Mineral rich states want ban on mineral export

It is reported that chief ministers of mineral rich states like Orissa, Jharkhand, Chhattisgarh, Rajasthan and Karnataka will submit a joint memorandum to the Prime Minister, demanding that the value addition of iron ore and curbing of exports of the mineral be ensured in the coming mineral policy.

A top Orissa government official said that "Chief Ministers of these states will meet Mr Manmohan Singh at his residence and will discuss at length the issues pertaining to the coming mineral policy. They will be categorically demanding value addition of iron ore within their respective boundaries and ban on its exports."

Mr Naveen Patnaik chief minister of Orissa said that “We will discuss the matter with the prime minister during the discussion with him regarding our apprehension about the implementation of the proposed national mineral policy. We will convince him about the value addition of minerals within the country rather than exporting these resources.”

Vale and TATA Steel in talks for slab plant in Brazil – Report

BS reported that the world’s largest producer of iron ore and pellets Brazilian miner Vale is in talks with some of its clients, which includes TATA Steel, to set up a steel slab plant in Brazil.

However the report cited a spokesperson of Vale as saying that “A company as large as Vale is often in talks with several companies, among them TATA Steel from India. But other than that, there is no further information about partnership or anything beyond.”

The report also cited a TATA Steel spokesperson as saying that “At this point, there is nothing.”

Vale already has three plants under construction in Brazil in partnership with ThyssenKrupp, Dongkuk and Baosteel, in which Vale has a minority stake.

According to industry analysts, a TTATA Steel and Vale alliance will be a win win scenario for both companies. While Vale is looking to leverage its mineral resources and cash in on the booming steel market, TATA Steel is aiming to set up steel plants close to its raw material base as well as ramp up its raw material security as it required large quantity of iron ore on account of Corus.

Environment Month celebrated at SAIL SSP

Steel Authority of India Limited’s Salem Steel Plant has celebrated Environment Month from November 19th 2007 to December 18th 2007.

Mr BB Singh ED of Salem Steel Plant, while speaking at the closing ceremony, said that “Alongside industrialization, we have to continue our efforts to optimally utilize the limited resources to preserve the fragile planet and its eco systems. We owe it to our future generations to hand over the world in a condition where life can sustain itself.”

He elaborated on the measures taken by Salem Steel Plant, the first SAIL unit to be certified to ISO 14001 in 1999, for pollution control and environment protection.

Dr R Nagendran professor at Centre for Environmental Studies of Anna University gave a lecture on “Integrated Approach – The need of the hour to understand our environment better”. He elaborated the need for first understanding the environment in its multi dimensional perspective and then to develop and execute management strategies. He explained the law of ecology stating nothing comes from nowhere, everything comes from somewhere. He expressed satisfaction on the commitment to environment protection by corporate like SAIL.

Slogan competition for Salem Steel Plant employees, besides drawing and quiz competitions for school children had been held during the month. Prizes were also given to the winners.

Electrosteel lodges appeal on AD duty on DI pipes from Hebei Xinxing

Chinese media has reported that India's Electrosteel Casting Limited has lodged an appeal to the customs, excise and service tax court in India against the rulings on import of ductile iron pipes from China and has asked to revise the affinitive rulings decided by the antidumping bureau and announcement by ministry of commerce of India, wishing to label Hebei Xinxing Ductile Iron Pipe Co Limited as uncooperative and remove its special duty policy.

It is noted that relevant department of India had issued final rulings on import of China's ductile iron pipes on August 23rd 2007, suggesting imposing duty of USD 127.40 per tonne for XinXing Ductile Iron Pipes Co Limited, who responded to the accusation and all other Chinese enterprises USD 139.79 per tonne, effective from the date of issuance.

Xinxing Ductile Iron Pipes Company Ltd was reported to have said that it exports annually 12,000 tonnes of ductile iron pipes to India and during last three years exports to India was merely 1.5% of its total dales volume.

Orissa CM hopes for work start on POSCO plant by April

It is reported that Orissa chief Minster hopes that POSCO will begin construction work on its Orissa steel plant by April 2008.

Mr Naveen Patnaik chief minister of Orissa said that "POSCO is the largest foreign direct investment in India. It will bring huge revenues to the central government and create many jobs and infrastructure. We are trying to sort out mining issues."

It is noted that the proposed steel plant has been left hanging for 2 years due to stiff opposition from local farmers angry over losing their land for the project.

Indian Railways freight revenue in 8 months up by 10.99% YoY

Indian Railways has generated revenue of INR 29416.42 crore from freight traffic during April to November 2007 period up by 10.99% YoY as compared to INR 26502.79 crore during April to November 2006 period.

Indian Railways carried 501.38 million tonnes of freight traffic during April to November 2007 period up by 7.97% YoY as compared to 464.39 million tonnes carried during April to November 2006 period. The net tonne kilometers recorded at 321460 million up by 5.44% YoY from 304871 million.

The earnings from freight traffic during the month of November 2007 was INR 3992.83 crore up by 10.67% YoY as compared to INR 3607.85 crore November 206. It carried 65.67 million tonnes of freight traffic during November 2007 up by 7.55% YoY as compared to 61.06 million tonnes of freight traffic during November 2006. The net tonne Kilometers went up from 39670 million to 42093 million, showing an increase of 6.11% YoY.

The details of total earnings in November 2007 are

Volume in million tonnes
Earnings in INR crore

Shipping ministry pitching for 20% shipbuilding subsidy

It is reported that union shipping ministry is pitching for about 20% subsidy levels for the ship building sector and has floated a cabinet note with the proposal. Additionally, the shipbuilders may also get subsidies for large vessels only with the ministry batting for a level playing field between domestic and export orders.


Till mid August 2007, the ship manufacturing sector used to receive 30% subsidy under the shipbuilding subsidy scheme. In the earlier subsidy regime, if ships were manufactured for exports, all types of ships were eligible for the subsidy provided the Indian firms won orders by meeting certain norms like global competitive bidding process. However, if they were manufactured for the domestic market, the subsidy was restricted to ocean going merchant vessels that were over 80 meters in length. Thus even if ships are manufactured for the export market, a subsidy would be extended only if the ships are larger than 80 meters.

According to a KPMG study, Indian shipyards face a price disadvantage of about 51% and 41% as compared with those in China and Korea on account of lower taxes and customs duties, lower interest rates on working capital and capital expenditure apart from bulk purchase discounts on purchase of inputs.

Despite the current boom in the ship building sector, Indian ship makers have sought extension of the subsidy pointing out that shipbuilders in Europe, China and Korea receive several fiscal benefits that makes the Indian shipyards sector uncompetitive. Private shipyards like ABG, Bharati and Pipavav are witnessing the growth significantly from exports. According to consulting firm I maritime early this year, out of the private shipyards’ total orders of USD 2,686 million, exports account for almost USD 2,284 million.

Tax breaks for captive and merchant power plants unlikely

It is reported that revenue department has declined to provide any tax breaks for captive and merchant power plants and has shot down the power ministry’s proposal to give tax incentives to these power plants if they have a capacity of 1,000 MW or more.

The report said that the revenue department is of the view that the ministry should support such sectoral development through plan support or budgetary allocation instead of tax exemptions.

The revenue department is of the view that since selling price of both merchant and captive power plants is to be determined by way of competitive bidding or by electricity regulatory authorities, extending fiscal sops to captive power plants will lead to a double benefit for their promoters. This is because capital assets of captive power plants are normally taken on the balance sheet of the main company. Since all fixed costs of captive power plants are accounted for, if their selling price is determined by competitive bidding alone, their competitors that have to factor in costs relating both to capital assets and variable expenses will be at a price disadvantage, giving such captive power plants an undue advantage.

The mega power policy offers incentives such as complete waiver from customs duty on equipment imports and a 10 year tax holiday to thermal power projects with a minimum capacity of 1,000 MW and hydel projects of 500 MW capacities. The power ministry, which feels that captive and merchant power plants may play an important role in boosting India’s power generation capacity, wanted similar concessions extended to this category of power plants. It had circulated a draft cabinet note on the proposed changes in the mega power plants policy.

CPI M stages rally against bauxite mining in Vizag

It is reported that CPI M has staged a protest demonstration and rally in Visakhapatnam on December 18th 2007 against the move by the Andhra Pradesh Mineral Development Corporation to undertake bauxite mining in the agency tracts of Visakhapatnam for providing raw material to the alumina refineries to be set up by the Jindal Group in Vizianagaram district and Ras Al Khaimah Group in Vizag district.

Mr Ch Narasinga Rao district unit secretary of CPI M said that the party, along with other opposition parties and voluntary organizations, would mobilize the Girijans against the proposed mining in the Eastern Ghats, as it will spell ruin to the livelihood of Girijans and also result in wanton destruction of the environment, especially pollution of water sources.

Mr Rao alleged that the state government was totally impervious to public opinion and going ahead with its move to take up bauxite mining. He said the requisite environmental clearances and forest clearances had not been obtained for mining in 1,649 hectares in GK Veedhi mandal of Visakhapatnam district for the RAK alumina refinery.

He further alleged that the public opinion was overwhelmingly against the setting up of alumina refinery in the S Kota mandal of Vizianagaram district. He said that “More than 90% of the speakers were against the refinery at the public hearing conducted by the AP Pollution Control Board, but the state government is unruffled.”

REL eyeing for power projects in Africa - Report

It is reported that Reliance Energy Limited, which is in the race for Tuas Power of Singapore and a green field project in Bahrain, is now planning to foray into Africa and is believed to be in talks with the governments of Botswana, Tanzania and Zambia for setting up generation capacities of over 1,000 MW.

The report said that “REL has submitted an expression of interest for a 300 MW to 400 MW coal fired power plant in Botswana, 500 MW hydel power project in Tanzania and coal based generation capacity in Zambia.” It added that for building 1,000 MW projects in these countries, REL will have to shell out around INR 4,000 crore.

The report cited a source as saying that “REL is planning around INR 20,000 crore investments across the world. As part of it, the company has submitted a non binding bid for Tuas Power of Singapore, valued at USD 2 billion. Previous week, the Bahrain government had short listed 4 companies including REL for the technical and commercial bids for a 1,200 MW gas fired combined cycle project and 48 million gallons per day desalination plant. The projects will need INR 4,500 crore investments.”

The report added that REL is also likely to bid for 1,200 MW Greenfield project at Yanbu in Saudi Arabia.

India to invest INR 50000 crore to increase cement capacity

Cement Manufacturers' Association recently said that India’s cement industry will add 110 million tonnes to its production capacity at an investment of INR 50,000 crore in the next 3 years.

Mr HM Bangur president of Cement Manufacturers' Association said that "In the next 3 years, INR 50,000 crore is being invested for increasing cement capacity in India by 110 million tonnes."

He added that during April to November 2007 period, India saw an 8% YoY growth in the cement production.

On pricing, Mr Bangur said that it is stable right now and would remain at the existing level for the next 6 months.

Work on Chennai Metro to start in 2008

Mr Jaipal Reddy union minister for urban development announced that centre would soon sanction the INR 10,000 crore Metro Rail project in Chennai. The work on the metro project would start in 2008, which would start functioning in 3 years.

Mr Reddy, while addressing CII’s Infra 2007 MAP Tomorrow’s at Chennai said that the working of the urban local bodies needs to improve for planned urbanization. He added that “I do not think there are free lunches in urbanization. Urban local bodies have to reform and people will be willing to pay for better services.”

MAP, an acronym for Marakanam, Arakonam and Pulicat in Tamil Nadu, is a proposal by the CII for the development of a planned urban belt around the city that will act as a counter magnet that will ease the pressure on Chennai.

Mr Reddy said that MAP could replicate the success of the NCR where Gurgaon and Noida are important centers of development that ease the pressure on Delhi.

He added that a bus rapid transport system for Chennai is also in the pipeline.

BEML to start producing high speed coaches in 2008

BL reported that Bharat Earth Movers Limited is expected to start producing medium speed rail coaches that can run at 200 kilometer per hour from 2008-09.

Mr VRS Natarajan CMD of BEML said that the medium speed project will come up as a JV with a global major, which will be BEML’s technology partner. Production will be at a new third plant. He did not disclose the investment in the JV or its location.

Mr Natarajan said that “This will be possible when we set up a Greenfield plant to produce bogies for the proposed high speed freight corridors and the work for the plant is likely to begin in 2008-09. This plant would produce 2,000 bogies in all types per annum from the first year. These trains will be introduced in Bangalore and Hyderabad to connect the city with new airports. We are trying for suitable technology to produce these metro bogies.”

BEML currently has rail coach facilities in Bangalore and Kolar Gold Fields.

Kerala HC admits writ against illegal strikes in Kochi port

It is reported that a writ petition seeking to declare that the strikes are illegal in the Cochin Port Trust has been admitted by the Kerala High Court. The court also issued notices to the trade unions on the petition filed by the Cochin Chamber of Commerce and Industry, Cochin Steamer Agents Association, Cochin Customs House Agents Association and Indian Chamber of Commerce and Industry.

The petitioners representing the entire maritime community in the port pointed out that the illegal strikes recently have caused irretrievable financial loss as well as the loss of future business to the members of the trade. They pointed out that the foreign buyers would shy away from the investment due to flash strikes and the resultant instability that occurs in the port.

Mr Joy Thattil, who appeared for the petitioners, submitted that the passenger vessels as well as the cargo vessels are now being deviated from the port which is exploited by the neighboring ports due to these illegal strikes called by the trade unions.

The petitioners said that foreign investors including DP World, who had invested crores of rupees for the construction activities of the dream project of International Container Transshipment Terminal at Vallarpadam, might withdraw from their obligations due to these illegal strikes.

It is pointed out that 1,595 hours of strikes were already called by the various trade unions in the port during the period from April 2005 to November 2007 and this has resulted in heavy financial loss not only to the port but also to the entire maritime community in Kochi.

CIL inks MoU with NBCC for residential complex in Kolkata

Coal India Limited has entered into a MoU with National Building & Construction Company Limited for construction of an INR 120 crore modern residential complex for CIL on a 15 acre plot in Kolkata.

The pact aims at turnkey implementation of the project in 30 months. The proposed integrated complex will house all offices of CIL, currently scattered all over the city, as well as the Kolkata based offices of CIL's subsidies.

AP to rename 2 power plants

It is reported that Andhra Pradesh government has decided to name the 6x210 MW Vijayawada Thermal Power Station and the upcoming 500 MW unit in the Krishna district as Dr Narla Tata Rao Thermal Power Station in recognition for his exemplary contribution to the power sector in India and the state.

According to a statement from Mr Ajay Jain MD of AP GENCO, the state government also ordered that 1600 MW proposed thermal power station at Krishnapatnam in the Nellore district be named Sri Damodaram Sanjeeviah Thermal Power Station for his exemplary statesmanship and dedicated services rendered to the state as the chief minister of Andhra Pradesh.

Meghalaya plans to add 700 MW hydel capacity

BS reported that, with abundant hydro power generating around 4,000 MW at its disposal, Meghalaya is all set to tap the resource through public private partnership mode to generate more than 700 MW of power and targets to earn revenue of at least INR 1,000 crore in the coming years.

For that matter, the state government has come up with a new power policy, based on the parameters of electricity act of 2003, to facilitate private investment in the state's power sector.

Mr Mukul Sangma deputy chief minister of Meghalaya said that the government has already floated expression of interest and as many as 30 small and big companies such as JP group, Jindal group, Essar, Athena, have evinced interests in taking up the projects. It has identified 4 projects to be developed either by private players on build operate and transfer basis or through JVs.

Mr Sangma said that Meghalaya cabinet has approved all the project and MoUs with private players would be signed soon. State government has decided to fund the state electricity board to conduct surveys of river basins to identify potential projects sites. He added that JP group has shown interest to develop the Khynshi II and Umngot basin projects and Athena and Seven Sister Energy Limited are interested for Khynshi I and Simsang basin projects respectively. Umiew, Myntdu and Umingi basin projects are other few big hydel projects which the state government plans to develop through private partnership.

Mr Sangma said that the state government has been receiving lot of proposals from prospective private players for investing in these projects too. The state of Meghalaya, which was once power surplus, is now plagued by severe power crisis. The peak hour demand in the state is around 610 MW and the state generates just around 185 MW.

He said, once the projects are completed and put into operation, the state would not only be self sufficient in power but would also sell power to other states. He added that the state would expeditiously develop these projects to meet the power shortage in the state. In addition, Meghalaya is exploring the possibilities in coal based thermal power projects.

AP poised to become seat of gas based power projects

It is reported that Andhra Pradesh is poised to become the seat of gas based power projects due to its proximity to the Krishna Godavari basin, which holds India's largest gas discovery.

As of October 2007, the state had a total gas fired power capacity of 1,603 MW coming from private plants or nearly 40% of the total gas fired power capacity in the private sector.

Besides operational plants, Andhra Pradesh is also witnessing a spate of new gas fired projects both in the private and public sector. Konaseema Gas Power, which recently commissioned a 460 MW plant, is planning to add another 820 MW of gas fired capacity. Andhra Pradesh Power Development Company has also proposed to set up a massive 2,100 MW gas fired plant in Karimnagar district of the state.

In fact the 460 MW Konaseema plant has not been able to begin commercial operations pending gas linkages. Other commissioned gas fired plants in the state unable to operate at full capacity include GVK Group's 464 MW Gautami project and GMR Group's 370 MW Vemagiri project.

L&T bags INR 287 crore road contract from MMRDA

Projects Today reported that Larsen & Toubro has bagged an order worth INR 287 crore from Mumbai Metropolitan Region Development Authority for the construction of elevated access road from Western Express Highway in Mumbai to the Chhatrapati Shivaji International Airport.

The scope of work involves design and construction of 1,850 meter long six lane corridor consisting of pedestrian and vehicular subways, resurfacing of roads at western express highway including the construction of a 1,150 meter long six lane elevated access road as well as one 165 meter long tunnel. The elevated access road will be built using segmental construction technique.

The work order is expected to be completed within 30 months.

Ternium to sell IMSA Acero non core assets in US to BlueScope Steel NA

Ternium SA announced that its subsidiary, IMSA Acero SA de CV has entered into a stock purchase agreement with BlueScope Steel Limited’s US based subsidiary BlueScope Steel North America Corporation for the sale of IMSA’s interests in following assets, accounted for annual net sales of approximately USD1.2 billion in 2006.
1. Steelscape Inc
2. ASC Profiles Inc
3. Varco Pruden Buildings Inc
4. Metl-Span LLC.

Steelscape Inc, excluding the Shreveport facility, has a total annual production capacity of approximately 450,000 tonnes of galvanized steel and 300,000 tonnes of pre painted steel. ASC Profiles and Varco Pruden Buildings are in the building components and pre engineered metal buildings businesses, respectively, while Metl-Span manufactures insulated steel panels.

The transaction values the assets at USD 730 million on a cash free and debt free basis, subject to working capital and other adjustments. BlueScope Steel will also assume approximately USD 20 million in under funded pension liabilities. The transaction is subject to US antitrust clearance and other customary conditions and is expected to close in the first quarter of 2008.

Ternium will continue to own Steelscape’s Shreveport, LA plant, which has a total annual production capacity of approximately 250,000 tonnes of galvanized steel and 200,000 tonnes of pre painted steel. Ternium also will retain its pre engineered metal buildings and insulated steel panels businesses in Mexico.

Ternium intends to use the proceeds of the sale to prepay financial debt.

Mr Daniel Novegil CEO of Ternium said “By selling the assets that are not a strategic fit with our production system, we seek to enhance our focus on our core businesses in the Americas and reaffirm our commitment to create value through a disciplined approach to expansion that is consistent with our regional strategy.”

He added that “Additionally, we are retaining Steelscape’s Shreveport facility, which we believe can be readily integrated into our operations as we work to achieve the synergies that are expected to result from our integration of Grupo Imsa.”

Goldman, Sachs & Co. acted as exclusive financial advisor to Ternium in connection with the transaction.

Ternium is one of the leading steel companies in the Americas, offering a wide range of flat and long steel products. With its main operations in Mexico, Venezuela and Argentina and 25,000 employees, Ternium has annual sales of approximately USD 10 billion and annual shipments of approximately 12 million tons of finished steel products.

Nippon Sumitomo Kobe new alliance to save JPY 10 billion yearly

It is reported that an alliance between Japanese steelmakers Nippon Steel, Sumitomo Metal Industries and Kobe Steel will result in a cost benefit of JPY 10 billion annually.

Mr Kiichiro Masuda VP of Nippon Steel during a news conference in Tokyo said that companies are investing in the stake acquisition because there is value created from sharing production facilities. He said that “The companies share a hot rolled mill and other production facilities, and this generates an economic benefit of JPY 10 billion annually.”

Nippon Steel, Sumitomo Metal Industries and Kobe Steel formed an alliance in 2005, purchasing each others' shares, sharing production facilities and technologies, and purchasing raw materials jointly, for their mutual benefit. They jointly announced on Wednesday that they had deepened capital ties by agreeing to increase their cross shareholding.

Specifically, Sumitomo Metal Industries and Nippon Steel share a hot rolled mill and sheet rolling facility, and are currently discussing sharing of a rolled titanium production facility operated by the Sumitomo Metal Industries group. Nippon Steel and Kobe Steel plan a project on reduced direct iron, and Sumitomo and Kobe are to collaborate in the field of volts and stainless steel tube products. Meanwhile, though their initial alliance agreement included joint procurement of resources, the steelmakers have made little progress in this area.

BHPB bid for Rio – Likely to tighten uranium market

Reuters reported that a formal bid by BHP Billiton for rival Rio Tinto could tighten the uranium market due to uncertainty over supply as a link up would create the world's largest uranium company, ahead of Canada's Cameco, but a lengthy merger process might slow expansion at BHP's Olympic Dam mine in Australia.

Mr Jerry Grandey CEO of Cameco said "The biggest implication for the market, and for Cameco, is whether the significant expansion at Olympic Dam proceeds as scheduled. A potential merger may delay that decision.”

Olympic Dam, with the world's largest uranium deposit, is also Australia's largest underground mine. BHP is considering a major expansion to more than double production capacity by 2013. The firm is now conducting a pre feasibility study.

Rio is the second largest producer of uranium in the world with two large operating mines Ranger in Australia and Rossing in Namibia. In 2006, Rio's total production was 7,094 tonnes, second only to Cameco, which produced 8,249 tonnes. BHP Billiton produced 2,868 tonnes of uranium in 2006, making it the sixth largest uranium producer in the world. Post merger, 2 companies would be controlling 40% of the world's uranium supplies even without an expansion of Olympic.

Other buyers interested in Sparrows Point – US DOJ

Platts reported that in the wake of ArcelorMittal's terminating an agreement to sell its Maryland based Sparrows Point steel mill to E2 Acquisition Corporation, the US Department of Justice said it had been in close contact with the trustee appointed to sell the plant and that there are other interested buyers.

Ms Gina Talamona deputy director of the DOJ's public affairs office in a statement said that "The Department has been aware of the issues concerning the sale of the mill under the August 1st 2007 agreement between ArcelorMittal and E2 Acquisition.”

She added that “Other capable buyers are interested in acquiring this important asset, and the trustee appointed by the court will continue to have the authority to consummate a sale of the Sparrows Point mill to a buyer approved by the department."

Ms Talamona further added that the DOJ expects the trustee will carry out such a sale as expeditiously as possible. Mr Joseph Krauss is the trustee overseeing the sale and a partner with the Hogan & Hartson law firm in Washington.

DOJ had ruled in February that ArcelorMittal had to sell Sparrows Point in order to satisfy an earlier consent decree calling for the divestiture of one of three ArcelorMittal mills that supplied tin mill products to the eastern US Sparrows Point needs to be divested in compliance with the final judgment entered by the court in United States v Mittal Steel Company on May 23rd 2007

The Sparrows Point plant is an integrated steelmaking facility capable of producing 3.9 million tons of raw steel annually. Products made include hot rolled sheet, cold rolled sheet, galvanized sheet, Galvalume, tin mill products and semi finished steel.

Salzgitter Flachstahl to revamp its HSM

It is reported that German steel maker Salzgitter Flachstahl GmbH has decided to modernization its hot strip mill for increasing of production capacity to 4.5 million tonnes per year and also increasing the maximum finished strip width to 2,000 mm. This revamping project will be commenced by Salzgitter Flachstahl in the spring of 2009 and will be completed by the end of 2010.

It has placed an order with SMS Demag comprising of following areas

1. Extensive revamping work on the roughing and finishing trains
In the area of the roughing train, the opening dimensions of the side guards and of the edging stand will be increased. The stands of the finishing train are to be provided with new entry and exit guides and with differential tension loopers. SMS Demagbe equipping stand F1 with the CVC plus® system, which means that all finishing stands will now have this technology. SMS Demag shall also be replacing the cooling systems in the interstand area and installing new fume suppression systems in the rearmost stands.

2. Installation of new gears
As part of the reinforcement of the main drives of the finishing train, SMS Demag shall be installing new spur gear units for stands F1 to F4.

3. Supply of a new coiler
The UNI plus coiler is designed for the winding of high-strength tube steels up to a thickness of 25.4 mm.

4. Supply of a coil conveyor system

5. Automation of the new mechanical equipment

6. Automation of the complete coiler system.

7. Renewal of the water treatment station of the cooling circuit in order to satisfy the stricter requirements relating to water volumes and quality.

Steel bridge design competition announced

It is reported that Corus Students Awards Structural Bridge Design has been organized by The Steel Construction Institute. The objective of the Competition is to encourage excellence in steel bridge design and the competition is restricted to undergraduates.

One of a pair of undergraduate prize award competitions and the other competition covers the design of building structures.

The project Brief this year is to design a structure to carry a pedestrian link and cycle way over a major river that separates two parts of a major city. A wide range of solutions is available and the client is seeking a cost effective, elegant solution.

This project is intended both to motivate and challenge the entrants. The competitors are expected to demonstrate sound engineering skills and structural design and to produce an elegant structural solution.

Soaring raw material costs to drive global steel prices higher

UK based MEPS reported that inventories at US service centers and OEMs are up from the very low levels of a month ago and the proposed January price rises have spawned a mild buying frenzy for December delivery. It said that “The market is described as moderately strong due to tightened supply, with little or no offshore offers. The October transaction price increases are now fully implemented. However, distributors report that underlying demand is only steady. There is a great deal of anxiety over which way the economy is heading.”

MEPS said that “In Canada, producers have announced a CAD 40 per tonne increase for January business. A portion of the rise has been accepted on some products but service centers are worried that their customers will not be able to absorb the higher prices. Current demand is weak with substantial automotive production cuts planned for period one. Inventory levels have been falling. Moreover, offshore imports are not a factor. The strong Canadian dollar is having a detrimental impact on the country's manufacturing base.”

MEPS said that “Chinese prices have made some very positive developments over the last month in a climate of strong demand and low stock levels. As expected, increases in input costs have encouraged producers to push for higher prices. Meanwhile, the strong Yuan, together with recent changes to the export tax system, continues to dampen overseas business.”

MEPS added that “In Japan, demand from the major domestic manufacturing sectors is still firm and steel exports are also growing. Producers are talking up price rises for April whom they feel will be necessary to compensate for higher raw material costs. Total domestic stocks of coil held by the mills and service centers as end October, moved up by just 0.8% compared to September. Quayside inventories of imported flat products dropped by 1.3% in the same time frame the first fall in three months.”

MEPS further added that “Downstream demand is strengthening in South Korea. Automotive, shipbuilding and machine manufacturing are all expected to perform well in 2008. In Taiwan, CSC has announced its domestic list prices for the first quarter of next year. The company has proposed increases for most flat product categories. Demand is strong and raw material prices and shipping costs are rising.”
MEPS also said that “The Polish economy continues to prosper. Mittal Steel Poland will roll over December prices into January 2008. In the Czech Republic and Slovakia, mills and customers continue to keep stocks under control. The market is not troubled by large quantities of imports. We have noted some price deterioration this month, partly because a number of steel contracts are made in Euros and both Czech and Slovak currencies are very strong at present. This is also adversely affecting exporters.”

It added that “Following ArcelorMittal’s’ price announcement, it now seems unlikely that any strip mill product increases will be implemented in Western Europe in the first trimester 2008. The company intends to defer the rise, which will reflect an escalation in raw material costs, until period two. Inventories in most countries are still above normal levels and third country imports, ordered some time ago, continue to arrive.”

Japanese SBQ plate export prices move up

YIEH reported that Japan has reached an agreement with China end users on ship plate export price for the first quarter of 2008. The report added that the new price is settled at FOB USD 780 per tonne up by USD 80 per tonne as compared to the fourth quarter of 2007. It is expected that the price will up further to reach USD 800 per tonne.

It was recently reported that Japanese shipbuilding companies have agreed to a 10% price rise on Nippon Steel Corp's thick plate, effective October 1st 2007, a factor boosting its second half profit above the company's forecast.

An industry source said that price hikes on shipbuilding plate and other products starting in the second half and rising export prices have not been taken into account in Japanese steelmakers' profit estimates for the year to March 2008. It said that the 10% rise is seen equaling a JPY 7,000 to JPY 8,000 yen rise per tonne. The price hike is for a fifth consecutive year.

JFE Holdings Inc, the world's third biggest steelmaker, said in October it was in talks to raise the price of thick steel plate by 15%.

Demand for thick plate used in ships, construction and other machinery remains tight amid strong economic expansion in emerging markets while the prices of Japanese steelmakers' products are still low compared to foreign rivals.

Vale confirms termination of Sparrows Point agreement

Vale announced that negotiations carried through a JV, in which Vale would have a minority stake, with ArcelorMittal USA, for the acquisition of the Sparrows Point steel mill, in the east cost of the US, were terminated without the achievement of its goal.

In consequence, Vale’s commitment of investing up to USD 270 million, publicly announced in August 2nd 2007, no longer exits.

ILZSG says zinc market still in deficit in October

Metals Insider reported that the International Lead and Zinc Study Group have estimates the global refined zinc market was still in deficit in October to the tune of 37,700 tonnes.

The Group calculates that the cumulative production consumption deficit was 51,000 tonnes over the first 10 months of this year, compared with a deficit of 440,000 tonnes in the same period of 2006.

US SS exports in 10 months up by 76% YoY

YIEH reported that US exported 101,897 tons of stainless scrap in October 2007 up by 11% MoM as compared to September’s 91,774 tons up by 290%YoY.

The report added that major importers during November are as under

In tonnes

The average export price for stainless scrap in October was USD 1217.76 per ton, up by11.5% MoM as compared to September’s USD 1091.81 per ton. The price increase is mainly due to the high export price to China.

The report further added that US exported 805,982 tons stainless scrap in January to October 2007 up by 76.4% YoY and the figure for the whole year is predicted to reach 960,000 tons.

Thyssenkrupp Turin toll reaches 6 - Report

The ANSA news agency reported. that a sixth steelworker died from serious burns sustained in a fire nearly two weeks ago at German steelmaker ThyssenKrupp AG's mill in northern Italy,

ANSA said that the latest victim, aged 26, died in hospital in Turin following the December 6th fire that claimed the lives of five others.

The report added that another steelworker, also 26, is still fighting for his life.

Prosecutors have opened a probe into the causes of the fire at the site in Turin, with workers describing slack safety measures to investigators.

Vale Inco to boost nickel production at Sudbury unit

Metals Insider reported that Vale Inco intends to boost significantly nickel production at its Sudbury division in Ontario next year.

Vale Inco said this will be achieved by foregoing the usual annual maintenance shutdown, which will be pushed back to May 2009.

Mr Fred Stanford president of the Sudbury division told a local mining association that the company intends to lift divisional production by 54 million pounds to 298 million pounds in 2008.

US October steel shipments up by 5.9% YoY

American Iron and Steel Institute reported that for the month of October 2007, US steel mills shipped 9.238 million net up by 5.9% YoY as against 8.725 million net tons shipped in October 2006 and increase by 8.8% MoM as against 8.492 million net tons shipped in September 2007

YOY comparison of YTD shipments shows the following changes within major market classifications:
1. Service centers and distributors down 10.5%
2. Automotive has stayed the same
3. Construction and contractors’ products down by 3.1%
4. Oil and gas down by 7.9%

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months and year.

Fortescue Metals increases size of Solomon Iron ore deposit

Bloomberg reported that Fortescue Metals Group Ltd aiming to become Australia's third biggest iron ore producer has increased the size of the Solomon deposit in Western Australia's Pilbara region by 70%.

Fortescue Metals in a statement lodged with the Australian Stock Exchange said that the deposit now has 1.7 billion tonnes of iron ore.

GM increases vehicle prices due to higher steel costs

Thomson Financial reported that Detroit based automaker General Motors Corp will increase prices of most of its 2008 model year vehicles by an average of 1.5% to help offset increasing steel and commodity costs.

GM in a statement said the price increases are effective with vehicles invoiced to dealers on and after December 19th 2007. But some vehicles will not see a price increase.

Mr Schulz to stay in office until early 2011 - Report

Manager magazin citing no sources reported that Mr Ekkehard Schulz CEO of Thyssenkrupp AG is to remain in office until early 2011.

The report added that Mr Gerhard Cromme chairman of the supervisory board is intending to extend Mr Schulz's contract, which terminates in early 2009, by two more years.

Vietnam pushes for port investment

It is reported that Vietnam is encouraging both domestic and foreign investors to develop the country’s port system, which is reportedly projected to handle 200 million tonnes of cargo in 2010 and 400 million tonnes in 2020.

A Maritime Administration official of Vietnam was quoted as saying that overseas investors can establish joint ventures or even wholly foreign invested enterprises to build ports, especially large ones. They can manage the ports themselves, or lease or sell them to other.

According to Mr Nguyen Ngoc Hue vice director of the Vietnam Maritime Administration, now Vietnamese ports are able to handle over 170 million tonnes of cargo up from 154 million tonnes in 2006. He added that "One of our main disadvantages is that we have only a few ports that can receive ships of 50,000 tonnes or more."

Since 2006, over 10 foreign invested companies have engaged in building ports in Vietnam. Before the year, money to construct ports mainly came from the state budget and official development assistance.

The release further added a joint venture between local firm Saigon Port and three foreign partners SSA of the US, PSA of Singapore and Maersk of Denmark is building a port in southern Ba Ria Vung Tau province, capable of receiving ships of 80,000 tonnes or more, with total investment of USD 1.5 billion.

Oil prices drop on fear of US slow down

It is reported that oil prices fell as the market tracked fresh concerns about the US economy, with fears that a slowdown in the United States could dampen demand for crude.

A trader said that prices had risen earlier on Monday as a major snowstorm struck the United States over the weekend, raising expectations of higher demand for heating oil.

In late London trade, Brent North Sea crude for February delivery shed 79 cents to USD 90.90 per barrel.

Mr Mike Wittner analyst at Societe Generale said that “Again the market is looking at concerns on the economy and on oil demand.”

Cotton & Western Mining acquires iron ore rights in Mexico

Cotton & Western Mining Inc announced that it has completed its initial geological investigations on seven iron mineral deposits in the northwest of Baja California in Mexico and has acquired the rights to designated Baja Pacific mining lot number 4, a mixed magnetite and hematite iron mineral deposit.

It said that “Outcrop chemical analysis has revealed the iron minerals to be of commercial grade suitable for concentrated fines in sizes 0.15 through 10 millimeters.”

Diamond bit core drilling and mine development planning are scheduled to begin in late January 2008.

Kobe Steel to seek growth in global market in next 3 year plan

JMB reported that Kobe Steel shifts the effort to growth more for 3 year plan starting fiscal 2009 after the firm improves the financial position in 3 year plan to fiscal 2008 ending March 2009.

Mr Yasuo Inubushi president of Kobe Steel said that the next 3 year plan is to seek growth aggressively by utilizing the technology and high valued products line to meet growing demand worldwide.

Update on Allegiance Mining

Australia's Allegiance, which has hit the headlines after Zinifex’s offer, is an ASX listed mining company that owns the Avebury nickel sulphide mine development project located on the west coast of Tasmania in Australia, 8 kilometer west of Zeehan and 30 kilometer from Zinifex’s Rosebery mine.

The project is expected to treat approximately 900,000 tonnes of ore annually producing 8,500 tonnes of nickel in concentrates. Avebury is at an advanced stage of construction, with first production expected by the end of the first quarter 2008. The mine is operational and 16,800 tonnes of ore have already been stockpiled.

Allegiance also has a 10% interest in the Nymagee Mine Joint Venture, with joint venture operator Triako Resources Limited, which is a wholly owned subsidiary of CBH Resources Limited and Ausmindex NL holding the remaining 80% and 10% interests respectively. Nymagee Copper Mine is located within the township of Nymagee, approximately 80 kilometers south east of Cobar in New South Wales.

Siemens bags EUR 150 million contract from TransCanada

Siemens announced it has been awarded a more than EUR 150 million contract from TransCanada Corporation to supply the Keystone Pipeline project with electrical equipment, electrical power supply and pumping equipment.

The 3,456 kilometer pipeline project will have the capability to transport crude oil from the oil sands in Northern Alberta to US markets in the Midwest and Cushing Oklahoma area.

With the support of Siemens Industrial Solutions and Services Group, Siemens Canada Limited and the US based Siemens Energy & Automation, Inc will deliver 37 pumping stations, including pump skids, a series of electrical houses and 19 substations, to supply pumping electrics and portions of electrical distribution along 2,867 kilometers of this crude oil pipeline project.

The Canadian portion of the project involves the conversion of existing TransCanada Mainline facilities from natural gas to crude oil transmission service and the construction of pipeline, pump stations and terminal facilities in Canada and the United States. The in service date for Keystone is expected to be fourth quarter of 2009 and will initially deliver capacity of 435,000 barrels per day. Keystone will expand capacity to 590,000 bpd and extend its reach with the Cushing Oklahoma delivery point expected to be in service in late 2010.

Mr Guenther Scholz president & CEO of Siemens Canada said that “The oil and gas market segment and the Oil Sands in particular, is strategically important for Siemens and this order represents a significant milestone as it presents a homogenous cross-border customer solution with Siemens in Canada and the United States.”

Mr Dennis Sadlowski president & CEO of Siemens Energy & Automation, Inc said that “This solution is unique in that it brings together a seamless approach of technology for our customer and guarantees delivery and pricing from both sides of the border.”

PSMC Privatization – Decision to be based on capital needs

News Daily reported that Mr Salmaan Taseer Pakistan’s caretaker federal minister for industries, production & special, on a question about privatization of the mills said that “If the performance of an organization is good and required capital is also available, then there is no need to privatize such a unit.”

He added that however, if capital is required, a decision in this regard should be taken keeping in view the national interest.

Kuwait to invest USD 51 billion to enhance energy output

Khaleej Times reported that Kuwait is to invest USD 51 billion in its energy sector over the next 5 years in a bid to increase production capacity and stem a decline in supply from older oilfields.

Mr Sa’ad Al Shuwaib CEO of Kuwait Petroleum said that Kuwait is undertaking an aggressive program to enhance production capacity and production should reach 4 million barrels per day by 2020.

Mr Al Shuwaib further added that Kuwait Oil Co is set to develop heavy oil reserves in the Lower Fars reservoir with ExxonMobil within 2 to 3 years, producing very sufficient quantities within 5 years.

Pakistan seeks USD 1.3 billion for power projects

Daily Times recorded that Pakistan has sought a soft loan of USD 1,320.54 million from South Korea for extending its electricity supply network and sustain financial losses of the electric supply corporations. Sources said that ministry of water and power has approached the Economic Affairs Division to generate required funds as soft loans from different countries and financial institutions.

Sources said that Pakistan government needed around USD 2,692.55 million to materialize such projects. The ministry of water and power is seeking USD 1,320.54 million from South Korea and the economic affairs division has sent a formal request to South Korea in this regard.

Sources further said that government would use the money obtained under these heads also for the revamping rehabilitation of irrigation system in provinces. The money would also be used for a 220 KV grid station and a Dadu Khuzdar 220 KV transmission line. The project also includes provisions for IESCO, PESCO, FESCO, Punjab Barrages rehabilitation and modernisation project and 6th secondary transmission and grids of GEPCO.

The EAD had sent a loan request to Korea but the country is giving money only for the GEPCO project. While this project that will extend six phase of GEPCO will cost USD 76.5 million, the ministry requires USD 18.8 million for the project. Showing reservations over the other projects worth USD 1,301.74 million, the government of Korea has conveyed that these were commercial projects it could not provide funds as soft loans.

Siemens secures supply order from Orascom Construction

It is reported that Siemens Industrial Solutions & Services Group has received a EUR 20 million order from Orascom Construction Industries of Egypt to engineer and supply all the electrical equipment for the new cement works of the Al Safwa Cement Company in Saudi Arabia. The project is scheduled for completion in 2009.

The Al Safwa Cement Company is a JV of Orascom Construction Industries and the Khayyat Group of Saudi Arabia and the new cement plant is to be built near King Abdullah City. When completed, it will produce 5,300 tonnes of cement per day.

Siemens is responsible for planning, supply and commissioning of all the electrical equipment intended for the cement works. This includes the 5,300 KW slip ring motors for the cement mills and the raw mill blower drives with Robicon medium voltage frequency converters. These systems are especially suitable for reducing harmonics.

Orascom Construction Industries is a leading contracting company in the construction industry of the Middle East and has its own extensive cement production facilities. It has cement works in Egypt, Algeria, Iraq, Pakistan, Spain and Turkey with a total annual production capacity of 21 million tonnes. After the new equipment has been installed and the modernizations have been completed in 2009, the capacity will be about 36 million tonnes.

Iran set to launch power trading exchange in 2008

Tehran Times reported that Iran’s power bourse will be most likely launched in March 2008.

Mr Mas’ud Hojjat MD of Iran's Electricity Network Management Company said that ministry of energy’s sessions with Tehran Stock Exchange in a bid to guarantee the success of the project.

He added that “To this end, we need to design comprehensive software to train the staff and to facilitate business activities.”

Under the Tehran Stock Exchange regulations, all transactions must be transparent and open to the public, adding the power bourse has the potential to be a venue for fair deals.

Japan inks economic ties with UAE

It is reported that Japan and the United Arab Emirates has signed an accord to strengthen economic ties including a deal for Japanese banks to extend a multibillion dollar loan to a state owned Abu Dhabi oil firm.

Under the agreement, the 2 countries will strengthen their partnership in the field of energy, jointly boost support for small businesses and speed up talks on legal arrangements to avoid dual taxation.

Japan hosted high level economic talks with the UAE in the face of growing competition for energy from the fast growing Chinese and Indian economies. Japan, which has virtually no natural energy resources of its own, is stepping up efforts to secure stable supplies of crude oil to feed its economy.

Vietnam welcomes Kuwaiti investors

Mr Nguyen Tan Dung prime minister of Viet Nam said that Viet Nam will create favorable conditions for businesses from Kuwait to invest in the country.

Mr Tan Dung spoke highly of the opening of the Kuwaiti embassy in Hanoi and the Kuwaiti Consul General in Ho Chi Minh City. He said that the move will help lift the relations between the 2 countries to a higher level and bolster their cooperation in various spheres, particularly economy, investment and labor.

Mr Faisal Sulaiman Fahad Al Mukhaizim ambassador of Kuwait expressed his thanks to the government of Viet Nam for supporting the opening of the Kuwaiti Embassy in Ha Noi and the Kuwaiti Consul General in Ho chi min city.

The ambassador noted that he has worked with Kuwaiti businesses to invest in Viet Nam and expressed his hope that the Viet Nam-Kuwait cooperation in economy, commerce and investment will be further strengthened.

Aramco likely to boost stake in Showa Shell

Arab News reported that Saudi Aramco, which currently holds a 15% stake, is considering raising its stake in Japan's Showa Shell Sekiyu KK if it wants to expand its operations.

In mid 2005, Aramco Japan Holdings Company BV, a subsidiary of Saudi Aramco, acquired an additional 18,840,000 shares in Showa Shell from Royal Dutch Shell Group. It also acquired a 9.96% strategic shareholding in Showa Shell Sekiyu KK from Royal Dutch Shell Group pursuant to an agreement signed in July 2004. As a result of completion of this share transfer, Saudi Aramco holds 14.96% of Showa Shell shares, while Royal Dutch Shell Group holds 35.04%.

Mr Adil Al Tubayyeb VP of Saudi Aramco said that Saudi Aramco may also raise its stake if Showa Shell expresses a desire to expand into other fields.

Saudi Aramco supplies more than 60% of Showa Shell's crude oil needs and Showa is expected to post a group net profit of USD 397 million for the year ending December 31st 2007. Showa Shell increased its market share of gasoline sales by 0.5% YoY to 16.1% in fiscal 2006, while industry leader Nippon Oil Corp and No 2 ExxonMobil lost market share last year.

SLS Shipping wins USD 620 million order from Dubai

Reuter reported that South Korea's SLS Shipping has won an order worth USD 620 billion to build 10 45,000 DWT chemical tankers for the United Arab Chemical Carriers. The ships would be delivered by late February 2012.

SLS Shipping in a statement said that "The order included a request to use a specific paint of 'marineline coating' for its cargo tank, and we were the only domestic company with the technology.”

Sacyr inks JV with Libya for infrastructure development

Spanish construction group BTP Sacyr Vallehermoso announced that it had created a 60:40 JV called Ledico Libya with the Libyan government to bid for infrastructure contracts in Libya.

Sacyr Vallehermoso, in a statement, said that “Sacyr Vallehermoso and the State Libyan Company for development and investment have established a partnership for the development of infrastructure works in Libya.”

The release added that “The Libyan government is preparing to launch an infrastructure investment project to the tune of more than EUR 50 billion. With the creation of this vehicle, Sacyr Vallehermoso enters into the small group of European enterprises who will benefit from a privileged relationship to lead these works.”

ADPC signs financing agreement with NBAD for Khalifa Port

Khaleej Times reported that Abu Dhabi Ports Company and National Bank of Abu Dhabi has signed an AED 1.1 billion financing agreement to meet the initial construction costs of the Khalifa Port.

Abu Dhabi Ports Company is the master developer of the multi billion dollar Khalifa Port and Industrial Zone. It is in the process of structuring long term project finance facilities. The National Bank of Abu Dhabi financing will enable it to meet the immediate project development expenses of the first phase of Khalifa Port’s construction which is expected to be completed by end of 2010.

Mr Ahmed Al Calily CEO & MD of Abu Dhabi Ports Company said that “We are keen on selecting only the best in class partners for our development. We are very pleased to be cooperating on our first credit facility with NBAD, a highly reputable bank with strong track record.”

Mr Michael Tomalin CEO of National Bank of Abu Dhabi said that “National Bank of Abu Dhabi is proud to play a major role in Abu Dhabi Ports Company’s continued growth by financing the first phase of the Khalifa Port, which will be one of the region’s largest industrial and commercial ports. This agreement comes to reflect that National Bank of Abu Dhabi is well positioned to take advantage of the huge growth opportunities in Abu Dhabi and its firm commitment to play a significant part in the economic development of the UAE. It also reflects National Bank of Abu Dhabi’s strong relationships and cooperation with leading local and regional companies such as Abu Dhabi Ports Company.”

Khalifa Port and Industrial Zone is a multi purpose facility that involves the construction of a world class container and industrial port in addition to the development of over 100 square kilometers of industrial, logistics, commercial, educational, and residential special economic and free zones. It will play a major role in Abu Dhabi’s industrial and economic diversification in serving as a key hub for large scale industrial investments that will be serviced by state of the art port, transport and other infrastructure facilities and services.

Dana Gas discovers gas in Egypt

Dana Gas has announced the discovery of a new gas well drilled in its Egyptian concessions. The Dabayaa 2 delineation well was drilled by Centurion Petroleum Corporation, the upstream division of Dana Gas in Egypt, on the eastern side of the West Manzala concession, in order to appraise the Dabayaa 1 discovery well in the Lower Abu Madi Sandstone formation.

The well was drilled to a total depth of approximately 3,000 meters and encountered gas bearing zones in both the Upper and Lower Abu Madi formations. The Lower Abu Madi formation was tested and found to flow at a gas rate of over 10 million cubic feet per day, and 240 barrels per day of condensate, and will provide a further boost to Dana Gas production and revenues from Egypt.

Dr Hany El Sherkawi director of Dana Gas Egypt said that “We are very pleased with the results we obtained from Dabayaa 2, which confirm our high expectations for the potential of the Abu Madi formation in this block. The Lower Abu Madi formation was tested previously, but this is the first time that we have been able to confirm the productivity in the Upper Abu Madi formation. The gathering pipe line from Dabayaa 2 is under construction and the well should be flowing on stream before the end of December.”

A report by the Middle East Economic Survey confirmed that Dana Gas was the only private company from the region to make new Middle East oil and gas discoveries in 2007, with important discoveries already announced from wells drilled earlier this year including El Wastani EWW 2, West Manzala 1 and Komombo 1, which was re named Al Baraka by the Egyptian Petroleum Minister, Mr Sameh Fahmy. Dana Gas is the 6th highest natural gas producer in Egypt from among the 64 companies operating in the country.

Dana Gas is currently also leading a consortium to build and operate the Gulf of Suez Gas LPG Plant, in partnership with the Egyptian Natural Gas Holding Company and the Arab Petroleum Investment Corporation, with construction on schedule for the first quarter of 2008.

Oman tightens lending to control inflation

Reuters reported that Oman has tightened bank lending restrictions for the second time in 5 months to prevent lower borrowing costs from fuelling inflation which was running near a 16 year high in October 2007. Now Omani banks are required to hold 5% of total deposits up from earlier 3%.

Mr Sankar Kailasam VP of research at Muscat based Gulf Investment Services said that “There is a lot of liquidity in rials as a lot of people are changing their dollars into rials.” He added that dollar pegs force central banks in the world’s biggest oil exporting region to track US monetary policy to maintain the relative value of their currencies.

Mr Hamood Sangoor Al Zadjali executive president of Oman Central Bank ruled out any change to currency policy last month, forcing the country to use alternative means to control price rises.

Oman raised the reserve ratio by one percentage point in August 2007. It also changed rules to prevent banks from using their foreign currency holdings as part of the previous reserve requirement in July 2007.

Oman is the third Gulf Arab oil producer in 6 weeks to force banks to keep more money in their vaults as central banks cut interest rates in tandem with the US Federal Reserve to ease pressure on their dollar pegged currencies to appreciate Qatar, facing inflation just below a record 15%, raised its reserve ratio for the first time in more than 8 years following last week’s quarter percentage point Fed cut.

Chinese rebar price likely to stay at high levels

Chinese traders and stockiest anticipate steel prices to witness some fluctuations but staying at high level.

At the same time, they also note some uncertainties which should be paid attention to.

Construction steel prices started another wave of rise since November 2007. The robust demand in China has bolstered the price explosion, which saw an average increase of CNY 100per tonne up per day in Shanghai and East China during climax period, which compares with average CNY 150 per tonne in South West China.

While prices start to drop in the second week of December 2007 and the downward corrections are across the board. The decrease is believed to healthy following so rapid a rise during the past weeks. In addition, end users are refusing to take such expensive material and some even suspend construction.

Rebar output reached 8,795,600 tonnes in November 2007 up by 15.4% YoY from November 2006. Daily production volume for November 2007 is 293,200 tonnes up by 4.4% MoM from October 2007. Wire rod output for November 2007 totals 6,421,200 tonnes equivalent to daily production of 214,000 tonnes, a gain of 5% YoY and a decrease of 4.4% MoM respectively.

Raw material price are still on the rise and producers have to raise their ex works prices to offset the surging cost. Apart from iron ore cost, the price for pig iron, oil, transport and electivity cost are also climbing up and they are shooting up the whole production cost further. Pig iron price in Shandong province has jumped to CNY 3700 to CNY 3750 per tonne, 20 silicon manganese billet for rebar production surged to CNY 4500 to 4600 per tonne in East China.

Under such circumstances, some producers have to suspend production and some choose to further rise ex works prices. Shagang has just lifted wire rod and rebar price by CNY 250 per tonne and CNY 300 per tonne respectively. Hence, the market is still under the cost push mode.

Reduced Brazilian iron ore shipment to put pressure on Chinese market

It is reported that Brazilian iron ore giant Vale has delayed vessels from taking shipments of iron ore from Brazil to China due to an accident that damaged a berth of a port in Rio de Janeiro state on December 8th 2007.

Earlier in November 2007, it has postponed some 15 to 20 shipments totaling 3 million tonnes from the ports of Ponta da Madeira in Brazil’s northern state of Maranhao and Ilha Guaiba in Rio de Janeiro state following problems include rains and the railway blockages. Vale has also resorted to other measures for slashing iron ore supply to China.

Brazil's ore shipment to China is estimated to reduce by 3 million tonnes to 3.5 million tonnes till January 2008. In this case, ore imports price is set to move up further in days to come on back of strong steel market and firm domestic ore concentrate price.

Meanwhile, China's domestic iron ore concentrate supply shortage has become more severe as Beijing tightens efforts in closing mini ore mines coupled with power disruptions and winter season. The EXW price for ore concentrate has reached a high of CNY 1600 per tonne in Tangshan. Market analysts expect domestic ore concentrate price to rise further in the first quarter of next year on supply shortage. A recovery in China's iron ore import market has sent up India's offerings for fines with 63.5% Fe content back to the previous peak of nearly USD 200 per tonne after hovering at USD 180 to 185 per tonne CFR for two weeks.

An iron ore trader in north China said that "After holding back for some time, medium and small sized steel mills have to return to the market to buy for their production."

Silicon manganese prices to remain firm in China

It is reported that, though silicon manganese price hike has slowed down during recent days in China, upward momentums still exist with suppliers strongly trying to increase prices but steelmakers taking a cautious view on purchasing, on the backdrop of strong exports of ferrous silicon and silicon manganese, which have resulted in undersupply in Chinese domestic market.

The first factor is imported manganese ore.
Australia's giant BHP has released manganese ore price for the first quarter of 2008. 44% manganese ore is quoted at USD 9.5 to USD 9.7 per dry MTU, 48% ore at USD 10 to USD 10.1 per dry MTU, 45% lump ore at USD 9.88 per dry MTU. 48% ore was priced at USD 6.8 per dry MTU and USD 7.18 per dry MTU respectively in the third and fourth quarters of this year. Analysts feel that the price will soar to over USD10 per dry MTU in the coming quarter.

The second is electricity price.
Coal price hikes have squeezed profits of power generation enterprises, thus it is said that five large power generation groups have asked National Development and Reform Commission to introduce coal price and electricity price linkage mechanism, which means electricity price will rise. Ferroalloy producers thus will see a surging production cost. Differential tariffs of electricity price will further worsen producers' productions and output may drop sharply.

The third is environment protection
Chinese government is likely to further strengthen measures in 2008. Due to high energy consuming and heavy pollution, ferroalloy industry is likely to receive strict control and those unqualified enterprises will be washed out. SiMn supply will become increasingly tight.

The fourth is freight rate.
Rising oil price has driven up freight rate for ferroalloy products, squeezing producers' profits. In the meanwhile railway transport capacity will ensure the shipments of electric coal and farm produce, further restricting silicon manganese shipments.

The last is growing demand.
Demand from steel sector swells notably as new equipments are put into operation, plus falling supply, the situation of undersupply may worsen.

Iron ore price negotiations –Likely to be very tough

It is reported that Baosteel Group administrator recently said that they would start formal negotiations for iron ore prices for next year with world’s three large iron ore suppliers soon

The administrator also expressed that the negotiation would be more difficult than the previous years. He said that they feel great pressures because suppliers would seek for high prices.

He said that the negotiating parties have not decides the time and place to start the negotiation but it is predicated that this negotiation will be started after Christmas.

Guanggang and JFE to start new CR project in Nansha

It is reported that the 180 million tonne CR project by Guanggang Group and Japanese JFE has started in Nansha on December 18th 2007.

This project’s products are cars inside and outside plate, top grade home appliances plate and some other high value added products. It is the largest CR production line project in Guangdong province at present. The total investment of this project is CNY 6.349 billion and the construction would take 32 months.

It is the second cooperation project by Guanggang and JFE after the 400,000 tonnes hot dip galvanizing production line in January 2006.

Shougang to expand overseas sales network to MEA and EU

It is reported that China Shougang International Trade Engineering Company, which is the export trading company of Shougang, is now building affiliates in Austria and Dubai in order to improve its overseas sales network.

It is learned that the business of Dubai affiliate will cover the Middle East and African markets and the Austrian subsidiary will responsible for the European business.

At present, its overseas offices are located in Hong Kong, South Korea and America.

Statistics from China Iron and Steel Association shows that the export of Shougang amounted to 1.230 million tonnes in 2006 and has increased to t 1.770 million tonnes in January to November 2007.

Baogang exports 1 million tonne steel products in 11 months

It is reported that Baotou Iron & Steel Group Co Limited has earned USD 520 million by exporting 1.01 million tonnes of steel products during January to November 2007 up by 68% YoY from 720,000 tonnes in January to November 2006. It is the first time Baogang's exports break 1 million tonnes.

It has optimized product mix and expanded export channels in 2007 and its products have entered EU, Middle East, Southeast China, South Korea and Hong Kong.

Hebei Province increase crude steel production share in 2007

It is reported that China has exported 39.69 million tonnes of crude steel in November 2007 up by 4.3% YoY as against 38.05 million tonnes in November 2006.

The province wise crude steel production is as under

In million tonnes

During January to November period Hebei has accounted for 22.3% of crude steel production share as compared to 21.9% in January to November 2006, reflecting stronger growth than other provinces. The change in share of various provinces in crude steel production is as under

China is the second largest economy – WB Report

The World Bank recently said that the size of China’s economy is overestimated by some 40% but it still remains the world’s second largest using a ranking based on purchasing power.

In a report ranking the world’s economies for 2005, the World Bank said that its updated survey using purchasing power parity shows a much smaller value for China than earlier estimates which the Bank called less reliable.

A WB statement said that the study carried out by the World Bank and other partners was the most extensive and thorough effort to measure the relative size of 146 economies using the private public partnership method which strips out the effect of exchange rates.

China participated in the survey for the first time and India for the first time since 1985. While the economies of China and other developing countries appear larger using the private public partnership method compared to using market rates, the new estimates include more reliable data on goods and services in China. The private public partnership method is still somewhat controversial among economists compared with the traditional market exchange rate methods.

Using market methods, Japan would be the second largest economy and China would rank behind Germany, roughly equivalent to the economies of Britain and France, according to the World Bank report. The World Bank had in the past extrapolated figures on China and India using the purchasing power method, but the latest report is based on more extensive data.

Coal prices in China likely to increase by 10% in 2008

According to China Coal Transport & Distribution Association, the Key contracts of coal for electricity generation for delivery in 2008 have been increased by CNY 30 per tonne to CNY 40 per tonne up by around 10% YoY.

According to securities analysts, listed coal firms will have better financial results in 2008 because of the key contract price hike. The power industry may face larger cost pressures because it is still unknown whether the government will peg electricity prices to coal prices.

The hike will drive up electricity prices in tandem, but the National Development & Reform Commission is reluctant to mention electricity price hikes due to concerns on exacerbating inflation. Insiders attribute the price hikes to tighter coal supply, global crude oil price rises and costs.

Electricity firms often propose an electricity price increase when price of coal for electricity generation rises to pass the increased costs onto their consumers.

Chengdu to establish Asia biggest railway container center

It is reported that the biggest railway international container center in Asia will start construction in Chengdu in Sichuan province of China at the end of this month.

The total investment of the project is estimated at CNY 2 billion. The annual throughput of the center will amount to 2.5 million TEU.

As per reports, it is one of the 18 centers programmed by Chinese Ministry of Railways.

China Shipping expects to top profit projections

China Shipping Container Lines Co said that it will beat its profit forecast after raising rates for shipments from Europe and carrying more cargo from the US.

Mr Li Shaode chairman of China Shipping said that profit this year will be significantly better than the CNY 3.18 billion as previously expected.

He added that shipping lines are carrying more out of US ports this year as a 10.3% decline in the dollar against a basket of major world currencies cuts overseas prices for exporters including General Electric Co and Caterpillar Inc.

Mr Shaode said that China Shipping’s vessels are now about 40% full on voyages from the US compared with about 10% in the whole of 2006. He added that almost all vessels are completely full on sailings to the US.

China Shipping raised rates for shipments from Europe to Asia by USD 500 a box on October 1st 2007.

Siemens starts a BOF converter at NTMK before schedule

Siemens Metals Technologies announced that within only 75 days, it has replaced and started up a BOF converter and the off gas treatment system at the Russian steel producer Nizhny Tagil Iron & Steel Works, 15 days less than stipulated by the contract. Following the start up of the first 160 tonnes capacity replacement converter in November 2007, more than 20,000 tonnes of steel were tapped in 128 heats during the first eight days and the prescribed dust emission values were met.

Siemen said that this was achieved through meticulous engineering planning and intensive on site activities carried out seven days per week. All converter replacement work was implemented with minimal interference to ongoing steelmaking operations.

The project is part of a major modernization program, within which Siemens will replace three more BOF converters by 2009, including the environmental facilities. The second converter will be replaced in March to June 2008, the third in the fourth quarter of 2008 and the remaining No 4 Converter in 2009. The converters are equipped with bottom stirring, automatic slag stopper, oxygen lances with flow rate 500 meter cube per minute. With a larger converter size and shorter tap to tap times the annual steel output of each converter will be increased from approximately 900,000 tonnes to 1.1 million tonnes. At the same time, the cost effectiveness, environmental emissions, onsite working conditions and steel quality will be improved.

The project scope for Siemens Metals Technologies includes engineering and equipment supply, installation of the new converters, electrics and basic automation, replacement of the outdated off gas treatment system, modifications to the low bunker system, and the installation of a new feeding line for converter and ladle charging. The major challenge of this project was that all onsite installation work is to be performed during full steel production operations and within a very tight timeline of less than three months for each converter replacement.

Nizhny Tagil Iron & Steel Works is part of the Evraz Group SA one of the largest Russian metals producers. In 2006, NTMK produced approximately 3.6 million tonnes of steel in their converter steel mill, which were further processed to semi finished products such as slabs for external sales and long products foreseen for various applications, in particular, railway products.

ChTPZ KTS Czech subsidiary MSA forms valve JV in India

It is reported that ChTPZ pipe and metals group’s ChTPZ Comprehensive Pipeline System’s Czech based industrial valves unit MSA AS and Indian Allport International Private Limited have entered into an agreement on establishing a 50:50 JV called MSA Allport Private Limited in India.

MSA Allport Private Limited will be primarily engaged in carrying out export & import operations on the market of valves and pipes, forgings, castings, as well as production of different valves and pipes components.

Establishing the new joint venture would allow MSA AS to reduce product costs due to cutting down expenses on input materials and production and considerably increase product competitiveness. Reduction of order delivery period and costs of products transportation to the Asian Region would be yet another competitive advantage of MSA Allport Private Limited.

Mr Vladimir Khristenko chairman of supervisory board of MSA AS said that "Participation in the JV with Allport International Private Limited having long established customer base, allows us to enter the Asian market, with MSA AS contributing to the JV being set up its experience, technologies, know how and the trade mark known to consumers.”

Allport International Private Limited specializes in purchase and sale, marketing and servicing in such areas as oil, natural gas and petrochemicals, in India.

MSA AS specializes in industrial valves, such as ball, gate, globe, swing check, as well as special valves for nuclear power sector, produced according to CSN, API, ANSI, DIN and GOST standards.

ChTPZ Group unites companies specializing in the ferrous metallurgy sector. It consists of Chelyabinsk Pipe Rolling Plant OJSC (RTS: CHEP), Pervouralsk New Pipe Plant OJSC, ChTPZ-Meta, a company specializing in scrap metal collection and processing, metal trading company Uraltrubostal Trading House CJSC, Chelyabinsk Zinc Plant. The Company's Services division is represented by two companies ChTPZ - Comprehensive Pipeline Systems specialized in production and sales of pipeline components and MSA Comprehensive Pipeline Systems specialized in valves production. ARKLEY CAPITAL Sarl Luxembourg, manages ChTPZ Group's assets.

Azovstal takes 1st place in safety review

It is reported that PJSC Azovstal Iron and Steel Works took the first place in safety review competition among Mariupol based companies.

According to the results of the competition, corporate newspaper Noviy Azovtsalets was recognized to be the best in covering safety issues, reported. Appreciation of Azovstal’s safety and industrial safety administration system at the city level substantiates Azovstal’s status as one of the best employers in the industry.

Mr Dmitriy Livshits GD of Azovstal Iron and Steel Works said “One of our most important targets is to reach maximum safety level at Azovstal and to reduce accident rate in production to a zero level. Safety level is one of Azovstal management’s KPI and this in its turn means consistent operation of the plant, increase of its profitability and sustainable position of the company at the world market.”

At Azovstal the work on implementation and certification of industrial safety management system is being continued according to OHSAS 18001 standards that is one of the most widely used standards at all leading industrial enterprises in the world. For the first time in Ukraine Metinvest Group simultaneously implements world best safety standards at the largest industrial enterprises.

Safety review on the city level was held among Mariupol enterprises, institutions and organizations within Regional Agreement between Donetsk State Regional Administration, trade union organizations of Donetsk region and Donetsk Regional Organization of Employers for 2007-2008. The event was aimed to increase the level of control and transparency of safety administration system at the companies of the city.

Review results were summarized by the city competition committee in following groups
1. Steel Making Industry
2. Machine Building Industry
3. Construction
4. Light and Food Industry
5. Transport
6. Communications
7. Housing and Communal Services
8. Public Health
9. Education
10. Science
11. Mass Media
12. Trade
13. Culture

Shutdown of Zasiadko mine could pose danger to Donetsk

Ukrainian Journal reported that closing down a Ukrainian coal mine, which has been the scene of three deadly accidents in the past few weeks, would lead to an explosive accumulation of methane under the city near which it is situated.

The report quoted the chairman of the board as saying this in an interview.

Zasiadko mine near Donetsk became the site of the worst coal mine accident in post Soviet Ukraine. A methane explosion claimed 101 lives.

RZD plans entry into North Korea

Bloomberg reported that Russian Railways RZD is planning to build a USD 100 million container terminal in North Korea as the world's largest rail company tries to create a land transport corridor linking Asia to Europe.

RZD in a statement said that it wants to turn the North Korean port of Rajin into a hub capable of handling 320,000 containers a year for shipment across Russia to Europe.

Caspian pipeline agreement to be signed in Moscow

Interfax quoted Mr Viktor Khristenko industry & energy minister of Russia at a meeting with Mr Gurbanguly Berdimuhammedow president of Turkmen as saying that work on an agreement to build the Caspian gas pipeline project has been competed.

Turkmen state information service TDKh reported that an understanding has been reached to sign the trilateral document in Moscow on December 20th 2007.

The Caspian gas pipeline is to have capacity to ship 20 billion cubic meters of gas a year.

The report further added that Mr Berdimuhammedow and Mr Khristenko also discussed modernization of the existing gas transportation that links their countries.

Nikolaev Shipbuilding Yard forms backlog of orders for 2008

Ukraine Industrial reported that Ukrainian state owned enterprise Nikolaev Shipbuilding Yard has substantial backlog of orders for 2008.

As per report major orders are for construction of three hulls for a Dutch company. The contract was signed owing to the yard's cooperation with Kherson shipbuilders experienced in construction of such tankers. Besides, negotiations with a Norwegian customer on construction of two container carriers are nearing the completion.

According to the yard's deputy GD, from 2009, Nikolaev Shipbuilding61 Communars is likely to transfer from hull construction to complete construction of vessels. By the end of 2007, the yard is to complete its so called Spanish program: construction of four dry cargo carriers hulls for Spanish company Factoria Naval de marin.

Russian car production up 9.3%YoY in 11 months

According to the Federal State Statistics Service, Russia increased production of car in January to November 2007, to 1.2 million automobiles up by 9.3%YoY as compared to January to November 2006.

The statistics added that productions of Truck up by 15.8% to 259,000 units in the period, while bus production fell by 4.8% to 78,100 units.

Russian plants produced 6,600 wheel mounted tractors in the period, up by 32.8% YoY from the first eleven months of 2006 and 5,500 track tractors up by 14.3% YoY.

Gazprom sales to rise by 27% in2008

Kommersant citing an unidentified person reported that Gazprom expects its revenue to rise by 27% in 2008 to USD 117 billion under a conservative draft budget.

The paper said that the forecast applies if natural gas prices average USD 281 per 1,000 cubic meters and crude oil averages USD 61 a barrel.

Troika Dialog expects Gazprom to earn USD 348 per 1,000 cubic meters of exported gas and as much as USD 75 per barrel for oil next year.

Nord Stream project should reflect Baltic countries' interests

Interfax reported that Germany hopes that interests of the Baltic States will be fully taken into account when choosing a final route of the Nord Stream pipeline across the Baltic Sea.

Mr Michael Gloss economic minister of German said that "Which particular route across the bottom of the Baltic Sea will be chosen has not yet been decided. It is important that fair interests of the Baltic States are fully taken into account."

He added that "Nord Stream is a private European economic project. The construction of this gas pipeline and its routing depends not only on economic, but also, and to a great extent, on environmental factors. In particular, environmental concerns prompted project participants to consider several routing options recently.”

Gazprom to receive power plants in Europe in asset swap

RIA Novosti reported that Gazprom could receive electric power plants in Europe in an asset swap with Germany's EON.

Gazprom and EON have drawn up a list of potential assets for the exchange in which E.ON will participate in a project to develop the Yuzhno-Russkoye gas condensate field in northwest Siberia while Gazprom will receive stakes in E.ON's assets in western and central Europe.

Gazprom said the assets included in the list are currently being valuated.

Transneft to swap shares of Transnefteprodukt

Bloomberg reported that Transneft will use RUB 52.6 billion (USD 2.1 billon) of new shares in a swap to take control of the state owned oil product pipeline operator Transnefteprodukt.

Transneft in a statement said that the shares are equivalent to 19% of voting stock and valued at RUB 59,570.17 each.