Kulti unit to support SAIL’s expansion plans

It is reported that Steel Authority of India Limited is likely to start functioning of its Kulati Works shall become operational in about 4 months with production of both non ferrous and ferrous foundry along with support facilities in stages. It has been christened as SAIL Growth Works Kulti and Mr M Singh ED Growth has been put in charge of the new unit and posting of executives from other plants to Kulti is in progress as per requirement.

Mr SK Roongta chairman SAIL said that “With the closure of Kulti, number of items, which were earlier supplied from Kulti works to SAIL plants, were being procured from outside agencies. Over the years with the growing requirement of ferrous and non ferrous castings and machinery items, plants have been experiencing difficulties in getting such items in time and also with regards to quality and high prices”

Mr. Roongta added that “The requirement of castings and machineries will further increase in coming years with the implementation of expansion plan, which can be met by developing a captive source for SAIL for some of the critical casting and machinery.”

A detailed study has already been carried out and schedule has been drawn for bringing up the health of equipments and other infrastructure to repair, overhaul, maintain and then operate all the required facilities. SAIL's Centre for Engineering and Technology has been engaged as a consultant to prepare feasibility reports for enhancing the level of production, up gradation & augmentation of foundry and machine shop facilities for manufacturing high value & capital items of SAIL steel plants

Blast furnace tuyers, cooler, monkey, bosh plate, phosphorous bronze slipper pad etc. amongst non ferrous products and Ferrous foundry products such as cast steel pellet frame for sinter plant, gate bar, charging boxes, pig mould, alloy steel hammer, chilled steel rolls, wheels and other casting etc will be produced at Kulti Works.

SAIL to invest INR 20,000 crore on steel plants in WB

BS quoted Mr Ram Vilas Paswan union steel minister as saying that Steel Authority of India Limited will invest INR 20,000 crore in West Bengal. This is almost two fifths of the INR 53,000 crore spread planned by SAIL.

Mr Paswan said that SAIL will invest INR 13,500 crore in the IISCO Steel Plant at Kulti, INR 5,600 crore in the Durgapur Steel Plant and the balance in the Alloy Steel Plant. This will raise SAIL’s annual hot metal production from the current 14.6 million tonnes to 26 million tonnes.

Mr Paswan, while addressing a large gathering at the inauguration of the SAIL Growth Works, added that the centre is keen on reviving the National Iron & Steel Company owned by the West Bengal government and closed for the last 6 years. He had asked the West Bengal government to waive the loans and liabilities to the company so that it could be started on a clean slate. NISCO could be merged into SAIL.

NMDC moves to Delhi HC against allocation of iron ore deposit in Chattisgarh

PTI reported that Delhi High Court has sought an explanation from the central government on a petition by National Mineral Development Corporation challenging its decision to grant prospecting license for mining iron ore to TATA Steel at Dantewada in Chhattisgarh. Justice S Ravindra Bhatt also sought response from the Chhattisgarh government and TATA Steel on the petition filed by NMDC Ltd.

NMDC contended that the Chhattisgarh government, with whom it was pursuing the matter since April 15th 1991 for prospecting license over an area of 1,130 hectare, ignored its rightful claim and recommended TATA Steel's name. NMDC alleged the decision of both the Centre and Chhattisgarh government to grant prospecting license to TATA Steel is arbitrary and illegal as it had applied way back in April 1991 whereas TATA Steel had applied only in March 2006 for this deposit.

Chattisgarh government had recommended TATA Steel for the license for iron ore over an area of 2,500 hectare in Bailadila area of the district. Central government gave its approval on February 14th 2007 thus granted prospecting license to TATA Steel for two years.

Jharkhand approves 26 more MoUs for steel and power plants

Ranchi Express reported that a high powered committee headed by Mr PP Sharma chief secretary of Jharkhand has approved the signing of 26 new MoU for setting up iron & steel, power and cement units in the state. It also extended the terms of MoUs of 6 companies for anther 2 years.

The major investors among these 26 new companies are GPI Steel Industries Limited, ARESS Iron & Steel Limited, Zoom Vallabh, Corporate Ispat Alloys Limited and Vijaya Steel. There proposal is reported to be as under

1. GPI Steel Industries Limited has proposed to set up a 2 million tonne steel plant with an investment of INR 17,000 crore

2. ARESS Iron & Steel Limited has proposed to establish a 2.5 million tonne plant with an investment of INR 9,800 crore.

3. Zoom Vallabh have proposed to invest INR 13,500 crore

4. Corporate Ispat Alloys Limited have proposed to invest INR 9,120 crore

5. Vijaya Steel have proposed to invest INR 7,470 crore

Government survey delayed at POSCO site

SNS reported that Non finalization of various demands of villages falling in the proposed POSCO’s project area, in two different meetings, has delayed survey work, causing headache for both administration and the company.

After the recent violence, Dhinkia village has been isolated from POSCO project areas by deployment of police forces. Now the district administration has decided to start survey work in all villages of Nuagaon, Dhinikia and Gadakujang panchayats by leaving Dhinkia revenue village.

Earlier, district administration and POSCO officials had conducted a meeting with the village chiefs and sarpanch, samiti members to solicit corporation to expedite survey work but united action committee decided to extend their cooperation after successful discussion with the villagers.

On the other hand, united action village committee has formed another core committee with 11 members to scrutinize or finalize hundreds of demands being raised by the villagers. Non finalization of their demands has affected two meetings, prompting the committee to form one core committee to address the issue. As per report, villages have presented hundreds numbers of demands so core committee has formed to select eight to ten genuine demands

As per report, villagers have made following major demands
1. Job opportunity for each family
2. INR 3 million to INR 4 million per one acre land towards compensation
3. INR 50,000 per one decimal of betel vine land
4. Three to four dwelling to displaced families etc

On the other hands, villagers of Noliasahi and other villages have threatened not to give one inch land for POSCO project if their demands would not be fulfilled by POSCO. They have also threatened to protest POSCO project like anti POSCO activists if their genuine demands would not be fulfilled by the district administration and POSCO officials.

RINL expansion plan progressing per schedule

RINL’s Visakhapatnam Steel Plant, in a press release, said that the expansion work is progressing as per schedule and the first phase expansion will be completed by fourth quarter of 2009.

The release said that piling work nearing completion and other works like concrete pouring, steel structural fabrication and erection is gaining momentum. Monthly concrete pouring of 23,000 cubic meters will be achieved by December 2007 end.

RINL added that order placement for all major process packages of 6.3 million tonnes expansion work are already completed.

NTPC scraps two hydropower projects in Arunachal

It is reported that National Thermal Power Corporation Limited has decided not to take lying down the scrapping of two of its hydro power projects in Arunachal Pradesh.

NTPC was to build the 4,000 MW Etalin and the 500 MW Attunli projects in the Debang valley on a build own operate maintain basis. However, even before it could complete the techno economic viability study of these projects, the state government demanded an upfront payment of INR 250 crore, which was not part of the agreement signed earlier. Arunachal government had scrapped the projects totaling 4,500 MW after NTPC declined to pay the upfront fee demanded by the state government in the form of an interest bearing loan.

Mr T Sankaralingam CMD of NTPC said that “We are also not interested in giving this loan as there is no security for it. When even the detailed project reports have not been prepared and we do not know if the project is viable.”

NTPC has taken the issue to ministry of power as it does not want to let go of these projects. The union power ministry is likely to convene a tripartite meet with NTPC, Arunachal government and power ministry officials shortly to resolve the issue.

It is noted that Arunachal government had entered into a Memorandum of Agreement with central power utilities like NHPC, NTPC and North Eastern Electric Power Corporation for harnessing 10,230 MW of hydroelectricity in September 2006. Many hydro power projects in Arunachal Pradesh are facing roadblocks because of the state government’s unpredictable policies. Though the state has already awarded projects of about 25,000 MW to both central utilities and private sector companies like Reliance Energy, JP Associate, DS Construction, KSK Energy, GMR and Mountain Fall, industry observers are skeptical about fruition of these projects.

India’s leading hydropower states

Potential in MW
Source: Central Electricity Authority

GML raises INR 260 crore for ship building yard in TN

BS reported that Chennai based bulk shipping company Goodearth Maritime Limited has raised INR 260 crore from IDFC Private Equity to fund a Greenfield ship building yard in Tamil Nadu and to make foray into the onshore and off shore oil drilling sectors.

Mr PB Anandam chairman of GML said that “We are in the process of making Goodearth Maritime a global shipping company with a strong ship building base in India.”

He added that the shipyard will have a capacity to build 25 to 30 ships a year and the estimated investment will be close to USD 500 million in the first phase.

Mr Luis Miranda president & CEO of IDFC Private Equity said that “We have a large portfolio in the transport sector, covering ports, airports, roads and logistics. GML fills the gap in the shipping and ship building segments. This is our largest investment to date.”

o3 Capital was the sole adviser to GML for this transaction.

Mr BS Meena appointed as director on SAIL board

Steel Authority of India Limited announced that the government of India has appointed Mr BS Meena Additional Secretary & Financial Adviser with the ministry of steel as director on the board of directors of SAIL.

Lok Ayukta seeks suspension of iron ore exports from Karnataka

BS reported that the controversy surrounding the iron ore exports in Karnataka has taken a new turn with the Karnataka’s anti corruption cell Lok Ayukta seeking suspension of overseas sales of the mineral from the state.

Mr N Santosh Hegde official of Lok Ayukta held discussions with Mr Rameshwar Thakur governor of Karnataka on the issue. He said “We are seeking the suspension of iron ore exports from Karnataka to conduct an enquiry into the allotment of the mining leases. A formal letter is being sent to the centre on this by the Lok Ayukta soon.”

The Lok Ayukta is keen on seeking the suspension of iron ore exports particularly from the Hospet, Sandur and Bellary region. As per report, over 80 mining leases, including government and private, are in operation in this region alone.

The Lok Ayukta’s action has become a cause for concern among iron ore exporters in Karnataka. Iron ore exporters are under pressure from various quarters. The steel industry has been demanding a ban on the exports of iron ore on the grounds that it is a strategic asset. Bowing to the demands of the steel industry, the union government imposed an INR 300 tax on every tonne of high grade iron ore with ferrous content of 63.5% and above exported.

BMS opposes disinvestment of equity in RINL

It is reported that the Bharatiya Mazdoor Sangh has opposed the move for disinvestment of 25% equity in Visakhapatnam Steel Plant and wants the proposal to be dropped.

In addition, BMS has accused the union government of pushing RINL into a difficult situation by not allocating captive mines for its ore requirement.

During a recent district conference, BMS deplored that the union government is not granting interim relief for employees pending the recommendations of the 6th Pay Revision Commission. It said that “Not sanctioning interim relief has been causing hardship to employees in facing a steep rise in prices. It wanted INR 1200 to be sanctioned as IR and finalizing the recommendations of the commission.”

Delhi HC pulls up mining firms on royalty payment to states

It is reported that Delhi High Court has pulled up mining companies for making fortunes out of countries mineral resources without paying sufficient royalty to the state and said it would examine the matter as industrial growth cannot be allowed at the cost of public exchequer.

A bench comprising Justice Mr TS Thakur and Mr Veena Birbal said that "We would like to examine how much you pay for the valuable minerals. You are getting it almost free of cost. It cannot be allowed at the cost of life of the countrymen. The industrial growth cannot be allowed at the cost of government exchequer. It is a public property and you are using it for your own benefit. Why is the rush? We have serious doubts about your motive. This is a very valuable deposit of iron ore worth of hundreds of crore."

The court's observation came while adjudicating a dispute between steel giant TATA Steel and Jayaswals Neco Limited over mining lease in Bastar district of Chhattisgarh. The bench was hearing a petition filed by TATA Steel challenging the mines tribunal's order that had virtually granted the lease to his rival Jayaswals Neco Limited. TATA Steel contended that the order was passed without giving it an opportunity to present its case. It also said that granting lease to Jayaswals Neco was against the law.

Select group of minerals likely in new mineral policy

BL reported that Indian government is looking at bringing in only a select group of minerals for which large area prospecting licenses would be issued in the National Mineral Policy. The move, however, could hamper large investments that foreign companies have planned for mining of iron ore in India as that mineral is not part of the select group.

Mr T Subbarami Reddy union minister of state for mines said that “Large area prospecting licenses will not be given for every mineral but only for selected minerals. For exploration minerals like iron ore and a couple of others, large area prospecting licenses will not be given in the NMP, which is under consideration by the union government.”

It is noted that the union government has accepted the request from the 5 state governments seeking more time to scrutinize applications. Mr Reddy said “The chief ministers at the meeting of the mineral development council said that the time to scrutinize the applications be increased from 13 months in case of multiple mining lease applications and nine months for single applications. Agreeing to this, the National Mineral Policy now proposes 18 months for multiple applications and 15 months for single applications.”

Mr Reddy added that even beyond this if the applications are not cleared then the tribunal will only ask the States to hasten the process. He said “The tribunal is an autonomous body and can only interfere to dispose of the cases. However, it cannot dictate how the applications should be cleared or who should get the license. And further, the powers of the tribunal have not yet been finalized and we have told the state governments that a mechanism can be arrived at after further discussions.”

Curb agitation on land acquisition issue - Mr Pranab

Mr Pranab Mukherjee union external affairs minister has called for setting limits to launching agitation based opposition to acquisition of land for industry saying that land was after all a crucial input.

Mr Mukherjee, while speaking at the inaugural ceremony for commencement of activities for operation of the Kulti Works of SAIL, said that “Land is necessary for industrialization and for progress. It is necessary to adopt a more tolerant attitude and decide where agitation should be launched and where it should not be launched. There was need to draw a line and set limits.”

IIFCL sanctions INR 2800 crore for Mundra and Sasan UMPPs

It is reported that India Infrastructure Finance Company Limited has sanctioned INR 1,800 crore to the TATA Group promoted Mundra ultra mega power project and is planning to extend INR 1,000 crore credit to Reliance Power for Sasan ultra mega power project.

Mr SS Kohli CMD of IIFCL said that "We have sanctioned a loan of INR 1,800 crore for the TATA's Mundra project and would also provide loans for other UMPPs bagged by Reliance such as Sasan and Krishnapatnam." He added that it would provide INR 1,000 crore for the Sasan project being developed by Reliance Power.

It is noted that TATA Power had bagged the first of the series of 9 ultra mega power projects from the government in December 2006 to generate 4,000 MW of energy at an estimated cost of INR 16,000 crore. The project will come up at coastal site at Mundra in Gujarat.

Reliance Power won the bid for the Sasan power project to be developed at Madhya Pradesh and Krishnapatnam project at Andhra Pradesh. While the Sasan power project is expected to cost INR 14,000 crore, the 4,000 MW Krishnapatnam project would require an investment of more than INR 16,000 crore.

Centre is proposing to add 78,000 MW of additional power generation capacity during the 11th Plan with an estimated investment of USD 177 billion.

Indian government auctions enemy assets in TATA Steel

BS reported that, in the first ever auction of enemy property that the Indian government has held since the 1971 Indo Pak war, rights shares of TATA Steel were sold to an Indian investment firm for INR 485 per share against the rights issue price of INR 300 per share. The cum rights price of TATA Steel currently stand at INR 862.

Mr Dinesh Singh custodian of enemy property for India said that the auction resulted in a profit of INR 5.8 million, which will be invested in government bonds and treasury bills. He added that “The government cannot allot funds for us to such subscription, which left us with only two choices. We could have chosen to ignore the issue as we had done in the past, which would have meant a loss to the owner of the shares. However, we decided to auction them if the price was right and the method transparent.”

Mr Singh has already put forward a proposal to the ministry of home Affairs to auction all the moveable property like shares and debentures held by the custodian. He said “The money which is generated by the auction can be returned to those who are still entitled for a payment under the government’s ex gratia scheme formatted in 1971.”

It is noted that an ad hoc sum of INR 70.99 crore has so far been paid as ex gratia relief to those Indian nationals and companies whose assets in Pakistan or Bangladesh were seized by the governments in the respective countries in the conflict of 1965 and who had notified their property with the custodian of enemy property.

NTPC’s coal mining foray facing delays - Report

It is reported that National Thermal Power Corporation Limited’s coal mining foray is in for delays, with the commissioning of its first mine all set to miss a revised deadline of March 2008 and possession of land for the project is running way behind schedule and a proposed railway linkage to be built for moving coal out of the mine is facing tardy progress.

According to NTPC officials, NTPC’s Pakri Barwadih block in Jharkhand is now being tentatively targeted for commissioning by 2008 end. The block was originally scheduled to be commissioned by December 2007, which was revised to March 2008.

Acquisition of land around the site has been held up following delays by the union coal ministry in issuing notifications required to kick start work. NTPC is also in talks with union railway ministry to expedite building of a rail linkage, which the Railways expected to complete only by 2009-10.

The Pakri Barwadih mine is expected to produce around 3 million tonnes of coal in the first year, which would be ramped up to its full estimated capacity of 15 million tonnes by around 2017.

NTPC’s foray into coal mining, which is being seen as a strategic backward integration exercise, is primarily aimed at ensuring fuel security and deriving economy and stability of fuel pricing for its cumulative coal based capacity of 23,209 MW. NTPC has been depending on Coal India Limited and also on some imported coal to operate its coal fired stations. With its foray into mining, it hopes to meet up to 25% of its total coal requirement from its own production over the next 10 years.

NTPC, which has been allocated 8 domestic coal mining blocks, is also evaluating opportunities in Indonesia and Australia, besides eyeing mines in Nigeria, Mozambique and South Africa. It plans to nearly double its generating capacity to 50,000 MW by 2012 from the current 27,904 MW. It operates 18 coal fired projects with a cumulative capacity of 23,209 MW, while its remaining capacity operates on gas and liquid fuel.

MMRDA approves Charkop Bandra Mankhurd metro rail project

Projects Today reported that Mumbai Metropolitan Region Development Authority board has approved the Line 2 Phase I of Charkop Bandra Mankhurd metro rail project on December 24th 2007. The state cabinet will approve the final proposal and work on the 20 kilometer route is expected to start by 2012.

It is learnt that most of the stretch will be underground due to the problems of acquiring land and the state government is considering two options namely

1) The first option comprised an INR 8,857 crore proposal wherein the Colaba to Mahalaxmi stretch of the Metro will run underground

2) The second option of the INR 12,152 crore Colaba Mahim stretch proposal, which will to be underground and an elevated stretch from Mahim to Bandra will be provided

Mumbai Metropolitan Region Development Authority has received requests for qualification from seven consortia for developing the Charkop-Bandra-Mankhurd Metro Rail project line 2, for which the global tender was closed on 11 June 2007. The seven consortia includes
1. Reliance Industries along with Siemens AG and Gammon India
2. Reliance Energy in partnership with Canadian firm SNC Levalin
3. Bombardier Transportation and YTL Malaysia have teamed up with Hyderabad-based GVK Industries
4. Alstom along with the Essar Group and Lanco Infratech
5. Mitsubishi in partnership with TATA Power
6. Larsen& Toubro Ltd has formed a consortium with Spanish rolling stock supplier CAF and GE
7. Infrastructure Leasing & Financial Services along with Punj Lloyd and Soma Enterprises.

ONGC to supply gas to NEEPC's Tripura power project

Projects Today reported that Oil & Natural Gas Corporation has agreed to supply natural gas for North Eastern Electric Power Corporation's 104 MW gas based thermal project at Monarchak in West Tripura district.

ONGC is expected to sign an agreement by February 2008 and will supply 500,000 cubic meter gas per day in Tripura for a period 15 years.

POSCO to acquire Malaysian EG maker MEGS

POSCO announced that it has signed a deal to take over a Malaysian steelmaker for USD 15.6 million, its first acquisition of an overseas steel manufacturer. POSCO in a regulatory filing said that under the deal, POSCO will purchase a 60% stake in MEGS Industries Sdn Bhd, a maker of electrolytic galvanized coils.

Ms Ko Min-jin spokeswoman of POSCO said that South Korea's Daewoo International Corp would buy a 10% stake in the company while the remaining 30% would remain in the hands of Mr Zaid Ibrahim chairman of MEGS.

POSCO release added that it would assume management control of the company when the stock purchase is completed in early 2008. She added that POSCO plans to supply EG coils to a Samsung Electronics Co plant in Malaysia

MEGS, based at Klang near Kuala Lumpur, has an annual production capacity of 120,000 tonnes of electrolytic galvanized coil.

POSCO said that "The investment will help POSCO to secure the fast growing Southeast Asian market. We will keep actively seeking the merger and acquisition of firms abroad to increase our competitiveness in the global market."

ArcelorMittal forecasts USD 800 levels for HRC in 2008

Platts recently reported that according to an ArcelorMittal commercial executive, flat rolled steel prices will need to increase by USD 110 per tonne during 2008 to cover the expected escalation in steelmaking costs as compared to an estimate of USD 60 to USD 65 per tonne only a few weeks ago.

The report cited an ArcelorMittal commercial executive during an interview with Platts as saying that “The latest figure means hot rolled coil prices would have to reach nearly USD 800 per tonne EU ex works, in order to maintain the mills' current margins.”

He said that “The increase in product prices is based on estimated higher input prices of materials in the steelmaking cost matrix specifically iron ore, coke, scrap, logistics and energy. The increase in costs would be similar for all steel manufacturers globally. ”

The executive emphasizing that the figure of USD 110 per tonne is an average estimate said that ArcelorMittal's intention to pass the full cost increase on into the market by raising its prices.

Kumba files arbitration case over iron ore mines in Senegal

AFP reported that a South African affiliate of mining giant Anglo American is suing Senegal for USD 667 million for tearing up an iron ore extraction contract. Kumba Iron Ore accused authorities of Senegal of culpable behavior in the way it severed their contract in favor of ArcelorMittal earlier in 2007.

Mr Boucounta Diallo lawyer of Kumba said that “The warring parties have agreed to submit their dispute to the International Court of Arbitration, with KIO, formerly known as Kumba Resources, accusing Dakar of breaking the contract in an unorthodox fashion."

Senegal argued that it was within its rights to rescind the contract for extracting iron ore in the Faleme in the south east Tamabacounda region, because KIO missed certain deadlines.

ArcelorMittal has agreed to invest around USD 2.2 billion into iron ore project in Senegal and aims from 2011 to extract 25 million tonnes of iron ore.

Iron ore price negotiations –Japanese steel major to hold 2nd round in January

JMB reported that Japanese major steel makers including Nippon Steel and JFE Steel finished the first price negotiation of iron ore with major miners for fiscal 2008 shipment starting April 2008 last week.

They apparently failed to step forward to the agreement though the miners indicated substantial hike under worldwide tight supply. They will negotiate again in January 2008.

Valcovny Plechu to increase electrical steel capacity

It is reported that Czech electrical sheet producer Valcovny Plechu is expanding their transformer sheet capacity to 40,000 tonne per year. It plans to invest more than CZK 1 billion in modernization by 2009.

Valcovny Plechu has ordered new high temperature annealing furnaces for coil and hot straightening and coating lines.

IMF likely to cut global growth outlook

Reuters reported that The International Monetary Fund will lower its growth outlook as the continued credit crisis hurts the US and European economies, while global imbalances also weigh on growth.

Mr Simon Johnson chief economist of IMF told Switzerland’s Finanz und Wirtschaft business newspaper in an interview that “Given this background, the numbers will indeed be weaker than in our latest World Economic Outlook.”

He added that The IMF already lowered the forecasts from its July World Economic Outlook in October. But the numbers would in all likelihood have to be revised down again at the Fund’s next update in January, when it gives a preview of its April official forecasts.

Mr Johnson said that “We will not be able to stick to 1.9% 2008 Gross Domestic Product growth for the United States, nor to 2.1% for Europe. By how much we will have to lower our GDP forecasts, we will know in January.”

IMF already warned in November the global economic growth outlook had dimmed, because of a troublesome mix of credit terms and rising energy prices.

Hyundai Steel to raise steel prices by 7% in January 2008

Reuters reported that South Korea's second largest steel maker Hyundai Steel will raise some steel products prices by up to 7%, reflecting soaring raw material prices.

The unit of Hyundai Motor Group will increase prices of steel bars by KRW 40,000 (USD 42.62) or 6.8% effective from January 2nd 2007. The prices of small H beams will be raised by 7.2% while the prices of large metal will grow by 4%.

Hyundai last raised prices of bars and beams in September.

Newcastle coal trades near a record

Bloomberg reported that coal prices at Australia's Newcastle port traded near a record on concern that demand is outpacing supply. According to the globalCOAL NEWC Index, power station coal excluding shipping cost for delivery within three months settled at AUD 88.84 a tonne in the week ended December 21st 2007 up by 49 cents from a week earlier and near the AUD 89.76 record.

Newcastle said that the port increased coal loadings by 13% to 2.04 million tonnes in the week ended. Twenty two ships with coal departed the port in the week ended December 22, three more than a week earlier. It added that Sixteen headed to Japan, four to Taiwan and two to South Korea.

Mr Glyn Lawcock analyst at UBS AG in a December 18th 2007 report said that “Tight market conditions are expected to continue for some time as global production growth has been unable to keep pace with increasing demand, particularly from the ongoing industrialization of China and India.”

Bottlenecks at Australian ports, heavy rain in Indonesia and increased imports by China have constrained supplies of the fuel to Asian customers. Rio Tinto Group, Xstrata Plc and other mining companies in the Hunter Valley plan to ship 18% more than Newcastle.

According to Port Waratah Coal Services Ltd, Newcastle will have the capacity to load 95 million tons of coal next year. Port Waratah, the terminal operator, agreed to an interim plan to continue the existing system through 2008 to help prevent an increase in shipping delays after the Australian competition regulator rejected an alternative method.

US Steel to increase pipe prices in January 2008

United States announced that it will raise pipe prices in January 2008.

Consequently the new prices of ASTM A 53 standard pipe and ASTM A 500 structural pipe have raised by USD 44 to USD 55 per ton to FOB USD 980 to USD 1025 per ton and USD 882 to USD 926 per ton respectively in January 2008.

US Steel said that the reason for the price up is because soaring costs of raw materials, energy and freight.

Malaysian steel sector likely to recover in 2008

It is reported that the steel sector in Malaysia has not aroused much investor interest largely because it is seen as requiring huge capital outlays and marred by debt and intense competition, but things may be about to change.

The sector also mirrors the broad economy which is expected to grow by at least 6%. Most of Malaysia's steelmakers are heavily dependent on local sales which are expected to climb on the back of a recovering construction sector which actually contracted between 2003 and 2006. Indeed, According to government estimates, the sector is expected to grow by 4.8% this year and rise to 6% in 2008.

The construction spike is mostly driven by public investment works. Over CNY 22 billion worth of projects have been awarded under the Ninth Malaysia Plan and a further CNY 114 billion waiting in the wings. Meanwhile, the manufacturing sector, which uses flat steel products, is expected to grow around 4%.

Adding to the feel good factor is an expectation that international steel prices will stabilize. The key factor there for producers is the steadily increasing prices of iron ore a key raw material which jumped over 70% in 2006. Next year, however, analysts expect the price of iron ore to rise only slightly. In that context, analysts are also heartened by China's recent moves to check its steel oversupply, a measure that would also stabilize prices.

Meanwhile, certain steel products mainly billet and steel bars have their prices controlled by Malaysia's Ministry of International Trade and Industry. The cap has also given rise to optimism over steel stocks as the local industry is currently lobbying the government for an automatic pricing mechanism that allows producers to pass on raw materials' price increases on to customers.

Mr Oates appoints as president of Universal Stainless

Universal Stainless & Alloy Products, Inc announced that Mr Dennis Oates has been named president & CEO of the company effective January 2nd 2008.

Mr Oates will succeed Mr Clarence McAninch who founded Universal Stainless in 1994, as CEO and Mr McAninch will continue to serve as chairman of the board. Mr. Oates assumes the post of President from Mr Kenneth Matz who has left the company to pursue other opportunities.

Mr Oates most recently served as senior VP of the Specialty Alloys Operations of Carpenter Technology. Prior to joining Carpenter in 2003 Mr Oates served for 5 years as president &VEO of TW Metals. Previously, he held the post of president & COO for Connell Limited Partnership. Mr Oates began his career in the steel industry at Lukens Steel Company, where he held positions of increasing responsibility, ultimately becoming president & COO. Mr Oates is past chairman of the North American Specialty Metals Council and has served on the Metals Service Center Institute Board of Directors.

Mr Mac McAninch current chairman & CEO of Universal stainless said that "We believe that Dennis Oates is the right person to lead our company going forward. I have known Dennis for many years. He is sharp, tough and highly knowledgeable about the global specialty steel business from both the manufacturing and distribution sides of our industry. During his 33 year career in the steel industry, he has established a noteworthy record of accomplishment as a leader able to deliver significant growth in revenues and profitability through smart strategic planning and execution and by building organizational commitment and focus. His approach is consistent with the path we have taken since establishing this Company thirteen years ago. His experience and abilities are ideally suited for Universal Stainless & Alloy Products."

Mr Oates commented that "I am very pleased to join Universal Stainless at this exciting stage in its growth and development. Mac and his team have built a highly successful and well regarded specialty steel company, which has enormous untapped opportunities before it. I look forwarded to working with him, with the rest of the Board and with all the employees of Universal Stainless to further realize its substantial potential."

Universal Stainless & Alloy Products Inc, headquartered at Bridgeville in Pennsylvania, manufactures and markets a broad line of semi-finished and finished specialty steels, including stainless steel, tool steel and certain other alloyed steels.

POSCO’s sales volume of HR plates in 2008 to surge

It is reportedly that POSCO 2008 sales volume of hot rolled plates is likely to increase compared to 2007. The reason for the increase is the maintenance and improvement of the hot rolled plant and blast furnace.

The report added that the forecast sales of 2008 will be 8.5 million tonnes. It is estimated that the sales volume of 2007 will be 8.1 million tonnes and the sales will hit 8.5 million tonnes in 2008.

So far, the company has not finalized the 2008 marketing plan, but the relevant person of the corporation said there is great possibility to increase.

Mitsui Mining to end oil operations - Nikkei

The Nikkei business daily recently reported that Japan's Mitsui Mining Co has plans to end its petroleum related operations by the end of March 2007.

The Nikkei without citing any sources said that the company, which has been hit by a surge in crude oil prices, plans to end domestic petroleum product sales in March. It added that instead, it will focus on core operations like sales of imported coal and coke production.

The Nikkei said the firm would also unload all shares in its overseas subsidiary in Singapore to a local entrepreneur. The move comes as climbing oil prices slash profit margins and demand across the industry.

Mitsui Mining's petroleum business produced JPY 49.3 billion (USD 435.3 million) in sales or 25% of the consolidated figure in fiscal 2006. It struggled during that period, as it was unable to pass on higher prices to its customers and its operating profit was just above JPY 100 million.

Alcan launches USD 22 million investments in France

It is reported that Rio Tinto Alcan inaugurated a new USD 7 million melting furnace for the recycling of used beverage cans and a new USD 15 million trimming and slitting machine for beverage can body stock at its Neuf Brisach site in France.

Ms Christel Bories president & CEO of Alcan Engineered Products said that "These investments strengthen Alcan Specialty Sheet's position as the leading supplier of the rapid expanding European can stock market. Neuf-Brisach's fully integrated recycling, rolling and finishing facility makes it unique on the European continent.”

Mr Christophe Villemin president of Alcan Specialty Sheet said that "Alcan Specialty Sheet is now able to offer competitive end to end customer solutions. These investments will provide an economical and environmentally friendly solution to producing can body stock using UBC based metal, and will allow Neuf-Brisach to meet growing customer demand and offer a differentiated value proposition both in quality and service.”

Alcan Specialty Sheet is a division of Alcan Engineered Products, a business of Rio Tinto Alcan. Rio Tinto Alcan is the aluminum product group of Rio Tinto.

Bangladesh to set up first nuclear power plant by 2015

Finance Express reported that Bangladesh's plan to install its first nuclear power plant by 2015 to meet the country's increasing electricity demand has been received positively by the International Atomic Energy Agency.

Bangladesh is planning to set up the country's first nuclear power plant with a generation capacity between 700 MW and 1,000 MW at Rooppur in Pabna district, 125 kilometer northwest of capital Dhaka. The total investment required to set up a nuclear plant is anywhere between USD 1 billion and USD 1.5 billion.

The paper quoted Mr Tapan Chowdhury energy and power adviser of Bangladesh as saying that "The IAEA's response received recently was found to be very positive towards installation of a nuclear power plant.”

Mr Chowdhury said that the IAEA, the global nuclear watchdog, also asked Bangladesh to send a delegation to expedite the process of installing a nuclear power plant with its assistance. He added that
A five member delegation comprising nuclear experts from the Bangladesh Atomic Energy Commission is expected to visit Vienna by mid-January 2008 to discuss the subject.

Bangladesh submitted the work plan to the IAEA last October, giving details on how the country planned to install the nuclear power plant at Rooppur and maintain safeguards with proper management of nuclear waste. A senior power division official said the IAEA was pleased with the government's commitment for setting up the nuclear power plant, selection of the project site and assurance of utilizing the plant for peaceful purposes.

ETA to commence new facilities in UAE by April 2008

It is reported that Al Ghurair Group’s UAE based bar producer ETA LLC is scheduling to set up a new steel plant called Star Steel International with 2 new projects, one rebar and sections rolling mill and one steel cutting and bending plant.

According to the company official, the annual capacity for those new plants is around 600,000 tonnes and both would be located in the UAE and commissioning of new facilities will be in April 2008.

However, due to the rising import billet prices, ETA will also purpose to build its own billet pant with 1 million annual capacity by 2009.

MEA to continue steel imports despite hike in output - Report

Khaleej Times reported that Middle East will continue to be a net importer of steel due to increasing demand, even if production is set to increase 70% to 26 million tonnes by 2010 from this year's 15.4 million tonnes.

In a statement, Expo Centre Sharjah, organizer of Sharjah exhibitions dedicated to the steel industry, said that the region would need 90 million tonnes of steel by 2010 from 70 million tonnes in 2007. Middle East has a current demand for steel at 9% per annum mainly due to the rapidly growing construction sector. Mr Fasahat Ali Khan adviser to the chairman and board of directors of Expo Centre Sharjah said that "These development projects have no doubt to a very large extent contributed towards the unprecedented growth that the regional steel working industry is currently witnessing."

As per report, demand for steel in the region is expected to increase from 70 million tonnes in 2007 to around 90 million tonnes by 2010. Steel production in the region is projected to increase by nearly 70% from 15.4 million tonnes in 2006 to over 26 million tonnes by 2010 driven by the region's rapidly expanding construction sector.

The construction boom is bringing a major expansion of the region's steel industry as demands for machinery and equipment for major building projects are growing. At present, the value of active construction projects within the Gulf Cooperation Council region exceeds USD 1 trillion. Saudi Arabia accounts for more than USD 200 billion, Kuwait for over USD 211 billion and the United Arab Emirates above USD 221 billion.

L&T JV bags 2 major power system contracts in Oman

Indian engineering major Larsen & Toubro announced that its Oman based subsidiary Larsen & Toubro (Oman) LLC has received two EPC contracts totaling USD 79.71 million from Dhofar Power Company and Muscat Electricity Distribution Company for electrical substations & associated works in Oman.

The contract from Dhofar Power Company, valued USD 47.16 million is for strengthening various transmission & distribution systems in Dhofar Region, in order to meet the growth in demand and new loads. It involves construction of new substation, modernization & expansion of existing network and construction of associated overhead lines and cabling works.

Muscat Electricity Distribution Company has placed orders totaling USD 32.55 million for construction of 5 numbers of 33/11.5 kV primary substations and associated cabling works at Al Hail North, Azaiba North, Al Mawaleh South, Qurum Heights & Al Amret Area. On completion of these substations, the growth demand and new loads within the Muscat area will be met.

These projects will be executed by Power Transmission & Distribution Sector of L&T Oman and are to be completed in a time span of 7 months to 16 months, under the consultancy of Mott MacDonald & Energoprojekt Entel LLC.

Larsen & Toubro (Oman) LLC is a joint venture of Larsen & Toubro FZE and The Zubair Corporation. Larsen & Toubro (Oman) LLC has been operating in this country since last 14 years and making its presence felt in the construction industry of Oman with every passing day.

Dhofar Power Company & Muscat Electricity Distribution Company are the major power distribution companies existing in Oman.

Kuwait to cut tax for foreign firms

It is reported that Kuwait's parliament passed a law yesterday slashing tax on net profits of foreign companies to 15% from 55% in a bid to attract more investment from abroad. The legislation, which has been under discussion for several years, will come into force once it is approved by the emir of the oil rich Gulf state, HH Sheikh Sabah Al Ahmad Al Sabah.

Thirty-seven MPs voted in favour of the government-sponsored law while 17 voted against.

Mr Ahmad Baqer head of parliament's financial and economic affairs panel MP said the new legislation will replace a 1955 law, which has been hindering the flow of foreign investment into the oil rich emirate. He said "The law will encourage foreign investors in all sectors of the economy," including the massive oil sector which generates 95% of public revenue.”

Mr Mustafa al-Shamali finance minter added that the law is an important tool in the effort to transform Kuwait, which heavily relies on oil as the sole source of income, into a regional financial and trade hub. He said "We actually do not need the money. We need the expertise and technology that come with foreign investors.”

Kuwait has been struggling to attract foreign investment, with inflows of about USD 300 million in 2006 as compared with USD 18.7 billion for the United Arab Emirates.

9 firms show interest in port dredging work in Pakistan

Dawn reported that 9 foreign companies have shown interest in dredging and reclamation work for the upcoming Pakistan Deep Water Container Port being constructed by the Karachi Port Trust at an estimated cost of USD 1 billion, official sources said Monday.

The new harbor enclave being developed at the east of Keamari Groyne would need an estimated dredging of 32 million cubic meters. Out of this, 15 million cubic meter dredging would be required in approach channel and 17 million cubic meters in basin. However, around 08 million cubic meters of dredged spoil picked from the basin will be utilized for reclamation.

The new channel will be 16 meter deep with 300 meter width at the entrance and 600 meter in the inner harbor, with a turning circle of 510 meter diameters. The channel will be protected with three break waters. The estimated time for completion of dredging work has been fixed at 27 to 30 months.

Karachi Port Trust has inked an agreement last month with the Hutchison Port Holdings to set up PDWCP project at an estimated cost of USD 1 billion, out of which USD 57 million will be foreign direct investment and the remaining to be invested by the KPT. Under the first phase, four berths would become functional by 2010 and the remaining six berths by 1212. The concession has been awarded on built-operate and transfer basis for an initial lease of 25 years and could be extended for another 25 years on mutually agreed terms and conditions.

The PDWCT is a green field project in which the Karachi Port will undertake infrastructure development, including building of three new breakwaters, extensive dredging work and construction of 1500 meters long quay wall at a depth of 18 meters. Hutchison Port Holdings will establish a high throughput container terminal, including back up area, provision of utilities, procurement of gantry cranes and other associated equipment, along with computers and management systems. They will also develop container yard, storage and transfer areas, operational buildings, ship to shore gantry cranes, rubber gantry and mobile gantries.

Reliance orders CRP topsides with J Ray McDermott

It is reported that Mr Mukesh Ambani chairman of Reliance Industries recently visited J Ray McDermott Middle East's fabrication facility and marine department in Jebel Ali Free Zone to inspect the control riser platform topsides, which is currently nearing completion in J Ray’s yard.

Once completed, the platform will form part of the Reliance’s Dhirubhai 1 and 3 field development project near offshore Kakinada, on the East coast of India which is destined to provide natural gas for domestic consumption in India.

J Ray’s Houston office performed the necessary design development engineering and associated equipment procurement; the jacket was fabricated at the Company’s Morgan City fabrication facility in Louisiana in US and topsides construction is currently well advanced in Jebel Ali.

Fabrication work on the topsides recently crossed a safety milestone of over 1 million man hours without a loss time incident proving that at J Ray, despite an accelerated fabrication schedule, the speed of fabrication does not compromise safe working.

J Ray’s derrick barge DB101 will commence installation of the jacket structure in January 2008 and the topsides installation will follow in February 2008. Hook up of the topsides, weighing approximately 19,000 tonnes and jacket structure will follow with completion expected in May 2008, 18 months from the date that the project was awarded.

UAE’s FDI reached AED 68.63 billion in 2006

Mr Sheikha Lubna bint Khalid Al Qasimi minister of economy of UAE said that according to a survey conducted by the ministry of economy, in coordination with the economic and social commission for Western Asia and the United Nations Conference on Trade & Development, foreign direct investments in the UAE reached AED 68.63 billion in 2006 up by 10.8% YoY as against AED 61.91 billion in 2005.

According to the field survey, which gathered data for the years 2005 to 2006, the main economic sectors instrumental in the substantial FDI growth were the financial intermediation and insurance with 34.4%, construction with 29%, domestic trade with 14% and manufacturing with 10.1%. Dubai posted the largest share at 62%, followed by Abu Dhabi at 24%, while Sharjah contributed 10%. The rest of the Emirates contributed 4% to the total FDI.

The survey also showed manufacturing as the largest contributing factor in the rest of the emirates with Umm Al Qaiwain at 99%, Ajman 95%, Ras Al Khaimah 87% and Fujairah at 58%. Extracting industries also contributed a significant 24% of FDI in Fujairah, while water and electricity accounted for the remaining 5% in Ajman.

The figures were culled from a statistical survey project on FDI which forms part of efforts to develop a database of foreign investments in the UAE. The survey included companies with at least one non resident, regardless of nationality, having invested 10% or more of the company’s capital. Abu Dhabi’s department of planning and economy, the Abu Dhabi Chamber of Commerce & Industry, the Dubai Statistics Centre and Sharjah’s Management Information Systems Department also collaborated on the project.

Mr Qasimi said that “It is imperative that we expedite the development of a database of our country’s FDI, given the increased competition among countries to attract international investments. Our stable investment environment, which enjoys both regional and global prominence, must be enhanced not only systematically but scientifically as well so it can reach its full potential. The UAE Government has in fact adopted a strategy of enhancing its statistical and developmental capabilities, especially as applied to an economic sector as important as foreign investments.”

He said “Foreign investments are of strategic importance to the UAE. They provide external sources of capital that are necessary for our country’s sustained development. They also fuel the efficient transfer of expertise, knowledge and technology and affirm our status as a regional and international trade hub.”

The UAE is considered one of the best global locations for FDI as a result of progressive economic liberalization policies and a strong collaboration between the public and private sectors.

Iran and Malaysia ink mega gas filed development deal

Iran signed a multi-billion dollar deal with Malaysia yesterday to develop two offshore Iranian gas fields, boasting that the planned investment was the biggest ever in the country. Iran's Pars Oil and Gas Company and Malaysia's SKS signed the USD 6 billion final contract for development of Golshan and Ferdos gas fields a ceremony in Tehran.

Golshan field holds 42 trillion cubic feet to 56 trillion cubic feet of in place gas. Golshan is located 180 km southeast of Bushehr city, southern Hormuzgan Province, 65 kilometer from Iran’s shore. Ferdowsi field, located 190 kilometer southeast of Bushehr and 85 kilometer from the Iranian coast, has estimated in situ gas reserves of 9 trillion cubic feet to 13 10 trillion cubic feet. According to the contract, SKS Ventures, a subsidiary of Al-Bukhari Foundation, will develop the two gas fields in southern Iran.

Mr Gholam Hossein Nozari oil minster of Iran said "The estimate for the investment for both the upstream and gas sweetening sectors of the project is about six billion dollars.”

Mr Nozari described the deal as the biggest investment in the country and said his administration would now focus on Asian companies as opposed to Europeans which were once Iran's top energy partners.

The two sides had already signed a USD 16 billion MoU on the development of two gas fields and the establishment of LNG production units.

KS Energy secures USD 37 million rig deal in MEA

KS Energy Services Limited announced that it has secured a USD 37 million contract for the supply and management of the Discoverer 1, a 1500 hp land rig in the Middle East.

Atlantic Oilfield Services, the wholly owned subsidiary of KS Energy, will be the operator for this contract. Operations under this contract will commence in the second quarter of 2008. The duration of the contract is for a period of 3 years, comprising a 2 year firm contract plus a 1 year renewal option.

Mr Kris Wiluan chairman & CEO of KS Energy said that “By combining the capabilities of both KS Energy and AOS, we are able to make inroads into major oil companies by providing them with an integrated suite of services ranging from capital equipment charter to drilling management. Furthermore, our international accreditation and high HSE standards have strategically placed us in an optimal position to serve a broader base of customers globally.”

Iran to export 600 million KWH energy to Turkey

Fars News Agency quoted Mr Masoud Hojjat MD of Iran's Electricity Network as saying that Iran is ready to export 600 million KWH of electricity to Turkey in 3 months.

According to an agreement signed between Iran and Turkey' energy ministers, Iran will also annually export 600 million KWH of electricity to Turkey in addition to jointly building a 6,000 MW power plant with Turkey.

Mr Hojjat said that "Iran already transfers 70 MW of electricity from Turkmenistan to Turkey and with the new arrangement it is hoped that its electricity export will reach 600 million KWH in 5 years." He added that talks are being finalized with Turkish officials to execute the project as soon as possible.

Bahrain eyeing to invest in Iran’s gas field - Report

Mowj News Agency reported that Bahrain is interested in investing in the South Pars gas field in Iran and the 4th meeting of an Iranian Bahraini expert gas committee will take place in a few weeks to implement their gas contract by 2010.

Mr Taqi Sarrafi of the National Iranian Gas Company said that the joint committee will meet to set timelines for moving towards the exportation of gas to Bahrain in 2008. He added that Bahrain initially wants to buy 1 billion cubic feet a day of gas from Iran. The Farsi gas field will be at the disposal of the National Iranian Oil Company's exploration management unit to meet this demand.

Mr Sarrafi said that Iran and Bahrain met a year ago and signed a MoU regarding gas exports. The expert committee has met 3 times since to define the framework for implementing the agreement. Preliminary discussions are also underway to explore the possibility of Bahraini investment in one of the phases of the South Pars gas field.

Oman's crude exports down by 6.9% YoY in 10 months

Khaleej Times reported that Oman's crude exports fell by 6.9% in the January to October 2007 period to 184.25 million barrels as against 97.7 million barrels in January to October 2006 period.

Production of oil and condensates was 215.8 million barrels in January to October 2007 period down by 4.5% YoY as against 225.2 million barrels in January to October 2006 period. Average daily production was 707,500 barrels.

China increases export tax for steel products

Chinese government has unveiled new tax structure on steel exports, which will take effect on January 1st 2008. The news came as the officials attended a forum held by the Economic Operation Department of the National Development and Reform Commission and the China Iron and Steel Association on Tuesday.

China’s ministry of finance in an official statement posted on its website on Wednesday afternoon said that “Under the approval of the State Council, China will further readjust its import and export tariffs as of January 1st 2008.”

It said that “Starting from the New Year's Day, such energy-intensive and high polluting metallurgical products as coke, ferroalloys, steel billet and part of finished steel products will be subject to either fresh imposition or further elevation of export taxes.”

The new export tax structure is reported to be as under

Export taxes of other products unmentioned will stay in line with the old levels.

The tariff increase would help to close more out dated, small steel plants as the government vowed to meet its target of reducing energy consumption used to generate per unit of gross domestic product by 20%. It also aimed to cut major pollutant emissions by 10% between 2006 and 2010.

China will implement further hikes if steel exports do not decline. Mr Luo Bingsheng secretary general of CISA said that there was no limit to how far export taxes would rise if exports were not brought under control.”

Baosteel to triple Bayi Steel output by 2010

It is reported that Baosteel plans to triple Bayi Steel's annual crude steel output to 10 million tonnes from current 3 million tonnes by 2010. The plan has been confirmed by Baiyi Steel yet it has not been handed in to the National Development and Reform Commission.

Bayi Steel is ambitious to raise output to 5 million tonnes in 2008, 8 million tonnes in 2009 and 10 million tonnes in 2010.

Bayi Steel now mainly produces low end construction steel.

Shagang and Endesa ink carbon credit deal

It is reported that Jiangsu Shagang Group has signed a carbon credit agreement with Spanish utility Endesa SA involving three clean development mechanism projects.

Under the agreement, Endesa will purchase carbon credits from a combined cycle power plant, a coke dry quenching project and a blast-furnace top pressure recovery turbine. The three projects are expected to save 1 million tonnes of carbon dioxide equivalent per year.

The project has been approved by the National Development and Reform Commission, China's economic planning agency and approval is pending from the United Nations Development Program.

Under the Kyoto Protocol's clean development mechanism, clean energy projects in the developing world will have the right to sell credits to companies in developed countries, enabling the latter to meet their Kyoto commitments to reduce greenhouse gases.

Anyang Steel gets nod to buy parent's assets

Anyang Iron & Steel Inc issued a bulletin overnight, declaring approval for non public issue of shares application by China Securities Regulatory Commission, which marks the parent group's overall listing has stridden a step further.

Anyang Steel had noted to issue no more than 377 million shares for CNY 8.35 per share to the parent group to purchase CNY 3.15 billion worth of assets, including 78.14% stock in Yongtong ductile cast iron pipe co, 100% in construction and installation co of Angang Group, 100% in the machinery equipment manufacturing co as well as the abovementioned three companies' rented land use right and a 450 cubic meter blast furnace.

The listed unit expected to help synthesize the industrial chain, promote profiting capability and strengthen sustainable development of the company. It's estimated the purchased assets would realize CNY 162 million Yuan net profits this year.

China's demand for steel to keep strong in 2008 - Report

Mr Cai Weici VC of China Machinery Industry Federation has predicted that China's steel demand will continue to rise in 2008 boosted by fast development of machinery industry. He said that China's machinery industry is currently in the adjusting period.

Mr Cia said in the January to October 2007, China’s total output value grew by 31.91% YoY. He said that “The output value of the whole industry is to rise by some 25% in 2008 and its total profits are predicted to increase by about 20%. To be more specific, the major sectors of China's machinery industry have reported fast growth in 2007. In January to October 2007, the output value of auto industry grew by 32%, with automobiles output totaling 7.51 million units up by 23.68% YoY. The heavy machinery industry achieved a 32% rise in output value, with the growth rate of 2.6 percentage points higher year on year.”

Mr Cai believes that boosted by the fast developing machinery industry, the demand for steel will increase continuously in 2008. But he also noted that compared with the demand for volume growth, the requirements for the category, quality and function of steel are more urgent. The development of large-scale heavy machinery demands more new types of steel products with the function of high temperature and pressure resistance, anti radiation and anti rust.

Mr He Qi vice secretary general of China Real Estate Association noted that China's real estate industry has registered a sharp growth in 2007, with growth of investment in the industry rising month by month, exceeding the growth speed of fixed asset investment, a situation different from the past two years. He predicted that the steel demand from real estate industry will grow steadily next year.

Chinese yuan climbs to new high against USD

According to the Chinese Foreign Exchange Trading System, Chinese Yuan has climbed 54 basis points to break the 7.33 mark, with the central parity rate at CNY 7.3261 against 1 US dollar.

This was the 80th new high the yuan has hit since the beginning of 2007 up by more than 6.6% accumulatively. The accumulative appreciation since July 21st 2005, when China discontinued Yuan’s peg to the greenback has exceeded 10.7%.

China Securities Journal said that the yuan would still maintain a slow and stable appreciation trend. The weak performance of the dollar in the international market also gave a spur to the Yuan’s appreciation.

Last week, the US Treasury Department released a report determining that China was not manipulating its currency to gain unfair trade advantages. The half yearly report came after China and the United States had their third round of strategic economic dialogue in Beijing from December 12th to 13th 2007.

3 steel makers in Hainan combine to form Jianxingji

It is reported that 3 outdated steel enterprises with high energy cost in China’s Hainan Province including Danzhou Jianpeng Steel Co, Lingao Minqiong Steel Product Co and Lingao Fulin Steel Rolling Mill have recombined on December 25th 2007 and founded a new company named Jianxingji Company.

With efficient smelting line, the new company would deal with 300,000 tonnes of scrap each year. It could save 100 MW of electricity per year and the energy cost of the new line would decrease by 20% to 25%.

It is reported that total investment on the new company is CNY 135 million and is supposed to possess a capacity of 500,000 tonnes of scrap per year. The first phase of the project is expected to be completed in June 2008 and the second phase has been listed in the program of 11th five year plan.

Hebei strengthens efforts to eliminate outdated steel capacity

It is reported that Provincial Development & Reform Commission of Hebei has ordered to eliminate 3.98 million tonnes of outdated pig iron capacity and 5.19 million tonnes of steel capacity by the end of 2007.

It was understood that the province has so far completed the target of shutting down steel capacity and eliminated 2.6 million tonnes 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 cut power supply to the outdated capacity from January 1st 2008
3) To intensify differential electricity fee policy
4) To announce the 3rd batch of enterprises running outdated facilities

6 BF in Fengnan will be demolished in 2 weeks

It is reported that two 179 cube meter blast furnaces in Jinyou Iron & Steel Company Limited of Tangshan Ruifeng Iron & Steel Group were demolished. While 6 blast furnaces of below 200 cube meters in Fengnan district of Tangshan City will be demolished in 2 weeks.

Mr Li Zhong warden of Fengnan district of Tangshan, 8 blast furnaces under 200 cube meters in Fengnan have been demolished and with the 2 of Jinyou Iron & Steel, the number of demolished blast furnaces came to 6.

Meanwhile, the remaining 6 furnaces have stopped production till December 19th 2007 and will be demolished in 2 weeks from now. Otherwise, they will be forced to be demolished.

Taiyuan Steel hikes HRC price by CNY 300 per tonne

Taiyuan Steel has raised HRC price by CNY 300 per tonne for January 2008 on the basis of its December 2007 price.

Latest EXW price for Q235 3.0mm HRC stands at CNY 4090 tonne and that for Q235 5.5mm HRC stands at CNY 4010 per tonne, exclusive of 17% VAT effective as of December 24th 2007.

Bagang exports 280,000 tonnes of steel in 2007

It is reported that the total steel exports volume of Bagang had reached 283,000 tonnes in December 2007. Since it actively deals with market changes and continuously adjusts steel exports tactics, among which steel products exports outstrip 30,000 tonnes.

In the first half year, the sales of Bagang in Middle Asia roared substantially exceeding 10,000 tonnes, creating the best sales level during recent several years. In the second half year, especially after October 2007, the exports of Bagang were great affected, therefore, it adjusted exports strategies, strengthened steel exports of neighboring countries that have relatively stable market, expand the exports of branded steel and steel products and got a good achievement.

Mechel commissions new lines at Beloretsk Metallurgical Plant

Mechel announced that it has successfully implemented an investment development program at its steel subsidiary, Beloretsk Metallurgical Plant OAO at an investment of RUB 140 million.

In line with this program, a modern equipment complex has been commissioned at BMP Workshop No.11 to produce high tensile stabilized reinforcing wire strands for use in the construction industry. The new equipment complex will enable BMP to manufacture 25,500 tonnes annually of a new type of product stabilized reinforcing ropes. High tensile stabilized reinforcing strands manufactured at BMP will be supplied to construction companies for manufacturing of prestressed concrete structures used in the most technologically advanced construction elements, such as bridges, high rise buildings, and reinforced concrete pressure pipes.

The complex includes a drawing line to manufacture high tensile wires of 3 mm to 8 mm in diameter; lines to manufacture seven low relaxation wire strands of 6 mm to 18 mm in diameter and lines for toroidal packaging of finished product coils.

The wire drawing and rope manufacturing lines were supplied by MFL of Italy and the packaging line by H-BÖHL of Germany.

MMK stats construction on a new service center at Kolpino

MMK announced that it has started its construction project for new steel pressing plant and slitting center, the new mill is located at Kolpino in Leningrad.

Its new pressing plant can handle 150,000 tonnes processing per year and its slitting center can handle about 200,000 tonnes processing per year.

The management of MMK said that the company will organize new processing for automobile parts and white color home electrical equipment parts need based on its Izhora mill's foundation.

According to MMK's program, its pressing plant will major in parts supply for automobile and home electrical equipment industries and its slitting center will target its steel supply for construction, shipbuilding and mechanical engineering usage which located in Petersburg area.

Russia crude steel output in 11 months up by 2.6% YoY

It is reported that Russia has produced 60.4 million tonnes of crude steel from January to November 2007 up by 2.6% YoY.

The report added that output of semi finished was 47.1 million tonnes, up by 6.6% YoY. Wire Rod steel output surged by 2.6% YoY or 30.8 million tonnes than the same time of last year and plate output was 23.1 million tons, increasing by 2.5% YoY. In the meantime, the output CR and HR were 7.6 million tonnes and 16.3 million respectively.

Gazprom against foreign investments in Russian mineral deposits

RIA Novosti reported that Russian energy giant Gazprom is against foreign companies developing Russia's mineral deposits.

Mr Alexander Ananenkov deputy chairman of the Gazprom management committee said that "I want to emphasize that we do not want our state owned mineral resources to be developed with the participation of foreign companies.”

According to Mr Ananenkov, an inauspicious situation for the Russian state has emerged under the Sakhalin-I and Sakhalin-II oil and gas projects off Russia's Pacific Coast and the Kharyaga oil field in northern Russia, all of which are being developed under production sharing agreements.

He said that "Mineral resources companies using our sub soils do not intend to organize supplies to the Russian Far East. They seem to be motivated by some economically more advantageous possibilities for deliveries of this gas.”

However, the deputy chairman said Gazprom is ready to cooperate with foreign companies in projects that would be mutually beneficial. He added that "We are ready to cooperate with foreign companies on mutually beneficial principles and equal investment in a joint project. Gazprom has effectively achieved this.”

Vostochniy Port starts modernization of coal complex

Prima Media reported that approaching its 35th anniversary, Vostochniy Port OJSC starts fundamental modernization of its coal complex to support high freight turnover as most of the equipment is to be replaced as soon as possible.

This year the port signed a contract with the US Heyl & Patterson on the manufacture and supply of two double wagon tipplers. The next step will be the reconstruction of the coal warehouse with the replacement of the drainage system. During the so called season windows the port will also replace power equipment and other machines and equipment to be on a par with modern requirements.

Voestalpine to manufacture railway switches in Russia

FIS reported that Austrian steel makers Voestalpine is planning to start railway switches production in Russia. As per report, Voestalpine's subsidiary VAE is aiming to finalize the plans in the first quarter of 2008.

VAE is reviewing two options as regards the Russian partnership: Russia's largest switch plant in Murom and RZhD Branch Novosibirsk Switch Plant.

Earlier Sweden's SKF Group announced that it would invest USD38.53 million into the construction of a plant making conical wheel spin bearing units in one of the regions near Moscow.

Uralmash and Mechels’s ChMK ink modernization pact

FIS reported that Russian machine building corporation Uralmash and Mecheld’s Chelyabinsk Metal Integrated Works have inked a strategic partnership agreement on the modernization of existing metallurgical equipment in 2008-2010.

Uralmash press service reported that the largest investment projects include reconstruction of SCCM No 2 and blast furnace No 3, overhaul of blast furnace No 5, 20 roll mill and supply of various metallurgical equipments.

Also, agglomeration equipment will be supplied to increase production to 6.5 million tonnes of agglomerate per annum

Kazakhstan favors Caspian railroad

It is reported that Mr Nursultan Nazarbayev president of Kazakhstan has highlighted the importance of a joint Iran-Turkmenistan-Kazakhstan railroad project.

Turkmen TV quoted Mr Nazarbayev as saying in a phone conversation with his Turkmen counterpart that "The project is as important as Turkmenistan's gas transfer to Russia via Kazakhstan.”

Iran, Turkmenistan and Kazakhstan are financing the construction of a railroad, which will connect the three neighboring countries together.

The 900 kilometer long railroad will be constructed within the next four years.

3 new thermal power plans to be built in Primorye

FIS reported that the Primorsky Krai's Governor emphasized that in 2007 several decisions were made to implement significant industrial projects in the Krai, including the construction of three thermal power stations in Ussuriysk, Khasansky and Nadezhdinsky districts.

The report added that there are investors willing to build up oil processing and petrochemical companies in the Krai.

It said that the agreement was reached on the construction of an oil filling port in the final point of the Eastern Siberia - Pacific Ocean oil pipeline and the construction of the gas pipeline is to be completed by 2012.

Gazprom invests USD 1.2 billion in Yuzhno-Russkoye giant gas field

RIA Novosti reported that Russian energy giant Gazprom has invested EUR 0.85 billion in the development of northwest Siberia's Yuzhno-Russkoye oil and gas deposit. Mr Alexander Medvedev deputy chairman of the Gazprom management committee said total investment in the deposit, which went into operation recently and would total EUR 2 billion.

The deposit launch ceremony was attended by First Deputy Chairman of the Russian Government and Chairman of the Gazprom Board of Directors Dmitry Medvedev, Chairman of the Gazprom Management Committee Alexei Miller and German Foreign Minister Frank-Walter Steinmeier.

The deposit, for which Gazprom subsidiary Severneftegazprom holds a license, has 805 billion cubic meters of proven gas reserves, and 5.7 million tonnes (42 million barrels) of proven oil reserves.

The Yuzhno-Russkoye deposit is expected to produce 1.4 billion cubic meters of gas in the fourth quarter of 2007 and reach its design capacity of 25 billion cubic meters per year in 2009.

Gazprom closed a deal with BASF AG on the German chemical company's participation in the project, and also drew up a list of assets to be swapped with Germany's E.ON to enable it to join the west Siberian gas field project as well. Under an asset swap agreement between Gazprom and Germany's BASF AG, signed earlier this year, the German energy concern bought a 25% minus one ordinary share and one privileged share without a voting right in Severneftegazprom.

Fire traps workers at Ukrainian coal mine

Russia Today reported that a major fire has broken out at a coal mine in the city of Rodinskoe in Ukraine's Donetsk region. According to reports it started Wednesday morning, when more than 850 miners were underground.

An evacuation is now under way. A rescue team is thought to already have been inside the mine.

Ukraine has been hit by a series of mine disasters this year, including a blast at the Zasyadko mine, also in the Donetsk region, which killed at least 100 people.

New Pipe Technologies to build up glass plastic pipe plant

RCC News reported that the Moscow based New Pipe Technologies is to construct a plant making glass plastic polyether pipes of the diameter from 300mm to 2,600 mm. The plant is to make about 180 kilometers of pipes per annum.

The glass plastic pipes' main competitive advantage is that they are made by Techno Bell technology, which is used by many plants in Europe and only by one plant in Russia that is in Sergiev Posad.

The pipes produced by this technology are light and have high corrosive and chemical resistance. As well as high mechanical strength and can be used in household and industrial water supply systems, for repairs of worn pipelines and irrigation installations.