January, 30 2008
SAIL Q3 2007 net profit up by 31.5% YoY
Steel Authority of India Limited has posted net profit of INR 19.35 billion for October to December 2007 quarter up by 31.5% YoY as against INR 14.71 billion in October to December 2006 quarter. SAIL’s turnover in the quarter increasing by 11.4% YoY to INR 10,756 crore and profit before tax stood at INR 2,922 crore up by 31% YoY.
The highlights of performance during October to December 2007 quarter are
1. Best ever Q3 PBT of INR 2,922 crore up by 31% YoY
2. Highest ever Q3 turnover of INR 10,756 crore up by 11.4% YoY
3. Best ever Q3 production
4. 121% capacity utilization in Q3
5. Production of special steels and value-added items crossed the 1 million tonne mark recording a growth of 30%
6. Substantial growth was recorded in products like high corrosion resistant TMT bars for coastal areas up by 326% YoY, LPG grade steel up by 24% YoY, TMT bars up by 32% YoY, plates up by 18% YoY, medium structural up by 11% YoY, 90 UTS rails up by 13% YoY, wheels & axles up by 6% YoY and CRNO up by 5% YoY.
6. Achieved record domestic sales of 3 million tonnes during Q3.
7. Highest ever interim dividend of 19%
SAIL release attributed tremendous growth in its profitability during Q3 to
1. Improvement in its product mix
2. Substantial increase in production of special grade steel and value added items
3. Higher net sales realization
4. Special efforts towards cost reduction, in spite of sharp increase in cost of inputs such as ferroalloys, additives like zinc, copper etc and spares, as well as much higher employee remunerations.
Mr SK Roongta chairman of SAIL said "We will continue to emphasize on achieving sustained growth on the strength of internal initiatives and improvements."
For the first 9 month period of April to December 2007 SAIL’s net profit is INR 5,160 crore up by 20% YoY and highest ever April to December turnover of INR 30,026 crore up by 9% YoY. SAIL achieved record production of 11.3 million tonnes of hot metal, 10.4 million tonnes of crude steel and 9.6 million tonnes of saleable steel during the first nine months of the current financial year. Around 0.37 million tonnes of additional finished steel were produced during the period from existing mills by maximizing capacity utilization, reducing production of semis and thereby improving the share of finished steel to 84% from 81%.
Jindal Saw bags LoA from Cairn Energy for Barmer Salaya Pipeline
Jindal Saw Limited has received a letter of award from Cairn Energy India Private Limited for supply of line pipes, tracer tube, insulation and bends for the Barmer Salaya Pipeline project. The value of the LoA is more than USD 200
The pipeline will be jointly owned by Cairn in partnership with Oil & Natural Gas Corporation. Jindal Saw will manufacture and fabricate the pipes, the insulating and jacketing work will be performed by Perma Pipes. Jindal saw will execute this order from May 2008 to December 2008.
The pipeline will be jointly owned by Cairn in partnership with Oil and Natural Gas Corporation. The pipeline will be used to transport heavy crude oil from their oil fields in Mangala in North West India to a terminal in Salaya a distance of approximately 600 kilometers. The pipeline will be of a total distance of more than 600 kilometers with a weight of approximately 100,000 tonnes.
This is a prestigious and unique project involving supply of LSAW line pipes for worlds' longest underground pre insulated heat traced pipeline to transport waxy and heavy crude which otherwise solidifies at ambient temperature. Whereas JSL will manufacture and fabricate the pipes, the insulating and jacketing work will be performed by Perma Pipes, subsidiary of MFRI Inc JSL will also source 8" ERW pipe from other suppliers.
With this order, the total order book of JSL exceeds USD 1 billion. These orders are scheduled to be executed by January, 2009.
SAIL and RINL sign MoU for acquisition of lime stone mines in Oman
BL reported that Steel Authority of India Limited and Rashtriya Ispat Nigam Limited have signed a MoU for forming a 50:50 JV for acquisition of high grade lime stone in Oman.
Mr MVR Sarma ED corporate affairs of RINL and Mr AK Jain ED corporate planning of the SAIL signed the MoU.
JSW Steel to list overseas mining assets on LSE - Report
ET reported that JSW Steel is planning to spin off its overseas mining assets into a new company and list it on the London Stock Exchange.
The report cited Mr Sajjan Jindal vice CMD of JSW Steel as saying that the mining assets in India will remain with JSW Steel. He said “Only the international assets will be carved out and listed.”
He added that control over mining assets is of paramount importance for metal companies as commodity prices go up. Mr Jindal hopes to get 50% of the ore requirements from captive sources by next year. He however said that self sufficiency in coal will take more time.
FT cited Mr Seshagiri Rao finance director of JSW Steel as saying that “These mining assets are mostly Greenfield, which requires a lot of money for development. So that is why we wanted to raise that money through taking the mining unit to listing and then we can unlock that value.”
JSW Steel has begun aggressively acquiring mineral assets in India and abroad in an attempt to have more control over the metal chain. It currently has iron ore assets in Chile, coking coal mines in Mozambique and thermal coal mines in Australia and Bolivia. It is
currently negotiating for three coking coal mines in Australia and one in Canada, Most of the assets are owned by the Netherlands based wholly owned subsidiary JSW Steel Netherlands.
As per report, JSW is has two iron ore mines in India with combined reserves of about 110 million tonne. But it needs more raw materials to feed its proposed expansion plans in the country by 2020. Under its expansion plans, JSW Steel hopes to increase its capacity to about 22 million tonnes of steel a year by 2011, for which it plans to cover about 23 million tonnes of its iron ore needs and 11million tonnes of its coal requirements from its own mines.
Sujana Metal plans to buy 4 rolling mills
BS reported that Sujana Metal Products Ltd has firmed up plans to acquire four rolling mills with an overall investment of INR 1,400 crore over the next three years.
Mr YS Chowdary chairman of Sujana group said that “The company has finalized plans to acquire four rolling mills at Hyderabad, Chennai and Visakhapatnam with an aggregate installed capacity of about 200,000 tonnes per annum of structural steel and 120,000 tonnes per annum of TMT bars.”
He said that “We are known for acquiring sick units and turning them around in record time. The closeness of our units to India’s large consuming Markets located in and around Hyderabad, Visakhapatnam, Bangalore and Chennai gives a competitive edge for Sujana Metals over peer Companies owing to freight charges and short delivery schedules.”
He informed that with these acquisitions, its installed capacity for rolled products will go up from 290,000 tonnes per annum to over 700,000 tonnes per annum.
Sujana Group has just completed the acquisition of a new TMT rolling mill at Hyderabad with installed capacity of about 100,000 tonnes per annum together with ingots making facility of capacity about 50,000 tonnes per annum.
Jharkhand activists vow to oppose ArcelorMittal Torpa plant
BS reported that the Jharkhand Mines Area Coordination Committee has vowed that ArcelorMittal will face a tough fight.
The report cited Mr Xavior Dius head Jharkhand Mines Area Coordination Committee, which has so far thwarted any land acquisition in the state, “We would not allow the ArcelorMittal to even enter Torpa.”
The main obstacles to the project are the two rivers Koyal and Karo that flow through Torpa.
Jharkhand Mines Area Coordination Committee is an alliance of 52 local organizations across Jharkhand. Jharkhand Mines Area Coordination Committee has resisted the construction of a dam on these rivers for the past 30 years.
Usha Martin acquires Netherlands firm
India’s a leading producer of specialty steel and one of the world's largest wire rope manufacturers Usha Martin Limited has acquired the business of a Netherlands based distribution company DE Ruiter Staalkabel BV through its wholly-owned subsidiary unit Usha Martin International Limited UK.
DE Ruiter has strong brand equity in high end rope and allied products for shipping, port and oil field applications.
Mr Subhash Somani senior VP of Usha Martin said that "The total value of the acquisition is worth around EUR 3 million. The acquisition by Usha Martin would help the company widen its reach in the European market.”
Usha Martin has manufacturing facilities at Ranchi, Jamshedpur and Hoshiarpur in India. It also has manufacturing units in Britain, Thailand, UAE and USA. It enjoys a strong international presence with a worldwide distribution, service and marketing network spread across the US, the UK, Europe, Africa, the Middle East, South East Asia and Australia.
JSW Steel announces positive business outlook
JSW Steel Limited has announced the following business outlook
A JSW release said that “The outlook for the global economy in 2008 is expected to show a growth of 3.7% in 2008 in spite of slow down in matured markets led by turmoil in the financial markets. This optimism originates from the fact that large fixed assets investments are taking place across all emerging economies.”
It added that “The strong demand and the soaring input cost led to a sharp rise recently in the finished steel prices. The negotiations for revision in the long term prices for the iron ore and coal for the year 2008 signal that there will be a sharp rise in these prices too. With this backdrop, it is expected that new highs will be seen in the steel prices in 2008.”
SISCOL profit after tax for Q3 of 2007 surges by 33% YoY
Southern Iron & Steel Company Limited has posted net sales of INR 278.86 crores in October to December 2007 quarter up by 62% YoY while, net worth has improved to INR 655 crores.
It has posted operating profit of INR 27.80 crores in October to December 2007 quarter up by 62% YoY. Its EBIDTA improved to INR 46.57 crores up by 57% YoY and profit after tax was recorded at INR 6.38 crores up by 33% YoY.
The operational performance of SISCOL during in October to December 2007 quarter as against in October to December 2006 quarter is as below
Item Q3 '07 Q3 '07 Change
Billet 78701 114679 45%
Rolled Product 75663 82014 8%
In tonnes
SISCOL is implementing expansion project to expand the capacity from 0.3 million tonnes per annum to 1 million tonnes per annum and has commissioned the following major projects during October to December 2007 quarter
a) Energy optimization furnace II - 65 tonnes capacity
b) Wire rod block
c) Bloom caster
With the commissioning of coke oven, BF and gas based 30 MW captive power plant during the year 2007, SISCOL has become self sufficient in power and economics of own power generation would further improve the financials of the company. It will be one of the few plants in India to have its own iron ore mines, power plant and integrated operation.
POSCO may have to finally pay more to villagers
SNS reported POSCO India is under pressure from its headquarters to start work from the new target date of April 2008 and is now willing to make more concessions to resolve the biggest hurdle in its path land acquisition.
As per report, just approved by the POSCO board in South Korea, POSCO India is offering separate packages for those with land and those without, the agriculture and daily wage labourers who constitute a sizeable proportion of the people who will be displaced by the biggest foreign direct investment in India.
The offer, worked out in consultation with the Orissa government, is being kept under wraps till a committee of the villagers agrees to hold talks with the company. But sources close to the development said that the terms were more generous than the provisions of the state relief and rehabilitation policy 2006. Apart from compensation for land, the package includes an unemployment allowance to displaced families till they are provided jobs at the project.
A senior Orissa government official said that it could turn into a doubled edged sword. He added that “We need to get the POSCO project going. Yet, we are afraid that the settlement will set a dangerous precedent for other projects in the state. It may even reopen old cases where companies have resolved their R&R with project affected people.”
POSCO India needs 4,004 acres for its 12 million tonne steel factory, power plant and captive port but acquisition of land has been stymied for the past two years by stiff resistance from two of the target villages and dissension within the ranks of another group that was initially seen as being friendly towards the foreign venture. Towards the end of November 2007, clashes between the different factions resulted in a police cordon being thrown around the seven villages. Even today, close to 500 policemen are stationed in the area, billeted in schools and other public institutions. Dhinkia has barricaded itself and does not allow any official to visit it.
Sandvik Asia inaugurates HSS taps unit in Pune
It is reported that Sandvik Asia Limited has opened its new high speed steel taps plant at Dapodi on January 23rd 2008. High speed steel taps are used in all kinds of metal cutting and high precision activities across sectors such as automotive and aerospace, energy, pharmaceuticals and even medical equipment.
The plant has its production shop floor on the first floor and is equipped with environmental friendly features such as solar heaters, air coolers, state of the art fire fighting systems and a rain harvesting plant.
Over 80% of the plant's production will be exported and 20% will support the domestic market. Products will be sent to a central warehouse in Singapore to be dispatched to other locations worldwide.
Mr Hakan Kingstedt MD & president of Sandvik Asia said that the new unit will make 1 million pieces initially before doubling its output. He added that it will continue to invest in India to meet the increasing demand in Asia and Eastern Europe. Tooling is a USD 3 billion business for Sandvik globally.
Sandvik Asia has manufacturing units in Pune, Mehsana, Hosur, Hyderabad and Chiplun. It has its research and development centre in Bangalore. Its businesses in India include materials technology, tooling, mining and construction equipment.
L&T aims 20% revenue from power segment in 2 years
BS reported that Larsen & Toubro is aiming to earn at least 15% to 20% of its revenues from the power sector within a couple of years, through the engineering, procurement and construction of power plants in India.
Mr YM Deosthale whole time director & CFO of L&T said that “At present we have an order book of over INR 50,000 crore and of this the contribution of the power sector is less than 5%. We aim to increase this share to 20% in one or two years, considering the opportunities for power EPC projects in India.”
In December 2007, L&T had signed an agreement with Mitsubishi Electric Corporation to set up a manufacturing facility for super critical steam turbine and generators in the range of 500 MW to 1000 MW with technology licensing and assistance from Mitsubishi. The unit is proposed to come up at Hazira in Gujarat by 2009-10.
Mr Deosthale said that “Our investment is likely to be INR 250 crore, with a majority 51% stake in each of the projects.” He added that it has planned capital expenditure of INR 2,500 crore for a steel fabrication yard and manufacturing facility in Oman, electrical equipment manufacturing unit in Coimbatore and a ship building yard in Hazira.
It may noted that centre is considering entrusting L&T with the supply of power equipment for some of its upcoming power projects on a nomination basis. Currently, Bharat Heavy Electricals Limited is the only company that is eligible to set up power projects on a nomination basis from the government. The government plans to add 78,000 MW of power by 2012, with an investment of over INR 100,000 crore.
Naxalites threaten mining plans in Maharashtra
ET reported naxalites in Gadchiroli district in Maharashtra are trying to exploit the issue to intensify their movements in the district.
The posters pasted by Naxals on the gram panchayat buildings at Khutgaon and Mendhatola on Republic Day contained provocative statement, instigating the villagers to rage struggle against the government policy of acquiring land to set up industries.
The posters with slogans such as “We will not give our land to Capitalists and Imperialists”, “We will sacrifice the lives, but will not leave the land” and “Take the path of farmers of Nandigram” has already sent the administration and the police in a tizzy.
Mr Gadchiroli Rajesh Pradhan SP of Gadchiroli district said that the target of the Naxals is to motivate people against the administration. He added that “And this time they chose acquisition of land as an issue. They are trying to hit the conscience of the locals by bringing in the Nandigram issue, since it is in news for quite some times."
Surjagarh region in Etapalli tehsil has vast deposits of iron ore and as many as 5 companies will be given the mining lease in this area in coming days. However to execute these mining projects the government will need to rehabilitate around 30 villages in the tehsil. This apart, Reliance has plans to set up a cement factory in Gadchiroli in days ahead.
7 short listed for monorail project in Mumbai
Projects Today reported that 7 bidders have been shortlisted by Mumbai Metropolitan Region Development Authority for the 70 kilometer long monorail project.
The short listed bidders includes
1) Reliance Industries & Siemens Gammon India consortium
2) Reliance Energy, SNC Lavalin & Reliance Communication consortium
3) Essar, Alstom & Lanco consortium
4) IL&FS Transportation Networks, Punj Lloyd & Soma consortium
5) GVK, Yeoh Tiong Lay & Bombardier Transportation consortium
6) Pioneer Infratech, Mitsubishi & TATA Power consortium
7) L&T, Infra Development & India Infrastructure Private consortium
The shortlisted bidders will now require submitting technical bids and on evaluation. The entire bidding process is likely to be completed by the end of April 2008 and the execution of the monorail project is expected to begin by early May 2008. The project will be operated on the build operate and own basis.
MMRDA has appointed RITES to carry out a techno economic feasibility study to implement the monorail system in various parts of the Mumbai metropolitan region.
Mumbai Metropolitan Regional Development Authority board has given its approval for the construction of four monorail routes in the Mumbai metropolitan region.
1. 25 kilometer route running from Malabar Hill to Haji Ali, Jacob Circle, Wadala, Sion Hospital and Dharavi to BKC
2. 25 kilometer route from Thane to Kalyan to Bhiwandi
3. 10 kilometer Chembur-Mahul-Govandi route
4. 10 kilometer Lokhandwala Complex-Oshiwara-JVLR-Kanjurmarg stretch
GMR Infrastructure bags Upper Karnali power project in Nepal
GMR Infrastructure has signed an agreement with the Nepal government for setting up a 300 MW Upper Karnali hydro power project and has agreed to provide 12% of power to the Nepal government.
According to earlier estimates by Nepal Electricity Authority, the cost of building Upper Karnali project is around USD 468.6 million.
GMR has set a target of 2 years for preparatory works on the project and is expected to take another 4.5 years to complete the project.
Cabinet refers HSL revamp plan to GoM
Exim News Service reported that union cabinet has referred a proposal to restructure Hindustan Shipyard Limited to a Group of Ministers for further deliberations on account of the security considerations involved in it.
The Group of Ministers includes Mr AK Antony union defence minister, Mr Pranab Mukherjee union minister for external affairs, Mr P Chidambaram union finance minister and Mr TR Baalu union minister of shipping, road transport & highways.
It may be noted that the department of shipping had sent an INR 799.61 crore proposal to the cabinet secretariat to rehabilitate and revive the shipyard, which now has an order book of INR 2,000 crore. A department related parliamentary standing committee had recommended expeditious clearance of this proposal.
Hindustan Shipyard was in financial crisis for many years owing to several factors, including poor order book position, lack of working capital, managerial inadequacies and inability to raise funds from financial institutions due to a negative net worth. But driven by the recent surge in the shipping industry, the order books of all shipyards, including HSL, have swelled phenomenally.
The need to set up a new naval base has arisen because the existing channel of Visakhapatnam Port is shared by the Navy and the Port traffic has increased to such an extent as to leave little elbow room for the Navy.
NTPC to spend over USD 1 billion for overseas coal assets
BL reported that National Thermal Power Corporation Limited is looking to spend over USD 1 billion on buying coal assets abroad over the next few years as part of its efforts to secure long term fuel linkages.
A senior official at NTPC said that “We are on the lookout and hope to strike a coal mine deal overseas during the current year as part of a long term measure to ensure fuel security for our coal fired stations. We could be investing over USD 1 billion in securing assets abroad, including investments through CVIL over the next few years.”
NTPC, which is in fairly advanced stages of scouting for opportunities in countries such as Indonesia and Australia, Nigeria, Mozambique and South Africa, has already earmarked around USD 125 million to be pumped into Coal Ventures International Limited, co promoted by SAIL, RINL, CIL and NMDC.
NTPC’s plans to invest in coal assets abroad Korea Electric Power Corporation, which recently clinched a 10% stake in an Australian coal mine and China Shenhua Energy, which is in preliminary talks to invest in Indonesia and is studying targets in Australia as well.
NTPC, which generates over 28% of India’s total power, plans to nearly double its generating capacity to 50,000 MW by 2012, from 27,904 MW at present. NTPC’s coal consumption is expected to surge to between 185 million tonnes and 200 million tonnes a year by 2017, up from about 112 million tonnes. Of its cumulative capacity, NTPC operates 18 coal fired projects with a cumulative capacity of 23,209 MW, while its remaining capacity operates on gas and liquid fuel.
Enertia Alliance for Sustainable Energy forum launched
BL reported that a forum for promotion of sustainable energy and building an industry networking group called ‘Enertia Alliance for Sustainable Energy’ was launched recently for initiating actionable plans. The first networking of the exclusive power and energy sector initiative was attended by a number of power sector professionals.
RIL in talks with power equipment suppliers for captive plant
ET reported that Reliance Industries Limited has started advanced level discussions with equipment suppliers for its upcoming 2,000 MW captive power plant in Haryana. It may be noted that the negotiations had started with a number of domestic and multi national players about 4 months back.
According to sources close to developments, BHEL as well as Siemens and Alstom have emerged as front runners for the deal and a final decision is expected by early in February 2008. It added that the land acquisition has been completed for the project, which would be completed in a phased manner of 500 MW each.
The power plant is coming up at RIL's proposed multi product SEZ and would meet the electricity requirement of the export zone. The SEZ would also house a cargo airport, besides residential and other properties.
JP Morgan raises 2008 price forecast for thermal and coking coal
JP Morgan, citing Indian coal demand and global infrastructure constraints, has forecast 2008 thermal coal contract prices between Australian miners and Japanese utilities will jump by over 60%.
JP Morgan raised its thermal coal contract price forecast to USD 90 a tonne up by 61.7% YoY from last year's agreed price of USD 55.65 and a 28.5% YoY increase from its earlier forecast of USD 70.
Mr David George commodities analyst at JP Morgan said that "Given the strong growth in demand for seaborne coal with limited new supply, we see overall strength for the international coal market. We believe it is the growing demand for imported coal into India that could have the greatest impact on the industry."
Mr George said that India's plan to bring on 40 to 50 gigawatts of thermal coal capacity, to add to the existing 60 gigawatts of generation, could result in additional imports of about 80 million tonnes per year. He added that a developing drought in China could reduce the country's hydro power generation and raise its coal import demand in 2008.
JP Morgan also raised its forecast for 2008 coking coal prices to USD 140 a tonne up by 42% YoY from last year's agreed price of USD 98.38. Its previous estimate was USD 120 a tonne.
Futures could distort steel prices - ArcelorMittal
ArcelorMittal retreated its stance on much hyped steel futures and affirmed its pledge to offer visibility and stability to the steel market and its customers while pushing away the speculators.
Mr Julien Onillon VP of investor relations at ArcelorMittal, while speaking at the Platts Steel's Future conference, said that "We make steel for customers and have been quite happy without futures in steel for years. We do not want 90% of transactions to be made by financial institutions instead of the producers. Experience shows that futures trading can increase volatility and that speculators can distort price."
Mr Onillon added that "Is it really physical supply and demand that is settling the price, or is it traders, is it a risk for the producer? Futures increases the risk of non rational behavior. If prices are volatile is it destroying demand?"
He said that "ArcelorMittal can cut production when demand is weak and very quickly the price will be more stable. Other main players can do the same. The oil industry does the same and that brings a lot of stability in the pricing."
Mr Onillon said that "First we have globally only 10% of market share. It so much transparent, the costs are transparent, we are a listed company. Is it so controversial to reduce production when demand in going down? It's just good management. When prices are too high there is a risk of steel being substituted for other products."
Klöckner post strong results for financial year 2007
Klöckner & Co Group has achieved sales of around EUR 6.3 billion and EBITDA of around EUR 365 million in the financial year 2007, exceeding forecast of around EUR 355 million.
The rise in sales from EUR 5.5 billion in 2006 to EUR 6.3 billion in 2007 was essentially the result of price increases and acquisitions. EBITDA is approximately down by 8% YoY on the previous year’s figure of around EUR 365 million.
At approximately 10% above the fourth quarter of the previous year, EBITDA of around EUR 77 million was generated in the fourth quarter with sales of around EUR 1.5 billion.
In addition, net liabilities, which had risen to EUR 996 million in mid 2007 due largely to acquisitions, were reduced to around EUR 750 million by the end of 2007.
Dongkuk and Vale to form new JV called CSP
Dongkuk Steel Mill Company Limited has announced that it will establish a 51:49 JV company called CSP with Vale.
The new entity, to be capitalized at KRW 18,972 million, will be mainly engaged in the project feasibility study businesses.
Australia may lose 8% of coking coal due to flood - Merrill
Merrill Lynch & Co said that coking coal miners in Australia may lose at least 10 million tonnes or 8% of annual output because of flooding.
Bad weather forced Macarthur Coal Limited and West farmers Limited to declare force majeure, a legal clause allowing companies to default on delivery commitments due to circumstances beyond their control.
Mr Daniel Fairclough analyst at Merrill said that “We calculate at least 10 million tonnes of coking coal could be lost. There is little or no chance of making up this lost tonnage.”
Merrill said that producers including BHP Billiton Mitsubishi Alliance are in talks with buyers to set annual prices. International prices for hard coking coal were set at USD 92 to USD 98 a tonne for the current year and may rise to USD 160 to USD 170 a ton.
Merrill had forecast a global annual supply shortfall of 6 million tonnes before the flooding in Australia. The bigger deficit in supply may constrain global steel production.
Vietnam approves POSCO's USD 4.5 billion steel mill
VNA reported that POSCO has been approved by Vietnamese government to build a USD 4.5 billion steel mill in the central province of Khanh Hoa with a local partner.
POSCO’s hot rolled steel plant collaborates with Vietnam’s ship maker Vinashin and plans to be completed by 2010. A USD 1.13 billion cold rolled steel mill has already started to be built in province of Ba Ria Vung Tau and will go into production in 2009.
POSCO has permission to build a 1,000 MW thermal power plant for mill uses.
Rautaruukki to build a new sandwich panel plant in Finland
Rautaruukki is to strengthen its delivery capability for the commercial and industrial construction market by establishing a new sandwich element plant at Alajärvi, Finland. Starting production in autumn 2009, the new facility will broaden the range of sandwich panels and improve the capability for integrated system deliveries.
The EUR 20 million investments will incorporate a new 10,000 tonnes production plant, which will replace the existing sandwich panel production line at Alajärvi and almost double Ruukki’s sandwich panel production in Finland to more than 2 million. The new plant will also mean a significant improvement in production efficiency and safety at work. The investment is subject to a decision concerning properties relating to the project to be made by Alajärvi town council at its meeting on February 18th 2008.
Mr Jouni Metsämäki senior VP for Northern and Eastern Europe at Ruukk Construction said that “We aim to meet all customer expectations in terms of capacity, speed and reliability of deliveries. This investment will improve our customer service particularly in the Nordic countries and Baltics. Shorter delivery times and a greater product range will strengthen our competitive edge as a supplier of integrated systems in frame and envelope structures for the construction of commercial, industrial, logistics premises and sports complexes.”
In addition to the Alajärvi Works, Ruukki has sandwich panel production lines in Poland and Russia. Furthermore, production of sandwich panels will start in plants under construction in Romania and Ukraine during 2008. A new sandwich panel production line is planned also at Obninsk Works in Russia and will start up in late 2009.
Newcastle Coal Shipments dropped 4.5% last Week
Bloomberg reported that Coal shipments from Australia's Newcastle port, fell last week. Newcastle Port Corp said loadings declined by 4.5% about 1.99 million tonnes from 2.09 million tonnes the previous week, 22 vessels were queuing off the port as of yesterday morning, seven fewer than a week ago.
According to the globalCOAL NEWC index thermal coal prices at Newcastle, a benchmark for Japan, South Korea and Taiwan rose to a record USD 93.35 a tonne in the week ended January 25th 2008.
Xstrata Plc, Rio Tinto Group and other miners are struggling to meet increasing demand due to bottlenecks in port and rail networks in Australia's east.
Eskom asks producers for extra coal in 3 months
Reuters reported that State utility Eskom has asked South Africa's coal producers to find an extra 5 million tonnes of coal during the next three months to ensure there is enough to avoid power cuts and to build stocks ahead of the winter.
Eskom, which burns around 100 million tonnes of domestic grade coal a year, has not run out of coal but has stocks of only 1 to 3 days at some power stations.
The recent wave of power cuts was due to a variety of reasons, mostly higher than expected demand overwhelming the system at a time when some plants were shut for unscheduled maintenance.
IG Metall calls on strikes at start of steel wage round
German IG Metall trade union has called on strikes in the steel industry at the start of a round of wage negotiations for millions of workers in the sector. The strikes, which are traditionally brief and not aimed at halting production, would begin shortly and target steelmaking companies.
IG Metall is currently negotiating a wage rise for 85,000 workers employed in the steel sector in the western states of North Rhine Westphalia, Lower Saxony and Bremen.
They are demanding an increase of 8% but the employers have rejected the demand.
ArcelorMittal SA foresees steel supply problems
ArcelorMittal SA said that it would not be able to meet all of its customers needs due to continued power supply problems.
Mr Rick Reato CEO of ArcelorMittal SA said that “We are advising our customers that we are experiencing a force majeure event. We are continuing to assess the full impact of the power shortages but steel processing and steel dispatches will be delayed. Unfortunately we will not be able to meet all of our customers needs as a result of the unfortunate events over which the company has no control. We are advising our customers that we are experiencing a force majeure event. We are continuing to assess the full impact of the power shortages but steel processing and steel despatches will be delayed."
Mr Reato said that it will undertake a detailed assessment of the potential impact regarding the supply to its customers and the situation will be communicated on an individual basis. He added that "All reasonable steps are being taken to minimize supply interruptions or any other adverse affects to the market."
ArcelorMittal SA said that if the supply problems continue for approximately 2 weeks the impact on steel supply will be approximately 300,000 tonnes.
Italy to increase rebar surcharge from February
Recently, the domestic price of rebar in Italy remained stable at about USD 730 per tonne. The base price of rebar is at USD 438 per tonne. Moreover, the export price of Italian rebar is about USD 730 per tonne FOB so far.
However, mills will hike their surcharge by USD 29 per tonne in February 2008. Also, the medium sized rebar surcharge will be around USD 314 per tonne.
Taiwan imports 4.45 million tonnes of scrap in 10 months
It is reported that Taiwan has imported 4.4 million tonnes of scrap during the first 10 months in 2007 up by 16.3% YoY while, total scrap import is expected to reach about 5.3 million tonnes in 2007.
America has become Taiwan’s scrap import destination, followed by Hong Kong, Japan and Russia. America has 37% of total volume about 1.648 million tonnes. Besides, Hong Kong provided 586,000 tonnes, Japan 478,000 tonnes and Russia provides 394,000 tonnes.
Steel shortage could cripple SA automakers
It is reported that South African auto manufacturing industry could be in peril if the drastic government shutdown of major industrial users of electricity is expanded. Load shedding could seriously affect the auto industry as a huge user of specialized high grade sheet for engine bodies.
A spokesman for Ford, which has already lost the contract for the next generation Focus to Ford Australia due to MIDP concerns, said that a protracted shutdown would be fatal and it would close the doors.
BMW, by contrast, said that it would import sheet steel if local supplies were interrupted at a huge additional cost of course, but it would be cheaper than not building the cars. A BMW spokesman said that although its plant at Rosslyn had not had any power outages yet, contingency plans were in place. He added that it had back up generators but not enough to power the whole plant.
A spokesperson at the nearby Nissan plant said that it had sufficient sheet metal for the short term but that a protracted shortage of local sheet metal would be a problem because of its just in time procurement model. Nissan is currently ramping up for production of its new half tonner, so its sheet metal requirements are less than they will be when the new vehicles are in full production.
A Toyota spokesperson shrugged off the effects of a possible steel shortage and said that sheet metal could be sourced elsewhere. Toyota's Prospecton plant near Durban airport employs 10 000 people and exports about 4100 vehicles a month. She also stated that the plant had been guaranteed by Eskom there would be no power cuts at the Prospecton plant.
BlueScope Thailand hoping for strong sales in 2008
It is reported that BlueScope Steel Company Thailand, subsidiary of Australian BlueScope, is hoping to see its 2008 sales slightly better than last year on a stronger construction sector.
Mr Wilson president of BlueScope Thailand said that it is optimistic about the overall situation in Thailand. He added that ''Many factories need to expand their production capacity as their utilisation rates are over 70%. We are hopeful that steel demand from the residential and construction sectors will pick up from 2007 after the new government unveils its development projects.''
BlueScope Thailand also plans to build an additional assembly line for its new products and may allocate an incremental capital investment since the expansion would be added onto existing facilities. The new line would begin operations in the next 3 years and focus on commercial and residential roofing.
Mr Wilson said that the domestic spending mood would probably improve even though the Thai market could be affected by the US sub prime crisis. He added that ''We need to monitor this closely, because it could have a wide impact.'
He further added that the problem has not yet affected the company as its key export markets are in other regions such as Western Europe and India. He said another threat would be from cheap imported products from China and Vietnam.
Higher H beam price in Tokyo
JMB reported that construction steel materials dealers are trying to increase the reselling price after wide hike by Tokyo Steel Manufacturing.
As per report, The dealers offer JPY 6,000 per tonne higher price for H beam and section steels under cost push pressure from supply side. However, the dealers could have trouble to pass the higher cost price under slow demand when they could not pass even past makers' hike.
Job losses on agenda as EU considers steel AD measures
Delegates at the Platts steel futures conference said that the potential impact of antidumping measures on European jobs is being considered as a public interest issue by the European Commission as it investigates steel industry complaints lodged in 2007.
Mr Roelof Plijter EU director general of trade said that "We are in the process of investigation and will take into consideration the public interest and in this case the users of steel."
Mr Plijter said that "Contrary to the past, steel users are becoming more vocal and are better organized. General interest is already being lobbied ahead of real complaints being made. The mechanical and shipbuilding sectors could be impacted by antidumping measures. The Commission, in its preliminary and final assessment, will take the issue of job losses into consideration."
He concluded that "It is a tense argument, but what we know for sure is that the mechanical industries and steel users provide many, many more jobs than the steel industry itself does in Europe."
EU SS surcharge to increase by EUR 100 per tonne in February
YIEH reported that main European stainless steelworks are going to raise alloy surcharges on 304 grades by EUR 100 for February 2008 deliveries to between EUR 1,696 per tonne and EUR 1,740 per tonne.
Although the increase range reaches EUR 100 per tonne, the surcharge is still lower than the December 2007 surcharge of EUR 1,884 and EUR 1,635 per tonne.
Eskom asks BHP Billiton to cut power consumption
BHP Billiton announced that it is in receipt of a letter from the South African electricity utility Eskom requesting that power consumption be reduced to assist Eskom with meeting demand.
Officials at BHP Billiton said that it has been working with Eskom for some time to assist with demand and we continue to do so. At this time our Bayside, Hillside and Mozal aluminum smelters continue to operate, although load shedding at those smelters is ongoing.
They added that “No mining is taking place at the manganese mines in Hotazel. We have voluntarily reduced load at Metalloys and MMC since Thursday. We cannot be certain how long this situation will prevail and will continue to liaise with Eskom.”
BHP Billiton's coal mines are continuing to operate and are doing everything they can to ensure coal supply to Eskom.
Hyundai Heavy to deliver 134 ships in 2008
Hyundai Heavy Industries Company has announced that it has delivered 11 vessels, including 6 container vessels and 2 liquid natural gas carriers, in January 2008 and expects to deliver more vessels in 2008.
Hyundai Heavy delivered 81 vessels valued at USD 6.85 billion in 2007 as compared with 73 vessels worth USD 4.81 billion in 2006. This year, Hyundai Heavy plans to deliver 134 ships.
Hyundai Heavy won orders valued at USD 24.6 billion to build 208 ships in the first 11 months of 2007, the first time for a shipbuilder to acquire orders of such value in less than a year. It expects to win USD 27.4 billion worth of orders in 2008.
Shipyards in South Korea have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world. The shipbuilders have enough orders to keep them busy for about 4 years. To meet rising shipbuilding orders, Hyundai Heavy is building 2 more docks.
Viet Nam’s economy to grow by 8.7% in 2008 - Report
Institute of Developing Economies under the Japan External Trade Organisation has forecasted that Viet Nam’s economy will increase by 8.7% in 2008.
The forecast was made in the annual 2008 Economic Outlook for East Asia released in late December 2007, which covers 10 Asian economies, including China, Korea, Taiwan, Hong Kong, Singapore, Indonesia, Malaysia, the Philippines, Thailand, and Viet Nam.
The report said that both foreign and domestic investors seem to expect much from the second year of Viet Nam’s admission to the World Trade Organisation, resulting in their expanding investment in 2008 by 10% compared with 2007. Exports therefore may response to FDI by increasing by 12% and consequently the industrial sector will post a continuous double digit growth rate of 10.8%.
According to the report, strong industrial and service sectors are expected to drive the Vietnamese economy in the year. The report said that Viet Nam’s inflation rate will reduce to 8.1%, lower than that of 2007 and the economic growth rate of 8.7%.
Al Ghurair steel plant start up postponed to May 2008
Emirates Business reported that the start up of Al Ghurair Iron & Steel plant in Abu Dhabi, which was due to start production in September 2007 has been delayed to May 2008 due to construction obstacles.
The report cited an official at Al Ghurair as saying that "We hoped construction could be finished by the fourth quarter of 2007, but this won't happen before March 2008 due to obstacles at the site. Now we are aiming to start production in May 2008."
The AED 312 million plants will produce 100,000 tonnes of HRPO, 50,000 tonnes of CRFH steel and 200,000 tonnes of HDG. The second phase of the project is expected to be completed by the end of 2010 and raise the plant's total capacity to 500,000 tonnes of steel products.
Tradeline, Al Ghurair’s JV partner in the project, said that it hoped to meet 50% of the galvanised steel demand in the UAE, which now stands at 400,000 tonnes per year. It has said it plans to export 40% of the plant's output to international markets such as the United States.
KGL to set up USD 500 million fund for port projects
Gulf News reported that Kuwaiti logistics group KGL’s a private equity unit KGL Investment Company is looking to invest in port projects in emerging markets through a USD 500 million special fund, out of which it has already raised USD 250 million and hopes to collect the entire fund amount by summer this year. It is keen to acquire stakes in ports and related businesses the Middle East, Asia, Africa, Eastern Europe and Latin America.
Ms Marsha Lazareva MD told Gulf News that “We are looking for projects that can be developed operationally and financially. The common factors in these markets are strong GDP growth and growing demand for logistics.”
She said that potential projects are being considered in Saudi Arabia, Syria, the UAE, Algeria, Egypt, Mozambique, Thailand, Kenya, Gabon, China, the Philippines and India.
She added that the company benefits from the KGL Group's logistics expertise and has built up a team of 15 industry experts to handle investment projects.
So far KGL Investment Company has committed $104 million in four projects in Egypt, Jordan, Singapore and one business in Africa.
Jebel Ali container capacity to grow by 27% in 2009
Port operator DP World announced that the port of Jebel Ali achieved a throughput of 9.9 million TEUs in 2007 up by 25%YoY.
As per report, Jebel Ali's current capacity of 11 million TEUs will grow in phases and will reach 14 million TEUs early next year. DP World said that container handling capacity at its flagship facility in Jebel Ali will increase by 27% in February 2009 under the ongoing expansion that will satisfy annual double digit growth.
Mr Mohammad Al Muallem MD of DP World UAE told reporters "One million more will come in August, another million in October and the rest in February 2009.”
Mr Al Muallem said the port has enough land to launch further expansions. According to a blueprint, capacity at the port can be increased by 5 million TEUs each in 13 phases until 2030. He said "Whenever we need it, we can sanction expansion.”
The ongoing USD 1.5 billion Terminal 2 expansion project has already given an additional 2 million TEU capacity to Jebel Ali, which is seeing increased container traffic as rapid economic growth in the UAE and elsewhere in the region is boosting cargo volumes. The whole project has added 2,500 meters of berthing space at the port.
DP World also manages Abu Dhabi's Mina Zayed and the container terminal at the Port of Fujairah. The company will also be operating the upcoming Abu Dhabi's Port Khalifa, which is slated to become the UAE's second-biggest port.
Pak Railways to buy 150 new coaches from China
Daily Times reported that Pakistan Railways would buy 150 passenger coaches of different classes worth PKR 5.5 billion from China.
The officials at Pakistan Railways said that the department suffered a huge lost after the assassination of Pakistan Peoples Party leader Ms Benazir Bhutto, as at least 100 coaches were damaged. They added that PR is facing huge problems in facilitating its customers due to which the ministry has approved the tender of making 150 passengers coaches.
The officials said that “The railways network was very badly affected during the agitation and it will take more than 1 year for railways to come back in its actual position.” They added that besides the coaches, the signal system of the authority has also totally damaged due to which the concerned staff has been facing many issues including the operation of trains beyond the schedule.
Official sources said that “Pakistan Railways will receive 50 of the 150 passenger coaches bought from China during the second week of February 2008 while, the rest of locomotives would arrive in knockdown or semi knockdown condition and would be assembled in Risalpur locomotive factory.”
The basic reason behind purchasing the passenger coaches from China is to facilitate the passengers and resume the trains that were closed by the authority.
Gazprom plans to deliver gas to Israel via Turkey
Today's Zaman reported that Russian energy giant Gazprom is seeking to extend its business relations with Turkey, with plans to launch new projects to enlarge its delivery area in the Middle East and Israel via Turkey in particular.
Turkey faced another natural gas shortage earlier this winter as gas delivery from Iran to Turkey dropped in December 2007 and came to a complete halt in January 2008. Subsequently, Turkey asked Gazprom to increase gas shipments to Turkey.
In December 2007 Gazprom increased gas supplies from 30 million cubic meters per day to 38 million cubic meters per day. In January 2008, after Iran suspended deliveries, Blue Stream, the pipeline with which Gazprom transports gas to Turkey, pumped close to 41 million cubic meters of gas to Turkey daily, which corresponds to an increase of about 33%. In addition, Gazprom supplies natural gas to Turkey through a second pipeline via the Balkans, where supplies were sharply increased between January 18th and January 21st 2008 to 42.4 million cubic meters, 4.5 million cubic meters above the forecasted volumes.
Gazprom said that Turkey was one of their most important markets, and currently the third largest in Europe. The volume of exports to Turkey via the Blue Stream gas pipeline has continued to grow from year to year. In 2006, 19.9 billion cubic meters of gas were exported to Turkey and Russian natural gas supplies to Turkey grew over 10% in 2007 to comprise close to 22 billion cubic meters.
Gazprom is also interested in delivering gas to end consumers in Turkey, either directly or through a subsidiary company or a JV, taking into account the liberalization of the Turkish market. At the same time, Gazprom also said it was ready to reinvest a part of the revenues from gas exports to Turkey into the development of the Turkish gas transmission and gas distribution infrastructure, as well as its gas and power facilities, which will promote the development of the country's gas market as a whole.
Mr Tuğrul Erkin general coordinator of Gazprom's JV Bosphorus Gaz said that Gazprom's further investments in Turkey were subject to Turkey's reception of such investments. He added that Gazprom could invest large amounts if it was invited to the tenders in Turkey.
Meanwhile, the ownership structure of the Bosphorus Gaz Corporation has changed. Previously Gazprom held a 40% stake, with Turkey's Şen Group owner of another 40% and a Dutch firm with 20%. Gazprom now has a 50% stake, while Şen Group and the Dutch firm have 25% stakes each.
Gulf nuclear plans face lack of infrastructure - IAEA
Mr Hans Holger Rogner head of planning and economic studies at the International Atomic Energy Agency said that plans for nuclear power stations in the Gulf face a lack of infrastructure that the region's cash rich states will take time to overcome.
He added that "These countries are among the richer and you can buy some expertise. But you can not buy everything and you have to take responsibility for your safety that you can not outsource. You need a safety culture, you need an independent regulator and you need the basic engineering skills. They are starting from scratch."
Mr Rogner said that sellers of nuclear technology might be eager for the business, but they would also be reluctant to see their product used without a fully developed industry framework in place. He added that "Vendors would also be concerned. They do not want their technology to be associated with any of the risks. Gulf countries will have to regulate and oversee a plant even if it is operated by an international operator."
He said that for the IAEA, the best way forward for the nuclear industry in the region is with a GCC wide agreement, rather than for individual countries to go their own way. He added that such an approach would encourage transparency and mutual trust between the region's states. If the countries go ahead on their own, the UAE probably has the edge over the rest of the Gulf Arab states after signing a nuclear cooperation deal with the French government earlier this month.
Gulf Arab states are considering nuclear power as they look to meet escalating domestic electricity demand without burning more fuel and eating into record export revenues. Analysts said that they could quickly buy the technology they need and push through the planning, financing and licensing much more quickly than would be the case in more democratic countries. Even so, a nuclear power plant would be up and running in the Gulf before 2020.
French companies Total, Suez and Areva said earlier this month that they would join forces to develop plans for 2 nuclear reactors in the UAE, with a possible start up date of 2016.
OPEC to resist pressure for increasing oil output
Khaleej Times reported that OPEC, worried by a slowing US economy and the onset of seasonally lower demand in the spring, is widely expected to resist consumer calls for more oil when it meets on February 1st 2008.
Mr Hussain Al Shahristani oil minister of Iraq said that “We do not feel there is a shortage of oil on the market today. There does not seem to be a necessity to revise production figures, either to increase or decrease, for the time being.”
Top world exporter Saudi Arabia has said that OPEC will raise output when the market justifies it, but avoided comment on what ministers will do at their February 1st 2008 meeting in Vienna. The group meets again on March 5th 2008.
Concern is growing that the United States is slipping into a recession, which could drag growth in other countries lower and curb oil demand. The world’s top fuel burner has urged OPEC to raise supplies to help ease high prices. But there is a common view in the 13 member OPEC, source of more than a third of the world’s oil, that consumers have enough oil for now.
Abu Dhabi Real Estate & Investments Show opens
Khaleej Times reported that 83 exhibitors from 11 countries will participate in the fourth edition of Abu Dhabi Real Estate & Investments Show, which begins on January 30th 2008 and will continue till February 2nd 2008.
It has drawn master developers, property development companies, real estate agents and major financial institutions. Organisers expect the show to attract over 8000 visitors ranging from first time buyers to existing real estate investors, who are looking at expanding and diversifying their property investment portfolio.
Mr Antoine Georges director of Dome Exhibitions, while addressing a pre show Press conference for IREIS, said that “Exhibit space at this year's edition has reached 10,000 square meters up by 45% over the previous edition. The number of exhibitors has also increased from 52 at last year's event to 83 this time.” He added that besides strong participation from the UAE, the show had also received support from international exhibitors from 10 countries including Qatar, India, Kuwait, Spain, Germany, Cyprus, Malaysia, the US, the UK and Austria.
Mr Georges noted that the show's success is built on the IREIS' positioning as a strong platform for investors, real estate players and the end-customer to meet, interact and conclude business. He added that "The booming business environment in the UAE in general and Abu Dhabi in particular has encouraged both inward and outward real estate investment."
UAE participants at IREIS 2008 include Aldar Properties, Sorouh Real Estate, Al Qudra Real Estate, Hydra Properties, Falcon City of Wonders, Mumtalakat Real Estate, Plus Properties, Pearl Properties, Damac Properties and Real Estate Bank.
According to a recent report, public and private sector property projects amounting to AED 100 billion have been announced over the last nine months in Abu Dhabi and the demand for properties far outstrips supply.
Oman's economy may expanded by 5.7% in 2008 - Report
According to a data by ministry of national economy, Oman's economy has expanded by 7.2% in 2006 led by growth in services and industry.
Services surged 9.3%, spurred by wholesale and retail, and transport and finance. Industry, including mining, manufacturing and construction, expanded by 11.5% while, oil & gas grew up by 0.6%.
According to analysts' forecasts in a poll by newswire Reuters in December 2007, Oman's economy may grow up by 5.7% in 2008, almost unchanged compared with 5.6% in 2007.
NIOEC to build new refinery in Golestan Province
Tehran Times reported that National Iranian Oil Engineering & Construction Company is planning to build a new refinery called Caspian Refinery in Golestan Province. The Caspian Refinery will have 300,000 barrels per day capacity.
Mr Ali Asghar Sajedi engineering & construction chief of NIOECC said that “We are currently reviewing the potential construction sites.” He added that so far Turkmenistan and Kazakhstan have announced their readiness to cooperate and invest in this project.
On Iran’s foreign investments in this field, Mr Sajedi said that Iran has signed MoUs on refinery construction with Syria, Indonesia and Malaysia and the last project is to be launched soon. He added that Iran’s shares in Syrian, Malaysian and Indonesian refinery construction projects will be 20%, 30% and 30% respectively and Iran will also supply these plants after their construction.
Mr Sajedi further added that Malaysia is planning to invest in a refinery to be constructed in Pars Province. He said that this refinery, when completed, will have a capacity of 120,000 barrels per day and will be fed from the Pars Special Economic Energy Zone.
Iranian oil majors sign contract to drill 20 exploratory wells
Mehr News Agency reported that the Iran Exploration Company and the National Iranian Drilling Company has signed a contract with the Dana Energy Drilling Company of the private sector for drilling 20 exploration wells. Two derricks will drill the 20 exploration wells over the course of five years.
The contract states that the Dana Energy Drilling Company, in collaboration with NIDC, will implement the project which was commissioned by NIOC. NIDC will be the contractor for the services and the Dana Energy Drilling Company will conduct the project’s drilling operations.
Mr Mahmud Mohaddes exploration affairs manager of NIOC gave an address at the signing ceremony in which he expressed hope that new gas and oil deposits would be discovered in different parts of Iran during the drilling project. He said that the project provides an opportunity for the private sector to play a more active role in drilling operations.
Mr Mohaddes stated that it was decided to make the contract a 5 year deal because officials believe more long term deals must be offered to convince contractors to invest in the drilling industry. He said that “Since drilling plays a key role in oil and gas exploration and development, the contract prioritized the selection of Iranian contractors.”
Mr Heidar Bahmani MD of NIDC said that several exploration operations have been conducted in Iran since the victory of the Islamic Revolution in 1979, including exploration operations in 15 onshore and 5 offshore gas fields.
Dana Gas to invest USD 500 million in Egypt & Iraq gasfields
Dana Gas has announced that it is planning to invest about USD 500 million in Egypt and Iraq's Kurdish province this year to boost output of natural gas and is looking to enter Algeria.
Mr Neeraj Agrawal finance director of Dana Gas said that Egyptian gas output would hold steady this year at a minimum 30,000 barrels of oil equivalent per day as compared with 28,400 barrels of oil equivalent per day in the third quarter of 2007. He added that "In 2008, we are investing about USD 200 million in Egypt projects, including upstream and downstream. We will invest about USD 500 million in Egypt and Kurdistan combined."
M Agarwal said that "We should expect to maintain at least 30,000 barrels of oil equivalent per day in 2008 and we should see the fruits in 2009. We are looking at some opportunities for more acquisitions and greenfield projects in Egypt and Algeria." He added that the investments will be in exploration, production and petroleum transport and processing.
Minmetals buys majority stake in copper and gold mines in Peru
China Minmetals announced that it has successfully bought a majority stake in Northern Peru Copper of Canada and so acquired the property of EL Galeno copper and gold mine and Hilorico gold mine in northern Peru.
The acquisition has been conducted by the Copper Bridge Acquisition Corp, jointly established by the China Minmetals and the Jiangxi Copper Corporation. A total of 31,761,682 shares or 93.92% of NPC's total stakes has been transferred to the buyer's account, according to the announcement.
Copper Bridge Acquisition Corp will pay CAD 436.7 million on January 28th for the purchase and according to Canadian law, the remaining part of the purchase will be completed within two months through compulsory buying.
The latest materials available show that Northern Peru Copper 's total resources volume include 8.05 million tonnes of copper and 198 tonnes of gold. The development of the Galeno project needs an investment of some USD 1.5 billion and is expected to be operational in 2012.
The announcement said the acquisition has met with a positive response from the majority of Northern Peru Copper's shareholders and has been approved by the Chinese government.
PT Antam and Zhongjin bid for Herald Resources
Bloomberg reported that Indonesian government controlled PT Antam, and Shenzhen Zhongjin Lingnan Nonfemet Co offered AUD 504.8 million for Herald Resources Ltd topping a rival bid for the Australian based company that's seeking to develop a lead and zinc mine in Indonesia.
Antam, Indonesia's second-largest nickel miner by market value, and Zhongjin, China's fourth biggest zinc producer, offered AUD 2.50 a share in cash as compared with the AUD 2.25 a share bid by Indonesia's biggest coal producer PT Bumi Resources,.
PT Antam and Zhongin will fund the offer through a combination of cash and new and existing debt facilities, the statement said. The bid is subject to a number of conditions and includes a break fee of AUD 5 million payable to Antam and Zhongjin in certain circumstances.
Herald's board unanimously recommends the joint Antam, Zhongjin bid in the absence of a higher offer
Herald has been waiting two years for Indonesian approval for the AUD 192 million Dairi zinc and lead mine. PT Antam holds a 20% interest in the Dairi project and the joint acquisition of Herald Resources represents an opportunity for PT Antam to have a majority interest in the Dairi Project and build a strategic partnership with one of China's leading zinc and lead companies.
Euroz Securities Ltd is financial adviser to Herald and Blakiston & Crabb is acting as legal adviser. Antam and Zhongjin are being advised by Macquarie Capital Advisers, while Blake Dawson is acting as their Australian legal adviser.
Ferroalloys makers at Guizhou hit by power and snow crisis
Reuters reported that power shortages and icy weather have halted production in ferroalloys plants in Guizhou.
An executive at one large Hong Kong invested plant said that "As far as we know, all ferroalloys plants in Guizhou province have closed since last week.
He said that Guizhou produced half of China's ferromanganese used in steel. The country is the world's top supplier of ferroalloys and consumer of copper and aluminum.”
Heavy snow and sleet have hit central, eastern and southern China, regions used to milder winders, which have damaged power networks and blocked roads.
It is further reported that Guizhou government is considering cutting power supply to all local industrial users for two weeks from early February to save power to homes during the Lunar New Year. The Lunar New Year falls on February 7th 2008.
Baosteel becomes Global partner to World Expo 2010 Shanghai
Baosteel Group has become the 10th global partner of the World Expo 2010 Shanghai. Financial terms were not disclosed for the partnership deal and Baosteel didn't say how much steel might be used.
Mr Xu Lejiang chairman of BaoSteel said that it would provide a wide range of best quality steel products and services to support the construction of Expo venues.
Mr Xu vowed to work closely with the Bureau of Shanghai World Expo Coordination over the coming more than two years and fulfill its commitments. He said that “It is a fortune for Baosteel to become the partner of Shanghai Expo 2010. Baosteel will set up close cooperation with the Expo, and supply good quality, rich specifications steel products and excellent service to the construction of Expo council house in the next two years.”
World Expo 2010's global partners can use the brand in promotions worldwide. Global partners also get priority status to open a corporate pavilion at the site.
Other companies committed as global partners for the Expo include China Mobile, Bank of Communications, Siemens, State Grid Corp of China, China Eastern Airlines and Coca Cola.
NDRC to re open safe coalmines to alleviate power crisis
China’s National Development and Reform Commission has rejected a proposal to reopen small coal-fire power plants as severe power shortage plagues snowstorm hit regions in China but approved plans to re open coalmines that are deemed safe to help alleviate the current power crisis.
Mr Zhu Hongren an official from the NDRC at a press conference said that “Even though the small power generators, which were shut down last year in a national campaign would help ease the crisis, they will stay closed because they are inefficient and have a negative impact on the environment.” NDRC previously announced that it closed 553 small scale generators in 2007.
However Mr Zhu said that several coal mines were shut down because of stringent safety regulations, but will be re opened as long as they have no safety issues. He added that many mines were shut down when they actually did not have safety problems. He said "Shutting down mines that do not have safety issues is one of the factors behind the current shortage of coal in the country's coal fired power plants.”
Heavy snow since mid January, the worst in 50 years in central, eastern and southern areas of China, has affected Chinese power scenario very badly.
Kunming Steel reduces rebar prices
It is reported that Yunnan based Kunming Steel slightly cuts prices for construction steel, based on prices unveiled on Jan 21st 2008.
Rebar down by CNY 74 per tonne
16mm to 25mm HRB335II rebar is quoted at CNY 4680 per tonne
12mm to 14mm HRB335 rebar at CNY 4890 per tonne
28mm to 32mm HRB335 rebar at CNY 4760 per tonne
16mm to 25mm HRB400III rebar at CNY 4830 per tonne.
Wire Rod down by CNY 74 per tonne
8mm to 10mm Q235 common carbon wire rod at CNY 4570 per tonne
6.5mm to 12mm Q235 high speed wire rod at CNY 4710 per tonne
Tangshan Steel inks pact with Sinochem International
It is reported that Hebei based Tangshan Steel has signed a strategic cooperation agreement with Sinochem International Company Ltd. The agreement is hopeful to set up a stable supply channel of raw materials and explore overseas market.
Sinochem International is a subsidiary company of Sinochem Corporation.
Pansteel acquires right for two coal mines
It is reported that Panzhihua Company has acquired Xinhua pyrite and Xinhua coal mining rights which are in Xingwen County in Yibin City by CNY 100 million.
As per report, Panzhihua group will set up a limited company whose registered capital is not less than CNY 200 million in Xingwen county, it will be responsible for the sulfur chemical project and actively carry out mineral resources strategic reserve.
Not long ago, Panzhihua Iron and Steel has invested CNY billion in Xingwen County in Yibin City for the pyrite development projects.
Tianjin Wutie Baogang Metal Processing Distribution center opens
It is reported that Tianjin Wutie Baogang Metal Processing Distribution Company Ltd opened on January 25th 2008. The joint venture is invested by Baotou Steel Group, Tianjin Wuchan Metal International Trade Co Ltd and Tianjin Yatie Business Trade Co Ltd.
The joint venture is equipped varieties processing equipment and the processing precision is high. It is able to process CR plain steel, HDG steel, electric galvanized steel, coated and dipped steel, stainless steel etc. Its design processing capacity is 250,000 tonnes per year and the area of stocks is 7,000 square meters.
Wuhan Steel cuts non core operations to save power
It is reported that China's fifth largest steelmaker Wuhan Iron and Steel Group has shut down some non essential units as heavy snow in its home province of Hubei reduced supply of coal and power.
Mr Bai Fang the group's spokesman said that pig iron and crude steel production could be hurt if serious snows continue. He said that "We have stopped operations in the company's machine makers and other affiliated firms to save energy for core production, adding that the company's captive power plants were running at full capacity to keep a normal steel production.”
He added that "But the coal supply in the company is at crisis level and the coking coal stockpiles are sharply declining. I am not sure we can maintain supply to own power plants as they are not fed by the national coal system."
Mr Bai said "Another problem is we cannot use the frozen raw materials such as coal and coking coal. We have to extend a stream pipe to the spot for thawing the ice on the surface of the materials."
Most of the Chinese steel mills face similar challenges, and coke prices have surged to an unexpected high due to the supply shortfall.
Pengang made new records on business performance in 2007
It is reported that in 2007, Pangang Company realized incomes CNY 36.7 billion and profit CNY 2.0 billion from main businesses, increasing 7.36% and 183% from those in 2006, both making new records.
In 2007, Pangang produced 6.95 million tonnes of iron, 6.44 million tonnes of steel and 6.12 million tonnes of finished steel.
Through improving product mix, Pangang increased the output of strategic products. In consequence, the output of heavy rail, seamless steel pipe, cold rolled sheet and plate in 2007 came to 780,000 tonnes, 860,000 tonnes and 1.28 million tonnes up by 11.29%, 0.91% and 5.15% respectively from those in 2006.
Chinese plan for carbon trading exchange premature
Interfax China reported that it is too early to establish the domestic carbon trading exchange being planned by the Beijing municipal government as China's nascent carbon market is currently just a sellers market and lacks an efficient carbon emissions monitoring system.
The report said that China Beijing Equity Exchange is in the process of setting up the country's first carbon credit exchange after engaging with the world's largest carbon credit buyers and the country's major carbon credit sellers. The creation aims to close the huge gap between international carbon credit prices and those on the domestic market by allowing for greater transparency in such trading.
A source with a consultancy company that specializes in clean development mechanism projects and who wished to remain anonymous, expressed doubts over the possible success of the plan, as well as the overall purpose of setting up such an exchange.
The source said "Right now China is just a carbon credit sellers' market, because its developing country status under the Kyoto Protocol does not require that it implement any emission quotas. At the same time, the world's major credit buyers are all in Europe. I don't see how such an exchange can effectively link the two parties due to business, cultural and language barriers. Also, CDM projects are a segmented business. You need professional expertise to assess a project's potential to receive credits."
The source said "I think the purpose of the Beijing municipal government and CBEE's plan is to take a share in the booming and assumedly lucrative CDM market in China by asking for registration fees from project owners seeking to list on the exchange. Such a model is questionable, as currently, local Chinese project owners are not charged any additional fees from agents for linking up with potential buyers. Why would they pay to list in Beijing?"
The source added that "Domestic carbon credit prices are lower because buyers carry the risk that their targeted project may fail to be registered with the UN as well as the risk that their project may change."
The source also disagreed with what CBEE said in regards to fostering price transparency and closing the price gap between the international and domestic carbon markets. Carbon credit prices on the international market refer to spot prices based on projects that are already generating carbon emission credits, while prices on the domestic market usually refer to prices for projects that already have approval from the Chinese government but have not yet being registered with the United Nations.
World’s longest steel arch across Yangtze planned
It is reported that the world’s longest steel arch bridge will go into service across the Yangtze later this year. The main truss structure is 552 meter in span, about 50 meter longer than the Sydney Harbour Bridge on which it is modeled.
With two 190m side spans, the new Yangtze bridge spans nearly one kilometer in the form of a continuous steel truss arch with tie girders. Prestressed concrete box girder approaches east and west adds a further 809 meter to its overall length a total of 1741 meter.
Dorman Long Technology, design consultant to the Chinese contractor 2nd Navigation Engineering Bureau, played a key role in developing and detailing the construction methods employed. ChaoTianMen will be a double Decker, with three lanes for motor traffic on the upper deck in both directions. On the lower deck will be a light railway running at around 80 kilometer per hour and two two way lanes for motor traffic. Side pedestrian lanes are provided on both decks.
The bridge was constructed by cantilevering out the side spans from each end, with temporary stay cables to support the cantilevers. Specially designed gantries were used to ‘walk’ the steel trusses and erect the steel members.
The ChaoTianMen tied arch bridge in Chongqing is a few meters longer than the structure that held the record until this year the Lupu Bridge completed in Shanghai about five years ago.
TMK announces production results for 2007
OAO TMK one of the world’s largest oil and gas pipe producers and the market leader of the Russian pipe industry has announced its production results for 2007. For the year 2007, the total volume of shipped pipe products amounted to 3,074,000 tonnes.
Volumes of shipped pipe products in 2007
Product 2007 2006 Change
Seamless pipes 2,026 1,944 4.20%
Including OCTG 954 955 -0.10%
Welded pipes 1,048 1,074 -2.40%
Total, pipes 3,074 3,018 1.90%
(In thousand tonnes)
The release said that while implementing its investment program and offsetting downtime due to the extensive upgrading of its mills, TMK nonetheless managed to increase pipe shipments by 56,000 tonnes to reach 3,074,000 tonnes an increase of 1.9% on the previous 12 months.
It also added that the growth in shipment volumes for 2007 was mainly attributable to an increase in seamless pipe production, the company’s core product. TMK fully loaded its seamless capacities and increased shipments in this segment by 4.2% while retaining its dominant position in the high-tech OCTG segment. Shipments of seamless pipes in 2007 accounted for 65.9% of Company total, compared to 64.4% in 2006.
Mr Konstantin Semerikov CEO of TMK’s said “Following a very successful year for the pipe industry in 2006, we managed to keep our market position and further increase sales volumes thanks to TMK’s competitive advantages: its dominant Russian market position, focus on the oil and gas sector, relatively low costs and efficient modernization program.”
He added that “Despite some slowdown in growth in 2007-2008 we still expect growth to pick up by 2009. The implementation of our Strategic Investment Program is on schedule and its effects should be felt by that time, significantly strengthening our market position and establishing TMK as a world leader in pipe manufacturing.”
Metalloinvest to increase HBI output in 2008
Reuters reported that Metalloinvest, the Russian iron ore and steel company owned by billionaire Mr Alisher Usmanov, will more than double output of hot briquetted iron this year and has agreed long term contracts for 80% of its production.
Metalloinvest said that its Lebedinsky GOK subsidiary, Russia's largest iron ore miner, would this year produce 2.4 million tonnes of hot briquetted iron a raw material produced from iron ore and used in steel making. Output last year was about 1 million tonnes. The increase will follow the launch of a second HBI line at Lebedinsky GOK.
Metalloinvest said it would supply 25,000 tonnes a month of HBI to Corus and the two companies were in discussions about a possible increase to this amount. It said that its HBI customers also included US Steel Corp's plant in Slovakia and Italian firm Lucchini SpA, which is owned by Russian steel maker Severstal. In 2008, the company has agreed to supply about 15,000 tonnes a month of HBI to Iran, 20,000 tonnes to South Korea and at least 40,000 tonnes to Ukraine.
Metalloinvest said in the statement that "Negotiations are also taking place about the supply of raw materials to Japan and Vietnam."
Market for rolled steel products in Ukraine grew by 26% YoY in 2007
Ukrainian Journal Staff cited Mr Andriy Fedoseyev Ukrainian Metal Traders Association president as saying that Ukraine's market for rolled steel products grew by a preliminary 26.5% to 9.453 million tonnes in 2007.
He said rolled steel purchases, including imports, are as under
1. Up by 5.7% YoY to 2.56 million tonnes at domestic pipe companies
2. Up by 43.2% YoY to 2.908 million tonnes by metal traders
3. Up by 43.2% YoY to 1.639 million tonnes at engineering companies
4. Up by 10.2% YoY to 768,958 tonnes at mining and metallurgy companies
5. Up by 16.8% YoY to 724,346 tonnes in the metalware industry.
Russia reduces scrap exports in 2007 by 6% YoY
According to statistics Russia exported 9.17 million tonnes of steel scrap in 2007 reduced by 16.1% from a year ago.
It is predicted that Russia will continue to reduce its scrap exports in 2008, because they will give domestic demand a priority.
ArcelorMittal Temirtau and Korgau coal miners ink wage pact
Kazakhstan Today reported that the management of ArcelorMittal and trade union of coal miners Korgau have signed a new wage agreement.
Mr Korgau Marat Mirgayazov chairman of trade union of coal miners informed the agency that the agreement on increase of wages of coal miners by 50 % has been reached.
The negotiations between trade union of coal miners Korgau and ArcelorMittal began on January 24th 2008 at Karaganda. The topic of the negotiations was the requirements put forward by the miners, including: increase of wages by 50 %, retirement age at the age of 50, 100% payment of sick leaves, decrease of lava load due to strong gas laden atmosphere in the mines and establishment of cost price of ton of coal not less than USD 60.
Ukrainian regulators okay RUSAL purchase of 25% stake in Norilsk Nickel
Interfax reported that the Ukrainian Antimonopoly Committee approved recently purchase of a 25% plus one stake in MMC Norilsk Nickel by United Company RUSAL.
RUSAL's purchase of a blocking stake in Norilsk Nickel from Mr Mikhail Prokhorov must receive the approval of regulators in seven countries. RUSAL has already filed for permission in all seven and expects to close the deal in the first quarter 2008. The company has not named the countries concerned.
Mr Igor Artemyev head of the Russian Federal Antimonopoly Service said his service might approve the deal in February 2008. I think we can limit ourselves to 60 days and sign off as early as February.
In approving the deal, the FAS will set conditions on Norilsk Nickel in order to preserve competition. He said "UC RUSAL is already operating under the conditions prescribed in the SUAL. But Norilsk Nickel has no such conditions. Norilsk Nickel will object, because it is only selling 25%, but we will insist. The conditions will be similar to those imposed on RUSAL in the merger with SUAL and Glencore in early 2007.”
RUSAL has received guarantees from ABN Amro, BNP Paribas, Credit Suisse and Merrill Lynch on a loan to finance the cash component of the deal. Syndication of a USD 4.5 billion loan for the 25% plus one share in Norilsk Nickel began on December 19th 2007.
Peugeot Citroen to set up car plant in Kaluga Region
Itar-Tass reported that the Kaluga Region and the French Peugeot Citroen Company signed an agreement on building a car factory.
The volume of Peugeot Citroen investments in the construction project will total around EUR 300 million and 2,600 new jobs will be created. The factory will be built by 2010 and it will put out annually 75,000 cars when reaching a design capacity.
Mr Christian Streiff president of Peugeot Citroen said earlier that the company would decide by June 2008 whether it would build the factory independently or jointly with partners.
According to company financial director Isabelle Maria-Semper, Peugeot-Citroen is holding talks on building the factory in Russia with various car firms, including Japanese Mitsubishi Motors and Russian enterprises.
Peugeot-Citroen Concern is the third world car giant after Volkswagen and Volvo which are building factories in Kaluga.
Ukraine steel firm sees Gazmetall talks ended soon
Reuters reported that Ukraine's major steel company, the Industrial Union of Donbass is close to finalizing merger talks with Russia's Gazmetall.
The report cited Mr Serhiy Taruta of IUD at the World Economic Forum in Davos as saying that "Talks are in the final stage. The result should be announced in two weeks."
IUD, co owned by businessmen Mr Serhiy Taruta and Mr Vitaly Haiduk, and Gazmetall, half owned by Russian billionaire Mr Alisher Usmanov, has been in talks for almost a year.
Russian media have quoted Mr Usmanov as saying the combined group would have EUR 15 billion to EUR 19 billion in assets and produce 40 million tonnes of iron ore alongside 15 million tonnes to 20 million tonnes of steel.
ChTPZ buys around 95% of ESP producer Alnas
Interfax reported that ChTPZ Group has gained control of OJSC Alnas, based in Almetevsk in Tatarstan and one of the leading electric submersible pump producers in Russia.
The statement said that Alnas would become part of the group's servicing profile following the completion of the acquisition planned for the second quarter of this year. It was decided at an extraordinary meeting of Alnas shareholders on January 25th 2008, that a ten person board of directors be elected of which six are ChTPZ Group representatives.
Representatives from ChTPZ group did not specify the terms of the acquisition. However, an Alnas representative told Interfax that ChTPZ Group had purchased 94% to 95% of the shares in the company. The representative did not divulge the cost of the share acquisition.
ChTPZ Group unites companies specializing in the ferrous metallurgy sector. It consists of Chelyabinsk Pipe Rolling Plant; Pervouralsk New Pipe Plant; ChTPZ Meta a company specializing in scrap metal collection and processing; metal trading company Uraltrubostal Trading House; and Chelyabinsk Zinc Plant. The Services division is represented by two companies, ChTPZ Comprehensive Pipeline Systems, specializing in production and sales of pipeline components; and MSA Comprehensive Pipeline Systems specialized in valves production.
Russian budget surplus could widen to RUB 1.08 trillion in 2008
Interfax cited Mr Viktor Zubkov PM of Russia while speaking at the meeting of the government's budget planning commission said that Russia's federal budget surplus could widen to RUB 1.08 trillion in 2008.
Mr Zubkov said that "Budget revenue could be increased by RUB 1.4 trillion and spending by RUB 313.3 billion, so the surplus would be RUB 1.08 trillion."
The approved 2008 budget projects a surplus of RUB 74.15 billion
OMK takes interest in iron ore deposit in Tomsk region
FIS reported that Group of specialists of the United Metallurgical Company headed by Mr Evgeny Shevelev Vice President, Member of the Directors Board arrived in the Tomsk region with a working visit.
The delegation aims to study carefully the samples and analytical results from the Kolpashevo section and will come to Tomsk again in mid March to discuss concrete proposals.
Kazakhstan's 2007 trade up by 27.3% to USD 78.8 billion
Interfax reported that Kazakhstan's trade turnover in 2007 increased by 27.3% YoY in 2007. According to preliminary data "Trade turnover in 2007 will amount to about USD 78.8 billion an increase of roughly 27.3% over 2006 based on preliminary figures."
Mr Galym Orazbakov Industry and Trade Minister said at a meeting of ministry officials in Astana recently that the trade surplus will total about USD 13.8 billion or USD 800 million less than in 2006."
He said that the reduced surplus on rising prices for imports, not higher demand for imports. He added that milk and cream imports in value terms were up 37.9%, but by just 1% in terms of volume. It indicates we are importing inflation.
Mr Galym Orazbakov said Kazakhstan's exports continue to be dominated by raw materials. However, export of processed goods increased last year including an increase of 24.4% in chemicals and 32.5% in transportation equipment and spare parts.
