TATA Motor launches revolutionary USD 2,500 car

TATA Motor has launched the much awaited world's cheapest car. The 33 HP 624 CC Nano will come at a dealer price of INR 100,000.

Mr Ratan Tata chairman of TATA Group said that the project was started 4 years ago despite rise in the price of inputs such as steel since. He added that “A promise is a promise.”

Mr Tata also said that Nano fully meets safety and emission standards. He added that the car has passed the full frontal crash test and meets Euro IV emission norms. It can accommodate 4 to 5 people.

The car will be manufactured at the company's Singur facility in West Bengal.

Goa urges to finance minister for not increasing export duty

It is reported that Goa Mineral Ore Exporters’ Association will soon lead a delegation to the union finance minister to urge him not to increase the export duty on iron ore.

Mr Shivanand Salgaocar president of the GMOEA said that “There is a move now to impose export duty. Low grade ore is being exported from Goa. With the export duty contemplated, the export of ore become completely unviable so it will continue to lie as dumps.”

He added that “We in Goa would be severely affected by this export duty. It will also have an environmental impact because the ore will continue to lie as dumps. We are planning of going next week and appeal to the finance minister. I am sure the state government will help us.’

Mr Salgaocar said that total export of iron ore from Goa came down by 11% on April to December 2007 period due to export duty and problems at berth number nine.

He emphasized that the mining industry in Goa was not violating any norms. He stressed that “The mining industry is critical to the economy of Goa. It not only provide direct employment but there are also ancillary industries like the transport industry, the workshops that go with them, the barge industry, the activities in the harbor in the Mormugao Port Trust, the trans shippers, the multiplier effect is quite substantial. There are about 9,500 people employed directly in the mining and barge industry and it gives indirect employment to about 35,000 people. The second issue is the issue of pollution. The industry gives revenues to the department of mines and revenues to the government of India.”

Mr Salgaocar further added that “We are contributing to the national exchequer, contributing to the local economy and we are contributing to the social benefit. We are meeting with our social obligations. On a combined basis we formed the mineral foundation and it adopted 2 villages one each in the two districts of Goa.’

ISSDA calls for doubling import duty on Chinese CR SS

It is reported that, in its pre budget memorandum to the finance ministry, the Indian Stainless Steel Development Association has suggested that customs duty on value added stainless steel cold rolled coils should be doubled to 10% so that India does not turn into a dumping ground for Chinese manufacturers.

Mr NC Mathur president of ISSDA said that “The China factor is slowly becoming a serious concern for the stainless steel industry. China has built up huge production of the metal, accounting for over 25% of global production. With such huge capacities, China may soon upset the global trade of stainless steel and may even resort to dumping. We need to be prepared for this change. While we would aim to improve quality, reduce cost and become competitive, the government should also come to the aid of the industry by providing basic protection from this very real fear of dumping.”

ISSDA has also suggested that duty structure on basic inputs going into stainless making should be scrapped. It has said that the present 5% duty on stainless steel melting scrap should be withdrawn and similarly, duty on nickel products including unwrought nickel, unalloyed nickel, nickel oxide sinter and ferronickel should be brought down from 2% and 5% levels to zero.

Mr Mathur said that “The duty cuts would cost the exchequer less than INR 350 crore in revenue loss while it would help industry earn revenue several times this amount and give it the necessary boost to invest INR 15,000 crore to double stainless steel production by 2010.”

He added that “The government is looking at providing relief to common people through this year’s budget. Duty cuts for the sector would also help in bringing down the price of stainless steel kitchen utensils that constitutes 70% of the market for domestically produced metal.”

India is a small importer of stainless steel but rising input cost is affecting the competitiveness of the industry. The imports have grown by 50% from a level of 10,000 tonnes in 2006 to 15,000 tonnes in 2007. The imports should be viewed in the context of domestic consumption that is mere 1.3 million tonnes against a production of about 2 million tonnes.

Indian Railways freight traffic in 9 months up by 8.23% YoY

Indian Railways has carried 571.4 million tonnes of revenue earning freight traffic during April to December 2007 period up by 8.23% YoY as against 527.95 million tonnes during April to December 2006 period.

The total approximate goods earnings of Indian Railways during April to December 2007 are INR 34126.27 crore up by 11.77% YoY as compared to INR 30533.39 crore during April to December 2006.

During the month of December 2007, the revenue earning freight traffic carried by Indian Railways was 70.03 million tonnes up by 10.18% YoY as against 63.56 million tonnes during December 2007.

SCI plans shipyard project

It is reported that Shipping Corporation of India is planning to start building ships and is in talks with private shipbuilders at home and abroad for a shipyard project that will cost around INR 4,000 crore.

Mr S Hajara CMD of SCI said that ''We are negotiating with both Indian shipbuilders as well as foreign companies. An agreement is expected to be formalized in 2 month's time.''

He added that Indian shipbuilders with whom SCI is in talks already have the land to house the new venture. If the SCI decides to go with a foreign partner, it will have to approach the centre or the respective state governments for allotment of land.

SCI is a mini ratna public sector unit, which empowers its board to invest up to INR 500 crore without having to seek approval from the Union cabinet. It plans to rely on debt to fund the JV shipyard project. Currently, SCI operates 83 ships with a capacity of 4.8 million DWT, which accounts for 35% of India’s total shipping tonnage.

It has placed orders for another 28 ships amounting to around 2.4 million DWT that will cost around INR 6,500 crore. The orders include container ships, tankers, bulk carriers and anchor handling tugs. Over the next 3 years, SCI plans to place orders for another 50 vessels, subject to government approvals. It plans to achieve a total tonnage of 8 million DWT by 2011.

SAIL BSP gives land for technical university

IANS reported that Steel Authority of India Limited’s Bhilai Steel Plant has agreed to give 250 acres to Jharkhand government to set up the Chhattisgarh Swami Vivekanand Technical University.

The MoU for the land transfer was signed by Mr SK Kujur Jharkhand’s state's technical education secretary and Mr PK Agrawal ED of BSP in presence of Dr Raman Singh chief minister of Jharkhand.

According to the MoU, BSP would provide INR 500 million besides the land to the state government for developing infrastructure for the university.

Jharkhand government would reserve 50% of the seats in postgraduate studies in certain courses such as steel technique and material handling for SAIL employees while a few seats would be reserved for SAIL employees' children in other courses.

Jharkhand government established Chhattisgarh Swami Vivekanand Technical University through an Act passed by the Chhattisgarh assembly January 21st 2005 to ensure systematic, efficient and quality education in engineering and technological subjects. Prime Minister Manmohan Singh laid the foundation stone of the university April 30th 2005.

Sesa Goa shareholders approve FII limit hike to 45%

Sesa Goa has announced that its shareholders have approved the resolution to enhance the foreign institutional investors’ investment limit from 24% to 45% of the paid up equity share capital.

The total FII holding in the company was placed at 21.08% as on September 30th 2007. However, top among the FIIs, Genesis Asset Manager LLP, reduced its holding by offloading in the market in November 2007 as a result, its holding has come down to 2.08%.

Going by Sesa Goa’s communications, the current FII should be 17.59%. Overseas non promoter holdings have remained dispersed, most of them being less than 1% and do not get individually reflected in the official shareholding data.

After an open offer for 20% shares, which closed in September 2007, the promoter holding did not change significantly and moved up only by 0.18% as the response to the offer at a price of INR 2,036.30 was miniscule.

It is noted that Vedanta Resources plc had acquired 51% controlling stake in Sesa Goa Limited from Mitsui & Company Limited in April 2007.

Crude oil may reach USD 150 a barrel in 2 to 3 years - Report

Mr MS Srinivasan union secretary for petroleum & natural gas, while addressing the delegates at New Exploration Licensing Policy VII, said that in the next 2 to 3 years crude oil prices could reach USD 150 per barrel levels.

Mr Srinivasan said that given this scenario the government is putting more efforts in oil exploration and production. He added that in the first round of NELP only 11% of the sedimentary basins were explored for oil and gas, and in the current round the figure has increased to 44%. By end of the 11th five year plan, the government plans to explore 85% of the sedimentary basins.

He said under the current NELP, 57 oil and gas blocks are being offered to national and international oil companies. Of the total blocks, 9 are in shallow waters, 19 in deep sea and 29 on land. The bids for NELP VII would close on April 11th 2007.

Mr VK Sibal director general of Directorate General of Hydrocarbons said that the government wants global companies, including Exxon Mobil and Chevron Corporation to explore for oil and gas in the country. The Government is trying its best to get the big oil companies to bid for the new blocks. He added that it is expecting a major increase in the number of bidders for the 57 blocks as India has a transparent system in awarding the blocks. Mr Sibal said that in comparison to the pervious rounds, NELP VII offers a variety of blocks, from very small onshore blocks to major deep water blocks. ONGC plans to bid for about 40 blocks of the 57 blocks.

SER traffic in 9 months up by 11.3% YoY

South Eastern Railway has posted 80.5 million tonnes of revenue earning freight during April to December 2007 period up by 11.3% YoY as against 72.3 million tonnes in April to December 2006 period. The freight earnings during the period was INR 3,863 crore up by 8.5% YoY.

The item wise break up is as under
1. 48.7 million tonnes of iron ore
2. 13.6 million tonnes of coal
3. 8.2 million tonnes of pig iron and finished steel
4. 4.5 million tonnes of cement
5. 2 million tonnes of general merchandise
6. 1.4 million tonnes of raw materials for steel plants
7. 1 million tonne of petroleum products

PGCIL eying USD 3.6 billion overseas loans

It is reported that Power Grid Corporation of India Limited is planning to tie up overseas loans of up to USD 3.6 billion in the current fiscal.

As per report, out of the overseas loans of USD 3.6 billion, PGCIL expects to complete negotiations for a USD 600 million loan from the World Bank in January 2008 and shortly follow this up with negotiations for another USD 600 million with the Asian Development Bank. Another USD 400 million will be tied up later. Loans of up to USD 1.6 billion will have sovereign guarantee.

Mr RP Singh chairman of PGCIL said that it will issue a USD 1 billion global tender in February 2008 for equipment for an 800 KV HVDC transmission line connecting the North East to the western and northern regions. He added that the tender will be on a supplier credit basis. Bidders will also arrange the financing and bids will be evaluated not only on technical and cost parameters but also on terms of finance offered.

Power Grid’s capital expenditure for 2008-09 is expected to be INR 8,500 crore and it hinges on the progress of generating projects. The budgeted capital expenditure for the 11th Five Year Plan is INR 55,000 crore. It expects to end the current fiscal with revenues of INR 5,000 crore.

RINL to be assessed for PM’s trophy for “Best Integrated Steel Plant”

It is reported that a four member team of the administrative staff college of India will assess RINL Visakhapatnam Steel Plant for the Prime Minister’s trophy for the “Best Integrated Steel Plant” for 2006-07.

The team members would assess the performance, processes and efficiency of operation, productivity of blast furnace, steel furnace and labor and customer satisfaction and improvements brought in over 2005-06 by VSP. They would visit the places of peripheral development and CSR activities and areas of upstream and down stream units.

RINL has won the PM’s trophy for 2004-05 and 2005-06.

Suzlon’s Chinese subsidiary bags 2 turbine orders

Suzlon Energy Limited announced that its wholly owned subsidiary Suzlon Energy (Tianjin) Limited of China has signed 2 new orders with China's leading power project developer Jingneng Group.

The contracts call for a total of 100 MW of capacity, to be delivered by May 2008 of which the first order calls for a delivery of 33 units of S82 1.5 MW turbines and the second for 40 units of S64 1.25 MW turbines.

Hindustan Construction incorporates new SPV in Singapore

Hindustan Construction Company Limited has announced that it has incorporated a special purpose vehicle company HCC Singapore Enterprises Private Limited as its wholly owned subsidiary for promoting its business including those of the group companies.

Its wholly owned subsidiary HCC Real Estate Limited has also incorporated a special purpose vehicle company Charosa Wineries Limited for undertaking wine business.

Simplex bags INR 481 crore order for Maithon power project

Simplex Infrastructures Limited announced that it has bagged an order worth INR 481 crore for the 1,050 MW Maithon thermal power project from the JV company promoted by TATA Power and Damodar Valley Corporation. The project is scheduled for completion in 2 and half years.

Simplex Infrastructures’ order book as on date stands at INR 8,994 crore, including the value of unexecuted orders as of September 30th 2007 and the new orders received since then till date.

Coal smuggling racket busted in Paradip port

SNS reported that coal smuggling racket has been busted by the intervention of Paradip police and CISF personnel in Paradip port area in Orissa. Police has arrested 5 smugglers including 1 security guard and has seized 2 coal loaded trucks from Paradip town.

It is noted that frequent coal smuggling from port areas has been brought harassment for Paradip port authorities as well as different transport agencies. Even police failed to get any clue no nab the smugglers. Similarly different transport agencies have been facing heavy loss of export and import of coals and other cargoes.

Locals have alleged that nexus between Paradip port staff and other security guard of different factories with truck drivers and owners are main cause of rise of smuggling.

Similarly, coal racket smuggling has been busted by the intervention of CISF and the police. After loading coking coal from harbor areas, three trucks tried to abscond from CISF clause at gate no 1 of the port harbor. Even the drivers of these trucks did not show any documents or register about their transporting of goods at the gate so CISF personnel suspected on their activities. Later CISF personnel cashed them and the truck drivers and helpers left the place after leaving their stolen coal.

Production halted in NALCO due to fire mishap

SNS reported that aluminum production in NALCO smelter plant was hampered due to a fire mishap near its switch yard. The authorities stopped the power supply to the smelter plant following the fire. It also shut down two 120 MW units of its plant.

Preliminary reports indicate at a short circuit on a line drawn from the smelter to the power plant. The fire spread due to the wild grass growth in the area. Details on the extent of damage are awaited.

Jindal Drilling to foray into oil exploration & production

It is reported that Jindal Drilling & Industries Limited is planning to enter into oil exploration and production and jointly bid for oil and gas blocks being offered by the Indian government.

Mr Naresh Kumar MD of Jindal Drilling said that "We intend to make a foray into E&P by taking certain stakes in certain blocks." He added that it is in talks with overseas and domestic exploration firms to bid jointly.

Mr Kumar said that Jindal Drilling, which has 2 rigs on charter, has ordered 2 more rigs from Keppel Corporation and plans to add 1 to 2 rigs each year over the next 4 years.

RKKR doubles Krishnapatnam steel project size

BL reported that Chennai based RKKR group’s newly formed company SBQ Steels Limited, which was putting up a 250,000 tonne integrated alloy steel plant at Krishnapatnam at an investment of INR 500 crores, plans to double the capacity to 500,000 tonnes at a revised cost of INR 1,100 crores.

As per report, this decision was taken due to tremendous response received from user industries in the Chennai Sriperumbudur belt, especially from the anchor customer Caparo Industries. Mr Rajiv Rai chairman of RKKR group said that Caparo will buy a third of SBQ’s production.

Mr Rai said that phase 1A of the project, consisting of 1 blast furnace and a sinter plant, will produce 250,000 tonnes of foundry grade pig iron, market for which exists close by. This unit will consume investments of INR 300 crore and will be production ready by September 2008.

He added that Phase 1B, to be put up at a cost of INR 400 crore and completed by March 2009, will produce 0.5 million tonnes of steel, essentially meant for the auto industry.

He added that “SBQ is looking for a technical partnership with a Japanese or European specialty steel manufacturer, so that the products manufactured are to international specifications.”

Meanwhile, the RKKR group has also evinced interest in putting up a 1,200 MW merchant power plant in Nellore district, based on imported coal. It has also approached the Jharkhand government to set up a 2 million tonne integrated steel plant in the state.

FII can purchase equity shares of Gujarat NRE

Gujarat NRE Coke Limited announced that Reserve Bank of India vide its press release dated January 8th 2008 has notified that FII can now purchase equity shares of Gujarat NRE Coke Limited through primary markets and stock exchanges in India up to 74% of the paid up capital of the company.

The release said that “This will pave the way for increased participation by foreign investors who are keen to join and share in the prosperity of the company.”

RITES issues bonus shares worth INR 36 crore

RITES Limited has announced issue of bonus shares of INR 36 crore to its existing shareholders in the ratio of 9 shares for 1 share held in the company. The paid up capital with this bonus issue will stand increased to INR 40 crore from INR 4 crore. The entire paid up capital of the company is held by the Government of India.

RITES has also decided to split face value of its share from INR 100 to INR 10 each. The shareholders have also approved increasing the authorized capital to INR 100 crore. It has accumulated reserves of INR 521 crore as on September 30th 2007. Incidentally, RITES has proposed raising funds through an initial public offering for which the cabinet approval has not yet come through.

RITES has an operational experience in over 60 countries and is a multi disciplinary organization of consultants, project managers and engineers in transport and infrastructure sector such as railways, highways, urban transport, ports and harbors, airports, inland waterways, ropeways, concession and export packages of rolling stock.

Nucor and Duferco ink beam JV for Europe

Nucor Corporation announced the signing of a MoU with the Duferco Group to establish a 50:50 JV for the production of beams in Italy and the distribution of beams in Europe and North Africa. The two parties will immediately begin the tasks necessary in order to establish the JV company by mid 2008. The JV will encompass the Duferco Group's Duferdofin subsidiary and associated distribution companies.

The release said that final agreement to establish the joint venture company will be dependent on completion of appropriate due diligence, approval of appropriate regulatory bodies, and approval of the Boards of Directors of both companies.

The Duferco Group's wholly owned subsidiary, Duferdofin, is the leader in beam production in Italy and South Europe. Production of beams and other long products from Duferdofin's plants in San Zeno, Pallanzeno and Giamorro exceeded 900,000 metric tonne in 2007. A new merchant bar mill is under construction in Giamorro and is expected to be operational in the fall of 2008. Additional investments in the Italian operations are under review by the two companies.

Nucor is the largest producer of beams in North America, with a 2007 beam production of approximately 3 million tons. Nucor is recognized as a world leader in the efficient combination of technology and people to serve its customers with the highest quality products and customer service. As part of the contemplated joint venture, Nucor would bring its considerable technical and commercial expertise.

Mr Bruno Bolfo chairman of Duferco said that "In a rapidly consolidating steel industry environment, Duferco has chosen the direction of strategic alliances with major players in order to continue operating on a global level. We have the culture and experience to successfully develop these alliances for the ultimate benefit of both our customers and our employees. We have enjoyed an excellent business relationship with Nucor over the years, and the prospect of a structured cooperation with our American friends is certainly an attractive step, given their impressive record of operating excellence.”

Mr Dan DiMicco CEO & Chairman of the Board of Directors of Nucor said that "for the last few years we have been saying that Nucor would enter into international steel production through joint ventures with culturally compatible partners where Nucor can leverage its particular operating know how and intellectual property. We have been working with Duferco for some time to find the right fit for our two companies. We look forward to successful completion of the activities ahead to conclude the formation of this joint venture."

POSCO Q4 earning drop by 20%

POSCO, the world's fourth largest steelmaker announced that its Q4 earnings dropped about 20% largely due to weak demand for steel products and reduced steel production.

POSCO in a statement said that its net profit reached KRW 713 billion (USD 762 million) in the October to December 2007 period, down by 20.3% YoY from KRW 895 billion in October to December 2006. Its Q4 operating income fell by 20% YoY to KRW 875 billion, while sales edged up by 0.5% YoY to KRW 5.43 trillion.

The steelmaker said its profit decrease resulted from large price increases for iron ore and coal because of booming demand as well as supply constraints. Also, weak demand for stainless steel and a production reduction were cited as major reasons for the profit fall.

Last month, POSCO said it started in early December to cut monthly stainless steel output, responding to slower demand. The steelmaker also cut stainless steel product prices by 10.5% in December after the cost of nickel, used to make the alloy, fell.

Mr Lee Ku taek CEO of POSCO said that "Fourth quarter profit was below expectations because of negative market conditions. First quarter operating profit is likely to rebound to about KRW 1 trillion.”

Mr Kim Kyung choong an analyst at Samsung Securities said that "POSCO's performance in the second half of last year was not good because of weak demand for stainless steel and falling production.” He added that although its business outlook is still bright for the year, is faced with rising material prices and the impact of the subprime crisis.

POSCO had expected the stainless steel market to recover in the fourth quarter of last year, but growing concern about the aftermath of the credit squeeze has put renewed pressure on the sector.

US steel imports in 2007 down by 26% YoY

Based on the Commerce Department’s most recent Steel Import Monitoring and Analysis data, the American Iron and Steel Institute reported today that steel import permit applications for the month of December 2007 totaled 2,107,000 net tons. This was a 11% decrease from the 2,355,000 permit tons recorded in November 2007, a 8% decrease from the November preliminary imports total of 2,280,000 net tons.

Import permit tonnage for finished steel in December 2007 was 1,712,000, a decrease of 11% from the preliminary imports of 1,922,000 net tons in November 2007. YTD total and finished steel imports were 4% and 7% higher respectively, than in 2005, but 26% and 25% below the record levels of 2006.

For December 2007, the largest volumes of finished steel import permit applications for countries outside of North America were China 185,000 net tons, Korea 105,000 net tons and Japan 98,000 net tons.

For full year 2007, the largest offshore suppliers of finished steel imports were China 4,582,000 net tons, South Korea 2,044,000 net tons and Japan 1,491,000 net tons. Imports of finished steel from China last year were 14% below record 2006, but roughly double the amount in 2005.

Mr Andrew G Sharkey III president & CEO of AISI said that “While imports decelerated during the second half of 2007, steel import totals for the year were at elevated levels. In 2007, there were strong concerns about trade and market-distorting practices in the global steel sector, and about ongoing high levels of imports in certain product categories. China, a non market economy, remained of particular concern. Not only did China continue as the largest offshore supplier of finished steel to the US and NAFTA region in 2007, but we also saw record imports of downstream steel products and of steel-containing goods in general from China last year.”

German crude steel production in 2007 up by 2.8% YoY

According to Germany’s Federal Statistical Office, Germany's raw steel production rose by 2.8% YoY to 48.55 million tonnes in 2007, Meanwhile, pig iron production climbed by 2.3% YoY to 31.07 million tonnes.

In December 2007, 3.75 million tonnes of raw steel were produced, down by 2.5% YoY, compared to the previous year and the pig iron production slipped by 1.3% YoY to 2.56 million tonnes.

On a monthly basis, output dropped 6.9% in December and the calendar and seasonally adjusted production fell by 2.7%.

A spokeswoman for the German steel industry association said that "We practically cannot produce more since steel mills are working near their capacity limits.”

PT Krakatau to cut steel exports in 2008

Reuters reported that Indonesian state steel firm PT Krakatau Steel plans to cut exports of hot rolled coil and cold rolled coil by 50% this year to meet rising domestic demand.

The report quoted Mr Irvan Kamal Hakim marketing director of Krakatau Steel said that Krakatau Steel plans to export 125,000 tonnes hot rolled coil and cold rolled coil combined this year, compared with 250,000 tonnes in 2007. He added that "We may cut steel exports by half this year because domestic demand is rising."

Mr Hakim said the rise in local demand will come from a number of national projects such as power plants and ship building projects.

Mr Hakim said the company planned to increase production capacity to 5 million tonnes a year in 2010, from 3.1 million tonnes. He added that the lack of raw material at home has forced the company to import iron pellets from South America and it plans to import pellets from India and Australia in 2010.

Hot rolled coil is used in construction, ship building and oil and gas pipelines while cold rolled coil is often used in products such as automobiles and pipelines.

Japan steel mills to hike SBQ plates prices for South Korea

JMB reported that Japanese integrated steel makers prepare for wide hike offer for shipbuilding steel plate for South Korean shipbuilders for fiscal 2008 starting April.

The steel makers try to increase the price under tight supply and potential wide cost increase for iron ore and materials. They could offer FOB USD 900 to USD 1,000 per tonne compared with USD 630 to USD 640 for fiscal 2007. It added that some makers study to shift from current USD base to yen based contract to avoid foreign currency risk.

Australian coal port gets state environment approval

Bloomberg reported that Australia's Queensland state gave environmental approval for an AUD 3.5 billion (USD 3.1 billion) coal export terminal near Gladstone on the northeast coast.

Queensland Acting Premier Mr Paul Lucas in statement said that approval for the Wiggins Island project, which is subject to conditions, is for the construction in three stages of a terminal with a capacity to export as much as 84 million tonnes a year of coal.

Rising coal demand from Asia is causing congestion at Australian ports and on railways as mining companies seek to expand output. The Wiggins Island project, led by the Central Queensland Ports Authority, will boost coal export capacity at Gladstone port to 150 million tonnes a year.

Mr Lucas said that “Wiggins Island will greatly enhance Queensland's ability to get our number one export across the seas to 33 potential markets. More than 20 coal companies have already expressed interest in any extra capacity we can provide.''

He added that the first, AUD 1.3 billion stage of the project will involve building capacity for 25 million tonnes a year of exports, to be complete by 2012. Construction of the project, which still requires federal government approval, may start early next year. He further added that the government started an environmental study for an AUD 500 million railway upgrade to transport coal to the terminal.

GM switching to alternates to cut production costs

YIEH reported that in response to fluctuating global prices on key materials used in the automotive industry including palladium, aluminum, steel and plastics are causing GM to come up with a more flexible purchasing strategy.

To cut costs, GM is switching from zinc alloy die castings to magnesium die castings. They'll also be replacing cosmetic stainless steel with porcelain coatings.

Further, the company is replacing flat rolled steel with sheet molding compound and using custom 465 stainless and surface treated stainless steel to replace titanium alloys on aircraft.

CEZ signs MoU with US Steel Slovakia to build power plant

Thomson Financial reported that Czech power group CEZ has signed a MoU with US Steel Kosice, the Slovak unit of US Steel, to build a power plant with a capacity of up to a 400 MW in the steel group's Slovak premises.

CEZ said the two companies will complete a study of the project in the first half of this year to determine the size of the plant and the fuel to be used.

US imports of SS plate in November drops

According to the data issued by the US Census Bureau in November 2007, stainless coil and plate import in US dropped sharply to 762 tons year on year compared to last year’s 6,630 tonnes and also by 70% drop compared to last month’s 2,510 tonnes.

Discrete plate import increased by 42% to 6,225 tonnes in November 2007 compared to October 2007, but still down by 12% YoY as compared 7,050 tonnes in October 2006.

Xstrata Nickel completes Nickel Rim South's main shaft

Xstrata Nickel announced the completion of the Main Production Shaft at its Nickel Rim South Project, which reached bottom at a depth of 1,735 metres on December 20th 2007, and was sunk without a lost time injury over the course of 30 months and 540,000 effort hours. This follows the completion of the Vent Shaft in May 2007, which achieved the same safety record, for a combined 3.7 years, or 926,000 effort hours, without a lost time injury.

Mr Ian Pearce CEO of Xstrata Nickel said that “This is a remarkable accomplishment as health and safety performance exceeded shaft sinking targets and industry benchmarks, demonstrating that safety and productivity go hand in hand. We congratulate our dedicated project team at Nickel Rim South on this significant achievement and for leading Xstrata Nickel’s Zero Harm philosophy.”

The project team, in conjunction with our shaft sinking partner, Cementation Canada Inc, sank the two shafts with productivities consistently ahead of plan and within budget. Nickel Rim South required two shafts; one for production purposes, the other for ventilation and a second egress. Shaft sinking commenced in the Ventilation Shaft in February 2005 with the Production Shaft following four months later.

The completion of the Main Shaft is also a critical milestone in the development of Nickel Rim South, keeping the project on schedule to ramp up to 60% of its ultimate 1.25 million tonne per annum production capacity in 2009. Nickel Rim South is expected to provide a high value ore feed for more than 15 years, while significantly reducing Sudbury’s unit costs, and plays a key role in transforming Xstrata Nickel’s Sudbury operations from closure to growth mode.

ArcelorMittal US increases steel wire prices

Purchasing.com reported that steel wire list prices are being boosted by USD 60 per tonne in February by ArcelorMittal Long Carbon North America, which has joined with some other North American mills to raise list prices of steel wire rod by USD 100 per tonne since last September.

Steel Business Briefing, the online news service, reports that “wire drawers have been having a difficult time passing along rod price increases, due to flat demand and import competition from offshore wire and wire products makers.”

This matches Purchasingdata.com reports that wire rod prices have increased by just USD 35 per tonne since September and an earlier attempt to raise wire prices flopped.

OMX fines SSAB over results release

Nordic stock exchange operator OMX announced that it had fined Swedish steelmaker SSAB 2.2 million crowns (USD 343,900), equal to a year's fees, for the early release of details on its third quarter results.

The disciplinary panel of the OMX said its listing agreement requires Swedish companies to publish their interim reports in a fair and timely manner and holds them responsible for ensuring information does not leak ahead of time.

It said Swedish news agency Ticker published details from SSAB's third quarter report seven minutes before the numbers were officially released at 12:59 PM on October 29th 2007 after gaining access to a hidden draft on the Internet.

The panel in a statement said that "Because the report was made accessible on the Internet, the company bears factual responsibility for disclosing the information since it would be fairly easy to work out the website address."

The committee said after similar incidents in 2003, it found that the ban on incorrect disclosure of price-sensitive information also included unintentional release.

In a separate statement, SSAB said it had "undertaken extensive measures and strengthened its security procedures in order to avoid the repetition of any such incident in the future."

ArcelorMittal to cut 500-600 jobs in France-Report

French business daily La Tribune reported that ArcelorMittal, the world's largest steelmaker, could cut between 500 and 600 jobs in France by 2009.

The paper said that "The world leader of steel is preparing to close by 2009 the electric oven of its Gandrange steel plant in Moselle (eastern France), cutting 500 to 600 jobs out of the existing 1,300.”

ArcelorMittal could not be immediately reached for comment.

AK Steel hikes carbon steel prices again

AK Steel said it will increase its carbon steel prices by USD 50 per ton due to increased demand and the need to recover higher costs.

The price hike is in addition to a previously announced price increase of USD 30 per ton. Both increases will be for orders accepted for shipment on February 1st 2008 and later.

BNG Steel to maintain SS sales levels in 2008

YIEH reported that South Korean BNG Steel plans to produce and sell 270,000 tonnes of cold rolled stainless steel in 2008, which is similar to 2007’s figures.

The sales structure as well as the domestic demand and export of BNG Steel will remain at the same level of last year.

It is predicted that export markets will shrink and anti dumping suits undertaken. Meanwhile, competition from Chinese stainless steel products in South-East Asia will increase.

Bangladesh to build underground railway

It is reported that Bangladesh’s government has approved a nearly USD 1 billion project to build an underground railway to ease traffic congestion in the overcrowded capital.

The 52 kilometer subway would have six lines with 50 stations linking around 80% of the capital, with the capacity to transport 130,000 people a day. The project was conceived during the immediate past government of former Prime Minister Begum Khaleda Zia, who ended her rule in October 2006, but a decision was delayed after the country tumbled into prolonged political violence.

Mr Mahbubur Rahman secretary of the communications ministry said that “It will take five to eight years to complete the whole project.”

A high power committee headed by Mr A B Mirza Azizul Islam, finance adviser to the interim government which took charge in January last year, approved the proposed railway project. He added that the government will soon invite international bidding for awarding the contract.

Bekaert to issue EUR 100 million in 5 year notes

Bekaert has announced , through NV Bekaert SA, that it will issue notes for a total consideration of EUR 100 million in the form of a public offering in Belgium, the Netherlands and Luxembourg.

The purpose of the issue is to refinance the existing credit lines and short term commercial paper, and to finance future growth initiatives. The issue price is set at 101.80 % of the nominal value of each note with a coupon of 5.30 % per year.

The notes are available in denominations of EUR 1 000 and the subscription period will run from January 10 to February 11, 2008, subject to early closing.

Application has been made to list the notes on Euronext Brussels.

Fortis and KBC act jointly as financial intermediaries and lead managers for this transaction

Aleris to close Toronto coil coating plant

Aleris International Inc reported that it will permanently shut down a coil coating plant in Toronto, in the first quarter of 2008. The plant employs 64 people and coats aluminum strip that is distributed to building and construction markets. Transportation, service centers, and consumer durables are other markets it serves.

Production from the plant will be transferred to other Aleris operations in North America.

The Toronto plant was one of a portfolio of rolling and extrusion operations Aleris acquired from the former Corus PLC organization in 2006, for USD 1.06 billion. Aleris now says it will take a restructuring charge of USD 5 to USD 6 million related to the closing.

Aleris International Inc is a major North American manufacturer of rolled aluminium products and is a global leader in aluminium recycling and the production of specification alloys. Aleris is also a leading manufacturer of value added zinc products that include zinc oxide, zinc dust and zinc metal. Headquartered in Beachwood Ohio, a suburb of Cleveland, the Company operates 42 production facilities in the United States, Brazil, Germany, Mexico and Wales and employs approximately 4,200 employees.

Pakistani steel importers reject revised import trade price

As per reports in local media, Pakistani steel importers and custom department have been at loggerheads on the revision of import trade price of the secondary steel products for more than last two weeks.

Pakistan’s custom’s valuation department linked the import trade price for three major steel products with London Metal Exchange on December 18th 2007 in order to streamline the appraisal mechanism for the future. According to the new appraisal, import trade price prices surged to USD 392, USD 445 and USD 527 per tonne on hot rolled coil, cold rolled coils and galvanize coils respectively. This revision of import trade price has been made by Custom’s valuation after 2004.

But local steel importers have refused to accept this decision and stopped paying duties to Custom department. They said that LME linked prices were too high for them, which would directly surge the steel prices in the domestic market. The steel importers said that this fresh change would push prices of steel products up by PKR 2,500 to PKR 4,000 per tonne.

They said that it is irrational to link agreed prices with LME as it is the index of primary steel products. They demanded the Custom department to revise the prices with the mutual agreement between officials and steel merchants. They also proposed that import trade price should be increased not more than USD 25 per tonne on the major steel products.

Rising oil prices will boost Saudi Arabian economy - Report

Arab News reported that the surge in oil prices would provide a fillip to an already booming Saudi economy, which received an extra boost under the budget for 2008.

In Samba’s latest report on Saudi Arabia’s new budget and last year’s performance, the bank said that the 2008 budget amplifies the trends evident in the 2007 outturn, namely a pronounced increase in capital spending in conjunction with current spending restraint. A small surplus of SAR 40 billion is projected, equivalent to only 22% of the 2007 surplus as indicative of the authorities’ conservative oil price assumptions.

The Samba report said that the economy is set for a year of vigorous expansion in 2008. Oil output is expected to rebound as OPEC relaxes production constraints and with global oil prices expected to retain their upward trajectory. Private investment in an array of mega projects is expected to continue unabated, while public investment in basic infrastructure is also likely to be stepped up.

The report said that “Public current spending will likely remain restrained, but private consumption growth should be supported by the dynamism of the non-oil private sector, a recovering stock market, and enhanced financial intermediation.” It added that inflation is expected to remain above historical norms, reflecting higher global food prices and a tight local housing market.

Samba also forecast that the global oil market would remain tight and prices to stay high. Potentially softer US demand is likely to be offset by robust growth from China, India and the Middle East itself. On the supply side, most OPEC members are producing at or near full capacity, with the exception of Saudi Arabia, while non OPEC supply growth is also forecast to remain weak.

Gujarat HC up held DP World Mundra termination

Mr Ganesh Raj Raj senior VP & subcontinent MD of DP World said that DP World is awaiting a formal written order copy before deciding on its next step.

He said it was incorrect that the Gujarat High Court upheld any decision of the GMB. He said “We understand from what was pronounced on January 7th 2008 that the petition is not maintainable under writ jurisdiction. We will exhaust all legal options to protect our interest and investment. DP World would not alter its plans in India.”

The Gujarat Maritime Board claims that DP World is disqualified to run Mundra International Container Terminal as it had taken over control of the facility without prior permission from the state maritime regulator. According to the Gujarat Maritime Board, the transfer breached an undertaking given by P&O Ports when it acquired the facilities from the Adani Group. The undertaking required P&O Ports to hold a minimum shareholding of 51% in MICT for seven years from the date of acquisition.

The Adani Group owned Mundra Port and Special Economic Zone served notice in November 2007 on DP World to cease operations and facilitate the transfer of assets within three weeks.

The right to operate and develop the 1.5 million TEU per year capacity MICT was originally awarded to the Adani Group. The Adani Group then sold the rights to Britain's P&O Ports in 2003. In February 2006 however, DP World acquired P&O Ports which resulted in the transfer of management and ownership of Mundra's container facilities to the Dubai state owned operator.

DP World has also been involved with a legal battle against the Adani Group for not allowing it to operate the second container terminal at Mundra.

Chinese domestic HDG prices surge last week

It is reported that Chinese HDG prices increased by CNY 70 per tonne to CNY 100 per tonne since last week due to high zinc price.

In Shanghai, 1.0mm thick HDG price at CNY 5,500 per tonne whereas in Guangzhou, 1.0mm HDG price at CNY 5,600 to 5,700 per tonne. Because of the zinc price increased fast since December and the price at CNY 21,000 per tonne to CNY 22,000 per tonne in order to HDG price increased as well.

Gulf infrastructure industry up 88% in 3 years - Septech

According to waste and water management company Septech, the Gulf States' infrastructure industry has grown up by 88% and 1 in every 3 dollars will be spent on the region's infrastructure over the next 5 years.

Mr Ashruf Kamel VP of corporate development at Septech said that the region's continued economic boom has lead to revised growth predictions. He added that "Over the past several years, regional infrastructure growth estimates have increased dramatically from USD 277 billion in 2004 to the current figure of USD 1.4 trillion. Another factor that explains this phenomenal rise is that the definition of what constitutes infrastructure has expanded and now includes educational and healthcare, as well as telecommunications."

Mr Kamel said that "Septech's industry expansion has equally matched the infrastructure industry's growth and has shown a spectacular increase, with our company figures showing an excess of 200% revenue growth since 2006 and a 42% increase in management and labour force employed. This growth looks set to continue, as the UAE rulers have unveiled a strategic plan for the country which aims to triple its economy by 2015. In our specific areas of operation, waste and wastewater projects will be worth USD 133 billion over the next half a decade, conventional power developments USD 156 billion and renewable energy projects USD 12.9 billion."

Septech has been operating in the GCC for the past 11 years in water and wastewater management. It has particular expertise in reverse osmosis, desalination, network management, design, build, own, operate and transfer schemes and the assessment, handling and maintenance of municipal and industrial water operations. Septech's research and development department has also been developing renewable energy solutions.

Two UAE firms sign USD 2 billion refinery deal with Libya

The Peninsula reported that UAE based Star Consortium of TransAsia Gas International and Star Petro Energy have signed a deal worth around $2 billion with Libya's National Oil Corporation to revamp and upgrade a Libyan oil refinery have signed a deal worth around USD 2bn with Libya’s National Oil Corporation to revamp and upgrade a Libyan oil refinery.

The 2 UAE firms signed the 50:50 JV agreement with National Oil Corporation in Tripoli covering a 2 stage improvement of the 220,000 barrel per day Ras Lanuf export refinery.

The upgrades would take 5 years to complete. The site at Ras Lanuf includes a refining plant that produces naphtha, kerosene, light gas oil and heavy gas oil, and other units producing ethylene and polyethylene. The refinery upgrade will take place in 2 stages, the first to refurbish the existing plant to increase capacity and improve the ability to market the products.

In the second stage the companies will expand the refinery and add the latest technology for converting fuel oil into high value products, improve efficiency and bring overall quality in line with international standards.

Political uncertainty hits IPI gas link project

As per a report in local media, Mr Pervez Musharraf Pakistani president's repeated promise to oversee the construction of an ambitious pipeline project for transporting Iranian gas to Pakistan appears to have at least half fizzled out as Pakistan battles its current political turmoil after the assassination of Ms Benazir Bhutto.

IPI gas pipeline project was supposed to transport gas from reserves in southern Iran to Pakistan and onwards to India. But the effect of Pakistan's political trepidation is now certain to hit its economic prospects.

The report has cited 3 types of setbacks to the economy in the wake of the recent violence

1. The riots caused significant losses to private and government property with some estimates of the cost going up to the equivalent of USD 1.5 billion. Such damages do not help restore confidence as concerns mount over the extent to which Pakistan will be in a position to rebuild its damaged infrastructure. For the developers of new infrastructure such as the gas pipeline project, the security hazards to new developments have indeed risen.

2. The cost of damaged infrastructure has to be measured in terms of its loss to the overall economic productivity. If there is a delay in carrying out repairs to damaged railway tracks and train networks, that is bound to hurt interests of businessmen and other stakeholders in the economy. The profoundly important question raised in the wake of this damage indeed must be the extent to which future risks to projects such as a newly built up gas pipeline, will have wider repercussions for the Pakistani economy.

3. The extent, to which a large infrastructure project such as a new gas pipeline can be successfully undertaken, must raise questions over the ways in which this project can be financed. Lenders may raise troublesome questions when asked to judge the extent to which they will be willing to finance the pipeline. The way to the future for the moment appears ridden with many troubling questions. However, resolving the dilemma facing Pakistan and the country's economic and business interests today must be largely about the political outlook.

Expatriates excluded from GCC common market agreements

Gulf News quoted Dr Majeed Al Alawi labour minister of Bahrain as saying that expatriates who work in the Gulf will not be covered by GCC common market agreements, allowing freedom of movement, residency and employment.

Dr Alawi said that “These agreements are confined to Gulf citizens, investors and investments. The residency and work permits are the sole prerogatives of each of the 6 states and cannot be used by expatriates to live or work in another country.”

Under the agreement, citizens have the same rights in areas such as employment, healthcare, education, social security and residence, as well as in economic activities such as trading in stock markets, setting up companies, and buying and selling properties.

Turkey stops Azeri gas flow to Greece

A senior Turkish energy ministry official said that Turkey has halted the flow of Azeri gas to Greece due to a suspension of gas supplies from Iran to Turkey. He added that Iran, one of Ankara's main suppliers, stopped pumping to Turkey on December 7th 2008.

Tehran blamed the disruption on cold weather and a cut in Turkmen gas supplies. The official said that daily gas consumption in Turkey had fallen to 124 million cubic meters from 142 million as a result of measures prompted by the halt in Iranian gas flows. He added that an agreement had been reached with Greece to make up for the cut in their supplies in coming days.

Mr George Stergiou head of Greece's natural gas grid management company said that gas from Turkey stopped on January 5th 2008. He added that "We are not facing any shortage because we continue to get natural gas from Russia and also have liquefied natural gas coming from storage facilities in Revithousa."

It is noted that the pipeline between Turkey and Greece was inaugurated in November 2007 in a fresh step to boost ties between the former foes. It will eventually carry some 12 billion cubic meters of gas per year, 3 billion cubic meters of which will be for Greece from Azerbaijan's Shah Deniz field.

GCC may fetch USD 10 billion capital in IPO - Report

Abu Dhabi based investment company Gulf Capital said that a total number of 83 IPOs in the buoyant GCC region may fetch an estimated USD 10 billion capital. It added that 116 public offerings are likely to be offered to investors in the next 3 years. However, to date, only 42 companies have assigned a share issue manager for the float, while another 41 have announced their intention to carry out studies for an IPO.

The prospects of strong economic growth have continued into another year as GCC stock markets have reversed the downward trend of 2006, increasing by an average 36% in 2007 with the strengthening of the market and emergence of institutional investors. Since the beginning of 2007, all GCC indices witnessed a positive trend due to higher oil prices and strong performance by the service sector.

According to trends witnessed, average IPO size has increased by 25% during 2006 and decreased by 2.4% in 2007. The average IPO size is estimated to expand by 26% during the 2008 to 2010 period. In 2006, the average size was USD 327 million which shrunk to USD 319 million in 2007, while an estimate for 2008-10 suggests an average size of USD 401 million.

Total amount raised from IPOs increased 40% during 2007 compared with 2006, as people preferred to raise cheap capital over bank finances. In 2005, USD 6 billion capital was raised through IPOs which further rose to USD 7.5 billion and USD 10.5 billion in 2006 and 2007 respectively.

Saudi Arabia led the IPO market by attracting 26 of the 33 IPOs launched in the GCC during 2007 to raise USD 4.8 billion, while the UAE made a splash with the floatation of the mega IPO of USD 5.1 billion launched by DP World. Qatar ranked third by raising USD 389 million.

In the past IPOs were mainly concentrated in a limited number of sectors, but the recent trend has shown a change, expanding to new sectors like financial services which top the floatation, followed by oil and gas, real estate, construction and food companies.

Hill International and Makan Capital to form JV

Construction consulting firm Hill International announced that it has entered into an agreement with merchant banking and investment management firm Makan Capital Group to form a new JV that intends to develop commercial, mixed use, residential, infrastructure and other projects throughout the Middle East and North Africa.

The new JV Company, to be named Makan Hill International Limited, will be equally owned by the 2 signatory companies and will be headquartered in Abu Dhabi. Makan Capital Group, headed by Mr Abdul Aziz ibn Fahd, intends to raise a fund targeted at approximately USD 500 million to invest in projects to be developed by Makan Hill.

Mr Irvin E Richter chairman & CEO of Hill International said that “This new venture will bring Hill’s project management resources and experience to the development of projects throughout the Middle East region. It will also allow us to begin to develop projects as a principal with minimal investment by and risk to Hill.”

Mr Steven Koinis MD & CEO of MCG said that “The combination of MCG’s financial expertise and Hill’s project management expertise, together with our joint local market knowledge, will allow our new company to develop successful projects with the returns demanded by our investors.”

MCG’s special focus on the Middle East and North Africa provides superior investment products in a Shariah compliant manner.

Hill International provides program management, project management, construction management, development management and construction claims services. Engineering News Record magazine recently ranked Hill as the 10th largest construction management firm in the US.

Petro Rabigh's SAR 4.6 billion IPO oversubscribed by 21%

Saudi Arabia's Rabigh Refining & Petrochemical Company has announced that its SAR 4.6 billion initial public offering was 21% oversubscribed midway through the offer period. More than 2.86 million Saudi investors had offered at least SAR 5.6 billion. The sale will end on January 12th 2008.

Petro Rabigh, a USD 10 billion JV between Saudi Aramco and Japan's Sumitomo Chemicals, is selling 219 million shares or 25% stake, to Saudi nationals at SAR 21 each. Sumitomo Chemicals and Aramco will each retain a 37.5% stake after the IPO.

Lead manager HSBC Saudi Arabia said that institutional investors can end up with only a quarter of the shares on offer instead of 50% if retail demand was strong. This is the first time state owned Aramco has offered shares in one of its affiliates to the public.

Sumitomo and Aramco agreed in 2005 to develop the petrochemical complex through a 50:50 JV that would upgrade a refinery at Rabigh on the Red Sea coast. Aramco will supply Petro Rabigh with the feedstock necessary to operate the plant on a long term, fixed price basis and will market the refined products produced by Petro Rabigh. Sumitomo Chemicals will provide petrochemical international sales and marketing expertise, as well as technology licensing.

The JV is expected to start commercial operations in the fourth quarter of 2008. The complex will produce 18.4 million tonnes of oil products, 1.3 million tonnes of ethylene and 900,000 tonnes of propylene a year.

Alumco wins AED 81 million contract for Vision Tower

UAE based steel manufacturer Alumco LLC has announced that it has won a contract worth AED 81 million for Vision Tower, a Dubai Properties' development located at the main entrance of Business Bay.

Mr Samer Barakat MD of Alumco said that "This is another major project that adds to our status as a leading provider of premium products."

Project design has already started and installation will commence at the beginning of 2008.

Chinese steel exports in 2007 hit record high of 69 million tonnes

Mysteel citing, unconfirmed sources, reported that China has exported some 4.78 million tonnes of finished steel products in December 2007 to take export figure of finished steel products for 2007 to an all time high of 62.65 million tonne up by of 45.8% from the previous annum.

In million tonnes

In million tonnes

Mysteel has qualified that these figures above are for reference only, and may be subject to revision to announced by Chinese General Administration of Customs.

Chinese Cold rolled steel price catching up the upward trend

It is reported that Cold rolled steel sheet & coil prices have been jumping up in China and the increase is evidently speeding up this week. It is believed to be just catching up taking into account the surge of HRC price in past weeks.

On Shanghai market, price for 1.0 CR sheet by Anshan Steel have shoot up to CNY 5720 per tonne a jump of CNY 140 per tonne from end December. 1.0 CR coil by Maanshan Steel is being quoted at CNY 5570 per tonne to CNY 5600 per tonne, CNY 200 per tonne to CNY 230 per tonne above the level for December 29th 2007.

Export offers for 1.0 CRC remain stable at USD 720 per tonne to USD 725 per tonne FOB and lower quotations are at around USD 710 per tonne FOB. Tangshan is reported to be offering 1.0 CRC at USD 725 per tonne FOB while another North East China based steel producer is tagging at USD 730 per tonne FOB for 0.6mm and up.

In general, export tonnages are expected to keep stable in December, but some traders believe them to be drop further on a MoM basis.

Sumsung and POSCO Suzhou JV starts operation

It is reported that the Suzhou based steel company, co invested by Korea's Sumsung and POSCO held the completion ceremony recently to announce start of operation officially.

According to schedule the steel mill was settled in the industrial park in Suzhou January 2007 with construction work beginning from June, the mill will produce steels for household appliance and LCD machines etc once completed.

South Korean enterprises have poured above 40% of money in the Eastern area out of total investment in China. In 2007, nearly half of the enterprises directed at this region, attracted by logistics, workforce, environment and governmental policy advantages there.

Chonggang to invest in 40 billion iron ore mines

According to Chonggang Ministry of Land and Resources that one iron ore mine has been exploited in Chongqing Wushan and will become the second largest steel base in Southwest following Panzhihua steel. Five companies including Chonggang have set up a joint venture to invest CNY 1.4 billion for development.

Relevant people in charge of it introduced that the mine has an iron ore reserves of over 100 million tons with iron content reaching 42%, overrunning 5% over the average level of our country.

He added” the main iron ore zone is 8.5 kilometer high, 2.5 kilometer wide, 1meter to 7 meter thick averaging at 3.3 meter. The current market price of this kind of iron ore is CNY 350 per tonne to CNY 400 per tonne and the explored reserves value at more than CNY 40 billion. The exploitation of the iron ore mine has been finished and expected to start development this year, in addition, the joint venture plans to invest CNY 1.4 billion to realize the annual production capacity of 1.5 million tonnes of pellet iron valuing at CNY 1billion.”

4 Chinese steel major s to exploit overseas resources jointly

It is reported that Wisco, Baosteel Group, Anshan Steel Group and Shougang Group signed agreement on joint venture recently in order to build Beijing Gangqilian Mineral Resource Investing Company Ltd.

Wisco holds 50% stocks of the company and it is the first biggest shareholder. Analysts believe that the construction of the company may start a new time of Chinese iron and steel industry and Chinese steel enterprises begin to invest in foreign market and to exploit overseas mineral resources.

As per report four company plan to exploit an iron ore project in Cambodia at first. The reserves of the iron ore project are 200 million tonnes but there are no railways or ports in local regions, so the investment could be great. Now Chinese investors are dealing with prospection for risks and the final reserves and grade would be fixed later.

Mr Luo Bingsheng executive vice chairman and secretary general of China Iron & Steel Association said that the quantity of overseas iron ores controlled by Chinese steel enterprises should take over 1/3 or even over 60% in total volume of iron ore import. However, China imported 326.3 million tonnes of iron ores in 2006, only 58 million tonnes of which were controlled directly by Chinese steel enterprises, taking only 17.8% in total iron ore import.

Mr Luo Bingsheng believed that Chinese steel enterprises should take shares of foreign mining companies by investment or joint venture, in order to get direct control right of iron ore resources.

Hunan Valin Steel Tube & Wire profit down by CNY 231 million

Hunan Valin Steel Tube & Wire Co Ltd announces that its subsidiary Hunan Valin Guangyuan Copper Tube Co Ltd is unlikely to resume production in a short term. Valin Guangyuan is expected to report a total loss of CNY 264.17 million in 2007.

As per report total assets of Valin Guangyuan is valued at minus CNY 70.08 million. As Valin Steel Tube & Wire Co Ltd holds 82.79% of the shares it has to calculate allowances for assets impairment for the CNY 160.68 million long term equity investments in Valin Guangyuan.

Chinese gear steel industry develops rapidly

Chinese gear steel industry had made enormous progress in recent years, and many products have reached or approached international advanced level. However, many gear and sear box products have not reach the international level in the vibration noise and life, which is related to the hot process equipment and craft. The problem has become the bottleneck of the development of Chinese gear steel industry.

During the “11th five years plan”, the gross production value of Chinese gear steel industry rose by 100% from CNY 25 billion to CNY 50 billion, ranking fourth in the world. The concentration of the industry is high. There are currently 50 enterprises with sales scale of above CNY 100 million. In 2006, the annual production value was CNY 59 billion, among which vehicles gear accounted for two thirds. The auto industry is an important factor of supporting the development gear industry.

With the gradual maturity of the industry and the sustainable development of its downstream industries, the production value of gear industry will reach CNY 100 billion, which may rank second or third in the world. From 2011 to 2015, the industry may rank first of second in the world.

Sinotrans to develop service network through acquisitions JVs

It is reported that Sinotrans Ltd a leading integrated logistics and transportation services provider in China is eyeing future acquisitions with partners to strengthen and expand its service network for freight forwarding and express delivery.

Mr Zhang Jianwei president of Sinotrans Ltd said that the operating ability of a single network is not strong enough and hence the company intended to extend its network coverage as well as enhance head office control over those networks.

He revealed that the company was seeking overseas and domestic acquisitions to bolster its service networks.

The Sinotrans Group is expected to inject more assets into the Hong Kong listed Sinotrans Ltd in 2008.

Chery teams up with Quantum

It is reported that Chery Automobile Co a fast growing Chinese maker of cheap cars has been approved to form a venture with the US arm of Israel Corp to produce sedans and SUVs for the local and overseas markets.

The National Development and Reform Commission said the venture with Quantum LLC will have a production capacity of 150,000 Chery vehicles a year.

Mr Jin Yibo a Chery spokesman said that the venture would start building a plant this March in Wuhu, the Chinese firm's home base. The plant will begin making medium and high end sedans and SUVs in 18 months.

Chery said last week that its 2007 sales jumped by a quarter to 381,000 vehicles from the previous year. But the QQ micro car remains its best selling model. It has also set up tie ups with other foreign partners as it tries to achieve its ambitious sales target. It agreed to establish a 50-50 venture with Fiat last August to produce Chery, Fiat and Alfa Romeo cars with an annual production capacity of 175,000 units for both domestic and foreign buyers.

China has two more key harbors

Xinhua reported that the annual throughput of Yantai and Yingkou ports surpassed 100 million tonnes in 2007 bringing the number of such big harbors in China to 14.

According to Mr Li Shenglin Communications Minister of China while speaking at a national work conference on communications and transportation on the weekend said that the progress made China to become a country with the world's largest number of 100 million tonnes ports.

Currently, China has more than 1,400 ports with 35,000 berths, including 1,200 berths that accommodate 10,000 DWT ships.

Strong demand to push Chinese coastal coal shipping rates

Interfax China reported that the signing of annual long term coal contracts in China was completed last month with average power related coal prices rising 10%.

Analysts believe that coastal shipping rates for annual long term coal trading will rise by 15% to 20% in 2008, because of both strong domestic demand and the soaring Baltic Dry Index which tracks international dry bulk freight rates.

Mr Huang Yonglin a transportation industry analyst with Guangdong Development Securities told Interfax that coal demand is still strong in China which is the main reason behind the anticipated 15% to 20% growth in the coastal shipping rate for long term coal trade.

Mr Huang said China's huge demand has supported the skyrocketing BDI which surpassed 11,000 in 2007 and in return, the rising international ocean shipping rate will also push the Chinese coastal shipping rate up. He said that domestic carriers' expanding international business will also lead to a short supply of coastal shipping capacity which will be another reason behind the rise of the coastal shipping rate.

Handan Steel announces new prices

Handan Steel has announced its latest EXW prices for some products on the basis of price release on December 28th 2007

Rebar, Round Bar and Wire Rod: unchanged.
1. Q235 6.5mm wire rod is quoted at CNY 4450 per tonne
2. Q235 6.5mm high speed wire rod at CNY 4490 per tonne
3. HRB335 12mm rebar at CNY 4810 per tonne
4. HRB335 14mm rebar at CNY 4760 per tonne
5. HRB335 16mm to 25mm rebar at CNY 4610 per tonne
6. Q235 16mm to 25mm round bar at CNY 4650 per tonne.

Medium Plate: up by CNY 50 per tonne.
Latest EXW price for Q235B 20mm medium plate stands at CNY 5130 per tonne.

Ship building Plate: unchanged;CNY 50 per tonne higher for those with thickness of 50mm or more.
CCSA20mm ship building plate is offered at CNY 5395 per tonne.

Prices listed above are INCLUSIVE of 17% VAT effective as of January 1st 2008.

Alchevsk ups steel output in 2007 up by 6.3% YoY

Ukraine's Alchevsk Steel Plant has increased crude steel output to 3.948 million tonnes in 2007 up by 6.3% YoY, while pig iron output has increased by 12% YoY to 3.318 million tonnes and rolled steel production by 9.3% YoY to 3.563 million.

The Alchevsk mill, owned by Industrial Union of Donbass, cut steel output in 2006 by 0.2% to 3.715 million tonnes while boosted rolled steel production by 13.3% to 3.261 million. It aims to double crude steel output to 7.5 million tonnes by 2008 by building 2 new converters.

Industrial Union of Donbass is a holding company for more than 40 industrial enterprises in Ukraine and other countries, including the Dneprovsky and Kramatorsky steel plants, Hungary's Dunaferr and DAM Steel and Poland's Huta Czestochowa.

Nippon sees ArcelorMittal as supplier to Russian auto market

Mr Akio Mimura president of Nippon Steel Corporation said that Arcelor Mittal SA of Luxemburg will supply steel sheet and other steel products to Japanese automakers starting operations in Russia.

Mr Mimura said that "It is natural that Arcelor Mittal, to which Nippon Steel gives technical assistance, supplies steel products to Japanese automakers operating in Russia."

Among Japanese automakers, Toyota Motor Corporation launched production at its plant in the suburbs of St Petersburg in December 2007, eyeing an increase in output to an annual 200,000 to 300,000 units as early as 2010. Nissan Motor Co, Suzuki Motor Corporation and Isuzu Motors Limited are set to follow suit.

Mr Mimura said that shipping steel products from Japan is not economically feasible. Nippon Steel has no intention of starting producing steel products in Russia, even by setting up a JV firm. He added that "We will leave it to Arcelor Mittal for the time being. Russia is one of the markets that Nippon Steel has least information about. There are too many small steelmakers in the world. It is natural that Arcelor Mittal, to which Nippon Steel gives technical assistance, supplies steel products to Japanese automakers operating in Russia."

Russian steel bridge stolen for scrap

It is reported that a steel 11.5 meter long road bridge was stolen at Khabarovsk in Russia's Far East. The bridge was made of four steel pipes half a meter in diameter and covered with steel plates. It is likely that the thieves stole the bridge to sell it for scrap.

A spokesman said that "The total loss sustained to the bridge owner by the theft is estimated at RUB 400,000. However, repair works will cost the energy company over RUB 1 million.” The spokesperson added that the new bridge will be made of reinforced concrete, instead of steel and repair works will take at least a month.

It is not the first time a bridge has been stolen. A 5 meter span metal bridge disappeared from a river crossing in the Ryazan region, east of Moscow, Russia in August 2007 and a 10 tonnes 115 year old steel railway bridge disappeared from Howard Springs, 35 kilometers south of Darwin, Australia in November 2004.

ISTIL reports 13.8% rise in 2007 steel output

Interfax Ukraine reported that Donetsk based ISTIL mini steel mill in January through December 2007 increased finished rolled steel output by a preliminary 13.8% YoY, to 973,000 tonnes, steel output by 11.5% YoY, to 1.026 million tons.

A representative of the mill told Interfax Ukraine that in December the mill produced 86,000 tonnes of finished rolled steel and 79,300 tonnes of steel.

Chelyabinsk Zinc Amur deposit to produce 100,000 tonnes of concentrate

According to Russian Chelyabinsk Zinc Plant, its GOK Amur could produce some 100,000 tonnes of zinc in concentrate.

The company released previously that the plant will have annual production 30,000 tonnes of zinc in concentrates and it will reach 50,000 tonnes in 2011. However, it found that zinc content reached as high of 16.4% and the reserves are around two times larger than its surveys in the 1970s.

Chelyabinsk Zinc plans to invest around USD 100 million to develop the mine.

Kazakh PM visits Arcelor Mittal Temirtau coal mine

It is reported that Mr Karim Massimov prime minister of Kazakhstan, touring the Karaganda region, has attended the Kazakhstanskaya mine of Arcelor Mittal Temirtau JSC coal department.

In the course of the visit to the mine, Mr Massimov was informed of implementation of the Karaganda coal field development program. The program was introduced to him a year ago during his working trip to the Karagada region. He surveyed working conditions of the miners as well.

Gazprom planning to invest in Nigeria

FIS reported that Gazprom offers investments into Nigeria's energy infrastructure in exchange for an access to the development of large gas deposits.

According to a high rank official of the Nigerian Government, the Russian company offers more beneficial terms as compared with Chinese, Indian or US companies.

Mr Ilya Kochevrin official representative of Gazprom confirms the fact of negotiations with the Nigerian Government and calls Africa one of priorities of the Company's development strategy.

Kazakhstan's economy in 2007 up by 8.7%

It is reported that Kazakhstan's economy expanded by a preliminary 8.7% last year, below its average for the decade as the liquidity squeeze in international financial markets led banks to cut lending.

Kazakhstan's statistics agency said the cost of goods leaving Kazakhstan's factories and mines soared in December as gas condensate and crude oil prices surged. Producer prices in the energy exporter rose an annual 31.9% up from 26.8% in November.

Rosneft lose oil license in Chechen Republic

FIS reported that the republican government insists on the transfer of the license to a subsidiary of Rosneft, Grozneftegaz OJSC in order to direct the profits from the sales of the oil to the republican budget while under effective regulations the profits from the sale of Chechen oil go to Rosneft alone.

According to the republican mass media, Rosneft is not planning to stay in the republic for long and currently works with violations of environment conservation and technical safety rules.

Uralelktromed starts 2nd phase of gas unit upgrade

FIS reported that startup and adjustment works were started at the second startup complex of the gas purification unit of the chemical and metallurgical works.

Upon the commissioning the company will start the reconstruction of the third phase of the gas purification unit. Investments into the first startup complex, which was put online in 2006, totaled RUB 140 million. Investments into the second and third startup complexes amounted to RUB 72 million as of mid December.

Reconstruction of gas purification capacities is conducted without the shutdown of the production. Earlier the company used the so called wet purification technology to purify gases from contaminants. After reconstruction it will use a four stage purification technology with the use of new generation equipment and an automated control system.