February, 21 2008
RINL embarks on ambitious growth plan
Rashtriya Ispat Nigam limited has embarked on an ambitious growth plan.
Mr PK Bishnoi CMD of RINL Mr Bishnoi, while addressing the employees at the RINL Formation Day celebrations at Ukkunagaram on February 18th 2008 said “Having etched a place of eminence in the steel industry today, we have embarked on an ambitious growth plan to retain our competitive edge and ensure sustainable development.”
He said that that “The current expansion will see our capacity double and drawn a road map to expand the capacity of the Company to 16 million tonnes by 2019.”
He added that “It is time now that we have carved out pro active actions and evolve aggressive strategies to ensure sustainable growth. With the unprecedented increase in raw material prices, a further enhancement in production from the existing capacities has become the need of the hour to improve our net margins.”
Indian trade unions call for total ban on iron ore exports
BL reported that the contentious issue of iron ore exports is once again in the limelight with trade unions working in the steel sector CITU, INTUC, AITUC, HMS and the Officers Association calling for a total ban on the export of iron ore in the interest of the domestic steel industry.
According to the report, the trade unions have said that “With high quality raw materials such as iron ore, lime stone, manganese ore, and with basic infrastructural facilities like roads, railways and port facilities within a radius of 300 kilometer, India has an edge in the manufacture of steel. However, with the reckless export of iron ore going on, the commodity is likely to get exhausted by 2035.”
The report cited a source as saying that “As per industry data the domestic steel industry consumes only around 55 million tonne of iron ore whereas nearly 105 million tonne is exported. We feel that this is a short sighted policy and the export of iron ore should be banned in the interest of domestic producers, especially with so much of investment coming into the sector.”
The trade unions have also decided to hold a national convention, which would be attended by around 74 trade union organizations, on February 21st and February 22nd 2008 in Kolkata. The convention will discuss issues relating to the proposed National Mineral Policy.
ArcelorMittal plans USD 250 million R&R for Orissa villagers
SNS reported that, out of its pledged investment of USD 12 billion, ArcelorMittal will spend an estimated USD 250 million to resettle Orissa villagers who will be displaced by its planned steel mill.
Mr Remi Boyer VP of ArcelorMittal Foundation said that corporate social responsibility will further intervene and better what the state government’s resettlement and rehabilitation policy asked it to pay.
Orissa, which announced its resettlement and rehabilitation policy in 2006, requires an investor to provide a house for every displaced person above age 18, a job to each family member, and a compensation award of between INR 150,000 and INR 500,000 to those who cannot get direct employment.
According to a state government official, ArcelorMittal has so far paid only INR 9 crore out of the total INR 27 crore to the state’s land disbursal agency, Industrial Infrastructure Development Corporation Limited. Besides that amount, it has to pay farmers separately for 5,000 acres of private land.
POSCO E&C bags BF order from SAIL BSP
Reuters reported that South Korean builder POSCO Engineering & Construction Company has won a USD 400 million order to build a blast furnace for Steel Authority of India Limited at its Bhilai steel Plant in Chattisgarh.
It will have annual production capacity of 2.7 million tonnes and the project will be completed by end 2010.
JSW to increase galvalume and PPGI capacity
BS reported that JSW Steel will increase its galvalume capacity to 600,000 tonnes by October 2008 from the current 150,000 tonnes with an investment of up to INR 80 crore.
Mr Jayant Acharya senior VP sales & marketing of JSW Steel said that “JSW currently has six galvanizing lines, of which one line currently produces galvalume with the other lines making zinc coated galvanized steel products. Of these five lines, two lines will be upgraded for making galvalume.”
He added that “It will also increase color coating capacity to 200,000 tonnes by October 2008 from the current 100,000 tonnes.”
Mr Acharya said that “The cost of manufacturing galvalume is 2.5% more than zinc coated galvanized steel products while the price realization is 4% higher.”
Galvalume is a zinc and aluminum alloy coated steel with superior corrosion resistance.
Welspun bags major order of ERW line pipe from Europe
Welspun Gujarat Stahl Rohren Limited announced that it has bagged prestigious pipeline orders worth INR 120 Crores for the supply of ERW line pipes in Southern Europe.
Mr BK Goenka vice CMD of Welspun Group said "This order has reinstated Welspun's position as a significant player in the competitive European market. We look forward to more such orders in the near future and enforce Welspun's credibility and strive towards Engineering Excellence."
The new order has taken Welspun's order book position to above INR 4659 Crores.
‘Steelrise 2008’ to discuss capacity enhancement
It is reported that ‘Steelrise 2008’, a 3 day international exhibition and conference on the steel sector that is slated to be held in Jamshedpur from February 27th to February 29th 2008, will focus on India’s vision to increase steel production by 10% to 12% annually for the next 15 years and to achieve an aggregate production of 180 million tonnes by 2020.
‘Steelrise 2008’ will be inaugurated by Mr B Muthuraman MD of TATA Steel and will be attended by steel manufacturers, customers, suppliers, technical experts, academia, researchers and various stakeholders in the steel industry, among others.
According to the organizers of ‘Steelrise 2008’, augmenting domestic steel production to 180 million tonnes by 2020 will require an investment of over INR 400,000 crore and necessitate massive changes on both technological and socio economic fronts.
Emco enters into transformer JV with SA Edison Power
Emco Limited announced that it has entered into a MOU agreement for 51:49 JV partnership with a South Africa based Company, Edison Power (Pty) Ltd for manufacturing transformers in South Africa and marketing the transformers in the African Region. The joint venture is to be named EMCO-EDISON Transformers Africa (Pty) Ltd.
Mr Rajesh Jain chairman of EMCO Limited said that "In line with our growth strategy, we are aggressively planning to establish our overseas presence by setting up manufacturing and marketing units outside India and this JV is one of the steps towards achieving our Goal.”
He added that “We are aiming to achieve 30% of our turnover from Exports. Edison Group of Companies has ample resources and vast experience in handling all type of electrical installation Projects in Substation & Transmission sector. Partnership with Edison Corporation perfect synergetic alliance and both of us are poised to gain from Power sector boom in the region".
Sterling Infotech acquires JB Ugland Shipping
Chennai based Sterling Infotech Group’s Siva Ventures Limited has acquired the Norwegian shipping firm JB Ugland Shipping AS from JB Ugland Holding AS for a total consideration of around USD 300 million. The acquisition will propel the Sterling Group’s business plans within the shipping and logistics industry.
As part of the transaction, the incumbent management of JB Ugland Shipping AS, led by its CEO Mr Bjorn Bergsland, will continue to manage the company. The company has the rights to use the brand name of JBUS for three years and will continue trading under the JB Ugland name following the acquisition, the press release said.
JBUS’ operations are centered in Norway and in Singapore, where JBUS’ main operating subsidiary JB Ugland Shipping Singapore is an Approved International Shipping company. JB Ugland Shipping AS has a fleet of 40 owned and long time chartered vessels with an aggregate capacity of around 2 million dead weight tonne. The fleet consists of a mix of tankers, chemical carriers and bulk carriers. The fleet, with average life of around four years, includes operational vessels and a new building program with the vessels to be delivered in phases over the next three years, said the release.
Mr Sivasankaran chairman of Sterling Infotech Group said: “I believe that the shipping industry, especially the bulk commodities segment both tankers and dry bulk carriers will increasingly revolve around the broader Asian commodities story. In particular, the bulk shipping tonnage demand from India is likely to see explosive growth on the back of the increased raw material demand for the new power and oil refining projects coming up in India, a large number of which are based on imported raw materials.”
Standard Chartered Bank advised Siva Venture on the acquisition and JB Ugland Shipping was advised by Pareto, a leading Norwegian investment bank, the release said.
Strike delays iron ore exports from Goa – Report
BL reported that nearly 300,000 tonnes of iron ore exports from Goa were delayed by a strike last week. Industrial action in support of local fishermen who oppose plans to expand a key port crippled transport across the state between February 11th and February 13th 2008, preventing ships from taking on board iron ore cargoes.
Mr Glenn Kalvampara secretary of the Goa Mineral Ore Exporters' Association said that "We had a major strike. No loading and unloading could take place. So exports were paralyzed for three days." He added that about 50,000 tonnes of exports had been lost, while the remainder was likely to be loaded with a significant delay.
Mr Kalvampara said that Goa's exports of ore in the financial year ending March 2008 could drop by nearly 13% to 35 million tonnes from 40 million tonnes in 2007.
Nippon Steel to open office in New Delhi on March 1st 2008
It is reported that Japan’s largest steel maker, Nippon Steel Corporation on would open its first Indian office in New Delhi on March 1st 2008.
Nippon Steel said that the new move would enable the company to enhance its information collection and promote its operations in the fast growing Indian market.
Maruti Suzuki and Mundra Port ink pact for a mega car terminal
Maruti Suzuki India Limited announced that it has signed an agreement with Mundra Port and Special Economic Zone Limited for a mega car terminal at Mundra in Kutch district of Gujarat. This car terminal is expected to be operational by December 2008.
The initial investment in the project is expected to be around INR 100 crore, out of which Mundra Port and Special Economic Zone Limited will invest INR 60 crore in setting up infrastructure at the port and . Maruti Suzuki India Limited will invest INR 40 crore to set up a Pre Delivery Inspection' centre at the port premises.
The new Terminal will have a car stockyard spread over 35 acres and a dedicated buffer area for cars to be parked just before loading on the Pure Car Carrier ships. The car Terminal offers a "Roll On, Roll Off" (berth, which speeds up the loading process and minimizes the chance of damage to cars.
Mr S Nakanishi MD & CEO of Maruti Suzuki said "We are delighted to partner Mundra Port and Special Economic Zone Ltd for this critical Initiative. Maruti Suzuki is ready to play a much greater role in Suzuki's global operations, we have the technology and skills to build top quality cars for the international market. But our export ambitions need infrastructure support on the ground, and this initiative will be a big step forward in filling that gap."
Maruti Suzuki's exports have grown significantly this year, and will touch 50,000 units in 2007-08. It currently exports from Mumbai Port. Maruti Suzuki will commence export operations at Mundra Port from January 2009. In view of increasing export volumes, Maruti Suzuki will continue exports from Mumbai as well.
MP inks 61 MoUs in Jabalpur investor meet
It is reported that apart from Madhya Pradesh, investors from 9 other states have shown keen interest in making investments in the state at the Jabalpur Investors Meet held recently. 6 investors from 9 other states have signed 41 MoUs to the tune of INR 46337 crore. In all, 61 MoUs worth INR 56829 crore were inked at Jabalpur Investors Meet.
With proposals worth INR 18150 crore, Delhi tops the list as far as amount is concerned while the industrial houses of West Bengal's have topped in the number by signing 13 MoUs worth INR 12,602 crore. They are
The list of MoU’s for steel, power, metals, mining and cement are as under
Steel
1. Messrs Steel & Power Limited - INR 200 crore each for iron ore based plants at Katni and Jabalpur
2. SPJ Steel & Mineral Private Limited - INR 2250 crore for steel plant at Pathariya in Damoh district
3. Anik Industries Limited - INR 200 crore for pig iron project at Jabalpur
4. Sarthak Industries Limited - INR 700 crore for pig iron project at Dhar and Jhahua
5. Euro Bond Industries Private Limited - INR 1100 crore for iron ore based units at Chhatarpur and Katni
6. SKS Ispat & Power Limited - INR 2000 crore for steel plant at Singruali
7. ASR Multi Metals Private Limited - INR 150 crore for steel plant at Katni
Metals
1. Messrs Steel & Power Limited -INR 700 crore MoU for alumina plants at Dindori and Anuppur
2. Rashmi Metallic Limited - INR 2000 crore MoU for establishing ferromanganese plant
3. Rashmi Metallic Limited - INR 1000 for aluminum plant
4. Perfect Refractories Limited - INR 50 crore for refractory plant at Jabalpur
5. Agrawal Indotex Limited - INR 110 crore for manganese plant at Balaghat
Cement
1. Rashmi Metallic Limited - INR 1200 proposal for cement plant
2. Jain Steel & Power Limited - INR 1000 crore for cement plant
3. Rungta Mines Limited - INR 450 crore for cement plant at Katni
4. KJS Cement Private Limited - INR 750 crore for cement plant at Maihar
5. DSP Finprint Limited - INR 750 crore for cement plant at Satna
6. BLA Power Private Limited - INR 300 crore for cement plant at Narsinghpur
7. Mysore Cements - INR 890 crore for setting up cement plant at Damoh
Power
1. Jindal India Thermal Power Limited - INR 9000 crore for thermal power plant at Sidhi
2. Goyal MG Gases - INR 4000 crore for power plant at Khandwa
3. Abhijeet Cement Private Limited - INR 800 crore for power plant at Morena
4. OP Energy Private Limited - INR 4000 crore for power plants at Chhindwara and Jhabua
5. Raghuvir Ferro Alloys Private Limited - INR 415 crore for captive power project and captive mines
6. Jaiswal Neeco Industries - INR 1465 crore for coal based unit
7. Sanghi Energy Limited - INR 1620 crore for power plant at Satna
Mixed
1. Corporate Ispat Appliances Limited - INR 800 crore for setting up coal washery, coke oven plant
2. Electro Steel Casting Limited - INR 2380 for coal washery power plant and cement plant at Shahdol
3. Adhunik Corporation Limited - INR 1150 crore for cement and steel manufacturing plants
4. Bhushan Steel Limited - INR 3000 crore for coke oven plant and cement plant
5. Kamal Steel & Power Limited - INR 600 crore for sponge iron plant and power plant at Satna
Commerce ministry against customs duty cut
BS reported that union commerce ministry is not in favor of an across the board cut in the basic customs duty and has called for selective cuts on certain imported products in the coming Budget.
Mr Kamal Nath union commerce minister said that "We favor a reduction of customs duty only in some items. We want to ensure that the inverted duty structure in large number of areas is corrected."
According to Mr Nath, inverted duty structure, which adversely affects the domestic industry, needs to be addressed in this budget as India is likely to operationalize key free trade agreements with economic blocks such as ASEAN.
Sources also said that union commerce ministry has favored trimming import duties on raw materials to promote domestic sectors engaged in high value addition activities in sectors such as textiles.
It may be noted that union finance ministry has been cutting the import duties in the previous three budgets. In 2005-06, import duties were cut from 20% to 15% and an average of 10% in 2007-08. The government has committed to achieve ASEAN customs duty levels, which are between 4.5% and 5.5% by 2010.
TI to set up two car door panel units for TATA Motors
BS reported that Tube Investments of India Limited is building a plant in West Bengal's Singur to supply car door panels for TATA Motors' USD 2,500 Nano car and hopes to recover its Singur investment of INR 250 million in four years.
Tube Investments is building another car door panel plant at Pune in Maharashtra at an outlay of INR 350 million to supply TATA Motors' new Indica. The Pune plant was expected to go on stream by September 2008. With the addition of two new factories, it will have six facilities making car door panels.
Tube Investments has 4 major divisions that include TI Metal Forming for making car door panels and other metal formed products, TI Cycles for cycles and fitness equipments, TI Diamond Chain for automotive and industrial chains and Tube Products for steel tubes and strips.
Tube Investments makes precision steel tubes and strips, car doorframes, automotive and industrial chains and bicycles. It has 13 manufacturing and assembly units spread across India. It commands nearly 65% market share in the roll formed car door panel segment in India, supplying to automakers like Hyundai, Ford India, General Motors, Maruti Suzuki and others.
Vijay tanks bags INR 85.3 crore order from HPCL Mittal refinery
It is reported that Vijay Tanks & Vessels Limited has built on its robust order book for storage & process equipment with a major contract for the supply of field fabricated crude and vacuum columns to the 9 million tonnes per annum Bhatinda Refinery Project. The project cost estimate of INR 18,919 crore.
Mr V Sunderrajan director of Vijay Tanks & Vessels Limited said that this contract award by GGSRL was a strong endorsement of VTV’s credentials in high end equipment fabrication. He added that the design, fabrication & erection of these columns will be handled on a turnkey basis over a 20 month delivery schedule.
The new vacuum column will be the largest to be built for an Indian refinery and amongst the largest of its kind globally. To meet the logistical challenge of delivering such over dimensioned equipment to the inland Bhatinda Refinery, Vijay Tanks & Vessels Limited will build these critical equipments entirely at the project site. This path breaking approach towards critical equipment fabrication has drawn global attention amidst India’s growing presence as one of the main oil refining hubs of the world.
The project is being implemented by HPCL Mittal Energy Limited, where Mittal Energy Investment Pvt Limited and HPCL hold 49% stake each with financial institutions taking the remaining 2%. Engineers India Limited has been appointed as project management consultants for implementation of the project.
Vijay Tanks & Vessels Limited is an EPC player with a focus on delivering world scale projects for storage terminals & specialized process equipment. It serves the oil & gas, refinery, petrochemical, fertilizer, steel & power sectors. Vijay Tanks & Vessels Limited currently executes turnkey projects in India, the Middle East & Africa and delivers fabricated equipments to customers worldwide from its fabrication plants in Vadodara, Kandla and Jamnagar.
India hopes to invest in Mongolia's mining industry –Report
Xinhua reported that Indian companies are interested in investing in Mongolia's mining sector.
Mr Yogeshwar Varma Indian ambassador to Mongolia, while meeting with Mongolian President Mr Nambaryn Enkhbayar, said that Indian companies would be law abiding in their cooperation with Mongolia.
Mr Enkhbayar said that India is an important partner for Mongolia and Mongolia would like to boost economic cooperation with its partnership countries.
PFC inks MoA with WB for 2 MW solar power project
It is reported that Power Finance Corporation has inked a memorandum of agreement with West Bengal Green Energy Development Corporation Limited for setting up India's first grid connected 2 MW solar power plant at Dishergarh Power Station Complex near Asansol in Bardhaman district of southern West Bengal.
The unit will spread over 8.3 acres of land and will entail an investment of around INR 41crore. The state government would borrow about INR 40 crore from the Power Finance Corporation to execute the project.
Work on the first unit is likely to commence by July 2008 and the second unit is expected to complete by end 2008.
Maharashtra signs MoUs with seven companies
Projects Today reported that Maharashtra government has signed MoU with seven companies for an investment of INR 5,444 crore.
The MoUs was signed by Jindal Saw for seamless tubes expansion project at its existing plant at Malegaon in Sinnar taluka of Nashik district. The capacity will be increased from 75,000 tonnes per annum to 220,000 tonnes per annum with an investment of INR 350 crore.
Romin Mining & Industries has signed a MoU for setting up an INR 2,500 crore alumina refinery and captive power plant at Dabhol in Chiplun taluka of Ratnagiri district.
Konkan Alumina will invest INR 1,350 crore in an alumina plant and captive power plant at Shirse in Rajapur taluka of Ratnagiri district.
MoUs were also signed with Hemras Technologies, Vortex Spanning and Brakes Auto India.
Himachal signs MoUs for six hydel power projects
BL reported that, in a bid to increase power production, Himachal Pradesh government has signed six MoUs with private electricity producers. Mr Ajay Mittal principal secretary power has signed the agreement with six small power producers, which would generate an additional 17 MW electricity.
The projects are
1. Mansa - 5 MW
2. Alwas - 2.60 MW
3. Leyond - 1 MW
4. Banoo - 2 MW
5. Badakhanda Koohal - 1.50 MW
6. Ghoogan Khand - 1 MW
Himachal government promised the private power producers to provide all possible helps and also said action would be taken against those failing to complete the projects as per the condition within the given time-frame.
IIL’s Chhattisgarh Energy invites bids for thermal power plant
It is reported that Ispat Industries Limited’s subsidiary Chhattisgarh Energy Limited has invited bids through the international competitive bidding route for the EPC contract of a 1,200 MW thermal power plant in the state. The last day of submission of technical bids is February 25th 2008.
According to the bidding document, the bidder must have completed EPC contract of at least one project of unit size 500 MW or 2 projects each not less than 210 MW unit size. The contractor will also have a tie up with a boiler or turbine manufacturer of similar capacity which must have been commissioned and running satisfactorily.
The bids will be opened on February 26th 2008. Following that, the developers will be organizing a pre bid meeting on March 20th 2008. The last date to submit the final price bids will be April 30th 2008.
Chhattisgarh Energy Limited is setting up an independent power project to be located in Janjgir Champa district of Chhattisgarh, under a MoU with the state government. The land for the project is currently under acquisition. The state government has allocated the water required for the plant. The power purchase agreement for the project is currently under negotiation. The total project cost has been estimated at INR 5,300 crore. The financial closure for the project is expected by second quarter of 2008.
Tuticorin Port sets new record in day cargo handling
Tuticorin port created a new record on February 16th 2008 by handling 113,327 tonnes of cargo on a single day, surpassing the previous record of 110,403 tonnes set on November 17th 2008.
This achievement was mainly brought about due to anchorage, handling of coal and the increased volume in container traffic through the port.
Nippon, Sumitomo and Kobe agree on additional cross holding
Nippon Steel Corporation, Sumitomo Metal Industries and Kobe Steel, Ltd announced that they have agreed on additional Cross Purchase of shares backed by expanded and Enhanced Mutual Cooperation. The three steelmakers have reached an agreement at the end of October 2007 to consider ways of further expanding and enhancing their cooperative ties and additional cross purchase of shares.
The three companies have proceeded with consideration of these courses of action and now reached the following agreement regarding the additional cross purchase of shares. The companies share the view that increased cross shareholdings will be effective in promoting smooth and steady implementation of strategic cooperative measures, such as the mutual use and sharing of core production facilities, and will assist the companies in pursuing the mutual benefits of these arrangements based on relationships of trust.
1. Nippon Steel and Sumitomo Metals
Nippon Steel and Sumitomo Metals will each purchase the other's shares in the amount of around JPY 100 billion.
A. Nippon Steel will increase its ownership in all Sumitomo Metals shares from 5.01% representing a voting right percentage of about 5.3% at present to about 9.4% representing a voting right percentage of about 9.9%.
B. Sumitomo Metals will increase its ownership in all Nippon Steel shares from 1.81% representing a voting right percentage of about 2.0% at present to about 4.1% representing a voting right percentage of about 4.5%.
2. Nippon Steel and Kobe Steel
Nippon Steel and Kobe Steel will each purchase the other's shares in the amount of approximately JPY 15 billion.
A. Nippon Steel will increase its ownership in all Kobe Steel shares from 2.05% representing a voting right percentage of about 2.2% at present to about 3.4% representing a voting right percentage of about 3.6%.
B. Kobe Steel will increase its ownership in all Nippon Steel shares from 0.41% representing a voting right percentage of about 0.4% at present to about 0.8% representing a voting right percentage of about 0.8%.
3. Sumitomo Metals and Kobe Steel
Sumitomo Metals and Kobe Steel will each purchase the other's shares in the amount of approximately JPY 15 billion.
A. Sumitomo Metals will increase its ownership in all Kobe Steel shares from 2.05% representing a voting right percentage of about 2.2% at present to about 3.4% representing a voting right percentage of about 3.6%.
B. Kobe Steel will increase its ownership in all Sumitomo Metals shares from 1.71% representing a voting right percentage of about 1.8% at present to about 2.4% representing a voting right percentage of about 2.5%.
Taiwan may ban rebar exports to counter domestic under supply
United Evening News reported that starting on March 5th 2008, Industrial Development Bureau under Taiwanese ministry of economic affairs would prohibit the export of locally produced steel reinforcement bars and billet for a period of 3 months to counter recent domestic under supply. The ministry will also closely monitor the domestic demand and supply of scrap steel and H-beam steel before deciding on whether to ban their export as well.
Mr Steve Chen Taiwanese minister of economic affairs said that "However, no restrictions will be placed on steel imports as Taiwan is an open market and steel prices should be in line with international prices. The ministry will ask China Steel Corporation to set its prices lower than the international prices and to prioritize the supply to the domestic market."
Meanwhile, Mr Wu Sheng feng CEO of Taiwan Steel & Iron Industries Association said that he doubted the ministry's new policy would have any impact, as the sector's real problem lies in rising international steel prices rather than a domestic steel shortage. He added that "Soaring steel prices are an international phenomenon, which is something Taiwan can not buck. The government should reimburse construction contractors for the difference in steel price rather than asking contractors to absorb the costs themselves."
Mr Lai Cheng chairman of Taichung based construction company Shining Group said that rising steel prices have already driven up construction costs, which will result in higher property prices. The cost for buildings under construction rose TWD 6,000 per ping in the past week. Steel prices had risen by 44% from TWD 18,000 per tonne to TWD 26,000 in the second half of last year, but had gone up by TWD 4,000 this past week. Mr Lai urged the government to launch an investigation to determine if steelmakers and suppliers have unfairly inflated prices. The supply shortage of steel in the local market has also worried developers.
Nucor to construct sheet and coiled plate processing center in Mexico
Nucor Corporation announced that it plans to construct a sheet and coiled plate processing center in Mexico to better service the growing needs of its customers.
Nucor anticipates that the new facility will have an annual capacity in excess of 500,000 tonnes. The facility will include a variety of value added processing capabilities including pickling, slitting, cut to length and blanking. The new facility is expected to cost between USD 115 and USD 125 million and to employ more than 100 people.
Final determination of the location of the facility is expected to be made by the end of 2008 with construction expected to begin after satisfactory resolution of regulatory approvals.
Mr DiMicco chairman, president & CEO of Nucor said that "Mexico is a very important market to Nucor. We have many customers in Mexico, and it is important for us to be able to better service those existing customers and to expand our presence in the growing Mexican economy. We are very excited about this opportunity."
Iron ore price negotiations.-.Vale settles with Ilva
Companhia Vale do Rio Doce, the world’s largest iron ore producer, concluded the iron ore price negotiations for 2008 with Italian steelmaker Ilva SpA.
As an outcome of these negotiations, the iron ore prices for Southern System fines, FOB Tubarão, increased by 65% relatively to 2007, while the price for Carajás iron ore fines FOB Ponta da Madeira, increased by 66% relatively to 2007.Therefore, the new reference prices per dry metric ton Fe unit for 2008 are USD 1.3441 for Southern System fines and USD 1.4060 for SFCJ.
Vale in a release said that “The magnitude of the price increase for 2008 reflects the continuity of very tight conditions still prevailing in the global iron ore market. The iron ore price settlement with large high-quality companies and traditional customers such Ilva is an evidence of our commitment to the benchmark pricing system, respecting the weight of the long term relationship and trust involved in these negotiations.”
German steel workers reach wage deal
Reuters reported that Germany's steel trade union and employers have reached agreement on a 5.2% pay increase for workers in the northwest of the country, preventing large strikes in the sector.
Under the deal, reached after 10 hours of talks, some 85,000 workers in the northwest will receive the rise from March, as well as a one off payment of EURR 200 in February.
IG Metall had initially demanded an 8% pay rise for the steel workers, saying staff deserved a share of the recent success of firms such as ThyssenKrupp and Salzgitter. Employers had first offered 3.5% with a contract duration of at least 16 months.
Mr Oliver Burkhard from industrial union IG Metall said that "It's the best result in 15 years.” He added that the deal has duration of 13 months.
Mr Helmut Koch who negotiated for employers said that "We agreed to this wage deal because of the concrete threat of strikes.”
German steel workers had already staged temporary stoppages in support of the pay demands, and union officials had said if no deal was reached, IG Metall would aim to stage full scale strikes in Germany from late February or early March.
World steel demand to up by 5.7% YoY in 2008 - JISF
According to outlook released by Japan Iron and Steel Federation on Tuesday, World apparent steel consumption will increase by 5.7% YoY to record 1.287 billion tonnes in 2008 from 2007.
Japan Iron and Steel Federation expects that developing countries and mineral rich countries lift the demand while the demand slows down in European Union and decreased for 2 years in a row in USA. World raw steel output increases by 5.2% to 1.414 billion tonnes.
Japan Iron and Steel Federation sees the demand and output in 2008 increase is lower than 2007 due to slow down in developed countries.
Iron ore price negotiations.-Japan warns of slowdown
Kyodo News reported that Mr Akira Amari industry minister of Japan has expressed concern that rising prices of iron ore and other natural resources could dampen Japan's growth.
The report quoted Mr Amari at a regular news conference, a day after Japanese steelmakers agreed to a 65% rise in iron ore prices with a major Brazilian mining company as saying that "I am worried about the effects of rising prices of natural resources and raw materials on corporate management and the country's economy.”
Mr Amari said that "I hope companies will do their best to prevent consumer prices from being affected by the rising prices through the rationalization of their operations.”
He added that the government will also actively engage in natural resource diplomacy to secure adequate supplies of resources necessary for Japanese industry from overseas.
ITRI report calls for increased investment in tin mining
It is reported that a new detailed study by ITRI, “Tin to 2012”, identifies the need for accelerated investment in new mine projects to meet future global requirements. The report, released this week is the first Tin Annual Review from the 75 year old organization’s recently established Statistics and Market Studies unit.
ITRI said that “Over several decades the tin market has been over supplied, as a result of successive booms in small scale mining. However increasing restrictions on these operations and strong growth in consumption over the last decade have transformed the picture. Two countries, China and Indonesia, now account for over 70% of global mine production. But China is on the verge of becoming a net importer and small-scale production in Indonesia has started to decline.”
ITRI said that “World tin consumption has grown at a rate of 4% a year in the last decade, a dramatic improvement on its longer term performance. Growth rates are expected to dip in the forecast period, partly because the transition to high tin content lead-free solders will slow and also because higher prices will constrain usage in both existing and potential new applications.”
ITRI said that “In the next year or two the world supply and demand picture is fairly evenly balanced. ITRI forecasts that the market is likely to see a shortfall in new supply of 7,000 tonnes in 2008, but current stock levels are adequate or more than adequate to cover this. However by the end of the decade stocks may be reduced to historically very low levels, unless the current pipeline of committed and probable mine projects is rapidly augmented.”
The report concluded that “Looking ahead there is now a pressing need for increased investment in sustainable mining projects around the world. Outside the two major producing countries, production in the rest of the world needs to double by 2012 in order to keep up with forecast global requirements.”
Mr Peter Kettle senior analyst of ITRI said that “There is no shortage of tin today, and the world’s tin resource base is adequate to maintain long term supplies. But there could be supply problems in between from around 2010 to 2012”.
JFE announces development of ultra high strength steel plate
JFE Steel Corporation has announced the development of HITEN “JFE-HYD1100LE”1 a new ultra high strength steel plate for use in construction and industrial machinery. JFE said that samples are already being shipped. The new product features high resistance to delayed fracture and is the first steel plate of this strength level to be manufactured on a rolling line.
JFE Steel has developed a proprietary “HOP”2, online steel plate heat treatment facility, the first of its kind in the world, and uses it to manufacture high end steel products, including it is HITEN lineup and line pipe materials. JFE HYD1100LE is a new product made possible by the application of this innovative HOP technology.
JFE HYD1100LE is an ultra high strength steel plate with minimum yield strength of 1,100 MPa and minimum tensile strength of 1,180 MPa. It guarantees low temperature toughness value at 40°C. JFE HYD1100LE has many revolutionary features including superb resistance to delayed fracture3), which is one of the most important factors for safe usage of ultra high strength steels. Toughness and delayed fracture resistance generally deteriorate as steel materials are strengthened. In order to solve these issues, two advanced technologies are applied to the microstructure control of JFE HYD1100LE:
ILZSG sees deficit in Zn markets in 2007
According the latest report by the International Lead and Zinc Study Group, global zinc market in 2007 experienced a 15,000 tonne deficit with refined zinc production of 11.39 million tonnes and zinc usage of 11.41 million tonnes. This compares to a 352,000 tonnes deficit in 2006, when refined zinc metal production was 10.6Mt and demand totaled 11 million tonnes.
The study group said that an 18.9% increase in Chinese refined zinc metal output plus rises in Australia, Finland, Germany, India, South Korea, Mexico, Namibia and Thailand were the main contributors to the 7% increase.
ILZSG explained that in 2007 demand growth in China of 15.2%, India of 7% and Europe of 2.3% made up for reductions in Australia, Japan, South Korea, Taiwan and the US. It said that Global zinc mine output increased 9.2% to 11.4 million tonnes compared to 10.5 million tonnes in 2006, on increases of 20.9% in China and 20.1% in Peru, plus growth in Australia, Brazil, India, Kazakhstan, the US and Bolivia, where Apex Silver Mines' San Cristóbal mine started operations in August.
Timken to increase prices of seamless mechanical tubing
The Timken Company announced that it will increase prices on carbon and alloy seamless mechanical tubing by up to 15%, depending on the size and product specification. This price increase is effective with shipments beginning on April 1st 2008.
Raw material surcharges will remain in effect.
AMG Resources acquires Midwest Steel & Alloy
It is reported that St Pittsburgh based AMG Resources Corporation has acquired Cleveland based recycling operator Midwest Steel & Alloy Inc.
Midwest specializes in railcar dismantling, railcar parts reclamation, mill roll processing and heavy burning. It’s 50 acre facility in Youngstown is serviced by 2 major railroads, CSX and Norfolk Southern. It also operates commercial offices in Cleveland and in Yorkville.
Mr Don Forlani senior VP of AMG Resources said that “Based on the people, products, location and customer base, Midwest Steel & Alloy will be a great complement to AMG’s existing business. The acquisition provides AMG with a platform for growth in a key market area and enables AMG to expand into new product lines.”
Mr Bob Wallens president of Midwest Steel & Alloy said that “The Midwest team is very excited to join AMG, which over the years has demonstrated a commitment to growth and built a reputation for strong customer service.”
With the Midwest acquisition, AMG now operates 14 facilities in the United States and the United Kingdom plus 14 brokerage offices.
ArcelorMittal purchases 25 million shares from Carlo Tassara
ArcelorMittal, under its share buy-back program, announced that on February 19th 2008 it has repurchased 25 million shares from Carlo Tassara International SA.
ArcelorMittal said that the shares were repurchased at a price of EUR 46.60 per share and for a total amount of EUR 1,165,000,000.
US December steel shipments up by 11.6% YoY
American Iron and Steel Institute reported that for the month of December 2007, US steel mills shipped 8.495 million net tons up by 11.6% YoY as against 7.609 million net tons shipped in December 2006 and decreases by 2.2% MoM as against 8.683 million net tons shipped in November 2007
YOY comparison of YTD shipments shows the following changes within major market classifications:
1. Service centers and distributors down by 8.6%
2. Automotive up by 0.3%
3. Construction and contractors’ products down by 1.3%
4. Oil and gas down by 9.9%
AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months and year.
FMO and Alstom sign agreement to improve pellet plant
BNamericas reported that Venezuelan state owned miner Ferrominera Orinoco and French company Alstom have signed a tech support agreement to fine tune performance at the Venezuelan company's pellet plant.
As per report the 18 month agreement also aims to improve environmental protection in response to a technology modernization program underway in the iron industry. The agreement proposes training Ferrominera Orinoco personnel to improve maintenance techniques and upkeep on smoke purifying equipment.
In late 2007, Mr Balmore Luces CEO of Ferrominera Orinoco told BNamericas that the company expects to invest over USD 250 million per year to upgrade technology.
Ferrominera Orinoco has capacity to produce 25 million tonnes per year of iron ore.
Sumitomo raises nickel output in Philippine plant
Japan’s Sumitomo Metal Mining Co Ltd announced that they raised the combined nickel production at two plants in Philippines which will climb up to 22,000 tonnes a year by 10%.
Sumitomo also stated that the construction cost for the second nickel plant at Coral Bay Nickel Corp on Palawan Island have been added to USD 307 million from USD 285 million .
The production is predicted to start in April 2009 and Sumitomo owned 54%. Especially, this Coral Bay operation applies high pressure acid leach technology which can use abundant low grade latrite ores.
Thompson Creek cuts molybdenum forecast for 2008
Reuters reported that Thompson Creek Metals Co Inc has cut its 2008 production forecast for molybdenum after a pit wall slide at one of its mines, but said the group's 2007 output was higher than had been expected.
Thompson Creek, one of the world's largest publicly traded pure molybdenum producers, said that it expects its 75% share of output at the Endako mine will be between 6.5 million and 7.5 million pounds in 2008. It previously estimated output would be between 7.5 million and 8.5 million pounds.
Thompson Creek in a statement said that "This revised guidance is based on a new mine plan necessitated by a pit wall slide experienced last November at the mine's Endako pit.”
The company did not change its guidance for production at its other operation, the Thompson Creek mine, keeping it at between 16.5 million and 17.0 million pounds for this year.
Thompson Creek's total production of molybdenum is now expected to be between 23 million pounds and 24.5 million pounds in 2008, compared with the previous estimate of between 24 million pound and 25.5 million pounds. For 2009, the company continues to expect its total molybdenum production will be in excess of 34 million pounds.
Taiwanese imports of billet, slabs and pig iron in January
YIEH reported that Taiwan imported 93,390 tonnes of steel billet in January up by 34% MoM and the price on average was TWD 19,080 per tonne declined by TWD 440 per tonne from December 2007.
Meanwhile, the import of slab was 411,000 tonnes, increased slightly by 1% MoM and the import price on average was TWD 16,470 per tonne up by TWD 210 per tonne as compared with that of December 2007.
The import of pig iron in Taiwan in January totaled 71,212 tonnes, decreased by 16%MoM and the import price on average was TWD 17,010 per tonne up by TWD 1,440 per tonne from last month. Besides, Taiwan exported 32,180 tonnes of steel billet in January, down by 7% MoM.
One man killed at AK Steel's Coshocton Works
It is reported that an AK Steel Corp employee was killed following an early morning accident at the plant located on Ohio 16.
According to the Coshocton County Sheriff’s Office, Mr David Wentz 38, had been fatally crushed by a coil of steel and was pronounced dead at the scene by Coshocton County Coroner Dr Robert Gwinn.
The plant processes flat rolled stainless steel. Other details were not immediately available.
Thai shipbuilding sector to get government support
It is reported that Thailand’s industry ministry and the board of investment plan to support the shipbuilding and repair industry, in the hope of making Thailand a world class shipbuilding country.
As per report collaboration on developing the industry was signaled by the signing of an agreement by the Thailand’s office of industrial economics, the Thai Shipbuilding & Repairing Association, the Finance Ministry, the BoI and Chulalongkorn University. Chulalongkorn University will initiate program to train workers for the emerging industry while the TSRA will develop a database for the shipbuilding industry. OIE would negotiate with the Industrial Estate Authority of Thailand to set up an industrial estate for shipping near the planned Southern Seaboard project.
According Ms Atchaka Brimble, GD of Industrial Economics Office, the agency sees bright prospects for the industry, which hopes to capitalize on growing global demand. The office would play a major role as an industrial preparation centre, while the BoI will offer investment incentives. She added that the agreement also called on the Finance Ministry to amend tariff rates on equipment and machinery to support the industry.
Ms Atchaka said that most shipbuilding and repair services in Thailand were undeveloped and would require large capital investment. She said there was high demand for service providers for marine transport, which had a total market value of 6.12 trillion baht in 2005. She said ''We hope high demand in the global market will benefit our new service sector.”
Under the agreement, the state and private sectors will jointly update the data base on Thailand's shipbuilding and repair activities.
In 2006, the shipbuilding and repair industry enjoyed satisfactory growth with a total shipbuilding value of THB 3.81 billion and the repair value of THB 2.01 billion. This year, the value of shipbuilding is expected to reach some THB 10 billion and the value of the country's repair service business to rise to THB 5 billion.
APM to receive Karachipampa plant
BNamericas reported that Bolivia's government will hand over control of the Karachipampa metallurgical plant in Potosí department to Canada's Atlas Precious Metals on February 20th 2008. Karachipampa will start operating within 10 to 12 months with production scheduled to begin in 2009.
A mining ministry spokesperson told BNamericas that "It has been confirmed that the guarantee will be delivered to the government this Wednesday and physical control of the plant will be issued at the same time adding that the transfer ceremony has already been organized.”
The spokesman said that "We expect President Evo Morales to be present.”
Comibol and Atlas Precious Metals signed a 35:65 JV agreement in June 2005 to reactivate the 51,000 tonne per year Karachipampa plant for treatment of silver based concentrates with traces of zinc. Atlas Precious Metals has prepared the USD 850,000 guarantee to Bolivian state miner Comibol in exchange for the right to reactivate the lead-silver smelter under its own management. The project calls for a total investment of USD 174 million.
The Karachipampa plant was completed in 1983 at a cost of USD 500 million but has never been put into production because of what have been called conceptual errors in its design.
Duluth Metals options key infrastructure land parcel
Duluth Metals Limited announced the signing of an exclusive option to purchase a key piece of infrastructure land called the Dunka Pit from Cliffs Erie LLC, a subsidiary of Cleveland Cliffs Inc. The acquisition of this strategic land parcel which is in close proximity to the Duluth Metals Nokomis Deposit would meet a two fold objective of providing a location for offsite processing, while fulfilling Duluth Metal's commitment to environmental stewardship through use of an existing brownfield/industrial location.
Dr Henry J Sandri president & CEO of Duluth Metals said that "The potential use of Dunka is an excellent example of the re utilization of former ferrous mining sites as processing plant locations. The recycling of existing ferrous mining sites takes advantage of brownfield locations that have limited use, reduces the future disturbance of area lands and, under new regulations, can ensure that the eventual sites are reclaimed to existing environmental standards. The anticipated acquisition of Dunka will meet Duluth Metals' objective of locating off site processing and re-using an existing brownfield/industrial location.”
Dunka is a former iron ore / taconite open pit mine located at the northeastern tip of the Mesabi Range iron ore deposits. Dunka was mined first by Erie Mining Company and then later by LTV Steel Mining Company until 1994 and Dunka's ore, along with five other mines, was shipped to the beneficiation facilities at Hoyt Lakes, Minnesota for processing into pellets. CE acquired Dunka along with other LTVSMC properties and operations when it purchased the LTVSMC assets in 2001. The Dunka assets include approximately 1,845 acres, including three interconnected previously mined iron ore pits, rock berms, adjacent lands, access routes, rights-of-way, infrastructure and utility corridors, and operational facilities, including a water treatment plant.
Duluth Metals Limited is a Canadian Corporation committed to the exploration and development of copper, nickel and platinum group metal deposits within the rapidly emerging Duluth Complex mining camp in northeastern Minnesota of USA.
ZCCM extends deadline for bids to buy Maamba stake
Bloomberg reported that ZCCM Investment Holdings Plc, the state owned Zambian mining company, extended the deadline for the submission of bids to buy a stake in Maamba Collieries Ltd.
Mr Joseph Chikolwa CEO of ZCCM said that the closing date was extended to March 28th 2008 from February 28th 2008 because of logistical problems caused by flooding in the southern African country.
Zambia's government last year transferred its 100 stake in Maamba to ZCCM to enable it to secure funds to recapitalize the mine. Once the stake is sold, the government plans to retain a stake with the rights to appoint a director to sit on the company's board.
Maamba, the southern African country's largest coal miner suspended operations in September after creditors seized mining equipment. Zambia is Africa's largest copper producer and about 90% of Maamba's output is used by mining companies.
STX Pan Ocean wins USD 273 million coal shipping contract
Reuters reported that Singapore listed STX Pan Ocean has won a contract to transport steaming coal worth USD 273 million.
The South Korean dry bulk commodities shipper said that the 15 year deal, with Korea Southern Power Ltd begins in 2011 and will be a stable source of profit for the company.
Mr Roberts to join CMC Recycling
It is reported that the CMC Recycling Division of Commercial Metals Co has hired Mr Darrell Roberts as a ferrous scrap trader. Prior to joining CMC, Mr Roberts worked for eleven years with Chaparral Steel in raw materials management at both its Petersburg in Virginia and its Midlothian in Texas facilities.
Mr Roberts has been an active member of the Institute of Scrap Recycling Industries Inc for several years and currently serves as president of its Gulf Coast Chapter.
Mr Dale Schmelzle GM of CMC Recycling said that “We are very pleased to have an individual with Darrell’s experience and expertise join our ferrous scrap sales group, as well being confident that his abilities will significantly enhance our marketing effort.”
CMC Recycling is one of the largest processors of ferrous and nonferrous scrap metals in the United States.
Numsa calls for more health and safety statistics in steel industry
It is reported that The National Union of Metalworkers of South Africa has called on the government to release more statistics about accidents and occupational diseases in the iron and steel industry, saying that these sectors were some of the highest risk industries.
National Union of Metalworkers of South Africa in a statement said that "The country's iron and steel sectors are condemned as the highest risk industries in occupational health and safety, but no statistical reports have been released for the past ten years.”
Numsa stated that a 1998 accident frequency report released by the Department of Labor had shown high fatality rates and permanent disabilities in the iron and steel industries. It said that "Iron and steel remains the worst of all affected industries in the report.” it added that 8,008 total temporary disabilities were reported and that 1,257 permanent disabilities were suffered.
Numsa called on the Labor Department to finalize a review plan to ensure high reduction of the accidents and health hazard incidents. In October, the Labor Department conducted nationwide blitz inspections in the iron and steel, construction, farming and food and beverage sectors to identify employers that did not comply with labor laws.
Voestalpine to invest EUR 5 billion in Black Sea region
Sofia News agency reported that Austrian steel making group Voestalpine confirmed its plan to invest EUR 5 billion in a steel plant close to the Black Sea by 2012. But it is yet to choose among Bulgaria, Romania and the Ukraine as the location of the future investment.
As per report Austrians have directed their attention to the dynamically developing Black Sea region and they are looking for government support since the planned investment is massive and is expected to employ some 25 000 people. The factory is to be built in accordance with global environmental standards.
According to Mr Stanishev PM of Bulgaria, Bulgaria could offer close location to ports, access to the trans European railway network, excellent tax environment and qualified laborers. He also reminded that Austria is the No 1 foreign investor in Bulgaria as the Austrian financial investments occupy 26% of the market share of the Bulgarian banking sector.
Romanian media have pointed in turn that Romania would be a better choice for Voelstahlpine because the expenditures there were going to be lower, the industrial infrastructure was developing better, and the language would not be so hard for the Austrian investors compared to the languages of the two Slavic countries.
Voelstahpine has already bought two factories in Romania and has decided to invest EUR 18 million in a steel service center. Its representatives met Romanian government officials at the end of 2007. The planned factory will be constructed on a plot of 1000 hectares close to the Black Sea coast in order to lower the transportation costs.
Government Liquidators holding scrap auction in US
Recycling Today reported that Government Liquidation, the exclusive contractor for the sale of military surplus and scrap assets of the US Department of Defense, is hosting an online auction for two light and heavy steel term contracts based out of Indian Head in Maryland and Fort Knox in Kentucky.
As per release, materials under auction at Indian Head may include, but not limited to, pipes, angles, desks, chairs, cabinets, structures, rail, plate and sheet metal, drained certified refrigeration equipment, demil residue, vehicle residue, inert fired cases, inert ammo storage containers, with other ferrous and non ferrous attachments and other foreign attachments.
Materials at Fort Knox may include, but not limited to, vehicular components, braces, sheet metal, 25MM spent cartridge, 120MM base plates, links, chains, tank parts, construction material, racks, desks, chairs, shelving, file cabinets, wall lockers, wire, containers with ferrous, non ferrous and metallic foreign materials.
Online bidding begins on February 22nd 2008
SACMH to supply coal to Eskom's Camden power station
Mining weekly reported that South African Coal Mining Holdings has signed an off take agreement with State owned power utility Eskom to supply its Camden power station near Ermelo with 1.2 million tonnes of coal a year.
As per report the coal would be supplied from South African Coal Mining Holdings's 100 000 tonne per month Umlabu colliery over a period of three years, starting from April 1st 2008.
Eskom's Camden power station, which is being returned to service is about 30 kilometer from the colliery and the company said that coal would be delivered by road. The power station's first unit was commissioned in April 1967, but in 1988 half the station was mothballed with the rest of the station following suit in 1990.
Mr Karl Gribnitz CE said that "This is a significant contract for the company. Together with our controlling shareholder, Royal Bafokeng Capital, we have committed to increase our mining activity in order to increase the tonnage delivered to Eskom over the next two years.”
PSM incases prices for flat products again
Daily Times reported that Pakistan Steel Mills has, for the second time in 15 days, increased the prices of its various products from PKR 7,000 to PKR 8,000 per tonne, which the steel dealers fear may further increase prices of automobiles, home appliances and other value added products.
According to steel dealers, Pakistan Steel has enhanced prices of galvanized plain steel by PKR 8,295 per tonne to PKR 65,175 per tonne on February 15th 2008, which was PKR 56,680 per tonne on January 30, 2008.
Similarly, the rate of hot roll plate has increased by PKR 8,887 to PKR 55,458 per tonne from its previous rate of PKR 46,571 per tonne.
Prices of cold roll have been increased by PKR 7,110 per tonne to its highest level of PKR 62,509 per tonne from January 31st 2008 rate of PKR 55,399 per tonne.
Mr Qaiser Saleem marketing manager of Pakistan Steel confirmed the price increase in various steel products to Daily Times. He said that the recent hike was unavoidable because of surge in prices of raw material in international markets. He said on an average the prices of raw material used in steel making have increased by 3% in international markets.
Gazprom delegation visits Iran
It is reported that Mr Alexey Miller chairman of the Management Committee, lead a Gazprom delegation to visit to the Islamic Republic of Iran meeting with Mr Gholamhossein Nozari petroleum minister of Iran.
During the meeting the participants confirmed their interest in fortifying the mutually beneficial long term partnership between Gazprom and Iran in the energy sector.
As per report the parties discussed potential development of cooperation between Gazprom and Iranian companies in the oil and gas sector. Exploration and development of oil and gas fields as well as joint gas transportation, processing and marketing activities were named as the major areas of interaction.
The parties agreed to jointly develop two or three blocks of the South Pars gas field as well as on Gazprom Neft’s participation in an oil production project in Iran.
L&T bags USD 431 million deal in Kuwait
Engineering giant Larsen & Toubro has signed a contract worth USD 431 million as part of an upgrade of two of Kuwait's three refineries for environment friendly products. The 22 hydro crackers and de sulphurization reactors being sold will be used by Kuwait National Petroleum Co in a multi billion dollar clean fuel project.
Mr MV Kotwal senior executive VP of L&T said that "This is the largest ever order placed with a single manufacturer in the world for such critical reactors." He added that delivery will be made between May and November 2010.
Kuwait National Petroleum Co has embarked on a project to upgrade its refineries in Al Ahmadi and Mina Abdullah at a cost expected to reach about USD 5 billion. The project is slated for completion in 2011. It also plans to build a new 615,000 barrels per day refinery at a cost of close to USD 14.5 billion. It is slated to come on stream by 2012.
This will raise Kuwait's refining capacity from the current 930,000 barrels per day to around 1.4 million barrels per day. When the projects are completed, Kuwait National Petroleum plans to shut down a refinery at Shuaiba.
DIC to acquire more stakes in Japanese automakers – Report
Kyodo News reported that Dubai International Capital Llc has taken a keen interest in acquiring shares in Japanese automakers and other companies with strengths in emerging markets.
Mr Anand Krishnan COO of DIC said that it could raise its stake in the electronics and entertainment giant Sony Corporation as it maintains its focus on Japan and emerging markets in 2008 as part of plans to diversify its portfolio. He added that "Sony is a great company, which has a good market share in emerging markets. So as emerging markets grow, we believe Sony's share will rise as well."
Mr Krishnan said that "There are other companies here in Japan with a similar profile. There is every reason for us to be optimistic about some of the public equity companies here in Japan." He added that DIC plans to expand its investment to USD 25 billion to USD 30 billion in the next three to four years and that USD 5 billion of it will be made in Japan, China and India.
Shahid Rajaii terminal phase I to inaugurate on February 22
Mr Ali Reza Sateii deputy director of Ports & Shipping Organization said that the first phase of Iranian Shahid Rajaii Port Container Terminal will be inaugurated on February 22nd 2008.
It will be the port's second container terminal and will form part of the SRCT facilities in the Bandar Abbas Shahid Rajaie Port Complex. The first phase of the project will have a capacity of 1.5 million TEU.
Shipping facilities in Bandar Abbas are divided into two sections the new port named the Shahid Rajaie Port Complex through which all containers move and the old port called Shahid Bahonar.
Shahid Rajaii Port Container Terminal facilities are Iran's main container gateway, handling about 90% of the country's total throughput. It handled about 1.8 million TEUs last year. Phase one and two developments are intended to boost the port's total capacity to some 3.5 million TEUs and then 6 million TEUs.
Gulf must curb its oil demand – Report
Gulf Times reported that Middle East Gulf countries should do something about their increasing oil and gas demand. The demand of seven Gulf States, including Iran, is going to exceed 6 million barrels per day over the next few years. At such a rate, Gulf’s refining capacity may not cope with our rate of consumption which will reach nearly 30% in the next 2 years.
As per report, most Gulf states are net importers of oils, particularly of motor gasoline. Iran, Saudi Arabia, United Arab Emirates and Iraq are importing almost all finished petroleum products. Bearing in mind that Iraq is still not stable, its demand for oil in times of prosperity will be far more than that of Saudi Arabia and Iran.
There is no doubt that cheap and subsidized prices are contributing towards the fast growing demand of oil and gas which is mainly used for power and water generation and for driving cars. Cheap oil prices and cheap or free water and electricity in all of our Gulf countries are adding to billions of dollars but nobody is paying attention to our energy bills and there is no customer awareness. The picture is certainly bleak in the years to come. But again who is paying any attention.
The Gulf region should not be proud of its pattern of consumption and compare itself with China and India because they are gearing to run the global economy and they use oil and gas wisely and efficiently unlike us who are just burning it.
Pakistan’s Ship breaking witnesses new spell of growth
Daily Times reported that Pakistan’s ship breaking industry is witnessing a new spell of growth as it is pacing up its productions of steel scraps with the arrival of eight new vessels since beginning of the year at Gaddani beach.
Local ship breakers said that as many as 8 large and medium sized ships have been anchored in Gaddani dockyard during the last 5 weeks and they could generate 25,000 to 27,000 tonnes of steel scrap and other metals as the other 2 ships being under worked for the last 2 months. The new docked ships include Japanese Shanti having 16,000 tonne weight and Japanese Pink 1 having 66,145 tonne weight.
Mr Azam Malik president of Pakistan Ship Breakers’ Association said that the ship breakers have set the target to produce around 500,000 light displacement tonnage steel scraps by the end of the years as the local demand of ship billets and scrap metals have surged sharply since last year. He added that booming construction and engineering sectors have escalated demand in last five years, on the other hand, rising international prices of steel raw materials boosted industry’s need sharply.
Mr Azam said that overall demand of the country has reached at one million tonne in the country and the ship breaking industry is seeking to meet this demand. He informed that the waiver of import duties have encouraged ship breakers to enhance their production while the move of CARE system to advocate industry’s concerns have also boosted their confidence.
He added Pakistan’s ship breaking industry has been facing tough competition with their rival India and Bangladesh on the back of rising prices of ship’s import in the world, but due to high local demand it would capable to achieve the set target this year.
Mr Azam informed that in 2007, Pakistan’s ship breaking industry generated 152,260 light displacement tonnage steel and metal scraps through the dismantling of 34 various sized ships at Gaddani. However, in the last 10 years, it had noted remarkably performance as since 1999 it had produced 926,067 light displacement tonnage scraps by breaking up 64 different sized vessels. The industry had contributed PKR 3.53 billion in the national exchequer on the account of taxes and duties.
Gulf countries eying nuclear technology from South Africa
Mr Mohamed Sabah Al Salem Al Sabah foreign minister of Kuwait recently said that Gulf countries may enlist South African expertise in their plans to develop nuclear technology for peaceful purposes.
Mr Al Sabah said that Gulf Cooperation Council, which counts six Gulf states as members, had decided to embark on a nuclear program aimed at power generation and water desalination. He added that “Kuwait had a keen interest in strengthening co operation with SA.”
Ms Dlamini Zuma foreign minister of South Africa said that Kuwait is an important trading and investment partner. She added that "Kuwait is not just speculating on our stock exchange. They are putting money into long term investments and that is very important."
South Africa, which has one French built nuclear power station, is developing mini reactor technology in the form of a so called pebble bed modular reactor.
Pakistan seeks World Bank help to protect environment
Business Recorder reported that Pakistan’s ministry of environment has sought financial assistance from World Bank to initiate a project to protect environment degradation by ship breaking. The ministry is hopeful that after getting funds from the World Bank, the project would be designed in such a way that would bring positive environmental changes in the areas and its surroundings.
The report cited a government source as saying that "It is over a month now since the ministry has sent a letter to the World Bank asking for the funds for the project. As soon as a positive response is received, the ministry would start working on the project. The ministry plans to invite international experts to study the area and find out how the dismantling of ships is affecting the environment, and also see the interest of the parties involved in it."
The sources added that the scrapping of ships takes place on sandy beaches without taking measures to prevent water and soil pollution. There are few facilities for disposing of hazardous waste and materials that cannot be recycled and are usually dumped on the spot.
It may be noted that three countries including India, Bangladesh and Pakistan were given option for financial assistance for such projects. India and Bangladesh have already taken this initiative. However, Pakistan now has realized its right, therefore, it has asked for the financial assistance from the World Bank.
Iran and Russia sign MoU to synchronize power grids
Tehran Times reported that energy cooperation between Tehran and Moscow has entered a new state as the CIS Electric Power Council and Iran’s ministry of energy signed a MoU with the purpose of synchronizing electric systems.
Mr Parviz Fattah energy minister of Iran said that Iran and Russia rank high among countries having huge oil and gas reserves in the world and time is ripe for the two sides to raise cooperation in producing electricity.
Mr Anatoly Chubais director of CIS Electric Power Council said that Russian President Mr Vladimir Putin’s visit to Iran last year opened a new horizon for energy cooperation and other areas between the two countries. He added the power systems of Iran and Russia are technically very similar so that Iran’s power grid can benefit its neighbors like Turkmenistan, Azerbaijan, and Armenia.
Iran enjoys a 10% annual growth in power generation sector and a 6.8% growth in energy consumption.
Plans for Abu Dhabi aluminium smelter near completion
It is reported that feasibility studies into the construction of an aluminum smelter in Abu Dhabi are nearing completion and Abu Dhabi Basic Industries Corporation is in talks with Rio Tinto Alcan for the development of the smelter in al Ruwais, which has an estimated cost in the first phase of AED 18.3 billion.
Mr Sandeep Biswas senior VP business development at Rio Tinto Alcan said that "The pre feasibility is almost complete. This will be followed by a detailed feasibility study and the notice to proceed. We're also discussing the key commercial terms."
The smelter will be built over 3 phases, with each producing a capacity for 700 tonnes of aluminum a year. This is the second aluminum smelter planned in Abu Dhabi. Emirates Aluminum is currently constructing a 1.4 million tonne a year facility in the Taweelah Area.
Mr Biswas said that "The Middle East is fast becoming a centre for aluminum growth and bearing in mind just 5 of the planned smelters go ahead, we could be looking at producing six million tonnes of aluminum over the next few years." He added that inflation and a shortage of skilled labor and raw materials could jeopardize smelter projects unless companies are smart in their design and procurement strategies.
Naftogaz Ukrayiny to start oil production in Egypt this year
Ukrainian News Agency quoted Mr Yuriy Kolbushkin deputy head of Naftogaz Ukrayiny as saying that it forecasts a start to oil production in Egypt this year.
It may be noted that Naftogaz Ukrayiny and Egyptian General Petroleum Corporation had signed a concession agreement in December 2006 for exploration and development of oil and gas fields at the eastern portion of Alam El Shawish East.
Recoverable oil reserves were estimated by Naftogaz Ukraine subsidiary Naukanaftogaz at 73.5 million tonnes.
Ras al Khaimah hoping for Iran gas - Report
It is reported that UAE's Ras al Khaimah emirate is still hoping for gas supplies from Iran despite political pressure not to deal with Iran and a lack of progress on talks.
Talks between the emirate of Ras al Khaimah and Iran and Oman have been ongoing for years over gas from the West Bukha Hengam offshore gas field. Iran and Oman share the field, but Ras al Khaimah has a pipeline from Oman's nearby Bukha field to import gas. It hopes to extend the pipeline to receive gas from any deal between Oman and Iran to carve up West Bukha Hengam.
Mr Ruurd Abma COO of Ras al Khaimah Gas Company said that "It would be the easiest thing to drill on the Iranian side and pipe the gas through to Ras al Khaimah. Talks are still at a preliminary stage. There are political considerations and the terms of oil and gas deals with Iran are not so attractive."
Mr Abma said that Ras al Khaimah receives 30 million cubic feet per day of natural gas from the Bukha field, which it hopes to boost to 40 million cubic feet per day soon through wells drilled by RAK Petroleum on Oman's side of the West Bukha field. He added that “RAK Petroleum will start building a pipeline to link West Bukha and Bukha in May 2008.”
Ras al Khaimah is analyzing other ways to meet its energy demand, and considering options such as an import facility for liquefied natural gas or coal fired power plants. Rakgas is also exploring for gas in eastern Tanzania.
Rosneft Stroytransgaz to begin Algerian oil extraction in 2011
Mr Viktor Khristenko industry & energy minister of Russian said that Rosneft Stroytransgaz Limited will be able to start oil extraction in Algeria in 2011. He added that "Rosneft, in cooperation with Stroytransgaz, confirmed the beginning of commercial oil production at two fields in Algeria. This means that work at these fields will start this year, and oil extraction at these fields will begin in 2011. Oil extraction will amount to 3.5 million tonnes and more."
Mr Khristenko said that Russian Algerian energy cooperation is developing systematically and successfully. Stroytransgaz has been intensively building a gas transportation infrastructure. He added that “Considering the plans of our Algerian colleagues for the near term and Stroytransgaz's positive image in Algeria, one can hope that in the future this company will actively participate in these projects."
Earlier reports said that Rosneft Stroytransgaz Limited won the first international tender for hydrocarbons exploration, development and extraction at Gara Tisselit in Algeria. It has a 60% stake in the project, while the remaining 40% belongs to Sonatrach of Algeria.
Block 245 South, with an area of 6,548 square kilometers, is located in the Eastern part of Algeria, in the oil and gas rich Illizi Basin, and is one of the most promising oilfields in Algeria.
Alba plans to boost production by 40% to meet demand
Gulf News reported that Aluminum Bahrain is working on a plan to boost production capacity by about 40% to benefit from rising aluminum demand. Alba currently produces 860,000 tonnes of primary aluminum per year but has scope for adding 350,000 tonnes at its plant.
Mr Barry Marshall GM for business development at Alba said that "It depends on getting gas supplies. We are discussing it with a lot of people. We have scope for 350,000 tonnes more and are working on a plan."
Mr Marshall said that Alba is looking to expand abroad through JVs in the Middle East and North Africa region.
Alba supplies 46% of its output to the local Bahraini market and exports the rest is exported.
US ITC to initiate AD case against Chinese SS pipes
It is reported that US Commerce Initiates Antidumping and Countervailing Duty Investigations of Circular Welded Austenitic Stainless Pressure Pipe from the People’s Republic of China. As per report on February 20th 2008, the Department of Commerce announced its decision to initiate antidumping and countervailing duty investigations on imports of circular welded austenitic stainless pressure pipe from the People’s Republic of China.
The US International Trade Commission is scheduled to make its preliminary injury determination on or about March 17th 2008. If the ITC determines that there is a reasonable indication that imports from China are materially injuring or threatening material injury to, the domestic industry, the investigations will continue, and Commerce will be scheduled to make its preliminary CVD determination in April 2008, and its preliminary AD determination in July 2008.
The merchandise covered by each of these investigations is Circular Welded Austenitic Stainless Pressure Pipe not greater than 14 inches in outside diameter. This merchandise includes, but is not limited to, the American Society for Testing and Materials A 312 or ASTM A 778 specifications or comparable domestic or foreign specifications. Circular Welded Austenitic Stainless Pressure Pipe is a commodity product generally used as a conduit for liquids or gasses.
Circular Welded Austenitic Stainless Pressure Pipe is classifiable under subheadings 7306.40.5005, 7306.40.5040, 7306.40.5062, 7306.40.5064, and 7306.40.5085 of the Harmonized Tariff Schedule of the United States. It may also enter under Harmonized Tariff Schedule of the United States subheadings 7306.40.1010, 7306.40.1015, 7306.40.5042, 7306.40.5044, 7306.40.5080, and 7306.40.5090.
Bristol Metals, Felker Brothers Corporation, Marcegaglia USA Inc, Outokumpu Stainless Pipe Inc and the United Steelworkers of America are the petitioners for these investigations.
CCCMC denies accusation made by Alliance for American Manufacturing
China Chamber of Commerce of Metals, Minerals & Chemicals Importers and Exporters has denied the claims of a US study released in January 2008, which stated that massive government energy subsidies had fueled Chinese steel exports.
According to a statement from CCCMC, the accusation that China had supported its steel industry with energy subsidies of USD 27.1 billion from 2000-07 was groundless and deviated from the truth. It said that "The surge in China's steel output and exports in recent years has been totally driven by the need for steel products in China and importing countries for their economic growth."
The study commissioned by the Alliance for American Manufacturing has provided new ammunition for US steel companies that are pressing for tough measures by Congress against China's steel products.
Responding to foreign complaints about cheap Chinese steel, the CCCMC statement attributed the competitive edge of Chinese steel products to its low labor and management costs, rather than government subsidies. It added that, with raw material prices and labor costs increasing, export prices for China's steel products had jumped by 263% over the past 7 years and were still rising.
The statement also said that China had developed its steel industry for the purpose of satisfying domestic demand, not for exports. China had plans to phase out 100 million tonnes of obsolete iron capacity and 55 million tonnes of steel capacity by 2010. It added that “Anti dumping and anti subsidy investigations launched by the United States against Chinese steel products would not help solve trade problems, nor would it favor the US steel industry and consumers.”
Chinese construction steel prices see strong rebound
Mysteel reported that rebar and wire rod prices have picked up again following two month long downward correction, which started from early December 2007. It is believed to the start of another round of increase.
On Shanghai market HRB335 20mm rebar prices have surged up to CNY 4500 per tonne to CNY 4510 per tonne while that for HRB400 20mm are being offered at CNY 4600 per tonne increased to CNY 160 per tonne and CNY 130 per tonne to CNY 150 per tonne. Commercial and hi speed wire rod prices have skyrocketed by CNY 160 per tonne to CNY 190 per tonne to CNY 4550 per tonne and CNY 4650 per tonne respectively.
As per report, following factors are contributing to this situation
1. Construction steel market is in a cost push environment.
Most Chinese steel makers are dependent on the overseas iron ore and they have to import more to carry out the increase in output even at the cost of being ripped off. While some believe that China's explosive growth in steel production has put a strain on the world's ability to supply iron ore.
2. Robust demand
China has invested a lot in its infrastructure construction and this could ensure that most of the added output could be consumed. In addition, the ongoing urbanization; hot real estate industry and massive railway and subway construction nationwide would lead to better demand, which is believed to the major driver of price rise.
3. Slow growth in supply
On the one hand, the improving input cost is limiting the growth in output. Some smaller producers have to close off in face of sky-high raw material prices. On the other hand, there is not much increase in rolling capacity in rebar and wire rod, while some mini or smaller steel makers are forced to wash out on account of higher environmental protection thresholds. As a result, there is no need to worry about oversupply
4. Rejuvenation of international market prices
The swift increase in the United States, Europe and Middle East along with the high market price level in South East Asia has reduced the impact of export tax tariff. Most steel producers still set aside part of allocation for exports so that they would not lose their overseas customers. Anyway, there is likelihood that strong exports would resume as long as there are enough big price gaps.
At the same time, rebar export offers are prevailing at USD 760 per tonne FOB up and it is expected to approach USD 780 per tonne to USD 800 per tonne FOB in the near future, reflecting the updated domestic prices.
Wire rod offers are being raised to USD 760 per tonne to USD 770 per tonne FOB and there is strong likelihood that it will aim at USD 800 per tonne FOB sooner or later. Some steel makers and traders are assuming special skills and tricks so that they could save most part of the export tariff or even enjoy tax rebate. Those 6.5mm to 8mm SAE1008 wire rod with boron element is being quoted at USD 750 per tonne to USD 760 per tonne FOB.
Chinese HR export offer jump up after domestic increase
It is reported that hot rolled steel coil export offer have gone up again on account of surge in domestic market price. The 65% hike in iron ore benchmark price for 2008 fiscal year between Vale and Nippon Steel & POSCO along with the expectation of substantial rise in Baosteel's ex works price for Q2 has stimulated the market and led to the surge in prices.
On Shanghai market, commodity grade HRC in 4.75 mm to 11.5mm thickness and 1500mm width is being quoted at CNY 4900 per tonne, 1800mm width at CNY 5080 per tonne an increase of CNY 200 per tonne from the level before Chinese Spring Festival. While price for 2.75mm HRC has improved to CNY 5120 per tonne.
Export offers for commercial HRC are prevailing at USD 740 per tonne to USD 750 per tonne FOB up by USD 15 per tonne to USD 20 per tonne from early this month. It has almost approached our forecast level of USD 750 per tonne to USD 760 per tonne FOB.
How 65% ore price hike to affect steel industry?
According to Mr Zeng Jiesheng analyst for Mysteel 65% hike in iron ore prices will effect steel market and producers of China seriously.
He outlined the following effects
1. 65% hike on the term ore price is set to hurt sentiments of the market players and lead to steel price rises accordingly. Baosteel is reportedly revealing the ex plant price for second quarter, mainly with an upward trend. The traders keep also confident to push up the quotations and would rather not to sell if the price isn't high enough.
Though the downstream users were hesitating faced with consistent price rise, they tend to pick up purchase activities now. Underpinned by firm raw material cost, the steel prices are believed not to drop substantially despite possibility of declining following the surges.
2. The Chinese steelmakers are likely to face toughest situation this year since 2000, with thinning world economy, steep material costs, reinforced elimination campaign, raised export tax and frequent AD investigations. Margins for the steelmakers would be squeezed mainly by spiking costs of the raw materials, especially iron ore and coking coal.
And the effects should differ in degree for different companies:
a) For those who have no self owned iron mine and majority ore requirement fed by term import, calculated to take up 5% of the nation's total pig iron output, per tonne pig iron cost is about to rise CNY 376.6, or CNY 441 including vat. Mainly big sized, these enterprises are believed with strong acceptance though.
b) For those who have no iron mine and all ore requirement met by homemade and imported spot resource, accounting for 25% of total pig iron output, per ton pig iron production cost may gain CNY 300. They are already under heavy cost pressure and unlikely to endure too much more.
c) For those who have no iron mine and required ores sourcing from term contract, spot market and homemade resource, taking up 30% of pig iron output, the cost gain would lend similar effects with previous two groups. Often possessed with limited term contract, they pressure is more close to the second type.
d) Those who own ore mines with part of requirement fed by contracted and spot import occupy 40% pig iron production. A few of these enterprises that have over 50% ores self supplied would be affected less compared to those with lower self sufficient rate.
3. Following the term ore price rise should be hike on the spot market of India, and then at China’s domestic market as well. Given already high level, the spot price is believed to rise at a narrower than the term price magnitude while Indian government is likely to pick up export tax and aggregate the tight condition.
The climbing cost would result in purchase suspension and import drop in short term, but as the demand remains firm, this year's total imports are expected to move up than last year.
Chinese billet export in 2008 may fall by 15%
According to the China Iron and Steel Association, Chinese steel billet export will go into a downwards trend in 2008 and the figure is expected to reduce by 15% than 2007.
China’s steel billet export hit a record high in 2007 due to the strong demand in the globe. China’s steel export is expected to reach 62 million tonnes in the previous year. The export of billet is projected to hit 6.5 million tonnes while the import of steel product is around 17 million tonnes.
WISCO production cost in 2008 to go up by CNY 3.5 billion
Wuhan Iron and Steel Corporation has estimated that its production cost in 2008 will increase by CNY 3.5 billion and will account for one third of its profit in 2007.
An official responsible for iron ore from WISCO said that the 65% hike would push iron ore price up by over CNY 800 per tonne. The group plans to use 20 million tonnes of iron ore in 2008. Despite some long term contracts, total cost will rise by CNY 3.5 billion, representing one third of the steel maker's profit in 2007.
Chinese iron and steel industry to face high production cost in 2008
China Iron & Steel Association said that Chinese iron and steel industry has entered a high production period in 2008 and that it should strengthen the control of production cost and raise competitiveness.
CISA said “Chinese steel enterprises are under double pressures of higher production cost and short capital in 2008. In order to survive and to develop in intense market completion, we should carry out effective measures to restrict the hike of production cost and make capital active.”
It said that “Analyzing production cost in steel enterprises, the carryover of steelmaking pig iron price would increase the production cost by around 25%. Carryover effects of metallurgical coke, imported iron ore and domestic iron ore are 23.6%, 37.5% and 63.8% respectively.”
It added that “China reduces export tax rebate on steel products and levies export tax, which would increase the cost by about CNY25billion if China exports 50million tons of steel and billets in the whole year. Meanwhile, labor cost, period charge and capital cost in steel companies are also rising up.”
Baosteel’s EG pass authentication test of Mercedes Benz
It is reported that the head office of Mercedes Benz has issued an authentication report recently indicating that the quality of electric galvanized steel products provided by Baosteel is good and matches the requirements of production,.
Shougang Group sales income in 2007 crosses CNY100 billion
It is reported that sales income in Shougang Group was CNY 109 billion in 2007 and it was the first time for Shougang to exceed CNY 100 billion.
As per report products structure in Shougang was further improved in 2007 and the output of key products was as high as 7.13 million tonnes up by 2.38 million tonnes YoY, taking 53.1% in total steel output. The proportion of plate and strip was 37.4% up by 18.1% points.
Shougang produced 10 series and 31 varieties of new steel products by technology innovation, including pipe lie steel, ship plate, container steel, HT construction steel, etc.
Shougang produced 1.22million tonnes of high value added ship plates in 2007 and got approvals from ship classifications in nine countries. The production scale was the top three in China.
Ezhou Steel develops continuously annealed galvanized
It is reported that Wuhan Iron & Steel Group’s Ezhou Steel has rolled out continuously annealing product from the galvanizing line of the CR sheet mill, suggesting this line can not only make galvanized steels but also continuously annealing products.
Ezhou said galvanized steel products are earning little profit this period, which drives the line to produce continuously annealing products to ensure its normal operation and hold on the earnings.
Ezhou Steel's CR sheet plant has churned out 1000 tonnes of this product, with all performance indices up to SPCC standards.
One dead and 3 missing in iron ore mine collapse in Yunnan
Xinhua reported that a mine collapse in a village near Kunming capital of southwest China's Yunnan Province, killed one miner and three others were missing.
As per report the tragedy occurred on Tuesday in Jiaoxiping village. Four miners were down the pit when it suddenly collapsed. Witnesses said that the mine owner tried to find the buried workers by dialing their mobile phones and finally detected the corpse of one miner but he was unable to reach the other miners. A witness said that "Maybe they were buried much deeper.”
The report further added that rescuing work is still under way and investigation has been launched.
China to control global shipping market
Verkehra-rundschau.de said that a research report made by Fusion Consulting show that China was eagerly to buy foreign ports, which would strengthen its controlling power on global shipping lines.
The report says that China held 56.6% of global bulk cargo wheels and small sized oil tanker transport in the Q1 of 2007 and the related contracts will last to the year of 2009.
Meanwhile, it is forecasted that China also is likely to control global shipbuilding manufactures.
Australian PM to discuss resource cooperation in China
It is reported that Mr Kevin Rudd PM of Australia plans to visit Beijing in the near future to discuss the long term resource and energy relationship between the two countries with China's leadership.
Mr Kevin Rudd was quoted as saying during an interview on Australian radio "China's long term strategic interest is to secure its own resource and energy interests into the very long term future. That has been a stated part of Chinese government policy for a long, long time. China does depend on the reliable sources of supply from Australia in a whole range of commodity areas. This will continue into the future."
Siemens commissions another HVDC transmission system in China
After successful completion of the test phase, Siemens Energy commissioned the “Guizhou-Guangdong II” high voltage DC transmission link on schedule at the beginning of January 2008. 3000 MW of electric power now flows from hydroelectric and coal fired power plants in western China over 1225 kilometers to the urban and industrial centers of Guangdong province at a DC transmission voltage of +/- 500 KV.
Siemens built the system together with Chinese partners on behalf of the China Southern Power Grid Company, a state owned energy power supply company in Guangzhou. The value of the order for Siemens was over EUR100 million.
The released said the burgeoning demand for power in China’s urban and industrial centers requires the transmission of large amounts of energy over distances of several hundred miles or more. This is only technically feasible and economically viable using high voltage DC transmission. China has increased the DC transmission voltage of future large scale HVDC transmission links to +/- 800 KV, since China’s demand for power is growing and with it the need for longer power transmission routes.
Mr Udo Niehage CEO of the Power Transmission Division of the Siemens Energy Sector said “In this time of tremendous economic growth in China, our innovative high voltage DC transmission technology is not only facilitating the efficient, environmentally friendly use of energy sources located far from centers of consumption. With our solutions, we’re also helping to build reliable, sustainable energy systems in this very populous country.”
Peabody appoint Mr Jie Li as VP of business development China
Peabody Energy has announced that it has named Mr Jie "Jay" Li VP of Business Development of China and that he will be reporting to Mr Tayeb Tahir president of Peabody China. He is responsible for expanding Peabody's business development activities in China, Mongolia and other neighboring countries.
Mr Li has more than 20 years of experience managing international and energy generation operations in China, Southern Asia and the United States, including coal-fueled, gas and hydropower energy plants.
Mr Li joined Peabody in July 2005 and most recently served as Director of Business Development for Peabody China. He spent 10 years in increasingly responsible positions with Panda Energy International and was Senior Director of Asset Management and Mergers and Acquisitions before joining Peabody. Prior to that, Mr Li managed operations in Nepal, China and in the United States for various US companies including Panda. He began his career in 1982 with the Ministry of Light Industry of the People's Republic of China.
Peabody Energy is the world's largest private-sector coal company, with 2007 sales of 238 million tonnes of coal and USD 4.6 billion in revenues. Its coal products fuel approximately 10% of all US electricity generation and 2% of worldwide electricity.
Ningbo continues to invest in port development
It is reported that Beilun district of Ningbo city in Zhejiang, an eastern province in China will continue investments in port infrastructure in 2008. It plans to carry out 42 major development projects involving port transportation, port side industry, high technology industry and social utilities.
As per report the total investment reaches USD 7.99 billion and the government will allocate USD 1.79 billion of which for developments in 2008.
Among the port transportation projects, two container terminals, a multi purpose terminal in Beilunshan and the Beilun section of an expressway had already started in February 2008. Other projects such as Guangming Terminal for dry bulk cargo, connection of an expressway, Jiangnan Road, Meishan Bridge and Meishan container terminal will start construction soon.
Investments in port side industry, hi tech and public utilities include expansion of Beilun Power Plant, two submarine cable projects, development of a iron and steel plant, a sewage treatment plant as well as a power transmission and transformation plant. Port side investments will become major economic momentum of the district.
DMKD to start construction of new BF
Dniprovskiy Steelworks has announced the initiation of construction of the new blast furnace#4. The new unit will replace blast furnace#11 which was put out of operation in 2007.
The launch of the new blast furnace is scheduled for 2009.
Accordingly to UGMK Information, the plant plans to increase output to 6 million tonnes per year.
Izhstal purchases roll grinding plant from Herkules
FIS reported that Izhstal Plant entered into a contract with Herkules of Germany on the supply of a roll turning plant with a milling device intended for roll cutting and production of sectioned steel. The contract's worth is EUR 640,000.
The report said the plant will enable Izhstal to make high precision sectioned steel and reduce manual labor and influence of human factor.
SUEK boosts coal exports 9% in 2007
Interfax reported that Siberian Coal and Energy Company boosted coal exports 9% in 2007 to 25.8 million tonnes.
Overall coal sales increase by 4% to 89 million tonnes. Coal sales in Russia rose 2% to 63.2 million tonnes, including 45.6 million tonnes to power plants. Coal production grew by 1% to 90.9 million tonnes.
The report said SUEK exported most of the coal to Britain, South Korea, Japan, the Netherlands and Finland.
SUEK is Russia's largest coal producer, accounting for about 31% of the energy coal supplied to the domestic market and roughly 25% of Russian exports. The company has coal mines and branches in Siberia and Russia's Far East and is the biggest private shareholder in several power companies from these regions.
Russian export statistics for 2007
As per recent statistics, Russia has recorded following numbers for exports in 2007
Ferroalloy - 2.74 million tonnes down by 3.5% YoY
Pig iron - 5.63 million tonnes down by 5.2% YoY
Nonferrous - 0.77 million tonnes up by 6.4% YoY
Flat steel - 8.07 million tonnes down by 9.1% YoY
Iron ore - 25.50 million tonnes up by 11.7% YoY
Russia pipe sector to see overcapacity soon
Reuters reported that Russia's fast growing steel pipe industry is in danger of overheating as the country's biggest producers build more capacity than required to meet demand for oil and gas pipelines.
The report cited Mr Alexander Deineko, director of non profit industry body the Fund for Development of the Pipe Industry as saying that Russian demand for steel pipes would fall 8% YoY in 2008 after expanding by more than 9% YoY in 2007.
Mr Deineko while speaking during the Adam Smith Conferences CIS Metals Summit said that while output of large diameter pipe increases, Russia still has room for investment in production of other types of pipe, such as stainless pipes for the growing automotive sector.
He said that "In the next two to three years, the Russian pipe market can expect a period of stagnation, with the exception of certain segments. The sector stands on the threshold of over investment."
Mr Deineko said Russian demand for steel pipes rose to 8.72 million tonnes in 2007 from 7.97 million in 2006. This year, he forecast demand would drop to 8.00 million tonnes, rising gradually to 8.06 million in 2009 and 8.30 million in 2010. He said Russian production of large diameter pipes alone, excluding other types, would rise to 4.85 million tonnes this year, 5.60 million tonnes in 2009 and 6.20 million tonnes in 2010.
Metal structure plant to be built in Bryansk region
FIS reported that Stalkonstruktsiya' concern intends to build up two plants in the Bryansk region within the next 2 to 4 years a metal structure plant and oil refinery. Total investments into the projects will exceed RUB 12 billion.
The report said the metal structure plant will make girders and bridge spans as well as structures for ferrous and nonferrous metallurgical enterprises. Stalkonstruktsiya concern includes 12 metal structure plants and 16 assembling organizations.
RZHD and Stinnes form integrated logistic JV
It is reported that the German antitrust agency approved the foundation of JV by RZHD and Stinnes AG. The foundation of the new company is included into the strategy aimed to build the integrated logistic system to attract extra transportation from the Western Europe and China.
As per report in June 2007 the parties signed an agreement on the setting up of JV to work in the sector of the carriages and logistics and provision of proper transportation between the Western Europe and CIS. It is founded at par. The initial capital is expected to reach EUR 1 million.
The founders involve as well Transcontainer having 20%, JV Kombiverkehr and Polzug.
Kazak government to amend law for coal mining
Kazinform cited Mr Vladimir Bozhko Emergency Minister of Kazakhstan as saying that it is necessary to insert amendments to legislation of Kazakhstan on subsurface use regarding thorough chemical decontamination of coal bearing layers before starting coal mining.
He said that “It is crucial to work out a new law or insert amendments to legislation of Kazakhstan on subsurface use taking into account thorough chemical decontamination of coal bearing layers before starting coal mining.”
ESPO pipeline can be launched in October 2008
Interfax cited Mr Semyon Vainshtok former head of Russian oil pipeline operator Transneft as saying that he does not see any reason why the East Siberia Pacific Ocean oil pipeline will not be opened in October 2008.
He said that "I do not see any problems this pipeline from opening in October 2008, as originally planned."
Ukrainian GDP in January 2008 up by 4.9%YoY
Ukraine’s state statistics committee announced that Real GDP grew by 4.9%YoY in January 2008. The GDP level totaled USD 11.4 billion in January 2008.
The highest growth rates were in trade and related services 14%YoY, manufacturing 6%YoY and transport and communication 6.1%. Agriculture, education and health care stayed the same in January 2008 compared to January 2007. Meanwhile construction went down by 9.6%YoY.
The committee said we see the main reason for the substantial slow down in real GDP growth in January as being that that the entire first week of January 2008 was a national holiday related to Orthodox Christmas and the New Year. Many Ukrainian companies also extended the vacation to January 14th 2008, so the slow down in GDP is not surprising. We expect the high growth to resume this month and continue through 2008, as world prices for steel, chemicals and mechanical engineering stay high.
RZHD will invest in the energy supply.
It is reported that RZHD is planning to invest more than RUB 15.2 billion in the development of electrification and energy supply and RUB 7.7 billion will be invested in modernization of the equipment.
As per report for development of transport routes Kuzbass-North-West, Kuzbass-Azovo-Chernomorsky and Kuzbass-Far Eastern Transport Node RUB 7.5 billion will be spent. Other projects include the reconstruction of the sector Mga-Gatchina-Ivangorod, Kotelnikovo-Tikhoretskaya-Krymskaya etc.