to provide upfront bank guarantees up to 50% of their work plan for the exploration and development of natural resources.

However, the companies would be tied under the concession agreements to a strict time line for the implementation work program and the eligibility criteria would be defined under management information system programs for ranking instead of being at the discretion of government functionaries.

The new policy also allowed the oil and gas producers to sell gas to third parties, instead of being under compulsion to sell their production to the government alone under the existing policy. However, the producers would be required to pay a windfall levy in case third party sale prices are higher than the prices fixed by the government. If under this policy, half a trillion cubic feet gas is injected into the system by 2009-10, the weighted average price would increase by about 3.5%. The new price of gas, at a USD 60 per barrel of crude oil reference price, would be around USD 3.0 to USD 3.3 per metric million British thermal unit.

A government official said that standard operating procedures would be developed over the next few weeks in consultation with companies for security of exploration and development fields. For expeditious development of oil and gas fields, a new prequalification system has been introduced to encourage quality companies with technical expertise, proven track record, and financial capability, to become onshore and offshore operators.

Presently, 42 companies are working in Pakistan with 118 exploration licenses and 127 leases. The daily production of gas is around 4 billion cubic feet and 70,000 barrel of oil.

China likely to become net SS exporter in 2008

China Knowledge reported that If China keeps up its high stainless steel output it could turn into a net exporter of the alloy by 2008, as domestic demand could not rise fast enough to meet the increased output capacity.

China Special Steel Enterprise Association said that “Rising output from China, which overtook Japan as the world's biggest stainless steelmaker last year, may prolong a domestic glut until at least 2010. This may limit any price recovery.”

It added that China may have 500,000 tonnes of stainless steel in excess of domestic demand this year, with the gap widening to 1 million tons in 2010.

Mr Wang Chengxue assistant to the GM of Baoshan's stainless steel unit said Chinese plants are increasing capacity faster to meet high export quotas, to make up for a lull in domestic demand. Mr Wang said “Chinese mills are increasing capacity very quickly. They will have to sell more overseas because the domestic appetite is not big enough.''

Chinese HR plate export price remain firm

MySteel reported that plate export offers in China are staying at high levels despite weakening in domestic market prices mainly due to firm overseas demand and rising raw material prices.

HR plate prices in home market are experiencing small decreases in November. In Shanghai, Q235 16mm HR plate by Yingkou is being offered at CNY 4750 per tonne, low alloyed material of 16mm thickness at CNY 4850 per tonne as compared with CNY 4780 to CNY 4840 per tonne and CNY 4880 to CNY 4920 per tonne respectively in October end. However, most market participants believe that there would be no great room for drop in plate prices take in to account the improvement in slab market prices and strong export sentiment.

Export offers for commodity grade plate by tier-two steel makers are prevailing at USD 720 to USD 730 per tonne on FOB basis, while those by tier one producers are at USD 750 to USD 760 per tonne on FOB basis. Now more plates are being delivered to South Korea and S.E Asia rather than Europe, the former hot export destination.

SBQ export offers are enjoying high price levels and steel makers are expected to further shoot up in the next months. Quotations for Grade A ship plate are at about USD 800 per tonne on FOB for width of 2.5 meters to 2.8 meters with an extra of USD 30 to USD 40 per tonne for 3 meter wide cargo.

Iron ore price negotiations - CISA calls for sticking to old rules

It is reported that China Iron and Steel Association sees that supply and demand in global iron ore market is generally balanced, but the market may fluctuate temporarily owing to many factors.

Mr Luo Bingsheng VC of CISA recently said that “Chinese iron ore import volume is expected to record some 370 million tonnes in 2006 up 44 million tonnes from 2005 and may touch 410 million tonnes in 2008. But, we consider that supply and demand in global iron ore market is generally balanced and the market may fluctuate temporarily owing to many factors."

He also added that "According to previous experience, both undersupply and oversupply can emerge in global iron ore trade, but we target a win to win result. Besides, a set of basic rules and international practices has been formed: long term price is based on FOB price; benchmark price is fixed by representatives of miners and steelmakers; seaborne trade mainly covers long term contracts rather than spot transactions etc."

Mr Luo said "Both sides of supply and demand should obey and maintain these rules. China will make efforts to maintain the rules."

He also disclosed that according to usual practice, iron ore benchmark price negotiation would begin in late November and both sides implement pre negotiation on market operation and future trend. The negotiation will formally start in the first quarter of 2008. Baosteel group will represent Chinese steelmakers to take part in the negotiation.

(Sourced from MySteel.net)

Chinese steel exports to Latin America increase

According to the latest report of Latin American Iron and Steel Institute, the Chinese steel products exporting to the Latin American are 315,900 tonnes in August 2007 up by 166,500 tonnes as compares with the exports in July 2007 although Chinese total steel products exports volume declined.

In view of this, including Brazil, the Latin American Iron and Steel Enterprises issued a warning last week that the Chinese steel products can occupied the Latin American market quickly.

Mr Lopez VP of Brazil Iron and Steel Institute said that “Within this three years, China has changed a steel exporting country from a net importing country. Three years ago, China's steel imports are 35 million tonnes, in 2007, China's steel exports will reach 55 million tonnes.”

YUSCO plans CR SS mill in Anshan

It is reported that Taiwanese Yieh United Steel Corp’s subsidiary Guangzhou Lianzhong Stainless Steel Co Ltd plans to construct a 300,000 tonne CR stainless mill in the city of Anshan in the northeastern Chinese province of Liaoning

Mr Chen Faxi president of YUSCO has recently come to Anshan to exchange opinions with the local government on this project.

Chinese exports of billet and slabs in January to September 2007

China has exported 5.966 million tonnes of steel billets and slabs during January to September 2007.

The details of exports to various countries is as under

In million tonnes

Panzhihua to merge with two sister firms

It is reported that Panzhihua New Steel & Vanadium Co will merge with two sister firms and issue shares to buy core assets from its parent, heading for a group listing. According to a stock exchange filing the Shenzhen listed Chinese steel maker will issue additional shares to swap stocks in Chongqing Titanium Industry and Sichuan Changcheng Special Steel and then delist them.

Also, Panzhihua New Steel, based in Sichuan Province, will place up to CNY 750 million new denominated shares at no less than CNY 9.59 each to buy core assets worth up to CNY 7.5 billion from its parent.

According to Mr Yang Baofeng, metals analyst at Orient Securities in Shanghai that the asset purchase from the parent group and affiliates is expected to help increase Panzhihua New Steel's 2007 earnings by 10% or more. Mr Yang said "Panzhihua New Steel will become an integrated firm with businesses ranging from mining, steel to titanium and vanadium, giving it a solid earnings outlook.”

Shougang plans to build HIsmelt mill in Caofeidian

Export quotas cut for tin, tungsten and antimony

The China Ministry of Commerce said China cut its 2008 export quotas for tin, tungsten and antimony as the nation seeks to reduce its trade surplus and meet local demand for raw materials.

The China ministry said China will allow exports of 33,300 tonnes of tin next year down from 37,000 tonnes in 2007. The export quota for tungsten is 14,900 tonnes, compared with 15,400 tonnes in 2007 and for antimony 59,900 tonnes against 61,800 tonnes.

Cognex bags 3 orders for surface inspection systems from China

Cognex Corporation has announced that it received more than USD 2 million in bookings for its SmartView® surface inspection system from customers in China during the third quarter.

Dr Robert J Shillman Chairman & CEO of Cognex said that "All three of China's largest steel producers have now ordered SmartView systems from Cognex. One order received in Q3, from BaoSteel, represents the 900th SmartView system sold since Cognex introduced the product in 2000. BaoSteel is China's largest steel producer, and this order is the first system in a master supply and co-operation agreement that includes an option for nine additional systems."

Dr Shillman continued "Outside of the steel industry, Cognex also sold five SmartView systems to China's leading copper manufacturer. This success indicates that SmartView is well on its way to becoming the best selling web and surface inspection system in China, as it has already become in North America, Europe and Japan."

Cognex SmartView is a state-of-the-art surface inspection system that automatically detects, identifies, and classifies defects on the surface of products that are made in a continuous fashion, such as metals, paper, plastics and non wovens. Early detection of defects leads to less scrap and greater yield for manufacturers, and enables companies to eliminate low quality material before it is passed on to consumers.

WISCO fires reheating furnaces for universal rail mill

It is reported that the 100 meter high speed heavy rail WISCO reconstruction project for universal mill production line on the 1st furnace to successfully enter the stage ignition oven on October 30th 2007, which will reach final oven temperature in about 20 days.

This marks that the 100 meter high speed heavy rail reconstruction project has entered trial production preparation phase.

100 meter high speed heavy rail reconstruction project once completed will produce 1.05 million tonnes per year greatly enhancing the product competitiveness of WISCO.

Sinotrans Shipping to float 35% of company

It is reported that Chinese shipping services provider Sinotrans Shipping is kicking off the institutional road show recently for a Hong Kong initial public offering that aims to raise up to HKD 11.45 billion

The company is offering 1.4 billion new shares or 35% of the total share capital, at a price between HKD 7.18 and HKD 8.18 apiece. The deal will have the usual 90:10 split between institutional and retail investors, but standard clawback triggers will apply and could increase the size of the retail portion to 50% of the total in case of strong demand. There is also a 15% over allotment option, which may boost the total proceeds to as much as USD 1.68 billion if exercised in full. BOC International and UBS are joint book runners of the offering.

Analysts believe that, as China’s largest dry bulk shipping company in terms of the size of its self owned fleet, it is benefiting from the continued rise in dry bulk freight rates that is driven primarily by China’s seemingly insatiable demand for commodities. Aside from its fleet of 26 dry bulk vessels that are used to transport goods such as iron ore, coal, grain and steel products, the company also owns and operates three very large crude-carriers and five container ships. These vessels are chartered out to shipping companies complete with a crew, either on long term contracts or for one specific voyage.

Sinotrans’ plan to aggressively expand its shipping capacity over the next few years should also support a significant improvement in earnings. It has also placed orders for 13 new vessels, comprising eight dry bulk vessels, four container ships and one double hull oil tanker that will be bought by its 50% owned MS Tanker subsidiary. These ships will be delivered between 2008 and 2011 and will be part of the company’s plan to increase its dry bulk shipping capacity to 4 million-5 million dead weight tonnes in the next five years from 1.3 million DWT recently. The already ordered vessels will boost its capacity to 2.15 million DWT.

Another key earnings driver, according to sources, is the fact that contracts for 45% of the company’s dry bulk fleet is up for renewal within the next year, which should allow it to capture the surge in spot market rates over the past 12 months. The benchmark gauge of dry cargo freight rates is the Baltic Dry Index, which has soared from about 3,000 points a year ago to more than 9,000 points recently.

It is also looking to increase the capacity of its oil tanker fleet to 1.2 million to 1.8 million DWT from 832,000 DWT recently and of its container vessel fleet to at least 5,500 twenty foot equivalent units from the current 2,230 TEU, which will be met by the four ships on order as these have a combined capacity of about 3,400 TEU. The costs of the 13 new ships will be about USD 3.5 billion, which sources say it plans to finance primarily through bank loans.

Sinotrans Shipping is a subsidiary of state owned China National Foreign Trade Transportation also known as Sinotrans Group, which was formed in 1950 and ranks as China’s largest transportation and logistics Services Company.

Jigang new CR mill produces 0.28 mm in trial production

It is reported that recently, Ji’nan Iron and Steel Group’s cold rolling mill succeeded in 0.28 mm thin CR coils during trial rolling, with the shape and the technology indexes all meet national standards.

The success in trial rolling means Ji’gang’s cold rolling line has reach a relative higher level comparing with the counterparts in China, and the company has a high ability in transforming the imported equipments and technologies, as well as innovation and production. The development of such materials will meet the strong demand from market and contribute to the company’s profits increase.

Bohai Industrial Fund in Tianjin Pipe deal

It is reported that Bohai Industrial Investment Fund Management Co, which is controlled by Bank of China, has agreed to acquire a not more than 20% stake in Tianjin Pipe Corp. The deal will cost about CNY 1.5 billion, thus becoming the biggest acquisition in China mainland this year.

Tianjin Pipe is capable of producing one million ton of oil tube steels each year. In 2006, it achieved net profits of CNY 1.38 billion, representing a 46% growth over 2005. As of December 31, 2006, assets of the group totaled CNY 21.14 billion.

Debuted in December 2006, Bohai Industrial Fund is the country's first industrial investment fund. With an initial size of CNY 20 billion, it will focus on investments in manufacturing industry, infrastructure construction like transportation and energy projects, as well as hi-tech projects with independent intellectual property rights. Bank of China, parent of Bohai Industrial Fund, is the top foreign exchange bank in the nation.

China to invest USD 60 billion in nuclear power capacity

China's National Development and Reform Commission recently announced that China would spend CNY 450 billion (USD 60 billion) to increase the capacity of its nuclear generating units to add 23 million kilowatts of capacity its 2005 generating capacity by 2020.

NDRC report noted that the country's nuclear power capacity now stands at 16.97 million kilowatts, and its 11 nuclear generating units in operation have a combined capacity of 9.07 million kilowatts.

NDRC said that "China will have an installed nuclear power capacity of 40 million kilowatts on the mainland by 2020. By then, its annual nuclear power generation capacity will reach 260-280 billion kilowatt hours. The ratio of installed nuclear power capacity will be increased by half to account for 4% of China's total installed power generating capacity."

At least 13 areas have been identified to be the sites of the new nuclear plants including four in Zhejiang Province, one in Jiangsu Province, three in Guangdong Province, two in Shandong Province and three others in Liaoning and Fujian provinces and the Guangxi Zhuang Autonomous Region.

China is the world's second largest power consumer after the United States and about 80% of China's total generating capacity comes from coal fired generators.

MMK signs 5 year gas supply deal with Gazprom subsidiary

MMK said that it would receive more than 3 billion cubic meters of gas annually until 2012 from Chelyabinskregiongaz. Exact amounts would be set on an annual basis. Prices were not disclosed.

Mr Viktor Kutishchev commercial director of MMK said that "The signing of the agreement gives MMK confidence that the program the plant intends to implement by 2012 will be guaranteed the required energy resources.”

TMK starts commercial production of pipes for Astrakhan gas field

One of the world’s largest oil and gas pipe producers and the market leader of the Russian pipe industry, TMK announced that it has started production of special corrosion resistant seamless line pipes used for the transportation of gas extracted from wells operating in aggressive environments.

This new pipe range is especially developed by TMK’s R&D centre for the Astrakhan gas condensate field, which has a complex geological structure and contains high pressure formations saturated with corrosive and toxic agents.

TMK’s Sinarsky Pipe Plant has already produced a batch of seamless line pipes capable of withstanding the impact of the field’s destructive substances. The pipes have passed all bench and field tests and these pipes meet current Gazprom specifications and will provide them with an alternative to imported pipes.

Mr Konstantin Semerikov CEO of TMK said that “Production of pipes designed for gas condensate wells with high concentrations of hydrogen sulfide is new and very promising for These new products will allow us to meet the demand for high performance pipes from Gazprom and other oil and gas companies operating in various hydrocarbon fields.”

Tenova LOI Italimpianti wins order for 3 furnaces from MMK

It is reported that just after the order received from NKMK in Novokuznetsk for a 250 tonnes per hour walking beam furnace, a new prestigious order has been awarded to LOI Italimpianti by Magnitogorsk within their overall revamping of the existing hot strip mill. The start up is scheduled at the beginning of 2010.

LOI Italimpianti order includes the engineering, whole supply, training, supervision to erection and commissioning relevant to three new walking beam furnaces.

Tenova LOI ITALIMPIANTI is a leading supplier of industrial furnaces and services for the metal industry. Tenova, former Techint Technologies, design and supplies advanced technologies, products and services for the metal and mining industries. Tenova operates close to its customers through a network of 20 companies based in 14 different countries.

Mechel secures USD 2 billion acquisition refinancing package

Mechel OAO announced that it has arranged a USD 2 billion acquisition refinancing package through several banks comprising of a classic secured 5 year pre export finance facility totaling USD 1.7 billion and 3 year term loan facility totaling USD 300 million.

ABN AMRO, BNP Paribas, Calyon, Natixis, Sumitomo Mitsui Banking Corporation Europe Limited and Société Générale Corporate & Investment Banking are joint book running managers and are joined by Commerzbank Aktiengesellschaft to arrange this package.

These will be used to finance the acquisition of the issued share capital of following
1. Yakutugol OJSHC - 75% of the statutory issued share capital minus one share
2. Elgaugol OAO - 68.86% of the statutory issued share capital
3. The real estate complex of a railway and a road from the Zeysk Railway Station of Far Eastern Railway in Zeysk to the Elga coal deposits, which were acquired through an auction held on October 5th 2007.

Ukraine and Russia in talks for 2008 gas price

RIA Novosti reported that Russia and Ukraine are discussing the price for Russian natural gas supplies in 2008 within a range of USD 150 to USD 160 per 1,000 cubic meters.

The report cited Mr Yuriy Boiko fuel and energy minister of Ukraine as saying that "The prices under discussion are within this corridor. We believe we will reach an understanding with our partners on the price level for next year."

Ukraine currently pays USD 130 per 1,000 cubic meters for gas pumped from and via Russia. Media reports have suggested that in 2008 the price could appreciate to USD 180, in line with Moscow's drive to gradually raise gas prices for former Soviet allies to average European levels, which are currently at USD 230.

Norilsk may raise USD 3 billion from share sale - Report

Kommersant, citing a board member, reported that
OAO GMK Norilsk Nickel may raise as much as USD 3 billion from a sale of existing shares to reduce its USD 7 billion debt, as per report, Norilsk may sell as much as 4.9% of its shares by November 14th increasing the company’s free float to 45%.

Kommersant reported that Norilsk said on November 5th that it will sell 7.5 million shares, equivalent to a 3.9% stake, which was bought back from shareholders last year. Norilsk may sell another 1% held by its subsidiaries along with the treasury stock,

The report added that Morgan Stanley will probably run the sale.

Dutch Gasunie joins Nord Stream gas pipeline project

It is reported that Russian energy giant Gazprom signed a deal with the Dutch natural gas transportation company Gasunie for 9% stake in Nord Stream pipeline being built under the Baltic Sea.

Mr Alexei Miller CEO of Gazprom said "Gasunie will receive stakes from our German partners BASF and E.ON, 4.5% from each of them. The stake handover is in line with the original contract signed between Gazprom and the German firms on building the Nord Stream pipeline.”

Under the deal, Gazprom also receives 9% in Gasunie controlled pipeline operator BBL, which is building a pipeline to pump gas from the Netherlands to Britain. Gasunie owns 60% of BBL, with E.On Ruhrgas and Belgium's Fluxys owning 20% each.

Gazprom holds a 51% stake in operator Nord Stream AG, and BASF and E.ON held 24.5% each before this deal. The 1,200 kilometer pipeline with a capacity of 27.5 billion cubic meter of gas a year is planned to be commissioned in 2010.

Experts said the deal with the Dutch company will help Russia resolve political difficulties plaguing the ambitious project and clear the way for the state controlled giant to pump gas directly to consumers in the European Union.

Poland and the ex-Soviet Baltic states, which have chilly relations with Moscow, have criticized the pipeline project, fearing they will be cut off from Russian gas supplies. The pipe will bypass their territories, linking Russia to Germany. Other Baltic nations have voiced concerns over the environmental threat posed by Nord Stream.

RUSTEEL to help NLMK for electric Steel center in China

FIS reported that in the frame of the second Russian-Chinese Economic Forum on November 6th 2007, NLMK and TBEA are to sign the protocol of cooperation as regards the joint project on the organization of a metal center for transformer steel processing in the territory of China with assistance of RUSTEEL, the NLMK strategic partner.

Nord Stream looks at Baltic pipeline reroute

It is reported that Nord Stream is revamping the route for its proposed Baltic gas pipeline following concerns by Swedish authorities.

A spokesman for Nord Stream, a joint venture between Gazprom, E.ON and Wintershall said "Nord Stream is confident that the route, which will be presented to the Swedish permitting authorities later this year, is the best possible solution in terms of technical, environmental, and economic feasibility. As with every constructive approach to its planned pipeline project across the Baltic Sea, Nord Stream AG welcomes the statement by Mr Andreas Carlgren Swedish Minister for Environment."

Nord Stream said that it will make a key contribution to securing Europe's long-term energy supply and to the rapid implementation of crucial trans-national gas connections as well as meeting European climate change targets with the pipeline.

The spokesman added, "As a trans boundary European Union project of high importance according to the Trans European Energy Networks guidelines, Nord Stream is subject to international conventions and national legislation in each of the countries that are directly affected by the pipelines. Therefore, Nord Stream will study the Ministry's proposals very carefully. As a result of this consultation process, the pipeline route is already undergoing optimization."

For more than a year, the entire 1,200 kilometer route, running from Vyborg in Russia to Griefswald in Germany, has been the subject of intensive international consultations with all Baltic Sea countries within the framework of the Espoo Convention.