January, 07 2008
Mr Paswan urges Orissa CM for iron ore mines leases to SAIL
It is reported that Mr Ram Vilas Paswan union minister for chemicals, fertilizers & steel, while launching the expansion program o Steel Authority o India Limited’s Rourkela Steel plant urged to Orissa government for clearing the iron ore mines' leases immediately for the growth of the RSP in particular and SAIL in general.
Mr Paswan hinted that the RSP expansion program largely depends on the renewal of leases of existing mines and allotment of new ones.
Mr Paswan, stating that the Centre has reserved the Thakurani mines in Orissa for SAIL, urged Mr Naveen Patnaik chief minister of Orissa to renew leases of SAIL's Barsuan, Bolani, Taldiha-Kalta ore mines. These mines are now being operated on deemed extension.
Mr Paswan said SAIL has chalked out a strategy to maintain its leadership in the country and is proposing to increase its capacity to 26 million tonnes per year within the next three years from the present 14 million tonnes per year. He said that “However, the iron ore mines issue might affect the growth plan. Chiria mines in Jharkhand, the renewal of existing mines and clearance of Thakurani mines in Orissa were critical for the execution of the growth plan.”
JSW Bengal project to start in February 2008
PTI reported that JSW Steel will start the site work for the 10 million tonne project in West Bengal in the first week of February 2008. The report cited a company official as saying that "It will be a gala event as we commence the site work for our project in West Bengal. This will happen in the first week of February.”
JSW had signed the development agreement with the state government to put up the integrated plant with INR 35,000 crore investments at Salboni near Kharagpur in West Bengal. The Phase I, with a capacity of 3 million tonne, would see investment of INR 10,000 crore and go on stream in three years from now.
JSW Steel formed a special purpose joint venture with two state government entities with an authorized capital of INR100 crore in which JSW Group hold the majority 89% stake.
SAIL needs all the iron ore to meet expansion plans
BL reported that Steel Authority of India Limited is on the look out for new iron ore mines to meet its future requirements.
The report cited an official in the Steel Ministry as saying that “SAIL has applied for prospecting licenses for 5,330 hectares at Karampada and 3,160 hectares at Ankua. It has also applied for mining leases for 202 hectares at Meghataburu-Karampada and 2,580 hectares at Ghatkuri, all in Jharkhand.”
According to estimates, in the next 50 years SAIL will require around 5.7 billion tonnes of iron ore whereas its existing mines in Orissa, Chhattisgarh and Jharkhand, including Chiria, can supply only 3.4 billion tonnes of iron ore.
As per report, out of the total requirement, in Jharkhand alone SAIL would require around 3.164 billion tonnes of ore, including 1.6 million tonnes for raising the capacity of Bokaro Steel Plant, 454 million tonnes for enhancing the production of IISCO plant and 1.110 billion tonnes for the proposed 12 million tonne Greenfield project in the Jharkhand.
POSCO India CMD hopeful to start work on April 1st 2008
BL reported that POSCO India, despite facing sever opposition to its steel plant project, captive port venture and proposed mining, is hopeful of starting construction work on its proposed 12 million tonne steel plant on April 1st 2008.
Mr Soung-Sik Cho CMD of POSCO India told Business Line that
“The groundbreaking ceremony for the steel plant will be held as per schedule on April 1st 2008 and if opposition continues from the residents of Dhinkia village, we will exclude that from the project area. We can go ahead with the construction of the first phase of the steel plant by excluding Dhinkia.”
Mr Cho claimed that the people of the remaining seven villages had come forward for discussion on the rehabilitation and resettlement package and opposition to the steel project is now limited to Dhinkia village.
Mr Cho said that “The first phase construction of the steel plant would be completed by 2012, two years behind the original schedule.”
SAIL SSP saleable steel production in 9 months up by 17% YoY
Steel Authority of India Limited’s Salem Steel Plant has produced 172,011 tonnes of saleable steel during April to December 2007 period up by 17.7% YoY as against 146,064 tonnes in April to December 2006 period. This volume includes 128,894 tonnes of carbon steel up by 31% YoY.
A capacity utilization of 131% in saleable steel production was achieved during the period, besting the previous record of 111% in the corresponding period last year.
During April to December 2007 period, the plant’s hot rolling mill produced 157,711 tonnes of carbon and stainless steel up by 1% YoY as against 155,880 tonnes in April to December 2006. This includes 129,803 tonnes of carbon steel up by 29% YoY as against 100,716 tonnes. The capacity utilization of hot rolling mill at 113% was again an increase over the previous best of 112%.
Indian Railways to increase freight charges for iron ore
FE reported that Indian steel majors are likely to see an increase in operational costs with Indian Railways increasing freight charges of iron ore. The higher freightage results from the railways reclassifying iron ore into a more expensive tariff bracket classification 170 from the earlier classification 160. The hike comes into effect from January 7th 2008.
As per report, the increase in freight charges would not affect the likes of TATA Steel and Steel Authority of India Limited etc, which have captive mines.
The freight increase comes within a month of an almost doubling of the congestion surcharge on iron ore to 60% by the railways.
India produces 180 million tonne of iron ore and a bulk of its transportation takes place by rail. The higher costs of iron ore would invariably lead to an increase in steel prices. Steel companies without captive mines primarily source iron ore from National Mineral Development Corporation, which recently increased the price of iron ore, both lumps and fines.
Allocation of coal blocks to sponge iron, cement and power units likely
It is reported that union coal ministry has decided to allot 92.38 million tonnes of coal to ensure the much needed long term linkages to 236 sponge iron plants, 73 cement manufacturing units and 224 captive power facilities.
The report cited a coal ministry official as saying that “The recommendation of the standing linkage committee in this connection has been approved by Mr Dasari Narayan Rao union minister of state for coal.”
He said that “236 sponge iron units with a total production capacity of 41.5 million tonnes located in 13 states have been sanctioned long term linkages of 19 million tonnes of coal per annum. Out of the 236 units, 84 are located in Orissa, 48 in Chhattisgarh, 36 in West Bengal, 27 in Jharkhand, 15 in Andhra Pradesh and 8 each in Karnataka and Maharashtra. He added that about 194 units had already started producing 10.38 million tonnes of sponge iron annually, while another 42 with a capacity of 4.12 million tonnes would be commissioned soon.
A total of 73 cement plants located in 14 states with an annual capacity of 116.8 million tonnes have also been granted long term linkage of 21.4 million tonnes a year. Out of the 73 cement manufacturing units, 43 are being expanded to contribute 55.6 million tonnes, while another 30 are Greenfield projects with projected capacity of 61.2 million tonnes. 24 units are located in Andhra Pradesh alone with a production capacity of 46.25 million tonnes per annum.
He said “A total of 224 captive power plants in steel, cement and other sectors have also been approved long term linkage of 53 million tonnes per annum. These captive power plants are expected to generate 9,211 MW of power and most of these are to be commissioned.”
The official said that the new policy provides for Coal India Limited to import coal if required to meet its linkage commitments, in the wake up of rising coal demand in India. He added that “The new coal distribution policy has accorded captive power plants the same status as power utility and independent power projects as these plants will enhance the competitiveness of respective industrial units, while reducing the demand of the general distribution network.”
SC allows 16 iron ore mines to restart in Goa
It is reported that Supreme Court has last week allowed 16 out of 18 iron ore mines in Goa to restart after stopping about a month ago because of doubts over work permits.
Mr KK Venugopal the lawyer representing the mine owners said that "SC has permitted us to mine until the forest advisory committee and Supreme Court decides on the renewal."
It is reported that the Supreme Court in December 2007 had stopped operations in the 18 mines because they had been granted temporary work permits without allegedly meeting some procedural laws.
As per report, these 18 mines have an annual output of 8 million tonnes or nearly 25% of Goa's output of 30 million tonnes which is entirely exported.
Caparo inks MoU with AP for auto SEZ
TNN reported that Lord Swaraj Paul led Caparo Group will invest INR 3,500 crore to set up an auto special economic zone and a car cum aerospace components manufacturing facility in the Nellore district in Andhra Pradesh.
Caparo Group has inked a MoU with the AP government on weekend in this regard and plans to invest INR 3,000 crore in the car and aerospace component facility and INR 500 crore in the auto SEZ.
AP government is set to allot 2,000 acre land at a cost of INR 20 crore. The allotted land would include 500 acres for a SEZ to be earmarked for export promotion. The government would also extend tax incentives and infrastructure creation as per its industrial policy of 2005-10.
A top company official said work on the facility would commence in March this year. The first phase of production will start 15 months from now.
Mr Sunil Pahilajani CEO of Caparo India said that “The company aimed to create a base for car companies with a range of auto component technologies under one roof. It would also consolidate aerospace technologies at one place. Around 50,000 tonne of stamping work and 30,000 tonne of forging work will be done in the first phase.”
Indian construction industry to boom in next 5 to 7 years
Mr KV Rangaswami president construction and member of board at Larsen & Toubro recently said that, in the next 5 to 7 years, the construction industry will have infrastructure projects worth around USD 500 billion in India.
Mr Rangaswami added that the construction sector will be plagued with shortage of men, material, machinery, management and money and going by experience, the USD 500 billion investment may not happen.
He further added that “Even 50% of it means there will be projects worth USD 60 to USD 70 billion a year. Today, the combined business done by all the construction companies in India was only USD 20 billion. Companies need to scale up to 4 to 5 times to meet the massive infrastructure projects, which will take place in the next 5 to 6.”
US clean energy companies to assist India and China
Mr David Bohigian Washington US commerce assistant secretary recently announced that 18 US companies will join the second US clean energy trade mission, that will make stops in Beijing, Guangzhou and Hong Kong, as well as Kolkata and Bangalore from January 8th to January 18th 2008.
He added that these companies will be exposed to business opportunities in these fast growing markets, where American clean energy technology goods and services can help improve the environment.
Mr Bohigian said that “The continuing rapid growth of the Chinese and Indian economies presents unparalleled opportunities and challenges US clean energy companies can help China and India meet their enormous energy demands while deploying technology that benefits the environment. The 18 US companies participating in this mission are among the most innovative in the world and the mission’s business and government meetings allow them to present cutting edge products and services to these dynamic markets.”
The clean energy companies specialize in the renewable energy, energy efficiency, clean coal and distributed generation sectors. They offer innovative solutions to China’s and India’s energy and environmental challenges and are potential partners to the countries’ business and government leaders.
All companies participating in the mission belong to industry sectors advanced by the Asia Pacific Partnership on Clean Development and Climate. The APP is a presidential priority to achieve a reduction in the intensity of carbon dioxide and other greenhouse gas emissions and enhance energy security, in the context of sustained economic growth. APP is a public private partnership including 7 partner countries namely Australia, Canada, China, India, Japan, South Korea and the United States. Member countries work together to break down policy barriers and facilitate commercial deployment of technologies that reduce greenhouse gas emissions and enhance energy security.
DMRC becomes world's first rail project on UN's green list
ET reported that, riding high on its achievements, Delhi Metro has added another feather in its cap when it became the first railway project in the world to be registered by the UN Framework Convention on Climate Change.
Under the RBT system, whenever a train applies brake, the 30% of the energy released by it is conserved and is used by the train coming behind. The total amount of energy thus conserved can be converted into financial terms called certified emission reduction. Germany based technical service provider TUV NORD validated the project on behalf of the UNFCCC. TUV NORD submitted its reports in September 2007 after checking and verifying the DMRC's claim of energy consumption.
Mr Anuj Dayal chief public relation officer of DMRC said that "This is the first time in the world that the UNFCCC has registered a project based on regenerating braking technology. The registration under the UNFCCC's clean development mechanism will enable Delhi Metro Rail Corporation to claim carbon credits and will earn millions of rupees annually by converting energy into financial terms.”
This feat would help financially by earning carbon credits, which is measured in terms of reduction of carbon dioxide by adequate measures.
Mr Dayal said that "DMRC can now claim 400,000 certified emission reductions for a 10 year crediting period, translating to INR 1.2 crore per year for 10 years. It took over a year for DMRC to get itself registered as it had to go through several procedures. The entire project was carried out with the support of Japan Carbon Finance Limited which provided USD 95,000."
Maharashtra to spend INR 8,900 crore to improve power network
It is reported that Maharashtra State Electricity Distribution Co is planning to spend INR 8,900 crore within the next 3 years to improve the state's power distribution networks.
As much as 90% of the funding requirement has been tied up already with financial institutions and negotiations are on with the state government to arrange for the remaining 10%.
Indian firms to meet again with Iran on oil & gas deals
It is reported that Oil & Natural Gas Corporation and the Hinduja Group will meet again with Iranian firms on developing an oil & gas field in Iran and downstream projects in India. Officials from ONGC Videsh, the overseas arm of ONGC and Hinduja's Ashok Leyland Project Services have recently met officials of Iran's Petropras and Naft Iran Intertrade Co Limited.
Mr Subir Raha executive VC of Hinduja Group India said that the upstream and downstream projects could cost USD 20 billion. He added that "This is the ballpark number at current prices. But the exact number will be known after a detailed feasibility report. Negotiations will continue and we will meet shortly."
An ONGC official said that no agreement has been signed on the Indian firms' participation in the Iranian projects, but a basic understanding on some issues has been reached. He added that "There are still some open issues. We are moving ahead. Commercial issues have yet to be worked out."
ONGC and Hinduja Group are looking at joining the development of the South Pars Phase 12 gas field and the Azadegan oil field in Iran. ONGC has offered the Iranian firms an equity stake in its proposed refinery and a liquefied natural gas terminal in Southern India, which Hinduja Group will also be involved in.
Maruti considering Mundra Port for dedicated export terminal
Exim News Service reported that the Adani Group and Maruti Suzuki India are close to sign an agreement for the export of Maruti cars from Mundra Port.
While initially the vehicles would be dispatched from the Port’s second container terminal, which has been developed by the Adanis themselves, the Port authorities are subsequently likely to build a dedicated vehicle berth for Maruti depending on the export volumes.
Sectoral analysts aver that this would be a significant step towards Gujarat becoming a hub for vehicle exports. They point out that a key advantage Mundra has over many other ports on the West Coast is the availability of adequate land, which can perhaps be leased to car manufacturers to park their vehicles near the Mundra Port.
The state’s excellent road and rail connectivity with the rest of the country, especially the northern hinterland where Maruti’s plant is located, is a plus factor that makes Mundra Port the ideal gateway.
Besides Maruti Suzuki, some other Japanese car manufacturers have also reportedly evinced interest in exporting through Gujarat ports. In 2006, Japan had commissioned a study of potential port sites in the state for export of vehicles.
India ranks 3rd for added wind power capacity in 2007
According to Ren21, a renewable energy policy network for the 21st century, India was the world's top 3rd country in terms of added wind power capacity in 2007 with the global annual investment in renewable energy expected to exceed USD 100 billion by 2006. In terms of adding wind power capacity, India's 3rd position is behind that of the US and Germany.
Ms Virginia Sonntag O'Brien of Ren21 said that "India was number 3 globally in added wind power capacity in 2006. India had mandated blending biofuels with conventional vehicle fuels. Worldwide, annual biofuel production will exceed 50 billion liters this year, about 3% of the global petrol and diesel consumption. Wind power has continued to grow at 25% to 30% per year since 2000 and now receives the largest share of annual investments among renewable sources of energy. It will reach at least 93 GW cumulative capacity in 2007, up from just 7.5 GW in 1997."
Ms O'Brien said that among the various renewable sources of energy being promoted to replace the use of fossil fuels that lead to the emission of greenhouse gases such as carbon dioxide and global warming, small hydropower, biomass power and geothermal power are still relatively minor contributors. China accounts for 80% of the global market for solar hot water collectors and solar water heating and biofuels are growing at 15% to 20% annual rates.
Ms O'Brien predicted that these trends are set to continue, as the costs of renewable energy technologies continue to decline and as the renewable energy industry continues to diversify production and technology development. She said "With over 2.5 million jobs in the renewable energy industry and strong rural development benefits as well, they contribute to economic development, energy security and improving the local environment on top of helping mitigate climate change."
PGCIL bags 'MoU Excellence Award' for the year 2006-07
Power Grid Corporation of India Limited recently announced that it has been chosen for the government's MoU Excellence Award for the year 2006-07.
The MoU Excellence Award benchmarks performance of central public sector undertakings and is given by the department of public enterprises, ministry of heavy industries and public enterprises to only 1 public sector utility in a sector for its extraordinary performance.
Rajasthan to get major investments in the renewable energy sector
Mr Rajeev Swaroop CMD of Rajasthan Renewable Energy Corporation recently said that Rajasthan is likely to attract an investment of INR 8,000 crore in the renewable energy sector and has signed MoUs with 14 power companies to set up power plants in the fields of wind energy, biomass and solar energy.
There would be 5 wind energy projects in Jaisalmer, Barmer and Jodhpur with a generation capacity of 1,600 MW while 8 biomass projects would be set up in Sirohi, Baran, Tonk, Alwar, Sawai Madhopur, Kota, Nagaur, Hanumangarh and Jalore districts. Besides, Moser Baer would invest around INR 20 to INR 100 crore to set up a solar power project in Jodhpur with an estimated generation capacity of 1 to 5 MW.
Government official said that “Suzlon Gujarat Wind Park, with a proposed investment of INR 4,910 crore, leads the table followed by Enercon (India) and Wish Wind Infrastructure, with investments of INR 1,072 crore and INR 888 crore, respectively.”
These initiatives in wind electricity are the result of the wind power program, which was started in the 6th Plan in 1983-84. It aims at survey and assessment of wind resources, setting up demonstration projects and provisions of incentives to make wind electricity competitive.
Currently, Rajasthan has an installed capacity of 490 MW in wind energy and 46.3 MW in biomass. With the installation of the proposed projects, the installation capacity would increase to 2,150 MW in renewable energy sources.
Korean consortium buys 10% stake in Moolarben coal mine in Australia
It is reported that a South Korean consortium has signed a deal to mine bituminous coal in Australia that should bring some 2.8 million tonnes of coal annually to South Korea starting in 2009.
The consortium consisting of the Korea Resources Corp. and the Korea Electric Power Corp acquired a 10% stake in the Moolarben Bituminous Coal Mine in Australia for KRW 74 billion.
The deal makes it possible for South Korea to import bituminous coal at production cost, which is almost half of the market price. Bituminous coal is Korea's number two source of energy after uranium and all of it must be imported.
BHPB bid for Rio – Codename “De Bello”
Although BHPB’s takeover offer has unnerved almost all major global steel makers who buy hundreds of millions of tonnes of iron ore from both companies and raised eyebrows of regulators in dozens of countries fearing an anti competitive nightmare, in addition to snub by Rio that the idea “Out of the ballpark” and “Dead in the water”, BHPB is likely to continue its quest for from what would currently be the second biggest corporate takeover in the world.
Mr Marius Kloppers CEO of BHP has made it clear he wants to make the world's biggest mining house even bigger in time to catch the booming trade in world commodities markets. Mr Kloppers has left many investors wondering if he might pepper the offer with a cash sweetener.
Analysts polled by Reuters in November expected BHP may boost its offer by a fifth.
Reuters reported that Mr Kloppers has put together a team which code named the Rio plan “De Bello”, a reference to Caesar's hard fought victory over heroic Gallic leader Vercingetorix in 52 BC. Mr Kloppers, Like Caesar, who eventually had Vercingetorix strangled is undeterred.
Mega mergers are not new to Mr Kloppers, a management consultant who joined Billiton in 1993. In addition to mentioning a love of Bob Dylan songs, his biography also says he took a key role in BHP’s 2001 merger with Billiton, once part of Royal Dutch Shell.
British regulators have given BHPB a February 6th 2008 deadline to make a formal bid or walk away.
RBCT lifts capacity to 76 million tonne per year
Bloomberg reported that South Africa's Richards Bay Coal Terminal now has the capacity to export 76 million tonnes a year of coal up from earlier 72 million tonnes.
The increase, which came into effect on January 1st 2008, is part of a larger capacity expansion project, which will grow RBCT's annual export capacity to 91 million tonnes a year by mid 2009, at a cost of ZAR 1.2 billion.
RBCT received 64.7 million tonnes of coal during 2007 but was able to export 66.15 million tonnes during the year by reducing stockpiles. However, the figure still fell short of the 66.47 million tonnes shipped in 2006.
RBCT blamed State owned Transnet Freight Rail, formerly known as Spoornet for low levels of railings of coal. It said that “A number of factors outside of RBCT’s control contributed to last year’s exports, such as TFR’s derailments and the lightning incident to TFR’s power station, which resulted in delays.” Inclement weather conditions had also resulted in a series of port closures during the year, which negatively affected exports.
Builders against increase in prices of rebars in Malaysia
It is reported that Master Builders Association Malaysia is against the 12% increase in the ceiling price of steel bars and billets as the materials in Singapore cost relatively less.
Mr Patrick Wong president of Master Builders Association Malaysia said that following the revision, the prices of the various types of billets are now between MYR 1,907 and MYR 2,035 per tonne from between MYR 1,703 and MYR 1,817 previously. He added that "Steel bars now cost between MYR 2,225 and MYR 2,419 per tonne from between MYR 1,837 and MYR 2,010 or up by 20%."
Mr Wong said that despite claims of higher international selling prices for steel, its members were able to obtain the product in Singapore at between SGD 850 and SGD 900 per tonne. He added that "How do you explain the disparity in price? It would seem that the local steel millers are not efficient enough to meet the needs of the construction industry and has to pass on higher prices to the contractors."
Mr Wong further added that that Master Builders Association Malaysia is against the use of the automatic pricing mechanism for steel bars, which has been lobbied by the steel millers for years. He said "The automatic pricing mechanism, if implemented for steel bars, will only ensure profits for steel millers and continue to push the price of steel bars upwards. The MBAM urges the government to consider opening up the market and allow the market forces to decide on the prices of steel instead of using automatic pricing mechanism."
Malaysia’s domestic trade & consumer affairs ministry announced price increase in a circular to the Malaysian Iron & Steel Industry Federation on December 28th 2007.
LME announces third consecutive year of record volumes
The London Metal Exchange has announced its annual volume figures for 2007, revealing a third record year for the Exchange. Nearly 93 million lots were traded, across Futures and Options, representing an increase of around 7% on 2006 figures.
LME said that four contracts saw volume growth of more than 10% on 2006 figures:
1. The Primary Aluminum contract saw Futures growth of over 10%, taking the total traded to over 40 million lots
2. The Copper Grade A contract grew 13.6% to 21.4 million lots.
3. The NASAAC contract grew over 19% to 1.2 million lots.
4. The Aluminum Alloy contract grew almost 11% to around 0.5 million lots.
Commenting on the results, Mr Martin Abbott CEO of LME said that “These results clearly demonstrate another excellent year for the LME, its high levels of liquidity and the continued confidence and credibility of its services. Our current and expanding portfolio of service offerings, led by the launch of the steel billet contracts in February, means that we are on track to meet our target to double volumes in the next five years.”
Zinifex offer for Allegiance opens
Zinifex Limited has announced that its offer for Allegiance Mining is now open and capable of acceptance following the dispatch of the Bidder's Statement to Allegiance shareholders on January 3rd 2008.
Zinifex Limited has announced an off market all cash takeover offer for all of the issued ordinary shares of Allegiance Mining NL by its subsidiary Zinifex Australia Limited on December 17th 2007. Under the two tiered Offer structure, Zinifex is offering Allegiance shareholders AUD 0.90 cash per share. This Offer will be increased to AUD 1.00 cash per share for all Allegiance shareholders if Zinifex obtains a relevant interest of more than 30% of Allegiance shares or if the Allegiance Board of Directors recommends the Offer.
Mr Andrew Michelmore CEO elect of Zinifex said "Zinifex's Offer is compelling for Allegiance shareholders, providing an immediate opportunity to realize a substantial all-cash premium for their investment."
He said that "As with any resources project, there are significant risks involved in commissioning and operating a single site mine such as Avebury. We also recognize that substantial additional investment will be needed to ensure that the full potential of the Avebury nickel project is realized."
He added that "We believe that Zinifex's Offer recognizes the value of Allegiance's Avebury development project and offers an attractive and risk-free premium to Allegiance shareholders."'
Scrap prices skyrocketing
Platts reported that the export price of HMS ferrous scrap in Europe gained by 21% or USD 60 per tonne to a midpoint of USD 345 per metric tonne FOB Rotterdam, based on transactions.
Meanwhile, the price of A3 ferrous scrap also gained by 9.5% or USD 32.50 per metric tonne to a midpoint of USD 375 per metric tonne FOB Black Sea, as Turkish steel mills scrambled to buy material for their predominantly long product mills.
Prices for US shredded ferrous scrap rose approximately by 14% on average between early November and early December.
The upsurge comes at a time when steel mills the world over are anticipating higher raw material prices in general and for scrap in particular. What's more, the Russian and Ukrainian winters traditionally make scrap collection and shipment difficult throughout the region.
As per report, US steel mills are said to be preparing to pay more for their scrap needs this month possibly substantially more based on strong demand, competition from offshore buyers and reduced scrap availability since early December. Therefore in all likelihood, the global scrap prices are likely to further o up in short term.
Anglo completes study on Jacare nickel deposit in Brazil
Brazilian business daily Valor Económico reported last week that the Brazilian unit of mining major Anglo American is completing initial studies on a new nickel deposit in northern Brazil's Pará state.
Jacaré is located in the same area as the Onca Puma mine under development by Vale. Anglo American's preliminary drilling indicated that Jacaré, which contains laterite nickel, will likely be similar in size and scope to Barro Alto
Mr Walter De Simone president of Anglo American told Valor that Anglo American expects to complete studies to define nickel reserves at the Jacaré nickel mine by mid 2008.
He said that "The south of Pará is a new region of world class nickel reserves. Jacaré will be the next project to be developed by the company, after the conclusion of a second line at Barro Alto around April 2010.”
Jacaré would be the second major Brazilian nickel project for Anglo American, which is currently developing the Barro Alto nickel mine in Goiás state for USD 1.5 billion. Barro Alto is expected to produce 36,000 tonnes of nickel in ferronickel alloys, starting in 2009.
Surge in oil prices to drive coal business in Asia
WSJ reported that vast coal reserves in Asia are gaining attention as major energy consumers such as China and India grapple with the reality of oil prices around USD 100 a barrel and the risks they pose to their economies.
As per report, multibillion dollar facilities that convert coal to oil are being studied across Asia, while utilities are shelving plans to build power plants that use natural gas or fuel oil because prices of those fuels track the cost of crude. Mr Jim Brock a coal expert at Cambridge Energy Research Associates said that "The longer oil prices stay at these levels, then the more the incentives are going to be there for exploiting coal reserves.”
He added that coal prices would have to rise nearly fivefold to match current oil prices on a unit of energy basis and the difference between the cost of the commodities is actually widening.
Asia has a third of the world's proven coal reserves, which stood at 909.06 billion metric tons at the end of 2006, according to BP PLC's most recent statistical review of world energy. Most of Asia's reserves are shared by three countries China, India and Australia.
AK Steel announces February surcharges for electrical and stainless Steels
AK Steel has advised its customers that a USD 265 per ton surcharge will be added to invoices for electrical steel products shipped in February 2008.
AK Steel's surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the December 2007 purchase cost used to determine the February 2008 surcharges.
AK Steel produces flat-rolled carbon, stainless and electrical steel products, as well as carbon and stainless tubular steel products, for automotive, appliance, construction and manufacturing markets.
Daewoo Shipbuilding forecasts record sales in 2008
Daewoo Shipbuilding & Marine Engineering, the world's third largest shipbuilder, said that its sales would hit a record KRW 9,900 billion (USD 10.6 billion) in 2008 as increasing demand drives up vessel prices.
Daewoo did not provide an estimated sales figure for last year but this year's target is about 40% more than the KRW 7,000 billion it projected for 2007 at the beginning of last year.
Mr Nam Sang tae CEO of Daewoo in a new year's speech to employees said that "Competition is expected to be fierce this year as production capacity has expanded globally and raw material prices are surging. Orders for offshore platforms and container ships are expected to lead demand this year."
He added that Daewoo expects this year's orders to reach USD 17.5 billion, 19% less than the record USD 21.5 billion in 2007. The company delivered 43 vessels in the first 11 months of last year, compared with 45 for all of 2006. It plans to invest KRW 770 billion in facilities this year.
Analysts expect South Korean shipbuilders to post strong earnings this year as they boast order backlogs that will keep them busy for at least three years. According to shipbroker Clarkson, ship prices have more than doubled to a record since they hit a 10 year low in 2003, as global economic growth has fuelled demand for consumer goods and raw materials.
Tertiary Minerals confirms iron mineralisation at Kolari
It is reported that Tertiary Minerals plc assay results from initial sampling of core from its drilling program in the Kolari iron ore district of northern Finland confirm that wide intervals of magnetite iron ore mineralisation are present on the Kolari claims over a significant strike length. Based on these initial results, Tertiary said that it is now targeting a large body of open pittable mineralisation with a magnetite content in the 30% to 50% range.
The drilling, on Tertiary's Sivakkelehto target, comprised three scout holes at 200m intervals along the strike of the central part of the north east trending ground magnetic anomaly. The drill holes were between 101 meter and 126.5 meter long. Tertiary said that analysis of the drill core was initially carried out to confirm visual estimation of the magnetite content and some of the mineralised sections have not yet been sampled. The visual estimates correspond well with the assay results received and this has allowed the company to include additional comments on iron ore intervals and grade in the table below.
Tertiary said that the mineralised intervals grading 17% to 34% iron shown in this table represent magnetite contents of approximately 25% to 50%, the company states. It added that normally, magnetite can be concentrated into a saleable product grading 67% iron or more.
Mr Patrick Cheetham chairman of Tertiary said that "We are very pleased with these results. They indicate the possible presence of a large body of iron mineralisation at commercial grades."
Anglo American puts off plans to sell Tarmac - Report
UK’s Sunday Telegraph reported that Anglo American has postponed plans to sell its GBP 3 billion Tarmac road covering business until turmoil on capital markets eases.
The Telegraph, quoting sources close to the situation, said a sale was now unlikely to go ahead until debt markets improve, adding the group hoped to resurrect the deal in 2 months to 3 months. The paper quoted an unnamed source as saying that "Like everyone else who is looking to sell assets above 1.5 billion pounds, Anglo is nervous about pushing forward with the process and not getting the best sale value.”
Anglo American announced last August it planned to sell Tarmac, saying it had received interest from trade and private equity firms. It had said that it hoped to complete a deal in the first half of 2008, with proceeds due to be used to fund a pipeline of new projects and acquisitions.
Anglo American declined to comment on the report, but a spokesman for the group said it remained committed to the sale, though it was not under pressure to do a deal quickly.
Newcastle Port increases 2007 coal shipments by 6.3% YoY
Bloomberg reported that Australia's Newcastle Port increased its shipments of the fuel by 6.3% in 2007 on rising demand. The figure was below the planned capacity for that year.
Port Waratah Coal Services said that coal shipments rose to 84.8 million tonnes in 2007 from a year earlier. The figure was short of the planned 90.5 tonnes, partly because of bad weather and bottlenecks at the port.
Insufficient rail and port facilities are hampering Xstrata Plc and Rio Tinto Plc from increasing coal exports to meet rising demand from Asian customers, especially China. To help ease congestion, Port Waratah introduced a capacity allocation system in April 2004 to cut costs and reduce the number of ships waiting to load.
Port Waratah in 2008 agreed to continue the existing system of allocating port and rail capacity on a pro rata basis to stem an increase in shipping delays after the Australian competition regulator rejected an alternative method for sharing 95 million metric tons. To meet demand, Port Waratah is planning to expand coal export capacity at Newcastle to 113 million tonnes a year in the fourth quarter of 2009 from 102 million tonnes.
A rival group, Newcastle Coal Infrastructure Group, expects to start up a separate terminal in the second half of 2009.
Coal prices at Newcastle, rose to AUD 89.69 a tonne in the week ended December 28th 2007, near a record AUD 89.76 reached in the week ended December 7th 2007, on concern that demand is outpacing supply. The port also lost 2.5 million tonnes of coal in June because of disruptions caused by storms.
Sale of new homes in US in 2007 dips by 34%
Purchasing.com reported that sales of new homes in US plunged last month to their lowest level in more than 12 years, a grim testament to the problems plaguing the housing sector. US Commerce Department reported that new home sales tumbled by 9% in November from October to a seasonally adjusted annual rate of 647,000. That was the worst showing since April 1995, when the pace of sales was 621,000.
The Associated Press also said that over the last 12 months, new home sales nationwide have tumbled by 34.4%, the biggest annual slide since early 1991, and stark evidence of the painful collapse in the once high flying housing market.
The National Association of Home Builders housing forecast that “Shows systematic improvements in home sales by the second quarter of 2008, improvement in housing starts by the third quarter, maintenance of low levels of manufactured home shipments throughout 2008, and modest declines in the real value of residential remodeling next year.”
Mr David Seiders chief economist at National Association of Home Builders in this forecast said that residential fixed investment continues to contract through the first half of 2008 but posts modest growth in the second half of the year. He added that but, before you put much hope in forecasts for a 2008 rebound in the battered housing market, consider this “A year ago at this time many top economists were looking for that recovery to begin in 2007.”
Mr Chris Isidore senior writer of CNNMoney.com said that “The year saw historic declines in nearly every measure of housing strength and home building, and left a trail of predictions from some of the nation's top economists that look at best foolish.”
Japan headed for mild recession in 2008 - Morgan Stanley
In a piece published at the Morgan Stanley Global Economic Forum, Mr Takehiro Sato the firm’s chief Japan economist announced that he forecasts only a mild recession, with real growth of around 1% in 2008.” One month ago, Mr Sato’s growth estimate for Japan’s economy in 2008 stood at 1.9% and that was cut to 0.9%.
At the same time, Mr Sato acknowledged that the risk of zero growth in 2008 also exists. This scenario might result from the deadly trio of a stronger yen over a prolonged period of time, a recession or serious slowdown in the US economy and sustained higher oil prices.
Mr Sato’s blames not only high oil prices, the fallout from the subprime crisis and a strong yen for the negatively revised assessment, but also Japanese governmental policies. Stricter consumer finance laws and the bungled implementation of revisions to the Building Standards Law are both cited. Sato also asserted that the government has done a poor job discussing any possible tax increases with the public, and that this has contributed to sluggish consumer spending.
Mr Sato said that “We seem to remember back in October that the Ministry of Finance hired a certain Mr Masuda away from Dentsu to serve as the Ministry’s Director of Public Relations Planning and Coordination in other words, he was the man charged with laying out the plan to explain potential tax hikes to the public. Thus far, there has been noticeably little planning and perhaps even less coordination amongst governmental bodies on this issue. Even today, more news of government panels urging an increase in the consumption tax hit the news.”
USW continues to support Mr Edwards over Mr Obama
Platts reported that the big United Steelworkers union remained steadfast in its support of former Senator Mr John Edwards of North Carolina despite Senator Mr Barack Obama's impressive victory in the Iowa caucuses.
A USW spokesman told Platts that "We remain completely committed to Senator Edwards."
The USW represents 1.2 million members and retirees.
Mr Marco Trbovich of the USW's Pittsburgh based communications office said that "There is a good deal of evidence that Mr Edwards' strong showing in Iowa resulted from his forceful commitment to changing policies that have shortchanged everyday Americans to the advantage of powerful interests.” He added that "On to New Hampshire, where that message is already being projected by Senator Edwards."
It was back in September that the USW endorsed Edwards as the Democratic party's nominee for president. The USW, the nation's largest private sector union, was joined in making its endorsement by the United Mineworkers of America, giving Edwards the largest bloc of union support at the time among the field of presidential candidates.
In making the announcement last fall, Mr Leo W Gerard president of USW had said that "All of the Democratic candidates in the field share our values, and any one of them would be a major improvement over the current administration." He added that "But none of them is a more forceful advocate for those values than Mr John Edwards."
Senator Obama's victory in Thursday's Iowa caucuses gave him the early lead in the party's nominating process as well as momentum. The USW had noted in September, however, that numerous polls showed Edwards to be the most elect able Democrat.
Indonesia domestic investment in industrial sector up by 88%
Antara reported that Indonesia’s domestic investment in the non oil/non gas industrial sector this year grew by around 88% to IDR 24.8 trillion from IDR 13.2 trillion a year earlier.
Mr Agus Tjahajana Indonesia industry ministry’s secretary general at a press conference said that "Investment in the industrial sector rose more than 50% this year but it has not had a direct impact on industrial performance this year. The impact will be noticeable only in 2008 or 2009.”
He said that the investment value was based on a report issued by the Capital Investment Coordination Board on August 31st 2007. He added that the figure did not include investment in the oil and gas sector, banking industry, financial institutions, insurance industry, mining business, coal mining business and household investment and so on.
According to the report, paper and printing material industries topped the list of investment proposals approved with a total investment value of IDR 14.5 trillion in eight projects. Trailing behind in second place was the food industry with a total value of IDR 4.7 trillion in nine projects. Metal, machinery and electronic industries came in third with a total value of IDR 3.5 trillion in 15 projects, followed by chemical and pharmaceutical industries with a total value of IDR 1.1 trillion in 10 projects.
In 2007, the government issued a total of 79 permits to permanent business establishments. Meanwhile, foreign investment in the industrial sector in 2007 slightly rose to USD 3.622 billion from USD 3.604 billion the year before with the number of projects declining to 316 from 361.
Turkish rebar prices continue to surge
It is reported that in the Turkish domestic market, rebars are sold now at USD 700 to USD 725per tonne excluding VAT and Turkish mills offer for exports to markets, other than the US and Arabian Gulf are at USD 720 to USD 725 per tonne on FOB basis based on actual weight invoicing.
As per report Turkish offers for Dubai, which were at USD 750 per tonne on CFR basis levels on theoretical weight invoicing, have increased to USD 770 levels.
Rebar prices are expected to rise further because of ever increasing billet prices.
Pakistan customs links steel prices to LME
It is reported that Pakistan’s customs authorities and steel importers are at loggerheads over the linkage of import trade price of flat rolled products with the London Metal Exchange.
Mr Shamoon Bakir Ali senior VP of Pakistan Iron & Steel Merchants Association said that valuation of secondary items could not be linked with London Metal Exchange as LME deals in prime items while products imported by Pakistani importers are largely secondary items that are without any specifications. He added that “Earlier minimum import trade price was fixed on particular steel items separately and the current move of customs authority will not only open doors for corruption but will also stir prices in local market.”
He said that MITP has been fixed for last 20 years and earlier low import duty on silicone sheet used only in fan industry was largely misused, as other iron and steel products which have high import duties were brought into country in the garb of silicone sheets.
On December 18th 2007, the customs’ authorities linked the minimum import trade price of iron & steel products with the London Metal Exchange for valuation of duty on iron & steel products after unilaterally raising import duties without considering the viewpoints of the importers.
It may be noted that duty on silicone sheet is only 5% while import duty on secondary items of hot rolled, cold rolled and galvanized sheets is 20%. Contrary to this the import duty on prime products is 10%.
Changjiang & Jinggong Steel to establish branch in Dubai
Changjiang & Jinggong Steel Structure has announced that it will establish a branch in Dubai of the United Arab Emirates besides providing a guarantee with related liabilities for its wholly owned subsidiary on a credit line of CNY 40 million applied to Foshan City Sanshui sub branch of Agricultural Bank of China.
It also announced that it will increase the registered capital in its wholly owned subsidiary from CNY 1 million to CNY 50 million.
Abu Dhabi to spend USD 200 billion on infrastructure
WAM reported that Abu Dhabi has embarked on an ambitious plan to develop its infrastructure and the "Plan Abu Dhabi 2030" will be the comprehensive guideline for the development of the capital city for quarter of a century into the future.
Mr Falah Mohammad Al Ahbabi director general of urban planning with the executive affairs authority of Abu Dhabi said that a total of USD 200 billion will be pumped into various projects in the coming five years and the government's share will constitute only 40% of the total spending while the remaining share will come from the private sector.
He said that the Plan Abu Dhabi is drawn up in consultation with renowned experts in the field and the real estate and construction sectors will witness an unprecedented growth.
He said that the Plan is based on principles of sustained development, and has taken into its consideration the future population and economic realities of Abu Dhabi.
With an estimated GDP growth of 13% by 2010, Abu Dhabi has been taking advantage of its solid economic growth and diversifying investments in the non-oil industries such as tourism.
Suez Canal tolls to increase from April 1st 2008
The Suez Canal Authority has announced that Suez Canal tolls will be increased effective from April 1st 2008.
The indicate approximate increase in Canal tolls will be as follows
1) Tankers of crude oil at 7.3%
2) Tankers of petroleum products at 7.4%
3) Dry bulk carriers at 14.7%
4) LPG at 7%
5) LNG at 10.5%
6) Chemical carriers & other liquid bulk carriers at 5%
7) Container ships at 5.7%
8) General cargo ships at 4.2%
9) Roll on Roll off ships at 4.4%
10) Vehicle carriers at 4.4%
11) Passenger ships at 5.7%
12) Other vessels at 5%
OPEC not responsible for oil hitting at USD 100
OPEC officials said that it could do little to tame oil prices that hit USD 100 a barrel recently and world markets had enough crude oil. The comments underline the view of the producer group that factors other than supply are driving oil's record run. They added that there is no plan for an emergency OPEC meeting before a scheduled February 1st 2008 gathering.
Mr Hojjatollah Ghanimifard international affairs director at the National Iranian Oil Company said that "The problem is not shortage of supply. I think the main problem is outside the oil market. Too much liquidity is available and a big part of it is in the paper market of crude oil."
It is noted that OPEC, source of more than a third of the world's oil, decided to keep oil output steady at a December 5th 2007 meeting, rebuffing calls from consumer countries for more supply to rein in prices then trading around USD 90.
Mr Abdullah al Attiyah oil minister of Qatar said that the organization cannot tame the price rise because it is not a result of supply problems He added that "I don't think OPEC can do anything. If this was related to supply then we could move. Speculation has been very strong and it's a game for speculators."
Pakistan invites firms for shipyard expansion plans
Daily Times reported that Pakistan government is seeking advisory services from internationally qualified firms led by a reputable international financial institution or investment bank for development of shipyards at Port Qasim in Karachi and Gwadar Port till February 15th 2008.
Officials in the planning commission said that the international firms would comprise of requisite technical, legal and other consultants to assist the government in planning, development and implementation of these projects. They added that proposals for advisory services for both projects separately were solicited from internationally qualified and experienced advisory firms with demonstrable experience in structuring world class shipyard development related transactions.
Pakistan government had approved a plan to establish two new large sized shipyards called Gwadar Shipyard at Gwadar in Balochistan province and Port Qasim near Karachi in Sindh on a fast track basis. The shipyards are to be developed with minimum financial support from the government. The projects are conceived in a manner, whereby the private sector would be responsible for designing, financing, building, operating and maintaining these shipyards.
The Gwadar Shipyard is planned to be established at Gwadar East Bay on an area of approximately 500 acres. Initially it planned to carry out ship repairs, which would lead to ship building of up to very large crude carrier and ultra large crude carrier size and would have at least two dry docks of approximately 600,000 DWT.
The officials said that Pakistan government is concentrating on development of shipbuilding industry in the country and establishment of two new shipyards with bigger docks would ensure accommodation of larger vessels and would also open a new era of economic activities, creating new jobs and improving the living standard of the people.
Soueast Motor to export 5,700 minibuses to Iran in 2008
Xinhua reported that China's Soueast Motor Company Limited has clinched a deal with Iranian Mehreghan Co to sell 5,700 minibuses in 2008 after exporting 8,000 of the vehicles to Iran in 2007, which would be used as medium and short distance taxis in Iranian cities.
Soueast Motor was jointly founded by Fujian Auto Industrial Co Limited and the China Motor Corporation of Yulon Enterprise Group. Japan's Mitsubishi Motor Vehicle Co had held a quarter share in the company since last year, leaving its two founders with a half share and a quarter share, respectively. Since its 1995 inception, Southeast Motor had previously exported 11,000 vehicles to more than 10 countries, including Russia, Egypt and Syria, among others.
Burj Dubai becomes taller and taller
Khaleej Times reported that Burj Dubai continues to soar above Dubai and higher than any building in the world with its 158 levels now reaching a height of 598.5 meters. Burj Dubai is now taller than 508 meters tall Taipei 101 in Taiwan and 553.33 meters tall CN Tower in Canada.
According to a statement released by the iconic tower's developers Emaar Properties, cladding work of the tower is now taking place at an accelerated pace with 58 storeys already wearing the shimmering sheen of the high performance cladding system. The primary materials used reflective glazing, aluminum and textured stainless steel spandrels and vertical stainless tubular fins accentuate the tower's height and slenderness to the eye.
When completed, the tower will have used 330,000 cubic meters of concrete, 39,000 metric tonnes of steel rebar and 142,000 square meter of glass and 22 million man hours. More than 5,000 consultants and skilled professional workers are employed on site at the tower.
Emaar has partnered with South Korean construction major Samsung Corporation and New York based Project Manager Turner Construction in constructing Burj Dubai, which is designed by Adrian Smith and Skidmore, Owings & Merrill of Chicago.
Burj Dubai is the centre piece of Emaar's flagship project, set on 500 acres of land in the heart of Dubai. It will feature residences, commercial space and retail space and hospitality elements including the world's first Armani Hotel and Armani Residences.
Taiwanese fund to target Gulf energy projects
Economic Daily reported that Taiwan is preparing to set up an overseas investment fund combining government and private sector money that will initially target energy projects in the Gulf region of the Middle East.
As per report, Taiwan’s National Development Fund will set up the fund, which will be overseen by Taiwan's state planning commission the Council for Economic Planning and Development. National Development Fund would contribute TWD 800 million to start up the fund, while it was looking to raise another TWD 1.2 billion from private investors, with engineering firm CTCI Corporation, Teco Electric and China Steel among those showing interest.
The fund would initially target investments in Saudi Arabia, United Arab Emirates, Qatar and other Gulf countries, with an aim of investing in oil, natural gas and other energy projects.
Mr Hsieh Fadah vice economics minister of Taiwan said that "We have seen in the past the massive business opportunities in the Middle East. Looking at the potential business opportunities of the 6 Gulf states, we estimate they could be over USD 6.6 trillion. Pursuing this opportunity is essential. Formation of this company is the first step. It is hoped that private industry can take the lead, with the National Development Fund contributing 40% of the capital and we hope the remaining 60% can be contributed by the private sector." He added that if investment via this method was smooth, it would also consider opportunities next in India.
UAE to give short term work permits to Indian workers
Gulf News reported that, in a move which could help Indians seeking employment in the Emirates, the UAE will start granting short term work permits for January to June 2008 in the wake of labor shortage in the gulf country.
Dr Ali Bin Abdullah Al Ka’abi UAE minister of labor has announced the decision, which will allow companies in all sectors to apply for mission work permits for their employees who are in probation period or who are in the country for a short term job.
Dr Ka’abi added that “Implementing the mission work permit will help solve the problem of people working on visit visa and it will give greater flexibility in the relationship between the employer and employee.”
Mr Mohammad Al Merri director general of Dubai Naturalization and Residency Department said that the new type of work permit will limit the misuse of visit visas. No 6 month ban will be applied for workers on mission work permit if they decide to discontinue their work during the probation period, as per the new rule.
Companies with less than 500 workers can initially get as much as 50% of their total labor force as quota for the mission work permit, while companies with more than 500 workers can get 100% of their total staff as quota.
Iranian private port at Aftab inaugurated
It is reported that Iran’s first privately funded port was inaugurated near the southern Persian Gulf island of Kish in Hormuzgan province of Iran last week. The construction of the port began in 2001.
Aftab Port, being the closest point of the southern coast of Iran to the island, will mostly cater for passengers and goods transported to Kish Island. It will have modern port facilities and a well-equipped passenger terminal.
Mr Ali Taheri-Motlaq MD of Ports and Shipping Organization told MNA that the Aftab Port, located 100 kilometer from Bandar Lengeh, was fully funded by the private sector. He added that the port is operating on a trial basis and work is in progress on other phases of the port.
Mr Taheri-Motlaq said that the port, the construction of which began in 2001 at a cost of 150 billion rials, will be officially inaugurated in May 2008.
South Koreans firms bid for Al-Zour refinery in Kuwait
The Middle East Economic Digest reported that South Korean companies have submitted the lowest bids for Kuwait's planned 615,000 barrel per day Al-Zour refinery in Kuwait.
Kuwait has approved a budget of about USD 14 billion for the construction of the refinery, more than twice an initial cost estimate. State refiner Kuwait National Petroleum Co, which plans to announce winners in mid February, has split the project into five packages and the tender expired on December 26th 2007. KNPC had pre qualified 19 firms for the tender, with many firms teaming up in alliances.
As per report following companies have submitted competitive bids
1. For the key crude distillation package - A consortium of South Korea's GS Engineering & Construction and Japan's JGC Corp is best placed
2. For the hydrogen production package - South Korean firm SK Engineering & Construction has submitted the lowest price
3. For tank storage package South Korean firm Daewoo Engineering & Construction submitted the lowest bid
4. For the maritime export facilities package - Hyundai Engineering & Construction and Hyundai Heavy Industries are best placed
5. Industry sources told Reuters in September that KNPC was also in talks with US firm Fluor Corp. for a fifth tender
Kuwait cancelled a first tender for the refinery in February, after bids came in far above its initial budget. The new Al-Zour refinery is to replace the ageing 200,000-bpd Shuaiba refinery, which has been hit by several accidents. Kuwait plans to boost refining capacity to 1.415 million bpd from 930,000 bpd with the new plant and upgrades of its Mina Abdullah and Mina Ahmadi refineries.
US confirms preliminary AD on Chinese pipe imports
The US Department of Commerce has announced its affirmative preliminary determination in the antidumping duty investigation on imports of circular welded carbon quality steel pipe from China. US DOC determined that Chinese producers or exporters sold certain steel pipe in the United States at up to 51.34% less than fair value. US DOC will announce a final decision on anti dumping duties in May.
As a result of this preliminary determination, Commerce will instruct US customs & border protection to suspend liquidation of entries of subject merchandise and to collect a cash deposit or bond based on the preliminary rates.
Mr David Spooner assistant secretary for import administration said that “Price discrimination hurts American manufacturers. The administration is committed to aggressively enforcing America's trade remedy laws in order to achieve strong and fair relationships with our trading partners.”
Circular welded carbon quality steel pipe is used for the conveyance of water, steam, natural gas, air, and other liquids and gases in plumbing and heating systems, air conditioning units, and automatic sprinkler systems. The merchandise covered by this investigation includes certain circular welded carbon quality steel pipes and tubes with an outside diameter of 0.372 inches or more, but not more than 16 inches.
Allied Tube & Conduit, IPSCO Tubulars Inc, Northwest Pipe Company, Sharon Tube Company, Western Tube & Conduit Corporation, Wheatland Tube Company and the United Steelworkers are the petitioners for these investigations.
China’s rebar export jump up in the first week of 2008
It is reported that China’s export offers for rebar and wire rod have seen another jump in the first week of 2008 due to increase in export duty rate. The rise is expected to continue in January 2008 since domestic market prices are to pick up again.
Most steel producers have raised rebar export quotations to USD 730 to 735 per tonne FOB up by USD 30 to USD 40 per tonne from late December 2007.
Offers for wire rod are prevailing at USD 730 to USD 740 per tonne FOB. But prices are mixed from mill to mill. Some lower quotations are still at USD 710 to USD 720 per tonne FOB, while some producers are tagging at USD 750 to USD 760 per tonne FOB.
Traders said that the higher export tax would further curb exports in the long term and export volume is forecast to see evident drop in 2008. They added “We anticipate further rise in export offers on domestic market price improvement. There is likely to be a jump of CNY 500 to CNY 600 per tonne in the next 1 or 2 months.”
There is strong likelihood that international construction steel prices are going to move up further if China's exports are prove to be on the decrease.
Shougang closes BF No 4 to cut emissions for Olympics
It is reported that Bejing based Shougang Group, one of China's leading steel manufacturers and also the city's major polluter, extinguished the fire in one of its four blast furnaces on Saturday, as part of its pledge to cut its normal output by half during the Olympics. The fire was quenched in the No 4 blast furnace, which had been in operation for more than 35 years.
Mr said Li Yan head of the production department said that "Following the No 4 furnace, operation of the No 2 blast furnace and two sintering machines will cease by the end of March this year.”
Mr Li added that "During the third quarter when the Olympic Games are held, we will suspend the operation of the No 3 blast furnace and two sintering machines while only maintaining the work of the No 1 blast furnace. During that period, the monthly production output will be 200,000 tons, less that 30% of the normal output.”
Mr Li added that all the production in Beijing plants will be stopped by2010.
Shougang plans to reduce emissions of sulfur dioxide, soot and dust by 49.18%, 50.32% and 49.22% respectively in 2008, compared with that of 2007. All the pollutants are expected to plunge by more than 70% during the Olympics.
The Chinese government promised to make Beijing an ecological city with green hills, clear water, grass and blue skies after it won the 2008 Olympic bid. As one of the efforts made by the Chinese government to improve Beijing's air quality, Shougang Group began in 2005 to relocate its facilities to Hebei Province, some 200 kilometer east of Beijing. The new plant will be completed in 2010. After the removal, the old factory site will be developed into a complex for tourism and entertainment, cultural business, commercial and residential compound with an expanded area of 856 hectares from 707 hectares, according to the blueprint.
Chinese HDG export prices remain stable
It is reported that China’s export offers for hot dipped galvanized coil are generally stable and export tonnages are largely unchanged since October 2007. The market is comparatively quiet due to sluggish prices.
On Shanghai market, 1mm HDG by Anshan Steel is being quoted at CNY 5480 per tonne up by CNY 50 per tonne from December 2007. That for 0.5mm HDG by private producer remains at CNY 5800 per tonne. In the short term, price for 1.0 HDG by Anshan Steel is going to approach CNY 5600 per tonne, which has already been forecast when it went past CNY 5200 per tonne.
Export offers are largely unchanged and those for 1.0mm HDG are prevailing at USD 720 to USD 730 per tonne FOB. Traders are complaining that there have been fewer contracts than before due to weak overseas market prices.
At the same time, steel mills are reducing HDG output for account of less profit. A tier one steel producer in North East China has already stopped one of its line and transfer the capacity to cold rolled steel production. They only maintain a small allocation for exports. A lot of private HDG producer have shifted to produce more Galvalume than hot dipped galvanized coils. Only through this way can they avoid making loss amid higher cost and weak market price.
China issues tin export quotas for 2008
China’s Ministry of Commerce has issued a first batch of export quotas for 2008 for tin and other metals.
The initial allocation of tin quotas is for 15,967 tonnes, of which Yunnan Tin Company has been given 9,332 tonnes. The total quota for primary tin and tin products for 2006 is 33,300 tonnes, down from 37,000 tonnes in 2007.
China’s actual refined tin exports in January to November 2007 amounted to 22,126 tonnes, although recently volumes have dropped to less than 1,000 tonnes per month and China has been a net importer since September 2007. Strong domestic demand and the recently imposed 10% export duty are likely to result in exports well below the quotas.
Shenhua Group's revenue for 2007 reaches USD 13.7 billion
Shenhua Group Co Limited has announced that it recorded revenue of more than CNY 100 billion in 2007 up by 25% YoY and produced 230 million tonnes of coal.
It said that worker safety is also improved in 2007, with overall accident rates in railway and port transportation, coal mining and power generation dropping 33% YoY.
Shenhua Group is a state owned energy enterprise, founded in October 1995. Its major businesses include coal production, sales, electricity, thermal generation and railway and port transportation. Shenhua Group ranked 7th in 2006 among Chinese state owned enterprises in terms of profit.
Qinhuangdao Port’s cargo throughput in 2007 up by 21% YoY
Cargo News Asia reported that Chinese Qinhuangdao Port's cargo throughput has totaled 245 million tonnes in 2007 up by 21.7% YoY. Out of the total, coal and bulk goods throughput capacity were 193 million tonnes and 14.8 million tonnes respectively.
Although 2 wagon tippers at the port suspended operations and carried out reconstruction projects, Qinhuangdao Port's coal throughput hit 214 million tonnes in 2007, becoming the first port in the world with coal throughput exceeding 200 million tonnes.
In addition, the bulk goods throughput stood at 24.08 million tonnes, while the container throughput hit 300,000 TEUs up by 50% YoY.
COSCO likely to build deep sea Olokola Port in Nigeria
According to reports, China Ocean Shipping Group Company is being wooed by Nigerian officials to invest in a mega project involving a free trade zone and a deep sea port on the Ogun and Ondo borders. An agreement between the project consortium and a Chinese state owned construction and engineering company to begin a feasibility study is likely to be signed soon.
Nigerian officials claim that COSCO is interested to help finance the estimated USD 12 billion needed for development of the entire project on 10,000 hectares of land. A proposed container terminal itself could already cost some USD 1 billion.
According to the Ogun state governor, the project called Olokola port is slated to have capacity for haulage, transshipment, roll on roll off along with bulk cargo. Olokola's port depth would be 16 meters, making it the deepest port on the West African coast.
According to Lloyd's List, Nigerian National Petroleum Co, in partnership with the oil and gas giants Chevron Corp, BG Group and Royal Dutch Shell, are to build the USD 9.8 billion Olokola LNG train and pipeline with the first of four trains ready by 2012.
Chinese coke producer to build facility in Thailand
Interfax China reported that Tianjin General Nice Coke and Chemicals Co Ltd will build a 3 million tonne per annum coking plant in Thailand.
Jinling Mining to issue new shares to buy parent's assets
Jinling Mining announced that Shandong Jinling Mining Co. Ltd., the Shenzhen listed subsidiary of Shandong Jinling Iron Ore Mine, plans to issue between 30 million and 50 million new A-shares to purchase assets worth a total of CNY 1.28 billion from its parent.
Chang'an Automotive 2007 revenue up by 24.3% YoY
Xinhua reported that Chang'an Automotive Group’s 2007 sales rose by 24.3% YoY to a record CNY 57.4 billion as it rolled out new models and cooperated with global carmakers to expand in the fast growing market.
Chang'an Auto sold an estimated 850,000 cars in 2007 up by 20% YoY and its production rose by 22% YoY to 870,000. It planned to produce 2 million vehicles annually by 2010, with an output value of CNY 100 billion.
Mr Xu Liuping chairman & president of Chang'an Automotive said that the sales figure made Chang'an the first company in the southwestern municipality of Chongqing to surpass the CNY 50 billion milestone.
To meet expanding demand in China, Chang'an Auto, Ford and its Japanese affiliate Mazda began mass production at a new engine plant in the eastern city of Nanjing in April 2007.
Chongqing based Chang'an Ford Mazda Co was formed in 2006 when Mazda joined Chang'an Ford Co, which was established in 2001. The JV sold a record 129,790 Ford cars in 2006, more than double the 2005 figure. It opened a second plant in Nanjing in September 2007, with an initial annual capacity of 160,000 cars, including the all new Mazda 2 compact. The plant represents part of Mazda's plan to sell 300,000 cars in China by 2010.
Liugang output in 2007 reached 6 million tonne mark
Liugang held a ceremony for annual finished steel output topped 6 million tonnes on December 27th December 2007 to 6,001,085 tonnes. Before this, till December 25th 2007, Liugang has an operating income from main business exceeding CNYT 25 billion, reaching it to a new level.
From 1958 to 1999, Liugang took 41 years to bring the finished steel output to 1 million tonne, from 1999 to 2003, Liugang took 4 years to add 1 million tonne more finished steel output and from 2004 to 2007, its finished steel output increased at a speed of 1 million tonne per year and reaches 6 million tonnes per year till December 27th 2007.
Liugang invested more than CNY 10 Yuan on technology improving and demolishing outdated capacities, lifting the equipments and technologies of production to advanced level in China, forming a product mix of focusing on plate and sheet. Till now, it produced more than 1.60 million tonnes of medium plates and more than 2 million tons of hot rolled coil sheets, accounting for more than 60% of the whole, with strategic products taking more than 1.20 million tonnes, contributing to the maximum of the profits.
According to an official from Liugang, realizing the target of finished steel production reaching 6 million tons per year not only means the increase in output, but also the fruits of intensive operation, which means low input, high output, low costs and high profits, and also the harvest of improved product mix.
China to push forward energy price reform
According to a white paper published by the Information Office of the State Council, China will proceed with energy price reform in a vigorous and steady way.
The paper, titled "China's Energy Conditions & Policies," said that China will gradually establish a pricing mechanism that can reflect resource scarcities, changes in market supply and demand and environmental costs. It added that the price mechanism is the core of the market mechanism.
It said that China has driven electricity tariff reform to ensure that generation and selling prices are eventually established through market competition, with transmission and distribution charges supervised and controlled by the state. China has also extended coal price reform to achieve full market pricing.
The white paper said that China has gradually improved oil and natural gas markets so that prices quickly reflect changes both in world markets and domestic supply and demand. Faced with fuel shortages, China raised gasoline, diesel and jet fuel prices by nearly 10% in late 2007 to boost supplies but its wholesale gasoline prices are still below the international average.
Longtan hydropower project starts operation
Xinhua reported that Longtan hydropower project went into operation after a 7 month trial generation proved successful.
Mr Dai Bo GM of Longtan Hydropower Development Company of China Datang Corporation said that the project's 3 generators, which were put into a test run in May, July and October 2007, respectively, were announced to enter the formal generating stage.
The project was situated on the Hongshui River, a major tributary of the Pearl River in the southern Guangxi Zhuang Autonomous Region. It was China's third largest hydropower plant after the Three Gorges Project on the middle reaches of the Yangtze River, and Xiluodu hydropower project on the Jinsha River, a Yangtze tributary.
Construction began in July 2001 and was scheduled to finish at the end of 2009. It would be capable of generating 18.7 billion KWH of electricity annually once completed. An investment of CNY 30 billion from CDT was used to build the 216.5 meter high dam, a ship lock and an underground generating house with nine turbo generators with a combined installed capacity of 6.3 million kilowatts.
The project would also help in flood control and improving conditions for shipping. It would also benefit in combating a salt tide that had been plaguing water usage in cities on the Pearl River Delta. More than 80,000 residents in 10 counties of Guizhou Province and Guangxi would be resettled to make way for the project. So far 34,207 residents had been relocated to higher ground.
Fire reported at Severstal NA
The Detroit News reported that firefighters responded to a two alarm fire at the former Rouge Steel in US early morning that injured one plant employee and is believed to have caused extensive damage.
As per report, the fire started around midnight after an explosion at the B furnace of the Severstal Steel North America plant on Miller Road. The fire was brought under control within a few hours.
Mr Tim Prokop. Chief of Dearborn Fire department estimated there was millions of dollars in damages to the plant. He said "We were very luck there were no injuries or deaths over there."
A spokeswoman for Severstal declined to comment.
Severstal bought Rouge Steel in 2004 for USD 285.5 million from the bankrupt Rouge Industries Inc.
Gazprom to spread footprints to Nigeria – Report
FT reported that Russia’s state owned energy group Gazprom is seeking to win access to vast energy reserves in Nigeria in a move that will heighten concerns among western governments over its increasingly powerful grip on gas supplies to Europe.
The report cited a senior Nigerian oil industry official as saying that the company was offering to invest in energy infrastructure in return for the chance to develop some of the biggest gas deposits in the world. The Nigerian official said Gazprom executives had visited Abuja in mid December with a range of proposals to revamp the underperforming gas sector.
He said “What Gazprom is proposing is mind boggling. They are talking tough and saying the west has taken advantage of us in the last 50 years and they’re offering us a better deal. They are ready to beat the Chinese, the Indians and the Americans.”
The report cited Mr Ilya Kochevrin of Gazprom as confirming the talks with Nigerian officials. He said “We made a decision to go global in terms of acquiring assets and developing strategy outside Russia. Africa is one of our priorities.”
Any move by Gazprom to establish itself in Nigeria, long dominated by companies such as Royal Dutch Shell, Chevron and ExxonMobil, would reinforce a global trend of state backed energy companies challenging western rivals.
BHEL bags export order of transformers from Azerbaijan
It is reported that Indian power equipment major Bharat Heavy Electricals Limited has bagged an export order for transformers from Azerbaijan.
BHEL's scope in the contract envisages manufacture, supply and supervision of erection and commissioning of 330 kV class 240 MVA and 110 kV class, 75 MVA and 63 MVA rating transformers to be installed in Azerenerjis Power Transmission project.
BHEL has already supplied transformers to more than 20 countries around the world including Greece, Egypt, Libya, Oman, Malaysia, Saudi Arabia and Zambia.
Ukraine targeting low inflation in 2008
Ukrainian Journal reported that the new government of Ukraine intends to reduce inflation to single digits in 2008.
Mr Viktor Pinzenyk Ukrainian finance minister during a cabinet meeting last week said "I hope that we will never again have to live with double-digit inflation.”
Experts put Ukraine's 2007 inflation at 15.5% to 16%.
Port of Murmansk preparing for Arctic shipping boom
Kommersant reported that under the close supervision of the Russian Ministry of Transport, several key players in the Russian Arctic in late December established the Murmansk Port Management Company. The new company will be responsible the strategic development of the port, including investment projects worth EUR 4.4 billion.
The newspaper added that the constituent meeting of the new company was held in the Transport Ministry on the December 27th 2007. The establishment of the new company comes after Mr Vladimir Putin in May last year visited Murmansk and put major emphasis on the key role of the port.
The port, one of few Russian deep water and ice free ports in the High North, is believed to become the infrastructure hub for the development of Russian oil and gas fields in the Barents Sea. The new port management company is controlled by the Murmansk Sea Commercial Port by 40%, the Russian Railways by 25%, the Rosmorport by 15%, Rosneft by 15% and the Murmansk regional administration by 5%.
The Murmansk Sea Commercial Port is in its turn controlled by the Russian state with 25.5% and by the Laterium Commercial Ltd by 12,68% and Diamat Trading Commercial Ltd by 12,48%. The main role of the company will be to implement the development strategy of the Murmansk Trasport Hub, to prepare for the planned investment projects, to help management subjects in the resolution of issues with state authorities and companies and to prepare the entrance to international and Russian capital markets a note from the Transport Ministry reads. Among the main investment projects for the Murmansk Port Management Company will be the development of the western shore of the Kola Bay with a new 15 million ton coal terminal, a 3 million ton container terminal and a 25 to 35 million ton oil terminal.
Figures from the Murmansk Department of Industry and Transport shows that the investment projects have a total frame of RUB 157 billion of which RUB 60.9 billion will be covered by the federal Investment Fund, the federal budget and the state owned Russian Railways and the rest by private investors. The state share will cover the construction of a railway connection to the western shore of the Kola Bay. The price tag for the coal terminal is estimated to RUB 14.4 billion, the container terminal RUB 19.9 billion and the oil terminal RUB 46 billion.
The Sea Port of Murmansk is the fourth biggest in Russia and the second biggest in Northwest Russia after the Port of Sankt Petersburg. The port has more than 3000 meters of seaside and 17 quays. Today, the port handles first of all coal and apatite ore. Murmansk also has a fish port, which is located further south in the Kola Bay.
