Anti POSCO activists to stage a protest on April 1st 2008

Even as Orissa government has completed survey work for the POSCO steel project and is preparing to perform the groundbreaking ceremony on April 1st 2008, POSCO Pratirodh Sangram Samiti has said that it will organize a Vikalp Vikash Samabesh that day to oppose the foundation laying.

Mr Abhaya Sahu president of POSCO Pratirodhi Sangram Samiti said that the Samabesh would be held at Balitutha locality, close to the area earmarked for the 12 million tonne capacity steel project and those attending the rally would sing Orissa’s state song Bande Utkal Janani.

Mr Sahu has issued an appeal to those opposing displacement to attend the rally to raise their voice against company raj, forcible land acquisition and establishment of foreign territories in the name of industrial development.

As per earlier announcements, POSCO India wanted to perform the groundbreaking ceremony on April 1st 2008 as it happens to be the foundation day of their parent company POSCO as well as Orissa Formation Day. A POSCO India official said that "We are firm on our program and the groundbreaking ceremony will be held as per schedule."

Steel prices surge hurting engineering exports – EEPC

FE reported that after rupee appreciation, rise in steel prices has added to the Indian engineering exporters’ woes as it is seriously impacting engineering goods production and making exports uncompetitive.

Mr Rakesh Shah chairman of the Engineering Export Promotion Council said that between April 2007 and January 2008, steel prices increased by 10% on an average across all categories. But the recent average increase of INR 3000 per tonne has pushed prices up by 20%. This has made prices 8% to 16% higher in India compared with international market. He added that "We fear that there is cartelization within the Indian Steel industry, leading to monopolistic pricing."

Mr Shah said that EEPC has approached the Competition Commission of India but the government has not notified it as yet however, both the steel and commerce ministries had pleaded helplessness.

Mr Shah said that around 200 manufacturers, who are also exporters of engineering goods, are working to form a consortium so that they can run production with imported steel, which would be cheaper than domestic steel. He added that "EEPC is in talks with the Mineral & Metal Trading Corporation for importing and supplying to the proposed consortium."

Mr Shah concluded that in fact, for high exports of primary steel, there has been a crisis in the domestic market leading to artificial rates. China has increased import duty on steel by 25% on an average across various categories, which has not only curbed exports to the US and the European Union but also stabilized prices within China.

Binani Zinc plans to double capacity

BL reported that Binani Zinc is planning to invest INR 500 crore to double capacity from 38,000 tonnes per annum.

Mr Vinod Juneja deputy MD of Binani Zinc said that “We have zeroed in on 3 mines in Rajasthan, while the new plant will be set up between Jodhpur and Udaipur.”

He added that apart from expansions, we are planning a technology upgrade to bring down operational cost and improve profit margins. Mr Juneja said that “The future initiatives are aimed at diversifying the product portfolio by including value added products and backward integration into mining. This will make us as a quality, cost effective producer of zinc and its value adds.”

Presently, Binani Zinc has a production facility at Binanipuram in Kerala. The plant also has the capacity to treat concentrates of varying compositions.

India invites Canadian investment in mining sector

ET reported that Indian government has invited Canadian investment in India's mining sector while announcing that new mining policy to encourage foreign participation in exploration and exploitation of minerals and metals will come out soon.

Ms Ajita Bajpai Pande joint secretary in union ministry of mines, while addressing at International Conference of Prospectors and Developers Association of Canada, said that "India seeks increasing presence of Canadian companies in the mining sector as it is the world leader in mining sector."

Ms Pande added that India has stepped up efforts to attract foreign investment in mining sector and the new mining policy that would be based on security of tenure, segmentation and unbuilding, seamlessness, sustainable development, global reporting initiative and mining infrastructure development would be announced soon.

Ms Sandra Pupatello Ontario minister for economic development said that the province would send a delegation to India in November 2008 to look into the prospect of investments in the country's mining sector.

India's top 20 public and private sector mining companies, the Geological Survey of India and the Botanical Survey of India participated in the conference that was attended by over 2,500 delegates from all over the world.

SCI may ink shipbuilding JV with South Korean STX

Livemint reported that Shipping Corporation of India Limited is in talks with South Korean shipbuilder STX Shipbuilding Co Limited for a JV even as India looks to scale up its shipbuilding capacity to tap into a global shipbuilding boom.

Mr S Hajara CMD of SCI said that ''SCI has started discussions with STX for a JV shipyard in India, but nothing has been finalized as yet.''

As per report, STX has filed expression of interest to develop, construct, operate and manage the proposed mega shipyards on India's eastern and western coasts. The exact locations of the two yards are yet to be decided. The two shipyards proposed by the government will have a capacity to build and repair ships, initially, of up to 175,000 DWT. The yards can be expanded further to construct ships of up to 300,000 tonnes, which may be container ships, liquefied natural gas carriers, very large crude carriers and large dry bulk cargo ships. The yards will also be able to repair and refit about 70 to 80 ships of different types in a year.

STX Shipbuilding has facilities in Busan and Jinhae in South Korea, Dalian in China and is also building a new yard in Vietnam.

It may be noted that union government plans to build 2 international size shipyards, one each on the east and west coasts, with investments from private firms to boost India's shipbuilding capacity as part of its USD 12.4 billion national maritime development program.

Indian shipyards currently have the capacity to build ships with a combined cargo carrying capacity of 2.8 million tonnes a year. This is small by global standards. India has 23 shipyards, 7 of which are owned by the centre and 2 by state governments. The other shipyards are owned by private firms, including ABG Shipyard Limited, Bharati Shipyard Limited, Larsen & Toubro Limited and Pipavav Shipyard Limited.

NTPC to start captive coal production in 2009-10

It is reported that National Thermal Power Corporation Limited may start coal production from captive blocks in 2009-10.

Mr BP Singh executive director of NTPC said that it will start production of coal from its mines in 2009-10 and expects to boost annual output of the mineral to 70 million tonnes annually in next 8 years.

Mr Singh said that NTPC, which owns 5 mines, expects to start with production of 3 million to 4 million tonnes a year. The estimated spending on mining is still being worked out.

Union finance ministry in a report last month said that NTPC needs additional coal supplies to meet its target of almost doubling capacity to 51,000 MW in the next 4 years.

NHPC to become 10,000 MW plus in 5 years

PTI reported that National Hydroelectric Power Corporation will double the power generation to become a 10,000 MW plus corporation by 2011-12 envisaging an investment of INR 28,000 crore.

Mr SK Garg CMD of NHPC said that "We currently have a capacity of 4,700 MW with work on 13 projects going on in full swing. We shall be commissioning all the projects without time and cost overruns. This is all being done with internal accruals, debt funding and public offering in the near future."

Elaborating on the plans, Mr Garg said that government support was discontinued since 2007 and all projects ongoing and in the future would be funded largely from the internal accruals and debt financing.

On the status of India's largest hydel power project of 2,000 MW in Arunachal Pradesh, he said that work on dam's construction will start by December 2008, while power house work was already on. He added that "As committed, we shall commission this project in 2011-12, while rest of the 12 projects in next 3 years."

Asked details of INR 28,000 crore investment, Mr Garg said that about INR 4,800 crore would come from internal accruals and it has already signed an agreement with Power Finance Corporation for INR 3,000 crore in addition to INR 1,000 crore to be signed soon. Besides, NHPC has two lines of credit from Life Insurance Corporation for INR 9,000 crore.

On the public offering, he said that "We are waiting for appointment of independent directors and as soon as this is done we shall hit the market in no time as all preparations have been done."

PMO deferred iron ore export duty proposal in Budget - Report

BL reported that union steel ministry’s proposal of imposing export duty on iron ore on an ad valorem basis in place of the current specific rate of customs duty did not go too well with the Prime Minister’s Office due to stiff resistance from commerce ministry, although it was accepted by union finance ministry.

The report cite a senior government official as saying that the issue was taken up at a pre budget cabinet meeting a couple of days before the Budget was to be tabled in Parliament and since there was no consensus on the matter especially from the commerce and mines ministries, it had to be removed.

The official said that “The finance ministry was keen that the export duty on iron ore be imposed at 15% ad valorem. But since there was no consensus on the issue, Prime Minister intervened and asked the proposal to be removed from the Budget till a consensus was reached.”

Even, Mr P Chidambaram union finance minister, in his post budget press conference admitted that since there was no consent from commerce and mines ministries on the matter, the export duty on iron ore was not tinkered with and the government decided to continue with the specific rate of duty that was imposed in 2007.

According to officials in the steel ministry, since the imposition of an export duty of INR 300 per tonne during the current fiscal, the spot prices of iron ore had undergone a significant change. The ministry also felt that since there have been cases where in higher grades of iron ore was blended with lower grades to pay a lower export duty of INR 50 per tonne, an ad valorem duty instead of the current specific rate of customs duty was the best way to address the issue.

DGS forms 3 sub groups to promote coastal shipping

Exim News Service reported that, to promote the growth of coastal shipping, Mr Kiran Dhingra director general of shipping has formed 3 sub committees consisting of members of the Indian Coastal Conference, Indian National Shipowners’ Association and the Indian Register of Shipping.

As per report, each of the 3 committees has been given different assignments. One committee will look into construction, design and equipment for all weather vessels up to 20 nautical miles. Mr Suresh Kumar a DGS official will coordinate the activities of this panel.

The second panel has operation, survey and certification in manning, training and ISM as its responsibility and Mr D Kapoor will coordinate this 5 member group.

The third panel will address the legal framework and role making, including review of the existing provisions of various acts relating to the segment. Mr H. Khatri of the DGS has been given the responsibility of coordinating this panel’s activities.

NTPC to set up power projects in Mozambique

It is reported that National Thermal Power Corporation Limited is planning to set up power projects in Mozambique in an effort to ensure a steady source of coal to feed its power plants in India. This move is similar to the model NTPC has adopted in Nigeria and Yemen, where it is setting up power plants and, in return, getting gas and coal blocks.

A senior NTPC executive said that “We have had preliminary discussions in this regard with the Mozambique government. We hope to use our expertise in setting up power projects as leverage for securing coal blocks there.”

Coal is critical for NTPC, as more than 80% of its installed power generation capacity of 27,404 MW is coal based. NTPC proposes to add another 15,180 MW of coal based power generation capacity by 2012, out of a total of 50,000 MW that it plans to add in this period.

NTPC has an overall demand of 115 million tonnes per annum of coal and imports 4 million tonnes per annum of coal to meet its overall requirement. Its coal consumption is expected to surge to between 185 million tonnes and 200 million tonnes a year by 2017 on the back of expansion plans.

UNDP report on carbon emissions in India

Mr Namo Narain Meena, union minister of state for environment & forests, in a written reply to a question by Mr Prabodh Panda in Parliament, said that according to Human Development Report of the United Nations Development Program, India, as a developing country, does not have any mitigation commitments, nevertheless, a sustainable development path is being followed through a range of policies and programs to mitigate climate change and reduce carbon emissions.

The report has recommended developing a multilateral framework for avoiding dangerous climate change under the post 2012 Kyoto Protocol that includes inter alia

i) Agree to global sustainable emissions pathway aimed at 50% reductions of greenhouse gas emissions by 2050 from 1990 levels

ii) Targets under KP implemented by developed countries, with a further agreement to cut greenhouse gas emissions by at least 80 percent by 2050, with 20% to 30% cuts by 2020

iii) Major emitters in developing countries to aim at an emissions trajectory that peaks in 2020, with 20% cuts by 2050

Update on maritime boards in states

Mr TR Baalu union minister of shipping, road transport & highways recently said that under the Indian Ports Act 1908, responsibility for development of non major ports vests in the respective state government.

Mr Baalu said that maritime boards are set up and funded by the maritime state governments for the development of non major ports and sectors related thereto.

He added that out of the 9 maritime states, only Gujarat, Maharashtra, Tamil Nadu and West Bengal have so far set up the maritime boards.

Power generation from captive power plants in India

Mr Sushi Kumar Shinde union power minister said that according to the information available with the Central Electricity Authority, the generation capacity of captive power plants of capacity more than 1 MW was 21468 MW as on March 31st 2006 and 22335 MW as on March 31st 2007.

Mr Shinde said that during the year 2005-06, 5364.74 million units of electricity have been exported by these captive power plants to the utilities. No sanction is required under the provisions of the Electricity Act 2003 for setting up captive power plants. He added that centre has taken various legislative, policy and administrative measures to facilitate captive generation and utilization of surplus capacity.

He said that National Electricity Policy, notified in February 2005, emphasizes the need for bringing surplus capacity available with a large number of captive and standby generating stations in India to the grid continuously or during certain time periods. Tariff Policy, notified in January, 2006, recognizes that captive generation is an important means to make competitive power available and urges the Electricity Regulatory Commissions to create an enabling environment that encourages captive plants to be connected to the grid.

Mr Shinde further added that the conference of chief ministers on power sector held in May 2007, under the chairmanship of Prime Minister, has resolved to facilitate captive power plants to provide the spare generating capacity to the grid and strives to do away with restrictive levies, duties and regulations in a time bound manner.

Under the Electricity Act 2003, captive power plants, including group captive, have been freely permitted. The Act provides that any person may construct, maintain or operate a captive generating plant and dedicated transmission lines. Under the provisions of the Act, every person, who has constructed a captive generating plant and maintains and operates such plant, shall have the right to open access for the purposes of carrying electricity from his captive generating plant to the destination of his use subject to the availability of transmission capacity.

Dalmia Cement signs 1 year supply deal with BHPB for SA coal

It is reported that Dalmia Cement has signed a 12 to 18 month long supply contract with BHP Billiton for 10 cargoes of South African coal. Cargill is providing freight for the deal and deliveries will begin in April 2008.

Dalmia Cement is one of the Indian cement makers which prefer South African coal quality over Indonesian imports.

It may be noted that Indian cement makers have avoided long term supply contracts for South African coal during the past 2 years, when imports and prices have surged.

Indian potential of small hydro & wind power - 60,000 MW

It is reported that the potential of small hydropower projects and wind power in India together are estimated at 60,000 MW. Out of this, small hydro power is estimated at 15,000 MW and that of wind power is 45,000 MW in India.

Union ministry of new & renewable energy is responsible for the subject of small hydro up to 25 MW. The ministry is encouraging development of both small hydro power and wind power in India through various fiscal and financial incentives. So far, small hydro power projects of 2061 MW and wind power projects of 7940 MW have been set up in India.

The ministry is providing central financial assistance for the setting up of small or mini hydropower projects both in public and private sector. Central financial assistance is also given to community or individual watermill owners for development and up gradation of watermills for mechanical as well as electricity generation. Central financial assistance is to meet 75% of the project cost limited to INR 30,000 per water mill for mechanical application and INR 1 million per water mill for mechanical and electrical applications.

As per Central Electricity Authority, the total hydroelectric power potential in India is assessed at about 150,000 MW equivalents to 84,000 MW at 60% load factor.

Merrill Lynch revises forecast for thermal and coking coal

Merrill Lynch has raised its forecasts for contract prices of coal for power plants and steel mills in 2008, predicting that prices will jump by as much as 200%, after recent supply disruptions resulted in a severe global shortage.

Merrill Lynch in a research note released on weekend said that “Contract prices for coking coal are expected to reach a record high of USD 300 a tonne, a 3 fold rise from an agreed price of USD 98 last year, amid a supply apocalypse following recent weather-related supply disruptions in Australia. And Japanese utilities may need to pay miners in Australia USD 135 a tonne for coal contracts in fiscal 2008 beginning April up by 143% from last year's agreed USD 55.65.”

Merrill Lynch in a report led by Mr Vicky Binns said that “There is now an obvious scramble for supply with industry sources confirming that Asian steel mills are begging for tonnes at close to any cost. Under current market conditions, spot prices reflect the hysteria of the supply shortage and therefore spot appears a reasonable guide for contract settlement."

Merrill Lynch had previously forecast 2008 thermal coal prices at USD 80 tonne.

Mr Zaleski eying ArcelorMittal Gandrange - Report

Reuters reported that Mr Romain Zaleski told a French newspaper on Sunday that he is considering making an offer for ArcelorMittal's Gandrange steel plant in eastern France which the government in Paris wants to save from closure.

Mr Zaleski told Le Journal du Dimanche that “He took the decision because I am thinking about buying Gandrange via my Carla Tassara group. In Italy, we produce quality steels near Brescia but want to grow our capacity. We sell everywhere and in the special steels niche can afford higher costs of production."

Mr Zaleski last week resigned from ArcelorMittal's board and ArcelorMittal said in a statement that Mr Zaleski wanted to pursue other commercial interests in the steel sector.

Mr Zaleski was also quoted as saying by Le Journal du Dimanche that he would closely follow any moves to restructure the capital of non ferrous metals group Eramet, amid speculation that ArcelorMittal may be interested in the firm. He said "I am in Eramet for a long time. If there is a restructuring, I will look at it closely."

ArcelorMittal announced plans to stop production at Gandrange and refocus the plant on processing steel made elsewhere but granted a stay of execution after pressure from France's government.

Hyundai Steel may invest USD 2.4 billion in 3rd BF

Bloomberg reported that South Korea's second largest steelmaker Hyundai Steel Co may spend KWR 2.3 trillion (USD 2.4 billion) to build a third blast furnace by 2015 as demand for steel used in cars and ships soars.

Mr Kim Soo Min executive VP of Hyundai Steel Co told that the new BF may produce 4 million tonnes of steel per year.

Hyundai Steel currently produces 11 million tonnes of steel from its electric arc furnaces. Output from its first two blast furnaces under construction will start from 2010 which will have a combined capacity of 8 million tonnes per year.

MMX may boost Corumba iron resources and setup steel mill

Bloomberg recently reported that Brazilian MMX Mineracao e Metalicos SA may expand iron ore resources more than sevenfold and sell steel from a new mill at the Corumba project to builders in Bolivia.

As per report, MMX is studying two deposits that are likely to contain at least 370 million tonnes of iron ore, near an existing mine outside Corumba. The existing Corumba mine has 48 million tonnes of certified resources and 32 million tonnes of proven reserves.

Mr Rodrigo dos Anjos Xavier Batista of MMX said that “We still have a long way to go to determine if these resources will be exploitable. One deposit in the process of having its resources certified has about 70 million tonnes of iron ore in place. A second property that is being explored may have at least 300 million tonnes of resources.” He described that estimate as conservative.

MMX exports ore from Corumba and feeds some to its pig iron mill nearby that has a capacity to produce 400,000 tonnes a year. It plans to start making steel at the site later this year, and plans to produce as much as 500,000 tonnes a year of rebars.

Acerinox sees SS base price improving in Q2

Reuters reported that world's SS major, Spanish steel maker Acerinox expects the base price of its stainless steel to improve in the Q2 of 2008. Acerinox said that prices and demand were both recovering well after net profit fell 38% last year on meager second half orders and hefty provisions.

Mr Rafael Naranjo CEO of Acerinox last week said that the prices of its basic products were currently around EUR 1,250 per tonne, having recovered from a decade low of EUR 950 per tonne last November and should continue improving.

He said "We have the impression that base prices are going to continue to improve during the second quarter.”

Mr Naranjo told the media that he hoped prices would rise to EUR 1,500 to EUR 1,550 in that time.

Mr Naranjo said orders in January were at their best level since May last year when nickel started to fall from a record USD 51,600 a tonne to half that price just three months later.

The effect of customers waiting for falling nickel prices to feed through into stainless steel cut demand 40% in the third quarter and its base price to a decade low of EUR 950 per tonne in November.

South Korean steel mills urged for consolidation drive

Korean steel industry was advised by the Bank of Korea last week to more actively utilize M&As for the purpose of corporate growth or integration in order to counteract against hiking raw material prices and rapidly rising China.

The Bank of Korea disclosed in a report titled “Steel Industry’s Key Characteristics and Future Tasks” on February 28th 2008 that apart from POSCO, South Korean steel firms lack significantly behind in terms of scale against Top 10 Chinese steel enterprises; individual productivity of China’s Top 10 steel companies all exceeded that of Korea’s second ranking steel maker, Hyundai Steel 10 million tons by 2006 standard.

The report conveyed that the industrial outlook expects four to five global steel corporations with production scale of over 100 million tons to emerge within the next ten years with the integration and size growing trend among steel businesses, which had substantially begun in EU during mid 1990s, being recently spread worldwide to giant steel enterprises.

The report said that boosting corporate scale through M&A not only allows heightened efficiency through economy of scale but is also essential in increasing price negotiation power caused by oligopoly in cars, iron ore and other related industries.

The report asserted that spread of nationalism in nations with resources reserved, export regulations on iron ore and coking coal are being intensified, calling for an urgent need for domestic steel firms to boost size and integrate.

In case of the automobile industry, world’s Top 3 companies had enjoyed market concentration of 35% in 2005 while iron ore firms enjoyed 73% On the other hand, this rate was mere 12.5%for steel industries.

Updated price forecasts for coal contract prices in Asia

Most of the financial institutes have revised their price outlook for both thermal and coking coal due to prevailing situation of very tight supply conditions amid a boom in demand

In USD

Amalgamated Industries and HG Metal ink strategic partnership

Bernama reported that Malyasia local steel player Amalgamated Industrial Steel Bhd is working on a strategic partnership with Singapore's HG Metal Manufacturing Ltd to increase revenue both domestically and internationally for steel pipes and steel related products.

As per report the MoU they signed recently, aims at seeing how to jointly develop and manufacture other steel products for sectors such as oil & gas, heavy engineering, water and marine industry in addition to optimizing overall steel pipe production capacity.

Mr Datuk Ghazali Mat Ariff chairman of Amalgamated Industrial Steel Bhd in a statement said that “Establishing value added services to complement the manufacturing activities is yet another aim. Once detailed discussions and a study of the strategic alliance are completed, both firms will consider the feasibility of certain forms of business collaboration.”

Mr Mat Ariff said that any business alliance should capitalize on the manufacturing expertise of Amalgamated Industrial Steel Bhd and the strong international network of HG Metal Manufacturing Ltd in a way that synergizes the respective strengths of both companies.

HG Metal Manufacturing Limited was founded in 1971 as a small retailer of steel products and is now one of the leading steel stockiest in Singapore. Since 2000, it has diversified into the manufacturing of steel products through wholly owned subsidiary Oriental Metals for manufacturing of flat steel bars, mild steel lip channels, pipes and hollow sections.

Amalgamated Industrial Steel Sdn. Bhd was incorporated initially as a private limited company in 1969 and was the first manufacturer of steel pipes in Malaysia. It was formed by a group of leading local hardware importers and consumers supported by Tokyo Boeki Limited and Kawasaki Steel Corporation. It was converted into a public company, Amalgamated Industrial Steel Berhad in 1974 and is listed on the Main Board of Kuala Lumpur Stock Exchange since 1983.

Nippon Steel outlook for fiscal year ending March 31st 2009

Nippon Steel recently released falling outlook for financial year ending on March 2009

It said that “In fiscal 2008, it will be important to continue to monitor closely the ripple effects of the subprime loan problem, but we look for the global economic expansion, led by emerging countries in particular, to stay on track and for steel demand in Japan and overseas to remain firm. Yet, we also expect increases in raw material procurement costs of an unprecedented magnitude as structural problems stemming from the burgeoning expansion of gross steel production volumes in Brazil, Russia, India, and, above all, China worsen. More specifically, we expect this rapid increase in gross steel production volumes in the BRICs to lead to even tighter supply and demand for raw materials and greater ocean freight volumes. This outlook takes into account our recent acceptance of a sharp 65% price increase for some iron ore procurement agreements, compared with the price in fiscal 2007.”

It added that “In light of the tightening supply and demand picture for raw materials and fuels, we will work to secure the necessary supplies and do everything we can to ensure we remain a stable supplier of steel products to our customers. We are carefully explaining these market conditions to all of our customers and continue to make every effort to reduce costs through in-house initiatives, and we are in talks with our customers to raise our selling prices for steel products based on supply and demand trends for steel materials and the divergence between domestic and foreign steel prices.”

Nippon also said that “In business fields outside of steelmaking and steel fabrication, we are concentrating on maximizing the improvement in our earnings by directing management resources based on the specific characteristics of each business and swift action in response to changes in the business environment.”

The release added that “The Nippon Steel Group continues to be both flexible in making investments and in enhancing and upholding the soundness of its financial position. Through the expansion of our technological edge and active expansion of overseas businesses, as evidenced by the recent agreement to build a new No. 3 hot-dip galvanizing line at Baosteel NSC Arcelor Automotive Steel Sheets Co Ltd, we are cementing our strong presence among the leaders in the global steel industry. We at Nippon Steel greatly appreciate your understanding of the conditions that currently face us and look forward to your continued support.”

Australia forecasts record commodity exports

Canberra based Australian Bureau of Agricultural and Resource Economics last week forecast the biggest gain in commodity exports in 29 years, driven by demand in Chin and as prices for its top five commodity exports, iron ore, coking and thermal coals, gold and crude oil have risen to records this year.

It said that “Sales may rise by 30% to a fifth straight record of AUD 189.1 billion in the year ending June 30th 2009 as compared with a revised AUD 145.6 billion this fiscal year and is the biggest gain since 1979-1980.”

Exports of minerals and energy are forecast to jump up by 33% YoY to AUD 153.4 billion in fiscal 2009 and earnings from energy commodities may gain 54% YoY to AUD 66.8 billion on increased volumes and higher prices for coal and oil.

French port workers suspend planned 2 day strike

It is reported that France's port and dock union, part of the CGT federation, said on Saturday that it has suspended plans for a two-day strike to protest planned reforms of French state owned ports.

In a statement, the union said it took its decision after the government offered to hold talks on Monday to try and resolve the dispute. The 48 hour strike had been due to start on March 11th 2008. It said that "Of course, if the meeting on March 10 is not fruitful then the Federation will call on all port workers to take national action in the following days.”

The government has been under pressure from the shipping industry for years to reform French ports to make them more efficient, but has delayed doing so because port workers have high union membership and frequently go on strike. French government wants to privatize the loading activities of seven out of nine public ports as part of reforms to be carried out in the spring. 7 ports are Marseille, Dunkirk, Le Havre, Rouen, Nantes-Saint-Nazaire, La Rochelle and Bordeaux.

BHPB FMG battle for rail to continue in High Court

It is reported that the legal battle over third party access to BHP's rail lines in mining areas continues with the High Court granting the company leave to appeal against a Federal Court ruling last week. The matter is likely to be heard in the High Court in July or August.

The Federal Court ruled that the rail lines are not an integral part of the ore production process.

BHP welcomed the High Court’s decision to grant leave to appeal against an earlier court judgment that went in favor of Fortescue.

A BHP spokeswoman told Dow Jones Newswires that "Our view is that the rail is part of the integrated mine rail port production process in Western Australia and we will continue to protect the interests of BHP shareholders in that rail line.

Iron ore developer Fortescue Metals Group Ltd brought the original Federal Court action, as it sought access to BHP's Mount Newman line under Australia's Trade Practices Act.

Both BHP and Rio are gearing up for substantial expansions of their Pilbara iron ore divisions and have based the plans on an ability to keep others off their tracks and out of their ports. However, both miners’ State agreements demand they haul third party ore. A WA Government working group is trying to come up with a framework under which other miners can use the BHP and Rio railways in return for paying a mutually agreed tariff.

Fortescue has declared its rail and port network open to all comers and is considering spinning off its infrastructure assets.

Siderar posts 54% increase in Q4 profits

Argentina's biggest steelmaker, Siderar SID BA reported a 54% YoY rise in fourth quarter net profit. Siderar said that its quarterly net profit was ARA 389 million (USD 123 million) up from ARA 253 million a year ago, due to higher sales volumes and prices.

The company said its total sales volume in the quarter was 669,000 tonnes, up from 600,000 tonnes in the fourth quarter of 2006. The domestic market absorbed 612,000 tonnes up by 21% YoY.

Its sales volume of 2.6 million tonnes for 2007 is a record for the company.

Siderar said that "During 2007, the construction sector grew 6.4% YoY, while industry grew by 7.5% YoY mostly due to the strong growth in the automotive sector.”

Siderar is majority owned by Ternium SA, which is controlled by Argentina's Techint conglomerate and has steel operations in Mexico, Venezuela and Argentina.

Consolidated Thompson move ahead on Bloom Lake iron mine

The Canadian Press reported that Toronto based miner Consolidated Thompson Iron Mines Ltd has struck a financing deal to raise CAD 156 million to help launch the Bloom Lake open pit iron mine in the North Shore region near Fermont in Quebec expected to operate for 34 years. The Quebec government also approved the mine last week.

Consolidated Thompson Iron Mines Ltd has struck a deal with underwriters to sell 20 million shares at CAD 7.80 each and will use the money for the Bloom Lake open pit iron mine. It has signed the financing agreement, which took about nine months to negotiate, with a syndicate of underwriters led by Macquarie Capital Markets, and including Canaccord Capital Corp, GMP Securities and RBC Capital Markets.

Mr Quesnel said that "We have already spent CAD 50 million on the project itself. We're getting very close to finalizing our requirements. The financing deal "gives us more flexibility to be able to move on and develop the mine now that we have our permits on a fast track and be able to deliver by the second quarter of 2009."

Mr Richard Quesnel president and CEO of Consolidated Thompson Iron Mines Ltd said that “This agreement positions us with a very strong balance sheet in terms of cash. We already had CAD 190 million in cash in hand. So with this financing it almost completes the financing requirement for the project.”

Consolidated Thompson had bought the property in September 2005. The mine is expected to begin operating in 2009 and produce 7 million tonnes of 66.5% iron ore concentrate per year. Following the completion of a feasibility study, Consolidated Thompson said last year that the capital cost for the mine would be about CAD 410 million.

Chinese Worldlink Resources Ltd has previously agreed to buy its entire production.

Nippon Steel to boost hiring to prepare for mass retirements

Nikkei reported that steelmakers such as Nippon Steel Corp plan to step up hiring in fiscal 2009 in a bid to stay internationally competitive by ensuring that the skills of retiring baby boomers are passed on to younger workers.

Nippon Steel in a statement said that it plans to increase overall group hiring in fiscal 2009 by 10.9% on the year to 1,065, which would top its most recent peak of 1,030 recruits in fiscal 1992. The steelmaker intends to increase hiring for its parent operations by more than 20% on the year to 715, consisting of 190 new college graduates and 525 recent high school graduates.

With about half of steel mill employees expected to retire over the next 10 years, Nippon Steel aims to make sure that their skills are handed down to the next generation of workers. It will also expand the number of post-college and graduate school hires for technical positions by about 50% on the year to 145.

Other steelmakers, such as JFE Holdings Inc unit JFE Steel Corp are looking to recruit 150 new college graduates and around 500 high school graduates. Sumitomo Metal Industries Ltd and Kobe Steel Ltd plan to keep their hiring of college and high school graduates around the same level as fiscal 2008. The four major steelmakers are expected to hire around 2,500 workers combined, which would be the highest level since the roughly 3,500 hired in fiscal 1993.

Iron ore price negotiations – US Steel 2003 decision to pay off

US Steel Corp's decision five years ago not to sell its massive iron ore mine in Minnesota and instead to acquire another mine is likely to pay dividends as its European and Chinese competitors face huge price increases for iron ore used in steelmaking.

Mr Mark Liinamaa an analyst with Morgan Stanley in New York AMM recently that "US Steel, which produces 100% of its domestic iron ore needs in house, stands to benefit most from the larger than expected rise in iron ore prices.’

Before US Steel bought National Steel Corp. in April 2003, it planned to sell its Mt Iron mining operations, known as Minntac, along with its Clairton Coke Works and transportation facilities, to a New York City private equity firm. But, as part of its deal to reach a labor contract with the United Steelworkers at National Steel's mills and mines, US Steel dropped plans to sell its own iron ore mines and agreed to buy National Steel's Keetac operations.

US Steel now is planning to invest more than USD 300 million in its Keetac facility in Keewatin to boost production and to support the long term viability of its Minnesota iron ore operations. The 3 year program includes buying more mining equipment and installing more processing equipment at Keetac.

South Korea to form a price monitoring task force

South Korean government last week announced that it has set up a task force to closely monitor prices hikes and unfair businesses practices. As per report the inter governmental task force, chaired by Mr Choi Joong kyung vice finance minister will focus on preventing sharp price hikes for fuel, agricultural products and various industrial materials including scrap metal and steel beams.

Mr Yim Jong yong head of the ministry of strategy and finance's economic policy bureau said that "After adopting free market prices in 1994, the government can only influence about 16% of all prices with the rest being determined by the private sector.”

He added that the task force, which comprises experts from the Financial Ministry, Agriculture Ministry, the Fair Trade Commission and other government departments, will focus on devising plans to streamline the overall distribution system, consider opening the market to cheaper imports and deal with market failures like hoarding and illegal price rigging.

South Korean Finance Ministry said will crack down on people attempting to accumulate stocks of steel scraps and bars to prevent speculative demand and stabilize prices of those products. The move applies to producers and retailers of steel products, including electric furnace operators, as well as builders, as the construction industry is suffering from a shortage of reinforcing steel bars.

It said that "The soaring prices and unstable supply and demand of steel bars seem to be related to unfair trade activity such as cornering and hoarding practices by retailers and builders, along with higher raw material prices. We will sternly deal with profiteering in cooperation with relevant ministries."

Teck Cominco wants to add iron to its portfolio

Adding iron ore assets to Teck Cominco Ltd's diversified resource portfolio would be a particularly good fit, especially because of its metallurgical coal division.

Mr Don Lindsay president & CEO of Teck Cominco last month while speaking at the BMO Capital Markets 2008 Global Metals and Mining Conference in Hollywood said that "If you have iron ore, you are a stronger strategic supplier to a customer of coal.” He used the example of BHP Billiton Ltd, which uses its iron ore product as a carrot for customers looking for coal.

Mr Lindsay said that, especially in down years, its coal business has suffered as customers would order 100 metric tons of coal but only take 92 metric tons, while the BHP customers would take their full order, knowing full well that they would need BHP's iron ore as well.

He also said customers have literally come and asked us to get into the business, because they would like to see another competitor. He said "Customers do not like the current structure of the iron ore industry with three big players dominating.

Lindsay said there's a concern that players with both coal and iron ore will lure customers by saying: "Buy our iron ore and we'll cut you a good deal on coal."

He said that from a practical standpoint, iron ore business is a large open-pit mining, shovel truck operation, so Teck Cominco's skill set could be put to work.

Having said that, Mr Lindsay said the probability of buying an operating iron ore asset looks dim, if only because operators are currently enjoying a great pricing run, so why sell?

Gindalbie hits environmental hurdles for Karara project

Mr Garrett Dixon MD of Gindalbie Metals Ltd in an Open Briefing lodged with the Australian Securities Exchange said the Karara project was largely on track for initial production of magnetite concentrate in 2010 but disclosed that the company is facing environmental issues with the Karara project's start up phase, which involves mining direct shipping ore from a series of hematite orebodies on the Karara and nearby Mungada tenements.

Mr Dixon said that "That DSO phase has been out to public environmental review for a period of time and has received overwhelming public support. However, in working with the Government agencies it has become apparent that the tenements which cover the Mungada Ridge present significant environmental impact assessment challenges which may have a short-term effect on the DSO phase. In light of this we are continuing to work with the Government agencies for a positive outcome and remain confident of being able to start producing hematite from the Karara Iron Ore Project in 2009. However, it may be a case of reaching some sort of compromise regarding those hematite deposits contained within the Mungada Ridge, at least while further studies of the biodiversity of the region are conducted."

Mr Dixon said the initial DSO phase makes up less than 5% of the Karara Iron Ore Project while the magnetite phase, which the Government has already said it is pre-disposed to support, is going to be the company maker for Gindalbie and deliver significant returns to shareholders.

Scrap steel prices in US bouncing back

Purchasing.com reported that the average price paid for automotive factory bundles of scrap regained the USD 10 it had lost the month before in the latest auctions. As per report, auto bundle scrap was averaging USD 393 per gross ton for March 2008 delivery.

As per report, strong domestic demand from steel mills and foundries and high export prices are boosting domestic prices for other key grades as well.

The Midwest prices in early March sales for No 1 heavy melt grade are averaging USD 353 up from the average USD 347 of February sales, Chicago area scrap processors tell the Platts Metals Daily subscription newsletter. Midwest processors also say shredded scrap is back to January’s USD 397 and top grade busheling scrap is back to USD 420.

US exports of containerized ferrous scrap edge higher

Platts reported that the US ferrous scrap industry continues to enjoy prices in excess of USD 400 per long ton for containerized export shipments and prices have recently edged higher.

As per report, processors along the Atlantic Seaboard last week reported selling containerized scrap at USD 405 to USD 415 per tonne delivered to the dock, up slightly from a range of USD 400 to USD 415 per tonne in the previous week.

The report added that “A number of processors far inland have reported that they are shipping scrap in containers to the nearest coast because current prices make the practice worthwhile for the first time. One processor in the Midwest this week reported selling containers of shredded ferrous scrap into the New York and New Jersey area at USD 430 per tonne delivered to the dock with a freight component of USD 20 per tonne or less.

The growth of containerized ferrous scrap exports from US ports primarily is being driven by two factors. First, there is a general shortage of scrap globally, with the US being one of the few remaining markets with surplus metal to sell abroad. This has caused overseas buyers to scour the US market for smaller suppliers that had not previously been exporters.

Bulk scrap shipping is not, however, under much of a threat from containerized exports. Containers are limited in supply and are more costly and time-consuming to load and unload. Meanwhile, the large volumes needed by some buyers generally require bulk shipment. In addition, the heavier grades comprising the majority of scrap exports can more easily damage containers than lighter grades such as shredded material.

As per report, steel mills in India are said to have paid close to USD 508 per tonne recently for imported scrap.

Bangladeshi steel mills demand duty waiver on scrap import

Bangladesh’s The New Nation reported that steel makers and rolling mills have demanded waiving duty on melting scrap as has been done by India in its new budget to keep the price down.

Mr Sheikh Masadul Alam Masud general secretary of Bangladesh Steel & Re rolling Mills Association demanded similar measures as were taken in India to keep the steel products down in the domestic market. He added that the exiting framework, the duty is 10% on the import of raw materials melting and re rolling scraps.

Similarly, he said, the duty on chemicals used in steel industry is as high as 28% that contributed to the high price of their products. He added that melting scrap rod price has now gone up to BDT 60,000 per tonne as against below BDT 40,000 a few months ago.

India has withdrawn 5% duty on iron, steel melting scrap and aluminum scrap and the excise duty slashed to 14% from 16%. The measure has been taken in view of international price of copper that more than Doubled to USD 500 per tonne over the past one year and price of aluminum gone up by about one third giving significant rise in the domestic market.

The annual demand of melting scrap rod in Bangladesh is estimated at about 2.3 million tonnes for construction works, which is supplied by about 100 steel and 300 re rolling mills. The steel and re rolling millers produce the steel from imported melting scrap and scraps of old ships.

Western Canadian Coal starts strategic review

The Canadian Press reported that Vancouver based metallurgical coal producer Western Canadian Coal Corp has signaled last week that it is for sale by saying that its is starting a strategic review process that could also result in alliances and acquisitions.

WCC said that "The company believes the strategic review is timely for shareholders, considering that recent business analyst reports indicate that US dollar coal prices are expected to increase next year to record price levels.”

Western Canadian said it has set up a steering committee to make recommendations on strategic alternatives. It warned that there is no assurance that the committee will make any recommendation regarding a potential transaction or any other strategic move.

After the CAD 40 million private placement of convertible debentures, WCC is aiming to move forward with its Falls Mountain and Brule developments in northeastern BC. It hopes to grow annual production from 3.4 million tonnes to over 7 million through development of its Wolverine properties and Brule and Falls Mountain projects, while reducing costs.

Western Canadian Coal has interests in several coal properties in northern and southern British Columbia and a 50% interest in the Belcourt Saxon Limited Partnership.

Hyundai Heavy bags USD 792 million deal for 8 Ships

World's largest shipbuilder South Korea's Hyundai Heavy Industries Co announced on weekend that it has clinched a deal valued at KWR 758 billion (USD 792 million) to build eight bulk carriers.

The contract with a Liberian shipping company calls on the shipyard to deliver the vessels by July 2010.

Hyundai Heavy delivered 81 vessels valued at USD 6.85 billion in 2007 as compared with 73 vessels worth USD 4.81 billion in 2006. Hyundai Heavy plans to deliver 134 ships in 2008 and expects to win USD 27.4 billion worth of orders this year.

ArcelorMittal Poland agrees for wage increase

Puls Biznesu reported that ArcelorMittal Poland has reached a deal with workers under which each employee will get PLN 440 (EUR 124.9) of wage increase on average.

Mr Jacek Zub head of MZZP at Arcelor Mittal Poland said that “Wages will on average grow by PLN 440 per person. PLN 155 of this amount is the wage increase, while the rest is the award for good financial results.”

Ereğli Demir & Çelik to invest in iron ore

Turkish Daily News reported that Turkey's steel major Ereğli Demir & Çelik might spend USD 350 million on a mining venture in 2008.

Mr Oğuz Özgen CEO of Ereğli Demir said that "We have long term investment plans in southern Turkey's Hasan Çelebi mine, which has 700 million tonnes of iron ore reserves." He added that Erdemir will start work on the mine in the second quarter of 2008 and complete the investment by the second half of 2010.

Ereğli Demir, which invested USD 947 million in 2007, plans to invest nearly USD 800 million in various sectors this year. It is also planning to invest USD 4.2 billion by 2012 on projects including upgrading factories and expanding production.

Mr Özgen said that the flat production in its southern factory İşdemir and in its northern factory Erdemir total 4.206 million tonnes. He added that "Prior to the privatization the figure was 3.5 million tonnes. Within the last two years out northern factory saw a production increase of 700 million tonnes. The northern factory exported 656,000 tonnes in 2007, while the southern factory's experts reached 269,000 tonnes."

Ereğli Demir posted a net income of TRL 679.4 million for 2007 on sales of TRL 5.45 billion.

Gulf construction costs among world's lowest – Report

It is reported that construction costs in the Gulf are lower than in Europe, North America and some countries in Asia.

Mr Andy Davids technical director of Hyder Consulting Middle East said that contrary to popular belief, low costs were maintained by relatively inexpensive imports of labor, building products and processes into the region. He added that "The efficiency of Gulf contractors and the quality of work in the region was on a par with the best available in the rest of the world."

Speaking at the Council of Tall Buildings & Urban Habitat’s 8th World Congress in Dubai recently, Mr Davids said construction materials and methods in the region, including concrete and high yield structural steel, also meet global standards.

The conference, which brought together experts from the fields of sustainability, tall buildings and urban design, also addressed energy issues in high rise buildings.

Iran confident of India joining gas pipeline – Report

BS reported that Iran is confident that the proposed peace pipeline project to transfer natural gas from the rich Iranian fields to Pakistan and India will be constructed once the negotiations between New Delhi and Islamabad are concluded.

Mr Manouchehr Mottaki foreign minister of Iran said that “We are waiting for the talks between Pakistan and India to conclude and then the implementation of the project will be finalized. The implementation of the project will not be affected by current developments in Afghanistan and we are in regular contact with our friends in India.”

Mr Mottaki also maintained that Tehran is actively considering supporting India on the safeguards agreement between New Delhi and International Atomic Energy Agency. He asked the IAEA to look into the alleged supply of nuclear materials by France to Israel saying these actions would pose a threat to the non proliferation treaty.

He said that while some countries were beneficiaries and continued to receive nuclear technologies and materials without signing the NPT, Iran was penalized for pursuing legitimate civilian nuclear activities. He blasted Israel by saying that Zionist regime poses a uniquely grave threat to the regional and international peace and security and requires to be seriously dealt with by the international community taking practical measures.

India to provide 3 trains to import cement from Pakistan

Business Recorder reported that Indian government has agreed to provide 3 trains weekly for carrying cement consignments from Pakistan for its domestic consumption.

As per report, Pakistan Railways was already deploying 3 trains every week for cement supply to India, but Pakistani exporters had complaints of short supply of wagons for cement and other exportable items.

India has emerged as a promising market for Pakistan to export its surplus cement. The two sides are working closely to tap this potential. The private sector of both countries is playing a key role in making things happen, which were thought impossible in the past.

Arabian Canal excavation deal to be awarded in mid 2008 – Report

Gulf News reported that Dubai World's real restate firm Limitless will award its first major excavation contract for the ambitious AED 40 billion Arabian Canal project by the middle of 2008.

Mr Ian Raine development manager of Limitless said that some 30 international and Gulf based companies have contacted Limitless to do excavation work for the 75 kilometer long and 6 meters deep waterway. He added that "We are expecting to award the first contact by the middle of 2008. Several companies have approached us and we are going through the selection process."

There will be 6 to 7 major packages for the excavation work. The total depth of excavation is 70 meters from the ground to sea level. Limitless, which calls the canal the largest and most complex civil engineering project ever undertaken in the Middle East, is aiming to complete major civil works in 3 to 5 years.

An estimated 2 billion cubic meters of earth will be dug up for the canal. It could also be used in land reclamation work being done for offshore projects such as the Palm Islands, Dubai Waterfront and The Universe. Mr Raine said that "The intention is to use this material in creating topography around this development as much as possible." He added that mining technologies will be used in several places as the material being dug involves both sand and rocks. Excavation work has already begun on a trial basis.

The canal will flow inland from Nakheel's Dubai Waterfront development in the Jebel Ali area to a point near the Palm Jumeirah man made island. It will be up to 150 meters wide and support billions of dollars of real estate and leisure projects on both sides of the water. An area of 14,000 hectares will be developed for real estate, which will increase Dubai's population by 1.5 million.

Izmir Port suspension decision gets strong reactions

Turkish Daily News reported that the decision of suspension of sale of the right to operate Izmir Port to Hong Kong's Hutchison Whampoa and Turkey's Global Yatırım on March 6th 2008, has drawn mixed reactions from various bodies.

The State Council Administrative Matters Branch Committee has decided to stop the handover of the port and canceled the Supreme Privatization Board decision concerning the sale of the port, which belongs to the Turkish State Railways.

Mr Oğuz Satıcı chairman of the Turkish Exporters' Assembly has criticized the judgment harshly. He said that "We are trying to encourage international investors, but get stuck on such problems. It is impossible to understand the court decision. Both importers and exporters were waiting for a handover of the port. Such a handover would have helped the port to serve more efficiently, while cutting down costs."

On the other hand, Mr Niyazi Tuncer branch chairman of Izmir said that the decision is satisfactory. He added that" It is satisfactory not only for us but for the sake of Turkey. This port makes good money. It is not right to give it to foreigners. The workers are happy too."

Supreme Privatization Board had previously approved the transfer of the management rights of the port for USD 1.275 billion. The board approved the sale on July 3rd 2007, giving the nod to one of the year's biggest asset sales. After 8 months, the Council of State, acting upon a complaint by the Port Workers Union and the Foundation for Developing Public Institutions Management, blocked the handover.

Izmir is the leading export and container port in Turkey. The western city has been an important call destination for largest maritime lines during the last four centuries. Izmir Port is the largest container port of Turkey and the only container port in the region. The port is already shipping 38.8% of the container transportation of Turkey. The annual capacity of the port is 11 million tonnes. Yet, due lack of investment, big ships cannot dock.

Gulf property sector enjoys positive prospects – Moody’s

According to Moody’s Investors Service Industry Outlook report, market prospects for the Arabian Gulf property sector are broadly positive, contributing to an overall expectation of ratings stability, although different markets are at different stages of development. The report noted that despite a number of sector risks, Moody’s anticipates sustained real estate market growth in the region, based on fundamental factors that indicate that demand for new housing, office and retail space is likely to outpace supply in the medium term.

In its first Industry Outlook on the Gulf property sector, Moody’s assesses the pressure points for property companies in the region and any factors that might lead to deterioration in credit quality. Moody’s has identified eight key trends for the Gulf property sector, all of which have different rating implications, detailed in the report. Overall, Moody’s views these various trends as underpinning an expectation of broadly stable ratings for the rated entities in the sector. These trends include the fact that the evolution of the Gulf’s real estate sector remains closely tied with government support or initiatives, which is generally supportive of ratings, either through direct support in the case of the large government owned or government sponsored master developers that comprise a sizeable proportion of the sector or through general institutional support. Moody’s report also examines a number of region specific factors that support ratings and in some instances can lead to higher ratings than those of comparable peers elsewhere in the world.

Mr Philipp Lotter senior credit officer at Moody’s Middle East Limited and also author of the report said that “Supported by rapid economic and population growth, the Arabian Gulf region today incorporates some of the most unique and ambitious projects in the world, limited not to individual sites, but indeed creating entirely new cities and land stretches. However, accurate analysis of the market is made extremely difficult by the still sketchy nature of official information, only gradually evolving regulation and the significant differences in market estimates, depending on the source.”

Mr Lotter explained that “The two overriding features are the large scale availability of land, which is made available to many master developers either for free or at very favorable prices and the significant growth of the markets, fuelled both by speculative investors but also more sound fundamental factors, which have allowed developers to fund large parts of their projects from off plan pre sales proceeds.”

He added that on the other hand, many property companies in the Gulf are heavily exposed, both regionally to a certain country or even city, and operationally to a handful of large projects.

Moody’s currently rates 6 companies that engage in the Arabian Gulf property industry. 4 of these are based in Dubai, 1 is in Qatar and 1 in Saudi Arabia. All but 1 are government related issuers. All of them build, develop and, in most cases, maintain and sell commercial or residential real estate units.

Algeria, Iran, Qatar and Russia for creating gas OPEC

Mr Gholamreza Ansari Iranian ambassador to Russia, in an interview with Interfax, speaks about Iran’s approaches to the resolution of a number of domestic and foreign political problems.

Mr Ansari said that Algeria, Iran, Qatar and Russia are holding consultations on the creation of an OPEC like gas cartel, with the structure of the organization being the main topic on the agenda.

He added that "Now gas producers are in talks and consultations on the creation of a certain OPEC like structure. We hope that the creation of a relevant organization will be a result of the talks, which we view in a positive manner. We hope that the creation of this organization will bring good not only to producers but also consumers, and will contribute to the efficient use of this type of energy."

Mr Ansari said that the issue whether the OPEC like gas cartel will give up the US dollar as the currency for its operations is not on the agenda. He added that ''Of course, one of the issues, which this organization will address, deals with gas deliveries to international markets. However, it seems to me that the structure of the organization is a priority now.''

Corrections reported in Chinese domestic HR prices last week

It is reported that HR prices have been going down in the past four days of last week in Chinese domestic market.

On Shanghai market, commodity grade 4.75 to 11.5mm HRC was being offered at CNY 5160 to CNY 5200 per tonne for 1500mm down by CNY 130 per tonne to CNY 150 per tone. 1800mm wide material goes at CNY 5500 per tonne, 2.75mm thick coil goes at CNY 5420 per tonne.

As per My Steel analysts “If price for commercial 4.75 to 11.5mm HRC could remain above CNY 5000 per tonne, it would move up again and the short term target still would be CNY 5300 per tonne to CNY 5500 per tonne.”

Prevailing export prices have already jumped to USD 820 per tonne to USD 840 per tonne FOB and some steel producers have inked contracts at USD 810 per tonne FOB late April or early May shipment. Anshan Steel has shoot up its commodity grade HRC offer to USD 840 per tonne on FOB basis while Shagang was tagging at USD 820 per tonne on FOB basis .It normally takes one or two weeks to see what will the real transactions be at the updated levels. Many traders are upbeat on the price outlook in the short term since March export allocation in most steel mills have almost been fully booked.

MySteel analysts observed that Chinese steel exports in 2007 totaled 62.64 million tonne, a substantial rise of 45.6 per% YoY but HRC exports in 2007 totaled 9.67 million tones an increase of 14.7% YoY over the level of 8.43 million ton in 2008.

The major reasons for the lower growth rate for HRC exports are as under
A) Change in overseas steel demand structure. HRC production is easier than HR plate and wire rod while demand is comparatively stable. Actually, there's more demand for HR plate and construction steel than HRC.
B) The much narrower price gap between Chinese home price and international steel level.
C) The placement of export tariff adds to the cost and slow down the export speed.

They concluded that “At present, there is not strong sentiment for purchasing Chinese HRC but many uncertainties in the other parts of the world. Hence the future of HRC exports is not quite optimistic.”

(Sourced from MySteel.net)

Chinese coal exports in February 2008 down by 45% YoY

Xinhua reported that Chinese ports shipped 45.5 million tonnes of commodity coal in February 2008 up by 32%YoY, which included 43.55 million tonnes for domestic market up by 40.4% and 1.95 million tonnes for overseas market down by 45%.

According to analysts, more coal was shipped to southern China, which suffered heavy snowfalls earlier this year. So far, major power plants of snow hit areas have stored coal enough for 14 day consumption.

Statistics show that, the throughput of China's major ports amounted to 430 million tonnes up by 12% but 10% points lower than 2007. Meanwhile, the container throughput of these ports reached 8.9 million twenty foot equivalent units up by 12.4%.

Sign of stainless steel overcapacity looming in China

It is reported that China's fast economic development continuously has a rising demand for stainless steel and its stainless steel industry has showed a sign of overcapacity with the production capacity overgrowing the demand. Data shows that China's annual demand for stainless steel has maintained a growth around 15% since 1990s making the country the largest stainless steel consumer in the world.

There are three reasons for the continued growth of the demand, according to experts.

1. China's GDP has been growing and the growth of demand for stainless steel is 1.5 times that of GDP

2. Chinese market remains large, with limited market in broad rural area and remote areas having been developed

3. China stays at the middle age of industrialization, the petrochemical and energy industries still in great need of stainless steel.

The booming demand has spurred the growth of the production capacity and output of stainless steel in all countries of the world. With the output ascending, China has become the world's No 1 stainless steel producer.

Market experts said although China has become the world's No.1 stainless steel producer and consumer, the overcapacity issue is looming. Its demand for stainless steel was 6 million tonnes in 2006, while the output was 5 million tonnes. The domestic demand basically equaled to the demand in 2007 and the output was likely to be a little more.

Experts predicted that China's current production capacity has reached 10 million tonnes and if the production capacity is to be thoroughly released, it will greatly surpass the domestic demand. In the past few years, the growth of Chinese demand for stainless steel has been slowed down obviously, from 30% in 2005 to 10% in 2006 and 2007. The growth will stay around 10% in the years to come.

China’s unproven iron ore to reach 160 billion tonnes

It is reported that Mr Zoujian director of Metallurgical Mines Association of China in an interview on March 3rd 2008 said that the total iron ore reserves in China reached to 160 billion tonnes up to now, among which, 60 billion tonnes have been discovered and still 100 billion tonnes needs to be prospected.

Mr Zoujian said that “Our country is rich in iron ore resources but the prospecting work was not enough notably. There are 100 billion tonnes resources needs to be discovered at present, but it was very deep under earth and difficult to explore. China strengthened the prospecting work in recent two years and found several spot resources reaching to 1 billion tonnes 1000 meters beneath the earth. This resources needs to 5 to 10 years period from prospecting to mining.”

Chinese plates export prices increase last week

It is reported that export offers for steel plate have witnessed another jump last week and it has reached another record level.

Quotations for commercial HR plate have risen to USD 950 per tonne FOB up and the highest is USD 970 per tonne FOB for April shipment. Quotations for ship plate by tier one steel producer are all well above USD 1030 per tonne FOB as base and contract price is above USD 1000 per tonne FOB. An East China based producer has shoot up offer to USD 1100 per tonne FOB as base for all kinds of ship plates.

The increase is almost across the board and some traders are surprised at such a swift rise. A Shanghai based trader told Mysteel the steel makers have raised price again to achieve better profit than that from domestic market. There would be little sentiment for exports if prices are under USD 950 per tonne FOB.

Plate producers indicated that current export quotations are for May and June shipments and most of them are upbeat on the outlook. However, export volume has been on the decrease for months, taking into account higher and higher purchasing cost for overseas buyers. It is noticeable whether tonnage will drop further following this price lift.

(Sourced from MySteel.net)

13 coal miners trapped in NE China

Xinhua reported that local Police in Hegang city, where a coalmine fire on Wednesday left 13 miners trapped, have detained five suspects, seeking a sixth suspect who has fled and frozen mine's assets were also frozen.

Police said that the mine owner tried to cover up the accident by denying there were people trapped underground, which meant that the optimal rescue time had passed.

The fire began at about 10 PM on Wednesday in the facility in Hegang, which is in the northeastern province of Heilongjiang. Preliminary investigations showed that the accident was caused by an underground cable fire or improper use of welding equipment. The 13 trapped miners, in the Taiyuan Coal Mine, have little hope of survival because of high concentrations of toxic carbon monoxide gas, which have hampered rescue work, according to rescue sources. It's also estimated that the underground fire will take at least a week to put out.

The Taiyuan mine in Hegang, in the northeastern province of Heilongjiang, was formerly a state owned coal mine set up in 1978.It was bought by brothers Mr Jin Yonghui and Mr Jin Yongfu in 2001 and has an annual production capacity of 90,000 tonnes.

The city government issued an urgent circular asking that all 106 coal mines in the city halt production. The directive applies even to licensed facilities. The government sent more than 106 staff to monitor all mines around the clock to ensure 100 percent compliance. The circular also directed all miners working underground to leave the coal mines immediately.

Chinese nickel pig iron industry in 2008

In a review of Chinese nickel pig iron industry developments in terms of production output as well as cost analysis in 2008, recoverable nickel from nickel pig iron will be 110,000 tonnes up by 29.4%YoY from 85,000 tonnes in 2007. However, nickel ore imports will come down from the 15.6 million tonnes hit in 2007 to 12.0 million tonnes to 13.0 million tonnes in 2008 due to a large amount of ore inventory carried over from the previous year and higher grades.

Breakeven costs for nickel pig iron are rising due to rising nickel prices and also higher coke input costs. Chinese coal mining and weather problems, leading toward a severe shortage of coke and the surge in coke prices, have placed a critical upward pressure on nickel pig iron production costs. We estimate that for 7% nickel content pig iron, the rise in coke prices over the past six months has almost doubled the coke input value from an estimated USD 4,300 per tonnes nickel in H1 2007 to over USD 8,000 per tonnes nickel in 2008.

SHFE copper prices made marginal gains last week despite strength on the LME. The front month copper contract ended at CNY 67,900 per tonne up by 0.6% from the previous week. SHFE aluminium prices rose marginally last week despite the price hike on the LME. The front month aluminium contract closed at RMB 19,710 per tonne modestly up by 0.6%WoW.

Chinese spot steel prices rose for the second consecutive week after the Chinese New Year holiday. The hot rolled steel price rose by 4%WoW to USD 644 per tonne and the cold rolled coil price was up by 7.3% to USD 793 per tonne ex-Vat. The rebar price hit USD 576 per tonne over the past week, registering a 2.3%WoW increase and plate price was up by 5.6%WoW to reach USD 698 per tonne ex-Vat.

BHPB bid for Rio – Chinese mills too slow to take stake

Reuters reported that China's state owned steel mills had considered taking a spoiling stake in Rio Tinto to block a bid by BHP Billiton, but abandoned the plan after Aluminum Corp of China beat them to the punch.

Mr Deng Qilin head of Wuhan Iron and Steel Group and its listed unit said the China Iron and Steel Association had tried to arrange a similar move by its member mills late in 2007, but the state owned mills were unable to coordinate a purchase and get Beijing's approval quickly enough. He said "Before Chinalco bought in there was that thought, but it's like a long distance race. The one who races ahead gets the prize."

Mr Deng Qilin said "Everything happened so fast at the end of the year. A state-owned enterprise is not a joint venture or a private company; an SOE is controlled by the state and its decision-making process is relatively slow. He said I don't see any further moves by other Chinese companies at the moment. At the moment there are no plans. He added that the CISA plan was complicated because no single steel mill would have been able to make the investment by itself and none could act independently.”

Mr Deng Qilin said "If an SOE wants to invest a few million yuan, or a billion it can decide for itself. But this would have been over CNY 100 billion and would have needed government approval. It was a long process, and it wasn't so easy. He said I think they will succeed as this is a commercial move."

The report added that Chinalco and Alcoa stunned markets by scooping up 12% of Rio Tinto's London listed shares in late January, forcing BHP to raise its offer for the rival Anglo Australian miner. Rio says the BHP offer is still too low.

Beijing Bird Nest completion delayed until April 2008

Reuters reported that construction of the showpiece stadium for the Beijing Olympics, the Bird's Nest has been further delayed and will not be ready until mid April 2008.

A spokesman for the organisers said the 91,000 seaters National Stadium was originally due for completion along with the other 35 venues by the end of last year but preparations for the opening and closing ceremonies caused an initial delay until the end of March 2008.

Mr Sun Weide organizing committee for the Olympic Games said "The main structure is completed but the finishing touches and the requirements of the opening and closing ceremonies mean it will not be ready for use until April 2008. He added that it will be ready for the first test event."

The first test event scheduled for the stadium, nicknamed the Bird's Nest because of the interwoven steel trusses that encase its concrete bowl, is the IAAF Walking Challenge on April 18th to 19th 2008.

Steel price not to affect profit of large ship builders in China

It is reported that Chinese steel price jump would not affect the gross profit rate of ship builders as there is long term cooperation term between them and steel makers and the extant of increase for ship steel products is expected to be lower than that of other steel.

Industry analysts say that price for ship building steel plate picked up again since middle 2007 on higher iron ore and transportation cost. By the end of December 2007, the prices for 6mm, 10mm, 20mm ship plate have risen to CNY 6100 per tonne up by 35%, CNY 5800 per tonne up by 42% and CNY 5600 per tonne up by 30% respectively from the level in early 2007.

An expert with China Association of the National Ship building Industry said "The steel price increase is the most evident driver for the cost rise with ship builders and would reduce their profit margin directly."

Mr Gao xiaochun Researcher of CITICS said the average price increase rate for ship building steel is around 30% in 2007. He said "If the increase rate of ship steel price is equal to that of last year, the gross profit rate will be same with 2007. But it remains to see how steel price advances affect ship builders since steel makers have not confirmed the increase rate for ship plates. He said the rate would be smaller than that for other steel products since there are long term cooperation ties between ship builders and steel mills.”

Mr Gao xiaochun said "The extent is also dependent on the capability of cost transfer to end users by ship builders. It is certain that large ship builders would do a better job in terms of dealing the rising cost. I believe that the gross profit rate for large ship builder would be higher than that in 2007. As a matter of fact, large sized ship builders have talked with steel mills on steel purchase."

(Sourced from MySteel.net)

Masteel to cooperate with oil firms

It is reported that Exploration Company of Malaysia, Pertroliam Nasional Berhad and International Trade Company of Malaysia as well as Shell in China visited Masteel recently and inspected H-beam steel production line for seeking long term cooperation with Masteel.

As per report, H-beams used for marine oil are in short supply and multinational oil companies like Shell, Pertroliam and Exxon Mobile as well as Chevron Corporation etc are seeking new marine H-beam steel producers for expanding their purchase and supply channels.

H-beam steel used for marine oil filled the gap of domestic H-beam industry since successfully developed in October 1999. H-beam steel production line of Masteel has supplied almost 90,000 tonnes steel used for domestic marine oil.

Foreign enterprises expressed in their visit that they would like to cooperate with Masteel further for long term supply. Insiders think that this move played a great role for Masteel to develop high end H-beam steel market for attracting famous distributors.

Africa Israel buys Russian steel group Apogey

Haaretz.com reported that Lev Leviev's Africa Israel’s subsidiary Africa Israel Industries has recently completed the acquisition of a 65% share of the Russian steel trade group Apogey for USD 12.4 million, reflecting a valuation of USD 19.2 million.

The deal provides Apogey a put option to sell the remaining 35% within three years based on a valuation equal to five times the firm's net annual earnings during this period.

A spokesman for Africa Israel Industries said that Apogey is expected to report sales of USD 140 million in 2007 from the processing of some 200,000 tonnes of steel. Apogey estimates that its sales will increase to USD 150 million in 2008, generating a profit of about USD 5 million. Apogey operates through 13 branches throughout Russia, and employs about 200 workers.

Mr Nadav Shahar CEO of Africa Israel Industries said that “The conclusion of the deal as another step toward realizing the firm's long term business strategy of transforming Africa Israel Industries into a multi national, Israel based firm. Africa Israel Industry's proven experience can be expected to serve as the basis for worldwide expansion of the group's operations, particularly in Russia.”

The current deal follows the estimated USD 50 million transaction reported by the firm eight months ago, in which the company acquired a 260 dunam industrial complex near Moscow from KOA Gas.

Leviev had acquired a controlling share of Africa Israel Industries, formerly called Packer Steel, the largest steel firm in Israel, early last year.

Mr Putin scorns rival Nabucco pipeline project

It is reported that Putin president of Russia has scorned an EU and US backed project to build a natural gas pipeline from the Caspian Sea region to Europe, saying partners on its own project, like Hungary, need only take out a calculator to conclude Russia's plans are more profitable.

Mr Putin was speaking ahead of a signing ceremony with Mr Ferenc Gyurcsany PM of Hungary at Kremlin said that it will add Budapest's support to Moscow's South Stream gas pipeline which has been competing with the EU-backed Nabucco project.

He said "The task of our partners is simple, take a calculator and look at the figures. It is apparent that the project we propose can be realized and is backed with resources. If someone wants to dig up the soil to bury pipes there, we don't mind."

Nabucco, which would carry natural gas from the Caspian region and the Middle East to central and Western Europe, is still in its initial planning phases. It was devised as a means to diversify gas supplies and reduce energy dependence on Russia. The project aims to deliver 30 billion cubic meters of gas from Central Asia and the Caspian region to Europe through a 3,300 kilometer pipeline from Turkey through Romania, Bulgaria and Hungary to Austria.

OMK VMZ update on production

It is reported that Mining Metallurgical Plant OAO "VMZ", Nizhny Novgorod region, a part of the United Metallurgical Company, summed up the results of production activities for February and the beginning of 2008.

In February, it produced 123,576 tonnes of pipes of different assortment, which is 20.3% less than in February 2007. Production of large diameter pipes amounted to 60,627.

Since the beginning of the year, VMZ produced 226,455 tonnes of pipes. TDB in January and February were produced 109,420 tonnes which is 36.5% less than in the same period last year.

Mr Vladimir Marquina president of United Metallurgical Company said that a reduction in the demand for large diameter pipes and the average diameter pipes neftegazoprovodnye linked to the completion of shipments for a number of major projects for the construction of trunk pipelines and the postponement of the start of new projects OAO Gazprom to a later as well as the fact that oil and gas companies failed to neftegazoprovodnyh tenders for the supply of pipes for the current year.

Volvo to build excavators in Kaluga

It is reported that Volvo will set up the assembly of excavators in Kaluga. It will be the company's second production project on the Russian market.

Volvo is now building a EUR 100 million plant in Kaluga South industrial zone to produce 15,000 trucks per year. The new plant will be adjacent to that one. The new plant, in the will occupy 15 hectare and have a capacity of 1000 machines per year. It is expected to be launched in 2012.

Observers said the plant will cost no more than EUR 10 million and it may allow Volvo to occupy 20% of the Russian market for the heavy machines. More than half of the market is now taken up by imports.

Volvo sold 433 excavators in Russia last year on a market of about 5000 machines, worth about EUR 500 million. That market is growing by 15% to 20% per year. Market participants say that housing utilities and road builders are the main consumers of excavating equipment, and their fleets are 80% outdated. Import of excavators increased by 55% to 60% last year.

India to sign two MoUs in Russia

PTI reported that the India’s Engineering Export Promotion Council would sign two MoUs with the Russian Chamber of Commerce during its 18th mega exhibition at INDEE in St Petersburg.

Mr Rakesh Shah chairman of EEPC said "During the four day event, we will sign two MoUs with St Petersburg Chamber of Commerce and Leningrad Chamber of Commerce to formalize various methods of exchange of business and commercial information benefiting the engineering community of both the countries.''

Mr Shah said that the 18th engineering exhibition INDEE would be held between March 11th and 14th 2008. He said that "The exhibition is being held at the most opportune time when the year of Russia is being celebrated in India, while the year of India will be celebrated in Russia in 2009.''

EEPC organizes Indian engineering exhibitions branded INDEE in various focused markets to showcase India's rapid progress. Engineering goods export to Russia was USD 123.54 million in 2006 to 2007. The potential growth areas for Indian exports to Russia were manufacture of metals, machinery and instruments, transport equipments and machine tools.

New port planned for Russian Far East

It is reported that a new port is planned near the city of Nakhodka to serve as a terminus for a new multi billion dollar pipeline for Russian oil transported to Asia.

It was discovered in the 19th century by the crew of a ship called America. Then it became a Finnish settlement, a tiny fishing village. But all that changed in 1950, when nearby Vladivostok was chosen as the base for the Soviet Pacific Fleet. As Russia's primary deep water port in the Far East, the area was transformed.

A new multi billion dollar pipeline is being planned and its terminus is a new port to be built just a few kilometers up the coastline from Nakhodka. Right now Kozmino Bay serves as a hot spot for local ice fishermen, but this is where the port will be built to serve as the end point for the massive East European Pacific Ocean pipeline.

Once completed, the pipeline, stretching over some 4,000 kilometers of land, will carry 300,000 tonnes of oil per day to a place where it will be loaded onto ships to make its way across the Sea of Japan.

ESPO as the pipe is also known is designed to transport oil from central Russia to energy thirsty China and potentially Japan and other countries along the Pacific Rim.

The first stage of the project, from Taishet near Irkutsk, to Skovoridino in the Amur region is scheduled for completion by the end of this year.

Construction of the line began in April 2006, but suffered a major setback months later when President Putin ordered its re routing to move it further away from Lake Baikal. To the delight of environmentalists, ESPO was pushed back 200 kilometers from the banks of the UNESCO world heritage site.

Murmansk Port processes more exports

FIS reported that Murmansk Trade Port handled 1.105 million tonnes of cargoes of various types in February 2008 up by 22%YoY as compared with the same period of last year.

Export cargoes in February 2008 grew by 20.8% YoY to 1.061 million tons, including 853,200 tonnes of coal and 22,100 tonnes of non ferrous metals.

Murmansk Port has handled 2.277 million tonnes of various cargoes, 34,995 wagons and 81 ships in January to February 2008 period.