SAIL reopens Kulati Works

It is reported that after four years of closure, Steel Authority of India Limited has opened its Kulti Works at Burdwan in West Bengal has been reopened with a new name Kulati Growth Works.

Mr Ram Vilas Paswan union steel minister flagged off the ceremony, which was attended by Mr Pranab Mukherjee Indian foreign minister, Mr Priya Ranjan Das Munshi union information & broadcasting minister, Mr RS Pandey secretary steel and Mr SK Roongta chairman of SAIL.

As per a SAIL board proposal, the facilities to be started initially are non ferrous and steel foundry, machine shop and other supporting facilities and SAIL is starting off with two foundries one will process semi finished steel as well as scrap and the other will deal with alloy products that can be used in intermediary industries.

The total land area of Kulti plant, set up in 1870, is 812 acres which includes 218 acres of works area and a township. SAIL’s Centre for Engineering and Technology has worked out the detailed plan for start up and the investments required for this.

SAIL had decided to sell the Kulti plant and had proceeded to the extent of seeking formal expression of interest from prospective buyers.

CPI opposes RINL equity dilution move

The move to dilute the equity of Rashtriya Ispat Nigam by 25% came in for widespread criticism at a roundtable conference at a recent Visakhapatnam journalists’ forum.

Mr MVS Sarma member of CPI-M said that it was regrettable that the union government and the board had decided to sell off 25% of the shares when the plant has finally turned around and has been earning profits for the few years.

He said that “When the plant was in dire straits in the late nineties, the union government was very reluctant to go to its rescue. Now that the VSP is doing well and is in a position to expand the capacity on its own, the government is doing everything possible to weaken the plant. It is nothing but a blatant attempt to destroy a PSU steel unit.”

Mr Sarma said that the people of the state had agitated for the steel plant and got it finally after making great sacrifices. He found fault with the state government for allotting Obulapuram iron ore mines to the newly floated Brahmani steels in Kadapa district while ignoring the claims of the VSP.

SAIL RSP creates new heat record in December

Steel melting shop II of Steel Authority of India Limited’s Rourkela Steel Plant has created a new record on December 17th 2007 by achieving lining life of 4,267 heats in its converter one. The earlier record of 4,087 heats was made on April 7th 2007.

The significant rise in the lining life of the converter not only helped in reducing the refractory cost, thereby contributing to brining down the cost of production, but also resulted in substantial increase in crude steel production.

RSP officials said that while steel melting shop II collective put their best efforts and improved the converter operations, the refractory department provided timely service to maintain the lining health. They added that supply of quality hot metal from blast furnaces and instrumentation department and above all, teamwork had led to the superb performance.

TATA Steel and worker union ink Code of Conduct

It is reported that the office bearers of TATA Workers Union signed TATA Code of Conduct at a function organized at Jamshedpur, which was chaired by Mr B Muthuraman MD of TATA Steel. During the ceremony, Mr Muthuraman also released the 2008 version of TATA Code of Conduct.

MrMuthuraman observed that signing of TATA Code of Conduct by TATA Workers Union is a historical event. He also said that Ethical Conduct has been a hall mark of the Business philosophy of Tatas for 100 years. It is this philosophy of the Company that has ensured sustainable development and the company is being looked upon not only in India but abroad also as an Ethical and Trustworthy Company. The ethical reputation of the Company has enabled the Company to win businesses in different parts of the world. Mr. Muthuraman also expressed his concern at the dilution of the ethical standard in the society and therefore, the adherence of Code of Conduct by Tata Steel and its employees is of paramount importance. He also observed that while the Company is being perceived as very high on ethical conduct, the conduct of employees needs continuous improvement.

Mr Raghunath Pandey president of TATA Workers Union stated that the Tata Workers Union has always been following Tata Code of Conduct since its release initially. The commitment for Tata Code of Conduct by the Union has formalised the commitment. He also asked all employees and the management team to comply with code of conduct.

Mr. Muthuraman also launched the Tata Code of Conduct 2008 version. This has superseded the earlier version announced in 1998. The 2008 version has more Global focus because of the Global footprint of the Company and the Group.

CIL’s NCL and UPRVUNL plans power plant JV at Anpara

TNN reported that Coal India Limited’s subsidiary Northern Coalfields has entered into talks with Uttar Pradesh Rajya Vidyut Utpadan Nigam to float a 50:50 JV for setting up a 1,000 MW thermal station in the state at an investment of around INR 4,500 crore.

Mr VK Singh CMD of NCL told ET that “UPRVUNL is on an expansion spree and its expansion plans include Anpara-D, a 1,000 MW thermal plant at Anpara, for which it is scouting for JV partners. We have entered into talks with them to undertake this project through a JV. Currently, UPRVUNL is in the process of moving the UP government for permission following which we will present the proposal at our board meeting.”

Mr Singh added that “Coal will be supplied from our existing mines at Jayant in Madhya Pradesh which is about 30 kilometers from Anpara. NCL will source around 25 MW to 30 MW from this plant. It will be consumed in our existing mines at preferential tariffs while the rest will be sold to the grid.”

Mr Singh informed that “NCL and UPRVUNL will jointly pump in around INR 1,200 crore for the project in equal proportions. Rest of the funds will be sourced from financial institutions, including banks. The project will be built on a 70:30 debt equity ratio.”

BHEL to take over BHPV as a new subsidiary

It is reported that Bharat Heavy Electricals Limited would take over Visakhapatnam based Bharat Heavy Plate & Vessels Limited as a subsidiary and would initially invest INR 275 crore as CAPEX apart from investing INR 34 crore as equity in the company.

The government approved in principle the take over of BHPV by BHEL. The union cabinet on November 26th 2007 approved the financial restructuring and strengthening package of BHPV with the direction that the valuation of BHPV is carried out prudently on the basis of established principles.

As per report, the department of heavy industry had proposed that government may waive or write off loans and interests to BHPV amounting to INR 414.95 crore and to settle all outstanding liabilities of BHPV amounting to INR 263.97 crore.

Update on expansion works at major ports in 2007

The expansion and modernization of ports remained amongst the top priority areas of Indian government during the year 2007. Several developmental projects got underway at the major ports during the year and also witnessed significant growth in traffic and capacity at ports and also the growth in Indian Tonnage.

Perspective plans have also been prepared for 12 major ports along with a consolidated national development plan. In the April to November 2007 period, the traffic handled was 333.27 million tonnes up by 13.13%YoY as against 294.60 million tonnes in April to November 2006 period.

Port wise development works taken up by government are

Mumbai Port Trust
Construction of offshore container terminal on built own transfer basis at an estimated cost of INR 1228 crore. Construction of 2nd chemical jetty at a cost of INR 116 crore through internal resources of Mumbai Port Trust approved by the government of India, having a capacity of 2 million tonnes per annum.

Paradip Port Trust
The approval of the government was granted to the revised cost estimate proposal of deepening of channel at Paradip port on November 29th 2007. The proposal of deep draught iron ore berth on built own transfer basis was approved by PPPAC at estimated cost of INR 504.76 crores on March 30th 2007.

Visakhapatnam Port Trust
Modernization of outer harbor at Visakhapatnam Port Trust at an estimated cost of INR 185.15 crore was approved.

Tuticorin Port Trust
Construction of berth No.9 and north cargo berths are in progress. In principle of approval of planning commission obtained for deepening of channel and basin project at Tuticorin Port. Approval of public private partnership appraisal committee received for the project of development of 8th berth as the second container terminal at Tuticorin Port on built own transfer basis. Further action is under process.

Ennore Port
A marine liquid terminal of capacity 3 million tonnes per annum has been awarded to Ennore Port at a cost of INR 196.25 crores. Ennore Port has also signed the concession agreement with the selected bidders for development of an 8 million tonnes per annum coal terminal and 12 million tonnes per annum iron ore terminal on built own transfer basis. The estimated capital cost of these projects is INR 348.00 crores and INR 480.00 crores respectively. Centre has approved the project for undertaking capital dredging phase I by Ennore Port at an expenditure of INR 91 crores.

Chennai Port
Government has approved a second container terminal at estimated cost of INR 495 crores for Chennai Port. License agreement was signed on March 7th 2007 and project will become operational from April 2009. Creation of additional open storage area by reclamation at an estimated cost of INR 200 crores, construction of new bridges across Ponnai River at Tiruvalam on NH 4 near Vellore, Chennai Ennore Port road connectivity of 30 kilometers length with an estimated project cost of INR 309 crores.

Kolkata Port Trust
Construction of berth No 2 at a cost of INR 46.80 crore has been completed which will add a capacity of 2 million tonnes per annum. Construction of berth No 13 at a cost of INR 39.56 crore has been completed which will add a capacity of 2 million tonnes per annum.

Sethusamudram Ship Channel Project
Dredging work on a stretch of channel in Palk Strait package 'D' which was awarded to Dredging Corporation of India was under progress in 2006-07. Dredging Contract for dredging at Adam's Bridge and Southern Parts of Palk Bay Palk Strait under Sethusamudram Ship Channel Project, were also awarded to Dredging Corporation of India. About 28 million cubic meters of dredging has been undertaken so far. Dredging in Adam’s Bridge has been suspended in view of order of Supreme Court of India dated August 31st 2007 and September 14th 2007.

Rail Road Connectivity of Major Ports
During the year 2006-07, Indian Railways completed projects for rail connectivity to the Major Ports at Haldia, New Mangalore, Kandla and JNPT. The project for road connectivity to Vizag Port was also completed. Rail connectivity to international container transshipment terminal at Vallarpadam, Cochin Port India has been approved on March 22nd 2007 at cost of INR 245.67 crore.

Cement makers to feel cost pressures due to coal price hike

It is reported that sporadic increase in cement prices in the third quarter of 2008 is unlikely to compensate the high power and fuel cost incurred by manufacturers. A top industry official said that the recent hike in coal prices by 10% to 15% is expected to hit the cement industry, as the cost of coal constitutes around 12% of total operating cost of cement sector.

A Lehman Brothers research report said that “The price of coal over the year has risen sharply. It has appreciated by 26% in October 2007 alone.” It added that among the top line companies, India Cement is likely to report a rise of 21% in coal cost. Its coal price is expected to jump by INR 335 per tonne in Q3 of fiscal 2008 against INR 275 reported in Q2 of fiscal 2008. Mr Satish Kumar research analyst of Lehman Brothers said that “A combination of benign pricing and high fuel costs will lead to a dent in the profitability of cement companies.”

Mr Rajan Kumar analyst at Networth Stock Broking said that “The impact of coal price rise on companies may vary with their dependence on imports. For instance, India Cement imports about 70% of its requirement. Even domestic prices are mostly linked to global markets.” He added that in October 2007, dispatches of the top 4 companies rose by 3.2% YoY to 5.7 million tonnes.

Cement companies buy a certain percentage of their coal requirement through coal linkages at administered prices that are lower than market prices while, the remaining quantity is purchased from the open market.

Indo Russian titanium project hits roadblock

It is reported that the first major Indo Russian JV project, envisaging production of titanium dioxide with an investment of INR 2,000 crore in Orissa, has hit a major roadblock due to Indian Rare Earth Limited’s refusal to enter into a long term contract with the promoters for supply of raw material to the project.

Mr S Sivasubramanian CMD of IREL in a recent letter to Mr BN Majumdar director of Saraf Agencies pointed out that the IREL board has decided not to enter into a long haul contract for supply of raw material as it has not entered into such contracts with other customers. He said “We should supply you the product on terms we extend to all our other customers. The supplies will be based on prices ruling at the time of delivery.”

The JV is being promoted by Russia’s Vnesheconom bank or the Bank for Foreign Economic Affairs and JSC Technochim Holding and Kolkata based Saraf Agencies. According to the agreement, the Russian firms will together hold 55% stake in the project. Promoters were to source ilmenite, a key raw material for production of titanium dioxide, from Orissa Sands Complex near Chhatrapur. Accordingly, they had requested IREL to enter into a long term contract for supply of the raw material. Apart from the titanium dioxide plant, the scope of the JV included setting up a beach sand mineral SEZ in the area. Saraf Agencies had signed a pact with the Russian firms for the project during Mr Putin’s visit to India.

IREL recently floated a tender inviting expressions of interest to set up a 10,000 tonnes per annum titanium sponge plant adjacent to OSCOM on a build own operate basis. It expressed its willingness to provide, among other things, 100 acres of land or grade ilmenite up to a maximum quantity of 50,000 tonnes per year at a price of INR 1,800 a tonne and sub lease of north sector II mining area containing minimum of 7 million tonnes of ilmenite reserves and associated minerals such as zircon, rutile, sillimanite, garnet and monazite on successful operation of the titanium sponge plant.

Government to look into cement cartelization

Indian government said that it would look into cartelization of cement industry in the wake of anti monopoly watchdog MRTPC pronouncing 44 manufacturers guilty of unfair trade practices.

Mr Kamal Nath union minister of commerce and industry said that "Cartelization affects consumers, we will look into it."

His comments came after MRTPC held major cement manufacturers including L&T Cement, Birla Cement, Grasim and ACC guilty of cartelization under the aegis of Cement Manufacturers' Association.

Passing a cease and desist order, a 3 member MRTPC bench comprising Justice Mr OP Dwivedi, Mr MMK Sardana and DC Gupta directed the companies not to indulge in any such arrangement directly or through CMA.

The commission said that "In the present case, we have found direct as well as indirect evidence of concert. The existence of a common platform in the form of respondent No 1 which frequently reviews the price situation is a strong pointer towards existence of a cartel."

Chinese auto companies to take part in Auto Expo

As the Auto Expo kicks off soon, about 400 Chinese auto parts and automotive companies will display their competitive low cost products targeted at Indian domestic industry. This is more than double from the number of companies that participated at the last Auto Expo held 2 years ago.

Mr Dilip Chenoy DG society of Indian Automobile Manufacturers said that “In the last Auto Expo, there were about 40 to 50 Chinese companies that participated. But this year we are expecting their number to touch 400.” He added that apart from component makers who will be looking at making inroads in the Indian automotive market, the upcoming Auto Expo will also have Chinese motorcycle makers, electric bike companies as well as bus maker like Kinglon.

Mr Vishnu Mathur DG of Auto Component Manufacturers Association said that “The Indian market is now being recognized by China as a huge potential growth area. With their pricing and design, they would initially target the after sales market of auto parts and then the automobile companies that are present in India.

According to CII, which is also a partner for the event, about 100 German companies, 30 to 35 Malaysian companies, 70 to 80 from Taiwan, 10 to 12 from the US and the UK mainly from the component industry would leverage the Auto Expo platform for the Indian market. Mr Gurpal Singh from the confederation of Indian industries said that “Even during the last Auto Expo, some Chinese companies had bagged orders, others had received inquiries and in certain cases, companies were exploring JV and technical collaboration.”

Chinese component makers are already aggressive in the Indian market with imports from China growing from INR 766 crore in 2005 to INR 1,295 crore during 2006.

39 sites on East Coast identified for wind power

Mr Vilas Muttemwar union minister of state in the ministry of new & renewable sources recently said that 39 sites which could be considered suitable for wind power development have been identified in the East Coast and wind surveys have been conducted in costal areas including East Coast under the wind resource assessment program of the ministry

He said that 216 potential sites in 13 states and union territories have been identified as potential sites for setting up of wind power projects including 32 sites in the state of Andhra Pradesh. A wind power potential of about 8200 MW has been estimated in the state of Andhra Pradesh.

The government promotes setting up of commercial wind power projects in the country, by providing fiscal incentives such as concessional import duty on certain components of wind electricity generator, excise duty exemption, 10 years tax holiday on income generated from wind power projects, benefit of accelerated depreciation and loan from Indian Renewable Energy Development Agency. Technical support including detailed wind resource assessment to identify further potential sites is provided by the Centre for Wind Energy Technology. This apart, preferential tariff is being provided for wind power in most of the potential states.

A wind power installed capacity of 7660 MW has been achieved in India. It includes demonstration wind farm projects of 71 MW supported by the ministry with the objective to open up potential areas for commercial development of wind power. Central Financial Assistance is provided for setting up demonstration projects in those states, where commercial activity has not yet been initiated. The ministry, wind turbine manufacturers, wind power associations, O&M providers, state nodal agencies participate in various exhibitions to highlight the benefit and create awareness about wind energy.

Honda Motor India unit to invest INR 3 billion

It is reported that Japanese Honda Motor's Indian subsidiary Honda Motorcycle & Scooter India Private Limited will invest INR 3 billion in its plant over the next 3 years and launch two new models in calendar year 2008.

Mr Shinji Aoyama CEO of Honda Motorcycle India said that “The investment is for new models and for capacity expansion at the Manesar plant.” He added that Honda India would launch a premium scooter during the Auto Expo in New Delhi in January 2008 and a motorcycle in the first half of 2008.

Mr Aoyama said that Honda plans to launch a 100 cc motorbike within the next 36 months and will launch up to 5 new scooter and motorbike models in India. In 2007, Honda expects to sell 888,000 units, going up to 1 million in 2008. Honda sold 715,000 units in 2006. A decision on opening a second plant in India would be taken by 2009. He added that “In 2010, we will expand capacity to 1.2 million units and sell 1.2 million units. In 2011, if all goes well, maybe we will see further expansion. It takes 2 years to open a facility, so by 2009, we need to decide.”

NHAI inks concession agreement for Amritsar Wagah road project

National Highways Authority of India has signed a concession agreement with Rohan Rajdeep Toll Roads on December 19th 2007 for 4 laning of Amritsar Wagah border section on built operating and transfer annuity basis under National Highways Development Project phase III.

The INR 205.88 crore projects involve four laning of 36 kilometer length of existing 2 lane highways which connects international border of India and Pakistan. The work was awarded with semi annuity amount of INR 18.45 crore payable to the concessionaire by NHAI in 36 equal installments. The concession period for this project is 20 years including construction period of 24 months.

Indian Railways revenue earning up by 13.55% YoY in 10 days

Indian Railways has posted total approximate earnings of INR 1931.02 crore during December 1st to 10th 2007 period up by 13.55% YoY as against INR 1700.57 crore during December 1st to 10th 2006 period.

INR in crore

The total number of passengers booked during December 1st to 10th 2007 period was 186.96 million up by 7.5% YoY as compared to 173.92 million during December 1st to 10th 2006 period. In the suburban and non suburban sectors, the number of passengers booked was 107.13 million and 79.83 million compared to 100.36 million and 73.56 million, registering an increase of 6.75% YoY and 8.52% YoY respectively.

Global SS production in Q3 of 2007 dips by 16.6% YoY

Preliminary figures released by the International Stainless Steel Forum show that stainless steel crude steel production in the first three quarters of 2007 was by 20.9 million tonnes up by 0.4%YoY. Total production for the first nine months of 2007 is just 90,000 tonnes higher than for the same period of 2006.

Comparing the third quarter of 2007 with the same period of 2006 there is a 16.6% decrease in stainless crude steel production to 5.9 million tonnes. The decrease in production occurred across all regions. The quarter by quarter production 2007 shows a clear downward trend driven by high nickel prices and the need to reduce the global stock of stainless steel. However, ISSF believes there is a generally healthy underlying demand for stainless steel.

Asia showed accumulated stainless crude steel production of 12.2 million metric tons for the first nine months of the year up by 12.2% YoY. The main contributor again was China with a total increase of more than 45% YoY. China produced 5.2 million metric tons in the period. India slightly increased production to 1.3 million metric tons. With roughly 3 million metric tons Japanese production was almost stable.

The second biggest producing area Western Europe and Africa region has the most significant decline in production for the first nine months of 2007. The region produced 6.5 million metric tons of stainless steel, drop of almost 13% YoY. In the same period, The Americas region decreased their stainless crude steel production by 12 YoY% to 2 million metric tonnes. It added that production in the Central and Eastern Europe region was also reasonably stable.

Stainless and heat-resisting crude steel production details

In 000 tonnes
Source: International Stainless Steel Forum

ISSF said that the quarter by quarter figures show a clear downward direction in stainless steel production during 2007. After Quarter 1, global output was 15% higher than in the same period of 2006. Production in Quarter 2 was just 3.6% higher compared to the previous year. Production has decreased by 16.6% in Quarter 3. Even in Asia third quarter production in 2007 did not reach the same level as the corresponding quarter of 2006.

In 000 tonnes
Source: International Stainless Steel Forum

In 000 tonnes
Source: International Stainless Steel Forum

In 000 tonnes
Source: International Stainless Steel Forum

Service center inventories continue to decline in US and Canada

Recently released Metals Activity Report of the Metals Service Center Institute reported that the uncertain economic outlook compounded by seasonally low demand led to reduced shipments of steel and aluminum products from metals service centers in the United States and Canada in November. The report added that “Inventories also continued to decline from year ago levels as service centers, reluctant to restock, delayed most new orders until seasonal upswings require it.”

U.S. service centers further drew down steel inventories and added modestly to aluminum stocks compared with October inventory totals. Although US inventories, as measured by months of supply on hand, appeared to rise from October levels, the change was due to the seasonal demand decline. Canadian service centers added slightly to steel inventories while slightly reducing aluminum inventories from October.

November steel product shipments from US service centers totaled 3.99 million tons, down 7.8% from shipments during the same month in 2006. Shipments for the first 11 months of the year totaled 48.8 million tons, down 7% from a year ago. U.S. inventories at the end of the month totaled 12.1 million tons, 27% lower than November 2006 and the lowest total since November 1997, when inventories totaled 11.8 million tons. At current shipping rates, inventories represented a 3.0 month supply, compared with a 3.8 month supply on hand at the end of the year ago month and 2.6 month supply at the end of October.

Canadian steel product shipments fell from year ago totals for the 16th consecutive month, to 321,400 tons, down 0.3% from last year. Year to date shipments totaled 3.48 million tons, down 6.8% from last year. Steel inventories were down 12.4% from a year ago to 1.13 million tons, or a 3.5 month supply, compared with a 4.0 month supply a year ago and a 3.3-month supply at the end of October.

The Metals Activity Report, based on data from metals service centers in the United States and Canada, is produced by the Metals Service Center Institute and a third-party econometrics and strategy firm, McCoy, Scott & Co. MSCI tracks the relationships between many external economic variables and MAR shipment levels on a regular basis. The statistical validity of these relationships describes the credibility of the MSCI data and the importance of the metals distribution channel to the manufacturing economy as a whole.

Founded in 1909, the Metals Service Center Institute has more than 420 members operating from about 1,200 locations in the US, Canada, Mexico, and elsewhere in the world. Together, MSCI members constitute the largest single group of metals purchasers in North America, amounting each year to more than 65 million tons of steel, aluminum, and other metals, with about 300,000 manufacturers and fabricators as customers. MSCI’s membership also includes almost all ferrous and non-ferrous industrial metals producers in North America. Metals service centers inventory and distribute metals and provide first-stage fabrication services.

ArcelorMittal to increase raw material self sufficiency

French newspaper Les Echos reported that ArcelorMittal aims to lift its self sufficiency in iron ore to 90% by 2018 from 47% today and also wants to secure other commodities.

The paper quoted Mr Malay Mukherjee head of ArcelorMittal's mining strategy as saying that the company was also looking at expanding its power generation activities through joint ventures in South Africa and Trinidad where it has big electricity needs.

Mr Mukherjee said that "We don't consider mining activity to be a business in itself. Our approach is to cover our own needs and we still have lots of work to cover our needs. Our aim is to be 75% self sufficient in iron ore by 2012 and 90% by 2018 compared with 47% today."

He noted in the past the company had bought steel mills with mines attached. He said that "When we look at opportunities, we have this idea in our head.”

Mr Mukherjee said that the company currently produces 13 million tonnes of coal a year and wanted to raise that to 17 million tonnes. To achieve that, it was developing projects in Kazakhstan, Mozambique and India. He added that "We are also looking at Russia.”

But Mr Mukherjee declined to comment when asked if ArcelorMittal could be interested in mining groups Xstrata or Eramet.

Maghreb Steel to install a Steckel Mill

Morocco’s Maghreb Steel announced that it has awarded to Germany’s SMS Demag an order to construct a twin stand Steckel mill. The facility will be built in Casablanca and is scheduled to go into operation at the end of 2008.

The new mill is designed for an annual production of 1 million tonnes and will produce strips in the widths 600mm to 1,575 mm and thicknesses between 1.5mm and 20 mm. The product range comprises strip of low and medium carbon steel grades as well as high strength low alloy steels.

SMS supply scope is made up of the two mill stands and the Steckel furnaces, the descaler and the coiler, as well as the mill automation. For the first time in a twin stand Steckel mill, the mill stands will feature CVC plus® technology.

Twin stand Steckel mills still represent a young technology in the rolling mill field and they are equipped with two mill stands in tandem arrangement. These tandem stands perform both the roughing down and the finish rolling in mills without a roughing stand. For the finishing passes, the strip is kept at a constant temperature in the Steckel furnaces. Owing to the combination of Steckel technology and continuous rolling, the plant concept is suitable for the economical rolling of carbon steels in quantities between 1 and 1.5 million tonnes.

MMX Amapa begins iron ore operations

MMX Mineracao e Metalicos SA announced that MMX Amapa Mineracao Ltda a subsidiary of the Company, has begun commercial operations in the MMX Amapa System.

MMX Amapa's first iron ore shipment to Gulf Industrial Corporation is scheduled for the last week of December 2007. Key licenses have been granted to enable commercial operations and scheduled shipment. The construction and land clearance licenses were granted on August 16 and September 25, 2006, respectively. Thereafter construction began.

More recently, the operating license was issued on December 14, 2007, by the Amapa State Environmental Secretariat, authorizing MMX Amapa System operations. These operations include the iron ore mining project's ore-processing installations and infrastructure of the MMX Amapa System.

The MMX Amapa System infrastructure includes the Amapa Railway and the Port of Santana. The Amapa Railway is operated under a 20 year concession agreement that was entered into with the State of Amapa by a subsidiary of MMX Amapa in March 2006. The Port of Santana is now in its operational phase, fully equipped to receive, unload, stock and load ships with the MMX Amapa's iron ore production. This port was rebuilt and modernized by MMX Amapa.

German steel output to stagnate in 2008

The Deutsche Press Agentur citing Mr Dieter Ameling president of the German steel association reported that Germany's steel production will probably stagnate next year as the weak dollar and the global credit slump reduce demand.

Mr Dieter Ameling told the press agency in an interview that raw steel production will fall by 100,000 tonnes to 48.5 million tonnes in 2008 as compared to about 48.6 million tonnes in 2007.

Mr Ameling said that in particular major export industries such as cars and electrical engineering were likely to be hit by a weaker dollar with automakers also scaling back demand as a result of concerns about new CO2 emission rules. He said "The car industry is our most important customer but the tendency to purchase has been significantly curtailed.”

Three banks to fund Ha Tinh steel complex in Vietnam

Vietnam Agency reported that three commercial banks of Viet Nam have agreed to provide VND 750 billion in credit for the construction of an iron and steel complex in the central province of Ha Tinh.

As per report credit contracts have been signed between local branches of the Viet Nam Development Bank, the Bank for Investment and Development of Viet Nam and the Bank for Foreign Trade of Viet Nam and the project’s owner the Ha Tinh Iron and Steel Joint Stock Company.

The loan will enable the construction process of the project, which has a total investment of 885 billion VND.

Located in the Vung Ang economic zone, the complex has a designed capacity of churning out 500,000 tonnes of steel ingot per year during its first phase. The complex is expected to turn out its first batch of products in the first quarter of 2009.

UIC to become global quality assurance certification agency

In a significant policy move, the180 member strong International Union of Railways, in its general body meeting recently, has confirmed its strategic role in achieving higher quality assurance in all aspects of railway sector at global level under the present leadership. The move will position UIC as a global quality assurance certification agency.

It may be emphasized that India has been playing a major role in restructuring of the UIC. Mr KC Jena present chairman of UIC has gone a step ahead and given a fresh direction to UIC in the field of quality assurance. In a major policy formulation, the UIC meetings also laid special focus on establishing rail transport as a key element in the global logistic business through development of International Rail Corridor in partnership with major providers.

UIC general assembly also approved the progress of number of international cooperation projects in railway sector with global dimension which included integration of rail into global logistic chains, module for sustainable development objectives, development of a global communications strategy for rail promotion using internet, creation of a UIC subsidiary called “UIC events” dedicated to conference organization.

In a major related development, the 6 regional assemblies of UIC made detailed presentations during the meeting about the progress of works in their respective regions. The regional assemblies are working on finalizing the important strategy called “UIC Vision 2025” for their respective regions and defining an Action Plan to cover specific needs of the region. Another significant event was that UIC General Assembly officially supported the resolution on the launch of inter Korean railway operation to mark reopening of inter Korean railway links.

During the meeting, 10 new UIC members were welcomed in the world railway association. All UIC members appreciated the role of Indian Railways in developing UIC as a truly global organization.

SMS cooperation with Linde AG in the field of REBOX®-DFI

Germany’s SMS group has concluded a cooperation agreement with Linde AG, Germany, for the exclusive marketing of the REBOX® DFI process in continuous annealing furnaces to be newly erected for strip processing lines. Revamping work on existing plant will continue to be carried out by Linde AG.

The REBOX® DFI process has been developed by Linde AG and involves the very rapid heating of the strip in the continuous furnace. The REBOX®-DFI process is already being used successfully in several facilities including at ThyssenKrupp Steel and Outokumpu Stainless.

It is based on Linde AG’s many years of experience in the field of combustion of fuels using pure oxygen and the application of this in furnaces employed in the steel industry. The process is not only characterized by the extremely fast heating of the steel strip but also, to a very large extent, cleans the strip surface both of residual oil and of solid particles arising from the production process. Strip cleaning upstream of the furnace can thus be greatly simplified or even dispensed with altogether. Besides making it easily possible to significantly increase the production capacity of a strip processing line, the new process offers a great deal of potential as regards economic efficiency and quality.

Intec gets key approval for zinc project in Tasmania

Metals Insider reported that Australian junior Intec has received development approval for its planned residues project in Tasmania ahead of schedule.

The report added that it will now proceed with an application for the building permit but the project is on schedule for construction next year and production in 2009.

Intec and its JV partner Polymetal are already producing zinc from treating tailings at the Hellyer site. Production started up late last year and has totaled around 14,500 tonnes contained zinc so far.

The second stage of the project is to treat various types of metal bearing residue, including electric arc furnace dust from the steel industry, using proprietary technology.

Mongolia proposes takeover of coal mine

It is reported that Mongolia may thwart the bidding process and take control of a USD 2 billion coal project that BHP Billiton, Peabody Energy and China Shenhua Energy are eager to develop.

Mr N Algaa executive director of the Mongolian National Mining Association recently said that the new government led by Mr Sanj Bayar prime minister of Mongolia is seeking to change laws to allow it to take full control of the Tavan Tolgoi deposit. He added that the initial talks have begun between the government and Energy Resources, the private Mongolian owner of the deposit.

Mr Algaa said that "The new prime minister, Mr Bayar, has made a proposal to Energy Resources. His proposal is that the government takes 100 percent ownership of Tavan Tolgoi, but it will be done through negotiations."

The Tavan Tolgoi mine, with resources of 1.5 billion tonnes of coking coal and 3.6 billion tonnes of thermal coal, will produce as much as 30 million tonnes a year for at least 30 years. It may be the second largest mining investment in Mongolia after Rio Tinto and Ivanhoe Mines's proposed Oyu Tolgoi copper mine, which may cost USD 3 billion to develop.

Energy demand from emerging markets to drive coal use

The international energy Agency's annual forecast says several factors, including increased demand from emerging markets and the soaring cost of crude oil, will contribute to increased use of coal globally in coming years.

The Paris based The international energy Agency in a statement said that the global energy needs are projected to grow by 55% between 2005 and 2030, at an average annual rate of 1.8%, with almost half of the growth due to soaring demand in China and India. And despite efforts to boost the use of biofuels worldwide, the IEA says fossil fuels will remain the dominant source of primary energy, accounting for 84% of the overall increase in demand between 2005 and 2030.

Electricity use will nearly double, with most new plants burning coal. Aging and less productive oil fields and resistance among major oil exporters to build spare oil capacity will make crude oil and natural gas more expensive and prompt developing countries to turn increasingly to coal as fuel.

The IEA said that global oil demand will hit 116 million barrels a day by 2030, up from about 85 million barrels a day now. But in the short term, IEA added that high oil prices have been slowing consumption. The IEA says high prices in excess of USD 90 per barrel this fall are changing energy use in the developing world and in developed countries. Mr Lawrence Eagles chief author of the monthly report told Bloomberg that "We are certainly seeing a downward revision for 2007 and 2008, and high prices starting to have an effect.”

Mr Leo Drollas chief economist at the London based Center for Global Energy Studies in a recent Associated Press report said that consumption growth will be 1.2% to about 93 million barrels a day in 2015. He added that "Demand will not grow at those prices." He said that of oil at current, let alone higher levels.

Sumitomo Metals gets recurring order for non leaded free cutting steel

Sumitomo Metals (Kokura) Ltd and Sumitomo Metal Industries Ltd, which had previously developed low carbon non leaded free cutting steel wire rods Smigreen CS, to cater to the demand for environmentally friendly products and are also easy to machine, has recently received a recurring order for this product.

Sumitomo Metals (Kokura) and Sumitomo Metals have been working assiduously to develop the Smigreen Series of non leaded free cutting steel. The two companies previously developed middle carbon non leaded free cutting steel, which is carbon steel for machine structural use. Recurring orders for this product began in 2002 and production has reached several thousand tons per month.

Expecting demand for low carbon non leaded free cutting steel to rise, the Sumitomo Metals Group added this product to its Smigreen Series line-up. Now a major office machinery company has placed a recurring order for the Group's low carbon non leaded free cutting steel, which it will use in manufacturing printer shafts.

The Sumitomo Metals Group believes that Smigreen CS will replace widely used low carbon leaded free cutting steel (AISI-12L14/JIS-SUM24L) going forward. The Group will continue its efforts to anticipate customer needs and also plans to accelerate development of products that comply with increasingly strict environmental regulations. In this way, the Sumitomo Metals Group will contribute to protecting the global environment.

Brazil exports 156,559 tonnes of manganese ore in October

According to the statistics, Brazil exported 156,559 tonnes of manganese ore in October 2007, up by 68.3% YoY.

Manganese ore export to different county in October 2007

In USD
In tonne

URSA Major signs further nickel processing deal with Xstrata

URSA Major Minerals Incorporated announced that that the Company has signed an agreement with Xstrata Nickel that provides for the further treatment of ore from the Shakespeare nickel deposit at Xstrata Nickel's Strathcona Mill. URSA Major will resume shipments of ore to Xstrata as soon as possible in January 2008.

Xstrata Nickel has agreed to initially process another 50,000 tonne batch of ore from the Shakespeare property. The batching of ore through the mill is expected to take place on or about April 1, 2008, subject to confirmation of Xstrata Nickel's milling schedule and weekly production profile.

Immediately after the batch sample, Xstrata Nickel has agreed to treat Shakespeare ore at the Strathcona Mill on a blended basis. The initial target blending rate is 500 tonne per day and this may be increased. Xstrata will treat the blended ore for a period of at least 12 months with Xstrata Nickel giving 4 months notice of cancellation of treatment. The blended ore shipments are anticipated to commence on April 1st 2008.

Mr Richard Sutcliffe CEO of URSA Major said that "This is a significant agreement for the development of the Shakespeare deposit and for URSA Major. The batch ore processing in early 2008 will provide further data on recovery and deposit grade, while the subsequent ongoing ore blending will ensure steady cash flow. We can expect to process a minimum of 185,000 tonnes of ore in 2008, and possibly more. Based on the performance of the bulk sample processed in 2007, it is expected that ore processed in 2008 should produce contained metals in concentrate of approximately 1,000,000 lbs of nickel, 1,500,000 lbs of copper, 50,000 lbs of cobalt and 3,200 ounces of precious metals. This processing arrangement will provide the opportunity for significant cash flow to be realized in 2008 and well into 2009." The recovered and contained metals are subject to smelter recoveries and to further smelter deductions.”

Technip and Keppel consortium awarded P-56 EPC contract

It is reported that the FSTP consortium, composed of Technip and Keppel FELS was awarded an approximately USD 1.2 billion contract by Petrobras for the engineering, procurement and construction of the P-56 semi submersible platform. The platform will be installed on the Marlim Sul oil field in the Campos Basin in 1,700 meters of water offshore Brazil.

The P-56 platform, which is based on the design of the P-51 platform, will weigh 50,000 tonnes and will be one of the largest in the world. Following the P-51 and P-52 platforms, the P-56 platform will be the third semi submersible production platform built by the consortium.

The new platform will have a processing capacity of 100,000 b/d of oil and 5.2 MMcm/d of natural gas. Delivery is scheduled for the fourth quarter of 2010.

Technip's operating center in Rio de Janeiro, Brazil, will engineer the topsides. Transportation and offshore mating will be supervised by Technip's operating center in Paris. The consortium will undertake procurement activities from its Rio de Janeiro offices, with a contractual target of 60% local content.

Samsung Heavy reports orders worth 2.4 billion dollars

It is reported that South Korea's Samsung Heavy Industries has secured new orders worth a total of USD 2.41 billion.

Samsung Heavy Industries in a statement said that it won a USD 1.15 billion contract to build two semi submersible floating drilling rigs by September 2010 for an unidentified Russian client. Separately, clients in Africa and in the Americas ordered two oil drilling ships worth USD 1.26 billion which will be delivered by May 2011.

South Korea, home to seven of the world's top 10 shipyards, clinched record orders last year because of strong demand for crude carriers and offshore exploration equipment as oil prices remained high. The trend continued in the first six months of this year, when local shipbuilders secured a record USD 33.2 billion worth of orders up by 51.3% YoY.

Fitch assign B+ rating to Minerva SA

Fitch Ratings has affirmed the foreign and local currency Issuer Default Ratings of Minerva SA at 'B+'. The 'B+' rating on the USD 200 million senior unsecured notes due 2017 issued by Minerva Overseas Ltd which is unconditionally guaranteed by Minerva is also affirmed. In addition, Fitch has also affirmed Minerva's national debt rating at 'BBB(bra)'. The Rating Outlook is Stable.

The ratings of Minerva are supported by the company's business position as the third largest Brazilian exporter of fresh beef, its low cost structure, its high grade of product customization and its diversified and growing export revenue base.

The company's activities are significantly export oriented, with approximately 73% of gross revenues earned during the first nine months of 2007 from foreign markets, allowing Minerva to earn hard currency and mitigate transfer and convertibility risk. The export revenue base has gotten better diversified, with sales in approximately 80 countries, and less concentration, recently, to EU countries than in the past. Diversification of sales by country is important in order to mitigate risks related to the imposition of sanitary restrictions. However, Minerva is more exposed to sanitary restrictions than other top competitors due to plant locations (56% of current capacity located in the State of Sao Paulo and Mato Grosso do Sul, which are Brazilian States that face more global restrictions).

Quinto Mining increase in private placement financing

Quinto Mining Corporation announced that further to its news release of December 20th 2007, it has amended the terms of its private placement to increase the size of the offering to 11,185,000 units for total proceeds of USD 7,270,250, subject to the approval of the TSX Venture Exchange. All other terms of the offering remain the same as previously announced.

The proceeds received from this offering will be used to accelerate Quinto Mining's exploration program on its Peppler Lake property and for general working capital.

The securities proposed to be offered in the private placement have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements.

Quinto Mining is a junior mining exploration development company with two advanced projects in the Province of Quebec.

Pakistan’s domestic steel prices likely to go up - Report

Daily Times reported that the prices of Pakistan’s steel products will be increasing as the new assessment criterion for its import agreed prices has enhanced the cost of doing business, as the importers pay import duties on the basis of import agreed prices.

As per report, Pakistan’s custom’s valuation department has revised the agreed prices on the import of secondary & semi finished steel products since 2004. The report cited a Pakistani steel importer as saying that the agreed prices on steel have been increased by USD 70, USD 70 and USD 125 per tonne on hot rolled coil, cold rolled coil and galvanized coils respectively and that the new import agreed prices of steel products are USD 392, USD 450 and USD 527 per tonne.
The report quoted some steel traders as saying that the fresh agreed prices were too high and would increase retail prices of the steel products exorbitantly in local markets. They said the fresh agreed prices push up the prices by PKR 2,000 to PKR 3,500 per tonne on various categories of steel products.

They said that they would not accept this price change and stop paying duties to the department if the decision of increase in agreed prices would not revert. However, they said that steel traders’ body has filed a review petition in this regard.

On the other hand, custom officials claimed that the secondary steel products are being sold in the local markets on the prices of primary steel products vary in international market so the increase in agreed prices is not a matter of primary and secondary quality steel products. According to the Custom officials, the new import agreed prices of steel products will be evaluated with the prices released by London Metal Exchanges’ bulletin fortnightly, including appropriate average discounts to be given to traders by valuation department.

EIL and Tecnimont to form construction JV in UAE

It is reported that Engineers India Limited will form a 30:70 JV with Tecnimont SPA of Italy for the execution of engineering, procurement and construction jobs in the UAE.

The new JV will be registered at Madeira in Portugal, through the acquisition of a shell company, Lihatonbur Consultores e Servicos Lda, in Madeira. Madeira has been identified as the location for registering the JV, from the tax, legal and operational point of view.

The EIL Tecnimont JV will target mega projects exceeding USD 500 million. While the scope of state run EIL would be engineering, project management and part procurement, the Italian firm would be responsible for construction, management and part procurement.

As a part of its business growth strategy, EIL has been focusing on EPC projects in the international market. The formation of a JV with a construction company of global standing would help EIL pursue EPC projects in the oil and gas sector, especially in the UAE region.

UAE GDP set to grow at 7% per annum till 2012

It is reported that UAE's real gross domestic product will grow at an annual average of 7% over 5 years between 2008 and 2012 while inflation is seen to gradually drop and will average 5% for the same period.

However, Dubai Chamber of Commerce and Industry said that these medium term prospects can only be sustained into the future if inflation is reduced and UAE monetary and exchange rate policies are addressed in the run up to GCC monetary union by 2010.

Dubai Chamber also said that UAE's external debts would grow at an annual average rate of 61% of GDP for 2008-12 while its budget balance would fall to 24%. The country's debts, which are mostly foreign liabilities of commercial banks and private institutions, have almost tripled the past two years.

Quoting data from the International Monetary Fund, Dubai Chamber said the UAE economy looks rosy for the next five years, as it has been expanding steadily with non oil GDP growth averaging over 10 per cent since 2003. It added that economic diversification would fuel growth dependent on non-oil sectors such as construction, financial services, manufacturing, transport, tourism and trade services.

It also said that a restraint in government fiscal spending and the easing of housing shortage would bring the medium term fall in inflation, which the IMF estimated to have exceeded 9% in 2006.

Dubai Chamber said that investments and savings in the UAE would increase in the medium-term, noting a large number of infrastructure and oil projects being planned or undertaken by the government. It added that both public and private sectors are also carrying out massive projects in real estate, tourism, transportation and manufacturing.

It said that investment by the private sector would account for 20% of GDP between 2008 and 2012 while the government's investment rate would be 3%. It added that private investment rate would exceed savings while government savings would be more than its investment.

UAE’s non oil sector grows by 10% in 2007

It is reported that the UAE’s non oil economy surged by about 10% in real terms last year and more than 20% in current prices to become the fastest growing sector in the 6 nation Gulf Cooperation Council.

The performance is set to continue in 2007 as the country pursues long term economic diversification programs focused on encouraging non oil investments and attracting foreign capital into productive sectors.

Figures from the International Monetary Fund, which cited UAE Government statistics, showed the country’s non oil gross domestic product grew by 11.1% in real terms last year and was projected to expand by about 10.1% in 2007, the highest growth rate in the GCC.

According to the UAE ministry of economy and planning, in current prices, growth is expected to be much higher, standing at around 21% this year compared with 23% in 2006.

Experts said that the surge in the non oil economy was a result of massive investments by the public and private sector, high foreign direct investment, sharp expansion in such sectors as industry, services and construction, and a steady growth in the free zones. Such investments have sharply boosted the non-oil sector’s share of the GDP, jumping from just 30% in 1980 to nearly two thirds at present.

Despite a surge in the oil sector in 2007 because of a sharp rise in prices and maximum crude output by the UAE, the non oil sector was the dominant component of the GDP, accounting for 65%. Its value was estimated at about AED 455 billion of the expected total GDP of AED 698 billion. The ministry’s figures showed investment grew by around 19%t to a record AED 144 billion this year from AED 121 billion in 2006.

About 58% of the investments came from the private sector this year, indicating its growing role in the non oil economy. As for oil, its real GDP grew by around 2.5% this year.

Scorpion to build premium jackup at Lamprell

Scorpion Offshore Limited, through its wholly owned subsidiary, Scorpion Rigs Limited, has agreed to exercise the first of its four options with UAE based Lamprell Energy Limited, a subsidiary of Lamprell plc, to construct a Letourneau Super 116E ultra premium class jackup drilling rig.

The turnkey price of this rig, to be named the Offshore Mischief, is USD 175.9 million excluding drill pipe and handling tools.

The offshore mischief is a sister rig to the offshore freedom, and its construction will also proceed under a turnkey construction contract at Lamprell's yard in Sharjah. The rig is scheduled for delivery at the end of 2009. The rig is rated to work in up to 350 feet of water and has a rated drilling depth of 30,000 feet.

Mr Jon Cole CEO of , Scorpion said that “We believe that the combination of growing demand for 'ultra premium' jackup, particularly in the Arabian Gulf market, combined with the favorable pricing, yard location and delivery schedule offered by Lamprell, makes the Offshore Mischief a natural addition to the Scorpion fleet."

This will be Scorpion's 7th jackup new build and the second rig being built by Lamprell in the United Arab Emirates. With the exercise of this option, Scorpion still holds options to construct up to 3 additional LeTourneau Super 116E rigs at Lamprell.

Ajman Airport construction to begin in 2008

It is reported that construction will begin on the UAE’s fourth international airport next year as part of an international “PlaneStation” that will include 30 airports around the world, bringing tourists and business travelers to the booming Middle East.

According to a statement released at a conference, attended by Mr Sheikh Humaid bin Rashid Al Nuaimi, supreme council member and ruler of Ajman, the newest airport in the Emirates will be build in Ajman at a cost of AED 12 billion. The facility will be constructed in 6 stages and take its place as one of 11 airports to be built in the Middle East.

Other airports either planned or already under construction include 2 each in Egypt and Iran, as well as others in Saudi Arabia, Jordan, Oman, Bahrain and Morocco.

USD 3.63 trillion earmarked for tourism infrastructure in MEA

According to the preliminary results of a research program, a massive USD 3.63 trillion is being invested in hotels, leisure projects, aviation developments, cruise lines, tourism promotion and supporting infrastructure, across the Middle East.

Mr Rohit Talwar report’s author and CEO of Fast Future and GFF said that “We believe that an adverse outcome on any one or more of these factors could act to slow growth or even reduce demand.”

The study covers 13 Middle Eastern countries for the period to 2020 and is to be published in full at the Hotel Show 2008, the Middle East's leading supplies exhibition to the region’s hospitality sector, taking place at the Dubai international exhibition centre from 8 to 10th June 2008.

The Middle East Industry Outlook 2020 is an update of a groundbreaking research study by fast future and global futures and foresight on the future of travel and tourism in the Middle East. The study takes a futures perspective on the key trends and drivers shaping the region’s travel and tourism sector out to 2020 and beyond and is sponsored by the Hotel Show, Siraj Capital, Nakheel and Silverjet.

The study also looked at 19 major airports and identified a total planned investment of USD 38.9 billion with the ten largest airports expecting to add capacity for at least 320 million passengers. The two largest spending airports were Dubai World Central at USD 8.2 billion and Saudi Arabia’s King Abdulaziz International at Jeddah, which is investing USD 8 billion.

The report also highlights six critical factors that could cause turbulence and confusion and have an adverse economic impact in the coming years: the global economic outlook, environmental challenges, human resources, safety and security, infrastructure and information availability and reliability.

Iran to build 22 combined cycle plants by 2012

Mr Seyyed Ali Bani Hashemi an Iran Power Development Company official announced that 22 combined cycle power plants will be established in Iran by 2012. He added that already run and building power plants have the capacity to generate 12,000 MW.

Iran and UAE yet to agree on gas deal

Mr Mahmud Zirakchianzadeh MD of Iranian Offshore Oil Company said that if Iran and the United Arab Emirates reached an agreement and Iran would for the first time export over 540 million cubic feet of gas per day to an Islamic neighboring state.

Mr Gholamhossein Nozari oil minister of Iran said that an alternative pipeline was under construction in Iran to divert gas destined for Sharjah based Dana to the Iranian market if the two sides failed to reach a deal involving higher prices. He added that the National Iranian Oil Company had already carried out early engineering and design work on the alternative pipeline to supply the port of Assaluyeh, where it could be used for gas re injection.

Mr Nozari said “Iran’s High Economic Council has approved the plan to use the gas domestically. We are already working on the pipeline. If we do not reach an agreement for a higher price, the gas will be sent to Assaluyeh.”

Iranian official sources said the agreement called for the supply of about 116 billion cubic meters of natural gas to the UAE over 25 years, with the initial sale of 330 million cubic feet a day rising to 600 million in Sharjah’s Hamriyah Free Zone.

The contract to send gas to the UAE was signed following long negotiations between NIOC subsidiary Petroiran Development Company and Crescent, when oil and gas prices were low. Iranian gas supplies will be marketed in the UAE by Dana Gas.

Dubai to build 2nd cruise ship terminal in a year - Report

Gulf News reported that Dubai will build a second cruise ship terminal within a year to handle the growing number of tourist arrivals in the booming emirate.

Mr Awad Al Ketbi executive director of Dubai Cruise Terminal said that “Dubai will have a second terminal in the near future.” He added that the new facility would have the same passenger handling capacity as the Port Rashid terminal, which was opened in 2001. Port Rashid can handle up to two cruise ships simultaneously, the Dubai Cruise Terminal.

Dubai’s Department of Tourism and Commerce Marketing said it expects the number of tourists visiting the emirate by cruise ship to more than double to 350,000 by 2010-2011. Dubai, one of seven emirates that make up the United Arab Emirates, is a leisure hub in the oil-rich Gulf and draws millions of visitors every year, many of them Westerners.

Dubai is undertaking several other mega projects in order to woo tourists and more than double their numbers to 15 million by 2015.

Bahrain calls for patience in currency re valuation in GCC

It is reported that Bahrain has urged that Gulf Arab countries should not rush to decide on revaluing their dollar pegged currencies because volatility in the US currency is normal.

MEED quoted Mr Rasheed Al Maraj central bank governor of Bahrain as saying that "You cannot take a short term view and start ripping up your economic and monetary policy because of volatility during one snapshot of economic conditions. We are aware that there is volatility in the markets, and that sometimes volatility is higher at certain adverse economic points in the cycle."

Mr Maraj said that Bahrain would stand by its peg to the dollar because it has served the economy well and allowed it to grow. He said "We are sticking with the current policy." Mr Maraj accused foreign banks of unethically piling pressure on Gulf currency pegs and warned it would take action against anyone targeting its dinar.

Mr Sultan Nasser Al Suweidi UAE central bank governor was quoted as saying in London based Al Hayat Gulf that Arab oil producers are considering allowing their currencies to appreciate after agreeing to keep pegs to the dollar. Mr Suweidi had triggered a spell of intense market speculation about the imminent demise of the Gulf's fixed exchange rates, after he said last month he was under mounting social and economic pressure to sever the dirham's dollar peg. He backtracked on those remarks after Gulf rulers agreed at a summit in Qatar to retain dollar pegs and keep any talks on currency reform secret.

It is noted that pressure on Gulf Arab currency pegs is building as the dollar tumbled to record lows against the euro last month, pushing the Saudi Arabian riyal to a 21 year high and the UAE dirham to a 17 year peak. Last week the US currency climbed to six week peaks against the yen and two month highs versus the euro and a basket of currencies.

Chinese HRC export prices forecast to touch USD 700 FOB levels

Chinese hot rolled coil export prices have seen swift rise in the past two weeks and Chinese steel producers continued to raise offers last week so as to reflect the rise in domestic prices and offset the risk of possible export tax change although domestic HRC prices seem to be turning stable after slipping down from peak level. As per some traders, there would be another round of increase in the coming weeks.

As per reports, export quotations for commercial HRC are prevailing at USD 665 per tonne to USD 670 per tonne on FOB basis, as compared to USD 640 per tonne to USD 650 per tonne in the last but one week. As per reports, some of the steel producers are even quoting USD 700 per tonne on FOB basis citing high domestic price, possible export tariff rate hike and less output. However, transaction prices were reported at USD 645 per tonne to USD 655 per tonne on FOB basis.

The prices offers from some of the prominent mills are reported at following levels

1. Wuhan Steel is offering at USD 675 per tonne CFR for re rolling HRC, pipe making grade material at USD 665 per tonne CFR and commodity grade at USD 655 per tonne CFR for shipments to South Korea for February delivery.

2. Shagang is reported to be quoting at USD 650 per tonne CFR

3. Jiuquan Steel is quoting much higher at USD 700 per tonne CFR South Korea for end January or early February shipment.

Now most exports are flowing into South East Asia and South Korea since the EU market is still quiet now. But some traders indicated that some large importers have felt the market trend and started to believe that EU market prices are going to catch up in the end. And it is estimated that commercial HRC export offers would touch USD 700 per tonne on FOB basis soon.

Steel products in prohibited list of processing trade

China's ministry of commerce and customs jointly on December 24th 2007, issued a new batch of prohibited categories of processing trade directory, 589 kinds of products are list in this prohibited directory, iron and steel products and minerals are also listed. It will be executed by the January 21st 2008.

According to the China’s ministry of commerce, the new directory will help optimize the structure of China's export commodities, inhibition of low value added, low technological content of export products and promote the transformation and upgrading of the processing trade.

The directory mainly includes animal products, plant products, mineral products, iron and steel and related products, aluminum products, some containing endangered animals and plants have also been included.

Update on Chinese plate export prices

It is reported that Chinese steel makers continued to raise export offers for plates and the trend is going to spread into early next year due to strength in domestic market prices and strong overseas demand. Many steel mills have announced increase of CNY 150 to CNY 300 per tonne on ex works prices for January shipments in domestic market.

As per reports, export quotations for commercial plate have jumped to USD 780 per tonne on FOB basis up by USD 30 per tonne to USD 40 per tonne from early December and overseas customers seem to be on the verge of accepting taken into account the escalating Chinese domestic market prices. Although, some plate mills are reported to be offering at USD 740 per tonne to USD 750 per tonne on FOB basis.

In addition, tier one producers are concentrating on exports of high value added plates, such as ship plate, pipe line steel, wind tower plate and boiler steel plate etc.

Industry experts attribute recent price fluctuations to financial strains at end of the year, while for longer term outlook, they believe both market and prices will stabilize based on following reasons.

1. Domestic demand, especially from such sectors as shipbuilding, machinery, construction steel structure engineering, boiler and case manufacturing.

2. Input cost would prevent the medium plate price from falling. Next year, iron ore, coke, coal, oil etc will be priced high, exerting a relatively big upward force for plate prices.

3. Strong demand from overseas.

However some of the negative factors influencing plate prices in 2008 are as under

1. Capacity expansion will influence the market regionally and periodically. As estimated, the medium plate output will top some 52 million tonne in 2007, with newly released capacity of about 10 million tonne according to incomplete statistics. In 2008, the additional capacity is forecast at 15.7 million tonne.

2. Steelmakers are producing higher volumes of special grades to cater to surging demand, which will lead to decline in volumes of common grades leading to imbalanced structure and impacting on the price.

3. Trade surplus pressure will make export harder. Sizzling trade disputes and the government's constraints on export, the medium plate market would also feel pressure next year.

Hebei strengthens efforts to eliminate outdated steel capacity

It is reported that the Provincial Development and Reform Commission of Hebei, ha ordered in April 2007 for elimination of 3.98 million tons of outdated pig iron capacity and 5.19 million tons of steel capacity by the end of 2007.

It is learned that the province has so far completed the target of shutting down steel capacity and eliminated 2.6 million tons of pig iron capacity with 1.38 million tons to be closed by the year-end.

Four measures have been put forward to make sure to complete those targets before the deadline.
1. To strengthen supervision and inspection;
2. To compulsively cut power supply to the outdated capacity from January 1, 2008;
3. To intensify differential electricity fee policy;
4. To announce the third batch of enterprises running outdated facilities.

Xinxing Ductile to invest CNY1.365 billion in new project

It is reported that Xinxing Ductile Iron Pipes Company’s board of directors on December 21st 2007 approved plans to invest CNY 1.365 billion in technology reformation.

It is learned that this technology reformation includes three aspects.

1. Xinxing Ductile Iron Pipes will invest CNY 427 million to 700,000 tonnes per annum Coil steel products production line, mainly produce high quality cold upsetting steel and hard line steel in order to realize product structure upgrading thus raising the added value of products.

2. It plans to invest CNY 894 million in centrifugal casting composite pipe project

3. It will invest CNY 44.2 million in 200,000 tonne per year rotary kiln production line.

Baosteel increase stake in New China Life Insurance Co

It is reported that Baosteel Group Corp will buy 90.1 million shares in New China Life Insurance Co, taking its stake in the insurer to 17.3%. The share transfer from Shenhua Group Co will add to Baosteel's existing 9.7% stake to make it the third largest shareholder.

China Insurance Regulatory Commission said that "Shenhua Group Co will transfer the shares to Baosteel, after which Shenhua will no longer hold a stake in the insurance company."

New China Life Insurance Co is wholly owned subsidiary Huabao Investment is the largest shareholder in China Pacific Insurance Co, with a 21.43% stake.

As the largest steel producer in the country, Baosteel has shown growing interest in the insurance sector. Baosteel has also invested CNY50 million in Huatai Property and Casualty Co. According to sources the steelmaker also plans to set up a joint venture with Dai-ichi Mutual Life Insurance Co, Japan's second largest life insurer.

Masteel to become major production base for wheels

It is reported that Masteel wheels expansion plan is one of the key projects and it is expected to be completed by the end of 2008.

At that time, the annual output of wheel in Masteel will reach 1.1 million units, and Masteel will become the world’s largest wheel production base. At present, the annual output is about 600,000 units.

As per reports the wheel processing line is introduced from Germany, it is constituted by 8 RQQ CNC machine tools, two mechanical hands and transportation line, the design output is 300,000 units.

China’s exports of oil production equipment in 9 months up by 68% YoY

Xinhua reported that China exported USD 3.25 billion worth of oil production equipment and related products, including drilling machines and spare parts and steel oil pipe, during January to September 2007 period up by 67.4% YoY. As per report, US was the biggest target market of China's exports, while China's foreign sales to Russia, Algeria and India surged by big margins.

From January to September, China sold USD 1.04 billion dollars worth of oil production equipment and related products up by 31.9% YoY of the total, to the United States up by 29.9% YoY. China's exports to Russia and Algeria, which are major oil producers, amounted to USD 190 million and USD 130 million respectively up 10.2 folds and 420%. Sales to India soared by 59.8% YoY to USD 270 million.

Of the total oil equipment exports, state owned enterprises accounted for 53.5% up by 60.3% YoY, foreign funded and private companies made up USD 770 million and USD 610 million up by 79.1% YoY and 71.6% YoY respectively.

The robust export was buoyed by strong demand worldwide, the customs sources said. Price hikes prevailed the world's oil markets this year, and the ensuing big profits prompted major oil producers to expand business and increase investment, the sources said. Moreover, major oil producers in the Middle East, America, and Russia are entering a period of equipment upgrading.

Meanwhile, China has made progress in oil equipment manufacturing over recent years, with oil exploiting and drilling equipment up to the world's advanced standards. Besides, these products boast advantage in prices on international markets, according to the sources.

SAIC and Nanjing Auto to sign on merger

It is reported that Shanghai Automotive Industry Corp will sign the final agreement on a planned merger with Yuejin Motor Group, controlling shareholder of Nanjing Automobile Corp, on December 26 2007.

According to the report the two companies are planning a share swap, with Nanjing Auto's complete vehicle assets to be injected into SAIC's listed subsidiary SAIC Motor Corp and its auto parts and trade businesses to be injected into SAIC. Nanjing Auto will hold SAIC Motor Corp's stake.

After completion of the merger, the SAIC-Nanjing Auto complex will be the China's biggest auto group in terms of assets, number of products, and business scope.

Earlier the two parties signed a letter of intent in July this year for the much heralded association, according to an earlier China Daily report. They formed a working group to discuss "possibilities and programs for all-round collaboration" in vehicles, spare parts, auto trading and services.

SAIC, the partner of General Motors and Volkswagen, in 2004 bought the intellectual rights to the Rover 75 and 25 sedans, and K-series engines from MG Rover. Nanjing Auto, which runs a car venture with Fiat, in 2006, purchased the MG brand, a plant in England, and Powertrain, the engine arm of the British carmaker.

SAIC, one of the top Fortune 500 multinationals for the past three years is the most profitable carmaker in China. But Nanjing Auto has been in the red for years.

Dry bulk shipping fuels China Cosco

It is reported that China’s largest container shipping line China Cosco, has lifted its full year profit forecast by 50% because of improved conditions in the global shipping market. China Cosco said that net profit for 2007 was likely to be 50% higher than a forecast of CNY 12.17 billion (USD 1.65 billion) made in September 2007 to about CNY 18.26 billion.

Analysts said the revision was expected because of strong demand for dry bulk commodities in emerging economies, rising rates and the conservativeness of the company's earlier forecast.

Mr Gideon Lo an analyst at DBS Vickers in Hong Kong said that "Dry Bulk shipping is going to remain strong next year, despite the slowdown in the US. Much of the demand comes from places like China and India, which have huge need for infrastructure development. That's not going to slow down.”

Mr Lo said China Cosco was too cautious when making its earlier forecast, given that the newly acquired dry bulk business had net profit of CNY 6.24 billion in the first half. China Cosco, which previously relied on container shipping, posted a net profit of CNY 969 million in the first six months of 2007.

China Cosco acquired its parent's dry bulk shipping arm three months ago and now derives about 75% of net profit and 40% of revenue from the operation.

Shen Zhou Mining acquires gold & copper mines in Kyrgyz

China's Shen Zhou Mining and Resources Inc announced in its annual report that it had completed the acquisition of large scale gold and copper mine in the Kyrgyz Republic.

The mine, owned by the Kichi Chaarat Closed Joint Stock Company, was acquired through a deal late last month, when the Inner Mongolia Xiangzhen Mining Group Co, Ltd, a subsidiary of CSZM, acquired Kichi-Chaarat's parent company, Kyrgyz-based Tun Lin Limited Liability. The cost was USD 10 million.

Ms Jessica Yu CEO of Shen Zhou Mining Resources said that nonferrous reserves in Kyrgyzstan were plentiful and valuable and the acquisition would "strengthen the company's resources reserves in the longer term.

The Kuru-Tegerek Copper-Gold deposit, in the western part of the Kyrgyz Republic, contains 97.36 tonnes of gold and 1.02 million tonnes of copper.

Russia may start AD probe on SS imports

It is reported that Russia may increase import duties on stainless steel products by 35% to 40%, from EUR 840 per tonne to EUR 1,200 per tonne – EUR 1,300 per tonne in early 2008 and also expand the duties to Chinese imports, which enjoys the duty-free benefits so far.

A spokesman of Russian economic development & trade ministry, which controls the protective duties commission, said that. "Russian producers may initiate an anti dumping investigation and if it proves that imported metal products were sold at dumping prices, import duties will be raised in 2008.”

Analysts say this measure, aimed at closing a market with a capacity of 150,000 tonnes a year, will benefit metals giant Mechel and deliver a heavy blow against Russian traders of Chinese metal.

Russia introduced the duty on metal products imported from the European Union on March 20th 2007.

Ukrainian steel makers to pay 30% more for gas in 2008

Reuters reported that Ukrainian government has raised the gas price ceiling for industrial consumers by 30% for 2008 following a price increase for imported gas likely to intensify pressure on local producers and fuel inflation. However gas prices for residential customers would remain unchanged next year.

The government said in a statement on its website www.rada.gov.ua on Tuesday that it has allowed a rise in the ceiling to USD 185 per thousand cubic meters from USD 143 in 2007.

The news follows an agreement signed with Russian gas export monopoly Gazprom, under which Ukraine is to pay USD 179.50 per thousand cubic meters from next year against USD 130 at the moment.

Ukraine consumes around 75 billion cubic meters of gas per year and imports 55 billion cubic meters. It also produces around 20 billion cubic meters per year which is used by individuals for heating needs. Economists say the increase will hit the competitiveness of Ukrainian producers, especially the chemicals and steel sectors and fuel inflation.

Mr Mordashov to head Power Machines board of directors

RIA Novosti reported that Mr Alexei Mordashov CEO of Severstal will head the board of directors of Power Machines, Russia's leading heavy machinery manufacture.

According to a December 20th 2007 decision by the board of directors Mr Mordashov will replace Mr Sergei Batekhin the deputy general director of Interros financial holding, a co owner of Power Machines.

The release added that Mr Michael Suess vice president of the Siemens Power Generation Group was elected deputy board chairman. German electronics and engineering giant Siemens holds a blocking stake in Power Machines.

Mr Mordashov controlled, Cyprus registered Highstat Ltd increased its stake in Power Machines to over 55% in early December.

Uzbekistan and Gazprom fail to conclude gas prices deal

Interfax reported that Uzbekistan and Gazprom have failed to reach an agreement on a mutually acceptable price for exports of Uzbek gas to Russia or on tariffs for the transit of Turkmen gas in 2008. Uzbek media reported that "Following negotiations between a delegation led by Gazprom CEO Mr Alexei Miller and representatives of the republic of Uzbekistan's government, no agreement was reached.”

It was reported earlier that Mr Miller met with Mr Islam Karimov president of Uzbek. Mr Miller also attended negotiations with Deputy Prime Minister and Finance Minister Rustam Azimov and the management of the national holding company Uzbekneftegaz.

After Turkmenistan increased the price for its gas sold to Gazprom to USD 130 to USD 150 from USD 100 per 1,000 cubic meters, Kazakhstan and Uzbekistan also announced intentions to increase the price for their gas.

It was reported in late November that Uzbekneftegaz planned to hold negotiations with Gazprom in December to increase the price for Uzbek gas from the current USD 100. The Uzbek side declared its intention to switch from regional to world prices defined using a special price formula.

Uzbekneftegaz and Gazprom signed a strategic cooperation agreement back in 2002. The document stipulates long term purchases of Uzbek gas by Gazprom in the period up to 2012, Gazprom's participation in gas production projects in Uzbekistan on the basis of production sharing agreements, and cooperation in developing gas transportation infrastructure in Uzbekistan and transporting Central Asian gas through Uzbek territory.

Uzbekistan is the second largest producer of natural gas in the CIS and one of the world's top ten gas producers.

Murmansk Shipping to build 12 ice class ships in China

RIA Novosti reported that The Murmansk Shipping Company is set to sign contracts with Chinese shipbuilders on the construction of 12 ice class bulker ships.

Mr Alexander Medvedev GD of Murmansk Shipping during a press conference said that "We will soon sign contracts with Chinese manufacturers to build 12 ice class bulkers with a deadweight of 30,000 tons each.” Mr Medvedev did not name the sums and terms of contracts, only saying that the company, based in the Murmansk Region by the Barents Sea, had already cooperated with the Chinese manufacturers involved.

He added that "It is no secret that the cost of building a ship in Russia and Europe remains high. Therefore it is profitable to build ships in China, where the quality of work is constantly rising and prices still remain economically beneficial.”

Rusal seeks to buy stake in Norilsk Nickel

The world's biggest aluminum producer Rusal announced the purchase of a 2% share in top nickel producer, Norilsk Nickel from KM Invest, as part of its bid to buy up the company.

Rusal in a press statement issued said that "The official letter stating UC RUSAL's intention to buy a 2% stake in Norilsk Nickel was sent to the CEO of KM-Invest on December 24th 2007.”

The board of KM Invest, managing the joint investments of former partners Mr Vladimir Potanin and Mr Mikhail Prokhorov, approved last week the sale of 2% of Norilsk Nickel stock and 7.4% of major gold producer Polyus Gold, launching the economic liquidation of KM Invest's assets.

Rusal is already purchasing a blocking 25% plus one share stake in Norilsk Nickel as party of a complex bid to buy up the company and create a global metals and minerals giant. RusAl said Friday in a news release that an agreement to buy a blocking stake, 25% plus one share, in Norilsk Nickel from Mikhail Prokhorov's Onexim group had come into force.

Mr Dubyna appointed as chairman of Naftogaz Ukrayiny

Ukrainian Journal reported the Ukrainian government has appointed Mr Oleh Dubyna, former deputy prime minister and currently a steel industry executive, as the chairman of Naftogaz Ukrayiny, the national oil and gas company.

Mr Dubyna’s task will include streamlining finances of Naftogaz, which is facing a major financial crunch and pressure from creditors due to poor management and steep hike prices of in natural gas imports in 2006 and 2007.

Olenegorsk GOK obtains certificate of conformity to OHSAS 18001

FIS reported that Olenegorsk GOK obtains certificate of conformity of the enterprise's labor safety management to international standards as regards the production and processing of ores in the production of iron ore concentrate, ferrite-strontium powders and macadam.

The certificate requires supervision by an Evro-Register controlling body and annually conducted inspections.

UES completes thermal power sector restructuring

RIA Novosti reported that Russia's Unified Energy System has completed the restructuring of the thermal power sector as part of a broader electric power system reform.

Unified Energy in a statement said that a total of six wholesale generating companies and 14 territorial generating companies were currently operating and their shares, except for TGK-11's, had already been put on the market.

Unified Energy added that TGK-10 was the latest generating company to conclude the consolidation of assets in several Urals regions. The financial regulator registered an additional share issue on December 20.

Russia's power sector is undergoing radical changes aimed at increasing the efficiency of power plants and developing the industry by attracting investment. The potentially competitive sectors of the industry generation, sales and repair companies are to become mainly private and will compete with one another. The natural monopolies power transmission and dispatching will remain state controlled.

Once the reform is complete by July 2008, the parent company UES will be divided, and its shareholders will receive the shares of core electricity entities, proportionate to their holdings in the monopoly's charter capital.

Turkmen gas output up by 9% in 2007

Turkmenistan’s Economy and Finance Ministry citing the preliminary data reported that Turkmenistan has increased its natural gas output by 9% and gas export by 10% in 2007, but the statement did not say what the physical volume of production or exports was.

The ministry said that its production of Oil grew by 9%, and most crude production is handled by the state oil company, Turkmenneft, but a handful of foreign companies such as Dubai based oil explorer Dragon Oil Plc and UK based Burren Energy Plc, also operate in the country.

Turkmenistan rarely publishes official statistical data and many economic indicators are a state secret. Last year Turkmenistan, Central Asia’s largest gas supplier, produced 68 billion cubic meters of gas, most of which it exported through Russia. This year it planned to boost output to 80 billion cubic meters.

Azerbaijan Railway finalizes development program for 2008-2012

According to Mr Sadraddin Mammadov transport and economy minister of Azeri, the process of intergovernmental agreement on the Railway Development Program for 2008-2012 has already been completed. Mr Mammadov said that at present collection of intergovernmental resolutions for official address to the president is being completed. Soon the project of the State Program will be submitted to the president.

The ministry added that program endorsing is scheduled until late 2007. It estimates spending at AZN 1.2 billion. At the same time only 40% to 50% of finances will be raised from state budget and the rest from foreign investors and banks. Program drafting was started in accordance with the presidential decree on State Commission running the issues of Baku-Tbilisi-Kars railway project.

Mr Musa Panakhov deputy minister of transport said that the Program assumes resolving traffic security problem and creating logistic center. The state would like transport and forwarding companies to start purchasing own car fleet. Keeping communications in the state monopoly that will allow not only to develop private sector but also unload Azerbaijan State Railway from providing the car fleet.

Norilsk to pay 9 month dividend of RUB 108 per share

It is reported that Norilsk Nickel, the world's biggest producer of nickel and palladium will pay RUB 19.8 billion in nine month dividends.

Norilsk in a statement said that shareholders at an extraordinary general meeting, held on December 21st 2007, approved a dividend of RUB 108 a share.