January, 25 2008
TATA Steel posts financial results for April to September 2007
TATA Steel announced that it has recorded a consolidated net profit of INR 9,645.6 crore on a total income of INR 63,872 crore for April to September 2007 period. The financial results of Corus have helped TATA Steel post a half yearly profit more than double the company’s annual profits of INR 4,166 crore for 2006-07.
Highlights for the six months ended 30th September 2007 include
1. Profit before exceptional items and taxes for the six months ended 30th September 2007 was INR 5,483 crores against INR 3,227 crores for the same period of the last financial year.
2. Diluted EPS before exceptional items (not annualized) for the six months ended 30th September 2007 was INR 54.59 against INR 39.41 for the same period in the last financial year.
3. Total income for six months ended 30th September 2007, amounted to INR 63,872 crore as against INR 12,020 crore in the same period previous year. The increase comprise mainly of INR 49,809 crore of Corus income and increases of INR 866 crore in Indian operations, INR 1,237 crore in Nat Steel and INR 512 crore in TATA Steel, Thailand.
4. Total expenditure for the six months ended 30th September 2007 amounted to INR 56,112 crore as against INR 8,665 crore during the previous years. The increase is primarily on account of inclusion of expenditure of Corus during the current year.
5. The material cost for the six months ended 30th September 2007 was INR 28, 338 crore as against INR 4,076 crore during the previous year. The increase is principally due to inclusion of material cost of INR 23,406 crore of Corus, increase in NatSteel by INR 1,122 crore, increase in TATA Steel Thailand by around INR 356 crore and increase in the Indian operations by INR 54 cr. The increases in the material cost of NatSteel and TATA Steel Thailand are mainly due to the increase in the volume of operations and an increase in the scrap prices. The increases in the material cost of Indian operations were mainly due to use of imported coke.
6. The other expenditure for the six months ended 30th September 2007 was INR 17,692 crores as against INR 3,234 crores for the same period last financial year. The increase is primarily due to the inclusion of Other Expenditure of Corus of around INR 13,808 crores.
The board of directors of the company will meet on January 31st 2008 to take on record the audited financial results for the quarter ended December 31, 2007.
NMDC gets Navaratna status
NMDC Limited announced that it has been granted Navaratna status by the Government of India assessing the Company's comparative advantages and capacity to become a global giant and to make NMDC a significant player in the economic development of the country.
The release said that “This has been conveyed to the Company by the Government of India on January 24th 2008.”
The Navaratna status is conferred by the Government of India in a bid to make Central Public Sector strong and effective in the competitive environment. The increased autonomy is in the form of allowing a higher ceiling on equity investment to establish financial joint ventures and wholly owned subsidiaries in India or abroad, powers for mergers and acquisitions, etc.
POSCO outlines open market iron ore purchase option to SC
Realizing that securing captive mines for its proposed INR 52,000 crore steel plant could be a lengthy exercise, POSCO has said that it is ready to source iron ore from the open market for the first phase of the mega project.
POSCO in a petition to the Supreme Court said that “It is aware that in spite of the best of efforts, there may be a time mismatch between the two. In case of such an eventuality, POSCO India would not like to wait for captive mines to be obtained and made operational and then start production of steel, at least in respect of the first module.”
Saying that it was aware that millions of tonnes of iron ore are being sold in the open market both by indigenous sales and exports, POSCO said in the eventuality of a time mismatch between captive mines being available and rendered operational and completion of the first phase, the company is open to sourcing ore from the market.
However, it reminded that the decision to invest in India was made owing to assurances on captive mines being made available for its steel project.
It also pointed out that there were other applicants for the areas applied by it and hearings on the merits of the various applications were being conducted by the Orissa government. It also pointed out that unless the forest diversion proposal is cleared, it would not be able to fulfill certain conditions enshrined in the MoU with the state government.
POSCO’s petition comes after the central empowered committee, appointed by the apex court to delve into its forest diversion proposal, recommended that the steel giant’s entire plan comprising a steel plant with captive mines and port should be reviewed as one single project for its ecological significance and rehabilitation plans.
Ankit Metal plans INR 1000 CAPEX to expand capacity
Ankit Metal & Power Limited announced that its board of directors at its meeting held on January 24th 2008 has considered & approved expansion of it's operation with a INR 1000 crore plus project.
Ankit Metal & Power Limited has already taken more than 100 Acres of land at its existing plant site at Jorehira in West Bengal and it intends to enter into MOU with the state government for this investment in the West Bengal.
The plans include pelletization plant, mini blast furnaces, captive power plant etc. This expansion will come into two phases, and the fund requirement will be planned accordingly.
Godawari Power allotted iron ore mines in Chattisgarh
Godawari Power & Ispat Limited announced it has been granted prospecting license for Iron Ore mines over an area of 754.83 hectares land at Dhalli Rajhara Iron Ore Deposits in forest compartments bearing number 161, 166 and 168 in Durg District of Chhattisgarh.
Its release said that “The Mineral Resources Department of Government of Chhattisgarh vide its letter dated January 24th 2008, conveyed its the final approval of the Ministry of Mines Government of India, New Delhi in respect of the above iron ore mines.”
HZL slashes zinc prices by 2.36%
Hindustan Zinc Limited announced that it has cut zinc prices by 2.36% to INR 101,900 (USD 2,580) per tonne and lead prices by 3.27% to INR 112,500 per tonne, effective immediately.
Electrosteel inks lease agreement for coking coal mine in Jharia
It is reported that Electrosteel Castings Ltd has signed a lease agreement for a coal block at Jharia near Bokaro in Jharkhand.
The Jharia coal block has established reserves of 200 million tonne of prime coking coal. The land for the coal block has already been acquired and Electrosteel expects to commence development work soon.
This will help the company to establish backward linkage and reduce the cost of production of its ductile iron pipes. Company officials said this will ensure lower costs and avoid impact of demand and supply volatility. The benefits will accrue from 2008-09.
Electrosteel has also been allotted an iron ore mine in Kodolidab in Jharkhand and necessary clearances and infrastructure to exploit the deposits are current underway.
Essar to set up an integrated logistics firm
BS reported that Essar Group is planning to set up an integrated logistics firm by reorganizing its various businesses under its marine transportation and logistics firm Essar Shipping Limited. After the reorganization, the group may rename ESL to reflect its new status.
The reorganization committee will also appoint financial and legal advisors as independent valuers to recommend swap ratios and acquisition values for any mergers or arrangements that may be considered by the committee.
Mr Sanjay Mehta CEO of Essar Shipping Limited said that “We are looking at reorganizing or consolidating all our operations in bulk ports, oil terminals, crude and dry bulk carriers, port to plant logistics and oilfield services under ESL. This will enable us to provide end to end logistics solutions to our customers. This will help in creating larger value for shareholders, while the company will benefit from the organic growth of the sector.”
According to Mr Mehta, a clear picture will emerge in the next 2 weeks as the company will finalize the details of the rejig. A name change is also in the offing, as the present name Essar Shipping would not reflect the logistical operations of the company. He added that “The company received board approval for the proposed move. The board has also passed a resolution to constitute a reorganization committee.”
At present, Essar’s shipping and logistics businesses include ESL, Essar Oilfield Services, Essar Bulk Terminal, EBTL Limited, Vadinar Oil Terminal and Essar Logistics Limited. It is also exploring the possibilities of merging operations of Essar Oilfields Services with ESL.
Elecon bags INR 47.54 crore material handling equipments orders
Elecon Engineering has bagged orders worth INR 47.54 crore for designing, engineering, manufacturing, testing, supplying and commissioning of material handling equipments from various clients.
It received INR 31 crore order from BGR Energy Systems for 500 MW Khaperkheda TPS expansion project. It also received orders 14.85 crore orders from ACC for its plants in Secunderabad and Mumbai. In addition to the above orders, it received INR 8 million order from ENERGO Engineering Projects of New Delhi.
MMTC invites EoIs for coal mining and power plant
It is reported that international trading company MMTC is planning to make its foray into captive coal mining and setting up a power plant. It has invited expressions of interest for forming a JV in a special purpose vehicle for mining of coal and setting up of a power plant.
Inviting the expressions of interest, MMTC said that the bidder should have been in operation for more than 3 years and should be making profits in each of the immediately preceding 3 financial years. The bidder should also have experience of at least 3 years in manufacturing, mining or power and should have existing operational mining lease in its name along with the experience in mining of materials. Moreover, the turnover of the bidder should not be less than INR 500 crore in any of the last 3 years’ audited accounts. Net worth of the bidder should be a minimum of INR 250 crore as on last audited annual accounts.
While the company has not given the size of power project it would like to set up, it, has sought the participation of reputed companies in the proposed SPV. Its plan is important as the coal ministry has liberalized the allocation of captive coal blocks in order to help meet the fuel need of power project developers in India.
MMTC, which has been importing coal for NTPC, plans to approach the coal ministry for allocation of non coking coal block for captive mining to develop a power project. Bidders are expected to file expressions of interest by January 31st 2008. MMTC plans to join the bandwagon of development of coal mine and power project. Its subsidiary, MMTC Transnational Pte Limited has been involved in sourcing coal coke, hydrocarbon, fertilisers and fertilizer raw materials for India and the neighbouring countries.
Jharkhand asked to prepare master plan for steel projects
Ranchi Express reported that union steel ministry has asked the state government to prepare a plan foe setting up mega steel projects in the state.
Mr KK Khandelwal industry secretary of Jharkhand said that the centre wanted Jharkhand to produce 70 million tonnes to 75 million tonnes of steel in 7 years from now. The projection is based on the basis of a number of mega investment proposals from steel mammoths like ArcelorMittal, TATA Steel, JSW, JSPL and Essar Steel in Jharkhand. SAIL and TATS Steel too plan to augment their production.
He added that "We are almost ready with R & R Policy and Industrial Policy. Once they are in place, things would be expedited."
High powered group to drive manufacturing sector growth
Prime minister of India has constituted a high powered group under the chairmanship of Dr V Krishnamurthy a National Manufacturing Competitiveness Council for suggesting various measures to ensure the continuing growth of the manufacturing sector in the country. The secretaries to the government finance, revenue, commerce, textiles and industrial policy & promotion as well as the member secretary of the NMCC are the other members of the committee.
The following are the terms of reference of the group:
a) To suggest policy measures and a continuing mechanism to ensure sustained growth of the Indian manufacturing industries for the next 10 to 15 years
b) To suggest policy measures and immediate steps to reverse the recent deceleration in the growth of the manufacturing industries
c) To suggest policy measures and immediate steps to boost exports of Indian manufactured goods in the face of appreciation of the rupee and high interest rates, particularly with respect to labour intensive sectors like textiles, leather and handicrafts
d) To suggest policy measures to leverage FDI to modernize manufacturing in India and create a strong technological base
The high powered group is required to submit its report and final recommendations within 3 months. It will look into various issues and suggest policy measures and recommendations focusing on steps to boost export of Indian manufacturing goods. The group will also analyze and recommend various policy measures to leverage foreign direct investment to modernize manufacturing in India to help in creating a strong technological base that will provide the required momentum to sustain the growth of the Indian manufacturing industries over the next 10 to 15 years.
Gujarat to establish jetties to facilitate coastal shipping
Exim News Service reported that Gujarat Maritime Board is in the process of formulating a coastal express initiative, under which it proposes to establish jetties along the state’s coastline to facilitate coastal shipping.
The aim of the initiative is to encourage coastal transportation of goods by sea and, in the process, considerably reduce transportation costs as compared to road and rail.
Gujarat Maritime Board has reportedly floated tenders to invite consultants to study the potential of the coastal express initiative. It has also identified a few locations like Hazira, Dahej, Ghoga, Porbandar, Okha, Navlakhi and Morbi to develop the coastal jetties.
Already, nearly 19 companies have shown interest in the initiative and are keen to develop jetties at various ports in the state. The facilities are likely to be established on public private partnership basis.
JCB India plans INR 300 crore capacity expansion
It is reported that excavator manufacturer JCB India will invest INR 300 crore to double the capacity at its Ballabgarh plant in Haryana. In addition, it will invest INR 20 crore on a new parts distribution warehouse in Pune.
The Ballabgarh plant produces backhoe loaders, while one plant in Pune produces steel fabrications and the second factory manufactures excavators, wheeled loading shovels and JCB Vibromax equipment.
BHEL bags INR 866 crore contract from RIL
It is reported that Bharat Heavy Electricals Limited has bagged an order worth INR 866 crore from Reliance Industries for setting up a 345 MW gas based combined cycle power plant at Nagothane in Raigad district of Maharashtra.
BHEL's scope of work envisages design, engineering, manufacture, supply, erection and commissioning of 1 frame 9FA gas turbine generator set, 1 steam turbine generator set and 1 heat recovery steam generator with state of the art controls and instrumentation, associated auxiliaries and balance of plant, in addition to complete civil works and select spares.
While the gas turbine generator will be manufactured at BHEL's Hyderabad plant, the HRSG and state of the art control system will be manufactured at the company's Trichy plant & Electronics Division, Bangalore, respectively.
Significantly, this is the first commercial order on BHEL for an advanced class frame 9FA gas turbine. The project is being set up to meet the power requirement of Reliance Retail and other RIL ventures and is expandable up to 1,000 MW in future. The work order is slated for completion within 26 months.
RIL acquires 1,000 hectares land for Mumbai SEZ
BS reported that Reliance Industries promoted Mumbai SEZ Private Limited, which is developing a 1,000 hectare multi product special economic zone, has managed to buy 1,000 hectares of contiguous land from farmers. This qualifies the company for getting formal approval for the SEZ from the central government.
A senior state government official said that “Reliance managed to buy the land through direct negotiations with farmers.” He added that the state government would forward the company’s application to the centre as soon as it came with an official proposal.
Ever since its inception, the project got mired in controversies. The state government’s notice for land acquisition was sternly opposed by NGOs and political parties including Shiv Sena. The state government had to later clarify that though it had issued the notification for acquisition of land, the company would have to buy the land of its own through direct negotiations with farmers. When the company failed to acquire the minimum required land of 1,000 hectares within 1 year of the notification, it was forced to approach the board of approval for a year’s extension.
Maharashtra approves bagasse power projects capacity
Maharashtra government has given its approval for the capacity addition of 1,000 MW in a period of 5 years from the bagasse based co generation projects by cooperative sugar factories.
The promoter will be entitled for a 30% share capital from the center's Sugar Development Fund and the Urjankur fund. The government will also find an alternative of seeking loan from the national cooperative development corporation and provide that amount to cooperatives as share capital for cogeneration project.
The government will also find an option of raising bonds of INR 500 crore through Maharashtra Cooperative Development Corporation and subsequently use those proceeds for providing 30% share capital to cooperative units. Besides, the government will also consider making a budgetary allocation of INR 500 crore for providing share capital.
BHEL bags INR 2,475 crore contract from TNEB
Bharat Heavy Electricals bagged an EPC contract worth INR 2,475 crore from Tamil Nadu Electricity Board for setting up a 600 MW at North Chennai Thermal Power Station in Tamil Nadu.
Significantly, this is the first ever order secured by BHEL for the new rating unit of 600 MW designed to sub critical parameters. The boiler and its auxiliaries will be manufactured by BHEL at its Tiruchirapalli and Ranipet works in Tamil Nadu, while the steam turbine and generator will be manufactured at the company's Haridwar plant. The state of the art controls and instrumentation system will be supplied from BHEL's electronics division in Bangalore.
North Chennai Power Company, a special purpose vehicle floated by Aban Group, Chennai and Zelan Group, Malaysia is setting up a 1,200 MW coal based power unit at Chennai in Tamil Nadu.
Floods continue to hamper coal movements in Australia
According to the Queensland Resources Council despite an improvement in the weather in Central Queensland, it is expected to take several days for flooding to subside and even longer until all coal mines are back in full operation, the cost of damage caused by recent flooding is expected to be in the order of tens of millions of dollars. Flooding was expected to peak in Emerald this morning, as the Nagoa River approached the 15.5 meter mark.
Production in the Bowen Basin has been suspended or reduced across many mines because of safety concerns or staff shortages caused by difficulties for people to move around the region. The mines worst affected would appear to be those at the Southern end, exporting from Gladstone. Disruptions extend to the north of the Bowen Basin, where Xstrata Coal is reporting lost production from its Newlands and Collinsville operations, which export from Abbot Point.
While there have been some railing disruptions due to flooding, some mines where production had been halted or severely curtailed were continuing to rail coal from mine site stockpiles. All Queensland Rail services are now reported to be running but at restricted speeds. However, services to affected mines were reduced at the request of coal customers.
A number of coal companies have declared Force Majeure on certain vessels. Those that have confirmed are
1. BMA: Force Majeure has been declared on certain vessels
2. Kestrel Coal: Force Majeure has been declared on certain vessels
3. Curragh Coal: Force Majeure has been declared on certain vessels
4. Ensham Coal: Force Majeure has been declared on certain vessels
No further declarations have been made public.
US DOC finds unfair dumping of rectangular pipe and tube
The US Department of Commerce has announced its affirmative preliminary determinations in the antidumping duty investigations on imports of light walled rectangular pipe and tube from the People’s Republic of China, Korea, Mexico and Turkey.
US DOC determined that Chinese, Korean, Mexican and Turkish producers and exporters sold rectangular pipe in the United States at 223.52% to 264.64% 1.30% to 30.66%, 0.00% to 4.96% and 27.04% to 41.71% less than fair value, respectively.
Mr David Spooner Assistant Secretary for Import Administration said that “Unfair price discrimination by foreign competitors distorts the marketplace and damages the interests of American workers and industries. This Administration is strongly committed to ensuring that our manufacturers benefit from strong and fair relationships with our trading partners, and we will do so by aggressively enforcing America's trade remedy laws.”
The merchandise covered by these investigations is certain welded carbon quality light walled steel pipe and tube, of rectangular cross section, having a wall thickness of less than 4mm. Carbon quality steel includes both carbon steel and alloy steel which contains only small amounts of alloying elements. Rectangular pipe can be used for fencing, window guards, and railing for the construction industry. It is not used for the conveyance of liquid or gas.
The petitioners for these investigations are
1, Allied Tube & Conduit Corp
2. Atlas Tube
3. Bull Moose Tube Company
4. California Steel and Tube
5. EXLTUBE
6. Hannibal Industries
7. Leavitt Tube Company LLC
8. Maruichi American Corp
9. Searing Industries
10. Southland Tube
11. Vest, Inc
12. Welded Tube
13. Western Tube and Conduit
CSC 2007 pre tax profit up by 29% YoY
China Steel Corporation has posted pre tax profit of TWD 61.7 billion for 2007 up by 29% YoY benefiting from rising demand and prices.
China Steel has raised prices for 8 straight quarters on higher demand from shipbuilders and construction companies. Its profit in April to October 2007 period is increased by 43% YoY.
The rising costs of raw materials have forced some rivals to cut production and robust demand has boosted steel prices. Iron ore costs have tripled in 5 years due to surging demand from China and contract prices for the raw material may jump as much as 70% from April 2007.
China Steel, which produces about 10 million tonnes of the alloy a year, typically announces April to June prices for Taiwan customers in late February.
Japanese FTC searches 4 steelmakers on HDG cartel
It is reported that Japanese Fair Trade Commission searched the headquarters of 4 steel sheet makers namely Nisshin Steel Co, Nippon Steel & Sumikin Coated Sheet Corporation, JFE Galvanizing & Coating Co and Yodogawa Steel Works Limited, on suspicion of forming an unlawful cartel to set prices of zinc coated sheet metal used as building materials.
The commission believes that the price hikes for the products exceed the rise in raw material prices, suspecting that the companies used rising raw material prices as a pretext to boost their earnings.
As per report, FTC investigators plan to file a criminal accusation against them with prosecutors.
According to sources, the 4 companies raised the price of hot dip galvanized steel sheet products several times in fiscal 2006. They have seized a combined share of about 80% in Japan's zinc coated steel sheets market worth some JPY 300 billion a year.
Nisshin Steel is a major steelmaker based in Tokyo. Nippon Steel & Sumikin Coated Sheet, which is also based in Tokyo, is a joint venture owned by major steelmakers Nippon Steel Corporation and Sumitomo Metal Industries Limited. The four companies have explained to building material makers that the price increases were unavoidable after the price of raw materials such as steel rose sharply on global markets.
One dead in Prachuap steel plant protest
Thai News Agency reported that demonstrators supporting and opposed to a controversial steel smelting facility in Prachuap province of Thailand confronted each another leaving one local resident dead from a gunshot.
As the demonstration became more heated after a gunshot from an as yet unknown source killed one of the demonstrators, a man believed to be a supporter of the proposed upper south project.
It is noted that some 100 villagers gathered in a village in Bang Saphan district where construction of the plant by a major firm is to take place. Meanwhile, villagers supporting the project marched to the area while police and army officials tried to maintain peace. Many villagers in this resort province have obstructed the construction plan on fears that it would create pollution and affect environment.
Nippon Steel acquires 51.5% stake in Oji Steel
Platts reported that Japan's major steelmaker Nippon Steel has acquired a 51.5% stake in Oji Steel, making it a consolidated subsidiary.
Nippon Steel plans to support Oji Steel's business base and enhance the value of two companies.
Oji Steel is Japan’s largest manufacturer of flat steel bars with a 28% domestic market share. It runs an electric arc furnace and steel rolling facilities with the capacity to produce 380,000 tonnes per year of flat bar products.
Gerdau Ameristeel announces Jacksonville Mill expansion
Gerdau Ameristeel Corporation announced today that it has begun the planning process for a capital project to expand its Jacksonville Steel Mill in Florida.
Mr J Neal McCullohs VP of commercial & downstream operations at Gerdau Ameristeel said that the expansion is expected to add approximately 400,000 tons to the Gerdau Ameristeel Jacksonville rolling mill, matching the facility's recently expanded melting capacity of more than 1,000,000 tons.
He added that "This planned expansion will complete our plans to have a global scale rebar plant in Florida to serve the Southeastern United States with the highest quality, lowest cost products in the industry. We have been a market leader in rebar in this region and we believe this project will enable us to continue to serve our customers long into the future."
An engineering team is well into the planning process for the expansion; which is expected to be completed by 2010. The primary products out of the Jacksonville Mill will continue to be Rebar and Wire Rod.
Gerdau Ameristeel is the second largest mini mill steel producer in North America with annual manufacturing capacity of approximately 12 million tons of mill finished steel products. Its products are generally sold to steel service centers, steel fabricators, or directly to original equipment manufacturers for use in a variety of industries, including non residential, infrastructure, commercial, industrial and residential construction, metal building, manufacturing, automotive, mining, cellular and electrical transmission and equipment manufacturing.
Samsung Corporation buys 100% stake in Myodo Metal
Samsung Corporation said that it has purchased 100% of Japanese steelmaker Myodo Metal Co in efforts to diversify its business portfolio and to expand its business base in high end stainless products.
Myodo Metal, established in 1945, is one of Japan’s top 5 manufacturers of stainless steel products. It produces 50,000 tonnes of high end stainless steel products.
Nucor Q4 net earning decrease by 10%YoY
Nucor Corporation has announced its consolidated net earnings of USD 364.8 million for the fourth quarter of 2007 a decrease of 10% compared with USD 405.1 million earned in the fourth quarter of 2006 and a decrease of 4% from the USD 381.2 million earned in the third quarter of 2007.
In the fourth quarter of 2007, Nucor's consolidated net sales increased 27% to a quarterly record USD 4.40 billion compared with USD 3.47 billion in the fourth quarter of 2006 and increased 3% compared with USD 4.26 billion in the third quarter of 2007. Average sales price per ton increased 9% from the fourth quarter of 2006 and increased 1% from the third quarter of 2007. Total tons shipped to outside customers were 5.8 million tonnes in the fourth quarter of 2007 an increase of 16% over the fourth quarter of 2006 and an increase of 2% over the third quarter of 2007.
For the full year 2007, consolidated net earnings were USD 1.47 billion compared with the record net earnings of USD 1.76 billion in 2006. Although net earnings decreased 16% from 2006 levels, 2007 was the second best earnings year in Nucor's history. Its consolidated net sales for 2007 increased 12% to a record USD 16.59 billion compared with USD 14.75 billion in 2006. Average sales price per ton increased 8% while total tons shipped to outside customers increased 4% from 2006.
In the steel mill segment, Nucor steel production decreased 1% to 22.08 million tonnes in 2007 compared with 22.3 million tonnes produced in 2006. Its total steel shipments remained flat at 22.3 million tonnes in 2007 compared with 22.3 million tonnes in 2006. Steel shipments to outside customers decreased 2% to 20.2 million tonnes in 2007 compared with 20.6 million tonnes in 2006.
In the steel products segment, steel joist production during 2007 decreased to 542,000 tonnes, compared with 570,000 tonnes in 2006. Steel deck sales increased to 478,000 tons in 2007 compared with 398,000 tonnes in 2006. Cold finished steel sales increased to 449,000 tonnes compared with 327,000 tonnes in 2006. Sales of fabricated concrete reinforcing steel were 583,000 tonnes from the acquisition date of Harris Steel Group Inc near the end of the first quarter of 2007 through the end of the year.
In the fourth quarter, Nucor completed the acquisition of Nelson Steel, Inc a producer of wire mesh and related products. In addition, Nucor's wholly owned subsidiary, Harris Steel Inc completed three acquisitions in the fourth quarter. Harris Steel formed a new entity with Barker Steel Company Inc that combines the two companies' rebar fabrication operations in the northeastern US market. Harris Steel has a 90% interest in the joint venture. During the quarter, Harris Steel also acquired Rockford Fabricators Inc a rebar fabricator and US Drafting and Detailing Inc a provider of rebar detailing and project management services. With these acquisitions, Harris Steel's annual rebar fabrication capacity exceeds 1 million tonnes.
Indonesia approves coal miners production plans for 2008
According to Mr Mangantar Marpaung Indonesian Energy Ministry's director for coal and mineral development that the Indonesian government has approved the 2008 production plans proposed by six major coal miners.
He said "We have discussed the production plans from the six miners and have approved them."
Indonesia biggest coal miner PT Kaltim Prima Coal has proposed to produce 46.27 million tonnes of coal this year while its sister company PT Arutmin Indonesia planned to produce 20.30 million tonnes.
ArcelorMittal inaugurates an innovative vacuum plasma coating line
ArcelorMittal has announced that it inaugurates Arceo, its industrial prototype for a vacuum plasma steel coating line located at Liège in Belgium.
The release said that “This breakthrough technology, developed as a world first by the Group’s Research and Development in partnership with the Walloon Region, will open up a host of new uses for flat steel products. With this process steel can be a sensor, a reflector, a source of light, an anti bacterial or self cleaning surface or just simply more aesthetic or endowed with better anti corrosive properties. This process is one of ArcelorMittal’s promising development projects and will contribute to renewing and expanding its product range.”
The released said that the vacuum plasma process is respectful of the environment. It does not use solvents or chemical preparations; neither does it generate effluents or gases that require treatment. Furthermore, it enables the production of environmentally friendly products that allow for sustainable development.
After successfully developing the first investment phase, Mr Christophe Cornier, EVP Flat Carbon Western Europe, announced the launch of a second phase specifically devoted to increasing the anti corrosive properties of steel. Mr Christophe Cornier said that “ArcelorMittal can be proud of its faith in this project. Developments so far have proved that the process is robust and respectful of the environment. Several tests are currently being carried out for clients interested in the process. With Arceo, ArcelorMittal will transform the future of steel, opening up new horizons for it.”
Mr Greg Ludkovsky VP Research and Development added that “We are very happy to see that this project initiated within our research centers is becoming an industrial success.”
Hyundai Steel Q4 net falls 14% YoY on higher costs
South Korea's second largest steelmaker Hyundai Steel Co has announced that its fourth quarter earnings had fallen by 14% YoY largely due to increased raw material costs and lower demand for stainless products.
The Hyundai Steel Co said in a statement that its net profit reached KRW 125 billion in the October to December in 2007 in 2007 compared with KRW 145 billion in 2006. Sales for the quarter climbed 36% to KRW 1.97 trillion. It shares of Hyundai Steel were trading at KRW 67,800 up by 2.41%.
It said it posted a 35% increase in sales to KRW 7.38 trillion last year, and operating income increased by 13% to KRW 669 billion. Full year profit rose 9.8% to KRW 520 billion.
A company official said that "However, demand from builders and other customers will increase and increased steel prices will help us maintain a decent profit."
Mr Moon Jung-up an analyst at Daishin Securities said that Hyundai Steel and other local steelmakers are increasing steel prices in order to reflect increased prices of raw materials such as slab. He said the steelmaker is expected to post a good business result this year on rising demand for steel products and increased steel prices."
Ruukki construct comprehensive service concept for its customer
It is reported that Ruukki is building a comprehensive service concept for its customers. The concept includes not just design, but also components and systems fitted out as far as possible, for mobile machines. Booms are an important part of this concept.
Ruukki Engineering customers in the lifting, handling and transportation equipment industry make cranes, materials handling and forest machinery. The construction and mining sectors also rely on Ruukki’s products.
Mr Ruukki’s Lasse Mannola senior VP of LHT said that “All our customers are original equipment manufacturers. These billion euro companies represent the very best in their class, whether they make mining or earthmoving machinery, mobile cranes or reachstackers. He said we deliver numerous components including frames, cabins, steering axles and booms for machines.”
Ruukki now has a couple of dozen key customers in the LHT industry and expects this figure to double within a few years. Ruukki aims to work in partnership with existing and future customers and to create value added for their business. Value added arises from customers not needing to buy components, materials and labour from different places. Ruukki delivers a first class concept made by the company’s own works on a one stop shop basis. This is how we ensure quality and delivery reliability.
Mr Eder sees no real downturn ahead
Reuters cited Mr Wolfgang Eder CEO of Austrian steelmaker voestalpine's as saying that demand continued to be stable on a high level and tapping bond markets was not an issue now.
Mr Eder said that "Demand remains stable on a high level and we don't expect that anything will change until the summer, yet we also don't have any reason to doubt that the rest of the year will take a good course. He added that he did not foresee a noteworthy downturn and added selling a bond was not an issue at this point in time.”
Xstrata to spend USD 1.2 billion to expand SA coal mines
It is reported that world number-one steam coal exporter Xstrata plans to spend nearly USD 1.2 billion to lift its South African production of the fuel by some 16.4 million tonnes by 2012.
A presentation posted to its website showed that it had five projects that would start up in the country between this year and 2012 with some USD 400 million going to its Zonnebloem project.
Xstrata said that the Eskom market, the biggest local coal consumer, had grown by 179% since 2002.
Xstrata Coal South Africa operates in partnership with black owned African Rainbow Minerals.
IFM to produce 133 700 tonnes of ferrochrome in H1 of 2008
It is reported that Ferrochrome producer International Ferro Metals is on track to produce 133,700 tonnes of ferrochrome in the first half of 2008, after having produced at about one half of its capacity in the second half of 2007.
Mr Stephen Turner CEO of International Ferro Metals said that "We expect to be at full capacity during this coming year, a highlight of which will be the commencement of construction of the additional plant and mine development to increase production capacity by 150%."
International Ferro Metals said during the period, it produced 93,317 tonnes of ferrochrome as compared with its capacity of 133,700 tonnes. This was as a result of technical problems at two furnaces last year as well as electricity supply interruptions. It said Eskom has confirmed that IFM has an enforceable commitment to supply electricity to operate our three planned new furnaces as well as our current two furnaces.
Eskom has warned that electricity supplies will be tight until at least 2013, when its new capacity comes on stream. The utility said last week that mega projects, such as Rio Tinto's smelter at Coega in the Eastern Cape, might be delayed as a result of the power shortages.
'Eskom gave an enforceable commitment to supply electricity'
SS scrap prices to rebound on returning nickel strength
It is reported that after the sharp drop of nickel price in December last year, the LME price of nickel has stuck around USD 28,000 per tonne in recent weeks.
The nickel price is going up from the valley since the beginning of 2008 and the nickel behavior did not show any large drop in January. This has led the transaction price rebound of stainless steel scrap up to NTD 82 per kilogram and NTD 84 per kilogram in Taiwan, increasing by NTD 10 per kilogram than early January.
Currently, the steel scrap containing 8% nickel is offered averagely as NTD 73 per kilogram to NTD 75 per kilogram which has picked up from the bottom of NTD 62 per kilogram in last two months.
Tung Ho Steel hikes H beam prices
It is reported that due to the price increase of steel rebar, Taiwan’s Tung Ho Steel decided to raise H beam prices again.
At present, H beam price is stable at a high level of NTD 25,500 per tonne to NTD 25,700 per tonne. Due to soaring American scrap prices, the H beam market has been already ready for recovery since last week.
According to the previous experience, the reasonable price gap between steel rebar and H beam is at NTD 3,500 per tonne. Therefore, H beam price should be at NTD 27,000 per tonne to NTD 27,500 per tonne while steel rebars price is at NTD 24,000 per tonne. In that case, there will be an increase of NTD 1,500 per tonne to NTD 2,000 per tonne for H beam prices.
MPD iron ore mine in Congo needs USD 2 billion investment
It is reported that Mining Projects Development, a project by a British firm to mine iron ore in southwestern Congo Republic requires a USD 2 billion investment.
The project, announced in September 2007, envisages the construction of a 300 kilometer long railway from the proposed mine at Zanaga to the port of Pointe Noire and a minerals terminal there.
MPD had declined to say in September 2007 how much investment was required or what was the size of the iron deposit, which it described as world class.
Congo government, when it signed an initial exploration deal with MPD in May 2007, said that prospecting work in the 1960s suggested there could be 500 million tonnes of ore at the sites, with 50% to 55% iron content at a depth of more than 25 metres.
Hyundai Heavy to construct another yard in Kunsan
Hyundai Heavy Industries has announced that it will construct its number 2 shipyard in Kunsan city. The new shipyard will be equipped with a newbuilding dock and an outfitting basin. The yard, to be built with an investment of KRW 407.2 billion is scheduled to go into operation by January 2010.
Details of the project such as facilities and equipment are yet to be released, but local newspapers report that HHI plans to build a yard capable of building about 20 units of 180,000 DWT class vessels per year. The local papers report that the new yard will have a dry dock 380 meters long overall and a 1,600 ton gantry crane on a site of about 2.33 million square meter. In addition, it will be equipped with a barge for launching.
Construction work on the new yard is scheduled to begin within 2008, and completed within 2009 at the earliest. HHI reportedly plans to build about 20 ships per annum in terms of 180,000 DWT class with the volume of processed steel estimated at 400,000 tonnes.
It envisages chalking up KRW 2 trillion in annual sales. In September 2007, HHI acquired a total of 1.5 million square meter of land in Kunsan city and decided to build a block fabricating factory. In parallel with this, HHI is now giving technical and other training to about 500 workers newly hired locally. The new shipyard being planned for Kunsan will be built separately from this block factory. It seems that HHI had long been considering to develop Kunsan into its number 2 production center in the long run.
With a shipyard sitting on a total of 6 million square meter site in Ulsan, HHI is building ships and offshore structures with 9 dry docks and on land facility. A 10th dry dock is currently under construction scheduled for completion within 2009. HHI builds in excess of 5 million worth of new ships a year with annual sales totaling KRW 80 trillion as of 2006, ranking the world's number 1 both in newbuilding volume and annual revenue.
STX Group to invest USD 150 million in Vietnam
South Korea's STX Group said that it would set up a manufacturing base in Vietnam with an investment of USD 150 million by 2015, to expand its offshore plant business.
STX Group's 3 flagship companies namely, STX Corporation, STX Shipbuilding Co and STX Engine, will invest in the project.
It has won the Vietnamese government's approval to set up a unit and is yet to be decided whether it would build ships from the Vietnam unit.
Jordan Steel secures USD 25 million syndicated loan
It is reported that Jordan Commercial Bank led a USD 25 million syndicated loan in favor of Jordan Steel. The banks extending the credit include the Bank of Jordan and Jordan Investment and Finance Bank.
The loan will be used to finance and increase the investments of Jordan Steel which covers 25% of the market’s requirements of this commodity,
Mr Emad Badran GM of Jordan Steel said that “The Company is working to increase its output and to lower its production costs.”
Electrotherm to supply induction furnaces to Turkish steel makers
Indian engineering firm Electrotherm India Limited has bagged orders worth USD 14 million to design, manufacture and supply furnaces to Turkish steel makers. Electrotherm will also supervise erection and commissioning of the induction melting furnaces.
The orders also include manufacture and supply of electrical and cooling systems and other equipment.
An ISO 9001:2000 certified company, Electrotherm has its 90,000 square meter plant at Palodia on the outskirts of Ahmedabad in Gujarat.
Daewoo wins USD 443 million shipyard order in Oman
Daewoo Engineering & Construction said that it has clinched a USD 443 million order to build a shipyard in Oman jointly with an Oman based builder.
Daewoo Engineering & Construction holds a 59.07% stake in the order, equivalent to USD 262 million while the Galfar Engineering & Contracting Co holds the rest.
The ship repair yard is to be built in Duqm, a port city of Al Wusta on the southeastern coast of Oman.
Mining expo MENA EX 2008 in Jeddah opens
Khaleej Times reported that the first international exhibition for mineral exploration and applications ‘MENA EX 2008’ has opened at the Jeddah International Convention Center, with Jeddah governor Mr Mishaal ibn Majed describing it as the gateway for potential investors.
Around 190 companies from 16 countries are taking part in the 4 day exhibition, some of them with their latest mining and geological equipment.
Dr Zuhair Nawab chairman of Saudi Geological Survey and Dr Abdullah Dabbagh president & CEO of Saudi Arabia Mining Company has highlighted the objectives of the expo. Mr Nawab said hat “The pioneering exhibition provides a wealth of opportunities for international investors in the mining sector. Maaden, with its long history has global ambitions. Our objective is to place Saudi Arabia in the forefront of the mining sector and develop it as the biggest mining market in the world.”
Several workshops were scheduled during the 3 days with the participation of keynote speakers and experts in the fields of mining and mineral resources. Saudi Geological Survey presented the first workshop on the ‘Role as the Kingdom advisor on earth science and mineral resources.’ The workshop focused on applying earth science technology in the Kingdom’s mining industry.
Saudi Arab sets up National Water Company
Mr Abdullah Al Hussayen water & electricity minister of Saudi Arabia said that National Water Company, which was licensed by the cabinet, will be fully owned by the government and will cover all parts of the Kingdom in 3 years.
He said that the new company will have a capital of SAR 22 billion with 2.2 billion shares, each with a nominal value of SAR 10 and a paid up capital of SAR 6.84 billion with 684.88 million shares. He hinted at selling part of its shares in an initial public offering at a later stage.
Mr Al Hussayen described the cabinet decision on NWC as a historic one as it would bring about qualitative changes in water production and distribution in the country. Saudi Arabia is the world’s largest producer of desalinated water. He said that “The council of ministers will look into the possibility of selling the company’s shares in an IPO in light of proposals to be made by the ministry of water & electricity in coordination with the finance ministry and other authorities.”
According to a cabinet statement, NWC will provide all services related to underground water sector, drinking water distribution sector and collection and treatment of sewage water on a sound commercial basis. It said that “The company will receive all its dues, including charges for its services in the specified time from all subscribers without exception. All rights and properties of the state in the above sectors will be transferred to the company in phases determined by the minister of water and electricity.”
NWC’s activities will start from Riyadh as it will take over groundwater resources, sewage network and sewage treatment plants in the region. Within three months the company will move to Jeddah, then to Madinah, Dammam and Makkah. The plant is expected to supply about 194 million gallons of water daily as well as 900 MW of electricity daily when it becomes operational by the end of next year.
Pakistani cement exporters cut prices for India and MEA
It is reported that the value of Pakistani cement exports to India has fallen from USD 74 to USD 70 per tonne during the last few weeks due to competition amongst the exporters.
The report cited a top official of a cement exporting firm as saying that “Pakistani cement makers are fetching less value for their products from buyers abroad because they are competing with each other unnecessarily. It is unnecessary competition because the demand from Indian buyers is more than our capacity to export to them. The buyers there can offer much more to us.” He added that while the cement exported through land route is fetching USD 70 per tonne, the cement sent by sea is now priced at USD 63 per tonne as compared to USD 65 per tonne four to 6 weeks ago.
Industry source said that similar is the case of cement exports to the Middle East. Whereas the Pakistani companies were selling their products to Middle East buyers at USD 62 per tonne, now they are shipping for only USD 60 per tonne. Cement export value had risen very fast early last year. It had increased from USD 47 to USD 48 per tonne in January 2007 to USD 57 per tonne in March 2007 and then USD 65 per tonne in May 2007.
According to data provided by All Pakistan Cement Manufacturers Association, Pakistani cement makers exported 2.99 million tonnes of cement in July to December 2007 period, which was higher by 149 buyers from 1.20 million tonnes exported in the same period of last year. The capacity of local cement producers has almost doubled during the last 2 years, far exceeding the local demand. This has created a supply glut, leading to price cuts by the manufacturers. As a result the cement prices went as low as PKR 170 per 50 kilogram bag near the end of 2006. This forced the manufacturers to look for opportunities abroad and fortunately there was a huge demand-supply gap in the Indian market, which they targeted and managed to exploit well.
Turkish 2007 budget deficit TRL 13.9 billion
Mr Recep Tayyip Erdoğan prime minister of Turkey said that Turkey had a budget deficit of TRL 13.9 billion in 2007, beating its target for the year.
The 2007 budget aimed for a deficit of TRL 16.7 billion or about 2.7% of gross domestic product.
South Zagros produces 55% of Iran gas
Mr Javad Owji MD of South Zagros Oil & Gas Exploitation Co said that it is producing 55% of Iran’s gas. It produced 1.5 million barrels of crude oil per day.
He added that South Zagros Oil & Gas Exploitation Co working on 10 gas fields was producing over 246 million cubic meters of gas and 87,000 barrels of gas condensates, reiterating that the output constituted 55% of Iran’s total production. He said that “If we compare the value of the company’s output with the country’s crude, it is equal to 1.5 million barrels of oil daily.”
According to Mr Owji, South Zagros Oil & Gas Exploitation Co is exploiting 10 gas fields in three provinces of Fars, Bushehr and Hormuzgan. He added that Nar and Kangan fields, the largest onshore gas reserves in the Middle East, were located at Bushehr and the company was currently deriving 106 million cubic meters of sweet gas and 23,000 barrels of gas condensates from the 2 fields per day.
Mr Owji said that over 500 had been employed and 2,000 were working on contractual basis in Bushehr region, whose gas was transferred to Fajr e Jam Refinery after it was processed. Two other gas fields of the company were situated in Qeshm and Sarkhun, southern province of Hormuzgan. 2 reserves were yielding over 16.5 million cubic of gas and 14,000 barrels of condensates daily.
He further added that 4 fields of Tabnak, Homa, Shanol and Varavi having 6 gas collection units were producing over 84.5 million cubic meters of gas and 41,000 barrels of gas condensates a day that were transferred to Parisan 1 and 2 refineries after undergoing processing stage.
Emaar to raise USD 1.8 billion in India unit IPO
It is reported that Dubai's Emaar Properties hopes to raise up to USD 1.8 billion from an initial public offering of a unit in India, where IPOs are forecast to more than double this year despite choppy markets in the wake of the US sub prime mortgage crisis.
Emaar MGF Land said in a statement that it plans to sell 102.6 million shares at between INR 610 and INR 690 each in the February 1st to 6th 2008 IPO, looking to raise slightly more than had previously been expected.
Mr Pranay Vakil chairman of consultancy Knight Frank said that Emaar MGF, which has access to 13,024 acres in India, will use the IPO proceeds to acquire land and development rights, pay for development and construction and repay loans.
Property development in India has flourished and land prices have jumped since the country eased rules on foreign investment in the construction industry in early 2005.
Iran attracts USD 11 billion FDI in 10 months
Mr Ahmad Jamali director of the foreign investment department of the Iranian ministry of finance and financial affairs said that investment is on the rise in Iran as a result of incentives and new laws for the protection of investments.
Since March 2007, USD 11 billion has been invested in telecommunications, steel, petrochemicals, agriculture and small scale industries by foreign financiers, mostly from Turkey, the United Arab Emirates, India, China, Germany, France and Italy.
Over the past 10 months, foreign companies have expressed interest in investing in the construction of two refineries and a steel company.
The Iranian government liberalized investment regulations in the early part of the decade, but since then foreign investors have only focused on a few sectors of the economy, namely the oil and gas sectors, the vehicle manufacturing industry, copper mining, petrochemicals, foodstuffs and pharmaceuticals.
Iran attracted USD 24.3 billion of foreign investment from March 1993 to March 2007 and foreign transactions with Iran amounted to USD 150 billion between 2000 and 2007.
JK Cement plans cement plant at Fujairah in UAE
It is reported that Indian cement major JK Cement is planning to set up a cement facility in Fujairah, jointly with the local government.
It is reported to be in the final stages of talks and the amount of investment and capacity of the plant will be finalised by February 2008.
As per report, the Fujairah government is likely to pick up about 10% equity in the proposed cement factory.
Dubai non oil exports surge by 43% YoY in 2007
Khaleej Times reported that Dubai's non oil exports surged a record 43% YoY in 2007 to AED 167.9 billion from AED 117.4 billion on the back of a strong increase in trade with Iran, Saudi Arabia and Qatar.
Dubai Chamber of Commerce & Industry said that the jump in total exports, including re exports, underscored the buoyant economic growth of the emirate.
Exports to Iran rose by 33.4% YoY from AED 25.94 billion to AED 35.94 billion, while exports to Saudi Arabia grew up by 34.5% YoY to AED 31 billion from AED 23 billion. Qatar maintained the position as the third biggest export destination of Dubai with 81.1% YoY jump in imports from Dubai at AE 28 billion. India came 7th with total imports from Dubai hitting AED 5.58 billion up by 81.3% YoY.
In the GCC, Saudi Arabia was Dubai's largest export market, accounting for 6% of total exports. Among the GCC destinations, in terms of growth Qatar has been leading the table with an annual average growth rate of 34% over the past 5 years.
In 2007, the DCCI issued 559,652 certificates of origin compared to 442,287 in 2006 up by 16% YoY to over 210 destinations, whereas the total value of the commodities exported and re exported through Dubai according to the certificates of origin issued in 2007 reached AED 167.9 billion.
Mr Obaid Humaid Al Tayer chairman of the DCCI said that the increase in the number and value of the certificates of origin issued by Dubai Chamber in 2007 reflect the significant growth of Dubai economy. He attributed the record growth in exports to the hard work of all members and Dubai Chamber’s efficiency in opening up new global markets and exposing the businesses to a whole new world of open door business policy. Dubai's exports having been growing by an average of more than 28% annually during the past 5 years. Iran has been topping the list of export markets, with a share of 15%.
According to the Dubai Department of Tourism & Commerce Marketing, Dubai's non oil foreign trade grew up by 9.15% YoY to AED 523.5 billion in 2006 compared with AED 479.6 billion in 2005. Its imports have also increased by 15.5% YoY from AED 190.4 billion in 2005 to AED 219.8 billion in 2006.
Chinese GDP grows by record 11.4% in 2007
Chinese National Bureau of Statistics announced that China's gross domestic product grew by 11.4%YoY to CNY 24.6619 trillion (USD 3.43 trillion) in 2007. The growth rate was 0.3 percentage points higher than the 2006 level revised at 11.1%. Analysts said the 2007 figure was also the highest of the past 13 years.
The quarterly breakup of GDP growth is as under
Q1 11.1%
Q2 11.9%
Q3 11.5%
Q4 11.2%
Mr Xie Fuzhan head of National Bureau of Statistic told reporters that 2007 was the fifth year in a row in which GDP had expanded by more than 10%. Mr Xie said that “US and China had been powerful engines for the current cycle of global growth. However, the mounting possibility of the US economy moving into a recession was bound to have a negative effect on the world economy.”
However, Mr Xie was confident of China's economic prospects, saying that “A steady" growth is likely this year also”.
Mr Xie said that "We will keep a close watch on developments in the U.S. economy on one hand. On the other hand, we will be striving to address institutional and structural problems in the Chinese economy."
He said there is still a risk that China's economy could shift from rapid growth to overheating this year, with growing inflationary pressure. To avert this, the central government had adopted a tight monetary policy in tandem with a prudent fiscal policy for 2008.
China discovers 1 billion tonnes of iron deposits in Liaoning
Xinhua reported that geologists have discovered an iron ore deposit estimated to be at least 1 billion tonnes in northeast China's Liaoning Province after more than two years of exploration.
Mr Wang Wenqing deputy head of the Liaoning Provincial Survey Academy of Geology and Mineral Resources said that the newly found deposit, between 1,280 meters and 1,500 meters underground, is at the Pingshan District in Benxi City.
Mr Wang said that "We plan to spend two to three years finding out the actual reserves. He said however we will have to wait even longer before we can start excavating."
Mr Yu Wenli head of the Liaoning Provincial Bureau of Geology and Mineral Resources Exploration said that initial exploration show that the iron ore is mainly hematite or magnetite, and the average iron content is 34.68%. He said that he deposit can be exploited for more than 30 years.
China face power shortage due to coal shortage cuts
According to the State Electricity Regulatory Commission China is experiencing a power gap of up to 69.63 million kilowatts as a coal shortage cuts generation at some plants.
Mr You Quan chairman of SERC said that the shortage has led 13 provincial level regions, including Hubei, Sichuan, Shaanxi, Yunnan and Guangdong to ration electricity due to an acute shortage in coal stockpiles and strained coal transportation affected by adverse weather conditions.
Mr Yang Jianchu deputy head of the Provincial Economic and Trade Commission said that the booming southern province of Guangdong is expected to have a power gap of 6.5 million kilowatts in 2008.
According to the State Grid Coal reserves were down more than 40%YoY at 17.73 million tonnes as of January 20. The figure only equals eight days' supply for the country's power plants.
The region covered by the Central China Power Grid now has only 5.57 million tons of coal remaining, only half that of the normal level, and enough to meet only seven days of consumption volume, earlier reports said. Statistics from the State Power Control Center shows the country burned 2.1 million tons of coal for power generation on January 20, while national stock dropped to 17.73 million tons from 20 million tons on January 10.
SERC said China's installed power generating capacity increased by 100 million kilowatts to 713 million kilowatts last year. The China Electricity Council has recently predicted that capacity would jump to 900 million kilowatts in 2010.
Sinosteel builds 10% stake in Midwest
Australian iron ore company Midwest Corporation announced that Chinese Sinosteel now holds a 10% stake in the company. The Western Australia based miner said that Sinosteel does not intend to make an unsolicited takeover offer for the company.
Midwest, which is currently fielding a takeover offer from Murchison Metals Limited said 17.5 million shares were put through the market yesterday of which 15.3 million shares were crossed after market close at a price of AUD 5.30 per share.
Sinosteel last month proposed an AUD 1.2 billion cash takeover for Midwest at AUD 5.60 a share to rival an all stock bid from Perth-based Murchison Metals Ltd.
Midwest is currently fielding a takeover offer from Murchison Metals Limited, which has offered one of its shares for 1.08 Midwest shares, valuing the target at around AUD 700 million. Midwest recommended that its shareholder's reject Murchison's bid. Earlier this week, Murchison extended its offer period from January 23rd 208 to February 6th 2008.
Chinese CRC export offer keeps firm
It is reported that Cold rolled steel coil prices are largely unchanged in Chinese domestic market. Export quotations remain firm and most steel mills are dealing with business for March shipment.
Current prevailing offer for 1.0mm CRC has risen to USD 750 per tonne FOB from USD 730 per tonne to USD 740 per tonne in the past two weeks. There have been more transactions than before taken into account the competitive price.
A North East China based tier one steel maker has been fully booked for March shipment at USD 730 per tonne FOB as base price. It is expected to announce the price for April shipment in end January or early next month. While another major steel mills in central China also have finished its contract for March shipment now, with base price at USD 720 per tonne FOB which is likely to be the most competitive in China.
Export price are anticipated to move up further on ascending domestic CRC prices. On Shanghai market, 1.0 CR sheet by Anshan Steel goes at CNY 5800 per tonne 1.0 CR coil by Maanshan Steel is being offered at CNY 5700 per tonne.
ILAFA urges to reduce impact of Chinese import
Latin American Iron and Steel Institute said recently that because China’s export steel quantity has increased sharply in Latin America market, it made China has become the major competitor for Brazil’s and Argentina’s steel industries.
According to ILAFA's calculation, Latin America had imported 1.6 million tonnes of steel products from China since last January to October 2007 up by 35.6% YoY.
Therefore, ILAFA appealed the government to limit the China steel import to avoid damage to Latin America's steel industry; otherwise, Latin America's steel mills will have the pressure in cutting their production and may increase the unemployment rate.
Jigang exports 1.42 million tonnes of steel products in 2007
It is reported that Jinan Iron & Steel Group has exported 1.42 million tonnes of steel products in 2007 down 140,000 tonnes from the year before. However, the export value has risen 22%YoY to USD 810 million.
As a leading medium plate producer in China, Jigang has stepped up the ratio of high end and high value added specialty plate to 88%. Shipbuilding plate sales has recorded 100% increase for two straight years and hit a record high of 1.3 million tonnes in 2007. Moreover, it has become the country's 4th volume supplier of oil tan plate.
Chinese coal miners ordered to honor contracts
It is reported that Chinese central government has ordered coal firms to stop driving up prices and said they must honor their supply contracts with power plants in an effort to head off a power shortage.
At the request of the National Development and Reform Commission, the China Coal Transportation and Distribution Association has threatened to cancel the license of any company that ignores the order to stabilize prices.
The association said in a circular issued recently that "Coal producers must strictly implement their contract prices for 2008 and must not take advantage of the current tight supply to raise prices as they like. It said prices should be held at around the same level as at the end of last year.”
The government is also banning all coal shipments other than those to power plants.
Jinxi aims to build largest H beam base in China
It is reported that Jinxi Steel’s H-beam production line which can produce 1.5 million tonnes of products per year is the World’s most advanced H-beam production line and the products are sold to Japan, South Korea etc 15 countries.
In March this year, Jinxi Steel will invest CNY 2.6 billion to construct a small and medium sized H-beam project with an annual production capacity of 1.2 million tonnes, at that time Jinxi Steel will become the largest H-beam production base in China.
China Shipping and Shanghai International Port to establish JV
It is reported that China Shipping Development Co planned to set up a 51% to 49% shipping venture with Shanghai International Port Co.
As per report a Hong Kong unit of China Shipping would invest USD 10.20 million in the venture, while a Shanghai International Port subsidiary would contribute USD 9.8 million.
The venture will focus on the transport of imported iron ore. The terms of the venture's establishment is not announced.
Baotou Steel develops new automobile steel type
It is reported that Baotou Steel has reached an intended agreement with Dongfeng automobile wheel limited company to supply in bulk the beam steel or wheel rib indicating the steelmaker is successful in making HR duplex steel through its CSP line.
Compared to other light metal materials, HR duplex steel has advantages of high intensity, high moulding property and low cost, hence is very attractive to the automobile manufacturing industry.
Baotou Steel spent three years developing a whole set of CSP HR duplex steel strip technologies, made 4mm to 11mm products with 540, 590 million per annum. Its wheel rib is approved to be high quality, even superior to the standards and as known to use its 11mm thick DP 540 duplex steel to replace Q 235B steel can reduce the wheel rib weight by 21.4%.
Xinyuan launches commercial operation of SS mill
It is reported that on January 18th 2008 the first phase of Gaoyao Xinyuan Stainless Steel Company Ltd, a stainless steel hot rolling line launched commercial operation.
The line has a design capacity of 240,000 tonnes per year. According to the company, the products mainly composed of 201 and 304 grades, with a width of 510 mm and below, 2.2 to 5.0 mm thick.
The phase two and three will construct steel melting and pickling lines, which are to be completed in 2008.
Gengsheng Minerals to supply refractory to Baosteel-Han Steel
China Gengsheng Minerals Inc announced that it has won four supply contracts valued at approximately USD 1.9 million with Hanbao Iron & Steel Co Ltd.
Hanbo Steel is a USD 1.6 billion joint venture between Baosteel Group and Handan Iron & Steel Group. The Hanbao Steel project is expected to be completed in the first half of 2008 and will have a production capacity of 4.6 million tonnes of high end flat steel products annually.
Under the contracts, Gengsheng will supply castables, bricks and other refractory materials to Hanbao Steel for use in its hot rolled strip units construction project. Gengsheng will also provide technical services for the installation and inspection of the materials supplied under each of the contract.
Mr Shunqing Zhang chairman, CEO & president of Gengsheng said "We are honored and excited to be a supplier to Hanbao Steel, especially in light of Hanbao Steel's presence in the high end steel market, which primarily serves the automobile and shipping industries. We believe that the contracts are a testament to the superior quality and reliability of Gengsheng's products."
China Gengsheng Minerals Inc develops, manufactures and markets a broad range of mineral based, heat resistant products, including monolithic refractories, refractory bricks, industrial ceramics and fracture proppants.
15 bids for Beijing to Shanghai high speed railway line
It is reported that China's ministry of railways has announced the opening results for bidding on the Beijing to Shanghai high speed railway.
Fifteen Chinese companies have bid for the project's six civil construction sections, estimated at over CNY 80 billion based on bid prices.
The companies are affiliated with five large Chinese construction groups including China Railway Engineering Group.
Bayi Steel holds meeting for seamless pipe project
It is reported that Xinjiang based Bayi Steel recently held a demonstration meeting for the planned seamless pipe project which is attended by the group and relevant experts who reached consensus on this issue.
As per report the project will involve total investment of CNY 4 billion mainly to make oil production seamless pipes of 600,000 tonnes per year to 650,000 tonnes per year. Once completed, the annual production value will top about CNY 3 billion.
Shenzhen retains No 4 spot for container port in world
Xinhua reported that Shenzhen retained its position in the world as the fourth largest container port behind Singapore, Shanghai and Hong Kong as it posted a record breaking throughput of 21.10 million TEU, up 14.24%YoY.
Shenzhen had 197 international container services by the end of 2007 an increase of 29 compared with 2006. The south China port handled 298,400 ships in 2007.
As per report container throughput of Shenzhen is expected to grow to 23 million TEU and total cargo volume to 218 million tonnes in 2008. In 2007, Shenzhen's Yantian International Container Terminals contributed 9.31 million TEU to the port's total an increase of 12.23%YoY. Chiwan Container Terminals contributed 6 million TEU and Shekou Container Terminals 5.03 million TEU increasing 14.1% and 17.20% respectively. Shenzhen port had been expanding and added five deep water berths in 2007, including one in SCT, two in YICT and two in Dachan Bay.
The report added that Shenzhen port also boosted the construction of port highways to smooth the flow of port transportation. Meanwhile, port operators in Shenzhen were keen to expand the feeder service network and cargo sources. The South China Shuttle Service network, launched by Shenzhen western port areas of CCT and SCT has been expanded to cover 15 cities in Guangdong and neighbouring areas with 21 container feeder services.
Zijin and Midas form JV for Western China Copper project
Zijin Mining Group Co Asia's largest gold miner by market value has announced that it agreed to form a JV with Australia's Midas Resources Ltd to develop a copper project in China's west.
Zijin said in a statement that Perth based Midas may acquire as much as 70% of the venture in the Fuxing copper project, located in Hami city in the western province of Xinjiang. Zijin, based in eastern Fujian province, owns the exploration licenses of the project.
Mr Chen Jinghe Chairman of Zijin is seeking a domestic share sale this year to fund acquisitions and expansion of gold, copper and iron ore projects in China and overseas.
Zijin rose 75 Hong Kong cents or 8.5% to close at HKD 9.55 after the US Federal Reserve cut interest rates to revive the economy, which may boost metals demand. The US is the world's second biggest copper user after China.
Russian output of rolled metal in 2007 up by 2.4% YoY
AK&M reported Federal State Statistics Service reports that Russian enterprises increased the output of rolled metal products by 2.4% until 59.6 million tonnes.
As per report, the output of steel pipes increased by 10.2% YoY to 8.7 million tonnes and output of steel building structures rose by 32.7% YoY to 1.2 million tonnes.
Iron ore moutput in 2007 also increased by 2.4% YoY to 105 million tonnes.
Russian Coal Stepnoi mine reduces output
Interfax reported that Russian Coal's Stepnoi open pit mine in Khakasia produced 3.83 million tonnes of coal in 2007, slightly less than in the previous year
A spokesman for Russian Coal said that the mine last year focused on developing the Central section, where coal production and stripping is increasing with every year. In 2007, stripping at this section increased by 7.7% to 9.451 million meters, while coal production rose 9% to 2.177 million tonnes.
Ukrainian iron ore import in 2007 up by 76.2% YoY
Ukrainian Journal reported tat Ukrainian steelmakers increased iron ore imports in 2007 by 76.2% YoY to 3.55 million tonnes,
A source at Ukrrudprom, the association of Ukrainian mining enterprises, told Interfax that concentrate imports rose by 54.5% YoY to 1.716 million tonnes, sinter by 36% YoY to 991,300 tonnes and pellets by 380% YoY to 843,100 tonnes.
Russian MV Captain Uskov missing in East China Sea
It is reported that contact with the Russian dry cargo vessel MV Captain Uskov, which was supposed to reach Hong Kong on Thursday, was lost on Sunday in the East Sea of China.
The ship of the Alazara Navigations company is carrying 17 Russian crewmembers.
The vessel left Russia's Far East port of Nakhodka on January 15 and failed to arrive in China's special administrative region on January 24
Vessels sailing in the same area have been notified and Russia has also asked China and Japan for help.
Mechel appoints Mr Tsikanov as senior VP
Mechel has announced the appointment of Mr Mukhamed Tsikanov as its senior VP for Economics and Management. Mr Tsikanov was previously acting GD of Mechel’s Yakutugol OJSHC subsidiary.
In his new position, Mr Tsikanov will be responsible for the strategic development of Mechel OAO’s economic and management organization, management accounts policies and planning, and implementation of internal management and control systems.
Prior to being appointed acting GD of Yakutugol OJSHC in October 2007, Mr Tsikanov was GD of Elgaugol OAO from 2005 to 2007. From 2004 to 2005 he was senior VP of Yukos-Moscow OOO. From 1993 to 2005, he held various positions in the government agencies, including: deputy minister of economic development and trade of the Russian Federation from 2000 to 2004, deputy minister of economy of the Russian Federation from 1997 to 2000.
Mr Igor Zyuzin CEO of Mechel said “We are pleased that such a respected, professional and highly experienced economist and executive will continue working in our team in the new senior level position. The appointment of Mr Tsikanov to the position of Senior Vice President on Economic and Management confirms the importance and significance of a high quality and efficient operating management and control system for Mechel. With such an extensive network of subsidiaries and a wide marketing and sales infrastructure, it is difficult to overestimate the role of professional economic management for Mechel.”
He added that “We are confident that Mr Tsikanov’s knowledge and competence will enable the Company to implement management accounts policies and principles more efficiently, thus further enhancing the development of Mechel’s business.”
Norilsk to elect new board on April 8th 2008
Bloomberg reported that Russian mining giant Norilsk Nickel has called an extraordinary shareholders' meeting on April 8th 2008 to elect a new board.
Norilsk in a statement said that shareholders must nominate new board candidates before March 10th 2008.
RusAl in November agreed to purchase a 25% of Norilsk from investor Mr Mikhail Prokhorov by the end of the first quarter in 2008 and said it would seek a full takeover. Mr Prokhorov will get cash and 11% of RusAl in exchange for his Norilsk stake.
Mr Alexei Ryabinkin, a spokesman for Onexim Group, Prokhorov's investment company, declined to comment on whether Onexim would represent RusAl on the Norilsk board if the sale of the shares goes ahead.
Russian industrial output up 6.3% in 2007
RIA Novosti reported that Russia's industrial production rose 6.5% in December and 6.3% in 2007. The figures surpassed preliminary forecasts that suggested the figure would reach around 4% to 5%.
Experts said that the overall growth indicates that Russia successfully coped with the first wave of the US subprime loan crisis in August 2007 and ensuing global downturn.
Mr Yarislav Lisovolik a Deutsche Bank expert said that "For now, we can say that the financial crisis has had no negative impact on Russia's economic growth. This gives us reason to hope that Russia will successfully cope with the new crisis, which erupted in January."
Ukraine considering review of tariff for transiting natural gas
Ukrainian News Agency reported that Ms Yulia Tymoshenko PM of Ukraine believes that it is necessary to review the tariff for transiting natural gas through Ukrainian territory.
Ms Tymoshenko said that "As gas prices have almost tripled and the cost of transit has not risen, I believe that the time has come to hold a discussion between Ukraine and Russia regarding the size of the rate for transit of gas through Ukrainian territory to Europe.”
She said that, she has ordered conduct of studies in all the countries that has gas transit systems in order to determine the cost of transiting gas in order to enter talks with Russia with a clear knowledge of the market prices.
The Cabinet of Ministers directed the Fuel and Energy Ministry, the Finance Ministry, the Economy Ministry, and the Naftohaz Ukrainy national joint-stock company on January 16th 2008 to analyze the justification for the calculation of the rate for transit of Russian natural gas through Ukrainian territory.
Ukraine now pays almost USD 180 per 1,000 cubic meters of gas a steep rise from the USD 50 per 1,000 cubic meters it paid in 2005. But it has charged Russia more for transit USD 1.70 per 1,000 cubic meters for 100 kilometers now compared with USD 1.09 in 2005.
Ukraine opens case in Shakhtarska-Hluboka coalmine explosion
Ukrainian News Agency reported that the Mine Inter district Prosecutor's Office opened a criminal case upon the fact of the explosion at the Shakhtarska-Hluboka coalmine in Shakhtarsk, Donetsk region.
As per report the case was opened on the Penal Code's Article 272, part two, Violation of safety rules when performing highly dangerous operations resulted in casualties or other grave consequences.
Pre trial investigation is underway.
Kazakhstan plans new aluminum and steel plants
Reuters reported that Kazakhstan plans to build a new aluminium smelter and separately, a USD 1.2 billion steel plant.
Mr Galym Orazbakov Industry and Trade Minister at meeting said that Kazakhstan wanted to attract foreign investment for the aluminum project. He said its start was slated for 2008-2009 but did not say how much it would cost. He added that it's too early to talk about it and adding that it would be built in the bauxite-rich region of Kostanai in the north of the Central Asia state.
He also added without elaborating that "We have discussed it with investors from the Arab world they have shown interest in the project."
Kazakhstan operates one aluminium smelter launched in December last year as well as a steel plant run by ArcelorMittal the world's largest steel maker.
Armenia's GDP up 13.8% in 2007
Interfax cited Mr Nerses Yeritsian minister of Armenian Trade and Economic Development as saying that Armenia's GDP was up 13.8% in 2007 as compared with 2006, amounting to AMD 3.1404 trillion.
Mr Nerses Yeritsian said that the highest growth was witnessed in the construction industry, some 19.5%, or 666 billion dram. Armenia's foreign trade turnover grew 41.7% to USD 4.5 billion: exports were up 23.7%, to USD 1.2185 billion; while imports increased by 49.7%, to USD 3.2818 billion.
He said that prospects for the development of the industry are linked to cooperation between Armenian lapidary enterprises with Russia's Alrosa. He added that one should switch from diamond cutting to the development of jewelry, and Armenia has good competitive advantages in the area.
Kazakhstan could form rare metals corporation
Interfax reported that Kazakhstan's Industry and Trade Ministry is proposing to form a national corporation to develop the rare-earth metals industry.
Mr Galym Orazbakov Industry and Trade Minister said at a meeting of ministry officials that "We'll be addressing the production, sale and storage of rare metals, mining and processing capability and applied research into new alloys. I think we should form a national operator, one which could make a good impact in this sphere."
He said that Kazakhstan has unique rare metal reserves, in particular rhenium and niobium. We're the world's second biggest rhenium supplier, adding that rare metals could be used to make finished technological goods as well as special alloys.
