Iron Ore in India: The Present and the Future of It

'Iron Ore in India: The Present and the Future of It', authored by prominent author Dr AS Firoz provides you the valuable information on Indian iron ore market and is scenario. The report covers the reviews of the developments in Indian iron ore industry.

This report critically looks at the current situation in the industry, potential of the iron ore market growth in the medium term, growth plans of the individual major companies, demand and supply issues related to raw materials like coal and iron ore, competitive positioning of steel production in the country, socio economic and political factors which may have direct and indirect impact on the growth dreams of the Indian steel makers, etc among a large number of other relevant issues of strategic importance.

This report is the product of extensive and in depth analysis with incredible amount of time spent to put the numbers in perspective. There are neutral and frank expert views on matters which have drawn attention of the industry in the recent period.

The phenomenal rise in iron ore prices and their continued shortages worldwide have raised many important questions on the future of the iron and steel industry globally especially in the context of the changing dynamics in the environment surrounding especially in respect of raw materials to this industry. The steel makers are undergoing a phase of uncertainty, volatility and speculation amidst a supply side crisis looming large over raw materials, importantly iron ore and coking coal.

The Indian story is no different. A country having over 25 billion tonnes of officially declared iron ore resources and producing over 210 million tonnes of them annually and exporting nearly 95 million tonnes of them is important from all angles to the world of iron ore business.

Publish Date: April 2008
No. of Pages: 178 (103 analytical perspective + 25 Tables + 50 Charts)
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You can order your copy to reports@steelguru.com, who will send you an invoice of INR 100,000 for the report

Orissa leads states with CAPEX of INR 92,035 crore

According to the AIM study on 'State wise Investments', Orissa topped the chart claiming almost 30% of the total investments announced during the January to March 2008 quarter totaling to INR 3,25,285 crore. West Bengal and Andhra Pradesh followed with the CAPEX announcements of nearly INR 67,361 crore and INR 58,226 crore.

Mr Sajjan Jindal president of ASSOCHAM said that "The mineral rich states are attracting huge investments in sectors such as steel, oil & gas and power."

As per the corporate announcements tracked during January to March 2008 quarter, India Inc did not divulge any significant investment plans in the states of Kerala, Himachal Pradesh, Uttarakhand and Jammu & Kashmir. Furthermore, Assam was the only north eastern state to have any prominent investment. The power sector is expected to receive capital outlay of about INR 4,375 crore.

Home to huge iron ore and coal reserves, Orissa has emerged as a preferred destination for the players in steel producers. They intend to invest as much as INR 45,000 crore to install steel plants with aggregate capacity of 18.5 million tonne. The major players having lined up CAPEX announcements in the state were Vedanta Resources, TATA Steel, Mesco Steel and Bhushan Steel.

States attracting investments

Amount in INR crore
Data Source: Corporate Announcements in Jan-Mar 2008

West Bengal attracted about 21% of the of the total capital outlay proclaimed across India over the same time period. The sectors that drew maximum CAPEX announcements were metals and oil & gas. A sum of INR 20,000 crore is planned to be spent in each of the sectors by the Vedanta Group and Cals Refineries. Steel players too lined up almost INR 11,900 crore for setting up of steel plants in the state. Other major sectors were ports & shipping with INR 2,000 crore and power with INR 1,010 crore. Apart from the INR 1,010 crore in power projects, corporate also intend to invest in captive power projects in West Bengal.

Andhra Pradesh received 18% of the CAPEX planned by the industry over Q4 of 2007-08. Nearly 90% of the funds flowing to the state were allocated to the oil & gas sector. The sector majors envisaged to invest close to INR 52,000 crore in the state. While Hinduja Group in association with ONGC intends to set up a refinery in Kakinada, Reliance Industries would invest in the development of Krishna Godavari Basin.

Chhattisgarh was host to outlay plans of about INR 34,587 crore, as per the CAPEX announcements. Most of the capital spending was proclaimed in the sectors of power and steel. The planned investment in these sectors was INR 17,375 crore and INR 16,000 crore. TATA Steel and Gujarat Mineral Development Cooperation were among the major investors planning to deploy funds in the steel and power sectors of Chhatisgarh. About INR 1,200 crore would flow into real estate for building up of townships.

The corporate India plans to spend a total of INR 14,650 crore in the state of Punjab. As per the corporate announcements made over the last quarter of the financial year 2008, almost INR 14,000 crore may be incurred in setting up of thermal power projects across the state. GVK Power & Infrastructure was the main investor.

Pro POSCO faction seeks divine intervention

SNS reported that, while the scuffle between the pro POSCO and anti POSCO groups have perhaps reached its all time high, the latter has reportedly resorted to divine intervention and sought the blessings of the Almighty in their fight with the opponents.

Sources said that the members of anti POSCO group has congregated at a trouble torn Govindpur village and performed puja, yagnya and other religious rituals with an apparent aim to appease the Goddess and seek courage and power to fight both the company and the project supporters.

This development took place in the wake of a reported retaliation of the project supporters and repeated attack on the anti POSCO brigade. It may be noted that around 10 anti OSCO activists have been attacked within 2 to 3 months. Besides, bombs were hurled and paddy fields and betel vines of anti POSCO group members were destroyed.

However, the anti POSCO people allege that POSCO has been instigating the supporters to attack the project opponents. They alleged that "The project supporters have been supplied with cash, vehicles, mobile phones and other things to intensify their attack on us. While earlier the project supporters preferred to leave the village without fighting with us, now the scenario can change abruptly as they have started such an offensive act against us."

GMR picks Shangdong as EPC contractor for Kamalanga project

BL reported that GMR group has picked China’s Shangdong Electric Power Corporation as engineering procurement and construction contractor for the 1050 MW Kamalanga Thermal Power project in Orissa.

The project has a power purchase agreement for only 25% of the capacity with the Orissa’s distribution companies. The remaining generation was to be sold on a spot basis. GMR’s Kamalanga project is a merchant power station. The project is now expected to go into financial closure by July 2008 and generation from the project is expected to begin in 2010.

The sources said that discussions were still underway with SEPCO for accelerating the equipment supply. For SEPCO this is the second major order from domestic independent power producers. In August 2007, SEPCO had signed with BALCO for implementing a 1200 MW project.

The Kamalanga project is expected to be the first merchant power station to go into financial closure. The project cost is estimated at INR 4200 crore at current exchange rates.

The project is expected to have a debt component of at least 70% and equity of 30%. Although China has the option of providing suppliers credit to equipment buyers, GMR has opted for raising the entire project financing on its own, through domestic and international banks.

Alcan Packaging inaugurates flexible packaging plant in India

It is reported that, Alcan Packaging, part of Rio Tinto Alcan, has officially inaugurated its newest flexible packaging plant, located in the BHEL Industrial Park in Haridwar in Uttaranchal. The ceremony was chaired by Ms Ilene Gordon president & CEO of Alcan Packaging.

The new site, announced in February 2007, currently employs 48 people and is dedicated to producing high value flexible packaging for the food and personal care segments in India.

Ms Gordon said that "The dynamic Indian market represents an attractive opportunity for Alcan Packaging's strategy of growth, and we are pleased to make this USD 10 million investment which establishes our manufacturing presence in the region to better serve customers. This also expands our presence in emerging markets overall, which today represents approximately 20% of our sales."

Mr Jean Paul Meausoone president of Alcan Packaging Food Asia said that "The plant began production on schedule in April 2008 and is already meeting our local and global customers' needs for high quality packaging solutions. We are pleased to be part of this thriving business community in Northern India and we look forward to growing together with customers and becoming part of the local community as well."

Alcan Packaging is a world leader in value-added specialty packaging. It delivers multi material, innovative packaging solutions to customers around the world for the food, pharmaceutical, beauty and tobacco markets. Including the new plant in India, Alcan Packaging now operates 15 sites in six countries and employs approximately 6,000 people in Asia.

SAIL RSP presents scholarship to engineering students

The Hindu reported that six meritorious students belonging to backward castes were presented scholarship of INR 150,000 for their higher studies by the management of Steel Authority of India Limited’s Rourkela Steel Plant.

Mr Balbir Singh ED personnel & administration of RSP presented cheques for INR 25,000 each to Mr Bidyadhar Ekka of Karkatta village, Mr Biswadeep Ekka of Laing, Mr Sandip Lakra of Kamabahal, Mr Rabindra Kumar Lakra of Baidyanathpur, Mr Satish Franklin Tirkey of Jhirpeni and Ms Anupama Amat of Jaikuda.

These students, all from the engineering stream, have been selected by the RSP to receive scholarship of INR 100,000 each for their professional studies. The amount presented was the second installment. The first installment was presented to them in 2007.

Mergers to face mandatory review from Competition Council

The Telegraph reported that Indian government is planning to notify the rules on mergers and acquisitions that will allow the Competition Commission of India to compulsorily scrutinize merger and acquisition bids.

Officials in the ministry of corporate affairs said that "We are waiting for the CCI to put in place staff and train people. Very soon, the notifications allowing the CCI to scrutinize such deals would be in place and takeovers and buyouts would be checked for a potential monopoly impact."

Under the law, the CCI can veto takeovers by multinationals as well as large mergers and acquisitions by Indian firms, if the watchdog felt that this can impact competition in the Indian market.

The CCI has the powers to investigate suspected cartels and order them to desist from price hikes or exercising other monopoly powers they may try to force on the market. However, till now, it lacks the manpower to launch the kind of probes that may be required in a complex economy like India’s.

Foreign shippers seek level playing field in Indian waters

ET reported that foreign ship owners have asked the directorate general of shipping for a level playing field and a rethink on its latest order banning overseas vessels which are over 25 years old. Indian ships are exempted from this rule. Foreign ship owners said that the stress should not be on the age of a vessel, but on its working condition.

Mr Easow Thomas deputy GM of BW Shipping said that "The ban on old ships should be a blanket ban and not targeted at foreign ships. Most of the foreign ships are chartered by Indian companies."

Mr Rajesh Tandon MD of V Ships said that "As long as ships have met the safety requirements, they should be allowed even if they are over 25 years. If not then you are preventing business."

It may be noted that, In May 2008, the directorate general of shipping had banned the sailing of cargo vessels over 25 years in Indian waters during the monsoon period because of an increase in casualties. For gas carriers, the maximum age limit is 30 years. An analysis of accidents over the last 3 years showed a significant correlation between the age of vessels and the break downs that caused casualties.

Indian Railways modifies price variation norms in contracts

Addressing the concerns of infrastructure companies undertaking various railway projects over the sharp escalation in the prices of key raw materials like steel and cement, Indian Railways has suitably modified the price variation norms in one of its tender documents released recently. The new norms would help infrastructure players overcome any unanticipated rise in the prices of steel and cement, and complete the projects in time.

According to the modified price variation clause, the reimbursement for the escalation in the prices of steel during the work on the project would be based on the prices of steel published by Steel Authority of India Limited from time to time.

Currently, the price variation clause in a tender document for steel and cement is linked to the wholesale price index published by the ministry of commerce & industry, which contractors allege is not a true reflection of the actual increase in the price.

Mr Atul Agarwal senior VP at BSBK Private Limited said that "The modified price variation clause incorporated by the North West Railway zone in one of its tender documents for the Udhampur Katra section is a welcome step. We definitely hope that these new price variation norms will be incorporated in all future projects, which will ensure timely completion of various projects."

According to industry estimates, steel and cement together constitute around 35% of the total input cost in a railway project. In the last one year, the prices of these two key raw materials have witnessed an increase of over 70 per cent, forcing the contractors to bear the extra cost.

BHEL wins INR 3,500 crore BTG contract from NTPC

ET reported that National Thermal Power Corporation and its JV subsidiary Nabinagar power plant have awarded boiler turbine generator contracts for a total of 1,750 MW units to Bharat Heavy Electricals Limited at an estimated value of INR 3,500 crore.

The total cost of setting up these units will be around INR 8,700 crore. These are for 2 different projects. The first one includes 3 units of 250 MW at an investment of INR 3,300 crore at Bongaigaon in the North East. It is being set up by NTPC. The contract awarded to BHEL is for 3 units of 250 MW boiler turbine generators, along with a coal desulphurization plant, since coal available at Bongaigaon is high in sulphur content. One needs to get rid of this sulphur before the coal is fed into the boiler. The value of the contract for BHEL is about INR 1,500 crore.

The other boiler turbine generator contract, estimated at INR 2,000 crore for BHEL will be for 4 units of 250 MW at Navinagar in Bihar’s Aurangabad district. Total cost of the project for NTPC is estimated to be around INR 5,352 crore. The Bongaigaon plant, which will be NTPC’s first power plant in the Northeastern region is expected to start generating electricity from the first 250 MW unit by the end of 2009.

The second unit is likely to be completed in 2010-11 and the third by 2011-12. The project is expected to go a long way in solving Assam’s power crisis. The power station will come up at the existing facilities of the now-defunct Bongaigaon thermal power station of the Assam State Electricity Board.

The Nabinagar power plant with a 1,000 MW capacity, will supply 90% of its power to Indian Railways, while 10% of power from this plant is earmarked for other users. NTPC holds 74% in the power plant, while Indian Railways holds 26%. The companies will invest INR 1,188 crore and INR 417 crore respectively in the company. The electricity from this plant will be utilized by Indian Railways for running electric trains in Bihar, Jharkhand, West Bengal, Chhatisgarh, Maharashtra, Gujarat and Madhya Pradesh in the eastern and western regions of India.

Safety norms at major ports to be reviewed

BS reported that, with workers' safety in ports emerging as a major problem, the union ministry of labor has taken up the matter with urgency. The government has decided to appoint consultants for studying the safety aspects and transport system across all major ports in India. The decision was recently taken at the dock advisory committee meeting.

According to the government data, in 2007, a total of 23 workers had died at work and 153 accidents took place in ports. Between 2004 and 2006, as many as 94 workers died in ports and more than 600 accidents took place.

According to one government official, the major reasons of the deaths in ports were inadequate amenities for workers, poor infrastructure and outdated machineries. Shockingly, majority of deaths in ports over the years occurred when workers were asleep beneath the trucks, waiting to move, in absence of a proper shelter.

Cranes more than 20 year old would not be allowed to operate in ports. The union ministry of labor has also advised the state governments to frame their own rules for the safety of workers in minor ports. At present, the crane operators did not require any license from the government.

Mr A Majumdar deputy chairman of Kolkata Port Trust said that "New types of equipment are needed for the up gradation of ports and to ensure that the ports are of international standard."

DVC board may consider KPMG proposals

Moneycontrol.com reported that the board of directors of Damodar Valley Corporation may consider the KPMG recommendations on organizational restructuring and IPO soon. DVC will approach the centre for a formal clearance in this regard once board approves the proposals.

DVC have entered into a handholding relationship till IPO with KPMG in January 2008. As the first step towards the IPO, the consultancy firm has recently submitted its report recommending ways to restructure the organization without requiring any amendment of the DVC Act.

It may be mentioned that the union minister of state for power has recently said that considering the statutory status of DVC, the organization may tap the capital market only through an SPV or a wholly owned subsidiary. The minister was hopeful that the restructuring would be through in end 2008.

While the details of the KPMG recommendations are not known, sources said that the corporation may leave the existing power generation assets, including the projects lined up for implementation in the Eleventh Plan period with DVC and set up all the future projects through the SPV or subsidiary company which will eventually hit the capital market.

Having a generating capacity of 2210 MW till 2006-07, DVC has already added approximately 1000 MW fresh capacity taking the total to 3210 MW. This includes approximately 80 MW of hydro electric capacity. It is currently in different phases of implementation of 5 more projects to add 4800 MW capacity through either expansion of the existing thermal plants or setting up Greenfield projects. DVC is also partnering with Tata Power and SAIL for adding 1500 MW thermal capacity in the region.

Sevan Marine won deepwater drilling bid for ONGC project

Sevan Marine ASA has won a bid for deepwater drilling rigs from Oil & Natural Gas Corporation. According to ONGC procedures, after technical qualification, the commercial bids were opened recently, in which Sevan emerged as the lowest bidder.
Subject to the signing of a letter of intent between the parties, the drilling contract will have a fixed term of 3 years. Revenues that could be generated over the 3 year period are approximately USD 569 million including mobilization. Sevan Marine's scope will in addition include the provision of remotely operated vehicles.

Sevan and ONGC have during recent months carried out a detailed technical clarification process in order to qualify a Sevan rig for operations offshore India. Sevan will provide a new build rig to ONGC, based on its proprietary Sevan 650 design. The rig will be designed to include the most advanced drilling capabilities in the industry, with a capacity to drill in water depths to 10,000 feet.

It will have a variable deck load of more than 15,000 tonnes and a high storage capacity of bulk materials and drilling fluids, reducing the need for re-supply compared to semi submersibles. The secluded moon pool area limits the environmental impact of potential oil spills.

Villagers demand for a port along Barunai coast in Orissa

SNS reported that thousands of people gathered at the remote Koreapalli village under Rajnagar tehsil in Orissa, renewing their demand for an integrated port along the Barunai coast of the district for overall economic upliftment of the region.

Mr Prafulla Kumar Das secretary of Barunai Port Trust, while addressing the gathering, said that the natural harbor in Barunai has immense potential to become a major port.

Mr Das said that in 2004, the government had identified as many as 13 viable spots for port building and Barunai located on the confluence of the Mahanadi and the Bay of Bengal was one of them. But for some strange reason the government is looking at all other places, inviting private companies to set up ports overlooking Barunai’s claims. The spot is ideal and it does not involve any displacement whatsoever.

Keeping in view the surge in industrial activity in and around Paradip, the building up of a port in this part is the need of the hour. The people of Kendrapara are yet to reap the benefits of industrialization in the neighboring districts. There is also some sort of a regional imbalance with industry less Kendrapara sandwiched between Paradip and mineral rich Jajpur and Keonjhar districts. Thus an operational port would boost the sagging economy of the region.

Tuticorin Port unveils INR 5,200 crore CAPEX plan

BS reported that Tuticorin Port Trust is planning to invest INR 5,200 crore to create additional capacity and infrastructure. The port had recently received in principle approval from Indian government for two major projects involving the inner harbor and outer harbor. The projects, which will be executed through the public private partnership mode, are expected to be completed by 2012.

According to a senior TPT official, INR 4,350 crore would be spent on the outer harbor development project, which would include 2 or 3 container terminals, 1 oil terminal, 2 coal terminals and a general cargo terminal. This part of the project would be executed in the PPP mode.

The inner harbor project, which will cost INR 936 crore, will involve building of a coal berth and a general berth and deepening of the draft from 10.7 meters to 12.8 meters to allow higher capacity ships at the east cost port in Tamil Nadu. Of the total investment in the inner harbor, a major portion will be towards dredging, which is estimated to cost INR 538 crore. Of this, INR 350 crore will be funded by the port through its internal fund and the centre will bear the balance. Dredging work is likely to be completed in 18 months.

With this expansion in place, the capacity of the port would double from the existing 20.55 million tonne to 40.60 million tonne of cargo. Once dredging is completed, the port will be able to handle fourth generation container vessels with a capacity of 3,000 TEUs to 4,000 TEUs. Currently, the port can handle container vessels up to 2,000 TEUs capacity.

The port will also be able to accommodate vessels with a capacity of 70,000 DWT from the current 50,000 DWT. The increase in capacity will also reduce per tonne cost by 10% to 15% for a shipper. The expansion project would create an additional capacity of 40 million tonnes by the end of 2012 and an additional four million tonnes would be added by 2017.

Tuticorin Port handled 21.48 million tonnes of cargo during 2006-07, up by 14% YoY over 2005-06 when the port handled 18.70 million tonnes. While the traffic volume for 2007-08 is yet to be tabulated, the target for 2008-09 is set at 24.06 million tonnes.

JK Lakshmi to add 5 more RMC units

ET reported that JK Lakshmi Cement is adding 5 more ready mix concrete units as part of its expansion plans. At present, it has 10 RMCs and the addition of another 5 will be completed by the end of current fiscal with an investment of INR 100 core. The RMC units will come up around Delhi and the NCR region, including Noida and Greater Noida.

Mr Shailendra Chouksey whole time director of JK Lakshmi Cement said that "RMC is the business where the company will concentrate in the next few years as huge opportunity remains untapped."

Kerala to develop Beypore and Azhikkal port projects

BL reported that the proposals for the development of Beypore and Azhikkal ports in Kerala, which had suffered many hiccups and were kept aside after first mooted more than a decade ago, have got a fresh lease of life with the state cabinet approving the appointment of consultants for the projects.

As per report, the cabinet has given the go ahead for the appointment of Consulting Engineers Private Limited as the consultant for Beypore port and Deloitte India Limited for the Azhikkal port. The ports are proposed to be developed through public private partnership. Both the development proposals have seen ups and downs over the years and at one stage even developers had been identified for implementing the projects. In the case of Beypore port, a company called Mobil Peevees had commenced preliminary works before it pulled out for various reasons.

The development of Beypore port is reckoned as important for the economic development of the state, especially of the Malabar area. It is an estuarine port and currently handles 100,000 tonnes of cargo annually and its nearest competitors are Kochi and Mangalore ports. The hinterland of Beypore port comprises Kozhikode, Wayanad, Malappuarm, Kannur and Palakkad districts in the state as also major cities like Mysore, Bangalore and Coimbatore in the neighboring States. At present, the port has 2 wharves and other facilities such as storage sheds and cranes.

The Azhikkal port has been identified by the centre for developing coastal shipping under National Maritime Development Program. A detailed report on the project had earlier been prepared by ICICI Kinfra and the consultant will be required to review the report and effect suitable changes to integrate the port with NMDP. The port is to be developed in modules in a phased manner to include berths for containers, general cargo and petroleum carriers.

Mangalore Port highway project to completed by March 2009

BL reported that work on National Highways Authority of India's Mangalore Port highway project in Dakshina Kannada is expected to be completed by March 2009. The total project cost of the project is estimated to be about INR 196.5 crore.

The scope of work involves conversion of 37.5 kilometers, having 3 national highways between Surathkal and BC Road Town into four lane roads.

Work on 17.3 kilometers length highway on NH 17 is underway, of which four lane work has been completed on an 11 kilometers stretch. Three flyovers at Surathkal, Kottara Chowki and Kuntikan are in the advanced stages.

The repair work involving concreting of 13 curves on the 37 kilometers stretch of NH 48 at Shirady Ghat section, between Hassan and Mangalore, is partially completed. The stretch has been opened for movement of vehicles and some minor works, which are pending on the proposed stretch, will be completed by end June 2008.

250 acres identified in for expansion of Adityapur Industrial Area

FE reported that Jharkhand's biggest industrial area Adityapur Industrial Area Development Authority has identified 250 acres for its expansion in Baharogora. The AIADA has at its disposal the entire Kolhan division comprising 3 districts of East and West Singhbhum and Seraikela Kharswan for that purpose.

Mr Nitin Madan Kulkarni MD of AIADA said that "We have taken up the land issue with the deputy commissioner of East Singhbhum." He added that since the land belongs to the government, acquisition would not be a problem.

Mr Kulkarni said that the authority would have to look for land elsewhere, as the entire 3000 acre area under its jurisdiction had been exhausted. He added that "We have already surveyed the land and found it suitable for industrial purposes. We have requested the East Singhbhum deputy commissioner to initiate process of transferring it to the AIADA."

He has also written to the West Singhbhum deputy commissioner for identification of at least 50 to 100 acres that the AIADA could acquire near the Chaibasa Seraikela road. He said "Units that use iron ore from Chaibasa for making ingots, pellets, etc can be allotted plots there. That will result in reduction of their transportation costs."

Himachal approves Luhri hydel project

Express News Service reported that Himachal cabinet has cleared execution of the 775 MW Luhri hydel project by the Satluj Jal Vidyut Nigam.

In other decisions, the cabinet decided to modify the basic bidding and re advertising process for hydel projects. An upfront premium of INR 2 million per MW and free power from projects having capacity above 5 MW was also approved. The cabinet decided to have equity in the ratio of 51:49 in the Luhri project with SJVN. It also consented to change of location of the multi project special economic zone in Kangra from proposed Damtal to Milwan.

MCX launches futures trading in carbon credit

It is reported that Multi Commodity Exchange on Monday launched futures trading in carbon credit contracts for November 2008 and February 2009.

MCX said that
1. Under the contracts launched, trading would be for 250 tonnes of CER units with a maximum order size of 10,000 tonnes
2. The daily price limit for CER would be 5% and the initial margin would be for 6%
3. The delivery centre for the CER would be in Mumbai

Carbon credits are generated by entities for shifting to clean technologies, resulting in carbon emission reduction. They are bought by firms in rich nations for meeting targets on cutting down the quantity of carbon released into the atmosphere.

JSW crude steel production in May 2008 up by 19% YoY

JSW Steel Limited announced that it has registered 19% YoY Growth in crude steel production in May 2008.

The break up of production during May 2008 is as under

Volume in million tonnes
Change is YoY

JSW to shut down HSM for 17 days from June 12th

JSW Steel Limited announced that the shutdown of its hot strip mill for around 17 days starting from June 12th 2008.

The shutdown is being undertaken for modernizing HSM to enhance capacity from 2.5 million tonnes per annum to 3.2 million tonnes per annum

The mill is expected to be re commissioned after modernization on June 30th 2008

Ankit Metal starts 4MW captive power plant

Ankit Metal & Power Ltd has informed BSE that it has started the generation from its 4 MW AFBC captive power plant.

Dr Pramod Deo takes over as chairman of CERC

Mr Sushilkumar Shinde union minister of power administered the Oath of Office and Secrecy to Dr Pramod Deo Chairman Central Electricity Regulatory Commission.

Dr Pramod Deo has recently served as the Chairman of Maharashtra Electricity Regulatory Commission. Before joining MERC in 2002, he had acquired 30 years of experience in the Indian Administrative Service of which more than 20 years of experience has been at both policy and project management levels in the energy sector.

An alumnus of IIT Delhi, Dr. Pramod Deo has worked in the Ministry of Power, Government of India, Department of Energy, Government of Maharashtra and international institutions like United Nations Environment Program and Asian Institute of Technology. He is the recipient of the World Wind Energy Award 2005 and was conferred with the CII National Award for Distinguished Personality-Energy Management for the year 2006. He is also co author of three books on energy planning, energy management and regulatory practice.

REC to launch PE fund

BS reported that Rural Electrification Corporation is planning to enter into private equity arena by floating a PE fund for lending to power sector projects in the country.

As per report, REC is planning to set up the PE fund in tie up with US based Wachovia and may launch one offshore and another onshore fund.

The report added that REC may also join hands with financial institutions like LIC to be a part of fund.

Car sales in May 2008 up by 14.26% YoY

PTI reported that domestic passenger car sales in India rose by 14.26% YoY in May 2008 to 110,743 units from 96,923 units in May 2007.

According to the figures released by the Society of Indian Automobile Manufacturers, motorcycle sales in the country during the month was up by 7.39% YoY at 513,209 units as against 477,901 units in May 2007.

Total two wheeler sales in May went up by 6.99% YoY at 647,358 units as compared to 605,014 units in May 2007.

Commercial vehicle sales during May 2008 increased by 6.11% YoY to 35,294 units from 33,262 units in May 2007.

Rohit Ferro Tech inks pact for 60% stake in Indonesian coal miners

Rohit Ferro Tech Ltd announced that its Singapore based wholly owned subsidiary SKP Overseas Pte Ltd has signed the required definitive agreements with the PT Pacific Samudra Perkasa of Indonesia towards the 60% economic interest in its two mining companies PT Palopo Indah Raya and PT Bara Prima Mandiri as per the terms of the MOU entered into earlier.

Mr Ankit Patni joint MD of Rohit Ferro Tech has signed these agreement in Surabaya in Indonesia on June 6th 2008

SKP Overseas Pte Ltd has also signed a coal off take agreement for the long term supply of coal from PT Palopo Indah Raya and PT Bara Prima Mandiri as per the MoU entered earlier.

ArcelorMittal acquires Canadian metals recycler Bakermet

ArcelorMittal announced that it has signed an agreement to acquire Bakermet, a market leader in the scrap metal recycling industry at Eastern Ontario in Canada.

Bakermet which specializes in all types of ferrous and non ferrous metal, processed approximately 130,000 short tonnes of ferrous and 40 million pounds of non ferrous metals in 2007.

The plant, located near Ottawa will secure upstream self sufficiency in shredded metal for ArcelorMittal's Contrecoeur mill.

Mr Jos Jacqué CEO of ArcelorMittal Long Carbon North America said that "This acquisition further strengthens our access to and ownership of key raw material supplies. Further, we are delighted that Bakermet's existing management, have committed to stay with the business and bring a wealth of experience to the ArcelorMittal group. We are excited by this opportunity and look forward to integrating the Bakermet operations into the ArcelorMittal group."

South Korea steel output to cross 70 million tonnes by 2010

According to Korea Iron and Steel Association, South Korea's iron and steel production capacity is estimated to reach 70.53 million tonnes a year by 2010 up by 18% from the current 59.82 million tonnes.

The association said that South Korea, the world's fifth largest iron and steelmaker, will invest KRW 7.49 trillion in 2008 in building and upgrading facilities, up by 73.2% YoY.

South Korea's steel production topped 10 million tonnes for the first time in 1981.

Bondholders set to take over Kremikovtzi - Report

Dnevnik Daily quoting an unnamed bondholder reported that Kremikovtzi bondholders have cleared all legal obstacles and could take over Bulgaria's biggest steel works in the near future.

The paper said that majority shareholder Finmetals, owned by the Global Steel Holding of Indian billionaire Mr Pramod Mittal had until June 4 to repay the principal on the EUR 325 million seven year bond, due in 2013.

The paper added that the bondholders asked in April that the principal was repaid well before the maturity date after the steel mill missed interest payments.

The bond used Finmetals' 71% stake in Kremikovtzi, as well as key production facilities of the mill as collateral.

According to Dnevnik, a bondholders committee has agreed to sell the stake, once it takes over Kremikovtzi to ArcelorMittal in return for 79% of the nominal value of the bonds.

POSCO denies reports if immediate plan to hike steel prices

Reuters reported that POSCO denied Monday local newspaper reports that it would raise product prices soon to reflect higher raw material costs and a price gap with competitors' offerings. POSCO denied having any immediate plans for a price increase.

Mr Choi Doojin a POSCO spokesman said that "We have no current plan to raise steel prices. We are closely monitoring market conditions."

South Korea’s Maeil Business Newspaper citing industry sources said that POSCO could raise domestic prices as early as in June and predicted a hike of 15% or around KRW 100,000 (USD 97) per tonne.

POSCO raised prices by as much as a fifth on April 10th 2008 but expectations for a further hike have been high as its prices still lag those of Chinese or smaller domestic rivals such as Hyundai Steel. Despite rising prices of raw materials such as iron ore and coking coal, POSCO has kept its hikes minimal to maintain good relations with customers. POSCO sells three quarters of its products at home.

Oil price jump may slow global growth - IMF

According to International Monetary Fund, oil's gain of more than USD 10 a barrel Friday will likely slow global growth.

The report quoted Mr John Lipsky first deputy MD of International Monetary Fund as saying that "This will add to the downward pressure on global growth. If you compare it to where we were back in September when we made our forecast for 2008, this would take about a full percentage point off."

Mr Lipsky said that crude oil rose by USD 10.75 or 8.4% to USD 138.54 a barrel in New York Friday, the biggest ever gain in dollar terms and the largest on a percentage basis since June 1996. It surged as the dollar weakened following a report that the US unemployment rate grew the most in two decades and as Morgan Stanley said prices may reach USD 150 a barrel within a month.

He added that by the second half, all major economies will be growing below trend. Emerging markets will grow above the average of the last 10 to 15 years, although at a slower pace.

Mr Lipsky said that "We are not claiming that they are decoupled, but we think there is a clear division in performance.”

He said that the challenge to the economy of Russia, the world's biggest energy exporter, which has had average growth of more than 7% since 2000, is from managing large inflows of petrodollars. He added that "The government needs to take care both with its fiscal spending and with monetary policy to sustain the continued good performance and avoid worries about an inflationary spiral.”

CSC updates for May 2008 production

Taiwanese steel major China Steel Corporation has given the following update on production during May 2008

In tonnes

In million TWD

CSC said that the revenue for May increased due to higher production and sales volume caused by back to production of plants under maintenance of last month.

Billet import demand weakening in SEA

The Southeast Asia billet import market seemed quite last week. It is said that buyers in this region were not willing to pay more than USD 1,000 per tonne CFR for commercial quality billets.

Meanwhile, the Vietnamese government started to restrain the billet exports in order to avoid steel billet supply shortage. It is reported that one of the Vietnamese mills quoted its billet at USD 960 per tonne CFR to Thailand and the price of billet from Vietnam is the lowest in the Southeast Asia region.

Currently, billet from Malaysia is USD 1,100 per tonne FOB and expected to raise to USD 1,150 per tonne.

(Sourced from YIEH.com)

South Korean scrap import in April up by 9.4% YoY

According to the related statistics, South Korea imported 690,000 tonnes of scrap in April 2008 up by 9.4% YoY. Those scraps included 3,310,000 tonnes from Japan, 198,000 tonnes from US and 104,000 tonnes from Russia.

Moreover, South Korea imports 2.203 million tonnes of scrap in January to April 2008. Among those scrap imports
1. Japan - 1,029,000 tonnes down by 12% YoY
2. US - 676,000 tonnes up by 37.4% YoY
3. Russia - 312,000 tonnes up by 38.2% YoY

(Sourced from YIEH.com)

Rautaruukki to supply steel pile solutions for residential area

Rautaruukki announced that it is supplying the steel pile structures for the foundation construction of a new residential area and small marina in the new district of Hammarby Sjöstad at Stockholm in Sweden. The contract is valued at about EUR 3 million.

Ruukki's delivery for Henriksdalshamn consists of almost 26 kilometers of steel piles of various diameters. The piles are produced at Ruukki’s Oulainen and Pulkkila plants in Finland. Deliveries for construction of the Henriksdalshamn area in Hammarby Sjöstad will end in June 2008.

The area is being developed by Exploateringskontoret Stockholms Stad and the piling project is being carried out by Skanska Sverige AB. The first residents will move into the area in 2009.

Mr Magnus Silén of Skanska Sverige AB said that “We chose Ruukki because of its good delivery capacity and ability to quickly deliver different pile dimensions. Because of a demanding schedule and limited storage capacity at the building site, this project demands reliability and accuracy also in logistics.”

Assa Abloy acquires Italian Gardesa

ASSA ABLOY announced that it has signed an agreement to acquire Gardesa, a leading Italian manufacturer of high security steel doors. Gardesa is based near Piacenza, which employs 200 people and has a turnover of EUR 45 million. The transaction is expected to close at the end of June 2008.

Gardesa manufactures armored doors, including both standard and customized steel doors that can be tailored to the customer's needs thanks to a wide selection of panels, finishes and optional accessories. The majority of the products are sold through the company's distribution network in Italy while 25% is sold through distributors to other markets in Europe, Africa and Asia.

Mr Johan Molin president & CEO of ASSA ABLOY said that "This acquisition is another example on how the acquisition strategy is strengthening ASSA ABLOY's global leadership in providing door opening solutions in emerging and mature markets.”

Mr Tzachi Wiesenfeld head of the EMEA Division and executive VP of ASSA ABLOY said that "Gardesa is a great addition to ASSA ABLOY, bringing a leading brand, a very exciting product range, an advanced technology and a very attractive Italian design. The acquisition will complement our product range and strengthen ASSA ABLOY's leadership in the EMEA region.”

US steel pipes makers increase prices

US domestic steel pipe mills raise their prices by USD 110 per tons and will raise again in near future according to some participants. After the raising since May 23rd 2008, the price of A500 Grade A and B steel pipes reached USD 1609 per ton to USD 1603 per ton.

According to the statistics, the trend of rising will not stop and will announce another rise by the end of June or July at rate of USD 110 per tons. After that, the price is expected to be stable.

However, the level of demand has been decreasing and many large projects have already delayed. It means that the market is going to become weak.

(Sourced from YIEH.com

Doosan Heavy to supply 13 cranes to Singapore's PSA

Reuters reported that South Korea's Doosan Heavy Industries had won a KRW 103.5 billion (USD 100.4 million) order to supply 13 cranes to Singapore's PSA Corp. Ltd.

Doosan in a statement said that it would supply the equipment by July 2010.

Vietnam to bans new cement making licenses

VNA reported that Vietnam’s ministry of construction has told several provinces to stop granting investment licenses for new cement plants from now until 2015.

The report said that under the development plan of existing cement plants and plants under construction, the country will be able to supply enough cement for local demand in 2009.

It said that by 2015, domestic cement production will exceed local demand by about 17.8 million tonnes a year.

Aker Subsea win umbilical contract from Petrom

It is reported that Aker Subsea won the contract for the supply of 12 kilometers of steel tube umbilicals to the Petrom's Delta field development project in the Black Sea.

The contract party is Aker Solutions subsidiary Aker Subsea AS. The umbilicals will be manufactured and delivered out of Aker Solutions' facility at Moss in Norway.

Mr Svein Haug senior vice president for Umbilical & Riser in Aker Solutions said that "There is a lot of activity in the market, with emphasis on early deliveries becoming an increasingly prominent feature. Our ability to be flexible and forward thinking is what secured us this short lead contract.”

Petrom is Eastern Europe's largest oil and gas producer. The company is owned by Austrian oil company OMV.

Hyundai Mipo wins USD 159 billion order for bulk carriers

Yonhap reported that Hyundai Mipo Dockyard Co a unit of the world's largest shipbuilder has received a KRW 163 billion (USD 159 million) order to build four bulk carriers.

Hyundai Mipo said that the deal with an Asian shipping company calls on Hyundai Mipo Dockyard to deliver the vessels by December 2011.

Hyundai Mipo Dockyard, an affiliate of Hyundai Heavy Industries Co has received about USD 3.4 billion worth of orders this year, achieving 55% of its annual target of about USD 6.2 billion. Yards in South Korea, the world's largest shipbuilding nation are expanding capacity to build more vessels as backorders stretch into 2012.

ArcelorMittal to hold global interactive individual shareholder event

ArcelorMittal announced that a global interactive shareholder event which for the first time will feature real time dialogue with the Company’s management via a virtual reality website.

On June 17th 2008, individual shareholders will be able meet and interact with Mr LN Mittal chairman & CEO of ArcelorMittal to discuss the company’s strategy and business outlook as well as changes in the steel industry

Shareholders will be able to meet management in person at Company headquarters in Luxembourg. But, in a first for the company, individual shareholders will also be able to participate in a real time dialogue with Mr Mittal via Second Life, the virtual reality website. Second Life is a 3D virtual world created by its residents. It was developed by Linden Research and launched in June 2003.

ArcelorMittal’s platform on Second Life has been designed with maximum transparency for participants in mind and includes the following features which will be accessible before, during and after the event:
1. Online access to relevant documentation;
2. Access to episodes of ArcelorMittal’s award-winning WebTV series;
3. The ability to ask questions of Mr Mittal
4. The ability engage in dialogue with the company after the event via the Second Life platform.

Mr LN Mittal said that “I am very pleased to have an opportunity to meet with our individual shareholders and discuss our company’s outlook during this event. This will be the first event of its kind for ArcelorMittal incorporating a fully interactive online platform. The combination of a physical meeting with access to a virtual meeting centre demonstrates that ArcelorMittal is truly dedicated to its individual shareholders and wants to attract new shareholders by using innovative technologies. Individual shareholders are very stable and dedicated investors and I believe we have a real opportunity to develop this investor base thanks to our listing on 6 different stock exchanges, our high level of liquidity and our inclusion in major indices.”

Vietnam to cracks down on HCM City port backlog

VietNamNet Bridge reported that Mr Hoang Trung Hai deputy prime minister yesterday ordered the Ministry of Transport and relevant agencies to take prompt action and clear the backlog of imports and exports at HCM City’s ports.

As per report Viet Nam’s Maritime Administration under the ministry and relevant authorities was asked to ensure that there were adequate numbers of navigators to safely direct ships going in and out of seaports in HCM City. It said that this was being done in an effort to create favorable conditions for the transport of goods and avoid a backlog that creates problems.

According to the Ministry of Industry and Trade, the main reason for the pile up of containers at most seaports in HCM City was an unexpected increase in imports which the port was unable to handle due to its limited capacity for loading and unloading goods.

In the first five months of the year, imports at the Cat Lai Port increased remarkably by 43% YoY, whereas the number at the VICT stands at 40%. By the end of May, Tan Thuan Port was piled up with 140,000 tonnes of steel, while in previous years, the number averaged 60,000 tonnes.

Mr Nguyen Thanh Bien deputy minister of industry and trade attributed that the backlog to a lack of funds by some enterprises to free the goods. He said that this was caused by higher lending interest rates, and an intention to keep goods at ports while waiting for prices to further increase.

He also said that the city’s improperly built port system, poor seaport infrastructure and the jam in supply routes made the demand for storing and transporting goods beyond capacity.

A Sai Gon Port representative said more than 350,000 tonnes of goods needed to be freed up. He added that the problem was that container transporters were only allowed to operate at night and even then only one could pass the Tan Thuan bridge at a time as the bridge was only able to carry a load of 25 tonnes.

To solve the problem, Mr Bien suggested port management boards find measures to separate ways of importing and exporting goods in a bid to ease pressure on the ports.

Enel to build up to five 1,800 MW nuclear plants in Italy

Thomson Financial reported that Enel SpA is planning to build four or five 1,800 MW nuclear plants in Italy.

Mr Fulvio Conti CEO of Enel in an interview with daily La Repubblica said that Enel is familiar with all the technologies involved in a third-generation nuclear plant and is able to contribute to the design and management of a plant/

He said that other companies could be involved, citing Finmeccanica SpA unit Ansaldo Energia, Camozzi and Techint, while the storage of nuclear waste, a sector in which state owned Sogin is active, would not create problems.

Mr Conti said that the construction of the plants could be financed by a consortium perhaps including large consumers such as utilities, steel, paper and cement companies, but added Enel would not have problems in funding it alone.

Taiwan to lift electricity fees by 13% - Commercial Times

The Commercial Times reported that Taiwan government will raise electricity fees by an average of 13% in early July 2008 adding to inflation pressure after it lifted domestic oil prices.

The raise, which would come just weeks after state owned CPC Corp pushed up fuel prices, has been expected, as governments across Asia are finding it increasingly tough to shield their consumers from global crude oil prices that hit a record of nearly USD 140 a barrel.

The news paper without citing sources said that Taiwan’s government owned Taiwan Power will raise household electricity prices by an average of 7%, while industrial prices will be hiked more than 15%. After the price hikes, Taipower is forecast to post an estimated loss of TWD 110 billion (USD 3.6 billion) for the full year of 2008 and another TWD 150 billion loss next year.

Oil price touching USD 140 mark

Oil price jumped more than 8% to a record USD 139 a barrel, last week extending a two day rally to more than USD 16 as the slumping US currency and rising tensions between Israel and Iran attracted a flood of buyers.

Investment bank Morgan Stanley said that oil prices could top USD 150 by July 4th 2008 as strong demand in Asia triggers a slowdown in shipments of crude to the United States. It added that "We are calling for a short term spike in oil prices."

The report added to a string of upward price forecast revisions by analysts, with Goldman Sachs in May predicting prices could tip USD 200 a barrel within the next 2 years.

Oil price has risen by 44% this year, threatening economic growth in major consumer countries like the United States, already hobbled by a housing crisis.

Analysts have said the dramatic rally in oil prices is due to rising demand in China and other developing economies as well as an influx of cash from investors seeking a hedge against the weaker dollar and inflation.

NAAC becomes major iron and steel hubs - Report

Arab Steel reported that most of the crude steel production is concentrated in the North Africa Arab Countries. The steel production of four Arab countries located in NAAC amounted to 9.4 million tonnes in 2007, accounting for 55.3% of the total crude steel production which amounted to 17 million tonnes. Crude steel production had doubled in NAAC between 2000 and 2007. It rose from 4.9 million tonnes up to 9.2 million tonnes.

The production of NAAC amounted to 8.362 million tons of long products in 2007 or 41.33% of the total Arab production, which amounted to 20.232 million tonnes. Production of Egypt accounts for 61.26% of the total production of NAAC.

Production of the countries of NAAC amounted to 3.263 million tonnes of flat products in 2007 or 66.57% of the total Arab production which amounted to 4.902 million tons. Production of Egypt accounts for 66.44% of the total production of NAAC.

Production of flat products in NAAC is concentrated in 3 countries namely Egypt, Libya and Algeria. The Saudi Iron & Steel Company is the only one company in the GCC countries which produces flat products. It ranks second after Ezz Steel in Egypt.

Pakistani ports likely to be handed over to provinces - Report

Associated Press of Pakistan quoted Mr Qamar uz Zaman Kaira minister for ports & shipping as saying that ports in the country can be handed over to the provinces as a provincial subject under the spirit of maximum provincial autonomy. During his visit to Port Qasim, he said that the federal government has already decided to minimize items on the concurrent list to possible level.

Mr Kaira said that Gwadar Port owns only 600 acres of land and the rest land is occupied by private housing schemes under the administration of Balochistan government. He added that "We have planned to sit with all stakeholders and review what items or subjects can be transferred to the provinces under the first phase of giving provincial autonomy."

Mr Kaira emphasized that it is need of the hour to modernize or upgrade and expand our ports to meet the growing trade requirements of Pakistan, of the region and of the global economy. He added that "Till now, Pakistan’s ports are as single country ports and plans were in progress to transform these into major ports in the region where mother ships can be anchored."

He said that Gwadar port needs modern infrastructure and allied facilities to play its leading role in promotion of investment and trade upto Central Asian States. It would be also cheaper for some parts of China and India to do business through this port because of its geo important location. The roads and railways network connecting the Port with other areas of the country would be completed before end of 2010.

He further added that said 5 member Cabinet Committee, with due representation from Balochistan, has been constituted which is looking into the matters of Gwadar Port and framing viable plan to make this port operational at the earliest.

It may be noted that Karachi Port Trust and Port Qasim has already cut their charges significantly and had improved quality of services to port users to emerge as cost, services and time competitive ports in the region. Port Qasim caters to around 40% of the import and export of Pakistan.

Sungwon wins KRW 480 billion road construction deal in UAE

Yonhap reported that South Korean builder Sungwon Corporation has signed a KRW 480 billion deal to build roads in Dubai.

The roads are to link Business Bay, an area being developed into a main business town of Dubai, with an area where Burj Dubai, which will be the world's tallest building, is under construction.

Sungwon plans to complete construction of the roads by 2010.

Iran expresses interest in Nabucco pipeline project

Mr Alireza Sheikh Attar deputy foreign minister of Iran said that Iran is interested in the Nabucco gas pipeline project and other projects to be launched in the region.

Mr Attar said that "Yet we have not received an official suggestion to attend the project Nabucco. If there will be an official request, we will consider it."

The Nabucco gas pipeline will ensure the gas delivery via the Mediterranean and Caspian Sea to Europe via Azerbaijan, Georgia, Turkey, Bulgaria, Hungary, Romania, and Austria. Initial supplies will commence in 2013 with the cost of the project estimated at USD 7.4 billion.

No country powerful enough to determine oil prices - Saudi Arab

Saudi Arabia said that no country alone has the power to determine international oil prices, regardless of the size of its output capacity.

Prince Sultan said that "No country on its own, no matter what its production capacity has the ability to determine the price of oil, because there are factors outside its control and sovereignty." He added that supply, demand, inventories, politics and the state of financial markets all contributed to the price.

Prince Sultan said that "The behavior of speculators is another factor which requires the attention of consumer countries in order to limit these price fluctuations."

Saudi Arabia is OPEC's most influential member and the only country with large spare capacity that could be quickly brought online.

Arabtec wins major construction contract from Nakheel

UAE daily The National reported that Arabtec Construction has won an AED 3 billion contract to build the first 1,500 homes at Nakheel’s Al Furjan development in Dubai. The win by Arabtec follows an AED 1 billion contract awarded to Khansaheb Civil Engineering in May 2008 to undertake all infrastructure work at the development.

Arabtec will start construction of the first homes on the project in August 2008, with completion expected in the third quarter of 2010. The project will include 4,000 villas and terraced houses across four communities. It is located on a 5.4 million square meter site behind Discovery Gardens and close to Jebel Ali Village, which Nakheel is redeveloping as part of the Dubai government’s strategic plan to address the need for affordable housing in the emirate.

Mr Aaron Richardson media relations manager at Nakheel said that "Part of our remit is to provide housing for a complete range of socio-economic groups from selling islands on The World to top individual investors, to targeting family home buyers."

Mr Riad Kamal chairman of Arabtec said that the latest contract win will take the company’s value of work under construction in the UAE to AED 34 billion. He added that "All of our contracts have a price escalation clause to cover price rises of steel and cement. We also now fix the price of steel at the start of a job. Clients have very understood as no developer wants a contractor to go bust halfway through a project."

Contracts for the second phase of construction are yet to be awarded, but the entire project has been earmarked for completion in 2011. US based Turner Construction is the project manager on the development.

One dies in Selahattin Aslan shipyard accident

Today’s Zaman reported that another worker died in a work related accident at Selahattin Aslan shipyard in Istanbul's Tuzla district. The Selahattin Aslan shipyard is the scene of the most recent accident, but the area's shipyards have recently been the focus of criticism in the wake of a rash of deadly mishaps linked to unsafe working conditions.

As per report, the worker was killed in the shipyard after being crushed by a steel plate weighing hundreds of kilograms as he was working.

Mr Muammer Güler governor of Istanbul, who responded to journalists' questions regarding the frequent accidents at the Tuzla shipyards, said that serious measures need to be taken at the shipyards. He added that "Two important meetings on shipyards will be held in Istanbul next week. Workers' safety will be laid on the table during these meetings. Some Turkish shipyards face problems that stem from an increase in demand in the shipbuilding sector. I am hopeful that these problems will be solved thanks to efforts made to this end."

It may be noted that the number of fatalities from work related accidents at the Tuzla shipyards has exceeded 20 in just the past 8 months. More than 50 fatal accidents have occurred in the last 7 years at the shipyards, largely due to electric shocks and falls from platforms.

Saudi oil revenue put at USD 1 billion a day - Analyst

Mr Brad Bourland chief economist at Jadwan said that Saudi Arabia is making USD 1 billion a day in oil revenues on the back of record global fuel prices. The soaring cost of fuel in recent months has boosted state oil giant Saudi Aramco's revenues from USD 895 million a day at the end of February 2008 to over USD 1 billion currently.

Mr Bourland said that "Currently Saudi Arabia is making over a USD 1 billion a day in oil revenues. So USD 30 billion a month, of which about half is being used to support core government spending, and the other half is going to Sama which says it's growing its foreign assets by about USD 15 billion a month. This is going to continue on and on, and the sovereign wealth story will continue to roll."

According to International Energy Agency production assumptions, Saudi Arabia oil revenues are predicted to hit USD 16.6 trillion by 2030 with prices at USD 150 a barrel. Oil income for the UAE is expected to reach USD 4.6 trillion over the same period and for Kuwait this figure is USD 4.5 trillion. In total, by 2030 all 3 countries will command USD 25.7 trillion in revenues with oil priced at USD 150 a barrel.

Agility to buy Chinese Cosa Freight for USD 30.6 million

Kuwait based Agility said that it had signed an agreement to buy a Chinese freight forwarder in a deal worth up to USD 30.6 million.

The purchase of China's Cosa Freight will enable Agility to provide marine cargo services in China, Hong Kong, the United States and Canada.

ME maritime industry expects trade momentum to continue in 2008

It is reported that the credit crunch and the slowing US economy are not expected to have much impact on the Middle East maritime industry.

Mr Christopher Hayman MD of Seatrade, organizers of Seatrade Middle East Maritime 2008, said that "Continuing momentum from trade giants such as China will more than outweigh the US slowdown and the strong market returns being experienced by the industry in the Middle East are expected to continue."

Mr Sharafuddin Sharaf president of UAE Ship Owners’ Association said that "There are clear indications of a brighter market for 2008 and we do not foresee a reversal of the 2007 fortunes. The entire shipping industry is witnessing an unprecedented boom. The Middle East has never been more focused on its one-stop maritime trade hub ambition, or more alive with an abundance of business opportunities."

The optimism in the maritime industry here is based on continued demand for oil and gas worldwide and the vital role the region plays as a hub and a link between Europe and the Far East. Shipping companies based or operating on Middle East routes achieved an average growth of between 25% and 30% in both dry bulk and very large crude carriers markets last year.

The exhibition and conference is held every two years and has evolved into one of the world’s fastest growing maritime events and now ranks among the industry’s top 10 events. The 3 day event will begin on December 14th 2008 at Dubai International Convention & Exhibition Centre under the patronage of Mr Sheikh Mohammad bin Rashid Al Maktoum VP and PM of UAE and ruler of Dubai.

Saudi to curb steel exports due to surge in demand

The Kingdom's newspapers reported that Saudi Arabia has decided to curb steel exports to its Gulf neighbours and other countries after a surge in demand created shortages and gave rise to market manipulations.

Saudi newspapers said the decision to curb steel exports enforced was prompted by what they called an upsurge in local demand for the metal and growth in black market activities which have sharply boosted prices.

Mr Saleh Khalil supplies director at the Saudi Ministry of Trade and Industry said "We have introduced new regulations to curb steel exports to neighboring countries and other areas and we have actually started enforcing these regulations, which stipulate that exporters must obtain an export certificate from the Ministry before exporting products."

He said that "These curbs are within measures implemented by Saudi Arabia to ensure sufficient supplies of building materials for the local market, which is recording a sharp increase in demand. This has led to a steep jump in prices."

The move came less than a week after the world's dominant oil exporter decided to tighten its grip on cement exports following growing complaints by contractors that traders are stacking supplies for exports and more profits. Last week, Saudi Arabia began enforcing a decision to curb cement exports to the UAE and other Gulf countries following reports that many construction projects have been suspended because of shortages in building materials.

Rebar prices in up by 15% to 25%

Arab News reported that despite the decree issued by Sheikh Mohammed ibn Rashid Al-Maktoum vice president & prime minister of the UAE and ruler of Dubai exempting cement and reinforced steel from custom duties until further notice, the price of structural steel has recently risen by between 15% and 25%.

According to various real estate reports, the hike in the price of reinforced steel is not limited to Dubai or the UAE. It is rather a trend that can be seen throughout the GCC countries and which is driven by the real estate boom and the recycling of surplus petrodollars, much of which is taking place in the real estate sector, the safest and fastest growing investment channel in the regional markets.

Mr Fakhruddin from Fakhruddin Properties said of the situation that “The GCC countries have started addressing this issue, with more than USD 18 billion being invested in 46 steel manufacturing plants throughout the Gulf in an attempt to close the widening gap between supply and demand for steel. These projects indicate aggressive growth in the industrial sector in line with the five year real estate boom.”

He added that “The current flow of real estate projects, coupled with the expectations that this trend will continue in the region over the coming two decades, led us to seriously consider possible investment in steel projects, bearing in mind that we would need to bridge the current gap between supply and demand, while avoiding a situation of oversupply of these materials in the future once a balance has been established in the real estate market.”

According to recent industry research, in the face of rapid growth in domestic demand, the UAE and other Gulf countries are planning to develop 46 steel manufacturing plants throughout the GCC countries in order to expand output. Leading the way in these steel plant projects are Saudi Arabia, with 17 plants and the UAE with 16. Six of the remaining 13 plants are to be located in Oman, four in Bahrain and three in Qatar. The estimated cost required to establish a steel factory with full production capacity varies between USD 15 million and USD 2 billion, while the estimated cost to establish ten manufacturing plants, studies for one of which are currently underway is USD 10 billion.

Plans for integrated steel mill at Kalabagh in Pakistan

The News International, one of the leading English newspaper from Pakistan, reported that a consortium of four steel mills will establish an integrated steel mill at Kalabagh. The planned steel mill would have annual capacity of producing 1 million tonnes of steel using indigenous iron ore excavated from Kalabagh and Chiniot.

Sources in the ministry of Industry & Production said the consortium is comprised of four companies which include Mughal Steel, Star Cotton Corporation, Pak Steel and Ittehad Steel Mills.

As per report, they have already incorporated a company under the name of ‘Indus Consortium Mining & Steel Industry Ltd’ with Securities and Exchange Commission of Pakistan. The companies have also submitted an application to the DG, Punjab for the grant of lease for 2000 acres at Kalabagh and 1000 acres at Chinot.

Pakistan Steel Mills is the only integrated mill in the county with a capacity of 1.1 million tonnes per annum. It was making steel products from 100% imported ore and coke India, Iran and Australia. However, in last few years it has started using ore from Chaghi and imports ore only to meet the shortfall in local supply.

Probe points to deficiencies in MV Rezzak

PTI reported that there were several deficiencies relating to seafaring safety on M V Rezzak, the cargo ship that disappeared off the Turkish coast in the Black Sea with 25 Indian sailors on board four months ago while carrying steel billets from Russia to Turkey.

The probe report of global shipping registry Panama Maritime Authority said the ship's GM was very high and does not rule out rolling and pitching of the vessel due to wind direction.

The report sent to the Indian government said "The master of Rezzak decided to change her route to Bartin, which is a route opposite the anchoring area. This means that heavy rolling and pitching is very possible on the route.”

It said that “Local authorities at Novorossiysk port in Russia inspected the ship and reported a number of deficiencies regarding seafaring safety including it hull and maintenance. Some deficiencies found on board were rectified and the existing Emergency Position Indicating Radio Beacon was replaced due to damage to the outer shell. The ship's tonnage was below the maximum level with the harbour master reporting no overload condition deficiency, but the steel billets loaded on the vessel were of different sizes and their position is very important.”

It added that various records of the ship were examined but the most recent records, which must be filled out on board were not available.

Qatar firm interested in setting up power plant in South Africa

Engineering News reported that South Africa's Department of Minerals and Energy has received interest from its counterpart in Qatar, regarding a possible power project that a company from that country might build.

Ms Buyelwa Sonjica Minister of Minerals and Energy Republic of South Africa said "I am already getting indications from Qatar that a company could invest in a local power project. She said that she was heartened to have Suez's investment commitment and that if its projects were successful, it would give other companies the confidence to undertake similar projects.”

Ms Sonjica while speaking in an interview did not name the Qatari firm that is interested in becoming an independent power producer in South Africa.

She said that Eskom's impending power tariff increase, due to be announced on June 18, would entice potential investors, as companies had previously complained that projects would not be profitable at the lower rates they would receive. She added that that government wanted to take a 30% equity stake in IPP projects, but would increase this if it could.

South Africa is trying to attract electricity companies to build power stations in the country, to then sell their power to State owned Eskom, as part of its strategy to boost the country's inadequate power supplies.

Qatar may subsidize steel and cement for construction

Gulf Times cited Mr Sheikh Hamad bin Jassim bin Jabor Al Thani Prime Minister and Foreign Minister of Qatar as saying that Qatar will soon impose a three year freeze on prices of main construction materials, including steel and cement to help contain rising inflation.

While speaking at the annual meeting with Qatari businessmen, he said that "Contractors can now work without having any fears about any price rise in construction materials, namely steel, cement, sand and gabbro stones. Any future price rise of such materials in the global market will be borne by the state during the three year freeze."

Oil may hit USD 150 this summer - Goldman Sachs

Gulf News cited Mr Jeffrey global head of commodities research at Goldman Sachs while speaking at an oil and gas conference in Malaysia as saying that oil prices are likely to hit USD 150 a barrel this summer.

Mr Jeffrey Currie said "I would suggest that the likelihood of that happening sooner has increased tremendously sometime in summer. He said that demand for oil is weak but supplies are even weaker."

Iran to export 56 wagons to Cuba

Tehran Times Economic Desk cited Mr Gholamreza Razzazi managing director of the Pars Wagon Company as saying that the company has prepared 56 cargo wagons to be dispatched to Cuba. He said that 28 of the wagons are cement carriers and the remaining half of the wagons are for carrying fuel.

Mr Gholamreza said “The wagons will be sent to Bandar Abbas through railway and will be dispatched to Cuba from there by ship, adding that the company has heretofore sent one hundred and fifty 14 meter and 19 meter container wagons, 72 cement carrier wagons and 15 fuel wagons to Cuba.”

He said that consignment of the wagons is worth EUR 5 million and 85% of their parts are domestic.

Mr Razzazi added that the Pars Wagon Company and Cuba’s railroad company had inked a EUR 170 million deal due to which the Iranian side vowed to provide the Cuban railway with 550 cargo and 200 passenger wagons.

Ms Nasrin Haq appointed as chairperson of KPT

The News International reported that Ms Nasrin Haq took charge of the Karachi Port Trust as its chairperson becoming the first female head of the port authority.

Ms Haq took official charge from the DG Ports and Shipping after Mr Ahmed Hayat former chairman Vice Admiral who held the portfolio for eight years retired on May 31st 2008.

Prior to her appointment as KPT chairperson, Ms Haq had held some important positions like Managing Director Mass Transit, Director Export Promotion Bureau and Secretary Port Qasim.

Dubai Cables inaugurates its first copper rod plant

Khaleej Times reported that Dubai Cables Co ltd has inaugurated its first copper rod plant and the new cable factory at the Mussafah Industrial Area. The USD 45 million copper rod plant which is the first copper rod factory in the UAE, has a capacity of 110, 000 tonne per annum.

The reported that the two facilities were unveiled by Mr Shaikh Hamed bin Zayed Al Nahyan, Chairman of the Abu Dhabi Crown Prince Court and Chairman of the Higher Corporation for Specialized Economic Zones. A large number of dignitaries, including ministers and senior officials.

Mr Ahmad bin Hassan Al shaikh chairman of Ducab said Ducab customers and suppliers attended the inauguration ceremony of the state of the art factories. He said that "We meet here to inaugurate our company's two new plants, the copper rod, which is the first of its kind in the UAE and the new cable factory which increases our capacity by 40 per cent. The USD 45 million copper rod plants which occupy an area of about 3000 square meters have a production capacity of 110,000 tonnes of high quality copper rod per year, which can be increased to 160,000 tonnes in the future."

He added that "The state of art copper rod factory will apply the highest international quality standards and will provide all of the Ducab's rod requirements. In addition, there will be product available to serve the regional market."

Mr Andrew Shaw MD of Ducab said the new copper rod plant will take the raw copper cathode and convert it to high quality 8mm diameter copper rod the key raw material for cable manufacture. He said that "With the new factory having been officially inaugurated, we will be able to replace imported copper rod with material manufactured in the UAE it s a further strengthening of the UAE industrial base."

He also said that Ducab bought the Abu Dhabi facility to ensure the company has enough capacity to satisfy demand. He added that the acquisition has increased the company's production capacity by about 40 per cent allowing it to grow its regional market share.

Mr Andrew Shaw said "The new factory in Abu Dhabi is a welcome addition to Ducab's capacity in the UAE. As a market leader we are committed to continual improvement in all aspects of our business and with this new facility we will be able to further improve product offer, service and delivery to our customers."

By launching the two new plants, Ducab which is jointly owned by the Dubai and Abu Dhabi governments is on course to achieving its strategic plan of meeting the growing demand of the local and regional markets for copper rod and power cables of various voltages.

Global economic slowdown may halve oil price in 2009

Zawya reported that a sharp global economic slowdown could depress oil prices by more than half their present level in 2009 and this could prompt Opec to trim output to prop up prices.

Mr Leo Drollas Deputy Director of the London based Centre for Global Energy Studies said several factors had led to the recent sharp rise in crude prices including strong demand, speculation, Opec's low spare capacity, the weak US dollar and the Cartel's drive for higher prices.

In a study presented to an oil conference in Tokyo this week, Mr Drollas said strong demand had sharply pushed up the call on Opec crude but he warned that slowing global economy next year would push down the demand. In 2008 the call on Opec remains well above its expected output until the third quarter of 2008.

The study said "In 2009 the picture is quite different, the weak global economy causing oil demand growth to slacken considerably and the call on Opec to drop well below recent levels. Two scenarios bracket our reference case. On the upside we have the IEA's more buoyant view of oil demand growth for this year and next year. On the downside, a small amount of additional non-Opec supplies in 2008 are enough to bring the oil price down to USD 65 per barrel by the end of 2009."

Mr Drollas said referring to forecasts by CGES about an impending sharp economic slowdown in 2009. H e said the need for Opec oil will be down by almost 1 million barrels per day requiring production cuts from the organization to keep up the price of oil. Mr Drollas whose centre is owned by Mr Sheikh Ahmed Zaki Al Yamani former Saudi Oil Minister cited arguments by the 13 nation Opec that the oil market is well supplied and high prices are a result of growing speculation. Another argument is that oil producers need high oil prices because of cost escalation, dollar depreciation and their financial needs. In contrast, the CGES believes supplies have been tight, causing a decline in the stocks of the Organization of Economic Cooperation and Development. Led by Saudi Arabia, Opec squeezed the oil market in 2006 to 2007, leaving stock cover at low levels and spare output capacities bellow 5% of world oil consumption."

He said that "The Kingdom tightened the market in the last quarter of 2006 because it feared the price repercussions of the large OECD company oil inventory build in that quarter low spare capacity is generally associated with high prices and vice versa. However, the relationship is distorted by Opec's occasional drives to push up oil prices by constraining production and thus raising spare capacity. Between the second quarter of 2003 and the first quarter of 2006 spare capacity became much tighter. Spare capacity has been falling since the first quarter of 2007."

Tianjin Pipe commission pipe expander

It is reported that Tianjin Pipe Group has commissioned its 720 project, which is China’s first oblique rolling expansion unit with the world’s largest caliber and annual output of large caliber seamless steel tubes.

As per report the 720 project began to be constructed on March 7th 2007. The completion of the project has important role on further expanding industry chain, to optimize the product structure, realize product series, high end, high quality and enhance the enterprise’s core competitiveness.

It mainly produces large caliber high pressure boiler pipe, mechanical tube, structure pipe, oil pipeline pipe, the specification is 325mm to 720 mm ×15.5mm to 55mm. It is expected to yield 45,000 tonnes products this year.

Update on CR domestic prices in China

Shanghai
CR price continues to rise. Angang 1.0mm sheet is quoted at CNY 7400 per tonne
1.2mm to 2.0mm sheet at CNY 7350 per tonne up by 50 per tonne
Maanshan Steel-made 1.0mm coil stands at CNY 7280 per tonne up by CNY 30 per tonne.

Beijing
CR price keeps unchanged with 1.0mm wider sheet posted at CNY 7250 per tonne.

Guangzhou
CR offers stand still. Angang 1.0mm CR sheet is posted at CNY 7200 per tonne
1.0mm CR coil price offered by Ma'anshan Steel and Baotou Steel stands about CNY 7050 per tonne to CNY 7100 per tonne.

(Sourced from MySteel.net)

China has resources to back its GDP growth - OECD

The Organization for Economic Cooperation and Development last week said that China can increase social and infrastructure spending to support its economic expansion should the global economy slow more than expected.

OECD in a semi annual economic outlook said that “China's gross domestic product growth is expected to slacken further over the remainder of 2008 and in 2009 on weaker export gains. The fiscal balance is healthy and the government is well placed to raise social spending and infrastructure investment.”

It said that "The Chinese economy is slowing to a more sustainable pace and there are early indications that the pattern of growth is beginning to rebalance away from net exports to domestic demand. Export competitiveness will continue to erode over 2008 and 2009, reflecting wage and price inflation.”

The OECD however cut its estimates for China's economic growth from forecasts made in December. It now expects expansions of 10% in 2008 and 9.5% in 2009. The previous estimates were 10.7% and 10.1%.

Chinese pig iron export in April down by 41% MoM

It is reported that China exported 16632 tonnes of pig iron during April 2008 with an increase of 4864 tonnes or 41% MoM from 11767 tonnes in March.

Japan imported 16301 tonnes whilst South Korea accounted for 331 tonnes. Jilin provided 6932.8 tonnes and Jiangsu offered 9700 tonnes in April.

During the first four months China exported 85642 tonnes of pig iron down by 71.16% YoY compared with the 296997 tonnes in the same period of 2007.

The country also imported 62732.87 tonnes in April up by 56354 or 833.567% over the 6378 in a month earlier.

(Sourced from MySteel.net)

Earth quake losses estimated at CNY 206.5 in China

China’s State Council Information Office announced that the May 12th earthquake that jolted southwest China has caused a loss of CNY 206.53 billion (USD 29.5 billion) to the country's industrial and mining enterprises as of 4 PM on Saturday.

Figures from the Ministry of Industry and Information Technology showed 4,003 big companies had resumed production, while 1,482 enterprises still suffered suspension in production.

China hikes reserve ratio for commercial banks

China's central bank on weekend ordered lenders to set aside more money as reserve, the fifth such move this year as the latest effort to enhance liquidity management in the banking sector.

The People's Bank of China said on its website that the reserve-requirement ratio would be raised by 0.5 percentage points on June 15th 2008 and another 0.5 percentage points on June 25th 2008. This will bring the ratio to a record high of 17.5%.

PBOC had raised the ratio four times previously this year. The latest was on May 12th 2008 when it lifted the ratio to a new high of16.5%.

PBOC also said that corporate financial institutions in the worst quake-hit areas including Chengdu and Mianyang, would postpone carrying out the regulation. But it didn't say how long the delayed period would be.

It said that "The rise, a further materialization of the tight monetary policy, is aimed at strengthening liquidity management in the banking system.”

China adopted the tight monetary policy late last year to prevent the economy from overheating. It was also to guard against a shift from structural price rises to evident inflation. The country adhered to the policy despite a global slowdown hit by the international credit crunch. China's economic growth slowed in the first quarter but still reported double digit growth. It expanded 10.6% as compared with 11.7% in the same period a year ago.

Henan Shenhuo to invest 350 million to form subsidiary

China Knowledge reported that Henan Shenhuo Coal Ind & Elec Power Co plans to invest CNY 350 million to set up a wholly owned subsidiary Henan Shenhuo Aluminium Material Co Ltd.

The report added that the new subsidiary will build a plant with an annual capacity of 100,000 tonnes of high quality aluminum plates with total investment of CNY 947.08 million.

The aluminum plates facilities are expected to generate annual earnings of CNY 2.325 billion and a post-tax net profit of CNY 63.08 million each year.

Henan Shenhuo is principally engaged in coal production, power generation and electrolyzed aluminum production and processing facilities.

Hong Kong port cargo in first quarter grows 14%

The Census and Statistics Department of the Hong Kong Special Administrative Region government announced that Hong Kong's total port cargo throughput in the first quarter rose by 14% YoY to 62.6 million tonnes.

Inward port cargo increased by 12% YoY to 36.3 million tonnes with imports and inward transshipment rose by 10% YoY and 14% YoY respectively to 19.1 million tonnes and 17.1 million tonnes.

The outward port cargo rose by 17% YoY to 26.3 million tonnes in the first quarter, with exports and outward transshipment increasing by 22% YoY and 14% YoY respectively, to 9.3 million tonnes and 17 million tonnes.

Hong Kong's port handled 5.8 million containers in the first quarter up by 7% YoY with laden containers up by 8% to 4.8 million and empty containers virtually unchanged at 900,000. Among laden containers, inward and outward containers grew by 9% and 7%respectively, to 2.4 million and 2.5 million.

Sinosteel to support Midwest and Murchison Merger -WSJ

The Wall Street Journal citing a person without identifying reported that that China's second biggest iron ore trader Sinosteel Corp may support a proposed merger between Midwest Corp and Murchison Metals Ltd.

The Journal said that some concerns surrounding Murchison are weighing on Sinosteel's decision. Sinosteel, battling Murchison for control of Midwest raised its stake in the iron ore producer to 40.1%.

The Journal added that the merger requires 50.1% approval from Midwest shareholders.

Murchison said its deal valued Midwest shares at AUD 7.17 apiece.

Anshan to supply plates for bridge in Norway

It is reported that Anshan Iron and Steel’s high quality bridge steel plates are ready to be exported to Europe and will be used on the Glomma which is located in Norway. It is the first time for Angang steel plate export to Europe for this application.

As per reports, Anshan Iron and Steel has successfully bid for two plate supply contracts from Norway and Germany.

Bridge steel plate is one of the Anshan Steel’s leading products, has a long history has been used in three projects which were about the development of China’s railway bridge landmark projects, Wuhan Yangtze River Bridge, Nanjing Yangtze River Bridge and the Jiujiang Yangtze River Bridge.

Chonggang mining output to exceed 5 million tonnes

According to Mr Liu Jiacai GM of Chonggang, it is making efforts to achieve 5 million tonnes of self mining to shake off the import.

Mr Liu said that they have signed agreement with Shaanxi Ankang Iron Ore and will supply 1.5 million tonnes to 2 million tonnes of iron ore concentrate to Chonggang.

Besides the cooperation with Ankang, Chonggang also developed Chongqing Qijiang Iron Ore and Banan Jielong Iron ore this year, and it will also cooperate with Sichuan Xichang Taihe Iron Ore.

Tianjin Tiantie CR project to start construction in October

It is reported that Tianjin Iron and Steel Group plan to start construction on its CR project on October 28th 2008.

The investment of the first phase of the project is CNY 3.5 billion to build a pickling line, CR mill with a continuous hot dip galvanizing unit. The project would have an annual output of 1.5 million tonnes of cold rolled and 600,000 tonnes of galvanized.

Tianjin Longgang to launch new wire rod mill in June 2008

It is reported that recently, Tianjin Longgang high speed wire rod project has been nearly completed and it will be put into production by the end of June 2008.

The designed rolling speed of the wire rod mill is 120 meter per second for producing wire rods in diameter range of 5.5mm to 25mm in various grades. The mill would have and annual output of 1 million tonnes and the total investment is about CNY 600 million.

Laigang rebars achieve CARES certification

It is reported that recently, Laigang’s rebars as per BS have successfully passed the British CARES product certification and the logo recognition.

CARES experts tested the examination earnestly and all the results of the products meet the requirements.

The release said that “Now, Laigang rebars have got the green card to enter into European market, further enhancing the brand.”

Chalco eying 2nd spot as global copper enterprise

It is reported that Chalco is facing with a notable strategic transition. According to the expansion plan, the company will become a leader in domestic copper industry as well as the world’s second largest copper enterprise in the next two of three years.

Mr Xiao Yaqingm the board chairman and CEO of Chalco said that the group will spend CNY 20 to CNY 30 billion in oversea purchase in the future.

On May 28th 2008, CNY 10 billion medium term note issuance of Chalco was approved. Funds will be used mainly for the purchasing of relative assets of its parent company, Chalco.

Baosteel creates record in environmental parameters

According to the latest statistics, since this year, the key indexes for environmental protection of Baosteel's main business of steel, which are the emission of fume and dust, wastewater and COD down by 9.2% YoY, 22.3% YoY and 38% YoY respectively creating the best records in 10 years.

In recent years, with a view to reduce the emission of pollutant, Baosteel actively promotes the application of modernized management and technologies, strengthens the operation of environmental management system, gradually establishes and improves the environmental performance evaluation system and incentive method, and the emission of key wastes such as sulfur dioxide, fume and dust, wastewater and COD shows a trend of declining year by year.

Masteel dismantle five 300 cubic meter blast furnace

It is reported that in 2007, Masteel dismantled five 300 cubic meter blast furnaces and one 90 square meter sintering machine

Masteel also achieved following milestones in 2007
1. Started operating No1-4 coke dry quenching projects
2. Introduced CDQ process in all six coke ovens at old area
3. Carried out bag dust-removal update on two boilers at energy plant 4. Dust-removal update on No 1 LF furnace at No 1 rolling plant
5. Update on three water recycling systems at wheel company.

As per report Masteel’s thermal power plant and No 2 Machinery Manufacturing plant were among the four Greenfield enterprises identified at an environmental appraisal meeting in Maanshan city and 16 units were awarded as blue enterprises.

Baosteel and Gezhouba ink pact for supply of B610CF plates

It is reported that Baosteel and Gezhouba Group recently inked the agreement for the supply of B610CF high strength heavy plate used in the spiral case of the last two water turbine generator sets in Three Gorges Right Bank Underground Power Station.

So far, the heavy plate totaling 8700 tonnes used in the key components of all the generator sets in Three Gorges Right Bank Underground Power Station penstock and spiral case will all be supplied by Baosteel which contributes to the localized production of the steel for China's Three Gorges Hydro Project.

As per report in the previous constructions of Three Gorges project, most of this kind of plate used to depend on import. Paying close attention to national key water conservancy projects, Baosteel actively develops high strength heavy plate.

The successful application of Baosteel's high strength heavy plate for hydropower projects in Three Gorges Right Bank Underground Power Station will not only expand the market share of this product, but also greatly accelerates the process of localized production of the steel for China's Three Gorges Hydro Project.

CISA host 5th China International Steel Congress

It is reported that during the 5th China International Steel Congress, hosted by CISA and organized by Metallurgical Council of CCPIT recently Mr Xu Lejiang board chairman of Baosteel made a theme speech at the Congress, titled Advancing Merging & Recombination to Achieve Green Development of China Steel Industry.

At the conference Mr Pu Haiqing member of National Congress Standing Committee, Deputy Director of Environment & Resources Council and Advisor of CISA; Mr Zhang Xiaogang chairman of CISA, Advisor Mr Wu Xichun, Mr Weng Yuqing Director general of the Chinese Society for Metals, Mr Luo Bingsheng managing Deputy Chairman of CISA, Madame Xie Qihua former Chairwoman of Baosteel and Chairwoman of Metallurgical Council of CCPIT, and Mr Ian Christmas, Secretary General of IISI etc were present.

Mr Xu Lejiang elaborated the green development of steel industry in an all round manner in his theme speech. He pointed out that the conversion of the functions and developing scales of steel enterprises must be achieved to fulfill the green development of steel industry. Merging and recombination is an important way to green development strategy of China steel industry.

Mr Xu made a brief introduction to Baosteel experiences in practicing green development through merging and recombination, Baosteel achieved the synchronization between replacement of the lagged behind and green development, scale expansion and green development and optimization of the overall arrangement and regional economic development. The report was highly appraised by the experts at the Congress.

China International Steel Congress is a high level international conference mainly for study and exchange of the deep level, overall and strategic issues in the development of steel industry. It is an important platform for CISA to promote foreign exchange & cooperation and healthy development of the industry, which enjoys good reputation and wide influence at home and abroad. The Congress is a biennial event. The theme of this session is "Green Steel" with 4 topics namely, structure regulation, policy & macro economic environment, technical innovation and green application.

Chinese trade volume in 2007 up by 31%YoY

According to the Ministry of Commerce China saw its export and import volume in service trade stood at USD 250.91 billion up by 30.9%YoY in 2007.

The Ministry of Commerce China said export volume of service trade in 2007 hit USD 121.65 billion up by 33.1% YoY over the previous year, while the import volume of service trade was USD 129.26 billion up by 28.8%.

According to the Ministry of Commerce China China's Hong Kong, the United States, Japan and the Republic of Korea are the four biggest service trade partners of China's mainland.

Mr Yi Xiaozhun vice minister of Ministry of Commerce China said China was making efforts to beef up service trade in some pillar industries, and to expand cultural-related service trade in overseas markets. He said that China was also trying to boost its tourism industry, marine transport industry, and promote service trade in traditional Chinese medicine, insurance and finance and technological service.

China accounted for 3.6% of the world's service trade volume in 2006.

Maanshan to install Meros sinter off gas cleaning plants

Siemens Metals Technologies announced that it has received a contract from the Chinese steel producer Maanshan Iron & Steel Company Ltd to install the first Meros plant outside Europe. The completion of this project is expected by mid 2009.

The released added that the new facility will be built at the No 1 Sinter Plant of the company's integrated iron and steel works located at Maanshan in Anhui Province and will be capable of treating approximately 1,000,000 square meters of sinter offgas per hour.

The Meros dry cleaning process reduces emissions of dust, heavy metals, sulfur dioxide and organic compounds to levels previously unattained applying conventional technologies.

For the Maanshan project Siemens will supply basic data, basic engineering and key process equipment. This includes the additive injection system, the water injection system for the conditioning reactor, filter bags, special components of the ID fan as well as electrics and automation for the entire Meros installation. Training and also advisory services for erection start up and plant commissioning round off the Siemens scope of supply. The entire project will carried out with no interference to ongoing sintering operations.

In the Meros process, adsorbents and desulphurization agents are injected into the sinter offgas stream to bind heavy metals, organic compounds, sulfur dioxide and other acidic gases. The gas stream passes to a conditioning reactor where the gas is moisturized and cooled, accelerating chemical reactions. Dust particles are trapped in a bag filter. In order to enhance the gas-cleaning efficiency and reduce costs, a portion of this dust is recycled to the offgas stream, allowing unreacted additives to once again come into contact with the offgas.

OMK Vyksa update on production in 5 months 2008

It is reported that Vyksa Metallurgical Plant has produced 618,515 tonnes of pipes of various grades in January to May 2008 period.

Its production of large diameter pipes was 48 282 tonnes in May 2008 and 298, 817 tonnes in January to May 2008

VMZ also produced 70,706 pieces of railroad wheels in May 2008 and 355,014 in January to May 2008.

Russia to establish over 40 foreign auto component plants

RIA Novosti reported that over 40 foreign auto component manufacturing plants are to be established in Russia.

Mr Dmitry Levchenkov director of the economics ministry investment policy department said "We have already signed 21 investment agreements with component makers. He said these agreements would make it possible eventually to halt the import of auto parts.”

The report added that Mr Vladimir Putin Prime Minister of Russia earlier this week urged car makers to localize production and manufacture as many auto parts in Russia as possible.

Russia aims to manufacture at least 60% of all auto parts domestically by 2012.

Severstal Auto inks deal with Fiat to set up two joint ventures

Interfax reported that Russia's Severstal Auto signed agreements to set up two joint ventures with Italy's Fiat at the St Petersburg Economic Forum recently.

The report added that the agreements were signed to set up a joint venture to make Fiat Linea cars and another joint venture to produce diesel engines.

Mr Vadim Shvetsov GD of Severstal Auto said at the signing ceremony that the size of the investment into the Fiat Linea joint venture has not been determined yet, but it will be announced soon.

Mr Vitaly Samsonov appointed as director of RusAl

Interfax reported that United Company Russian Aluminium (UC RusAl) has appointed Mr Vitaly Samsonov as the company's director for control.

UC RusAl said in a statement that Mr Samsonov will be responsible for maintaining and enhancing the effectiveness of the group's internal control system and risk management. Ms Alina Gutkina who previously occupied this role has been appointed Director of Internal Audit.

The statement said "The change in the company's structure is made in accordance with international standards and will ensure the separation of internal control and risk management from internal audit.

The report added that such a structure is based on the world's best management practices of publicly-listed companies and will improve the transparency and management control of UC RUSAL.

The internal audit directorate is coordinated by the Audit Committee of the Board of Directors. The purpose of dividing these functions is to further develop UC RUSAL's corporate governance system contributing to the company's attractiveness among investors.

Gasunie Nord Stream deal to be completed next week

RIA Novosti reported that a deal which will see Dutch gas transportation company Gasunie join the Nord Stream gas pipeline project will be finalized next week.

Mr Stanislav Tsygankov Head of the Gazprom International Business Department said during an international economic forum in St Petersburg that "The [company's] registration is being finalized. All internal corporate procedures will be completed next week."

In November 2007, the Russian energy giant signed a deal with Gasunie, giving the Dutch company a 9% stake in the Nord Stream pipeline being built between Russia and Germany under the Baltic Sea.

As per report the first leg of the pipeline which will run 1,200 kilometer with a capacity of 27.5 billion cubic meter of gas a year is planned to be commissioned in 2010. The construction of the second leg is due to be completed by 2012.

LUKoil to boost oil output 1.2 YoY to 1.7% YoY in 2008

RIA Novosti reported that Russia's largest independent oil producer LUKoil intends to boost oil output 1.2% YoY to 1.7% YoY in 2008.

Mr Vagit Alekperov CEO of LUKoil while speaking at the 12th St Petersburg International Economic Forum said "Crude output growth