SAIL RSP succeeds in energy conservation

It is reported that Steel Authority of India Limited’s Rourkela Steel Plant has achieved a significant success in improving the performance of the plant as far as energy conservation is concerned. RSP, which is celebrating energy conservation week during December 14 to 20th 2007, attributed this performance to the strategic initiatives of its Energy Management Department.

As per reports, some of the achievements of RSP in this area are as under
1. Specific energy consumption has come down from 8.69 giga calories ton of crude steel in 2004-05 to 7.61 giga calories during 2007-08
2. Reduction in coke rate which has been brought down from 633 kilogram per ton of hot metal to 578 kilogram per ton of hot metal in 2007-08
3. The specific heat consumption rate in coke ovens and blast furnace gas yield which is used as fuel has registered an increasing trend.
4. Reduction in specific oxygen consumption in both steel melting shops
5. Improvement in hot blast temperature have also been effected

Steel industry is highly energy consuming in nature, where energy cost accounts for nearly 30% of the total production cost. Efficient utilization of energy not only boosts the bottom line of the organization, but also ensures a better environment, by reducing the usage of various fossil fuels and the emission of green house gases.

SC panel to decide fate of 18 iron ore mines in Goa

PTI reported that the fate of 18 mining companies that had obtained temporary permits for extracting iron ore from Goa’s forests will be decided by the Supreme Court appointed Central Empowered Committee.

Supreme Court has given full powers to Central Empowered Committee to examine and decide the cases of these mining companies and the special environment bench of the apex court had directed mine owners to make representations to Central Empowered Committee and satisfy it that they fulfill the nine strict conditions laid down for grant of mining leases as per its orders dated August 4th 2006, which deals with temporary working permits or November 30, 2006.

The bench stated that “CEC may examine the Temporary Working Permits and if it is satisfied then it may permit them to work and file a report before the court. The directions and the orders of CEC will be the orders of the court.”

Last week, the special bench had restrained these companies from mining after amicus curiae Harish Salve, appearing for CEC, pointed out that Ministry of Environment and Forests had granted temporary work permits during September 1st 2007 to November 30th 2007.

Danieli to expand Indian operations

ET reported that steel designing and engineering services major Danieli’s Indian unit Danieli India would open its second office in Pune with an investment of INR 30 crore and increase the number of engineers at its Kolkata office by 40% by early next year.

Mr Franco Alzetta executive vice president of Danieli & C said that “We will invest in skill set and manpower development to enhance our Indian operations. We are finalizing the site for our new engineering office in Pune that would be in place by the next year.”

He added that “Initially, we will hire close to 40 people, who will include skilled engineers and fresh graduates of reputed engineering institutes. We are also planning to collaborate with various universities of Mumbai and Pune to run joint engineering program in future.”

The move underscores Danieli’s growing business volumes in India, which would almost double its turnover to INR 1,300 crore in the next one year, from INR 650 crore currently. It has already bagged orders worth INR 900 crore this year and is further targeting to increase it’s a market share in steel designing and engineering services by the end of the next year.

POSCO plans hit CPI hurdle

Mr Gurudas Dasgupta leader of CPI while extending CPI support to the agitation by the villagers said Orissa that would lose much more than what it would gain by facilitating setting up of the POSCO steel plant as per the agreements reached between the Orissa state government and POSCO. He demanded that the state government should shift the project to any other place not having cultivation.

Mr Dasgupta also said that POSCO should not be allowed to have captive iron ore mines as well as a captive port. He said “If the company had captive mines and a captive port, the state government will not be able to know how much iron ore was extracted and exported.”

Mr Dasgupta added that “The decision of allowing POSCO to take water from Jobra barrage near Cuttack to run its proposed steel mill will adversely affect irrigation in four districts that were part of the erstwhile undivided Cuttack district.”

He told media that CPI will take up the matter with Dr Manmohan Singh. He said “I will urge the prime minister to direct the Orissa government as well as the South Korean steel major to shift its proposed site to somewhere else.”

Linde to increase stake in BOC India

ET recently reported that German industrial gases major Linde will invest INR 598 crore into its subsidiary BOC India to meet bulk of the latter’s fund requirement for ongoing projects by 2008.

As per report, Linde will bring in the capital through the preferential allotment route. In the process, Linde will consolidate its shareholding in BOC India to about 74% from the present 54.80%.

BOC India board on last week decided to allot around 3.62 crore equity shares at INR 165 apiece to Linde on a preferential basis, which represent up to 42.45 % of the total post issue paid up equity shares of the company. Linde said that “Pursuant to the preferential issue, the aggregate shareholding of Linde will increase from 54.80% to 73.99% of the total post issue paid up equity share capital of BOC India.”

To facilitate the preferential allotment issue, BOC India’s board has also decided to increase its authorized share capital to INR 86 crore from the current INR 60 crore. The board has also decided to convene an extraordinary general meeting on January 5th 2008, to obtain shareholders approval for the same.

Mr ER Raj Narayanan MD of BOC India told ET that “We need around INR 1,350 crore to meet capital expenses of new and ongoing projects over the next few years. Of this, we would require about INR 600 crore by 2008. We have completely leveraged our debt position. Hence the need for fresh equity infusion. This would meet nearly 50% of our fund requirement in our base business.”

Linde had acquired ownership of UK based BOC Group, the erstwhile parent of BOC India in September 2006. BOC India will supply gases to JSW Steel for its expansion program at Bellary. It has also won orders from SAIL amounting to INR 318 crore for setting up two air separation units at Rourkela Steel Plant and IISCO Steel Plant, among others.

SAIL to grab a pie of steel plant equipment market in India

ET reported that Steel Authority of India is now planning to enter into equipment manufacturing to cash in on the boom in the domestic steel sector. As per report SAIL plans to convert its engineering shops attached to its steel plants as a separate profit centre to manufacture medium and small equipment for commercial sale and it may also finalize a JV arrangement with an existing equipment manufacturer to scale up its manufacturing activities.

Mr S K Roongta chairman of SAIL told ET that “We plan to strengthen our existing engineering shops so that they grow beyond in house centers into full fledged manufacturing units and even cater to the requirements of other steel companies. The plan is to convert these into notional profit centers, which could later forge alliance with a joint venture partner and function as a separate entity.”

Mr Roongta added that “Commercial manufacturing of steel-making equipment makes sense for SAIL as it already has expertise in this area. Moreover, the huge investments of over INR 800,000 crore projected in the domestic steel for carrying out ambitious expansion plans, presents enormous business opportunity for the company.”

As per the plan, the engineering shops would be converted into manufacturing facilities capable of making small and medium equipment like fabricated wagons, stores, pipes, and foundry. The shops have already taken statutory licenses for manufacturing of specialized equipment such as high pressure vessels, medium size cranes, electro magnets etc.

At present SAIL’s engineering shops are used for making small and medium equipment required for captive consumption of the company. These shops are already undergoing expansion as SAIL’s steel making capacity is set to increase from 15 million tonnes to 26 million tonnes by 2010.

JSPL rolls HE 800 and HE 900 beams

BS reported that Jindal Steel and Power Limited have rolled HE800 and HE900 beams at its Raigarh based plant.

Mr PS Rana ED of JSPL said these are Asia's heaviest beams and that the Rail and Universal Beam Mill has set new benchmarks in the area of research and development.

He added that earlier, users had to weld plates and obtain the desired sections for structural uses and this was time consuming, expensive and prone to failure because of the welded joints. Mr Rana said that the rolled beams would not have such drawbacks and would help projects.

Such large size beams are used in infrastructure like flyovers, bridges, multi storied buildings, industrial yards, airports, dams and power plants.

Manaksia plans to expand metal business

BS reported that Manaksia Limited hopes to raise around INR 248 crore through a follow on net public issue of 15.4 million shares of INR 2 each for cash at a price band of INR 140 to INR 160. The issue opens on December 17th and closes on December 19th 2007. The book running lead manager is ICICI Securities.

Mr Basant Kumar Agrawal MD of Manaksia Limited told media that “Post issue, the promoters’ holding will be diluted to the extent of 22.15% from the existing 74.76%.”

As per the Manaksia Limited’s new business plan, INR 115.5 crore CAPEX is earmarked to expand its metal business, INR 60 crores for prepayment of certain term debt and the balance amount for corporate purpose.

Manaksia Limited has 15 manufacturing units in India and 3 overseas. Manaksia has three international subsidiaries MINL Ltd in Nigeria, Dynatech Industries Ltd in Ghana and Euroasian Ventures FZE in Dubai in addition to Mark Steels Ltd at Purulia in West Bengal. Its metals and metal products contribute to 80% of the turnover, with packaging products and coils contributing 12% and 7% respectively.

CIL to invite bids for coal washeries

It is reported that Coal India Limited is in the final stages of inviting tenders from private sector for setting up coal washeries. The scheme aims at supplying washed coal from the open cast mines to all non pithead power stations.

The report cited a CIL official as saying that “We are in the final stages of identifying locations of these refineries of capacities ranging from 2.5 million tonne to 10 million tonne and are expecting to invite the tenders in early 2008-09.”

As per the scheme, CIL will finance the cost of setting up the washeries while private parties will be run and maintaining the same in exchange of washing charges.

The project is also expected to wash coal at a substantially lower cost compared with the existing CIL washeries. The private washeries in Western India are currently charging in the range of INR 40 per tonne compared to the washing cost of INR 240 a tonne in CIL washeries.

Container scanners to be installed at 4 major ports

It is reported that Indian custom department will soon install seven new container scanners at Mumbai, Chennai, Tuticorin and Kandla Ports at an estimated cost of INR 173 crore.

As per report one fixed scanner will reportedly be installed at each of these ports with Chennai, Tuticorin and Kandla also getting a mobile gamma ray scanner.

The report cited an officials telling Business Line that “The scanners would enable the customs department to make non intrusive inspection of container cargo and would also bring down cost and time involved in such inspection.”

CIL plans forward e auction of coal in February 2008

BS recently reported that Coal India Ltd is planning to introduce forward e auction of coal and that it may be introduced as soon as in February 2008 and may be followed by a full fledged futures contract on coal in the long term.

Unlike futures trading where physical market players as well as speculators, investors and hedgers can participate in the bidding process, the participation right to CIL’s forward auction is reserved to the producer and users of coal.

In sharp contrast to futures trading, the forward e auction will pave way for a contractual obligation between both the buyer and seller for a period of one year divided into four quarters. The buyer will be allowed to bid different prices and quantities for different quarters and will be lifting his requirement on monthly basis based on 15 days advance payment.

A CIL source said that “The e auction has been a major draw to the small and medium sector which does not enjoy the linkage. To help these user groups to plan their procurement on a long term basis, we are now planning to conduct forward auctions. Through the forward auction, we are actually looking forward to discipline the supply of coal to a large number of users especially the small and medium users. Accordingly, the contract is more obligatory in nature and the contracted price will have no relevance to the spot e auction price.”

GAIL to invest INR 14,000 crore to double pipeline output

BS reported that the state run GAIL (India) is planning to invest INR 14,000 crore to double the capacity of its existing pipeline network to meet the increasing industrial demand for liquefied petroleum gas in the country.

Mr MM Mandal ED marketing GAIL on the sidelines of a conference organized by the Bombay Chambers of Commerce and Industry said that “We are planning to double our existing pipeline network to meet the growing demand from our consumers.”

GAIL is also holding discussions with oil marketing companies so as to provide connectivity to their various bottling plants for supplying LPG from fractionators and ensuring connectivity with the existing LPG pipeline network.

GAIL’s 1,927 kilometer LPG pipeline network connects the western, northern and southern parts of the country. GAIL’s LPG pipelines can transport 3.8 million tonnes per annum of LPG and have the capacity to supply more than 20% of the LPG consumed in the country.

India GDP to cross USD 2 trillion mark in 5 years - Report

Motilal Oswal Financial Services in a recent study predicted the Indian economy to hit the USD 2 trillion GDP mark in the next five years.

The study stated that “Given the high base, the GDP that will be added in the next five years will be more than what did get added in the last 30 years and twice that of the last five years.”

As per report, India’s nominal GDP was growing at a rate of 6.2% per annum during 1977 to 2002, to just under USD 0.5 trillion in 2002. In the last five years, the country’s GDP has more than doubled to hit USD 1 trillion at a CAGR of 16%.

The study added that “With a steady growth rate of 16% in the last five years, the growth would be exponential in the next five years and will percolate into several sectors such as financial services, wireless telecom, cars, engineering and construction and cement and steel."

ABG Shipyard to raise USD 200 million for expansion

BL recetly reported that ABG Shipyard plans to raise about USD 200 million through private placement to fund its expansion plans.

The report quoted Mr Dhananjay Datar CFO of ABG Shipyard as saying that the funds would be used for expansion of its existing shipyard at Surat and new shipyard on the sea front, which will be capable of building very large sized and all types of vessels.

Mr Datar said that “By procuring additional land near Vipul Shipyard, the shipyard size would increase to 22 acres to 23 acres and we would be shifting our engineering workshop to the new location. With this, we would be able to utilize the available land in a much better manner for shipbuilding purpose.”

Mr datar added that “ABG plans to build another shipyard in Surat, which will be capable of building very large sized vessels, on the sea front, on the other side of river. We had the option of building a shipyard on the east coast, but then our investments for the new shipyard would have been much larger.”

Mr Datar added that “After raising USD 200 million from the qualified institutional investors, there would be a reduction in promoter group stake from the current level of about 57%. However, for the proposed expansion, the promoter group would also be infusing about INR 300 crore and increase their stake.”

ABG Shipyard, which has acquired Vipul Shipyard located adjacent to the company’s existing shipyard at Magdalla Port in Surat, now plans to expand the shipyard by procuring another 15 acres near Vipul Shipyard. With the acquisition of Vipul Shipyard, the company was able to increase its shipbuilding capacity from the present 32 to 40 vessels.

Kochi Port traffic in April to December suffers due to strikes

BL reported that The Cochin Port Trust has registered a zero per cent growth rate in the April to December 2007 of the current fiscal as compared to 10% growth achieved last year.

Mr N Ramachandran chairman of Port Trust while speaking at a ministerial meeting convened at the port to discuss labor issues as well as those connected with the ICTT project at Vallarpadam and other developmental projects of the port pointed out that “Major ports in the country have achieved a growth rate of 15% by handling maximum quantity of cargo during the period. But Kochi port had lost around 66 working days on account of strikes since April 2005, thereby affecting its image in the international shipping arena. The intermittent strikes have also resulted in the diversion of ships to neighboring ports.”

Indian nuclear power generation capacity to rise 86% by 2012

PTI reported that Indian government has drawn up plans to increase power generation from nuclear energy by more than 86% to 7,280 MW by the end of 11th Plan period. As per release the government is proposing to add an additional 3,380 MW of nuclear power energy by the end of the 11th Plan.

The 11th Plan draft document cleared by the Union Cabinet and to be placed before the National Development Council for final approval on December 19th 2007 said that the additional capacity will come from the nuclear plants that are under construction.

The document, without referring to the Indo US deal, said the government was making efforts to import nuclear fuel from abroad and the effect of this is likely to be visible in the 12th plan period. It added that the government was also likely to involve other PSUs and the private sector in execution of the nuclear power projects in the future.

Currently, India has installed nuclear energy capacity of 3,900 MW, which is 3.1% of the total installed capacity of the power sector.

2nd phase of freight corridor project to start soon

Mr Lalu Prasad union minister for railways has recently announced that the government would soon take up the second phase of the freight corridor project connecting Mumbai Chennai Howrah.

Mr Lalu, while addressing a public meet in Tirupati recently to open the Tirupati Katpadi electrified line, said that the project is aimed at connecting the North, South, West and East with a dedicated line for goods trains. He added that the dedicated line will ease the burden on existing lines that are saturated.

Indian ports line up IPOs for 2008

It is reported that almost all emerging port players including Gammon India, Gujarat Pipavav Port Ltd and Navayuga Engineering Co have reportedly lined up initial public offerings subsequent to the smashing success of the recent IPO of Mundra Port and SEZ Limited.

It is learnt that Gammon India, which recently won the bid to develop Mumbai Port’s offshore container terminal project with Spain’s Dragados has already filed draft documents for an IPO with the Securities and Exchange Board of India.

Analysts also expect that thee IPOs of the APM Terminals promoted Gujarat Pipavav Port and Navayuga Engineering, which is developing the Krishnapatnam port in Andhra Pradesh, to hit the market next year.

Many other players in the sector have evinced interest in tapping the capital market, boosted by the response to Mundra Port and SEZ Limited’s IPO, which was oversubscribed by 100 times. The success of the Mundra Port and SEZ Limited IPO has also drawn the attention of the corporate sector, which seems to have suddenly realized that investments in port facilities will give good returns over the long term.

INR 51,600 crore raised from divestment: White paper

It is reported that Indian government has raised INR 51,600 crore from disinvestment of equity in Central Public Sector Enterprises and strategic sale of state owned companies since the inception of the policy in 1991.

According to the White Paper on Disinvestment of the Central Public Sector Enterprises tabled in Parliament recently, the total realization from the strategic sale transactions was INR 6,344.35 crore, which is around one tenth of the total amount of INR 51,608.8 crore raised from disinvestment till July 31st 2007.

The paper further pointed out that the market capitalization of the 40 Central Public Sector Enterprises, whose shares are listed and traded on stock exchanges, was INR 0.776 million crore as on July 31st 2007, with ONGC leading the chart with almost INR 0.2 million crore.

The other Central Public Sector Enterprises with high market capitalization are NTPC with INR 0.137 million crore, BHEL with INR 84,770 crore, SAIL with INR 61,976 crore and IOC with INR 48,039 crore. It said that “With regard to realization, bulk of the receipts amounting to INR 33,543.56 crore came from sale of minority shareholding in the state owned companies.”

During the current financial year, the paper said, the Government realized INR 2,366.94 crore from sale of residual 10.27% shares in Maruti Udyog Ltd. It added that the Government would realize another INR 2,881 crore from dilution of its stake in the NHPC, Power Grid Corporation and Rural Electrification Corporation.

India to save 10,000 MW through conservation in 11th Plan

It is reported that Indian government is targeting a saving of 10,000 MW through conservation of power during the 11th Plan period with the implementation of energy efficient technologies, which would translate into an avoided investment in generation of about INR 50,000 crore.

Mr Sushilkumar Shinde the union power minister while addressing a function to mark National Energy Conservation Day said that “We have targeted saving 10,000 MW through energy conservation in the five year plan.” Mr Shinde informed that the government has embarked upon various schemes such as promotion of CFL lamps and introduction of energy efficient buildings code for energy conservation.

Inaugurating the function, Mrs Pratibha Patil president of India also called for the use of energy efficient technology and said that “I remind each individual to implement at least one major change in lifestyle that promotes energy efficiency and also influences at least one more person to do the same.”

The President also said individuals can be motivators for energy efficiency and like minded people can join forces to launch a national energy efficiency movement. Ms Patil said fossil fuels would continue to play a dominant role in the energy mix for decades to come but the use of advanced and cleaner fossil fuel technologies should be increased. She added that “Promoting increased research and development in the field of various energy technologies in particularly renewable energy and advanced energy technologies can help in augmenting sustained and secure supply of energy.”

Iron ore price negotiations –ABARE predicts sharp jump

Australian Bureau of Agricultural and Resource Economics in a recent commodities outlook report said that iron ore prices are expected to rise substantially next year to record levels, marking the sixth consecutive year of rises.

ABARE listed out following factors, which would contribute to a rise in prices for ore sold under contract for the year starting April 1st 2008

1. Strong growth in global iron ore demand, led by production growth in China's steel industry

2. Rising iron ore production costs.

3. Introduction of an iron ore export duty by the Indian government

4. Sharp depreciation of the US dollar

ABARE said that the current divergence between spot and contract prices is likely to underpin price rises at the 2008-2009 negotiations. ABARE said that the landed cost of Australian iron ore sold on a contract basis to China is now more than USD 100 less than Indian iron ore sold on a spot basis to Chinese steel mills,.

Following is a table on iron ore settlement prices in last 11 years.

The prices refer to material in US cents per metric tonnes per one percent unit iron.
The prices refer to Australian iron ore on a FOB
(Source: Macquarie Bank)

Macquarie Equities, in a report last month, has forecast a 50% hike in prices

Global climate deal sealed

It is reported that nearly 200 nations agreed at UN led talks at Bali in Indonesia to launch negotiations on a new pact to fight global warming after a reversal by the US allowed a breakthrough.

The agreement marks a new chapter in climate diplomacy after six years of disputes with major allies US pulled out of the Kyoto Protocol, the main existing plan for combating warming. The deal after two weeks of talks came when the US dramatically dropped opposition to a proposal by the main developing nation bloc, the G77, for rich nations to do more to help the developing world fight rising greenhouse emissions.

The Bali meeting approved a roadmap for two years of talks to adopt a new treaty to succeed Kyoto beyond 2012, widening it to the US and developing nations such as China and India. Under the deal, a successor pact will be agreed at a meeting in Copenhagen in late 2009.

Mr Ban Ki-moon secretary general of United Nations said “This is the defining moment for me and my mandate as secretary general. I am deeply grateful to many member states for their spirit of flexibility and compromise.”

The accord marks a step toward slowing global warming that the UN climate panel says is caused by human activities led by burning fossil fuels that produce carbon dioxide, the main greenhouse gas. Scientists say rising temperatures could cause seas to rise sharply, glaciers to melt, storms and droughts to become more intense and mass migration of climate refugees.

ACCC rejects Newcastle port coal export allocation plan

It is reported that Australia’s competition regulator has rejected plans by the operator of Newcastle port and two rail companies to change the way export capacity is allocated at the world’s biggest coal export harbor.

Australian Competition and Consumer Commission in a statement said that the proposal for export allocations on rail transportation contracts ahs raised significant concerns that competition would be reduced.

Mr Graeme Samuel chairman of the regulator said that "Significant concerns have been raised with the ACCC that the proposed Vessel Queue Management System could have an immediate and permanent detrimental impact within the industry, including reduced competition in the provision of rail services in the Hunter Valley and reduced production levels at certain mines.”

The proposal was put forward by Port Waratah Coal Services Ltd, operator of the two coal terminals at Newcastle, Pacific National Pty and QR Ltd. Xstrata’s and Rio Tinto’s support of the plan pitted them against smaller mining companies including Donaldson Coal Pty, Whitehaven Coal Ltd, Idemitsu Australia Resources Pty and Centennial Coal Ltd all of whom opposed the change.

Under the existing capacity allocation system, which expires December 31, producers get a pro rata allocation based on the quantity they seek to ship, leading to some miners overstating their needs. Demand from coal mining companies for port capacity in 2008 is 116 million tonne while Port Waratah estimates 95 million tonnes will be available.

A shortage of rail and port capacity at Newcastle, which accounts for a third of Australia’s coal exports, has contributed to Asian prices for thermal coal rising to a record. The bottleneck has led to a build up in the line of ships waiting at the port to load coal, thus increasing costs for mining companies.

German steel workers seek 8% pay hike

Reuters reported that Germany's powerful IG Metall trade union has decided to seek 8% pay rise for steel workers in the industrial state of North Rhine Westphalia, just a day after the ECB said it was on guard against wage inflation.

Mr Detlef Wetzel deputy chairman of IG Metall told the Neue Ruhr Zeitung that "8% is absolutely appropriate. Such a rise was merited due to record results by steel firms.”

IG Metall expects to begin negotiations in mid January to seek a one year deal for the steel sector, an IG Metall spokeswoman said that the existing pay deal runs until the end of January.

The steel sector in North Rhine Westphalia employs some 85,000 workers, the bulk of those working in the industry in Germany. Wage deals in the northwestern state set the tone for settlements elsewhere. Last year, steel sector workers won a 3.8% pay rise and a one off payment in a deal lasting 13 months.

Exxaro may increase iron-ore exposure - CFO

Mining Weekly recently reported that Pretoria based diversified miner Exxaro would look at increasing its exposure to surging iron ore prices, but outside the Northern Cape.

Mr Dirk van Staden CFO of Exxaro told Mining Weekly that "We have always said that we want to be a moderately diversified mining company. Iron ore is a ferrous metal that would have a good fit in that strategy."

He added that while Exxaro had no particular objective of increasing its exposure to iron ore, it would consider it.

Mr Van Staden said that Exxaro would not lift its shareholding in the Sishen Iron Ore Company, but would look the Northern Cape.

Exxaro was locked into a one fifth stake in the Sishen Iron Ore Company, which used to be a part of under Kumba Resources, before its unbundling one year ago.

Ryerson to form 6 regional groups in North America

It is reported that North America’s largest metals distribution company Ryerson is restructuring its Chicago area operations, closing some facilities and mapping other changes to bring the USD 5.9 billion firm closer to its customers with improved service levels.

It was shareholder demands for a restructuring that eventually forced previous management to sell the firm to an investment house. The 165 year old company is the longest continually operating company in Chicago and will keep its corporate headquarters in the city but will eliminate roughly 300 office jobs and at least that many jobs at area stockholding depots.

As part of the restructuring, Ryerson will close its Chicago service center by the end of 2008 and beef up inventory and possibly some staffing at service centers in Indiana, Wisconsin and Missouri and possibly also at Elgin in Ill and Cincinnati in Ohio.

Company employees have been advised that a new decentralized business model is being designed to improve customer service through better inventory availability and market responsiveness. The word is that management will be decentralized into six regions, five in the US and one in Canada with each region having a director of supply chain, a financial officer, a director of operations and the various service center general managers all reporting to a regional president.

Mr Steve Makarewicz president & COO of Ryerson said that "We are taking these steps to enhance our long term viability.” Ryerson profits tumbled 55% in the Q3 of 2007 to USD 9.7 million on sales to USD 1.4 billion. Then, in October, private equity firm Platinum Equity bought the firm for about USD 915 million.

G Steel to modernize HSM

Thailand G Steel Public Company Limited announced that it has placed an order with Germany SMS Demag for the modernization of its medium slab casting and rolling plant in Rayong. The expansion of the single strand casting rolling plant by a conventional roughing mill operating in a parallel line represents a new modernization concept for this type of plant. The new equipment units will go into operation at the end of 2009.

The total capacity of the plant will be doubled as a result of the modernization. The new facilities will also enable G Steel to expand its present range of products and dimensions, for example by higher strength tube steels.

SMS Demag said that our supply scope comprises the roughing stand with edger and the descaler as well as a new coiler for the finishing mill and the pertaining electrical and automation systems. Furthermore, we shall be renewing the mechanical and automation equipment of the existing rolling line. The rolling section of the present casting-rolling facility at G Steel comprises a roughing mill with non reversing two high and four high stands, a coilbox, a six stand finishing mill, a cooling section and a recoiler.

In parallel with the tunnel furnace of the casting rolling plant, SMS Demag will now be installing a conventional roughing mill with heating furnace, descaler, four high reversing roughing stand with edger and a roller hearth furnace with cross transfer car. The transfer bar produced in this section of the plant will be fed into the existing process section via the cross transfer car upstream of the roughing mill of the casting rolling plant.

To improve the strip quality we shall be modernizing the descaler in the finishing mill and installing roll gap lubricating systems and more efficient work roll cooling systems in the stands. We shall also be installing a new fully hydraulic coiler.

Nippon Steel to seek organic growth with high end products

It is reported that Nippon Steel Corp will continue to seek organic growth by focusing on high end products as global demand for such steel is unlikely to fall back any time soon.

Mr Akio Mimura president of Nippon Steel Corp recently said that having a soft alliance with its business partners such as ArcelorMittal, POSCO and other Japanese steelmakers continues to be one of its key strategies, along with a sound relationship with stakeholders including buyers of its products.

He added that Nippon Steel isn't considering taking its ties with domestic peers beyond business cooperation and cross shareholdings, though further merger and acquisition moves in the global steel industry are expected.

Mr Mimura said that "When a company is making record profits, it wouldn't realistically choose to come under another company's umbrella. Steelmakers may face difficult times as they get sandwiched by expanding natural resources companies and steel users, and therefore it would be a move in the right direction for the steel industry as a whole to seek further realignment.”

Mr Mimura said that Nippon Steel would not drop its guard against takeover threats, but it has sound cooperation with ArcelorMittal in their joint production in the US and Europ. He added that "It is an unmistakable fact that ArcelorMittal needs Nippon Steel and we need them. But if you ask me whether this relationship will last forever, I would say anything can happen as surrounding conditions change and it is important to be always ready and prepared for an unsolicited takeover attempt.”

Mr Mimura said he hasn't yet set the next target for Nippon Steel's production increase after it meets the immediate target of raising crude steel production to 40 million tonnes a year from the current 34 million tons. He added that "I am not ready to give a specific number for Nippon Steel's future output plan.”

Usiminas eyeing increasing captive iron ore production

Folha de S Paulo newspaper quoted Mr Rinaldo Campos Soares president of Usiminas as saying that they are exploring opportunities for increasing iron ore production.

Mr Soares said that Usiminas is always on the lookout for opportunities and that it has already received some proposals regarding iron ore production.

Mr Soares said that "We are always analyzing what could happen. The consumption of iron ore is on average 1.5 times greater than our steel production. We produce 9 million tonnes per year and we consume 13 million tonnes per year of iron ore."

However he ruled out Usiminas suffering any lack of iron ore supply in the future by saying the company has long term contracts that guarantee the raw material.

Usiminas and subsidiary Cosipa have installed capacity of 9.5 million tonnes per year.

Japan strengths cooperation with Vietnam to exploit iron mine

YIEH reported that to consolidate the relationship with Vietnam, Japanese ministry of economy and Vietnamese trade and industry department held a meeting to discuss the cooperation plan to exploit the Vietnam iron mine, particularly for coal and rate earth.

Japan has high demand for coal and thus Japan is eager to build up intimate and long term cooperation with Vietnam. On the other hand, Vietnam also needs Japan to help in training on mining technology and environmental protection.

Nucor announces January price hike for rebars

Platts reported that US mini mill steel producer Nucor has notified customers that it will raise transaction prices for steel reinforcing bar and merchant bar by USD 25 per sort ton or USD 1.25 per CWT effective with orders shipped on January 1st 2008.

Several sources contacted by Platts said that Nucor is raising the raw material surcharge for ferrous scrap to USD 153 per short ton from USD 118 per short ton. This reflects the USD 35 per short ton increase in the Midwest price of shredded auto scrap to USD 315 per short ton, reported earlier this week.

In addition to the new raw material surcharge taking effect on January 1st 2008, Nucor will decrease its FOB mill base price by USD 10 per short ton or USD 0.50 per CWT.

Nucor is the largest producer of rebar and merchant bar in North America with shipments of over 6.5 million short tons in 2006.

Siemens to supplies a new main drive to Nippon plate mill

The Siemens Industrial Solutions and Services Group and its cooperation partner company, Fuji Electric Systems, have received an order to supply a new main drive for expansion of the heavy plate rolling mill of the Nippon Steel Corporation in Oita. Commissioning is scheduled for March 2009.

The heavy plate rolling mill will now be equipped with an additional roughing train, as a result of which the plant's capacity will be enhanced by 600.000 tonnes per year. The aim is to meet the Nippon Steel’s need for high end steels.

The heavy plate rolling mill of the Nippon Steel at Oita produces a maximum plate width of 5,500mm and is one of the largest and most productive mills in the world. The existing rolling stand was equipped with DC drives, which were supplied by Siemens when the stand was installed in 1975. As part of a program for increasing the output, they were replaced with Siemens AC drives in 1998.

Siemens is supplying a twin main drive with non salient pole synchronous motors. The drive has a speed of 40 rotations per minute and a rated power output of 8,000 kilowatts. Power will be supplied via Sinamics SM150 three point DC link converters connected in parallel. Siemens will also be responsible for supervising installation and commissioning the drives.

Sumitomo Metals bags award for development of slag technology

Sumitomo Metals Industries Ltd announced that its Wakayama Steel Works has won the Director General's Prize of Industrial Science and Technology Policy and Environment Bureau, METI from the Clean Japan Center 1 in the 2007 Award for 3R’s (Reduce, Reuse and Recycle) Oriented, Sustainable Technology 2.

The prize was presented for the development of a pressurized steam aging process for steel making slag. It recognizes that the successful development of the process and system, which substantially reduces the time and cost required to process steel making slag, encourages the reuse of slag.

The awards ceremony took place on October 5th 2007

To know details of the technology, please visit
http://www.sumitomometals.co.jp/e/news/news2007-10-15.html

South Korean association lists top milestones in 2007

South Korean Iron and Steel Association poll of 43 respondents, among those who are the industry’s business executives, professors and analysts, said that South Korean steel makers’ first time combined crude steel production of 50 million tonnes as the top news for 2007

The other milestones and events for 2007 are as under

1. POSCO’s successful commercialization of a new, innovative iron making furnace, FINEX, which significantly cuts costs and pollution. Capable of churning out 1.5 million tonnes of molten steel annually, the eco friendly plant that began operation in May is set to boost

2. POSCO’s yearly production capacity to 34 million tonnes, seating it as the world’s No 2 by 2008.

3. POSCO’s aggressive overseas expansion, including a USD 490 million cold rolled mill to produce 1.2 million tonnes in Vietnam

4. Dongkuk Steel Mill to build a USD 2 billion steel plant in Brazil next year

5. Mr Lee chairman of POSCO’s election as the 31st chairman of the biggest global steel body, the International Iron & Steel Institute, in October

6. Ongoing integrated steel mill plan of Hyundai Steel

7. Shortage of local steel plate supply due to the brisk growth of domestic shipbuilders

8. Profit polarization among steel groups.

World container traffic to see steady growth in 2008

According to the UK based Clarksons Research Services, global container traffic will grow by 8% in 2008 while capacity is expected to grow by 12%. However, analysts feel that the container shipping market will maintain growth, albeit slowly, despite the supply demand imbalance.

Clarksons said that this will happen because the terminal operators, as well as carriers, will adjust themselves to overcapacity. It added that the Chinese market too, it is felt will slow down to steady growth from a rapid one. Compared to 2006, the recovery of the market in 2007 has been slow and weak.

The cargo volume on Asia North America has been affected by the slowdown of the US economy but the growth on the Asia-Europe sector remains strong.

It is also felt that the container shipping market will be influenced by the policy pursued by Maersk Line, the world’s largest container operator. Meanwhile, the Financial Times reported that Maersk will restructure its container business and remove top executives. Also, trucking and warehousing under Maersk Logistics may be separated from the shipping business and converted into standalone business units.

Iron ore drilling commences at Yilgarn iron ore project

It was recently reported that drilling has commenced on Polaris Metals’ 100% owned Yilgarn Iron Ore Project north of Southern Cross in Western Australia.

As per report an 8,000 meter reverse circulation program, using two drilling rigs, is now under way following completion of a series of botanical and Aboriginal Heritage clearance surveys in recent months. The drilling program is aimed at testing and defining direct shipping grade iron ore resources at a number of project areas.

The focus of the drilling will be the Carina, Vela, Chamaeleon, Musca and Johnson Range prospects identified earlier this year through geophysical assessment, surface mapping and sampling and the extension of the J4 deposit previously tested along strike by Portman Mining. Drilling commenced at Carina, earlier this week and the second rig is being mobilized into the Johnson Range project.

Polaris is currently conducting a pre feasibility study assessing the economics of mining and exporting iron ore from the region via a rail link to the Kwinana Port. An economic evaluation study earlier in 2007 identified the potential for well over 100 million tonnes of resources in the YIOP, sufficient to support a 10 to 20 year mine life at an optimal mining rate of 10 million tonnes per annum.

The planned drilling density is sufficient to allow initial resource estimates to be completed on the Carina, Vela and J4 Extension deposits. Drilling is planned to continue on a campaign basis throughout 2008 on these targets as results dictate and others in the project area as approvals are granted.

Death toll of ThyssenKrupp Turin rises to 5

AP reported that a man died Sunday from wounds suffered during a fire at a ThyssenKrupp plant in Turin on December 6th 2007, bringing the death toll to five.

An official said that the man died Sunday at the Molinette hospital in Turin, hospital. He had suffered burns over 80% of his body.

The deaths have prompted widespread calls in Italy for increased workplace safety measures. Metalworkers have staged protests to lament what they say is the lack of proper safety measures at many plants.

ThyssenKrupp AG said in a statement after the blaze that there was no confirmation that any safety violations had played a role in the fire.

UN expects world economic growth to slow down in 2007

The United Nations reported that the world economy has been growing more slowly after global unemployment jumped to 6.3% in 2006, the highest in a decade.

According to UN report, released because it is the worlds largest economy, the United States and its weakening housing market are the major drag for this global slowdown. It puts the expected growth of 2007 world gross product at 3.2%, down from an average 3.8% a year during the previous decade.

Mr Sha Zukang the UN’s undersecretary general for economic and social affairs said that "We see a number of worrisome trends. Globally, despite robust rates of economic growth, employment creation is lagging behind growth of the working age population."

The report said that “Some 195 million people were unemployed in 2006, an increase that despite continued growth in global economic output is giving rise to the phenomenon of jobless growth.”

NWR raises coking coal reserves by 50%

Czech mining group New World Resources has recently raised its coking coal reserve estimates by 50% and said that it could keep up production almost twice as long as earlier forecast.

New World Resources, which is considering an initial share offering in London, Prague and Warsaw, said it had 218 million tonnes of coal reserves at mines operated by its fully owned subsidiary OKD. That secures stable production at the biggest Czech thermal coal miner for at least 20 years.

New World Resources in May estimated its reserves at 150.4 million tonnes, mostly consisting of coking coal but with some steam coal and said it would exhaust the mines within 11.5 years. In 2006, New World Resources sold 7.8 million tonnes of coking coal, 5.7 million tonnes of steam coal and 1.3 million tonnes of coke.

New World Resources said in November it would invest around EUR 300 million over the next three years in mining equipment to enhance efficiency and to reach resources that otherwise could not be explored.

A spokesman Mr Joe Cook of New World Resources said the revised estimates had not fully taken account of the investments and there would be another update next spring.

New World Resources sells almost all its coking coal, coke and steam coal production into the Czech market.

4 consortiums in race to build new Panama Canal ship locks

AFP reported that Panama will take bids from four international consortiums seeking to build new, larger ship locks for the Panama Canal. According to a Panama government official, the locks are a key part of the USD 5.25 billion canal expansion project begun in September, aimed at doubling the capacity of the 50 mile canal connecting two oceans. Panamanian officials hope the project will be finished by 2014.

Mr Alberto Aleman head of the Panama Canal Authority said that the four consortiums now have until August 2008 to present final proposals and price tags to compete for the contract.

The bidders are

1. The CANAL consortium which includes the Spanish companies ACS Servicios, Acciona Infraestructuras and Sner Engineering of Spain, as well as the Germany based Hochtief Construction, ICA of Mexico and Royal Haskoning of the Netherlands.

2. Atlantic-Pacific of Panama, which includes Bouygues Construction, VINCI Construction and Alstom of France, Bilfinger Berger of Germany, the US based AECOM, and four Brazilian companies.

3. A consortium that includes the US based Bechtel and Taisei and Mitsubishi corporations of Japan.

4. The fourth group, United Group for the Canal, includes Panama's Constructora Urbana, US based companies Tetra Tech, Montgomery Watson Harza and Heerema Group, and companies from the Netherlands, Italy, Spain and Belgium.

The canal was built 1904-1914 by the United States, which handed control over to Panama in December 1999. The largest ships that now use the canal carry up to 5,000 containers, but after the expansion supertankers and ships carrying as many as 12,000 containers will be able to sail the canal. Some 14,000 ships, comprising about 5% of annual world commerce, pass through the Central American shortcut between the Atlantic and Pacific Oceans, avoiding the arduous and costly journey around Cape Horn, at the southern tip of South America.

About 80% of Panama's economy is linked to canal activity, amounting to some USD 6 billion or 80% of Panama's gross domestic product.

Iran planning a mega steel plant in Golgohar region

Iran daily reported that construction of a steel mill with annual output of 10 million tonnes, being implemented by a consortium of Iranian and foreign investors will soon start in the iron ore rich Golgohar region of Sirjan in Kerman province of Iran. As per report, the project will cost of EUR 4 billion and take five years to get commissioned.

Mr Mohammadreza Pour-Ebrahimi deputy head of Social Security Investments Company for planning and development affairs said that a number of domestic and foreign investors have expressed their readiness to undertake the project.

He pointed out that following preliminary agreements between Kerman Governor General Office and Ministry of Industries and Mines, SHASTA formed a special consortium to implement the project with the assistance of local and foreign investors. He said that SHASTA, UAE’s ETA, UK’s Mittal, Retirement Fund of National Iranian Copper Company and Kerman Development Company have been mentioned as possible participants in the project.

He pointed out that simultaneous investment in mining, production of ingot and establishment of downstream industries have been proposed by the consortium. He hoped that with the final approval of the ministry, the project would be implemented.

Vale to open an office in Oman

It is reported that world’s biggest iron ore miner Brazilian Vale has announced the opening of its Middle East office at Muscat in Oman as a part of Vale's strategy to support steel sector growth in the Middle East and position itself as the best supplier for its Middle Eastern, North African and Indian customers.

Vale has appointed Mr Sergio Leite as its Oman country manager to lead the company's efforts.

Mr Leite said "Oman was an obvious choice when selecting a location for our office in the Middle East. Its strategic location on the Arabian peninsula will play a key role in boosting our competitiveness in the Middle East, North African and Indian markets."

He added that "Oman is already well established as a trading post and its deep water port and industrial areas are already part of well established distribution networks."

Vale plans to develop an industrial complex in Sohar, comprising a deep water port and a direct reduction palletizing plant.

L&T forms JV to setup refinery equipment unit in Oman

ET reported that Indian engineering and construction firm Larsen & Toubro JV firm has signed a deal with Oman's Sohar Industrial Port Company to set up an equipment manufacturing plant in Oman.

Larsen & Toubro in a statement said that Larsen & Toubro Heavy Engineering LLC a joint venture between Larsen and Oman's Zubair Corp signed an agreement recently for the project which will involve an initial spend of USD 50 million

L&T said that the new unit will make equipment for refineries petrochemicals, fertilizer and other processing industries.

Concrete shortages in UAE unlikely to ease off

According to Mr Abdel Razzak Dajani GM of Xtra Mix Concrete there will still be shortages in concrete supply in the UAE in 2008 because of rising demands.

Mr Dajani claimed that the huge number of building projects in the UAE would make it difficult for contractors to acquire adequate concrete supplies. Mr Dajani said he expected the consumption of cement to increase by about 15% in 2008.

He said that “Of course we will go back to the cat and mouse game between supply and the customers' needs. We do expect there will be a shortage next year because the cement that is forecast to go online as excess cement will not go online until the end of 2008 or 2009. Because there will be shortage of cement it will reflect on the shortage of concrete.”

Mr Dajani added that there were measures contractors could take to help keep a constant supply of concrete. He said they should give better notice to suppliers, sign long term contracts and also have two or three suppliers.

Concrete accounts for 75% of the commercial structure's costs and 30% of the whole commercial costs. In 2001, UAE consumption of locally produced cement was at 6 million tonnes.

Xtra Mix Concrete a member of the Al Jaber Group has eight plants and 500 employees.

Egypt to build 3 new power plants

Mr Hassan Younes Minister of Electricity and Energy of Egypt announced the establishment of three new power stations, two in Hurghada and one in Aswan, along with upgrades to current energy infrastructure in both regions. The new plants will come at a total cost of EGP 1.1 billion while the upgrades will cost approximately EGP 78 million.

The announcement came at a press conference that followed the signing of the three contracts with three different firms state owned Egymac, Arab Contractors affiliated Kahromech and ABB Egypt, the Egyptian subsidiary of Swiss based global power and automation giant ABB.

Mr Younes added that the new plants will be linked to the existing energy infrastructure by aerial or terrestrial cables and that the engineering talent and hardware necessary for the project would be entirely locally sourced.

Update on DGCX rebar future contracts

It is reported that Dubai Gold and Commodities Exchange rebar future contract volumes have steadily progressed, touching a record daily volume of 2.960 million tonnes in six weeks since the trading started on the exchange.

Mr Ahmed bin Sulayem chairman of DGCX said that "The DGCX steel Rebar Futures contract, the world's first in many ways, firmly reflects our drive to develop the regional commodity derivatives market. Since its launch, steel rebar futures have evoked positive response from the steel community, traders and investors alike. This is a solid indication of the effectiveness of the contract and the value it brings to the steel trade in the region."

Mr John Short ED of steel and base metals with Dubai Multi Commodities Centre said that "The DGCX steel Rebar Futures price is proving to be an accurate indicator for prices of regional rebar as well as correlated steel. This is its key early success. In the last 18 months the steel community has endured a series of vicious price swings, we are in another right now. Yet the steel market and its financial providers have not had the tools to manage the risks associated with these volatile prices. It is still very early days for our contract, but is fast gaining the favor of investors and steel traders.”

Mr Short said that “Trade in steel rebar futures was cautious initially as participants assessed its efficacy and got accustomed to screen trading of the world's first international exchange traded contract. Daily trade picked up from a modest 50 lots per day during the first week of launch, reaching almost 300 lots on December 6th 2007.”

DGCX's existing list of approved producers so far includes
1. Turkish Habas
2. Turkish Izmir Demir Celik
3. Turkish Ekinciler
4. Turkish Kroman
5. Turkish Kaptan
6. Turkish Diler
7. Saudi Arabian Al Tuwairqi Group;s Al Ittefaq
8. Saudi Arabian Sabic Steel’s Hadeed
9. Qatar’s Qatar Steel
10. UAE's Emirates steel Industries

GCC countries may revalue currencies soon

The United Arab Emirates central bank governor was quoted recently as saying that Gulf Arab oil producers are considering allowing their currencies to appreciate after agreeing to keep pegs to the weak dollar.

The London based al Hayat newspaper quoted UAE central bank governor Mr Sultan Nasser Al Suweidi as saying that "Revaluation of domestic currencies is still an option on the table for central bank governors in Gulf countries. He said the decision not to de link Gulf currencies to the US dollar is final."

Mr Suweidi triggered a spell of intense market speculation about the imminent demise of the Gulf's fixed exchange rates after the last month. He backtracked on those remarks after Gulf rulers agreed at a summit in Qatar to retain the dollar pegs and keep any talks on currency reform secret. He added that the dirham's exchange rate would not change for the foreseeable future.

Mr Suweidi is now the second policymaker since the summit to say Gulf government are considering allowing currencies to appreciate against the dollar which hit a record low against the euro and a basket of major currencies last month.

Saudi Arabia and neighbors, preparing for monetary union, agreed this month to keep their currencies shackled to the dollar after Kuwait broke ranks and started tracking a currency basket. The UAE called last month for the others to follow suit.

Hike in steel and cement prices could hit projects in Rawalpindi

It is reported that the skyrocketing prices of cement and steel i has increased the possibilities of the stoppage of ongoing development projects in Rawalpindi Division of Pakistan. As per report, the government contractors have threatened to stop the work underway with the total cost of over PKR 20 billion.

Mr Abdul Hafeez chairman of Government Contractor Welfare Association Rawalpindi Division in a statement said that PKR 50 has been increased per cement bag while PKR 5, 000 was increased for steel per tonne during the last 20 days.

He underlined that the owners of both the industries have reduced the production, adding that artificial shortage is being created. He demanded of the authorities concerned to take notice of the matter otherwise not only the work on the ongoing development projects would be halted but thousand of people would also be unemployed.

India Oil plans USD 9 billion investment in Egypt

It is reported that Indian Oil Corp announced will partner Egyptian General Petroleum Corp to jointly build a USD 9 billion refinery and petrochemical complex in Egypt.

The report cited an official of IOC as saying that “Talks on the size of the refinery, its cost or the location are yet to be finalized.” But he added that the refinery is expected to be of the size of 180,000 to 300,000 barrel per day as well as a petrochemical project.

Meanwhile, Engineers India Limited, on the sidelines of an energy conference in New Delhi recently said that it hopes to conduct a feasibility study for the project.

Dubai’S Al-Sufouh tram network attracts 3 consortiums

It is reported that Dubai's Roads & Transport Authority has received bids from 3 international consortium’s for its AED 2 billion designing and building contract for the Al-Sufouh tram scheme.

The consortiums are as under
1. French Alstom with the local and Belgian Bel Hasa Six Construct
2. Italian Ansaldo Trasporti with Japan's Marubeni Corporation and Pizzarotti
3. German Siemens with Australia's Gulf Leighton and the local Al-Habtoor Engineering Enterprises.

Pakistan 969MW Neelum Jhelum hydropower project

Pakistan Dawn recently reported that Pakistan cabinet has formally approved the strategically important Neelum Jhelum Hydropower project at a revised cost of PKR 128.4 billion with a foreign exchange component of PKR 46.5 billion. The approval cleared the way for the long awaited construction of the project.

The project envisages the diversion of Neelum waters at Nosairi in Azad Jammu and Kashmir and it will involve tunneling of 47 kilometer for diversion of the water from Nosairi to the power station.

The project, awarded to the Chinese company will be completed in eight years. The project will also be executed through a corporate company, which has since been set up and the debt ratio of the project will be around 50:50 with equity being raised through a nominal surcharge of electricity excluding 3 million lifeline consumers.

Aramco and Sumitomo to expand their petro JV

Nikkei business daily reported that Japan's Sumitomo Chemical Company and Saudi Aramco are in talks to expand their 50:50 petrochemical JV with additional investment of at least JPY 200 billion. JV's petrochemical complex will start commercial operations in the fourth quarter of 2008.

The paper said they are discussing building a new plant in Saudi Arabia for compound resin for digital consumer electronics and automobiles as early as 2012. It said the two companies will launch a feasibility study on the new plant as early as spring 2008 with an eye to starting construction in 2009.

The paper said that the new plant will produce optical materials for liquid crystal display TVs, compound resin for automobiles and other value added resin and will supply China, the Middle East and Europe.

Chinese industrial output growth slows to 17.3% in November

According to National Bureau of Statistics that Industrial output at Chinese companies with annual revenue of at least CNY 5 million increased at an annual rate of 17.3% in November 2007.

This is modestly lower, by 0.6% points than the figure for October 2007. It is also the smallest increase for any month since February 2007 when industrial output rose only 12.6% as many factories suspended production during the Spring Festival.

Mr Zhang Yansheng head of the Research Institute of Foreign Trade and Economic Cooperation which is under the National Development and Reform Commission said that "The slower pace in industrial output growth came as China's macro economic tightening measures started to yield results."

China has raised interest rates five times so far this year, lifted the bank reserve ratio 10 times and slashed export tax rebates as it attempted to curb sizzling economic growth.

Steel price in China to further strengthen in December

It is reported that Chinese steel prices, which started to skyrocket in the fourth quarter across the board due to various factors, are likely to surge in near futures.

The surge so far is attributed to
1. Robust economic growth
2. The increase in currency circulation and rising inflation
3. Increase in price for energy and non ferrous metal
4. Maintenance by steel makers

As per analysts, further increase for steel prices is likely in the balance period of December 2007 due to following reasons

1) Raw material prices are still on an upward trend. Besides iron ore, coke price also have jumped up and the strong overseas demand has led to a lot of growth in exports. As a result, there is limited supply of coke in domestic market, adding to the upward pressure. On the other hand, the rise in export duty for coke exports in China is going to raise international market price.

2) The global economy looks solid according to IMF forecast and there is still good demand for steel products in the rest of the world. Steel exports from Russia has seen great drop due to its good domestic consumption and China has become a leading steel supplier to the world. The rise in export tariff would only shoot up international price step by step and exports would continue growing as long as there is demand.

3) The weak US dollar versus the Euro is also a key factor to push up world steel prices. The USD per Euro value is a proxy for the global cost to produce steel in USD terms. The weaker the USD is, the higher the prices of iron ore and steel on the world market. Chinese domestic prices would also be driven up and this is particular the case with export price taken into account the strength of CNY over USD.

4) n addition, the tightening policy on credit would cast adverse effect on the market.

Therefore, in general, prices are expected to go on edging up after corrections although there could be a risk of downward adjustment later due to steep surge in prices.

Baosteel to expand its plate mill range and capacity

It is reported that Baoshan Iron & Steel Co Ltd China has placed an order with SMS Demag for the supply of a new roughing stand for its 5 meter plate mill in Shanghai. The first plate is to be rolled on the new roughing stand in December 2008.

Baosteel’s heavy plate mill, which was built by SMS Demag has been in operation since March 2005, will raise its annual production from 1.4 to 1.8 million tonnes as a result of the expansion. The new roughing stand will also make it possible to produce plates in thicknesses of up to 400 mm which are playing an increasingly important part above all in ship building.

The roughing stand with a work roll barrel length of 5,100 mm will have a rolling force of 108 MN, like the finishing stand. It will have hydraulic adjustment systems and rapid mechanical roll presetting so as to enable short reversing times.

A special revamping concept will allow the expansion to take place without non scheduled stoppages. Already at the end of 2007, the roller tables upstream and downstream of the roughing stand area are to be revamped to enable special purpose vehicles to remove the hot slabs downstream of the descaler and to re introduce them upstream of the finishing stand. We will thus be able to erect the roughing stand completely and put it into operation without needing to interrupt the production.

FMG eying loan from Chinese banks – Report

It is reported that Fortescue Metals Group is seeking at least USD 1 billion in loans from Chinese banks to fund expansion.

As per report, Mr Andrew Forrest CEO of Fortescue Metals Group has held talks with bank executives in Beijing recently for low interest loans to fund the expansion supply that will Chinese steelmakers. The bankers said that FMG aims to obtain funds from China as early as next January. The loans would be linked to its sales of iron ore to China.

Macquarie Group Ltd said in October 2007 that FMG needs money to fulfill its plan to quadruple output at its existing AUD 2.7 billion project in Australia by 2014.

Ms Anita Yadav head of credit and hybrid research at UBS AG said ”The Chinese banks may get some kind of support from the Chinese companies that need to buy iron ore from Fortescue and that is how this debt might get structured.''

Chinese HRC export offer climbs up on domestic rise

It is reported that Chinese steel makers have raised export offer for hot rolled steel coils again since this week citing the strong rise in home market prices. Transaction prices are also moving up accordingly as overseas customers turn to realize the upward trend for Chinese HRC.

Domestic HRC prices have witnessed substantial increase in the past two weeks. On Shanghai market, commercial 4.5mm to 11.5mm*1500mm HRC is being offered at CNY 4580 per tonne, 1800mm wide material at 4850 per tonne. 2.75mm*1250mm goes at CNY 4940 per tonne, 2.0mm*1250mm at CNY 5100 per tonne.

HRC price is believed to be on an upward trend. If we take commodity grade 4.5mm to 11.5mm HRC price as benchmark, the level above CNY 4500 per tonne means no further decline and another wave of rise is following. Otherwise, there is still room for further downward corrections.

China’s urban fixed asset investment sees robust rise in 11 months

It is reported that China’s urban fixed asset investments posted a robust rise in January to November 2007. The National Bureau of Statistics said that spending on fixed assets in the cities rose 26.8% in the period from January to November compared with a year earlier.

Mr David Melser an analyst with Moody’s said that “There looks to be little sign of a cooling on the mainland. Overall urban fixed assets investment a key measure of spending on items such as plants, equipment and infrastructure for the period was 10.1 trillion.”

Investment bank Goldman Sachs said in a research note said that the full 11 month data indicated no major change during the month as the first 10 months had seen an increase of 26.9%. It said the underlying growth momentum remains robust which is consistent with the strong import data. Imports increased at a faster rate than exports in November rising 25.3% in 2006 to USD 91.3 billion.

Mr Grace Ng Hong Kong based economist of JPMorgan Chase Bank said that “The likelihood of a near term interest rate move remains high. This is so especially considering the upside surprise in November inflation and the authorities’ target to correct the negative real deposit rate condition.”

China has already hiked the interest rate five times this year while raising the amount banks must keep in reserve 10 times.

Hanwa expands China steel processing sites

It is reported that Japan's Hanwa Co is expanding overseas processing sites for steel sheet and stainless steel to keep pace with growing local production by Japanese consumer electronics and automotive parts manufacturers. The expansion cost is around CNY 1.3 billion.

As part of this, Chang Fu Stainless Steel Center, a JV with Nisshin Steel Co, has relocated and expanded its plant in the Chinese city of Taicang, Jiangsu Province boosting monthly output capacity for steel sheet to 20,000 tonnes from 16,000 tonnes.

Accompanying the expansion, Hanwa has raised its stake in the Chinese unit to more than 70% from less than 60% before.

Domestic price rise drives HDG export offer upwards in China

It is reported that Chinese hot dipped galvanized coil export offers have seen remarkable increase in the past weeks due mainly to rebound in home market prices.

Domestic prices have been catching up in the past weeks with HRC and CRC leading the rise. On Shanghai market, 1.O HDG by Anshan Steel is being offered at 5350 per tonne to 5400 per tonne, 0.5mm HDG by private producers at CNY 5700 per tonne up by CNY 250 per tonne to CNY 300 per tonne and CNY 200 per tonne respectively than end November 2007. As forecast in last week, price for 1.0 HDG in Shanghai has continued edging up after it exceeded CNY 5200 per tonne. We believe that the short term target should be CNY 5600 per tonne as long as it goes past CNY 5400 per tonne.

Most steel makers have marked up export offers substantially to keep up with the domestic rise. A central China based steel producer has raised its quotation for 1.0mm HDG to USD 700 per tonne FOB from USD 660 per tonne FOB in November 2007.

Another steel mill in Hebei province is also quoting 1.0 HDG at USD 700 per tonne FOB USD 20 per tonne to USD 30 per tonne above the level in end November 2007. By contrast, a tier one steel maker in North China is tagging at USD 725 per tonne FOB for the same product, February or March shipment.

An export manager with HDG producer said that "Export tonnages are still on the rise and the volume for November and December shipments are expected to go down further due to weakening overseas market, possible anti dumping probe by the EU and rumored pending rise in export duty in 2008. And it is the case with other producers."

Baosteel to acquire Luojing project

It is reported that Baosteel will acquire Luojing Project of Shanghai Pudong Iron & Steel Co at CNY 14.28 billion. Baosteel will pay 20% of total payment per year and will complete the payment by December 31st 2012. After the acquisition, Baosteel would become one of the biggest medium heavy plate producers in China.

As per report Luojing Project includes a COREX C3000 smelting reverting furnace 150 tonne converter smelting equipment a slab continuous casting machine, a 4,200mm medium plate roller and related establishment such as power plant and other fixed assets.

Luojing Project lies in Baoshan District, the city of Shanghai. It started on June 29th 2005 and is supposed to be operated since November 2007. There are totally two phases of the project. The scale of construction in the first phase is 1.5 million tonnes of molten iron, 1.53 million tonnes of billet and 1.6 million tonnes of steel products per year.

Sinosteel acquires 5 state owned enterprises

It is reported that Sinosteel and SASAC of State Council recently inked agreement for state owned property rights be transferred to Sinosteel without compensation.

According to the agreement, following companies would be transfreed to Sinosteel
1. China Metallurgical Mining Company
2. Jing Xiang Housing Development Corporation
3. China International Heat Energy Engineering Company
4. Sunrise Investment Corporation
5. ZhongJing Industrial Development Company

Mr Zhang DongQuan director of SASAC said that “These five enterprises have gained development and benefit in the past five years, however the development was slow because of the limited objective conditions. After transfer to SinoSteel Group, the objective conditions will have fundamental change, its future development prospects will be even better.”

Baosteel and Dai-ichi Mutual to form insurance JV

Jiji Press reported that Dai-ichi Mutual Life Insurance Co and China's Baosteel Group Corp are in the final stage of talks on establishing a life insurance joint venture in Shanghai.

The joint insurance company is expected to start by selling savings type products such as endowment policies mainly in Shanghai and its vicinity, where the proportion of high income earners is high, according to the sources. It will also sell insurance products to Baosteel employees and will then aim to broaden its customer base by capitalizing on the high name recognition of Baosteel, one of the biggest conglomerates in China.

Dai-ichi Mutual Life which is planning to convert itself into a shareholder owned company and go public in fiscal 2010 intends to accelerate its business expansion by entering the huge Chinese market through the tie up with Baosteel. Dai-ichi Mutual Life is currently owned by policyholders. It will supply its insurance business know how to the joint venture and send officials to its board.

Shanghai based Baosteel, China's leading steelmaking group is aiming to diversify its revenue sources through the partnership with Dai ichi Mutual Life. Baosteel has a non bank lender and other financial service units under its wing.

China's bank reserve ratio raised by 1%

China central bank announced that China will raise the reserve requirement ratio by 1% point for commercial banks in an effort to cool the booming economy.

The People's Bank of China said in a statement that the move which will take effect on December 25th 2007 will push the ratio to a new high of 14.5% after it reached a 10 year high of 13.5% on November 26th 2007. This is the country's 10th rise in the reserve requirement ratio this year. It is aimed at "strengthening liquidity management in the banking system and checking excessive credit growth."

Mr Song Guoqing professor of the Peking University said that it means that a tighter monetary policy has been adopted. He said the move, launched at the end of the year is also to prevent a boom in credit, which usually rebounds at the beginning of a year.

Mr Peng Xingyun a researcher with the Research Institute of Finance under the Chinese Academy of Social Sciences said against a background of rising trade surplus and foreign exchange reserve, the rise is a further move to hedge excess liquidity in the country.

Baosteel and Hansteel launch USD 2.6 billion JV

It is reported that Baosteel Group has launched a USD 2.6 billion JV with Hansteel Group after China’s National Development and Reform Commission gave nod to the plan of building the CNY 19.4 billion steel plant in Handan in December 2005.

Upon completion, the plant will be able to produce annually 4.6 million tonnes of high grade steel.

First stage construction of the joint venture, including a 3,200 cubic meter blast furnace is expected to be completed in the first half of 2008.

The venture is expected to be put into complete operation at the end of 2010 when overall construction is finished.

Smart Energy to acquire controlling stake in CBM project

Interfax China recently reported that Hong Kong listed New Smart Energy Group will acquire a stake in a Chinese coal bed methane pipeline company and thereby hold a controlling interest in the country's first cross provincial CBM pipeline project.

New Smart Energy Group said that it intends to invest a total of CNY 250 million in purchasing a controlling 56% stake in Shanxi Tongyu Coalbed Methane Transportation Ltd from its two existing shareholders.

New Smart Energy Group aims to gain the 30% interest in the target company held by Sanxia International Energy Investment, as well as the 26% interest held by Chongqing Sanxia Gas Ltd. This will leave two other shareholders in the company, namely Shanxi Energy Coalbed Methane Investment Holdings Ltd and Henan Zhongyuan Oil and Natural Gas Development Ltd.

New Smart Energy Group will buy Sanxia International Energy Investment in its entirety from owner Mr Chen Keyu, an associate of New Smart Energy Group's ED Mr Tan Chuanrong. It will also acquire complete control of Chongqing Sanxia Gas by purchasing its parent company, China Sea Gas from Mr Tan's daughter Ms Tan Yinan.

The Duanshi Jincheng Boai pipeline project was first proposed in China's 2006 to 2010 CBM development plan. Construction on the project, which is expected to require CNY 453 million in investments, is scheduled to begin at the end of this year. The completed pipeline is scheduled to start operation in late 2008.

Under the country's 2006 to 2010 CBM development plan, 10 CBM pipelines are to be constructed by the end of 2010 to give the country an aggregate annual CBM transmission capacity of 650.3 billion cubic meters.

11 people to face trial in coal mine blast that killed 171

It is reported that 11 persons have been put on trial in connection with a coal mine blast that killed 171 people in northeast China's Heilongjiang province two years ago.

Xinhua said all the defendants were detained by police on December 13th 2005 but they were released on bail on August 28th 2006 before they were arrested again in November 2007.

It said the court gave no information on the other 10 defendants or the charges against them, nor did it explain why the trial was delayed for almost two years.

No indication was given about the proposed duration of the trial.

Production of seamless pipes launched at Pavlodar plant

It is reported that Mr Nursultan Nazarbayev president of Kazakhstan participated in the launching ceremony of a plant producing seamless pipes for oil and gas sector of KSP Steel Ltd in Pavlodar are of Kazakhstan.

Mr Nazarbayev while addressing the staff of KSP Steel said that “Advancing the oil and gas complex and being a large oil and gas exporter to the world market, we will always develop the engineering in this sphere.”

He said that nowadays the steel seamless pipes find a quick sale and hoped that it will expand its production soon.

Mr Nazarbayev also stressed that it was the first enterprise of this kind in Kazakhstan.

US Steel completes relining of BF No 2 at Serbia

Serbia & Montenegro Today reported that, after 83 days company, US Steel Serbia has successfully finished modernization of blast furnace No 2.

Mr Richard E Veitch GM of US Steel Serbia said that the aim of modernization, in which USD 40 million were invested, is to prolong life of that high furnace for another 15 years.

Blast furnace No 2 was put into operation in 1987 and it has been working non top for 20 years. At the end of June 2005 blast furnace No 1 which had been out of work for 18 years was put into operation.

US Steel Serbia invested USD 33.1million in that project and is trying to reach projected capacity of production of raw steel in amount of 2.2 million tonnes per year.

RZD to invest RUB 103 billion in infrastructure works in 2008

Mr Vadim Morozov first VP of Russian Railways, while speaking at a conference with managers from Russian Railways’ track repair and maintenance division, announced that "In 2008, we will be repairing and upgrading 15,900 kilometer of track 36% more than this year’s figure of 11,700 kilometer and increasing our spending on these purposes from RUB 77.3 billion in 2007 to 103 billion in 2008."

He explained that RZD is moving towards more reconstruction of the track and its associated infrastructure which includes the repair of the sub grade formation, artificial and drainage facilities and other complex works.

According to Mr Morozov “The task is complicated by the fact that the work will have to be carried out against the background of steadily increasing transportation and traffic volumes, which necessitates undertaking a whole series of important measures to improve and upgrade the track system. However, this situation also provides an opportunity to reexamine the existing order of planning and organizing the window of opportunity for completing track work and to apply more broadly the promising new technology for laying track in winter which the Company has successfully tested at Western Siberian Railways.”

Ms Tymoshenko make coal industry as a priority item

Ukrainian Journal reported that Ms Yulia Tymoshenko views the development of the coal industry in Ukraine as one of the priorities of her newly formed government.

She said that "Our one main priority is the development of coal production. We have agreed not to abolish the post in the Cabinet of Ministers and we will nominate a worthy candidate for the post."

However, she said that approach to the development of the coal industry in Ukraine should be changed.

Gazprom plans to stick to Nord Stream timeframe

RIA Novosti reported that Russian energy giant Gazprom does not intend to review the timeframe for the Nord Stream pipeline being built under the Baltic Sea to pump Russian natural gas to Germany.

Gazprom's spokesman told Vesti TV channel that "We expect this project to be implemented within the agreed timeframe. Now we are coordinating all environmental issues with the countries involved in the discussion Finland, Sweden, Denmark and Germany. So far, we see no grounds for reviewing our earlier announced plans to launch gas transportation via the pipeline in late 2010."

The ambitious pipeline project is being developed by Russia's state controlled gas giant Gazprom and Germany's E.ON and BASF at an estimated cost of USD 12 billion. The first of Nord Stream's two parallel pipelines, approximately 1,200 kilometers long, each with a transport capacity of some 27.5 billion cubic meters per year is to become operational in 2010. In the second phase, capacity should double to about 55 billion cubic meters per year.

Ukrainian electricity production in 11 months up by 1.4% YoY

It is reported that Electricity production in Ukraine rose by 1.4% YoY or 2.366 billion kWh YoY to 175.999 billion kWh in the first eleven months of 2007.

As per report over the 11 months, the increase has been as under
1. Ukrainian nuclear power plants – Up by 2.3% YoY
2. Thermal power plants – Up 3.4% YoY
3. Municipal thermal power stations - Up by 8.8% YoY
4. Hydro power plants – Down by 22.4% YoY

Construction of LNG plant at Shtokman to begin in Q2 of 2008

RIA Novosti reported that the construction of an LNG plant at the Shtokman gas field in the Barents Sea will be launched in the second quarter of 2008.

Mr Yury Komarov general director at Sevmorneftegaz said that "We have selected a construction site in the village of Teriberk. We should produce the first natural gas at Shtokman by July 2013 and everything should be prepared for the launch of LNG supplies by January 2014 adding that work was currently progressing on schedule.”

Mr Yury Yevdokimov governor of the Murmansk Region by the Barents Sea said the new plant would have serious social infrastructure including 28 four story apartment blocks, two kindergartens, three schools, a swimming pool and a clinic to be built alongside and "even at a faster pace.

Gazprom has a 51% stake in the project, while France's Total and Norway's Statoil Hydro have 25% and 24% respectively.

Mr Gaydamak sells own Russian oil co to his Israeli holding co

It is reported that Mr Arcardi Gaydamak's Israeli holding company, Ameris Holdings Ltd will buy a Russian oil company, Kaliningrad Neft Company from a private company owned by Gaydamak and registered in the British Virgin Islands. Ameris's board has approved the parties at interest transaction.

Ameris will establish a Cypriot registered company which will acquire the Russian oil company from Gaydamak's British Virgin Islands Company that owns 99% of Kaliningrad Neft in exchange for 120,000 Ameris shares. Third parties own the remaining 1% of Kalingrad Neft.