BHPB bid for Rio - TATA Steel backs merger move

It is reported that TATA Steel has backed BHP Billiton's proposed merger with Rio Tinto, by saying that it will be good for the steel industry.

Mr B Muthuraman MD of TATA Steel said that while there are some concerns that a combined entity could drive up market prices for iron ore, the merger is in the best interests of the industry.

He added that "It is a natural thing to happen. I think it is good for the commodity industry which has had serious cycles over the last 25 years to 50 years. It is time I think that both the steel industry as well as the commodity industry consolidate assets."

Incidentally, opposition to the merger move has emerged from steel mills and lobby groups in Europe and Asia, including International Iron & Steel Institute, the China Iron & Steel Association, Japanese steelmakers and South Korean steel maker POSCO.

Anti POSCO movement gathers more support

It is reported that a number of political parties and people’s organizations in Orissa held a daylong convention to express their support to those opposing the POSCO’s steel project in the state.

Political leaders said that the agitation by people in the POSCO project site was not against the company but for protection of people’s land and livelihood sources. They underlined the need for coming together of various organizations opposing different mineral based industrial projects at Kalinga Nagar, Keonjhar and Retagged districts and the farmers of western Orissa who were opposing diversion of water from Hirakud reservoir to industry to oppose the mindless and anti people industrialization.

The political parties and organizations which participated in the convention include
1. CPI (ML)
2.CPI (ML Liberation)
3. CPI (ML New democracy)
4. Samajwadi Jana Parishad,
5. Visthapan Virodhi Janamanch
6. POSCO Pratirodh Sangram Samiti
7. Paschim Odisha Krushak Sangathan Samanwaya Samiti
8. Jatadhari Banchao Andolan, Loka Shakti Abhijan (Orissa)
9. Lok Mukti Sangathan
10. Basti Suraksha Manch
11. Jeeban Jibika Surakhya Samiti and Lok Pakhya
12. Prakrutika Sampad Surakhya Parishad
13. Mittal Visthapan Virodhi Manch.

Indian steel industry urged for adopting suitable technology

Dr SP Mehrotra director of National Metallurgical Laboratory said that, with steel production surpassing projections, India would require to find suitable technologies and processes for optimum use of its limited iron ore and energy resources. He added that steel industry would face a lot of challenges in the future in terms of use of raw materials while also combating environmental problems.

Mr Malhotra said that “With current conservative projections of Indian steel production reaching 80 million tonnes by 2011-12 and 175 million tonnes by 2019-20, India should move ahead in a planned way. To achieve these targets things are not going to be very straightforward or routine as many aspects of steel making have to be altered very significantly. “

He said that “Though Indian iron ore reserves are currently projected at 25 billion tonnes it also has an undesirably high alumina and silica content. As compared with international norm of alumina content being less than 2%, Indian ore contained around 3% to 6% alumina. Similarly, while the international alumina to silica content ratio stood at 1, the Indian ratio was found to be as high as 3. These are very undesirable levels as even by bringing down the alumina content by 0.5%, the reduction degradation index would go up by 6 points leading to lesser consumption of coke in the blast furnace."

Mr Malhotra further added that higher alumina content also led to higher slag volumes and lower iron production, thus impacting steel production adversely. He said “Large quantities of slime and fines also get generated while processing iron ore, most of which remain dumped and unutilized at sites, thus becoming a source of major environmental hazard. Also, while environmental issues become more intense in the coming years, they need to be tackled by changing practices.”

TATA Steel expects iron ore prices stabilizing after 4 years

TATA Steel Limited expects iron ore prices to rise for another 2 to 4 years before stabilizing.

Mr B Muthuraman MD of TATA Steel said that "While the sudden jump in raw material prices such as iron ore happened because of the rise of capacity not matching increasing steel demand, prices have continued to rise.”

He4 said that “We see new prices stabilizing and settling down in 3 years to 4 years."

PGCIL board approves5 transmission line projects

Power Grid Corporation of India Limited announced that its board of directors has granted investment approval to the following projects:

1. Eastern region system strengthening scheme II at an estimated cost of INR 227.52 crore. The transmission system is scheduled to be commissioned within 30 months from the date of investment approval.

2. Western region system strengthening scheme V at an estimated cost of INR 477.69 crore. The transmission system is scheduled to be commissioned within 33 months from the date of investment approval.

3. Northern region system strengthening scheme X at an estimated cost of INR 408.36 crore. The transmission system is scheduled to be commissioned within 36 months from the date of investment approval.

4, Northern region system strengthening scheme XI at an estimated cost of INR 417.76 crore. The transmission system is scheduled to be commissioned within 36 months from the date of investment approval.

5. Establishment of 1200 kV UHV test station at Bina 400 kV (PG) S/S at an estimated cost of INR 98.50 crore. The project is scheduled to be commissioned in 24 months from the date of investment approval.

Orissa Congress supports Anti POSCO faction

It is reported that Congress party’s Orissa units has reaffirmed its stand of opposing the project in the area.

Mr Jayadev Jena president of Orissa Pradesh Congress Committee alleged that the government was behind the clash between pro and anti project groups.

He said “It was all part of the plan to provide a leeway for the police to enter. Congress will never tolerate such divide and rule policies and will join all like minded forces in opposing the project in a fertile and prosperous area.”

Meanwhile, tension continued to prevail in the three gram panchayats of Dhinkia, Nuagaon and Gadakujang in Jagatsinghpur. Four platoons of police personnel have been deployed at Balitutha where supporters of the steel venture attacked the project opponents on last Thursday afternoon.

Midhani develops four alloys of aeronautic grade

BL reported that Hyderabad based Mishra Dhatu Nigam Limited has developed 4 alloys, which will find application in India’s strategic projects.

The 4 alloys are

1. Creep resistant titanium Titan 26A, which would be used in the Adour engine being manufactured by Hindustan Aeronautical Limited

2. Nickel based cast super alloy which has good adaptability to manufacture cast components of various complex shapes and configuration

3. Nickel iron based super alloy Superni 718A, developed mainly for making rotating and static components of aero engines for use up to 650 C

4. Special purpose alloy steel, which makes it a good candidate for transmission of power in aero engine

The alloys have been type tested and approved by centre for military airworthiness & certification and the directorate general of airworthiness and quality assurance. Dr Dipankar Banerjee chief controller R&D of Defense Research & Development Organization has handed over the type approval certificates of these 4 alloys to Mr M Narayana Rao CMD of Mishra Dhatu Nigam Limited.

Mr K Tamilmani CEO of Centre for Military Airworthiness & Certification said that Midhani should play a key role in the development of aeronautic grades of alloys for the multiple aircraft program including Sukhoi 30, ALH, and LCA.

Cochin Shipyard delivers 6th bulk carrier for Clipper Group

It is reported that Clipper Tenacious, the 6th and the last of the series of bulk carriers built by Cochin Shipyard Limited for Denmark based Clipper Group was delivered on November 30th 2007.

Clipper Tenacious is designed and built as a single screw diesel engine driven bulk carrier for unrestricted world wide service. The 178 meter long ship is capable of carrying dry bulk, break bulk cargoes and can carry gross tonnage of about 19,918.
Presently, Cochin yard is constructing 18 platform supply vessels for European clients. The total order book of CSL consists of 19 ships including the air defense ship for the Indian Navy.

Cochin Shipyard’s achievement in 2006-07 has been impressive with a net profit of INR 58 crore and turnover of INR 800 crore. The net profit has grown 3 times and turnover double as compared to 2005-06.

3 day long flash strike at Kochi port called off

It is reported that the 3 day old indefinite strike at Kochi port has been called off by the striking employees following the intervention of Mr TR Baalu union shipping minister, who had held a meeting to discuss the issues in connection with the strike.

It is noted that the trade unions resorted to strike in protest against the refusal of the terminal operator DP World to book laborers for handling ICD containers, which had come to Kochi by rail. The workers also went on a strike on the same issue recently and the conciliatory talks held by the regional labor commissioner in this regard remained inconclusive.

The trade unions took the stand that it is in violation of the agreement reached between the port management and the trade unions in 1984 when ICD containers were brought to Kochi. They said that the unions are not informed of any amendment in the agreement when carriers with automatic twist lock system were allowed in Kochi.

However, the DP World officials said that the unions are interpreting the 1984 agreement which clearly stipulates for hooking and unhooking of containers from rail wagons. There is no need to book workers for unlocking the rakes from ICD containers as all the ICD carriers were fitted with automatic twist lock system that needed no man power.

The strike has also affected the cargo handling operations in other bulk vessels as the gangs engaged there extended moral support to the strike. However, in the container terminal, it has affected only the ICD rail yard.

Vizag Port sets day’s cargo discharging record

BL reported that Visakhapatnam port has set a record by discharging 31,746 tonnes of iron ore on November 25th 2007 from MV Govind Prasad surpassing the earlier record of 16,798 tonnes from MV Jag Vidya on May 1st 2005.

Oil & gas pipeline projects to get a boost

It is reported that, in a move to help oil & gas companies laying pipelines, Reserve Bank of India has expanded its helping hand in infrastructure sector.

As a result of the move, credit facilities sanctioned by RBI for projects involving laying down or maintenance of gas, crude oil and petroleum pipelines will be improved.

Large corporate like RIL, GAIL and IOC are currently laying cross country pipelines to carry gas and petroleum products to various parts of India.

SCI’s acquisition of 6 Handymax bulk carriers approved

Cabinet Committee on Economic Affairs has given its approval to the Shipping Corporation of India to acquire 6 Handymax bulk carriers of about 57,000 DWT each at price of USD 269.40 million or USD 44.90 million per vessel.

SCI would be availing of external borrowing up to 80% of the contract price of each vessel from Banks or financial institutions either from the international market or the domestic market and the balance from its internal resources.

The vessels would partly replace the ageing Handymax fleet of the company which would be due for scrapping in the near future. Acquisition of vessels would augment the Indian dry bulk carrier tonnage as also the share of Indian Lines in India’s overseas trade.

Jain Sponge to commission phase I of Orissa plant by December

It is reported that Jain Sponge is expected to commission the phase I of its Orissa integrated steel mill by December 2007. It is setting up the integrated steel plant in 2 phases with an investment of INR 250 crore at Durlaga in Jharsuguda district of Orissa.

In phase I of the project, capacities to manufacture 110,000 tonnes per annum sponge iron plant, 50,000 tonnes per annum billets and 8 MW waste heat based power plant will be installed.

Gurgaon based Predominant Engineers & Contractors is the consultant and Hyderabad based Kiti Steel & Thermal Systems is equipment supplier.

In phase II, the sponge iron plant and billets capacities will be doubled and the power unit capacity will be increased to 38 MW. Jain Sponge is also planning to set up a steel plant in Purulia district of West Bengal.

Sterlite may sell part stake in Sterlite Energy – Report

A group of investors said that Sterlite Industries India Limited is planning to sell 15% stake in its subsidiary Sterlite Energy Limited to investors for as much as USD 2 billion to build power plants.

As per report, Sterlite Energy may sell shares or debt to expand its electricity generating capacity to 10,000 MW, which would be completed in 5 years. It added that the group may consider an initial public offering of Sterlite Energy next year after the stake sale.

India is doubling investments in power because shortages cause blackouts in most of India and the spending plan is luring investors to shares of Sterlite.

CCEA approves revised cost estimates for Paradip Port project

Cabinet Committee on Economic Affairs has given its approval for revised cost estimates regarding implementation of deepening of channel at Paradip Port at a revised estimated cost of INR 253.359 crore. The project is likely to be completed within 60 weeks.

As a result of implementation of the project, Paradip Port shall be able to handle

1. Ships of 125,000 DWT from the existing capacity of 65,000 DWT thus handling large volumes of traffic

2. The project shall help in de congestion of port due to high capacity vessels

3. Reduce sea freight for bulk cargo in general and iron ore & coal in particular

4. Boost the industrial climate in hinterland of the port leading to creation of job opportunities

Sembawang bags INR 1272 crore contract in Singapore

Punj Lloyd Limited has announced that its subsidiary Sembawang Engineers & Constructors Pte Limited has won a major contract worth INR 1272 crore from Land Transport Authority of Singapore for architectural, civil and structural work at the proposed Bayfront MRT station in Marina Bay in Singapore.

Under the terms of contract, Sembawang E&C will be constructing the Bayfront station which is key to the Downtown Line as it serves the mega Marina Bay sands integrated resort Sembawang E&C will be responsible for the underground construction of Bayfront station and two pairs of tunnels for downtown line stage 1. This includes architectural, civil and structural works.

The downtown line is in the heart of Marina Bay and the Bayfront station is a key factor contributing to the success of the development in the Marina Bay area. Bayfront will be one of the first stations to open in the downtown line being a fast paced project, the schedule will require 24 hour work days for the station to be completed in time for the opening of Marina Sands IR. With extensive experience in infrastructure projects and having built a third of all MRT and LRT stations in Singapore, Sembawang E & C is confident of completing the project on schedule.

With this, the order backlog for the Punj Lloyd group on consolidated basis has gone up to INR 17894 crore. This is the total value of unexecuted orders as of September 30th 2007 and new orders received till date.

L&T builds a valve manufacturing unit in China

It is reported that Larsen & Toubro has expanded its presence in China with a new facility to manufacture industrial valves at Yangcheng in Jiangsu Province.

Mr AM Naik CMD of L&T said that the valves made in China would complement L&T's existing range of industrial valves and help it meet the needs of its growing client base of global oil majors. He added that the valve unit is its third factory in China.

Mr Naik had visited L&T's Rubber Machinery Company Limited at Jiaonan in Shangdong Province. He also visited its Wuxi plant to celebrate its first anniversary of operations.

REL to consider funding options for Sasan and Krishnapatnam UMPPs

It is reported that the board of Reliance Energy Limited will meet to consider proposals for raising long term resources for its infrastructure projects, including the Sasan and Krishnapatnam ultra mega power projects.

It is noted that REL’s wholly owned subsidiary Reliance Power Limited has been awarded the 4,000 MW imported coal based Krishnapatnam UMPP, which will have an estimated capital outlay of INR 20,000 crore. This is in addition to the 4,000 MW domestic coal based Sasan UMPP.

Reliance Power’s estimated capital outlay for these 2 projects alone aggregates approximately INR 38,000 crore. In addition, Reliance Energy and its group companies are implementing several large infrastructure development projects in the areas of metro railways, roads and real estate.

REL is exploring various options like acquiring stakes in overseas mines or long-term coal supply agreements with coal exporting countries such as Indonesia, South Africa and Australia.

Lanco Infratech plans 2,640 MW power plant in Orissa

It is reported that Lanco Infratech is planning to set up a 2,640 MW coal based power project at Baban in Orissa.

The project to be implemented through a special purpose vehicle called Lanco Baban Power Plant Limited, will have 4 units of 660 MW each, with an investment of INR 11,000 crore. The financial closure for the project is likely to achieve by early 2009.

Of the total 2,640 MW, around 25% will be sold to Orissa and the balance will be sold to other buyers through tenders. While coal for 1,000 MW capacities will come from Rampia coal blocks, another 660 MW will come from Coal India Limited.

Lanco Infratech also plans to keep a certain portion for merchant power. It is learnt to have lined up nearly 75% of its fuel supply arrangements in the form of captive coal and coal linkages.

TN to give surplus power from sugar mills to TNEB

Mr Durai Murugan PWD minister of Tamil Nadu said that the state is planning to give away the surplus power produced in the sugar mills to the Tamil Nadu Electricity Board.

Mr Murugan said that "I would discuss the matter with Mr M Karunanidhi chief minister and Mr Veerapandi Arumugham agriculture minister of the state and ask them to consider the proposal in the next budget year."

He added that 430,000 tonnes of sugar cane was expected to be crushed this crushing season and this would generate 15 MW power by burning the bagasse

He further added that sugar mills need only 4 MW of power and the rest could be given to the Electricity Board. The plan with an outlay of INR 75 crore, once approved, could also save many of the sick mills.

BHPB bid for Rio – Rio sees BHP approach below value

Mr Tom Albanese CEO of Rio Tinto while speaking to investors in Australia on Sunday, declined to put a value on Rio, but reiterated the company's stance that the all share offer did not recognize the miner's future prospects.

Mr Albanese told Australian Broadcasting Corp television that "We have seen the market move well past the BHP proposal, which we rejected. It is basically saying that, yes, we agree it is worth a lot more.”

Mr Albanese said that the BHP proposal also did not recognize that most of the synergies in a merged group would come from Rio, while Rio's iron ore business was growing faster than BHP's. He said "We have more mineral tenement, we have more operating mines, we have more mineralization, and we certainly have more infrastructure.”

Rio Tinto has rebuffed the offer of three BHP Billiton shares for every Rio Tinto share and Rio shares are currently trading at about a 17% premium to the offer.

GFMS sees weak pricing in early part of Q1 of 2008

UK based consulting firm GFMS said that steel prices broadly declined in November 2007 in line with their expectations of market weakness in Q 4 of 2007.

GFMS said that the main reason for the decline include

1. Emerging markets led the way with CIS mills forced to sell larger volumes into weaker markets at lower prices we also saw CIS mills back in Asia, which is a sure sign of market over supply.

2. European prices struggled on the back of higher inventories, a wide range of importers seeking to access the highest priced market and of most concern, a weaker economic environment.

3. The US market continues to march to a different cycle, as low inventories and a low domestic price should allow domestic mills to overcome a weak economic environment.

4. Somewhat surprisingly however, Asian prices were largely firm. A renewed interest in purchasing along with lower Chinese export volumes has helped strip prices.

GFMS said that “The general consensus is that the market will pick up in the New Year. However, the economy in mature markets appears to be weakening further, although China and emerging economies are holding up well for now. This could extend the weak pricing environment into the early part of Q1 of 2008.”

For subscribing to GFMS report, please visit

Inca to install new rolling mill to double its capacity

BNamericas reported that steel company Industrias Nacionales of the Dominican Republic will invest USD 100 million in the installation of a rolling mill to manufacture light bars and beams.

Gerdau which controls 49% of Inca's capital stock said the mill will have an installed capacity 420,000 tonnes bringing Inca's annual installed capacity from 300,000 tonnes to 720,000 tonnes of rolled product. The rolling mill is set to start operating in late 2009 or early 2010.

Mr Claudio Gerdau Johannpeter COO of Gerdau Group said that "With the expansion, Inca is strengthened as a steelmaking hub, aiming at meeting the Caribbean's growing demands."

He added that a further USD 25 million has been invested further downstream, including in a new production line for wire rod, a raw material for manufacturing wires, fences and welded steel mesh. Funds also went toward building a plant to cut and bend rebar plus a welded steel mesh plant.

A Gerdau communications officer told BNamericas that “70% of the USD 125 million investments will come from financing through a Dominican Republic bank, while the remaining 30% will come from Inca's own resources.”

Iron ore price negotiations – Rio sees substantial increase

According to Mr Sam Walsh CEO of Rio Tinto the long term contracted iron ore benchmark prices will see substantial growth in 2008 on the back of tight market supply.

Mr Walsh during a shareholder meeting said that "The 2008 benchmark iron ore price negotiations have kicked off in Asia and Europe, taking place against the backdrop of spot prices from India to China that are approaching USD 200 per tonne. The iron ore market is tighter than it has ever been, so a very substantial price increase can be anticipated.”

Mr Walsh said that the spot price from India to China is currently nearly USD 100 higher than this year's benchmark price. Iron ore demand is strong and getting stronger, not only in China, but also in India, the rest of Asia and the Middle East. He added that "We are addressing the freight differential as a major part of the current price negotiations."

Mr Walsh said that the company also expects Renminbi appreciation, meaning domestic Chinese producers will face rising costs in US dollar terms, which will reinforce the position of low cost producers like Rio Tinto.

Data for steel imports into US for October 2007

The preliminary data released by US authorities showed that overall steel imports into US in October 2007 increased by 13% MoM from September 2007.

he change in September’s total amount of steel imports was due largely to an increase in blooms, billets and slabs; which increased by 119% from September to October. Changes were mixed in other carbon categories and most stainless categories decreased. October 2007 imports of steel mill products were down 30% YoY percent compared to October 2006.

Preliminary census steel import statistic comparisons are as under

In net tons

In net tons

In net tons

Sumitomo Metals develops corrosion free Ni based alloy

Sumitomo Metal Industries Ltd announced that it has established an innovative technology to prevent corrosion and has developed a nickel based alloy to which the technology is applied.

The state of the art technology prevents severe corrosion that occurs at high temperature in the process for manufacturing environmentally friendly liquid fuels from natural gas. It also significantly improves the efficiency of plants that produce the fuels.

Sumitomo Metals calls the new technology Surfactant Mediated Resistance technique. The technology can restrain the dissociative adsorption of a carbon monoxide molecule in syngas environments.

You may like to visit http://www0.nsc.co.jp/shinnihon_english/news/index.html for details.

Google founders start search for alternatives to coal

It is reported that Google has committed hundreds of millions of dollars to renewable energy projects. Mr Larry Page and Mr Sergey Brin co founders of Google recently announced its initiative to produce electricity from renewable energy sources rather than coal.

Mr Page said that “Our goal is to produce one gigawatt of renewable energy capacity enough to power San Francisco that is cheaper than coal. We are optimistic this can be done in years, not decades.”

He added that if Google achieved this, the world would have the option of significantly reducing the greenhouse gases created by burning coal, a fuel used for 40% of electricity supply at present.

The Google founders were asked, during a conference call with reporters, if they were straying from their core mission. Mr Brin said that energy was already critical to Google’s operations, referring to the energy hungry data centers built by the company.

Logistics industry working towards standardization

It is reported that The Global Institute of Logistics headquartered in New York is set to launch Container Terminal Quality Indicator Standard 2007 by early 2008 and announced its move to create a global integrated database for the logistics industry.

Mr Mr Kieren E Ring CEO of Global Institute of Logistics said that the global logistics industry is fragmented and requires standardized approaches that would enable companies to leverage a standardized data.

Mr Ring said that “We have embarked on a project that seeks to create a common database which would enable companies to better monitor container movement from anywhere in the world through a Web-based interface. We expect the entire project to be completed by the end of 2008 as this would bring about synergies within the system and thereby streamline the container flow.”

Providing an overview of the logistics sector, Mr Ring said the total merchandise exports for 2006 was USD 11.76 trillion and growing rapidly. As per estimates, about 85 million containers are moving across the world now and this number is expected to triple to 243 million by 2025.

Gulf Mine to acquire iron ore project in Queensland

Gulf Mines announced that it has entered into an option agreement with Queensland Industrial Minerals to acquire an iron ore project near Bundaberg in Queensland.

Queensland Industrial Minerals is the owner of this significant iron ore project which covers 88 square km.

Gulf Mines in a statement said that it is currently finalizing its due diligence process which is scheduled for completion before Christmas. Mr Graham Raveleigh MD of Gulf Mines said that "The acquisition of this Iron Ore project could add a third significant mineral arm to Gulf Mines' existing projects.”

The projects already owned by Gulf Mines are the Copper and Uranium project at Wollogorang NT and the Ebagoola Gold project in Far North Queensland.

Gulf Mines said that as pertinent facts about the new Queensland project become available, it will make further announcements to the market.

Corus Strip gains Ford Q1 award

UK steel supplier of automotive strip products, Corus Strip Products announced that it has gained the Ford 'Q1' award for excellence in supply and continuous improvement.

Ford Q1 status is the highest possible accolade given by the Ford Motor Company to suppliers who have demonstrated excellence in key areas of supply including ongoing performance, site action planning, customer endorsement and continuous improvement.

Delighted at receiving the award, Mr Nick Busby commercial manager transport of Corus Strip explained that “Ford, like other OEM customers, has exacting demands and therefore sets the very highest standards for their suppliers. Achieving Q1 status underlines the drive by Corus to ensure engineering excellence and continued advances in the quality and standard of products, which has allowed it to become recognized as a class leading supplier by one of the most important global players in the industry.”

Corus Strip Products located at Port Talbot in UK supplies the automaker with over 30,000 tonnes of steel per year for the manufacture of vehicles in the Ford product range.

South Korean crude steel output in 2008 to rise 6.2% YoY

Bloomberg reported that South Korea crude steel production will increase by 6.2% YoY in 2008 due to commissioning of new furnaces.

The Korea Iron & Steel Association in an e mailed statement said that South Korean steelmakers are expected to make 54.6 million tonnes of crude steel in 2008 as compared to estimated 51.4 million tonnes in 2007. The statement added that domestic demand plus inventories will also gain by 4.2% to 57.1 million tonnes as shipyards build more vessels.

Vietnam says no to steel project at Da Nang to protect environment

VietnamNet recently reported that Vietnam central city’s authorities have refused to license two foreign direct investment projects worth USD 2.5 billion, for fear that the steel and paper projects may pollute the environment.

The report quoted Mr Nguyen Ba party committee secretary of Thanh Da Nang city as saying that the city had decided to refuse two FDI projects capitalized at USD 1.2 and USD 1.4 billion each. He added that one of the two projects had been proposed by Taiwan’s China Steel Corporation, Japan’s Sumitomo Metal Industries Corporation and Vietnam’s Vedan Enterprise Corp Ltd.

Mr Thanh said that “The city is on the course of changing its economic structure, striving for the tourism service industry scheme. Industrial projects must meet the requirements on clean industries which do not pollute the environment. The central city, which is famous for Da Nang beach, one of the most beautiful beaches on the planet, is striving to become the ‘environment city’ by 2020.”

Since the beginning of the year, Da Nang has licensed 24 FDI projects and approved expansion plans with the total investment capital of USD 803.6 million, up by 3.5 times over the same period of last year.

US coal exports to double to 20 million tons in 2008

According to McCloskey’s conference on US Coal Imports 2007, which has focused on renewed export activity as much as on the original planned agenda, US coal exports are likely to double to 20 million tons in 2008.

A panel representing industry and trade publications said that deals have been made and rail and port arrangements made, totaling at least 20 million tons for next year.

Voestalpine extends optimization program to reheating furnace

It is reported that voestalpine Stahl at Linz has been extended the existing AIS Steel Planner program to encompass a new reheating furnace. The plant optimization software has been serving the plant for four years, identifying optimal caster and hot strip mill schedules.

The SteelPlanner Furnace Optimization module is part of BetaPlanner, a mills scheduling software and it identifies optimal slab charging and discharging sequences using a combination of a pure thermal and or a fix charging pattern model. The model references reheating time needed for each slab and identifies the best available furnace for the task among two pusher type furnaces and the new walking beam furnace, as well as the process and logistics constraints of the hot mill.

The furnace optimizer closes the gap between Level 3 scheduler programs and Level 2 furnace optimization models.

The installation of the software at voestalpine Stahl was completed successfully on schedule in June 2007 and has been able to reduce furnace and mill bottlenecks and improve the operators’ efforts at hot slab charging.

Website tracks world's worst polluting power plants

It is reported that a new interactive online database provides maps, color coded categories and detailed information about who is putting 10 billion tons of carbon dioxide into the atmosphere annually from power plants around the world. Dubbed the Carbon Monitoring for Action database, or CARMA, it proclaims itself as the world's best place for power plant voyeurism.

The new Web site www.crma.org includes information from 4,000 utilities and 50,000 plants. It shows not only the biggest CO2 emitters, but also the facilities and companies that are most green.

Mr David Wheeler a senior researcher at the Center for Global Development, where he directed the creation of the massive database said that "We are trying to provide complete, balanced information. It's an open site." He added that using information filters, a user can find out how much CO2 comes from electricity plants in a particular city or county, in a congressional district, from a specific company, or an individual plant.

The world's top 10 polluting power plants, with annual emissions in millions of tons of CO2 are as under
1. Taichung in Taiwan with 41.3
2. Poryong in South Korea with 37
3. Castle Peak in Hong Kong with 35
4. Reftinskaya SDPP in Russia with 33
5. Mailiao FP Taiwan with 32.4
6. Tuoketuo-1 in China with 32.4
7. Vindhyachail in India with 29
8. Hekinan in Japan with 28.9
9. Kendal in South Africa with 28.6
10. Janschwalde in Germany with 27.4
Source : carma.org

Kazakh ENRC to raise up to GBP 1.5 billion in London IPO

Reuters reported that Kazakh mining and metals group Eurasian Natural Resources Corp plans to float 20% of its shares in London next month to raise up to GBP 1.5 billion.

A Eurasian Natural Resources spokesman said that “The world's biggest producer of ferrochrome and the sixth largest iron ore exporter by volume is offering 252.5 million new shares that would make up 20% of its capital. The price range has been set between 480 and 600 pence per share, valuing the offer at GBP 1.2 to GBP 1.5 billion.

Eurasian Natural Resources Corp's market capitalization would be GBP 7.5 billion at the top of the range.

Deutsche Bank, ABN AMRO Rothschild, Credit Suisse and Morgan Stanley are managing the deal.

Chinese Kabwe Fine Steel to resume operation in Zambia

It is reported that Kabwe Fine Steel Manufacturing Company factory will soon resume operations as the issues that led to the closure of the plant are being addressed.

Mr Wang Dang manager of Kabwe in an interview said that he regretted the closure by the Zambia’s ministry of labor and social security on grounds that the Chinese firm failed to comply with safety regulations. Mr Wang added that "I have taken corrective measures and all the issues Government has raised are being taken care of. By next week, the plant will resume operations.”

Mr Wang further added that "We have ordered uniforms for the over 50 workers and we have secured covers for the steel plant machines to avoid pollution.”

Mr Wang also said that the company had secured three industrial fans to cool rooms where workers operated from. Mr Wang said that "We want Government, the people of Kabwe and our workers to be happy with our operations hence our decision to do what is expected of us by the ministry of Labor.”

Last Week, Zambia’s ministry of labor and social security chief inspector of factories at Central Province in Kakoma Chivunda ordered the closure of the steel company following non compliance of safety regulations.

Mar Mac wire to open distribution center in Denison

It is reported that with the attractive local economy and the desire to expand business west of the Mississippi River, Mar Mac Wire will be opening a distribution center and sales office in Denison in 2008.

Mr Martin Martin logistics manager of Mar-Mac Wire said that “My grandfather established the business in 1953. We have been a manufacturer for the better of time since, but do some imports. We are committed to keeping as many jobs in the US as possible.”

Mar Mac Wire established in 1953 at McBee in South Carolina manufactures steel wire products for the concrete industry.

Crude steel output by EAF in Japan slowing down

YIEH reported that Japan's Tokai mill's crude output during September 2007 was 67,622 tonnes up by 14.9% YoY and output during the January to September 2007 was 520,392 tonnes down by 8% YoY.

The report further added that Nippon Steel’ crude steel output at Hikari mill was 38,118 tonnes in September 2007 down by 21.5% YoY and the output dying January to September 2007 was 401,976 tonnes.

Banpu and Ratchaburi seal power plant deal with Vientiane

Bangkok Post reported that Banpu Plc and the Thailand's largest private power producer Ratchaburi Electricity Generating Holding Plc have entered into an agreement with the government of Laos for the Hongsa coal fired power plant and lignite mining project. The project, with a capacity of 1,800 MW will require fresh funds totaling THB 2.3 billion.

Banpu will take part in the venture through a subsidiary, Banpu Power Ltd. The agreement with Laos follows the earlier signing of a joint development agreement by BPP and Ratchaburi to collaborate in studying and co developing Hongsa.

The project consists of the power plant, in which BPP and Ratchaburi hold 40% each and the Laotian government 20% and a lignite mining project in which BPP and Ratchaburi each hold 37.5% and Laos 25%. However, the two Thai parties have also agreed to invite a Chinese investor to invest in both the power and mining businesses, in which the BPP and Ratchaburi stakes would be diluted to 30% and 28.125% each, respectively.

Under the joint development agreement, Ratchaburi is required to pay a joint development rights fee to BPP in an amount of USD 10 to USD 16 million, which will vary depending on the power tariff approved by the Electricity Generating Authority of Thailand.

Corus GC quits for role at building company

It is reported that steel giant Corus has lost its general counsel, Mr Richard Shoylekov to UK building supply distributor Wolseley in mid November. Ms Helen Matheson associate general counsel has stepped in as acting general counsel until a replacement is found.

Mr Shoylekov had joined Corus in 2004 as its director of legal affairs from Italian oil company Agip. Mr Shoylekov led a restructuring of Corus legal team when he joined the company before being promoted to general counsel and company secretary in 2005.

Moody's downgrades Canadian Pacific Railway

Moody’s Investors Service downgraded Canadian Pacific Railway Ltd citing its debt financed plans to acquire Dakota, Minnesota & Eastern Railroad Corp for nearly USD 1.5 billion.

Moody said that “Canadian Pacific Railway will not have control over operations or cash flows of DM&E until the deal closes, which is not expected until late in 2008.”

Moody said that “Moody’s believes that the purchase price of almost USD 1.5 billion suggests that Canadian Pacific Railway has paid a premium for the DM&E at a time when the transportation market has likely already passed its peak. To finance this acquisition, CP has increased its debt substantially, by over 30% to approximately USD 6 billion.”

The move has resulted in Moody’s downgrading all the debt ratings for Canadian Pacific Railway Co and its subsidiaries from a senior unsecured rating to Baa3 with a stable outlook. Baa3 is the lowest investment grade, and just one notch above junk status.

Moody’s said if Canadian Pacific Railway were to decide to go ahead with its planned expansion into the coal rich region of the Powder River Basin, credit metrics could further deteriorate to below Baa3 levels.

In order to finance the purchase of the regional railway, Canadian Pacific Railway had drawn USD 1.27 billion on its newly arranged USD 1.8 billion 18 month bridge loan facility, before the shares were placed in a voting trust.

Brush Transformers Gulf opens a new plant in Abu Dhabi

Arabian Business reported that Brush Transformers Gulf, a JV between Al Nasser Industrial Enterprises and Brush Transformers, has officially started operations at its new plant in Abu Dhabi. The 20000 square meter plant was officially opened by Mr Abdulla Nasser Hawaileel Al Mansoori chairman of ANIE and Mr Paul Heiden CEO of FKI plc, the parent company of Brush Transformers.

The factory will build units in the 33 KV to 132 KV voltage class, up to 90 MVA. This range is widely used in the transmission of power from a generating plant to the end user. The local availability of power transformers from Brush Transformers Gulf will reduce the reliance of the region on units imported from Europe and Japan.

Mr Nasser said that "This landmark project is a pioneering initiative for the UAE industrial sector. Local transformer production will support the industrial growth of Abu Dhabi, the UAE and the whole region, where economic growth and industrialization have spurred the demand for power transformers. The new facility is also an example of economic growth leading to industrial diversification, which feeds back into the local economy."

Mr Tim Walker GM of Brush Transformers Gulf said that "Production of units in Abu Dhabi will reduce delivery times, shipping costs and the possibility of damage during transportation. Dedicated treatment and a high level of support will be given to our local customers by our specialist team of support service engineers."

Brush Transformers Gulf was formed in 2005. Construction of the new plant began in 2006 with the first shipment to local customers already completed. The facility manufactures the largest power transformers produced in the Middle East. It supplies distribution power transformers to oil and gas, steel, cement and other classes of the industrial sector as well as power companies in the Gulf region.

Pakistani auto industry concerned over import policy

It is reported that the representatives of Pakistan’s auto industry has requested the government to formulate long term policies and restrict import of used vehicles by allowing registration of vehicles in the name of returning Pakistani expatriates for at least 1 year and reducing the age of vehicles from 3 years to 2 years.

Discussing their issues and problems, the representatives highlighted that Pakistan’s auto industry was experiencing a production gap due to continued imports of used vehicles, substantial increase in the cost of financing, significant reduction in auto financing, deviation from the announced Auto Industry Development Program and reduction in demand due to uncertainties.

Mr Mushtaq Malik secretary of Pakistan’s Board of Investment, while addressing the members of the Automobile Advisory Board, said that automobile industry is the strength of engineering sector in Pakistan and if it could be integrated with the world market, it would become driving force for economic growth.

He added that “Auto sector has received a much focused attention of the government and that was why deletion programs in 2005 was replaced with tariff based system, as it was leading to progressive localization and TBS enabled capacity expansion, competitive production, encouraged further localization and incentives for the technology acquisition.”

Pakistan’s cars production during 2006-07 was 160,496 as compared to 40,088 in 2001-02, showing aggregate compound growth rate of 32%. In 2006-07 auto industry contributed 2.8% towards GDP, which would be 5.6% in 2011-12. It also contribution to indirect taxes in 2006-07 was PKR 63 billion and in 2011-12 it would be PKR 190 billion. Direct employment is also expected to increase to 250,000 in 2011-12 from 190,000 in 2006-07. In the same periods, contribution of auto industry to manufacturing sector would increase from 16% to 25%.

Turkish steel mills increasing their purchases of scrap from US

It is reported that delivery price of HMS scrap from US was posted at USD 361 per tonne CIF in December 2007 whereas shredded scrap price was at USD 366 per tonne and P&S scrap price was at USD 371 per tonne.

As per reports, Turkish steel mill also transacted with European scrap traders and H1 and H2 mix scrap price was posted at USD 343 per tonne CIF.

Italian firms to invest in Turkish energy sector

Dr Roberto Luongo director of the Italian Trade Center said that 9 prominent Italian energy companies will come to Turkey in December 2007 to invest in the Turkish energy sector and to develop cooperation with Turkish companies. He added that a delegation from the 9 companies will arrive in Istanbul on December 6th 2007 and inspect companies with which they plan to cooperate.

Mr Luongo said that “We want these 9 companies to invest in the Turkish energy sector because they plan to make an investment of EUR 100 million. Italian government urges all countries to invest in renewable energy sources and supports incentives to decrease dependence on oil. Several Italian companies prefer the United States, Middle Eastern countries and Turkey for investment.” He added that Turkey provides a golden opportunity for Italian investors.

He added that “The annual commercial cooperation between Turkey and Italy is around USD 15 billion. Italian energy firms Rossi and Beneditti will be among the 9 companies coming to assess the investment atmosphere in Turkey.” He added that Turkey is an important geothermal center.

Mr Luongo further added that “Our strategy is to make both countries see each other’s potential. We conducted the necessary studies on the Turkish energy market. We all know that almost 60% of Italy is dependent on the machinery industry. Italian companies are trying to obtain a significant share in the global market with new initiatives. I believe that Turkey and Italy will take concrete steps for cooperation in the energy sector because Turkey is a very attractive market for Italians.”

Investments in manufacturing sector in GCC to exceed USD115 billion

Arab News reported that Gulf Cooperation Council countries are investing heavily in their industrial manufacturing sectors, stimulated by booming economic growth which is fueling demand for finished products and materials. The total value of all non oil and gas industrial projects in the region currently exceeds USD 115 billion.

Mr Trevor Punt group exhibition director of IIR Middle East said that "The manufacturing sector is currently experiencing annual growth rates in excess of 22%. This new wave of manufacturers are catering to the new economy providing machinery and tools for industries related to construction, shipbuilding, infrastructure, power generation and even retail. The traditional oil and gas and associated downstream industries are still vitally important to the regional economy but it is the success of diversification that is driving the non oil growth."

The report said that Saudi Arabia has an estimated total value of active industrial projects well in excess of USD 50 billion. Saudi Arabia has started to accelerate the growth of its industrial base with numerous industrial zones being created. King Abdullah Economic City is now being developed outside of the Red Sea port of Jeddah, at an initial investment of USD 26.6 billion.

Across the causeway, with USD 5 billion in investment, Bahrain is planning a variety of industrial initiatives in the metals sector with 15 projects in the aluminum sector valued at USD142 million. It is also witnessing wide scale development in the steel sector with key projects such as Stainless Steel Company's cold rolled stainless steel mill worth more than USD 200 million.

In the United Arab Emirates alone, just over USD 25 billion is currently being invested in manufacturing machinery, facilities and equipment. Abu Dhabi is planning a series of industrial cities offering huge incentives such as 100% foreign ownership and tax free status. The first Industrial City of Abu Dhabi includes economic zones for base metals, building and construction products, electronics, plastics manufacturing and automotive industries and has already attracted USD 2.99 billion in investment. ICAD 2 has already attracted nearly USD 1.63 billion with new projects including air conditioning water chillers, architectural hardware and aluminum windows and doors manufacturing. Dubai Industrial City is also targeting USD 2 billion in investment over the next 5 years.

Pipe scrap smuggling in Pakistan on Afghanistan border

Business Recorder last week reported that despite heavy checking at Afghan Pakistan borders, steel pipes from states of the former Soviet Union are being smuggled into Pakistan through Afghanistan at Taftan, Chaman, Quetta and Waziristan resulting in around PKR 3 billion annual losses to the national exchequer in terms of taxes and a competition to the Gadani ship breaking yards.

As per report, steel water pipes from states of the old Soviet Union, especially Russia, have found their way into Pakistan and are available much cheaper than the scraps of ships, thus making it difficult for the ship scrap to compete in the market.

Mr Azam Malik chairman of the Ship Breakers Association said that around 20,000 to 25,000 people worked at the ship breaking yard in 1999 but currently the number of workers at Gadani ship breaking yard had declined below 2,000 men only.

According to a report of the Engineering Development Board, illegal import of the substandard material from former Soviet states is reported in the range of 0.75 to 1.0 million tonnes annually.

Sumitomo, J Power and Tabreed form JV in UAE

It is reported that Sumitomo Corporation, Electric Power Development Co Limited and National Central Cooling Co have established a new company called Sahara Cooling Limited in the UAE. Sumitomo and Electric Power Development Co Limited have each invested 30% in the new entity, with the remaining 40% coming from Tabreed.

Sahara Cooling has begun operations after it purchased 6 plants in the UAE owned by Tabreed. Operating funds for the new company will be managed and raised by Sumitomo Mitsui Banking Corporation.

With the growing demand for environmentally friendly, energy saving district cooling in the UAE and neighboring nations, the 3 companies are planning further expansion of business in the UAE and the surrounding region.

In 2004, Sumitomo and Tabreed established a special purpose corporation called Summit District Cooling Company with 49% invested by Sumitomo and 51% by Tabreed. One project was started by this corporation in October 2006. The new company is designed to build on the foundation established by Summit District Cooling to further expand business.

Iran to open auto line in Egypt

Mr Ali Akbar Mehrabian minister of industries & mines of Iran said that a production line for the Iranian made sedan called Peugeot Pars will be inaugurated in Egypt. He added that the plant is expected to produce 5,000 cars every year during initial stages.

Mr Mehrabian said that if the sedan gains a foothold in the Egyptian market, a production line for another Iranian made car will also be launched in Egypt.

Pakistan claims of investments friendly climate

Mr Mohammadmian Soomro caretaker prime minister of Pakistan said that Pakistan has always welcomed foreign investment to allow friendly countries to take advantage of Pakistani markets and investment friendly policies.

He added that this trend is being encouraged so that joint investment companies can participate in industrial projects, financial services as well as infrastructure projects.

Mr Soomro said that Iran is a very important investor and trading partner of Pakistan and the relations between the 2 countries are developing very well. Besides Iran, Pakistan has JV investment companies with Kuwait, Saudi Arabia, Libya, Brunei and China. He added that this model of cooperation between institutions of friendly countries has been a catalyst to promote investment and trade between Pakistan and these countries.

He further added that "Our strategy for improving the investment climate is multi pronged marked by financial sector, trade and taxation reforms, dismantling of archaic procedures, better enforcement of civil contracts and documentation of property rights, infrastructure development and, above all, ensuring consistency and continuity of government policies."

MEA lagging in terms of energy efficiency in construction - Report

Mr Michael Ankers CEO of UK based Construction Products Association said that Middle East is lagging behind the UK in terms of energy efficiency.

He said that “I think, there is greater attention in the UK on energy efficiency than here in the kind of products used in construction, the use of water and the use of energy. Energy efficiency has not been as big a focus here as it has in the UK."

He added that, reflecting the global increase in awareness of energy efficiency issues, regional awareness of the importance of energy efficiency is expected to improve with the greater use of solar power in particular.

Mr Ankers said that the use of off site solutions is another major difference between the Middle East and the UK construction market, with the UK doing more and more work off site for components such as bathrooms. He added that "There is less focus in this region on off site solutions because labor is plentiful and cheap."

Iran asks China to join North South corridor project

It is reported that Iran has proposed China to team up with it for the India’s largest ongoing expressway project North South corridor. Iranian roads & transportation authority officials said that the proposal will be taken under advisement and responded to within 3 months.

If an agreement is reached, Beijing's goods shipment into Europe via Iran could be greatly facilitated. Bilateral trade between Iran and China could escalate to USD 50 billion in the next 10 years.

Studies are under way to investigate the feasibility of opening the East West corridor which would abet goods transportation from Iran to Iraq, Syria, Greece and Tunisia.

Iran, Russia and India are key members of the 18 member North South corridor.

Skilled worker shortage to hit oil & gas sector in MEA

According to Dr Leon Thomsen geophysicist at BP Principal, petroleum industry in Middle East Asia is currently challenged by severe shortages of skilled scientific and engineering staff.

Dr Thomsen said that the energy sector in Middle East is projected to lose 40% of its skilled workers to retirement over the next 10 years and this at a time when demand for petroleum and other commodities is reaching unprecedented highs.

He added that "At BP we understand that it is essential to nurture future talent, and we run a number of programs to educate young talent and mentor tomorrow's employees. Lectures to organizations such as the Petroleum Institute give BP the chance to speak to young people about an important, exciting, and rewarding career in oil and gas."

He informed about the role of geoscientists in the development of the oil & gas industry and said that “It may take between 7 and 10 years to train such staff, filling in job vacancies created by the retirement of the current generation of geoscientists. This effort is required to sustain and grow production levels in response to rising energy demand.”

Iran’s inter state railroad connection under consideration

IRNA quoted Mr Farhad Zohourparvaz MD of Northern Railroad Company as saying that studies are underway to connect the national railroad to Caspian Sea littoral states. He added that “When implemented, this project will connect all littoral states to one another.”

Mr Zohourparvaz recalled that Iran’s road & transportation ministry is also working on a plan to connect Gorgan to Mashhad. He added that “The plan was approved by the cabinet during its visit to North Khorasan province. The subject is being pursued by the technical projects office of the company for constructing and developing state transportation infrastructures.”

He underlined that experts are studying the construction of 4 non level junctions in Behshahr, Sari, Qaemshahr and Pol Sofid. He added that “The northern railway extends about 500 kilometer connecting Gorgan to Garmsar. There are 25 stations along this route.”

EHS design regulations for green buildings ready

Dubai World’s subsidiary Environment, Health & Safety said that its design regulations for green buildings have been ready by the end of November 2007.

As per report, the regulations will make sustainable development for any Dubai World owned project compulsory and will govern water and energy efficiency plus environmental impact in the design and development of projects.

Mr Ahmed Abdul Hussain CEO of EHS said that "The regulations for Dubai World areas will include important parameters like optimization of energy and water resources, environment protection and use of automation etc, in line with international standards."

Under the ruling, all buildings in Dubai will have to be constructed according to environment friendly green building standards from January 2008. The regulations will address sustainability with the region's unique requirements in mind.

Iran and Azerbaijan sign MoU to boost maritime trade

It is reported that Iran and Azerbaijan have recently signed a MoU on cooperation in maritime trade and shipping in the Caspian Sea.

Mr Aydin Agami Ogli Bashirov president of Azerbaijan's Shipping Company Limited and Mr Mohammad Reza Qaderi a senior official with Iran's Ports & Shipping Organization have inked the agreement.

The standardization of vessels and compliance with safety regulations as well as environmental issues are among the key points of the MoU. The agreement also calls for boosting maritime trade between the 2 neighboring countries.

EIP launches Abu Dhabi Marina project

Abu Dhabi based Emirates International Properties announced that it has launched Abu Dhabi Marina, situated off the coast of Abu Dhabi city. Construction on the AED 1.4 billion Abu Dhabi Marina project is expected to begin in 2008 with an expected completion date of 2011.

Abu Dhabi Marina's unique peninsular location will provide magnificent views of the Gulf and marina which surround the development from all sides. The mixed use waterfront development will house a 5 star hotel, hotel apartments, residential apartments, townhouses, offices and commercial space including select dining and retail outlets.

Mr Hani Shammah CEO of Emirates International Properties said that “Abu Dhabi Marina will provide Abu Dabi with a world class development in a central location. It will set the benchmark for a distinctive, integrated environment within a single, modern community surrounding the Arabian Gulf and adjacent marinas. The Marina project will undoubtedly benefit the local community in terms of entertainment, leisure and business facilities, adding to the future direction of the vibrant Abu Dhabi real estate market.”

CISA estimates 2008 crude output at 540 million tonnes

According to China Iron and Steel Association China crude steel output is expected to rise 10% YoY to a record 540 million tonnes in 2008. Its 2008 estimate was revised up from an earlier forecast of 490 million tonnes.

Chinese crude steel output for the first ten months was up by 18% YoY.

The association said that “Even though decreasing exports and rising production costs will dampen growth, domestic demand for steel will remain strong.”

Steel exports unfavorable to obsolete capacity elimination

National Development and Reform Commission in a recent report said that China's steel exports maintained strong trends in 2007 easing domestic overcapacity but have hindered obsolete capacity elimination as a result.

China daily steel output hits new highs since this year, spurred by robust demand both at home and abroad. Despite increasing of steel output, large amounts of fresh resources did not impact the market notably as steel exports eased pressure in home market.

NDRC believes that surging exports relieved domestic oversupply where the market fails to form a binding force on outdated capacity, hindering obsolete capacity elimination.

NDRC forecasts that the situation will change that international market consumes superfluous capacity and helps balance domestic supply and demand relationship. Plenty of fresh resources will flow back to home market including remarkable capacity release domestic market is expected to face great pressure.

(Sourced from MySteel.net)

Taiyuan to cut SS production in December

Interfax China cited China company official, while speaking at 2007 International Seminar on Nickel & Ferro Alloys with Stainless Steel Market in Qingdao, as saying that China's largest stainless steel maker Taiyuan Iron and Steel Co Ltd will cut stainless steel production in December in an attempt to invigorate the current sluggish market.

Mr Hao Peigang senior economist with TISCO's policy research office said "We have altered our production target for 2007 from an original 2.3 million tonnes to 2.05 million tonnes in light of the production cut scheduled for next month.” He said that TISCO has a policy of tailoring production to market demand.

Mr Hao said other major domestic stainless steelmakers, namely Zhangjiagang POSCO and Guangzhou Lianzhong Stainless Steel also plan to cut production of series 200 and series 300 stainless steel in December.

He said that China will be a net importer of stainless steel to the tune of 400,000 tonnes this year down by 75% from last year, with imports down by 26% to 1.86 million tonnes and exports growing 62% to 1.46 million tonnes.

Mr Hao said "However, economic growth, rather than fluctuating nickel prices will be the main factor determining stainless steel production and demand in China next year and predicting that China's stainless steel demand will climb over 10%YoY next year. If China's GDP grows 7% next year, China will produce 8.88 million tonnes of stainless steel and consume 7.73 million tonnes next year. While if GDP grows 10% next year, stainless steel production will reach 9.29 million tonnes and consumption will reach 8.08 million tonnes.”

The China Special Steel Enterprise Association predicts that China's stainless steel capacity will reach 12 million tonnes this year up by 20% from 10 million tonnes last year.

Shagang inks HRC supply MoU with HYSCO

It is reported that China's biggest private steelmaker Shagang Group signed MoU on November 21st 2007 with South Korea's HYSCO on HRC supply in 2008 which is the first long term cooperation framework on HRC supply with overseas end users.

Shagang has promised to provide 240,000 tonnes of high quality HRC to HYSCO in 2008.

As per report the two parties also compared notes on strengthening exchange visits and technology communication, jointly developing high value added products and broadening cooperation fields.

(Sourced from MySteel.net)

Baosteel inks 6 million auto wheels a year pact

It is reported that Baosteel Group Corp signed an agreement recently with the Shanghai Automotive Industry Corp to cooperate in the production of wheels. Mr Xu Lejiang chairman of Baosteel and Mr Hu Maoyuan his counterpart at Shanghai Automotive Industry Corp attended the signing ceremony.

A spokeswoman for China's largest car maker said "Shanghai Automotive Industry Corp will be acting in a supporting role in the new Baosteel unit. It will help meet Shanghai Automotive Industry Corp needs during our development."

Baosteel said that it has set up Shanghai Baosteel Wheels Co which will build a state of the art plant, capable of producing 6 million steel wheels per year in Baoshan District, north Shanghai. No financial details were disclosed.

Baosteel Group Corp said Baosteel is increasing spending in the auto parts sector to take advantage of a fast growing market. Shanghai Automotive Industry Corp is gradually shedding some non core auto parts manufacture.

Chinese nickel imports start to reflect lower prices

Metals Insider reported that China lower nickel prices are now starting to impact both imports of refined metal and imports of laterite ore.

The report said that at 9,257 tonnes imports of refined metal in October 2007 were the highest they have been since April. Net imports of 8,645 tonnes were the highest monthly level since February 2007.

The sharp rise in net imports is also a function of the steep fall off in exports. They were just 612 tonnes in October, the second consecutive month in which they have been below the 1,000 tonnes level.

State enterprises to see more joint stock based M&A

According to Mr Wang Xiaoqi director with the planning and development bureau of State owned Asset Supervision and Administration Commission SASAC would guide the state owned enterprises to carry on M&A on a voluntary basis which will take shareholding system as primary rather than free share assignments.

Mr Wang disclosed consolidation between Angang and Bengang would also adopt shareholding system with each other's state owned stock held by the central and provincial asset administrating bodies.

According to Mr Wang the next step is to promote state enterprises' structure reform and enhance their vitality by standardizing corporate management and diversifying investors. He predicted the state enterprises' profit growth rate this year would exceed that of 2006 and by 2015 at latest, the top 500 list will include 30 Chinese state enterprises from the present 16.

On the direction of the consolidation, the SASAC mainly calculates such points as, first, it should comply with the national industry policy; second, be lucrative to making the core business bigger and stronger; third, it can bring the enterprises' integral advantage into full play. On the modes, shareholding system will be taken as primary in future with no free assignment of shares, the shareholding reconstruction will be flexible and subject to specific conditions.

(Sourced from MySteel.net)

NDRC releases notice for annual coal contracts for 2008

The National Development and Reform Commission have recently released a notice recently that offers some guidelines for the signing of annual key coal contracts for 2008.

The notice stated that the NDRC will further market reform of the coal industry so that prices will be decided by suppliers and consumers instead of by the government.

The NDRC predicted that supply and demand will be balanced in 2008, but it also said that shortages for railway transportation still exist, and that coal shortages will occur in some regions next year. It hopes that coal contracts involving 785 million tonnes of coal for the railway industry will be signed in this round of contracts.

The NDRC also said that transportation plans for the railway industry cannot be made before the contracts are signed. It said in a similar notice last year that it will continue to link electricity prices with coal prices. The notice this year does not include such a stipulation.

China becomes net coal exporter again in October

According to statistics from China Customs, coal exports have rebounded recently and coal export has been more than the import for four straight months. In October 2007, China exported 5.25 million tonnes of coal up by 18.8%YoY while imported 3.72 million tonnes of coal up by 15.2% YoY. By then, China has been a coal exporter for four months.

Analysts said that the sharply rising price for coal in international market was the main factor encouraging China's coal exports and that the high flow will help to alleviate oversupply in domestic markets or drive up domestic coal price.

In order to curb exports of resource oriented products China has decided to cancel the export tax rebate from coal from January 1st 2004 and impose 5% export tariff on coal from November 1st 2006. Under such circumstances, coal exporters' profits were squeezed. Plus the strong demand in domestic market, domestic coal makers suspended all exports except some long term export contract.

Insiders pointed out that sharply rising price for coal in international market was the main factor contributing to China's coal export rebound. Some analysts said that export rise would drive up domestic coal price against the backgrounds that China's coal growth slowed down while domestic demand became stronger and stronger. Therefore, the export rise would not last too long.

In fact, domestic coal price keeps on climbing up without any signs of stopping rising. And domestic coal price for 2008 contract is expected to go up by another CNY 30 per tonne.

(Sourced from MySteel.net)

NDRC examines Shanxi's progress of eliminating obsolete capacity

It is reported that National Development & Reform Commission has recently conducted a spot inspection of facilities that should be closed in Shanxi's Quwo County.

During the inspection, it was seen that two 110 cubic meter blast furnaces had not been torn down, despite the fact that they had stopped operating. Another three small blast furnaces had been only partially dismantled.

According to the NDRC's requirements, backward facilities must not only be shut down, but also destroyed to prevent them being restarted after such inspections.

Shanxi is required to eliminate 10 million tonnes per year of iron making capacity this year according to an agreement between the province and NDRC that was signed in April 2007.

NDRC admitted that the local government faces immense pressure in solving problems like replacing tax income and unemployment that go hand in hand with closing facilities. Without a government compensation plan, some companies with debts and legal issues may not be able to demolish facilities.

(Sourced from MySteel.net)

Coal mine blast kills 9 in Yunnan

Xinhua reported that a coal mine gas explosion killed nine and injured another six in southwest China's Yunnan province on Sunday.

The accident happened in Shizishan Colliery of Zhenxiong County, Zhaotong City at 8:30AM on Sunday. 8 people died at the scene and another one died later in hospital. Of the injured, two are still in critical condition.

The head of the coal mine and people in charge of production safety have been held by local authorities. Investigation into the cause of the accident is underway.

China Shipping Container Line gets nod for IPO

Xinhua reported that China Shipping Container Lines Company Ltd recently got nod from the China Securities Regulatory Commission for its A-share initial public offering.

China Shipping Container Lines Company Ltd which owns and operates the country's largest container fleet, plans to raise at least CNY 12 billion through the issuance of 2.34 billion new A shares. According to the company's prospectus to the China Securities Regulatory Commission the new A-share issuance would account for 20% of the total number of stocks issued.

After the issuance, the State owned China Shipping Company would decrease its stake in China Shipping Container Lines which is already listed in Hong Kong from 59.87% to 47.89% and CNY 8.8 billion of the proceeds would be used to buy eight container ships in China and an additional eight from overseas. About CNY 2 billion would be used to purchase assets including stakes in container leasing companies and CNY 1.2 billion would be earmarked for replenishing cash flow and paying banking loans.

According to China Daily as the world's 10th largest container liner, the Shanghai based China Shipping Container Lines Company Ltd now manages 151 container ships. Its total operating capacity ranks sixth in the world at 427,107 TEU. The company operates 74 international lines and 17 domestic lines

Magang become model for energy management in Chinese steel industry

It is reported that Magang new area’s energy controlling center has become a model for china’s steel industry to realize the energy management modernization.

On November 22nd 2007, leaders and experts from Masteel and Baosteel unanimously thought that Magang’s EMS had reached the highest level in energy saving and environmental protection, information capabilities and equipment localization rate.

At present, the existing domestic iron and steel enterprises will be based on Magang’s new energy management Magang new model, upgrade the behindhand energy management system.

Novolipetsk Steel 9 months 2007 US GAAP results

Novolipetsk Steel has announces its consolidated results for January to September 2007.

Highlights for NLMK January to October results:
1. Revenues amounted to USD 5.545 billion up by 29%YoY
2. Operating cash flow reached USD 1,979 billion
3. EBITDA amounted to USD 2,463.2 million up by 35%YoY with EBITDA margin of 44% up by 1% YoY

Key financials for nine months ended September 30th 2007

In USD millions

Disposals of non ore assets in accordance with its internal restructuring plan
1. Disposal of stakes in energy assets for USD 78.7 million in February 2007. Proceeds from the transaction were directed to the modernization and development of in house energy facilities;
2. Disposal of the Company’s 54.88% stake in OJSC Lipetskcombank for USD 47.7 million in June 2007.

Total CAPEX in January to September 2007 reached USD 616 million. In Q3 of 2007, the major projects under way as part of Phase 2 of the Technical Upgrading Program were as follows
1. EUR 23 million contracts signed with Siemens VAI of Germany to supply two new 160 tonne ladle furnaces for BOF production at the Company's main site in Lipetsk
2. EUR 33 million contracts signed with Sundwig of Germany to supply an additional pre painting line, with an annual production capacity of 200,000 tonnes of steel.
3. Commissioning the group’s third pre painting line will lift galvanized steel capacity to 1.1 million tonnes, including 0.6 million tonnes of pre painted steel.
4. Commissioning a new high tech 300,000 tonnes per year pickling line for hot rolled grain oriented and carbon steel at the Lipetsk production site.
5. Continuous furnace #4 relined increase production capacity of the hot rolling mill.

Ms Galina Aglyamova VP Finance & CFO of NLMK said that "NLMK has demonstrated strong financial results in January to October 2007. Operating income surged 30%YoY basis and the EBITDA margin stood at 44%. The company’s sound performance was driven by a favorable pricing environment in our core markets, improved sales mix and implementation of a number of important projects within Phase 2 of the Technical Upgrade Program.”

She said “This year, some negative one off factors influenced our performance, such as the technical malfunction of blast furnace number six and non compliance with coal supply terms caused by accidents at major Russian coal mines. Nevertheless, NLMK managed to meet its planned production volumes, demonstrating the sustainability of the Company’s business model.”

She added that “We expect that NLMK will demonstrate strong financial results for the remainder of 2007 and maintain its position among world’s most profitable steelmaking companies."

Volgograd regional gas pipe ruptures

Itar-Tass reported that the backup branch of the trunk Central Asia Center gas pipeline ruptured on the 485th kilometer of the pipe that triggered the fire at 18.50 Moscow time on Saturday. The site of rapture is far from settlements and no casualties were reported.

Mr Sergei Ledyashov assistant director general of the Volgogradtransgaz Company said that Mr Ledyashov said “Volgogradtransgaz emergency workers, bulldozers, pipe-layers and excavators arrived at the accident site in the Alekseyevsk district of the Volgograd region. The fire is less than ten meters at the rupture site. The gas supply in settlements was cut, fuel supplies will be made along other gas pipelines.”

He said that “It is impossible to begin restoring the gas pipeline until all gas burns down at the place, where the backup branch of the Central Asia Center gas pipeline ruptured.”

UES board approves formation of 5 inter regional grid firms

Interfax reported that the board of directors at RAO UES has approved the terms for forming five inter regional distribution grid companies namely IDGC Center, Volga, Urals, North Caucasus and South. The formation of the IDGCs will be completed in the second quarter of 2008.

The additional issue of common shares by IDGC Center for conversion of shares of regional distribution companies was approved for 42.118 billion shares, IDGC Volga will issue 178.515 billion shares, IDGC Urals will issue 89.809 billion shares, IDGC North Caucasus will issue 29.389 million shares and IDGC South will issue 80.789 billion shares.

The preferred shares of regional distribution companies will be converted into common shares of IDGCs at 0.9158.

In the event any regional distribution company shareholders vote against the merger with an IDGC the company will become a subsidiary of the IDGC which will require an additional share issue in favor of UES to be paid with the share package in the regional distribution company.

The directors approved the parameters for those additional share issues at 21.106 billion shares for IDGC Center, 57.349 billion shares for IDGC Volga, 44.944 billion shares for IDGC Urals, 11.201 million shares for IDGC North Caucasus and 38.990 billion shares for IDGC South.

UES's share in the charter capital of the IDGC Center, Volga, Urals, North Caucasus and South companies will ultimately be at least 50% +1 share.

Iveco and Saveco JV breaks ground for auto plant in Semonov

Interfax reported that a JV between Fiat subsidiary Iveco and Russia's Samotlor-NN industrial group, Saveco has begun building a plant in the Nizhny Novgorod town of Semonov to produce Iveco Daily light commercial vehicles. The plant will be located on more than 20,000 square meters on the premises of NPP Semar and is scheduled to open in the first quarter of 2009.

Mr Paolo Monferino president of Iveco, at a press conference after the ground breaking ceremony, said that “More than EUR 50 million would be invested in the joint venture and plant construction. He said that the plant will include a welding shop, paint shop, body assembly line and a warehouse for finished products. There will also be an automobile finishing and testing facility.”

Mr Monferino said once the venture achieves capacity, it will aim to win a 15% share of the Russian market for light commercial vehicles. He said that “The vehicles produced at the venture in Nizhny Novgorod region will not be any different from those produced in Italy. Production will not be restricted to vans. The venture will build specialized vehicles, especially AWD. He said some 70% of Saveco's vehicles will be automobiles with the maximum allowable weight of more than 5 tonnes, so the venture is positioning itself in a different segment and will not compete with Russia's GAZ.”

The Iveco Daily, a light commercial vehicle with capacity of up to 6.5 tonnes, will be produced under the Iveco brand and sold in Russia and other CIS markets through the distribution network of both partners.

Ukraine preparing for entry in WTO

Ukrainian Journal Staff reported that the Ukrainian government has approved four minor regulatory issues aimed at clearing the way for the country’s accession to the World Trade Organization next month. Ukraine’s accession to the WTO will also open way for a free trade agreement with the European Union, further strengthening trade ties between the two.

Mr Mykola Azarov first deputy prime minister & finance minister of Ukraine said that “Today we approved four decisions closing outstanding regulatory issues. In other words our team will have a complete set of papers showing we have fulfilled all conditions for the WTO accession.”

Ukraine is expected to send the team to Geneva in early December for the final round of talks and expects to get invited to a December 19th 2007 meeting of the WTO for the formal accession.

Ukraine was deadlocked for years in talks with Kyrgyzstan over a disputed USD 27.3 million debts that Bishkek claims has been owned by Ukraine since the break up of the former Soviet Union. But the breakthrough in the talks with Bishkek came last week after Ukraine had suggested sending USD 27.3 million humanitarian aids to Kyrgyzstan.

Sovkomflot set for IPO in 2008

RIA Novosti cited Mr Sergei Frank CEO of Sovkomflot as saying that Sovkomflot plans to prepare for an IPO in 2008. Mr Sergei Frank said "We would like the company to be ready for that by 2008."

Sovkomflot, 100% owned by the state, owns a fleet of 56 vessels with a total deadweight of over 4.3 million tonnes. It specializes in the transportation of energy products by sea.

Gazprom and Dow study Valanginian gas processing JV

It is reported that Dow Chemical and Gazprom are studying the possibility of forming a JV for Russia and Germany related to high value hydrocarbon procession.

Gazprom said "In pursuance of the Memorandum within the examination of the issue related to participation in extraction of light hydrocarbon mixtures in the Valanginian deposits of the Yamal Nenets Autonomous Okrug and its processing at the petrochemical large capacity complexes in the territory of the Russian Federation. The Dow Chemical Company, Gazprom and Sibur Holding will examine an opportunity to set up a JV."

Following the meeting, the parties will create a working group to evaluate the economic feasibility of the project including the creation of the JV and the preparing of a draft agreement for further joint technical and economic research.

According to Gazprom, the document outlines the creation of a JV based on the new petrochemical production facilities of the Dow Chemical Company in Germany, the joint natural gas processing in the Valanginian deposits of the Yamal Nenets Autonomous Okrug as well as possible cooperation in other sectors.

Dow Chemical Company is the largest chemical company in the US operating in more than 175 countries and with 2006 annual sales and net profit of USD 49.1 billion and USD 3.7 billion respectively.