JSW Steel to begin work on Salboni plant in March 2008

Mr Sajjan Jindal vice CMD of JSW Steel last week announced that the construction work at the site of JSW Steel’s proposed Greenfield steel plant at Salboni in West Bengal is slated to begin in March 2008.

Mr Jindal, while discussing the progress of the project with Mr Buddhadeb Bhattacharjee chief minister of West Bengal, said that the CM would soon request Dr Manmohan Singh, to lay the foundation stone of the project in February 2008.

He added that about 15,000 workers would be engaged during the construction period. The Industrial Training Institutes at Jhargram and Midnapore would be upgraded in a public private partnership mode to train the construction workers appropriately.

JSW is setting up t10 million tonnes capacity integrated steel plant at Salboni near Kharagpur at an estimated cumulative investment of INR 35,000 crore.

IFCI puts Vishwas Steel’s Goa and Tararpur units on block

PTI reported that IFCI has put on sale the Goa and Tarapur units of Vishwas Steels to recover its debts under the provisions of the Securitization & Reconstruction of Financial Assets and Security Interest Act.

IFCI, which is to recover around INR 72 crore from Vishwas Steel, has received consent for sale of the company from other secured creditors having more than 75% of outstanding loans.

The reserve price for Goa unit has been fixed at INR 20 crore, while for Tarapur unit it would be INR 4.60 crore. Interested buyers can send in their bids for one or both the units to the IFCI by February 26th 2008. Prospective buyers can inspect the Goa unit on February 11th and 12th 2008 and Tarapur unit on February 13th 2008.

The Goa unit of the Vishwas Steel has facilities to manufacture mild steel and alloy steel billets and blooms, while the Tarapur unit has a rolling mill.

Prakash Industries net sales in Q3 of 2007 up by 28% YoY

Prakash Industries Limited has posted net sales of INR 329.13 crores in October to December 2007 quarter up by 28% YoY as against INR 257.36 crore in October to December 2006 quarter. EBIDTA increased by 41.57% YoY to INR 78.60 crore as against INR 55.52 crore. Profit after tax is up by 47% YoY to INR 55.46 crore as against INR 37.76 crore.

During the October to December 2007 quarter, Prakash Industries has acquired coal blocks in the state of Chhattisgarh for company’s captive use. Union ministry of coal has allotted a non coking Fatehpur coal block in Chhattisgarh for the expansion of capacities to 625 MW. The coal reserves in the block are estimated to be in excess of 45 million tonnes. It has earlier signed a MoU with Chattisgarh for these investments into the state. The implementation of this power projects would commence from the next quarter.

Prakash Industries had set up manufacturing units in Chhattisgarh such as coal based sponge iron plant, captive power plant, steel melting shop, development of captive coal mines, development of iron ore mines with crushing plant, submerged arc furnaces for producing ferro alloys, structural rolling mill and wire rod mill etc. It has also signed MoU with Madhya Pradesh government for installation of 1000 MW power plant in Madhya Pradesh.

Konkan Railway completes 10 years of operations

It is reported that Konkan Railway has achieved a significant milestone of completing 10 glorious years of train operations on its route on January 26th 2008.

There has been a major turn around in revenues of the Konkan Railways over the last 2 years. The operating surplus increased by 74% in 2005-06 fiscal and is steadily increasing by 30% per year. The freight earnings have shown a significant quantum jump in last 2 years, increasing by a record 71% in 2005-06 and surging by almost 25% to 30% per annum, for the first time surpassing the coaching earnings. The total earnings are expected to increase from INR 279 crore in 2004-05 to about INR 470 crore in current financial year, exhibiting an initial rise of 25% and thereafter a steady increase of about 15% to 20% per year. The operating ratio has significantly dropped by 12% in 2005-06 and further by 5% to 6% during 2006-07.

In these 10 years, Konkan Railways has also invented anti collision device, which can prevent midsection head on collisions, side collisions and rear end collisions of trains in addition to having many other safety features and acts as an additional safety layer over the existing system. No other technology in the world offers these features. Konkan Railway holds patent for the product. The first pilot project of ACD on Northeast Frontier Railway covering 1736 kilometer was commissioned in this financial year.

Konkan Railway also completed 9 years of operation of roll on roll off truck on train service on January 26th 2008. This innovative service has established that railways and roadways can exist in a symbiotic relationship. KRCL has earned more than INR 90 crore from ro ro service in 9 years.

Konkan Railway has been transporting millions of passengers and millions of tonnes of freight along the West Coast of India over last 10 years. On an average, about 35 million passengers travel by Konkan Railway route every year. Konkan Railway transports food grains, iron ore, fertilizers, cement, LPG, bauxite, vegetable oil, coal, containers etc via its route and has enabled prompt and fast delivery of goods being the shortest physical route connecting Mumbai to Mangalore.

Elecon Engineering eying windmill business

BS reported that Elecon Engineering is betting big on the windmill business and expects to garner revenues of around INR 40 crore from this business in 2008 and INR 150 crore in 2009.

Mr Hemendra C Shah VP commercial & CEO of Elecon Engineering said that “There is large demand for windmill gear boxes between 1 MW and 2 MW in India. We plan to foray into 1 to 2 MW capacity windmill gear boxes manufacturing. Construction of the facility has already been completed and installation of the machinery is under way. The facility is expected to go on stream in the first quarter of 2009.”

Elecon Engineering has already signed an agreement with the Centre for Wind Energy Technology for the certification of 600 KW windmills. It intends to go in for higher segments in future, besides planning to sell 50 units a year, which can subsequently be scaled up to 300 units in a phased manner.

BHEL net profit in Q3 of 2007 up by 15.6% YoY

Bharat Heavy Electricals Limited has announced the following unaudited results for the October to December 2007 quarter

BHEL has posted a net profit of INR 7719 million for October to December 2007 quarter up by 15.6% YoY as compared to INR 6,676.5 million for October to December 2006 quarter. Its total income has been recorded at INR 52,290 million up by 15.5% YoY as against INR 45,251.6 million.

NTPC NCDEX power exchange facing management issues – Report

As per a report in BL, NTPC NCDEX led mega Power Exchange proposal is facing birth pangs, with the venture yet to make a formal application before the regulator for a license despite being in the works for over 5 months now.

The delays in the NTPC NCDEX venture, which also has on board the National Stock Exchange, National Hydroelectric Power Corporation and Power Finance Corporation, are being attributed to perceived differences between promoters on issues of management control and e appointment of the top brass of the venture.

The Central Electricity Regulatory Commission has earlier asked NTPC, which had submitted an initial application in July 2007 seeking permission to set up a power exchange, to incorporate a new company first before applying for a license. When contacted, a CERC official confirmed that the NTPC NCDEX combine was still to revert to the Commission on the proposal.

Rival Financial Technologies and PTC India Limited led India Energy Exchange, which was formally cleared in November 2007, is reported to be set to kick off operations by February 2008. The venture also has on board TATA Power, Reliance Energy, Rural Electrification Corporation, Infrastructure Development Finance Company, Adani Enterprises and Lanco Infratech as co promoters.

SC calls for guidelines on the shipping code

Exim News Service reported that Supreme Court has asked the union government to provide guidelines on the Ship Recycling Industries Association’s plea for a relaxation in the conditions applicable to the industry.

A bench, headed by Mr Justice Arijit Pasayat, issued a notice to the government asking for its reply within 8 weeks. The court, in its order, had directed that the recommendations made by Technical Experts Committee on ships with hazardous waste shall continue till the government formulates a code for dismantling such ships.

A senior advocate, Mr Abhishek Singvi, who appeared for Ship Recycling Industries Association, disclosed that over 50 ships were waiting to be dismantled and there was an urgent need to modify the order passed by the apex court on September 6th 2007.

ADB to provide USD 350 million for Uttarakhand development

It is reported that Asian Development Bank will provide a USD 350 million loan to improve urban infrastructure and services in 31 towns and cities in Uttarakhand.

Under the investment program, the quality and quantity of water supply will be improved to meet national standards. About 60% of wastewater from the towns and cities will be properly collected and treated. Nearly 3 quarters of all solid waste will be collected and disposed of adequately. The road network will be improved to shorten travel times and increase road safety. The investments will also focus on improving the conditions of slums that are home to about 300,000 people.

In addition, part of the funds will be used to improve the capacity of relevant state departments, urban local bodies and other urban service providers to ensure that they have the ability to manage and deliver urban services efficiently and on a sustainable basis.

Areva plans nuclear power equipment JV in India

It is reported that French power equipment major Areva is planning to join hands with some Indian firms for production of nuclear power equipment in India and has already initiated talks with potential partners.

Ms Anne Lauvergeon president of Areva said that “We are negotiating with Indian companies for a possible joint production of nuclear power equipment in India. We are looking for a long term partnership here. We are very optimistic about the nuclear deal getting cleared at international level.”

Ms Lauvergeon said that “Revenue from Indian business contributes 10% to the global T&D business of Areva. Indian revenue has been growing at 20% growth. We expect to grow at the same rate for the next couple of years in India. We have recently been awarded a contract in Qatar, part of the equipment for which will be supplied from India.”

It is understood that public sector power equipment major BHEL has shown interest in joining hands with the French firm. It is said that the company is also in talks with Reliance Energy and TATA Power, both of which have expressed their desire to enter nuclear power business.

Dronagiri and Bakreswar power projects get eco approval

Projects Today reported that union ministry of environment & forests has cleared 2 power plants namely Urban Energy Generation's 2,000 MW gas based combined cycle power project at Dronagiri and West Bengal Power Development Corporation's Bakreswar 440 MW thermal power plant stage II units 4&5 at Birbhum in West Bengal.

The INR 5,902 crore Dronagiri project will come up on about 40 hectares of land and will consume around 11 million standard cubic meters per day gas, which will be sourced from the spur line of the east west pipeline. The power plant is part of the Reliance Industries' proposed SEZ at the same location.

WBPDC's Bakreswar is in an advanced stage of completion with unit IV scheduled for completion next month followed by unit V in March 2008.

Unnicornn Powergen seeking Chinese suppliers for power project

Project Monitor reported that Unnicornn Powergen Private Limited is negotiating with Chinese suppliers for the main plant equipment of its proposed 1,200 MW coal fired power project in Tamil Nadu.

Mr Govind Sharda MD of Unnicornn Powergen said that negotiations are on with three leading Chinese suppliers including Shanghai Electric Co. He added that suppliers for the main plant that will use supercritical technology will be finalised by September 2008 and the project is likely to be grounded by December 2008.

The project is making good progress on other fronts and the environment clearance is expected soon. Unnicornn Powergen has also finalized Delhi based Knowledge Infrastructure Private Limited as the coal supplier to source 4 million tonnes of coal per year from Indonesia. Land, measuring around 1,000 acres, has already been acquired.

The project is promoted by the Sujana Group that is primarily engaged in metallurgy.

DVC appoints KPMG for organizational restructuring

BL reported that Damodar Valley Corporation has appointed KPMG to facilitate organizational restructuring by way of creating a corporate entity under the corporation and paving the way to tap the capital market through an initial public offering.

As per the letter of intent issued by the DVC last week, KPMG will enjoy a handholding relationship with DVC till the IPO and will be responsible for recommending ways and means for restructuring, facilitating compliance of all legal formalities for the same and finally determining the issue size, timing and other details pertinent to the IPO.

To begin with, KPMG will submit a report within 3 months recommending ways to create a new structure without requiring any amendment to the existing DVC Act. The entire focus would be to let DVC enjoy the benefit of the two worlds. The IPO route is explored primarily to finance DVC’s plan to emerge as one of the largest power producer by the end of the 11th Plan.

A DVC official said that “The proposed restructuring has to be approved by all 3 stakeholders of DVC including the state governments of West Bengal and Jharkhand and the centre. Naturally, we may have to wait at least a year before the process is through.”

Policy for non conventional energy

Mr Vilas Muttemwar union minister of state in the ministry of new & renewable sources said that under the Electricity Act 2003, National Electricity Policy 2005 and Tariff Policy 2006, it is obligatory upon State Electricity Regulatory Commissions to fix certain percentage for purchase of power from renewable energy sources in the area of a distribution licensee and to fix preferential tariffs for the same.

It was further stated that grid interactive renewable power installed capacity in the country has reached 11,063 MW as on October 31st 2007. Centre has been providing several concessions in the form of fiscal and financial incentives to encourage the use of renewable energy sources. These include capital interest subsidy, accelerated depreciation, nil concessional excise and customs duties. Further, as applicable to all new infrastructure projects, profits earned from sale of renewable power are exempt from income tax for any 10 years out of the first 15 years of project’s operation.

This apart, preferential tariff for grid interactive renewable power is being given in most potential states. Publicity and awareness on the use of renewable energy systems or devices is also created through print, postal and electronic media and special events like the Rajiv Gandhi Akshay Urja Diwas are being organised.

Jharkhand HC gets tough on power supply issues

Ranchi Express reported that irked at non compliance of its earlier orders, the Jharkhand High Court has directed union power secretary to personally appear before the court on February 5th 2008 to explain the reasons for the centre's failure to provide the agreed quota of power to the state.

A division bench comprising chief justice Mr M Karpagavniyagam and Justice Mr DK Sinha observed that the centre and its counsel were not properly assisting the court in the matter.

The court also pulled up the director commercial of the Damodar Valley Corporation and set January 31st 2008 as the deadline for supply of 150 MW of electricity to the state, as per the agreement. It added that if the DVC failed to meet the deadline, the director commercial would have to appear personally on the same date.

2008 thermal coal price likely to reach record levels

Reuters reported that Japanese utilities have begun talks with some Australian producers for 2008 thermal coal contracts that could be sealed at a record high above USD 90 amid tight global supplies. Miners and analysts have said that coal supplies are set to tighten significantly this year on continued supply constraints in Australia and Indonesia as well as growing Asian demand, particularly in China and India.

As per report, marketing teams from Xstrata Plc and Rio Tinto Limited are in Tokyo this week, hoping to negotiate a near 80% jump in contract prices at about USD 100 a tonne, but Japanese buyers are seeking between USD 15 to USD 20 below that.

Mr Malcolm Southwood a resource analyst at Goldman Sachs in Melbourne said that "Our forecast is for prices to be settled at USD 90 but recent developments would suggest that there are some upside risks to the price. The emergence of China and India as major importers has been a critical factor in tipping the market balance. And when you add supply constraints in Australia and South Africa into the equation, you get a very tight market."

The report cited an executive of Rio Tinto as saying that “Its initial offer to Japanese utilities would be in the range of USD 90 to USD 100. The market is a lot tighter this year. But some Japanese utilities are still hoping to get something at USD 80 or even USD 90 levels, which I think is quite impossible. This could be a long drawn out negotiation."

Industry sources said that Xstrata and Rio have yet to put in firm offers, as prices on the index, commonly used as a benchmark for coal prices in Asia, were still hovering in the USD 90. This signals that they may be targeting higher levels on forecasts of even tighter supplies and rising demand from Japan and China, which are grappling with power shortages due to high prices of other fuels as well as outages.

Other Japanese buyers said that it was unreasonable for prices to jump this high when South Korean utilities managed to ink their 2008 coal contracts at about USD 60 a tonne. Some Japanese utilities have also agreed with Indonesia's Bumi Resources to buy 2008 coal supplies at about USD 85 a tonne in November.

In the 2006 fiscal year, Japan imported 179 million tonnes of coal, of which about 60% came from Australia, 20% from Indonesia and 12% from China.

Japan’s coal price in past 5 year and the current fiscal is as under

Price in USD per tonne

Mr Mittal bullish on global steel scenario

Mr LN Mittal president & CEO of ArcelorMittal in an exclusive interview with CNBC-TV18’s said that emerging markets and economies still continue to be strong but he feels that there could be a ripple effect of a US recession.

Mr Mittal said that “It is true that there is a concern about the US entering into a recession. There is a pessimist feeling within the American businessman. At the same time, I see less concern in the rest of the world. Europeans are not as pessimistic as the Americans are. If you look at emerging markets and emerging economies, they still continue to be strong. This morning, the Chinese GDP growth for the fourth quarter came down to 11.2% from 11.4%. It is not worrying for emerging markets. There could be a ripple effect of a US recession. But the year generally looks positive to me. However, there is concern on the financial sector. There are some structural issues, which need to be corrected. I am sure with Fed’s intervention the banking industry and the financial sectors would correct themselves.”

He added that “The landscape of the steel industry has changed and it is much stronger and healthier, financially as well as structurally. There has been a lot of consolidation in the steel industry. We are seeing steel growth of about 3% to 4% on a global basis, which is strong growth. All the emerging markets and developing markets are strong. The demand is very strong in those markets and even in the Europe and the US, where we see a stable steel environment. However, we are always threatened by the increasing cost of raw material and the energy cost, iron ore and coal. This will increase the cost of steel and the steel industry will necessarily pass on cost increase on the customers.”

Dillinger upbeat on plate demand from wind energy sector in Europe

Platts cited a spokesperson of German steelmaker Dillinger Huettenwerke as saying that the climate change proposals made recently by the European Commission will lead to higher demand for wind energy and consequently for wind turbine steel.

He said that "The measures will encourage the political direction taken by the major European countries to accelerate the adoption of wind energy. Naturally, this will mean more business for us."

He added that demand for steel plate for wind turbine towers was already high prior to Wednesday's announcements, forcing steelmakers to allocate increasing proportions of their stock to this sector. We have fully scheduled the volumes of steel for these wind energy projects into 2009. We are having to move away from other sectors in order to accommodate for this demand.

He said that “Wind turbines typically use steel plates of thickness between 15mm to 40mm thick of a grade S355 or S375, but research to develop lighter and more resistant steels is ongoing. We are looking to phase out S355 grades in favour of S420 grades, which would reduce weight considerably. However there are still fatigue resistance problems with the product.”

Australian flooding to hit Asian steelmakers bottom line

With world coking coal prices already high, the world's largest supplier of seaborne coking coal, BHP Mitsubishi Alliance, which owns and operates nine coal mines in Central Queensland that produced 58 million metric tons of coal in 2007, has last week declared force majeure on its supply contracts with its customers due to heavy rain and record floods across central Queensland's Bowen Basin

Mr Michael Roche CEO of Queensland Resources Council said that the heavy rain and record floods across central Queensland's Bowen Basin last week would cost USD 100 millions in lost coal production. The region's 33 coal mines produce AUD 18 billion of coal annually. He said that over the next few days, a number of coal mines will face flood peaks but have reported that they are well prepared to cope with whatever eventuates.

Coking coal prices have rocketed over the past year due to robust demand from Asian steelmakers and constraints on supply stemming from Queensland's insufficient port and rail infrastructure. Commodity statistics provider Platts estimated January 7th 2007 that the first quarter spot price for low volume hard coking coal from Queensland would hit USD 170 per tonne to USD 175 per tonne up by USD 40 per ton from last quarter.

Vale Xstrata tie up – Brazilian government undecided

Bloomberg, citing Brazilian President Mr Luiz Inacio Lula da Silva, reported that Brazilian government has taken no position yet on Vale’s offer to buy Xstrata Plc.

O Estado de S Paulo reported on its Web site that the government still hasn't discussed the issue. Mr Lula da Silva said The government has not discussed this issue yet.”

According to Estado, the Brazilian president did not rule out the possibility of using the government's golden share' veto power in Vale to block the transaction.

According to an earlier report in Valor Economico, Brazil's government is against Vale taking over Xstrata as it considers the offer to be expensive and harmful to the country's interests.

However, as per some analysts, this could be a move to lower the transaction price. Mr Michael Rawlinson head of mining, resources and energy at Liberum Capital Ltd. in London said that “We feel the story is somewhat of a scare story in part released by Vale's advisers to negotiate a lower price for Xstrata. We feel it inconceivable that Vale enter into detailed discussions in a major acquisition flagged since mid December without having its own board behind it.”

Brazilian 2007 crude steel output up by 9.3% YoY

According to Brazilian Steel Institute, Brazilian steelmakers pushed crude steel output to record levels in 2007 due to strong demand from the automotive and steel industries.

IBS said that Brazilian steelmakers produced a record 33.784 million metric tons of crude steel in 2007 up from 9.3% YoY from 30.901 million tonnes in 2006. That was down slightly from year end projections from the trade group in December, which forecast a 9.9% YoY increase to 33.958 million tonnes.

IBS said that in December 2007, steelmakers' output jumped 13.8% to 3.011 million tonnes that was up from 2.646 million tonnes in December 2006. Production of rolled steel products ended 2007 at 25.578 million tonnes up by 9.1% from 23.453 million tonnes the previous year. December's rolled steel output rose 15.4% to 2.195 million tonnes against 1.902 million tonnes in the same month a year ago.

IBS added that long steel production soared 8.8% to 9.851 million tonnes in 2007 compared with 9.050 million tonnes in 2006. Output in the segment also rose 31.3% YoY in December to 839,600 metric tonnes. Meanwhile, the flat steel sector benefited from a record year in the Brazilian automotive industry, as well as a boom in the oil, natural gas and naval sectors, the IBS said. Flat steel production finished 2007 at 15.728 million tonnes an increase of 9.2% YoY from 14.403 million tonnes in 2006.

The IBS also said that in December, local steelmakers produced 1.355 million tonnes of flat steel products, up 7.4% from 1.262 million tonnes in December 2006. Increased demand across Brazil's industrial sector resulted in double digit increases in domestic sales throughout the year. Domestic steel sales surged 16.9% in 2007 to 20.486 million tonnes up from 17.531 million tonnes in 2006. In December, domestic sales reached 1.676 million tonnes a 22.5% jump from 1.368 million tonnes in the same month of 2006.

IBS said high value rolled products, especially the flat steel used to make cars, trucks, pipelines and white line domestic goods, dominated domestic sales in 2007. Domestic sales of rolled steel products increased 17.1% to 19.723 million tonnes up from 16.848 million tonnes in 2006. December's domestic rolled steel sales rose 23.1%YoY to 1.621 million tonnes.

Task team meet to develop immediate mine reopening measures

It is reported that a newly established joint government and industry task team met on Sunday to develop immediate measures to enable closed South African mines to reopen.

South Africa's Department of Minerals and Energy said in a statement that in line with the National Emergency Response Plan to South Africa's power crisis, the Minerals and Energy Minister Mr Buyelwa Sonjica and Public Enterprises Minister Mr Alec Erwin on Saturday convened a high level meeting in Pretoria with the mining industry, Eskom and organized labor.

The meeting discussed Friday's cessation of electricity supply to mines and the development of immediate measures to enable closed mines to reopen. Stakeholders committed themselves to addressing the ongoing challenges in a positive and constructive manner.

As part of the plan, both Ministers would also be engaging other big electricity consumers on Tuesday January 29th 2008 in order to obtain a similar commitment on the reduction of energy consumption.

The Ministers also agreed to an industry request that there be sufficient power supply to enable employees to continue with essential underground operations, particularly in deep level gold mines, at a level that would ensure the safety of the workplace for mineworkers.

US scrap prices continue moving up

Platts reported that US domestic prices of heavy melting scrap moved higher in the Northeast and Midwest regions last week, while most other grades remained stable at the higher levels established in the second week of January 2008.

Scrap was sold at USD 365 per long ton delivered this week to an East Coast mill. The same grade was sold in the Midwest in a range of USD 360 to USD 365 per long ton on a delivered mill basis over the past 10 days. This compares with transactions earlier this month reported in a range of USD 325 to USD 340 per long ton in the same regions.

There were indications that the premium for cut plate and structural steel scrap, which widened to as much as USD 20 to USD 25 per long ton above the heavy melt price in some regions early January 2008, has now narrowed again.

The report cited a processor in the Northeast as saying that cut plate and structural scrap are selling at USD 276 per long ton, only USD 11 more than he reported getting for number1 heavy melt. He added that "I think the market will continue higher. I think we may see record breaking prices before too long."

Shredded scrap hit the USD 400 per long ton mark earlier January 2008 but prices for this grade were little changed so far this week. Current price levels for ferrous scrap in general, however, are approaching record levels in the US market. Prompt industrial grades such as bushelling and factory auto bundles are in relatively short supply and are reported to have sold earlier this month in the Midwest region in a range of USD 410 to USD 420 per long ton delivered mill. These two grades hit an all time high slightly above the USD 440 per long ton mark in 2006.

Processors exporting from the US East Coast meanwhile have been forced to increase their dock side buy prices to match domestic levels. Processors in the New York Philadelphia corridor were reported to be paying USD 360 to USD 365 per long ton this week for heavy melt delivered to the dock. Number 1 and number 2 heavy melt are the main export grades, followed by plate and structural steel scrap.

South Korea stays as top shipbuilding nation in 2007

According to London based market researcher, South Korea took the No 1 ranking in the global shipbuilding industry in terms of new orders, order backlogs and the volume of vessels built in 2007.

According to Clarkson, South Korea shipbuilders won a combined 32 million compensated gross tonnes in new orders last year, accounting for 40.4% of all global new orders. Consequently, South Korea has maintained the top spot in terms of new orders since 2003. Chinese shipbuilders took the second spot with orders totaling 29.2 million CGTs last year, outpacing Japanese rivals, which won a combined 6.5 million CGTs.

Clarkson said South Korean shipbuilders' combined order backlogs totaled 64.4 million CGTs, making up nearly 36.1% of 178.2 million CGTs in global backlogs. China followed with order backlogs of 52.4 million CGTs and Japan with 30.3 million CGTs. Korean shipyards built one in every three newly constructed vessels in the world last year, totaling 11.2 million CGTs which accounts for 34% of the global total.

By shipbuilder, Hyundai Heavy Industries Co the world's largest shipyard, had 14.45 million CGTs in order backlogs, trailed by Samsung Heavy Industries Co with 10.9 million CGTs and Daewoo Shipbuilding and Marine Engineering Co with 9.68 million CGTs.

South Korea, home to seven of the world's top 10 shipyards, clinched record-high orders last year because of strong demand for crude carriers and offshore exploration equipment amid lofty oil prices.

US economy to remain strong - Mr Bill Gates

Mr Bill Gates in an interview with German newspaper said that believes the US economy will not fall into a slump because technological progress will help it to grow.

He said that “The US economy has been very strong in the last 10 to 15 years. Unfortunately I do not have a crystal ball to see into the next few years. But I am an optimist. The US economy could remain strong in the next few years because technological progress will propel it.”

He added that “I’m no expert on shares, I am a software person. I look at the share price every couple of weeks.”

He also said that the important thing is that in the past it has gone up far more often than it has gone down.”

BHPB halts manganese mining operations in South Africa

It is reported that BHPB has stopped mining at its South African manganese mines due to a power crisis that has gripped the country, but its coal mines in the country were in production.

Ms Bronwyn Wilkinson a spokeswoman of BHPB said "No mining is taking place at the manganese mines in Hotazel. We cannot be certain how long this situation will prevail.”

BHP's 60% owned global manganese ore and alloy business comprises operations in South Africa and Australia and is the world's largest integrated producer of manganese units.

AISA terms privatization of steel sector in Nigeria faulty

The African Iron and Steel Association recently said that the entire privatization in the Nigerian iron and steel sector was done on a selfish note and should be revisited and where necessary cancelled. Mr Sanusi Mohammed secretary of AISA, stated this at a stakeholders forum in the steel sector with the Minister of State for Mines and Steel Development Mr Alhaji Ahmed Muhammed Gusau.

Mr Sanusi said that Nigeria is not benefiting enough from the privatized companies because those managing them lack the technical capacity to run the industries. He said that the foreign companies who bought the several iron and steel companies across the country lack the technical capacity, the financial capacity and the will to run the companies successfully.

He added that though he is not against privatization, it should however be credible and the companies who are buying them should be able to add value to the nation rather than coming to milk the country.

Nigerian federal government about four years ago privatized the Aluminium Smelter Company, Ikot Abasi, Akwa Ibom State, Ajaokuta Steel Company in Kogi, Delta Steel Company in Aldja near Warri, National Iron Ore Mining Company Itakpe, Katsina Steel rolling mill, Jos Steel Rolling Mill Company and Oshogbo Steel Rolling Mill Company.

Randon to start works on foundry in December 2008

BNamericas reported that Brazilian metal products group Randon expects to start operations at its 30,000 tonnes per year iron and steel foundry plant in southern Rio Grande do Sul state in December 2008.

Mr David Randon VC of Random said that the plant, to be installed in Caxias do Sul city, was originally scheduled to enter a test stage in July or August 2008.

He added that “Reasons for starting operations in December 2008 reflect the normal paperwork in the environmental licensing process and the company's strategy."

Random makes steel products including highway equipment and vehicle parts. The foundry plant will satisfy a portion of Randon's foundry part needs and is due to require investments of some BRR 100 million.

Taiwanese SS scrap price sure by 12% in January

It is reported that after the sharp drop of nickel price in December 2007, LME price of nickel has stuck to around USD 28,000 per tonne in recent weeks.

The nickel price is going up in Taiwan since the beginning of 2008 and the nickel behavior did not show any large drop in January 2008. This has led the transaction price rebound of stainless steel scrap up to TWD 82 per kilogram and TWD 84 per kilogram, increased by TWD 10 per kilogram.

Currently, the steel scrap containing 8% nickel is offered averagely as TWD 73 per kilogram to TWD 75 per kilogram, which has picked up from the bottom of TWD 62 per kilogram in last 2 months.

MultiServ bags 3 contracts in Australia, Italy and UK

Worldwide industrial services company Harsco Corporation announced that its industry leading mill services division MultiServ has been awarded multi year contracts in Australia, Italy and the UK that include USD 15 million in combined new revenues over their terms.

1. MultiServ has received a 7 year contract extension from OneSteel at its operations at Victoria in Australia that includes new responsibilities for a range of melt shop and property services previously handled by outside contractors. The contract adds to a nearly 20 year MultiServ presence at this location.

2. In Italy, MultiServ has been awarded a new contract to provide manual slab scarfing and oxycutting services at Duferco's Verona Steel Spa plate mill. MultiServ's scarfing services remove surface and sub surface imperfections on steel slabs prior to rolling. The plant is in the heartland of Italy's steelmaking zone adjacent to the Ferriera Valsider. Under a JV signed last year between Duferco and Novolipetsk Steel, the Verona Steel works is being upgraded with a 25% capacity increase to handle and process high quality steel slabs produced by NLMK.

3. Under a new contract from Corus Group's Teesside Beam Mill in the UK, MultiServ will provide round the clock handling and stockyard management of incoming steel slabs from the nearby Scunthorpe works for processing at the Teesside beam rolling mill in accordance with the mill's production schedules. The Teesside plant is regarded as one of the most efficient structural section rolling mills in the world, handling approximately 750,000 tons per year and producing a range of structural beams and columns for the construction industry.

Harsco's MultiServ division is the world's largest provider of on site, outsourced mill services to the steel and metals industries, serving some 170 sites in 35 countries.

DEME secures another contract in Australia

Belgian dredging contractor DEME has announced that it has been awarded a contract to deepen a berth at Fisherman’s Island in Queensland in Australia.

DEME officials said that "This is another commodity related project, allowing Rio Tinto Aluminium to expand its alumina refinery and increase the annual output of smelter grade alumina from that area."

The work is being managed by Central Queensland Port Authority. Dredeco’s CSD Wombat will execute the project in 2 phases, starting early in 2008. Dredeco is a subsidiary of DEME.

Z-Group's steel units sales in 2007 up by 13% YoY

Mr Marcela Mrazkova project manger of Z Group said that its steel companies saw a 13% YoY growth in sales to CZK 8.7 billion in 2007.

It’s Zelezarny Hradek, Zelezarny Veseli na Morave and Zelezarny Chomutov produced 435,000 tonnes of steel in 2007. Over a half of 2007, its production was exported, mostly to the EU, USA, South America and Asia.

Mr Mrazkova said that "We expect further economic growth of all companies this year."

The first time the steel group of entrepreneur Mr Zdenek Zemek ended in black figures was in 2005 after a drastic restructuring of production. It has been improving notably its economic indicators ever since. Wages at the company are growing as well and the collective agreement signed for this year guarantees a 6% wage increase.

RBCT coal export unaffected by power shortage

Mr Kuseni Dlamini CEO of South Africa's coal producer Richards Bay Coal Terminal said that its coal exports have not yet been affected by power outages that have hit mines.

He said that "Our operations are ongoing and we do not have a problem as yet. Our stockpiles were very low at the end of December 2007 but it has been gradually picking up. Although some mines had stopped production, backlogged supplies were still flowing to the terminal.”

Meanwhile, Anglo Coal said that a severe power shortage had forced them to shut down mines. Anglo Coal said that only it affected its exporting operations and domestic clients would not be affected.

Mr Pranill Ramchander spokesman of Anglo Coal said that "All of Anglo Coal South Africa export collieries have been closed due to the emergency power crisis. Our Eskom and Sasol supplying collieries are operating as normal."

He added that state power utility Eskom had given no clear indication about when the mine's power supplies would return to normal.

Hadeed posts record performance for 2007

Arab Steel reported that Al Tuwairqi Group’s Saudi Arabia based Saudi Basic Industries Company has posted a total sales of 4.659 million tonnes in 2007 u by 19% YoY as compared to 3.907 tonnes in 2006.

Hadeed’s sale of long products in 2007 was 3.227 million tonnes up by15% YoY as against 2.807 million tonnes in 2006 and sale of flat products was 1.432 million tonnes up by 30% YoY as against 1.100 million tonnes in 2006.

Mr Mohammad Saleh Al-Jabr VP for Metals in SABIC confirmed that these attained figures are considered one of the fruits of expansion in Hadeed company and are record figures in the history of Hadeed.

Lindenberg Emirates wins Transco contract

Abu Dhabi based Lindenberg Emirates announced that it has won a USD157 million water transmission contract from the Abu Dhabi Transmission and Despatch Company, a subsidiary of the Abu Dhabi Water and Electricity Authority.

The project involves water transmission from Abu Dhabi's Sas Al Nakheel Junction to Saad-iyat Island. The works are scheduled to start next month and are expected to be completed within 18 months.

Lindenberg will provide the design, engineering, supply and construction, testing and commissioning of onshore and offshore ductile iron and carbon steel pipelines complete with valves and fittings, associated instrumentation, electrical, civil and earth works.

A senior Lindenberg executive told Gulf News that "We were awarded the contract on January 20. There were several bidders. We feel Lindenberg's was the winning bid because of our competitive price and also because of the timely manner in which we executed our previous projects with Adwea.

Transco supplies water and electricity throughout the emirate.

GCC power grid to be carried out in 3 phases - Report

Mr Saleh Alawaji deputy minister for electricity affairs of Saudi Arabia and also chairman of the GCC Interconnection Authority said that the GCC power grid, linking Saudi Arabia, Qatar, Bahrain and Kuwait, would be carried out in 3 phases. He added that the project will reduce the cost of power generation in member countries.

Phase 1 includes a double circuit 400 kV, 50Hz line from Al Zour in Kuwait to Ghunan in Saudi Arabia with an intermediate connection at Fadhili in Saudi and associated substations and a back to back HVDC interconnection to the 380 kV, 60Hz system at Fadhili. The total cost saving rate of return after 3 years of operations is projected at USD 3.35 billion. The GCC Interconnection Authority, which supervises the project, signed 13 contracts with six companies in October 2005 at a cost of USD 1.079 billion for the implementation of Phase 1.

Mr Alawaji said that “The benefit to cost ratio for first phase is 1:5 and that the payback period for the investment is less than 4 years. Upon completion of phase I and the reduction of generation capacity, the total cost savings rate of return after 4 years of operations would be USD 2.5 billion.

The four GCC countries will be linked in a power grid this year in the first phase of the major project aimed at connecting the 6 member GCC states in an electricity network. Mr Abdullah Al Hussayen minister of water & electricity said that the project aimed at ensuring an adequate supply of electricity in the GCC countries would be completed by the end of 2009. He said the project's cost could be recovered by 2011.

It is noted that the GCC countries gave the go ahead for the power grid project in late 2004 after the project was declared technically feasible.

Pakistan and Iran may sign gas agreement next month

Business Recorder reported that Pakistan and Iran have agreed to sign gas sales and purchase agreement for cross border pipeline project in the third week of January 2008.

Informed sources said that due to Iran's increasing international commitments and compulsions, the signing of GSPA has been delayed for some time. Iran has communicated to Pakistan that GSPA, which was earlier to be signed in the second week of January 2008, could now be inked in the second or third week of February 2008.

Mr Ahsanullah Khan minister for petroleum & natural resources of Pakistan said that that GSPA with Iran will be signed next week. He added that "But we have in principle agreed on all the documents to be finalized about the GSPA transaction. Now it is only a matter of time."

Originally, Pakistan was to get a total of 2.1 billion cubic feet per day of gas from 2600 kilometer IPI project and India was to receive 3.2 billion cubic feet per day, making a total of 5.3 billion cubic feet per day. The pipeline length will come down to about 1600 kilometer resultantly reducing the project cost in case India does not join the project. The delivered price of Iranian gas in Pakistan would be around USD 8 per million British thermal unit at the current crude oil price of about 100 per barrel a day under the JCC based gas pricing mechanism already agreed to by the 2 countries.

Current gas prices in Pakistan are less than USD 2.6 per million British thermal unit, which means the imported gas would be about 200% higher than domestic prices. The government, however, estimates that it would still be 40% lower than furnace oil.

Russia to consider Iranian proposal for Gas OPEC

It is reported that Russia is considering an Iranian proposal to set up an OPEC style cartel that would include the world's largest natural gas producers. A final decision on a charter to strengthen the clout of the Gas Exporting Countries Forum will be made when the group holds its annual summit in Moscow in June 2008.

Mr Anatoly Yanovsky deputy energy minister of Russia said that Russia received Iran's draft charter at a meeting with other forum members in Doha on October 28th 2007.

As per report, Russian foreign ministry has opposed the Iranian proposal because of negative implications for the country's international relations while, economic development & trade ministry is against it because the economic advantages for Russia are not clear.

The forum, which was first held in 2001, does not have a charter, a clear membership system or any permanent representatives.

Egypt government controlling steel and cement prices

Due to a notable increase in steel and cement prices on the local market during the past few months, Egyptian government found it necessary to interfere and control prices. Mr Rachid Mohamed Rachid minister of trade & industry of Egypt has issued a decree that imposed additional export duties of EGP 56 per tonne of cement and EGP 160 per tonne of steel. The aim of decree 142 was to reduce the volume of steel and cement exports to meet local market needs.

According to the ministry of trade & industry figures, the local market needs for cement stand at 30 million tonnes annually, while total annual production is estimated at 38 million tonnes. But due to an increase in prices on the international market, producers find it more lucrative to export their goods. As a result, supply to the local market dropped and cement prices rose.

In response to consumer complaints that the steel and cement sectors were being monopolized which is driving prices higher, Mr Rachid asked the Egyptian Competition Authority to investigate both sectors. The ECA issued a report asserting that cement companies are involved in monopoly acts and have colluded to control cement prices. The report added that these companies coordinated in rationing their output to control prices.

In reaction to these conclusions, Mr Rachid referred cement companies to administrative investigations, accusing them of violating Article 6 of the competition and anti monopoly law. The penalty for monopoly acts is a fine between EGP 30,000 to EGP 10 million.

Iranian bank allots funds for 7th nationwide gas pipeline project

Mr Seyyed Reza Kassaeizadeh MD of National Iranian Gas Company recently said that the Central Bank of Iran had allocated USD 150 million for the completion of the 7th cross country gas pipeline.

Mr Kassaeizadeh added that 60 million cubic meters of natural gas would be transferred to the southern and southeastern areas of the country per day when the first phase of the 7th pipeline came on stream. He said that the first phase that would link Assaluyeh to Iranshahr would meet the gas need of Sistan & Baluchestan and Hormuzgan provinces and some parts of Bushehr, Fars, and Kerman provinces.

Mr Kassaeizadeh added that the pipeline would also inject natural gas into high consuming industries, power plants and cities of the provinces. He said that the 6th cross country gas transmission pipeline with an appropriation of IRR 10 trillion would become operational at the end of the current Iranian calendar year ended on March 19th 2008.

Mr Kassaeizadeh said that Iran would make a USD 90 billion investment in the gas transmission projects in its 20 Year Vision Plan. He termed as important the gas transmission sector, calling it an infrastructure and national industry. He added that “Based on the 20 Year Vision Plan, USD 130 billion will be invested, out of which USD 90 billion will be allocated to the gas transmission projects.”

According to the plan, Iran needed to lay 53,000 kilometers of transmission pipes and build 140 boosters and 35 gas pressure stations would become operational every 5 years of the 20 year period, costing USD 100 million each. He said that “At present over 25,000 kilometers of high pressure gas transmission lines and 52 boosters are working nationwide.”

He further added that to achieve the objectives of the Vision Plan, the NIGC had given top priorities to exports, imports, swap and supply of gas for different sectors including household, commercial, industrial, power plant and transportation sectors.

WB to conduct fresh review of Pakistan economy

Daily Times reported that World Bank would carryout fresh review of Pakistan’s economy in view of the recent socio and economic developments in the last one and half year.

Mr Emesto May, sector director of poverty reduction & economic management, finance & private sector development, South Asia Region will be visiting Pakistan during February 3rd to 8th 2008 on operational trip. During his visit he would hold meetings with relevant government officials for an update on recent economic developments.

World Bank in its recent report Global Economic Prospects 2008 has highlighted that Pakistan is to miss its annual GDP growth target of 7.2% and growth to be around 6.5% by the end of current fiscal 2007-08.

Depreciation of Pakistani rupee after imposition of emergency by the president of Pakistan, increasing food imports as threat for country’s economy as food imports stand at 11% of its total imports. Current account deficits reaching close to 5% of GDP in Pakistan. Tighter credit conditions in international markets and a decreased appetite for risk among investors could result in a falloff in regional capital inflows, which have contributed to recent strong growth outturns, particularly in India and Pakistan.

World Bank officials would also meet with Dr Waqar Masood Khan secretary finance. The agenda of the meeting would be recent macroeconomic developments, update on PRSC 3 and PRSP 2.

Egypt likely to record 7% plus economic growth in 2007

Khaleej Times reported that Egypt is on course to beat last year’s 7.1% economic growth despite indications of an international slowdown.

Mr Youssef Boutros Ghali finance minister of Egypt said that “I not only plan to match last year’s growth, I plan to exceed it. With the setback in the world economy and all this talk about recession and stagnation we may not be able to do 7.5% but we will do more than 7%.” He added that growth in the last 2 fiscal years ending in June has reached 6.8% and 7.1%.

Mr Ghali predicted that investment from oil producing Gulf Arab states would remain strong and there is no sign yet of a slowdown of sales to Egypt’s main export markets in Europe. He added that “The Gulf investments are no longer into real estate, they go into factories, into construction and into hotels.”

Mr Ghali said that Egypt is in the process of registering with the US Security & Exchange Commission and with Euroclear to facilitate bond issues. He added that “What we intended was to start registration process this month. And do also similar registration in Euroclear so we access the European market. And then, at our convenience, probably in early summer, issue the instruments we have.”

He further added that he expected to issue a bond around mid year with roughly the same value as last year’s EGP 6 billion bond, payable in US dollars and with a 10 year tenor.

Socar to invest USD 15 billions to develop refinery in Turkey

Azerbaijan energy firm Socar said that it would invest USD 12 billion to USD 15 billion by 2017 to build a domestic refinery and 2 plants in Turkey.

Mr Davud Mamedov VP of Socar said that the plants would process up to 600,000 barrels per day. He added that "We want to increase production and exports of refined products as it will bring more profits and will help raise our profile on the Turkish market. Our local market is not that big, so we can cover product shortages in other markets."

Mr Mamedov said that "This plant will be designed to process different types of crude from neighboring markets with sulfur content below 2% and will mainly supply Petkim to cover the shortage of refined products in Turkey, including diesel."

It is noted that Turkey's top administrative court in December 2007 suspended the USD 2 billion sale of 51% in Petkim after a trade union challenged its sale to a consortium involving Socar, Turcas and Saudi based Injaz Projects.

Mr Mamedov said that the consortium was ready to invest USD 30 million to USD 40 million in improving Petkim's logistics and equipment as soon as the dispute was over. He adds "We believe in a positive outcome."

UAE to form an agency to check health and safety at construction sites

The UAE ministry of labour will form an independent agency for the sole purpose of inspecting health and safety standards on construction sites. The agency is part of the ministry's plans to upgrade the country's health and safety regulations and is expected to be up and running within the next few months.

The Institute of Occupational Safety & Health has been working closely with the ministry to revise health and safety laws, which will also extend to labour accommodation standards.

According to Mr Ahmed Al Menhali of IOSH Middle East, the new regulations will also mean tougher penalties for construction companies violating the rules. He said that "We are in the early stages at the moment, but an independent agency will focus on health and safety inspections. It will work independently from the ministry of labour. There will also be more fines, contractors will be expected to prove good health and safety standards, and intentions prescription law can be good, but it's not possible to have an inspector on every site all of the time. So it will be up to the industry to assume responsibility."

Mr Al Menhali said that the new law is also expected to address heat related illnesses, first aid requirements, electrical safety at work and protective equipment to prevent falls from height. He added that "There's a very strong commitment from the ministry of labour to improve health and safety standards. But the law on its own won't be enough. We need to build a capacity for enforcement and the industry needs to improve things. Some sectors here, like oil and gas, have standards that are comparable with the rest of the world. So something has to be done by the construction industry to get its act together."

According to the latest figures, there are 60,000 accidents on construction sites each year. Contractors in the UAE stand to lose an estimated AED 18,300 per hour if work on site is stopped because of an accident. And fines for flouting standards are currently around USD 13,000.

India remains key export market for Dubai in 2007

ET reported that India's position in Dubai's foreign trade emerged stronger in 2007 with supplying 12% of the Emirate's total imports. India is also the single largest importer of products from Dubai, accounting for 43% of its total exports.

Exports to India soared to AED 59.93 billion in 2007 up by 81% YoY as compared to AED 33 billion in 2006. Last week, Dubai reported a whopping 81.3% increase in exports of non oil products to India in 2007. Dubai's total non oil exports in 2007 grew up by 43% YoY.

Dubai's total non oil foreign trade, including direct, free zone and customs warehouse, grew up by 29.6% in 2007, defying a grim warning by the World Trade Organization of a slower global economic growth during the period. The total non oil foreign trade in 2007 increased by AED 155 billion to reached AED 678 billion. Dubai's direct exports in 2007 registered an increase of 48% YoY, while direct imports rose by 35% YoY.

Mr Sultan Ahmed Bin Sulayem chairman of Dubai World said that "The year 2007 has been a phenomenal year for Dubai. The figures released by Dubai World Statistics Department only confirm the emirate's ability to sustain rapid economic growth despite the worries at global levels." He added that it is particularly encouraging to see Dubai's exports growing faster than its imports. The fact is that emerging economies in the region stepped up their imports from Dubai further strengthens the emirate's status as a regional economic hub.

Canada starts AD investigation on welded pipes from China

Canada Border Services Agency has announced the initiation of investigations into the alleged injurious dumping and subsidizing of certain carbon steel welded pipe originating in or exported from the People's Republic of China.

The Canadian International Trade Tribunal will now begin a preliminary inquiry to determine whether the imports are harming Canadian producers. The Tribunal will issue a decision by March 25th 2008. While the Tribunal is examining the question of injury, the CBSA will investigate whether the imports are being dumped and or subsidized and will make a decision by April 22nd 2008.

The investigations follow a complaint filed by ArcelorMittal of Montréal, which alleged that the dumping and subsidizing of the goods in question are harming Canadian production by causing price erosion, price suppression, lost sales, reduced market share, lost revenues, reduced profitability, reduced production and overcapacity, lost employment and plant shut downs, increased inventory levels and impairment to make future investments.

Chinese rebar export prices gain a bit in last week

It is reported that Chinese domestic construction steel prices remained unchanged last week but export offers surged due to general improvement in global market.

As per market reports, HRB335 grade 20mm rebar at Shanghai remained at CNY 4260 per tonne to CNY 4280 per tonne, HRB400 grade rebar at CNY 4360 per tonne to CNY 4380 per tonne and commercial grade rebar at CNY 4280 per tonne and high speed grade wire rod at CNY 4390 per tonne.

Export price for rebar in last week prevailed at around USD 730 per tonne on FOB basis. . It is reported that most products will flow to Vietnam and Singapore where prices are much better than other countries.

According to South Korean Steel Daily, Chinese offer for South Korea are looking up and Laiwu Steel has raised its offers by USD 20 per tonne to USD 760 per tonne on CFR basis for 10mm rebar with KS certification and JIS grade rebar was being quoted at USD 745 per tonne CFR basis.

China seeking spot Indonesian coal to overcome shortages

It is reported that Chinese coal buyers, faced with a shortage of domestic coal and rising local prices, are making active spot enquiries for Indonesian coal supply this month.

China is increasingly looking to Indonesia for coal supply, a trend seen since early last year. Chinese firms joined Japanese and South Korean buyers turning to alternative supply sources such as Indonesia, Australia and South Africa to compensate for reduced shipments from China, which has turned into a net importer. A cut in China's coal import tax from 3% to 1% is also encouraging buying interest from Chinese importers.

Indonesian producers and traders said they have received a surge of buying interest from China this week, seeking to procure mostly 5,000 to 5,500 kcal/kg coal. One key Indonesian producer said it may even consider signing long term supply contracts with Chinese buyers.

Some Japanese utilities recently bought Indonesian coal cargoes for delivery in the first quarter of 2008 at about USD 84 per tonne while Hokuriku Electric Power and Chubu Electric Power each bought a Panamax of Australian coal for December-loading at about USD 80 per tonne FOB. In addition, Japanese utilities have agreed to pay international mining conglomerate Xstrata USD 78 per tonne for Australian thermal coal a 40% increase from last year.

Indonesia aims to increase coal production to 234 million tonnes this year as a result of strong demand from China and India.

Chinese HDG export prices move up a bit in last week

It is reported that export offer for Chinese hot dipped galvanized coil have improved a bit during last week due to rising input cost and pursuit of more profit from exports.

On Shanghai market, 1.0 HDG by Anshan Steel is being quoted at CNY 5580 per tonne to CNY 5600 per tonne, 0.5mm HDG by private producers goes at CNY 5900 per tonne.

As per reports, export offers are mixed from mill to mill as a result of different production cost and quality level. A tier one producer in North East China is exporting 1.0mm HDG with Z140 to Z180 coating at USD 750 per tonne on FOB basis for March shipment. Whereas a Hebei province based tier two steel mills has raised offer to USD 780 per tonne to USD 785 per tonne on FOB basis for 1.0mm HDG in Z120 coating and there is an extra of USD 8 per tonne and USF 23 per tonne for Z140 and Z180 respectively.

As per report, most of the March delivery cargoes are destined for US and Latin America, where a lot of orders have come forth suddenly due to sharp rise in ex work prices by local steel producers and there is strong likelihood that major exports of HDG in coming months would be to these destinations.

As per some market players offers for April shipment could be higher by USD 20 to USD 30 per tonne and, which would be announced in end of January. As per market expectations, almost half of the allocation would be booked before Chinese Spring Festival.

Chinese 2007 GDP growth highest in 14 years

According to Chinese National Bureau of Statistics that the economy expanded by 11.4%YoY in 2007 at the fastest clip since 1994 and the fifth consecutive year it grew by more than 10%.

Mr Xie Fuzhan chief of NBS said that the ups and downs each year have also been within 1 percentage point in the past five years, which is an extraordinary feat. He said that the economy will hopefully maintain stable growth this year and after, but faces challenges. He added that "I am optimistic about growth this year. Even if the growth dropped moderately, it will be what we want to see.”

Mr Xie said "The price rises were caused by a number of factors. They include rising oil and grain prices in the international markets as well as ample liquidity and rising costs of domestic pig breeding. China government has taken a series of measures, such as increasing supply and temporarily intervening in the market, to stabilize prices. But it will take some time for them to take hold."

He said the economy still faces the risk of entrenched inflation.

Mr Chen Xingdong chief economist of BNP Paribas Peregrine Securities said that the law coincides with the onset of economic woes in the US and global economies and, coupled with China's renewed tightening this year, will seriously affect the economy. But Mr Zhuang Jian senior economist with the Asian Development Bank in Beijing said the fundamentals for economic growth have not changed.

Wuxi Seamless and Liaonin form seamless pipe JV

Xinhua reported that Wuxi Seamless Oil Pipe Co Ltd recently signed an agreement with the Liaoning Large sized Steel Pipe Manufacture Co Ltd under Liaoning Shenxin Group to build a joint venture.

As per report the joint venture will require CNY 100 million of investment and is designed to produce 300,000 tonnes of seamless steel pipe and special petroleum pipe each year.

The joint venture expects to realize CNY 5 billion of output and CNY 200 million of pre tax profits annually.

TISCO becomes market leader for high grade CRGO in China

It is reported that 2007 has been the mile stone for Taiyuan Steel in its development of high grade cold rolled silicon steel and it succeeded to grab highest market share of high grade CR silicon steel in China.

It takes TISCO just two years to be No 1 in this field following its successful development in August 2005. Its sales volume reached 22,000 million tonnes in 2006. During the past two years, it developed 50TW250, 50TW, 35TW230, 35TW250, 35TW270 in succession, with thickness at 0.35mm and 0.65mm.

In addition, it has been improving its overseas sales channel and set up cooperation ties with several famous enterprises home and abroad.

Chinese tin imports in 2007 dip by 25%

According to an official with Beijing Antaike, the state run nonferrous metals information provider, China's total refined tin imports in 2007 reached 16,932 million tonnes down 25% from 2006.

The Antaike official said "The decline is mainly due to Indonesia having decreased its tin exports last year."

Antaike source said Chinese customs statistics show that China's exports had increased in 2007 despite the decline in imports. China exported 23,582 million tonnes tin in 2007 up by 9.5% from 2006. The rise is mainly attributed to relatively higher international tin prices during the first half of 2007."

It said that the Chinese government's imposition of a 10% export tariff on unwrought non alloy tin from January 1st 2008 would limit China's tin exports in 2008. The new 10% export tax imposed by the state would discourage Chinese tin smelters from exporting this year, so it's quite likely that the 33,300 million tonnes export quota for 2008 would not be fully utilized this year.

Chinese zinc surplus in 2008 peed at 100,000 tonnes

Interfax China reported that analysts have released varying forecasts for zinc prices this year as China's impact is undetermined, although all agree that zinc will be in surplus globally for the first time in years.

According to the latest analysis from CHR Metals, despite predictions that zinc this year will be in surplus for the first time since 2003, a geographical gap between zinc concentrate supply and refined zinc smelting capacity is a factor expected to push up zinc prices on the London Metal Exchange.

Mr Claire Hassall a CHR Metals analyst said that a big surplus in global zinc concentrate supply is expected this year, despite disruptions from mining project delays and cancellations. But the situation is that the major zinc concentrate suppliers are outside China, while the major zinc smelting capacity is inside China. We expect the global zinc market, China excluded, will experience a slight shortage, while China's domestic market will be approximately 100,000 tonnes in surplus this year.

CHR Metals said China's zinc refining capacity grew 13% on an annual basis last year, dwarfing developments elsewhere in the world and is expected to grow twice as fast as the rest of the world this year. This means that mines outside China will need even greater access to Chinese smelting capacity.

China increased the export tax on unwrought zinc by 5% to 10% on June 1st 2007 and raised it again to 15% on January 1st in 2008. Currently, 0#zinc enjoys a 5% value added tax export rebate. There is also a 5% export tax on 1#zinc.

Brazil approves Baosteel and Vale slab JV

It is reported that Baoshan Iron & Steel Co Ltd has received approval from Brazil's anti monopoly authority to built a USD 3 billion joint venture steel plant with Vale.

As per report the venture, Baosteel Victoria Iron & Steel Co Ltd in the southern Brazilian state of Espirito Santo, will be Baosteel's first steel mill outside China.

Construction on the first phase of the project will begin in 2009 and production will start in 2011.

Baosteel releases CRFH and PPGI prices for March

It is reported that China's biggest steelmaker Baosteel has released prices for cold rolled full hard and PPGI products produced in March.

Prices for CRFH are raised by CNY 100 per tonne based on February prices whilst prices for PPGI products are kept firm.

MMK Issues USD 600 million guaranties to MMK Trading AG

FIS reported that Magnitogorsk Metal Integrated Works acted as a guarantor of the execution of the contract on the extension of a credit line concluded by its subsidiary MMK Trading AG and Switzerland's PNB Paribas.

The contract's worth is USD 600 million. The funds will be used to finance pre export and trading activities of MMK Trading AG. MMK will act as a guarantor during three years.

Ferrexpo announces USD 158 million CAPEX

Ukrainian iron ore major Ferrexpo plc announced commencement of a USD 158 million project to expand production at its current mining operation on the Gorishne Plavninskoye Lavrikovskoye deposit to approximately 32 million tonnes of iron ore per annum by 2011 and to extend the life of the mine at these production levels to at least 2035.

The Board of Ferrexpo PLC has approved USD 158 million in development capital expenditure for this project. USD 68 million will be spent on capitalized stripping works over the next 3 years, to be implemented immediately to the north of the of the current pit operations. Most of the remainder will be spent on additional mining equipment.

Mr Mike Oppenheimer CEO of Ferrexpo said that “In September we announced the initial capital commitment for the new Yeristovskoye mine, the first of our major growth projects. While moving this project and our other longer term growth options ahead on schedule, we have also been aggressively pursuing nearer term options for expanding our production to meet strong demand from our customers and to take full advantage of our under utilized processing capacity.

He said we will continue to pursue opportunities for extracting greater value from our current operations whilst not losing focus on our major growth projects.”

This additional ore production will enable the Company to take advantage of currently under utilized processing capacity to increase high quality pellet production by approximately 1.3 million tonnes per annum.

Rautaruukki to supply airport building structures to Rosneft

It is reported that Rautaruukki and the largest Russian oil company Rosneft have signed an agreement about delivery of building structures to the reconstruction and expansion project of Igarka airport. The airport is located close to Rosneft’s Vankor oil and gas field project in Krasnoyarsk Region.

The complex will include buildings for passengers and utilities, a waiting hall, a hangar, a garage parking unit and a warehouse. Ruukki would supply steel frame, sandwich panels, roofing structures as well as windows and gates for seven buildings. The prefabricated building components and structures will be produced at Ruukki’s factory in Obninsk, Kaluga Region. The deliveries start in January and will continue for three months.

Mr Sergey Chernishev VP for Sales Eastern Europe from Ruukki Construction said that “We have successfully supplied structures for large building projects in Franz Josef Land and in the Island of Sakhalin. We have also long experience in designing and producing structures for airports. Our delivery will enable Rosneft to implement its plans quickly, and provide a first class airport.”

Mr Damir Kashapov Chief of the material support team of the Vankor project said that “The shortest delivery time together with the high quality of finished structures offered by Ruukki, were our crucial criteria in supplier selection. Furthermore, Ruukki has an extensive record of manufacturing and delivering building structures for harsh climate conditions.”

MMK inks contract with Tsentrogipruda for designing of Prioskol GOK

FIS reported that MMK recently signed a contract for design work of Prioskolsk iron ore deposit with the Belgorod Design Institute Tsentrogipruda.

MMK has started the implementation of the project on the development of the Prioskolsk iron ore deposit with the reserves of 45 million tonnes of rich ore and over 2 billion tonnes of ferruginous quartzite. Prioskolsk GOK is to reach its projected capacity by 2017.

The deposit's reserves are sufficient to satisfy the needs of MMK in iron ore in full for over 60 years. Its favorable geographical location and larges reserves allow considering the deposit's use in MMK's overseas projects as well.

Aker to sell Tulcea and Braila shipyards

Business Standard daily recently reported that Norwegian group Aker Yards is involved in ongoing negotiations for the sale of its Offshore & Specialized Vessels division, which owns two Romanian shipyards, based in the cities of Tulcea and Braila.

The sale is likely since Aker Yards’ new majority shareholder, Korean group STX Shipbuilding, is mainly focused on building cruise and transportation ships and ferries.

Mr Dumitru Ivanov GM of Aker Tulcea’s said the sale is likely to happen in 2008. The decision will be made this year by the Norwegian management.

STX Shipbuilding became main shareholder of Aker Yards last year and launched a rebranding process for the Norwegian group, including changing the name of the company and shipyards it controls.

Danube to Black Sea canal to be opened by 2009

Ukrainian News Agency cited Mr Yosyp Vinskyi Minister of Transport and Communications of Ukraine as saying that that the deep water shipping canal Danube to Black Sea will be opened by 2009.

Mr Yosyp Vinskyi said that the delay with the full fledged launch of Danube to Black Sea canal is linked with the ignorant organization of works on its construction which leads to clogging of the canal.

It is noted in the report that Danube to Black Sea canal would be capable of providing annual transit of 2 million tonnes of cargo.

asniy Oktyabr 2007 revenue surges by 45% YoY

RosFinCom reported that Volgograd Steel Works "asniy Oktyabr" produced steel products to the amount of RUB 14 billion in 2007 up by 45% YoY as against RUB 9.67 billion in 2006

asniy Oktyabr produced 732,000 tonnes of melted steel in 2007 up by 2% YoY and its production of finished products increased by 3% YoY to 533,000 tonnes.

The rise in sales revenue is attributed to the increase of the share of alloyed steel grades.

Mr Alexander Fomenko GD of asniy Oktyabr said that “In 2008, the mill has the goal to increase production volume to 762,000 tonnes of melted steel, to further increase the share of high alloyed steel in total volume production and to expanse the brand assortment.”

Abai coal miners seeking higher wages

Interfax reported that Kazak coal miners at the Abai mine belonging to ArcelorMittal Temirtau are demanding higher pay and better working conditions.

Mr Marat Mirgayazov the leader of the coalminers' trade union said that 86 members of the mine repair shift refused to return to the surface, demanding pay hikes and the improvement of working conditions.

He said that “They made the same demands that we are now discussing at the negotiating table with management at ArcelorMittal Temirtau.”

He said that after long negotiations the miners were raised to the surface and replaced. "The miners made concessions but the situation remains tense."

Thirty miners died in the January 11th 2008 methane explosion at the coalmine at a depth of 600 meters. Another fourteen were injured. The government commission has yet to announce what caused the blast.

Engels Pipe 2007 output up by 12% YoY

It is reported that CJSC Engels Pipe Plant increased its output by 12% YoY to 71,700 tonnes of finished products in 2007 as against 2006.

It produced 56,800 tonnes of water and gas pipes in 2007 up by 11% YoY and 14,900 tonnes of shaped tubes up by 15% YoY.

The plant produced 4200 tonnes of finished products in December.

Amurmetall to offer RUB 3 billion bond issue

Interfax reported that the board of directors of Amurmetall, a steelmaker in Russia's Far East, decided recently to issue three year bonds for RUB 3 billion.

Amurmetall plans to place 3 million bonds with face value of RUB 1,000 in a public offering. The bonds would mature 1,092 days from the date of the initial offering.

Amurmetall processes scrap metal and produces long and flat steel products. Board chairman Mr Alexander Shishkin controls 96.8% of the company's stock.

RZD to increase CAPEX in 2008 for Eastern Siberia network

FIS reported that in 2008 capital investments allocated by RZhD OJSC for the Eastern Siberia Railway will grow by 30% from those in 2007. These funds would be used to implement dedicated investment projects, projects of legal entities and to renew the rolling stock.

As per report RUB 2.8 billion will be invested into the development and modernization of infrastructure of the Kuzbass Far Eastern transport node route including the construction and reconstruction of artificial installations along the main and northern routes into automation of overhaul processes and implementation of resource saving technologies. RUB 4.6 billion will be invested into the renewal of the rolling stock.