SAIL and TATA Steel form coking coal JV

State run Steel Authority of India Limited and TATA Steel have formed a 50:50 JV to acquire and develop coal blocks in India. Mr SK Roongta chairman of SAIL and Mr B Muthuraman MD of TATA Steel signed the agreement. The move comes amid efforts by steelmakers in India and abroad to ensure raw material supplies.

Full details are not available but the JV is likely to mine four coking coal blocks in Jharkhand state, which have reserves of about 500 million tonnes.

Due to major expansion plans of steel firms, securing raw materials are crucial for them. By 2020, more than 70 million tonnes of coking coal will be required, of which 85% will have to be imported if not produced domestically.

JSPL’s El Mutun agreement with Bolivia becomes effective

Jindal Steel & Power Limited announced that its agreement with the Bolivian government for developing an iron ore mine and setting up a steel plant has become effective after approval by the national congress of Bolivia and completion of legalization formalities.

Effective steps would now be taken for development of EI Mutun iron ore mine and setting up of the steel plant. The contracted mine contains an estimated iron ore reserves of 20 billion tonnes and the proposed investment would be about USD 2.1 billion.

The project would allow Bolivia to develop its steel industry and the proposed investment was the single largest in Bolivian history.

It is noted that Jindal Steel had entered into an agreement with Bolivia in July 2007 for development of EI Mutun iron ore mine and setting up a 1.7 million tonnes per annum steel plant there.

SAIL RSP creates new heat record in December 2007

Steel melting shop II of Steel Authority of India Limited’s Rourkela Steel Plant has created a new record on December 17th 2007 by achieving lining life of 4,267 heats in its converter one. The earlier record of 4,087 heats was made on April 7th 2007.

The significant rise in the lining life of the converter not only helped in reducing the refractory cost, thereby contributing to brining down the cost of production, but also resulted in substantial increase in crude steel production.

RSP officials said that while steel melting shop II collective put their best efforts and improved the converter operations, the refractory department provided timely service to maintain the lining health. They added that supply of quality hot metal from blast furnaces and instrumentation department and above all, teamwork had led to the superb performance.

RINL’s highlights for 2007

A Rashtriya Ispat Nigam Limited release said that 2007 ended as an eventful year with following highlights

1. RINL registered a gross sale of INR 9,756 crores up by 7% YoY

2. RINL’s net sales realization also improved by 21% YoY

3. Production of value added steel increased to 1.56 million tonne in 2007 from 1.06 million tonne in 2006

4. Declaration of Prime Minister’s trophy for the best integrated steel plant for 2005-06

5. RINL received ‘Commemoration Prize’ for significant achievement in business excellence-2007 by CII EXIM bank

6. IIM’s ‘Sustainability Award for Steel Enterprise 2006-07’ was conferred on RINL

7. Mr PK Bishnoi CMD of RINL was conferred the Indira Gandhi national award for best CEO

8. Mr PK Bishnoialso received Udyog Ratna award from Institute of Economic Studies in 2007

9. INR 9,000 crore expansion project of RINL was launched by Dr Manmohan Singh Prime Minister in May 2007.

TATA Steel’s centenary celebrations begun

It is reported that TATA Steel's centenary celebrations ‘Shatrang’ to mark 100 years of the company began with a huge bang in Jamshedpur with Mr B Muthuraman MD of TATA Steel opening Shatrang Mela amidst music, dance and colors. TATA Steel's centenary celebration promises 4 days of fun, frolic and excitement for the citizens of Jamshedpur.

Shatrang, a festival of 100 colors, symbolizes the coming together of the different hues and groups of Jamshedpur that include employees, youth, traders, professionals, business groups and communities that have prospered and grown in the last 100 years with TATA Steel. This is an opportunity and an effort by TATA Steel to bring together everyone associated with it and gives them a platform to participate in the centenary celebrations.

Mr B Muthuraman MD of TATA Steel while addressing the citizens of Jamshedpur said that "To mark its centenary, TATA Steel has extended its boundaries and involved not only its employees but also embraced the entire society to participate in the celebrations. It was founded with the philosophy that the prime purpose of all enterprises is to improve the quality of life of the society and it has done so in the last 100 years.”

He added that “TATA Steel in its purpose and execution, combines business acumen with caring for the society, a modern well run high technology steel facilities with meeting basic needs of the poor and the needy, business excellence with an equal passion in the service of the society. All these are a rare combination in today's materialistic world."

India to review import duty on CRGO

PTI reported that, in view of excessive power supply losses due to imported defective material used in the manufacture of distribution transformers, union power ministry has favored a review of the custom duty on imports of cold rolled grain oriented steel.

Goa government says NO to SEZs in the state

Exim News Service reported that Goa government has decided against the setting up of special economic zones in the state, feeling that the SEZs are detrimental to the overall interest of Goa.

Mr Charles Correa vice chairman of the Task Force, which is headed by Mr Digamber Kamat chief minister of Goa, said that "The intention of permitting SEZs is to reap the benefits of industrialization and consequent employment generation. These can be served without SEZs also if incentives are extended to incoming industries." He added that the required industrial development can be achieved if the government focuses on providing excellent infrastructure in terms of roads, water and power to the incoming industrial units.

The Task Force was set up to work out a regional plan 2021 for Goa after the spread of the anti SEZ movement in the state. It took into account the growing anti SEZ sentiments in the state. However, it maintained silence on the Rajiv Gandhi Habitat Project which has been opposed by locals terming it as a real estate scam.

Goa had received 15 applications from promoters to set up SEZs. Of these, 7 were approved by the centre while 8 are pending approval.

New Mangalore Port traffic in 9 months up by 12% YoY

It is reported that New Mangalore Port has handled 26.91 million tonnes of traffic during April to December 2007 up by 12% YoY as against 24.03 million tonnes in April to December 2006 period. The overall container traffic during the period also went up by 32% YoY.

Some of the items, which contributed to this growth are as under
1. Rail bound cargo was 4.3 million tonnes up by 103% YoY
2. Coal up by 101% YoY
3. Limestone up by 513% YoY
4. Iron ore pellets up by 346% YoY
5. LPG cargo up by 18% YoY

Mr P Tamilvanan chairman of New Mangalore Port Trust said that cargoes such as coal, limestone and iron ore pellets and rail bound cargo recorded more than 100% growth, contributing significantly for the overall traffic growth. He added that for the first time, 10,000 tonnes of maize will be exported to Dubai through the New Mangalore Port next week.

Mr S Gopalakrishna traffic manager of NMPT said that the port handled 15,437 TEUs of containers during April to December of 2007 as against 11,692 TEUs in April to December 2006 period. He added that there is an indication that the Singapore based Pacific International Lines may extend its main line container service from East Africa to Mangalore and this would help raw cashew importers, as there will be reduction in transit period.

BHEL and NPCIL to form JV for manufacturing nuclear reactors

It is reported that Bharat Heavy Electricals Limited and the Nuclear Power Corporation of India Limited is likely to form a 50:50 JV for manufacturing nuclear reactors. As per report, the board of directors of BHEL and NPCIL has given consent for the proposed JV.

The new JV will produce reactors of 700 MW and 1,000 MW for nuclear power projects and the initial investment is estimated to be around INR 500 crore.

TATA Steel appoints Mr Manzer as new group director

It is reported that Mr Manzer Hussain, currently resident director of TATA Group in Bangladesh, has been appointed group director communications of TATA Steel Group.

Mr Manzer will continue to be the point person for the TATA Group's Bangladesh projects but he will be relocated to London in early 2008 to take over his additional international responsibilities.

TATA Steel has the ambition to become one of the leading players in the global steel industry. Consequently, it has now set up a group centre for the coordination of core functions including technology and integration, finance, strategy, communications and global minerals. The group directors responsible for these functions will report to the managing director of TATA Steel and CEO of Corus.

AP plans another UMPP at Machilipatnam

After the recent award of Krishnapatnam ultra mega power project to Reliance Energy consortium, the Andhra Pradesh government, with the center’s consent, is considering to make out a case for another ultra mega power project at Machilipatnam.

Mr Shabbir Ali Mohammad energy minister of Andhra said that “Mr Sushil Kumar Shinde union power minister was impressed at the pace at which we managed to secure clearances for 69 mandatory issues for setting up power project. Following this, he proposed that the state could consider setting up another UMPP provided it was ready.”

He added that this triggered the state administration to prepare a detailed project proposal which is being readied with the demand to allot 50% of the power generated for the state.

Mr Mohammed said that the Krishnapatnam power would provide about 1,600 MW of the 4,000 MW to the state with a levelised tariff of INR 2.37 per unit. The rest of the power generated from the plant would be a merchant power. In fact, during a recent meeting with officials of Reliance Energy, they had proposed setting up additional 4,000 MW at the Krishnapatnam plant site. However, nothing has been confirmed on this proposal.

Gulab Steel is setting up steel plant in AP

FT reported that Gulab Steel & Power Private Limited is setting up an integrated steel unit, comprising a 10 MW coal based power unit, a 65 cubic blast furnace unit, a 200 tonne per day induction furnace unit, a 200 tonne per day sponge iron unit and a CTD bars unit at Motkur in Andhra Pradesh.

Work on the plant is in progress and is scheduled to be completed by May 2008.

Tamil Nadu to import cement

BS reported that at a high level meeting chaired by Mr M Karunanidhi chief minister of Tamil Nadu, the state government decided to go ahead with import of cement through MMTC. The government will issue immediate orders for importing 100,000 tonnes of cement through the state owned Tancem, which will have a tie up with MMTC.

Depending on the need, Tancem will make arrangements for import. It is learnt that the corporation has plans to import up to 1.8 million tonnes over 12 months to control the price. An official release said the imported cement will be distributed directly to consumers through the 200 outlets of Tamil Nadu civil supplies corporation at the actual cost without any profit.

Last week, Tancem issued a public notice stating in tune with the policy decision of the state government to control cement price, the corporation has obtained an exclusive dispensation license from the Centre for import.

It is reported that the rate of import cement per bag of OPC 43 grade up to Chennai and Tuticorin ports is about INR 160 while the ruling price of cement per bag from domestic cement majors is INR 245 to INR 255.

Steel Exchange to raise funds through issue of securities

Steel Exchange India Limited has announced that its board of directors at its meeting held on January 2nd 2008 has approved to increase the authorized capital of the company from INR 25 crores to INR 50 crores.

The board approved to issue of securities under qualified institutional placement in accordance with SEBI guidelines 2000 under chapter XIIIA /GDR/ADR up to INR 200 crores.

The board also approved to issue of 47,90,000 share warrants of INR 10 each at a price of INR 126 per share warrant including a premium of INR 116 per share warrant to Umashiv Garments Private Limited on preferential basis in accordance with the SEBI guidelines 2000.

The board approved notice to convene extra ordinary general meeting of the company to be held on January 29th 2008.

West coast ports attract more private investment - Report

Exim News Service reported that maritime states on the West coast have attracted more private investment for developing ports and shipyards than those on the East coast.

Mr TR Baalu union minister for shipping, road transport and highways has revealed that ports on the West coast have also registered the maximum progress in implementing the National Maritime Development Program of the ministry of shipping. As per report, Kandla, Cochin, Jawaharlal Nehru and Mormugao Ports have so far spent the highest sums in implementing NMDP projects.

The Kandla Port Trust, which has utilized over 25% of its INR 5,000 crore outlay in the last 3 years, stands first having completed 6 projects out of the 26 it needs to undertake under NMDP. It is now working on 9 more projects and the rest are slated to be taken up in 5 years.

The Jawaharlal Nehru Port Trust has also made sizeable progress by undertaking 32 projects accorded to it. It has so far spent INR 1,220 crore of it’s approximately INR 7,200 crore project outlay.

The Mormugao Port Trust has spent 25% of its INR 800 crore outlay under NMDP over the last 3 years.

And the Cochin Port Trust has spent over INR 700 crore or 10% of its total planned outlay since 2005.

South Asia LPG commissions storage facility in Vizag

It is reported that South Asia LPG Company, a 50:50 JV of HPCL and Total has commissioned INR 333 crore underground cavern facility to store 60,000 tonnes liquefied petroleum gas in Visakhapatnam. The facility has started functioning after technical consultant Geostock of France gave the completion certificate.

Mr Murli Deora union petroleum minister said that “This is a major step towards India’s energy security. The LPG storage facility has started with an intake of 40,000 tonnes capacity gas carrier. This is the first time such a large vessel has entered the country with full LPG cargo, entailing freight savings.”

He added that the new project is expected to ease LPG storage constraint on the eastern coast and it will enable oil companies to meet the ever growing demand for LPG in the country.

US steel imports in November plummet

American Institute for International Steel reported that US imports plummeted in November to 2.279 million tons down by 17.8% MoM from October 2007 and down by 33.3% YoY from November 2006.

According to YTD figures, imports decreased by 26.2% YoY compared to 2006 or from 42.3 million tons in 2006 to 31.2 million tons in 2007. The data show that imported semi finished products decreased by 42.7% YoY in November 2007 as compared to November 2006. For the YTD period, semi finished imports decreased from 8.778 million tons in 2006 to 6.258 million tons in 2007, a 28.7% decrease, based on preliminary reporting.

In ‘000 short tons

The country wise imports are as under

In ‘000 short tons

It is noticed that the share of Canadian imports has increased substantially while that from Russia decreased

In ‘000 short tons

Mr David Phelps president of AIIS said that “While demand for steel is slowly improving in the US market, imports declined precipitously in November due to the weak dollar, high freight rates and prices in the US market that had not as yet become attractive to foreign mills when these products were ordered 3 to 5 months ago.

Mr Phelps added that “Current market conditions in most US steel markets are improving and so we believe that in the New Year, import ordering will slowly improve.”

POSCO cuts costs by USD 1.1 billion

Bloomberg reported that POSCO has reduced costs by KRW 1 trillion (USD 1.1 billion) in 2007 in an effort to weather increased raw material prices. POSCO was among steelmakers that reported lower third quarter profit as iron ore, coal and shipping prices rose.

According to Mr Lee Ku Taek CEO of POSCO that cost saving figure for 2007 is higher than the KRW 871 billion earned by the South Korean company in those three months.

Mr Lee added thatthe global steel industry is still facing some difficulties, including soaring raw material prices, intensifying competition and trade disputes but he did not elaborate on how they achieved the cost saving.

High grade iron ore found near Port Lincoln

Port Lincoln mineral exploration company Lincoln Resources announced that it has found high grade iron formations at its Gum Flat prospect in the southern Gawler Craton.

Lincoln Resources has been drilling in the area, 20 kilometers from Port Lincoln, under a joint agreement with Indian based Mineral Enterprises.

Mr John Parker resources director of Lincoln said that early results indicate the potential to process around 250 million tonnes of iron ore. He said that "We know that there's definitely iron ore there of you know certain grade.”

He added that "Now we don't have any direct shipping ore yet but I think the fact that in just the very first phase of drilling we've identified quite high grade haematite as well as magnetite gives us a lot of confidence to move down to, you know, the next stage."

MSC in new Indonesian mining venture

Malaysia Smelting Corporation has announced signing of an agreement between its 60% owned local subsidiary PT Tenaga Anugerah and PT Sarana Marindo which will allow it to start offshore tin production in Indonesia in the Q1 of 2008.

The cooperation between PT Tenaga Anugerah and PT Sarana Marindo is on a tribute mining basis, in which the former is responsible for mining and marketing and the latter will receive monthly tribute payment based on tin production valued at prevailing London Metal Exchange tin prices.

PT Tenaga Anugerah owns two cutter suction dredges while PT Sarana Marindo has mining concessions covering 1,020 hectares, with mining exploitation status and Environmental Impact Assessment approvals already secured.

The capital investment required to implement the offshore mining venture is estimated at USD 5.5 million, including an upfront payment of USD 4.7 million to PT Sarana Marindo as consideration for the acquisition of the mining rights. Based on the 60% shareholding, MSC's contribution towards the capital investment will be USD 3.257 million. Based on past drilling results, the mining concessions are estimated to contain some 7,000 tonnes of tin resources with a mine life of up to 8 years. However, further confirmatory drilling will be carried out to accurately assess the tin grades and reserves required for mine and production planning.

MSC’s main tin interest in Indonesia is its 75% stake in PT Koba Tin, which has onshore mining operations and a smelter on Bangka Island.

ArcelorMittal Tubarao advances HR strip mill expansion

BNamericas reported that Brazilian steelmaker ArcelorMittal Tubarao has hired Germany's Hochtief to carry out the civil works for an expansion of its hot rolled strip mill. It added that works by Hochtief do Brasil kicked off on December 20th 2007 and include pouring 7,000 meter cube of concrete on a deadline of about 10 months.

The 2 million tonne per year hot rolled strip mill kicked off operations in 2002 and is currently producing 2.8 million tonne per year. The mill is due to receive investments of some USD 80 million to take capacity to 4 million tonne per year.

Tubarão is part of ArcelorMittal Brasil, which unveiled plans in November to invest USD 5 billion in its Brazilian operations over the next five years.

Northern Iron considering to reopen Sydvaranger iron ore mine

It is reported that Australian Northern Iron planning to reopen the Sydvaranger iron ore mine in northern Norway which is said to contain 2.9 million tonne per year of magnetite concentrate from 7 million tonne per year of run of mine ore with 19 years expected mine life, the schedule is set to complete by the second quarter of 2009.

Australian Northern Iron in a statement said that the cost to revive the mine closed in 1997 is estimated about USD 100 million.

Norwegian shipping company Tschudi holds 51.5% of the mine's share.

US imports of stainless plate drop

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

The Bureau said that discrete plate import increased by 42% to 6,225 tons in November 2007 compared to October 2007, but still down by 12% YoY compared to last year’s 7,050 tons.

European stainless alloy surcharge down by EUR 300 per tonne

YIEH reported that in December 2007, European stainless steel alloy surcharge stayed between EUR 1,884 to EUR 1,958 per tonne, but it went down by EUR 300 to EUR 1,595 to EUR 1,635 per tonne in January 2008.

The report further added that currently three European mills including ThyssenKrupp, ArcelorMittal and Outokumpu are using new system to make new calculation for stainless alloy surcharge

However, other stainless steel producer such as Acerinox announced that the company will not change its current alloy-surcharge calculation method because they felt that the current system contributes certain benefits to the company in the short term.

The purpose of the new calculation method is to try to foster stability in the stainless steel market and to reduce or prevent volatility in nickel prices.

Tube City IMS Corp subsidiaries merge

The new company is Tube City IMS LLC and will continue to operate under the trade names Tube City Division Tube City IMS and IMS Division Tube City IMS.

Tube City and International Mill Service had operated as wholly owned subsidiaries of Tube City IMS Corp since December 2004.

Also, Tube City IMS' Canadian subsidiary was renamed from International Mill Service Limited to Tube City IMS Canada Limited.

Tube City IMS Corp. provides products and services to steel mills and foundries in the United States, Canada, Asia, Europe and South America.

Korean contractors win record orders

Bloomberg reported that Doosan Heavy Industries & Construction Co and rival South Korean contractors won record construction orders from overseas last year, aided by demand for refineries and power plants in the Middle East.

The ministry of construction & transportation in a statement said that “Overseas contracts from 76 countries reached USD 39.8 billion in 2007, more than doubling from USD 16.5 billion a year earlier.” It added that orders may dip to USD 35 billion this year because of a shortage of raw material and workers and will recover in 2009.

The ministry said that about USD 25 billion worth of overseas projects, including USD 19 billion from the Middle East region, are expected to be offered soon, leading to a surge in contracts early this year. It added that South Korea aims to grab more than 8% of the global construction market in 2010 to become the world's fifth biggest building nation.

South Korean companies, including Doosan Heavy and Hyundai Engineering & Construction Co, may receive combined annual orders of as much USD 40 billion until 2011 as higher earnings from selling oil prompt Persian Gulf nations to build more refineries and power plants for sustaining economic growth.

Ms Kim Suk Joon an analyst at SK Securities Co in Seoul said that “Overseas orders are expected to remain strong for at least until 2010 as higher oil prices are encouraging oil countries to spend more for infrastructure and industrial projects to keep up with demand.”

Zambia floods cut key coal supply for copper miner

Reuters reported that floods have cut off a key mine which supplies coal to Zambia's largest copper and cobalt mine and left thousands of people without homes and food.

A senior government official in Sinazongwe, 325 kilometer south of Lusaka, said the nearby Chinese owned Collum Mine Ltd, which supplies coal to Konkola Copper Mines had been cut off after floods destroyed a gravel road and a bridge leading to the town where the mine is located.

Mr Sam Equamo communications advisor of KCM could not immediately say whether the mine would face production problems due to a shortage of coal.

Collum Mine also supplies coal to the southern African country's largest cement producer Lafrage Zambia.

Heavy rains in the last two week have caused flooding and damaged roads in rural areas, including in some parts of Lusaka and other urban areas.

Foundation Coal promotes Mr Kost to president and COO

Foundation Coal Holdings Inc announced that Mr Kurt D Kost has been promoted to president & COO of the company effective January 1st 2008 following the recommendation of Mr James F Roberts chairman & CEO and board approval in December 2007.

In his new role, Mr Kost will share in the executive management of the company and will work together with Mr Roberts on strategic planning initiatives and investor related activities.

Mr Kost had served as executive vice president since June 2007. He has been with Foundation Coal and its predecessor companies since 1980.

Mr Jim Roberts chairman & CEO of Foundation Coal said that "Throughout his long tenure with the company Mr Kurt has made tremendous contributions in each position in which he has served. He is thoroughly prepared from both an operational and organizational perspective to exert effective and influential leadership throughout the company. I look forward to continue working closely with Mr Kurt to ensure the ongoing success of Foundation Coal."

Mr Kost said that "I appreciate the confidence that the organization has placed in me, and I am eager to lead the finest mining operations in the coal industry. With a major presence in key coal-producing regions, including the Powder River Basin, Northern Appalachia and Central Appalachia, Foundation Coal is well positioned to continue to meet America's growing energy needs."

Foundation Coal Holdings Inc, through its affiliates is a major US coal producer with 13 coal mines and related facilities at Pennsylvania in West Virginia and Wyoming. Through its subsidiaries, Foundation Coal employs approximately 3,000 people and produces approximately 72 million tons annually.

Technip and Acergy win USD 1.9 billion orders

Bloomberg reported that Europe's second largest provider of oilfield services Technip and UK based energy services company Acergy won contracts from Total worth USD 1.9 billion to help develop an offshore oilfield in Angola. The report further added that drilling at the field will start in 2009 with oil production scheduled to begin in 2011.

As per report Technip got a USD 1.2 billion contract for engineering and equipment installation work at the Pazflor oil deposit and Acergy got an order worth USD 700 million for work on the same project.

Mr Antoine Leurent a Paris based analyst at KBC Securities said that "It is good news for Technip as this order goes to the company's most profitable offshore division.”

Rising exploration and production investment by oil companies such as ExxonMobil, the world's biggest, and Royal Dutch Shell, Europe's largest by market value, has increased demand for oil services. It added that energy companies are paying more for specialized equipment to increase their oil and gas reserves.

32 coal miners died in accidents in 2007 in US

AP reported that year 2007 was the second deadliest since 2002 for US coal miners, federal statistics show. According to the Mine Safety and Health Administration, 32 miners died on the job in 2007. That was down from 47 miners killed on the job in 2006, matching the total who died in 1995.

It added that by comparison, 27 miners died in job related mishaps in 2002, 29 miners were killed in 2003, 28 miners died in 2004 and 22 miners were killed in 2005. Among the deadliest years since 1995, 2001 with 42; and 1996 and 2000, each with 38.

Most of the fatal accidents in 2007 involved one or two miners. However, six died after a cave in at Utah's Crandall Canyon mine.

BKW buys stake in Electrabel German coal plant

Reuters reported that Swiss energy group BKW FMB Energy Ltd will acquire a 33% share in a coal fired power plant to be operated by Electrabel for EUR 430 million.

Electrabel, a unit of French utilities giant Suez is currently planning to build coal fired power plants in three locations and BKW said its interest was for a plant at Wilhelmshaven in Northern Germany.

With the investment, BKW aimed to strengthen its production capacities and support its sales activities in Germany.

Hotex Steel service center in Oman completes 1 year

Oman Daily reported that Hotex Steel coil factory, a new plant established by National Heaters Industries for producing steel sheets, has proved to be a very successful venture. It went on stream in January 2007 and caters to local industries, which earlier got this job done in Dubai.

NHI's state of the art, computer controlled automatic metal sheet cutting plant is designed to cater to the requirements of local manufacturing units using steel for their products. The plant has taken off the ground smoothly and is emerging as a strong steel player since its inception. Plant takes steel coil from different clients and cuts it to size as per their requirements.

Mr BK Menon CFO of Hotex Steel said that "Investing in capacity expansion and new technology has been a key to the growth of NHI. The company opened its new Hotex Steel coil service centre in January 2007, which can be seen both as a backward integration for Hotex water heaters and a new venture producing steel sheets for the local and export market."

Mr Menon said that as part of its policy to identify gaps in the market and tap new business opportunities, NHI's next venture will be Hotex Solar for water heating and street, courtyard, garden lighting. This is expected to be launched in 2008.

Mr Menon further added that "We see ourselves as becoming market leaders in the next 5 to 10 years in the GCC with the kind of growth we have been registering. We understand the market, we understand the product so our product and policies are very fine tuned to what the consumer expects."

NHI, a focused water heater manufacturing company with 25 years of industry experience, has a history of value additions. It has had the reputation of a trendsetter and industry challenger since its takeover in 1988 by the Omar Zawawi Establishment.

Riots disrupt Karachi Port operations

It is reported that civil unrest in Pakistan, following the December 27th 2007 assassination of Ms Benazir Bhutto, has disrupted freight movements from Pakistan's ports and several vessels are reported to be waiting outside the port.

As per report, after some trucks carrying containers were looted on highways connecting Karachi with the rest of the country, Pakistan government has suspended all movement of cargo and containers to and from the Karachi Port Trust.

But the chairman of the Karachi Port Trust has said that despite the disruption port operations including ship movements, discharging and loading are proceeding as per normal routine and without any hindrance.

Indian firms eyeing USD 10 billion oilfield projects in Iran

It is reported that Indian and Iranian officials are set to meet to discuss development of one of the world's largest gas fields in Iran. It is noted that ONGC’s overseas arm ONGC Videsh Limited and Ashok Leyland Project Services Limited, a subsidiary of Hinduja Group, will sign an agreement with Iran.

Mr RS Sharma chairman of ONGC, ahead of meeting with Iranian officials, said that ONGC and the Hinduja Group have teamed up to secure a possible USD 10 billion contract on development of phase 12 of South Pars and Azadegan in Iran.

He added that "We are proceeding cautiously but steadily. The areas have huge potential. Iranians are very interested. They are very satisfied with ONGC's competence, technical and financial capabilities and project execution."

Energy hungry India is keen on investing in Iran oil and gas sectors in a bid to fuel its booming economy. Iran holds the world's 2nd largest oil and gas reserves.

Turkey hikes domestic gas prices

Turkish news agency Anatolian reported that state energy firm Botas has raised the price of natural gas by 7.4% for households and 6.5% for industry with effect from January 1st 2008.

Turkey’s central bank, which targets inflation of 4% this year, has repeatedly cited energy prices as a risk to the inflation outlook. It has cut interest rates 4 times since September 2007, although November 2007 consumer price inflation came in at annual 8.4%, more than double last year’s target, which was also 4%.

Iran expressed satisfaction over IPI pipeline progress

Mr Mashallah Shakeri Ambassador of Iran to Pakistan has called on Mr Ahsanullah Khan Pakistani minister for petroleum & natural resources and expressed satisfaction over the pace of progress on IPI gas pipeline project and reiterated the desire of their leaderships for its early implementation for the benefit of the entire region.

Expressing his sentiments, Mr Shakeri said that IPI gas pipeline project would not only open up new avenues of cooperation among the member states but also help to bring the regional countries closer.

The two sides also discussed with him matters pertaining to promoting bilateral cooperation in the oil and gas sectors. During the meeting both sides expressed satisfaction over the pace of progress on IPI gas pipeline project and reiterated the desire of their leaderships for its early implementation for the benefit of the entire region.

Mr Khan said that Pakistan government is taking concrete steps for exploiting the untapped hydrocarbon resources spanning over 627,000 square kilometers, which is a sedimentary area in order to meet the speedy socio economic growth in Pakistan. He added that more onshore and offshore blocks would be opened for enhancing the oil and gas exploration activities in the country, which would provide enormous investment opportunities.

Mr Khan added that there exists tremendous scope for promoting Pakistan Iran ties in the oil, gas and mineral sectors and invited the Iranian companies to participate in the upcoming petroleum projects for learning a lot from their experience.

Pakistan cement sales in H2 of 2007 up by 24% YoY

Mr Shahzad Ahmed secretary general of the All Pakistan Cement Manufacturers Association said that Pakistani cement makers have sold 13.9 million tonnes of cement in July to December 2007 period up by 24% YoY as against 11.18 million tonnes in July to December 2006 period.

Pakistani cement manufacturers have capitalized on a shortage in the region and have started exporting to India. Exports of cement in July to December 2007 soared by 149% YoY to 2.99 million tones from 1.20 million tonnes.

Cement sales for December 2007 fell by 9.5% YoY to 1.9 million tonnes while, exports rose to 0.40 million tonnes in December from 0.21 million tonnes in December 2006.

Mr Bilal Hameed an analyst at JS Global Capital said that “The rise can be attributed to increasing local and export demand due to rising construction activities and regional cement shortages.” He added that cement demand is expected to rise further as the 2007-08 budget has earmarked a record PKR 520 billion for the public sector.

ECC to approve IPI gas purchase agreement in next meeting

Daily Times reported that Pakistan’s petroleum & natural resource ministry will seek approval of gas sales purchase agreement on USD 7.2 billion Iran Pakistan India gas pipeline project from economic coordination committee of the cabinet in its next meeting.

A government official said that the petroleum minister, the adviser to the prime minister on energy, the planning commission deputy chairman, FBR chairman, the finance secretary, foreign affairs secretary and the petroleum and natural resources secretary attended the meeting. He added that Pakistan and Iran finalized the draft of GSPA on IPI gas pipeline project during the recent talks between two sides in Tehran on December 18th 2007.

Iranian side would also sought approval of different provisions of the draft of GSPA on IPI from the competent authority and petroleum ministry would also seek approval from ECC of the cabinet in its next meeting before the signing of the agreement. The steering committee reviewed the cost of the project, estimated cost of laying pipeline in Pakistani territory, gas price, the gas delivery mechanism, and routes of the pipeline. Pakistan will carry out the techno economic feasibility of the project structure to be laid in its territory and to this effect an international firm would be appointed.

Earlier, the ECC had approved in principle the gas pricing formula, linking it to the price of Japan crude cocktail to the IPI gas line project and Pakistan and Iran have agreed on that pricing formula. The ECC has also approved sharing of Iranian gas of 2.1 billion cubic feet per day equally between Pakistan and India in the phase I of the project.

Chinese steel exports to drop following export tax hike

It is reported that Chinese steel market has been stable despite the rise in export tariff rate. HRC price has seen evident rise since its export tax rate keep unchanged and in general, there is little impact on Chinese steel market.

Mr Zhao Zhicheng market analyst with Essence Securities said that "Though export tax rate is lifted by 5% rebar and wire rod prices start to rebound since late last week. CRC and HDG also witness evident increase since they still enjoy 5% export rebate as before."

Mr Zhao said that "The uncertainty now lies in the iron ore benchmark price negotiation, which is believed to pessimistic. However, there is no need to worry about steel share prices since current level actually have factored in the expectation of the input cost rise.”

Meanwhile, Mr Xiaoping Mysteel market analyst believed that Chinese steel export volume is expected to see further drop in 2008 if there is no enough great price gap between Chinese local market and overseas market. The average 9% export tax for steel export is definitely a heavy burden. He also pointed that out exports would differentiate, that is to say that exports for rebar, wire rod, billet and slab is to be further restrained, but those for HRC, HR plate, CRC and HDG export would not be affected.

In the short term, there would be not great effect on the local market price for rebar and wire rod since they are not quite dependent on exports. However, the momentum of price increase probably would be choked back to some extent in the long run.

Shanghai Port remains world's busiest cargo port

According to the Shanghai Port & Shipping Bureau, Shanghai handled 560 million tonnes of cargo in 2007 up by 4.2% YoY and has retained its position as the world's busiest cargo port for the 3rd year running.

The Shanghai Port & Shipping Bureau also said that Shanghai's 2007 container throughput jumped by 20.4% YoY to 26.15 million TEUs. Based on current monthly throughput data, Shanghai has already overtaken Hong Kong as the world's second busiest container port.

The past 5 years has seen cargo handling at Shanghai more than double. Rapid development of the Chinese economy and the large industrial and trade base of the Yangtze River Delta region have propelled growth. Supporting this growth has been the construction and development of the USD 2.3 billion Yangshan deep water facility, which has been developed to allow deep water access at Shanghai to accommodate the world's largest vessels.

Mr Huang Xin VP of Shanghai International Port Group Company Limited said that the port will have a container handling capacity of 34 million TEUs by 2010 due to the construction of Yangshan. The first 2 phases of the project with nine berths and an annual designed capacity of 4.3 million TEUs have been completed. Phase III, which will add 7 new berths, is designed to bring throughput capacity to 15 million TEUs at Yangshan alone.

Shougang plans to sell 25.43% stake of Yantai Shougang

It is reported that Shougang is planning to sell 25.43% stake of Yantai Shougang magnetic materials company for CNY 20.4425 million. After the completion of the sale, Shougang which is as the second largest shareholder of Yantai Shougang will completely evacuate from Yantai Shougang.

According to the conditions issued by Shougang, the intention transferee should be a magnetic materials manufacturing sector enterprise, which can introduce of foreign advanced technology and investment are given priority consideration.

Yantai Shougang is mainly engaged in the development, production and sales of magnetic materials. Its income of main business reached CNY 70 million in 2006, net profits CNY 3.021 million and 25.43% stake is just assessed value at CNY 20.4425 million.

China to see 6th year of double digit growth in 2008

Shanghai Securities News reported that China's economy is likely to see its 6th consecutive year of double digit growth in 2008, with inflation remaining near 10 year highs.

State Information Centre said in a report published in the Shanghai Securities News that the gross domestic product is expected to grow 10.8% in 2008 as compared with estimated growth of 11.5% in 2007. Consumer inflation is seen at 4.5% for 2008 from an estimated 4.7% in 2007.

The report said that growth in the trade surplus would drop in 2008 due to foreign protectionism, uncertainty about the US economy and the removal or reduction of tax incentives for exporters. It predicted the trade surplus for 2008 would be around USD 328.4 billion up by 22.5% YoY from an estimated USD 268 billion in 2007. Growth in urban fixed asset investment, another driver of economic growth, is expected to slow to 24% from 26.3%.

State Information Centre is a research body under the National Development & Reform Commission, the state economic planner and is one of the most authoritative outlets for economic predictions in China.

WISCO announces price hike for February

On the base of price policy for January 2008, WISCO has issued steel price policy for February 2008 on January 2nd 2008 as under.

1. HR coiled sheet price up by CNY 100 per tonne to CNY 4,590 per tonne

2. HR coiled sheet 1550mm up by CNY 100 a tonne to CNY 4,440 a tonne

3. CR coiled sheet up by CNY 350 per tonne to CNY 4,990 per tonne

4. CR coil Q195 up by CNY 390 per tonne to CNY 4,940 per tonne

5. Bridge plate & ship plate up by CNY 400 a tonne

6. Galvanized coiled sheet up by CNY 100 a ton to CNY 4,783 a tonne

7. Tinplate price up by CNY 200 a tonne

8. Non oriented silicon steel price up by CNY 100 a tonne

9. Oriented silicon steel price up by CNY 1,000 a tonne

10. 82B wire up by CNY 280 a tonne

11. Other wire up by CNY 200 a tonne

Prices above exclude 17% VAT and prices of other products remain unchanged as in January 2008.

Ningbo signs purchase and distribution contract with Cargill

It is reported that Cargill Ferrous International and Ningbo Iron & Steel Corporation has signed a 3 year purchase and distribution contract on iron ore on December 18th 2007.

Under the contract, Cargill would supply 500,000 tonnes of iron ores from SNIM to Ningbo Steel each year.

With a 15 year long experiences in steel import and export business in China, Cargill Ferrous International is a leading supplier of iron ore and pig iron to key steelworks in China and its trade range covers all kinds of steel products, such as slab, billet, HR coiled sheet, medium heavy plate, CR coiled sheet, galvanized sheet and color coated sheet etc. Cargill had also signed a 5 year long contract with Laiwu Steel in August 2007.

Valin Lianyuan 2007 steel output up by 4.85% YoY

Valin Lianyuan Steel said that it has produce 4.54 million tonnes of steel in 2007 up by 4.85% YoY, 4.27 million tonnes of iron up by 3.54% YoY and 4.33 million tonnes of steel billet up by 5.82% YoY. The sales income reaches CNY 1.6 billion and the export income is USD 0.22 billion.

In order to grasp the price information in international market, Liangang established a high efficient marketing team and through the innovative marketing strategy, the export volume of steel reached 390,000 tonnes. In 2007, Liangang’s cold rolled plates and galvanized sheet successfully entered into Europe, South America and Africa. At present, Liangang’s products are exported to more than 20 countries.

China shuts down 553 small thermal power plants in 2007

According to the National Development & Reform Commission, China shut down 553 small thermal power generators in 2007 with a total capacity of 14.38 million kilowatts or 44% above the annual goal.

Shangdong, Henan, Guangdong, Jiangsu and Shanxi are the top 5 provincial regions in this shut down drive, having closed 6.7 million kilowatts thermal power capacity, accounting for 46.6% of the total.

China's top 5 power enterprises, local investment corporations and local state owned enterprises made the overwhelming majority of the efforts by shutting down 256 thermal power generators or 10.5 million kilowatts in capacity, accounting for 73.1% of the total, while the remaining 26.9% came from private enterprises.

Closing down small thermal power plants is part of China's energy saving and pollution reduction efforts. The State Council, or cabinet, set the annual goal of shutting down 10 million kilowatts thermal power capacity at the beginning of 2007, which had been achieved by October 26th 2007. On average, these closed generators have a single set capacity of 26,000 kilowatts and have been operating for 28 years.

According to an official with NDRC, after shutting down the obsolete facilities, large thermal power generators, exceeding 50,000 kilowatts, will take the place of generating power. The large scale facilities will help China save 18.8 million tonnes of coal consumption and avoid emitting 290,000 tonnes of sulphur dioxide and 37.6 million tonnes of carbon dioxide every year.

Tianjin Tiantie’s daily HR output breaks through 7000 tonnes

It is reported that Tianjin Tiantie’s daily output of plate slab reached 6,732 tonnes by the end of December 31st 2007 and the hot rolled coil reached 7,397 tonnes. So far, it has produced 1.05 million tonnes of hot rolled plate slab and 350,000 tonnes of hot rolled coil.

To complete 2 million tonnes hot rolled coil production task in 2008, it must accelerate the pace of production. In order to realize the 2008 production task, the number of steelmaking furnaces maintained at more than 30 every day since the end of December 2007. At the same time, two furnaces are put into production, to ensure the pace of production.

Xinyu steel sales income up by 28.32% YoY in 2007

It is reported that Xinyu steel company’s sales income had reached CNY 22.2 billion by the end of December 12th 2007 up by 28.32% YoY, the profits and tax is CNY 2.2 billion up by 60.35% YoY. Some main economic indicators have been kept for 7 consecutive years of double digit growth.

At the beginning of 2007, Xinyu steel accelerated the development of the company, so the output of steel reached 5.6 million tonnes in 2007 up by 10% YoY. 3 million tonnes of sheet project was also approved and started working.

5 years ago, Xinyu steel was just a general material production company but now it has become an extract material production base with high tech, high quality, high value added products. The products are widely used in the nest of Olympic Games in Beijing 2008.

Shanxi Datong produces 116 million tonnes coal in 2007

According to Shanxi Datong coal mine group, its coal production and sales volume in 2007 broke through 100 million tonnes and production reached 116.65 million tonnes.

At present, the production capacity of Datong coal mine group is just inferior to Shenhua group. Shanxi province will enhance the centralization intensity of coal industry by integrating small coal resources.

By 2010, the production capacity of Jiao coal, Datong coal, Jin coal, Luan and Yin coal will account for 60% of the total production in Shanxi province.

Linggang to invest CNY 0.37 billion for modernization

It is reported that Linggang plans to invest CNY 369.97 million to rebuild the production equipments, including number 4 blast furnaces in iron making plant, number 2 continuous casting machine, steel making hot delivery system, TRT dynamo units and other related facilities.

According to Linggang, number 4 blast furnace has been approaching the overhaul period. In order to enhance the equipment level, Liangang plans to invest CNY 97.83 million to reform it.

After the commissioning of the project, the total profits can be increased by CNY 24 million and after the commissioning of the 8000 KW TRT dynamo units and other related facilities, the capacity of generating electricity can reach 57.12 million degrees and the total profits will increase by CNY 20.56 million.

Serbia and Russia may sign agreement on gas January 18

Tanjug news agency quoting Serbian government sources reported that Russia and Serbia may sign an inter governmental agreement on cooperation in oil and gas sphere in Sofia January 18th 2008 in the format of ratification of other documents pertaining to the South Stream gas pipeline.

Russia’s gas giant OAO Gazprom gave a favorable assessment to a document entitled ‘The Platform for Negotiations between the Governments of Serbia and the Russian Federation in the Oil and Gas Industry’. Gazprom sources also told Tanjug a group of authorized experts is due to arrive in Belgrade soon for drafting the text of the document in cooperation with Serbian officials. As per report the agreement includes following major projects.

Gazprom’s offer to the Serbian government envisions a purchase of 51% in the state company Naftna Industrija Srbije for EUR 500 million, as well as investing the same amount of money in it from 2008 through 2012.

Russian gas giant also plans building a line of the South Stream major Serbian territory and completing construction of Banatski Dvor underground storage facility. The line of the South Stream project that will cross the territories of Bulgaria and Serbia will also call into the territory of the Republic of Srpska in Bosnia something that the government in Belgrade insists on.

3 hydrocarbon blocks in Krasnoyarsk Krai on auction

FIS reported that three hydrocarbon sites put for bidding on Krasnoyarsk krai in Russia. These are

1. Tanachinsky 25 million tonnes of oil and 28 billion cubic meter of gas

2. Olenchiminsky 43 million tons of oil and 121 billion cubic meter of gas
3. Moktakonsky sites, 30 million tons of oil and 34 billion cubic meter of gas

The auction is scheduled for February 27th 2008. The start price is set at RUB 80 million for Tanachinsky, RUB 175 million for Olenchiminsky and RUB 50 million for Moktakonsky site. The sites will be provided for the purposes of geologic prospecting, exploration and production of hydrocarbons.

Russia hopes to raise USD 32 billion from investment tenders

The Russian natural resources ministry said that 6 major investment projects, being implemented on a tender basis, could attract RUB 800 billion in funding. The ministry in a statement said that "After the bill is approved we plan to lease at least six deposits. This will help to attract investments worth 800 billion rubles into these projects and to create 31,000 jobs.”

As per report the ministry has worked out a number of amendments to a bill on Subsoil Use, which will determine a procedure for drawing up lists of deposits to be offered for development as part of investment tenders.

The subsoil use bill sets out criteria and procedures for classifying deposits as strategic. These will include oil fields with reserves above 70 million tonnes, natural gas deposits with over 50 billion cubic meters, gold deposits of more than 50 tonnes, copper deposits of over 500,000 tonnes and all continental shelf deposits.

Russian GDP to reach USD 1.25 trillion in 2007

According to Mr Alexei Kudrin deputy prime minister & finance minister, Russia’s gross domestic product will reach USD 1.25 trillion in 2007.

Mr Kudrin told reporters that the country’s GDP increased more than six fold as compared to 2000, when it amounted to USD 200 billion. Therefore, Russia will reach the level of developed countries in term of its per capita GDP, which will make up USD 11,000 to USD 12,000 by the year end.

Mr Kudrin pointed to the high rates of Russia’s economic development and stressed that, according to forecasts, investment growth will make up 20% as compared to the average 11.8% for the last few years.

Mr Kurdin said that the country’s capital influx will reach USD 75 billion to USD 80 billion and real incomes of the population will increase by 10%. At the same time, the deputy prime minister believes that the main goal is to guarantee stable economic development.

UES to sell 7% of shares off exchange

Reuters reported that Russia's former power monopoly Unified Energy System will sell 7.43% of its shares that it is now buying from shareholders who voted against its final break up plan.

UES in a statement said that it would offer around RUB 2.797 billion ordinary and 404.9 million preferred shares to a wide range of investors on over the counter market. It added that the minimum size of one lot has been set at 10 million shares and it will start accepting bids on January 9.

The sale price will be defined as the average price during three weeks before the deal, but can't be lower than that set for the share buyback RUB 32.15 (USD 1.31) per ordinary share and RUB 29.44 per preferred share.

UES, which is being broken up as part of a sweeping reform of the electricity sector, had made an offer to buy back its shares from shareholders who voted against the final phase of its break up plan at a meeting on October 26th 2007. This month, it approved the buyback that was slightly smaller than the volume of stock tendered by the shareholders due to law requirements. UES will have completed the buyback before January 9th 2008. The company said its board would decide on any unsold shares which may remain on its balance sheet no later than March.

Russia should step up energy cooperation with China

Interfax reported that Russia should build up energy cooperation with China. The report quoted Mr Alexander Lukin director of the MGIMO State University of International Relations' Center for East Asia and SCO Research as saying that "We are developing energy cooperation with China but it still falls short of the demands of the Chinese economy.”

He added that Russia ranks fourth among the suppliers of crude to China and exports dropped by 10% in the January to September period of 2007. Meanwhile, crude exports from Kazakhstan shot up by 107.8% in 2006, due to the construction of a new pipeline from Kazakhstan to China.

Mr Lukin said that about two thirds of Russian crude deliveries are done by railroad and another third by sea. He added that "The quick construction of the Chinese segment of the East Siberia-Pacific Ocean oil pipeline would considerably enlarge Russian crude supplies to China.”

Russia and China are successfully cooperating in nuclear power plant construction, despite certain delays and Chinese complaints about the quality of the work. He said that "Russia should actively seek new contracts in that sphere, adding that China would build 30 nuclear power plants. It would be a big success to win the order to build one or several nuclear power plants and complete work to a high quality while meeting the deadline.”

Naftogaz facing financial crisis - Report

Itar Tass reported that Naftogaz Ukrainy is now facing the financial crisis.

The report quoted Ms Yulia Timoshenko prime minister of Ukraine, after meeting with Naftogaz Ukrainy new head Mr Oleg Dubina, as telling reporters that she had studied the situation and the company is facing bankruptcy and has no tested gas balance for this year. In her words, Naftogaz Ukrainy has no its own gas in gas storage facilities. She said that “What has pumped there belongs to shady criminal structures.”

At the first government session on January 9th 2008, Ms Timoshenko intends to create a special commission and authorize it with special functions in order to revise the economic activity of the company.

At the same time, Ms Timoshenko pledged that Ukraine will comply with all obligations on stable gas supplies to Europe and domestic consumers despite the financial crisis.

UES Boosts H1 Sales by 13% YoY

Reuters reported that Russia former power monopoly, Unified Energy System has reported a 13% YoY rise in core consolidated revenues in the H1 of 2007 as it sold and transmitted more electricity. UES said its net profit fell to RUB 18.7 billion from RUB 27.1 billion in the same period last year, mainly due to deferred taxes on income from asset sales.

It added that its core revenues excluding asset sales rose to RUB 503.4 billion from RUB 446.1 billion in the first half of 2006. Net cash flows from core activities rose by 40.4% YoY to RUB 47.2 billion. Its core earnings, or earnings before interest, taxation, depreciation and amortization, rose by 15% YoY to RUB 96 billion excluding the effect of sales of shares in affiliates.

UES also sold big power generators TGK 5 and OGK 3 in the H1 of 2007 and more sales followed in the second half.

UES is 51% state owned while the remainder is split among strategic investors, such as state controlled Gazprom, which are waiting to swap their UES shares against the stocks of UES's affiliates.