Details of change of Indian export tax structure for steel

Indian government has carried out following changes in the rates of export duty on Friday. Notification No 77 /2008-Customs dated June13th 2008 to its notification No 66/2008-Customs dated May 10th 2008. They shall come into force with immediate effect.
The details are as under

SAIL to set up rebar mill and service center in J&K

ET reported that Steel Authority of India is setting up INR 150 crore steel processing unit in Kashmir and it is going to be a major investment by local standards. It will consume billets to produce TMT bars and get in galvanized sheets for corrugation and cutting to cater local market.

A SAIL official said that "It could be a small by SAIL standards but nobody has done such a huge investment in Kashmir. Profit is not the motive but the investment is as good as SAIL’s corporate social responsibility. The unit that is sprawling over 200 kanals would manufacture 40,000 tonnes of TMT bars and process 60,000 tonnes of GC sheet a year."

Another senior SAIL official said that "No, we have a quality restriction and for that we would be getting our own billets from iron ore sites. It is an integrated facility that we would be using and not the sub standard scrap."

Estimates have it that J&K consumes over 300,000 tonnes of rebars besides around 60,000 tonnes of CG sheets for roofing. SAIL controls over one third of the total market in TMT and shares the CG sheet with TATA Steel. Locally manufactured TMT bars dominate the local market. Almost half of the supply finds its use in various central and state power, road, bridges and railway projects, besides state government run Project Construction Corporation.

NHAI to put effective escalation clause for future projects

BS reported that, stung by the recent upward movement in input prices of road construction commodities and the lack of adequate escalation clause in the NHAI contracts to absorb them, the National Highways Builders Federation has written to National Highways Authority of India requesting it to take care of this issue in future contracts for upcoming projects.

NHAI currently reimburses escalation of input prices based on wholesale price index on cement, steel, bitumen and oil published by the economic advisor, union ministry of commerce and industry. However, these indices fail to provide the required reimbursement of actual price increase of key inputs.

NHAI said that "To ensure that contractors do not engage in speculative pricing and take on unmanageable risks leading to lack of progress at site, severe cash flow problems affecting the contractor’s ability to pay subcontractors and workmen, the reimbursement of cost increase for key inputs be based on difference in their prices prevailing 28 days before submission of bid to actual increase or decrease based on actual consumption of these key inputs."

For build, operate and transfer contracts, in which the developer is allowed to widen the roads and collect toll for a certain pre determined period, the association has said that after using the actual cost increase, NHAI should either increase the period for which the developer can collect toll or payout the grant.

Many of public agencies implementing projects including the railways, airports and state government agencies have already implemented some of these suggestions.

IIP fall is temporary - ASSOCHAM

Mr Sajjan Jindal president of Associated Chambers of Commerce & Industry of India said that higher input and borrowing costs coupled with global slowdown caused slippages in industrial production, which fell to 7% in April 2008 from 11.3% in April 2007.

Mr Jindal added that "It seems that slowdown has grappled Indian Inc temporarily because of higher input costs, little availability of power, disruption in infrastructure facilities and under capacities of ports and the government should address these issues with top priorities."

He further said that suitable policy measures would be forthcoming so that the infrastructure sector including steel and cement do better and contribute to industrial production in a manner so that no shortages are reported and employment is multiplied. He urged the government to correct anomalies in the steel sector as far as its tax structure is concerned.

Construction sector feeling cement and steel cost pressures

It is reported that Indian construction and infrastructure sector is feeling the heat of rising cement and steel costs following a steep increase in the prices of these primary inputs. Steel contributes about 15% to 20% of the total cost, whereas cement contributes about 10% to 15% of the total cost of a project.

Over the past several weeks, construction prices have climbed about 10% to 15% as the combination of a weak dollar and high crude oil prices filter their way through the economy. The weak dollar and global demand have caused base materials products to increase, thereby causing an upswing in building material prices. High fuel prices further compound the problem by naturally increasing the transport costs.

According to sources, in the past 3 months, the cost of construction has already shot up by about 10%. According to analysts, steel prices in the domestic market have gone up by 30% in the last 6 months, though now they are cooling down.

Steel and cement account for 33% of construction costs and every 50% escalation in the price of these materials will increase the cost of real estate by INR 75 to INR 100 per square feet. The average cost of freshly developed real estate will end up 8% to 10% higher from original estimates.

Mr Vikaas Ahluwalia director of Ahluwalia Contracts India Limited said that "There has been an increase in cement and steel prices which has led to increase in the cost of construction. This has also put a question mark on our efforts to provide affordable housing to middle and lower middle segment buyers. However, this is not an ongoing price hike trend as it can be attributed to market forces. The mismatch between demand and supply of these materials is expected to be normal soon and the high prices of steel and cement will gradually cool off."

Mr Kamal Taneja MD of TDI Group said that "There will be a significant rise in the cost of construction, by about 20%, due to the rise in cement and steel prices. Selling prices of property are expected to shoot up substantially in the near future."

West Bengal seeks help for rehabilitation of land losers

SNS reported that Mr Buddhadeb Bhattacharjee chief minister of West Bengal has sought assistance from the centre to prepare a comprehensive policy to compensate land losers.

Mr Bhattacharjee said that "We need to decide on an appropriate rehabilitation policy for the land losers. I have already spoken with the Centre to decide on the matter."

Meanwhile, the chief minister, once again pointed out that while the largest private steel plant was being set up in the state, there was a shortage of downstream industries. Accordingly, he urged industrialists to set up industries that use steel as their raw materials such as nails and screws.

He said that "Neither medical equipment nor power equipment like transformers and meters are manufactured in the state. Private parties should come ahead to manufacture such items."

PGCIL to seek USD 600 million loan from World Bank and ADB

It is reported that Power Grid Corporation of India Limited will seek fresh loan of USD 600 million from the World Bank and the Asian Development Bank to fund its mega transmission projects, including those relating to the ultra mega power projects.

As per report, PGCIL will approach ADB for USD 400 million and the World Bank for USD 200 million. The proposed loan will be over and above USD 800 million already sought from the 2 multilateral agencies.

Man Industries to develop real estate projects

Man Industries India is foraying into real estate, with a newly formed subsidiary called Man Infraprojects in Mumbai by investing INR 1,000 crore over 3 years to develop seven real estate projects in Mumbai, Navi Mumbai and Indore.

In Phase I, Man Industries will develop 3 projects, two in Mumbai and one in Navi Mumbai, with a built up area of over 1 million square feet. In Mumbai, it will develop 2 commercial projects in Bandra and Vile Parle, whereas in Navi Mumbai it develop a mixed use township complete with a 5 star hotel, a IT cum commercial centre besides a luxury residential block.

CSR Nanjing Puhez bags contract from Mumbai Metro One

CSR Nanjing Puzhen Rolling Stock Company has bagged an INR 604 crore contract from Mumbai Metro One, a special purpose vehicle implemented to develop the Versova Andheri Ghatkopar Metro Rail project.

CSR Nanjing has bagged the contract for supplying 16 trains. The first four coach train will be rolled out within 18 months and all 16 trains in the next 2 years.

Tariff Authority to finalize upfront tariffs for terminal projects

It is reported that Tariff Authority for Major Ports has started the process to finalize upfront tariffs for 5 upcoming terminal projects in 4 ports namely Paradip, Visakhapatnam, New Mangalore and Goa to ensure faster implementation of the projects under the new rules decided for port projects to be taken up on a build, operate and transfer basis through public private partnerships.

The new rules, which are specified in the model concession agreement, state that the tariff ceilings would be fixed upfront and competitive bids on a revenue share basis will then be invited from companies wanting to develop and operate port terminals. The authority is required to specify the desired key performance indicators for port services and the costs normally associated with such parameters. Based on these cost norms, TAMP would decide the tariff ceilings for different terminals of a port. These tariffs would be linked to wholesale price index and reworked periodically.

According to official sources, the projects for which TAMP has started the consultation process with port users are the deep-draft iron ore and coal terminal in Paradip, one of the berth development projects at Visakhapatnam, mechanized iron ore handling at berth 14 in New Mangalore, development of berth 17 for handling bulk cargo in Goa. Tuticorin port has also just submitted its normative report for developing berth number 8 as container terminal, which TAMP would start processing.

Earlier, port tariffs were finalized by the Tariff Authority for Major Ports after awarding the terminal development work to a company. This method was changed because the earlier methodology which assured 15% returns on capital employed had become a contentious issue, with terminal operators saying that the norms did not reward those operators who brought in efficiency. Some terminal operators such as PSA-SICAL, DPW had started approaching court following Tariff Authority for Major Ports’s attempts to reduce port charges during the port operations phase.

Karnataka approves INR 3,000 crore ring road project

Projects Today reported that Karnataka government gave approval for the INR 3,000 crore peripheral ring road project in Bangalore.

The proposed 116 kilometers long road project will be developed on the public private partnership model and will get connected to Sarjapura, Attibele, Anekal, Hoskote, Sulebele, Doddaballapur and Nelamangala. The road will be 100 meters wide and will be a tolled stretch with a dedicated bus lane. The private partner for the project is yet to be finalized.

Bangalore Development Agency will be the nodal agency to execute the project. In the first phase, construction will be taken up on 65 kilometers and that will connect Tumkur Road, Bellary Road, Old Maras Road and Hosur Road. Phase I will be completed within 30 months from the day of commencement of work.

CCEA approves new fertilizer pricing policy

Cabinet Committee on Economic Affairs has cleared a new fertilizer pricing policy that will make some varieties cheaper and help farmers. The proposed policy is expected to encourage farmers to use complex fertilizers that contain more than one nutrient instead of ones which have only one nutrient.

Under the existing pricing regime, the price of nutrients in complex fertilizers was higher than the price of same nutrient in straight fertilizers like urea or DAP. This led to higher usage of straight fertilizers vis a vis complex fertilizers.

CCEA also decided to provide a uniform freight subsidy for all fertilizers. This will help farmers across India get fertilizers in the crucial sowing period. Urea has so far been eligible for freight subsidies under the subsidy scheme but DAP and MoP was not. The new scheme is based on payment of actual freight, and will ensure easier availability of fertilizer in all parts of the country. At present, fertilizer firms get a fixed sum as freight irrespective of distance from the production centre to the sale point.

Work on Gurgaon Jaipur highway to start by December

It is reported that construction work on the 6 laning project of the 225.6 kilometers long Gurgaon Jaipur national highway is expected to start by December 2008. The concession agreement for the project was signed on June 6th 2008 between National Highways Authority of India and the private developers. The project that is part of NHDP Phase V has been awarded on BOT toll basis on design build operate finance basis.

NHAI had so far acquired 70% of the total land and the remaining would soon be handed over to the private developer.

The Gurgaon Kotputli Jaipur on NH 8 is a high traffic corridor connecting Haryana and Rajasthan. The corridor was 4 laned as part of NHAI's Golden Quadrilateral project. The project is also significant as it is amongst the early projects where NHAI has adopted the new model concession agreement where NHAI will have a share in the toll revenue earnings during the concession period. This is unlike the previous approach where projects were offered based on the upfront payment offered to NHAI.

Mr Shashank Shekhar VC of KMC Constructions Limited said that financial closure would be reached within 6 months, soon after which construction work would begin.

For the Gurgaon Jaipur section, the ETA KMC consortium has offered a revenue sharing proportion of 48%, which is amongst the highest seen in NHDP V projects awarded so far. This proportion would increase by 100 basis points every year, up to the end of the concession period.

Using the new model concession agreement, NHAI in February 2008 had awarded 5 projects under NHDP V including the Gurgaon Jaipur section. The others were Chennai Tada, Surat Dahisar, Chilkaluripet Vijaywada and Panipat Jalandhar.

Hinduja to finalize partner for Vizag power project

It is reported that Hinduja Group is expected to finalize a strategic investor to offload 15% stake in the 1,040 MW coal based power project at Visakhapatnam in Andhra Pradesh by August 2008.

The group is at an advanced stage of talks with 5 investors from Japan and 2 from Europe. The AP government has allocated land for the project and coal linkage is closer to being finalized. The total cost of the project is estimated at around USD1 billion.

SBI CAPS has been appointed lead banker and the banker will work with the group to raise the debt portion of the capital investment.

JSPL starts 3rd unit of power plant

Jindal Steel & Power Ltd announced that its subsidiary Jindal Power Ltd has informed that third unit of 250 MW capacity has started generation of power for commercial purposes from June 15th 2008.

With the commissioning of this Unit, JPL has now power generation capacity of 750 MW. Last unit of 250 MW is in the final stage of implementation and the total project of 1000 MW is likely to be operational by July, 2008.

TATA forms JV with Jasper Industries for power plant in Orissa

TATA Steel Ltd announced that it along with and its wholly owned subsidiary, Rawmet Ferrous Industries Ltd have entered into a Share Subscription Agreement and Shareholders' Agreement with Jasper Industries Pvt Ltd to set up a coal based power plant of 2 X 67.5 MW capacity at Anantpur Village near Cuttack in Orissa, subject to fulfillment of certain conditions.

Pursuant to the Shareholders' Agreement, TATA Steel and Rawmet together will hold 26% and Jasper Industries will hold 74% of the stake of the equity in JV named Bhubaneshwar Power Pvt Ltd.

Flat Products - Outcome of Board Meeting

Flat Products Equipments India Ltd has informed BSE that the Board of Directors of the Company at its meeting held on June 12th 2008, inter alia, under the Physical category has approved the Transfer of accepted Physical Shares numbering 3868 out of 5745 valid shares under 45 Nos of Folios tendered in the Letter of Credit by the Acquirer Cockerill Maintenance & Ingerierie SA Belgium. This approval is subject to the payment to the respective sellers.

Jyoti Structures designates Mr Nayak as deputy MD

Jyoti Structures Ltd announced that its board of directors at a meeting held on June 13th 2008 has re designated Mr Santosh Nayak as deputy MD of the Company with effect from June 14th 2008.

Financial closure for Krishnapattam UMPP in 3months – Report

It is reported that the financial closure of the Krishnapatnam ultra mega power project of Reliance Power Limited would be achieved in the coming 3 months.

Lenders to the INR 20,000 crore project, led by IDBI, have to commence due diligence for the project. Awarding contracts for boiler, turbine and generators would be completed in 2 months. These critical components component constitute 50% of the project cost.

Officials said that engineering majors such as BHEL, Doosan and L&T would be bidding for the contracts. These companies have submitted technical offers and commercial offers are yet to be negotiated. The EPC for the project would be undertaken by the group company Reliance Infrastructure Limited. Total land requirement for the project is 2,625 acres and it has been able to purchase about 65% of the land required for the project. The Andhra Pradesh government is in the process of acquiring the remaining land for it.

According to the schedule the first unit of the Krishnapatnam project is to be online by September 2013, but Reliance Power is making efforts to advance the commissioning of the unit by mid 2012. The 4,000 MW coal fired project would have 5 units of 800 MW each. The coal requirement for the project is estimated to be 14 million tonnes per annum at 80% plant load factor. Fly ash from the plant would be utilized for the upcoming cement plants of the group. A portion of ash would also be offered to cement manufactures in Visakhapatnam area.

Kerala HC restrains work on Vizhinjam terminal

BL reported that Kerala High Court has restrained the state government and Vizhinjam International Seaport Limited from commencing the construction works of the proposed international deepwater seaport & container transhipment terminal at Vizhinjam for 2 weeks in case it got clearance from the central government.

However, Mr Justice Thottathil B Radhakrishnan made it clear that the central government could go ahead with the consideration of the grant of clearance for the new port. He also directed the state government to place on record the report of the high level committee which considered the tenders submitted by various consortiums for the construction of the new port.

The court asked IL& FS Infrastructure Development Corporation Limited, which assisted the government to evaluate the tenders, to place on record its evaluation report regarding the tender submitted by the petitioner Zoom Developers Private Limited of Mumbai.

According to the petitioner, after an evaluation of the bid submitted by the petitioner, IL&FS had sought certain clarifications and documents. The petitioner had later complied with all these requirements. However, the petitioner came to know from the newspaper reports that Hyderabad based Infrastructure and Power Development Company, Lanco Infratech Limited had secured mandate from the Kerala government to develop the project.

Indian power ministry to improve ties with BHEL

Mr Jairam Ramesh union minister of state for power said that he wants to improve relations between Bharat Heavy Electricals Limited and his own ministry so that the power equipment major gets its due recognition.

Mr Ramesh said that BHEL has not been granted its due place in the past while the Chinese equipment makers are fast entering into India. The government has set an ambitious target of adding over 78,500 MW capacity in the 11th Plan, bulk of which would be through the coal fired stations.

While the BHEL would account for a major equipment supplies, the power generating companies have been facing shortages of the turbines and boilers going for imports.

Expressing concern on the bottlenecks faced by BHEL in transporting heavy equipment, Mr Ramesh said he would take up the issue with the ministries of railways and transport.

TN may allot land for TATA Steel titanium project

BS reported that Tamil Nadu government has agreed to help TATA Steel procure nearly 10,000 acres of land for its INR 2,500 crore titanium dioxide project in Tuticorin district.

This is the first time the state government has officially said it will get involved in the land acquisition process for TATA Steel's ambitious project, which has been on paper for nearly a year.

Senior government officials said that though the state would not directly buy large tracts of land on behalf of the steel major, it would ensure that the acquisition process was smooth for TATA Steel to do so on its own. They added that "We have already instructed district collectors and other revenue officials to make sure that clear title deeds were made available for the company to approach legitimate land owners. We will also help TATA Steel by buying small bits of land to let them aggregate continuous land area of 10,000 acres for mining."

TATA Steel had earlier indicated that it may look at alternative locations like Orissa and Andhra Pradesh to relocate the project owing to delays over land acquisition. A TATA Steel official, however, said that such a drastic move would be taken only after extensive negotiations with the Tamil Nadu government. He added that "We had committed ourselves to bringing this project to Tamil Nadu and will try to honor it as much as we can."

The land acquisition process was also caught in political crossfire as powerful local interests in Tuticorin had objected to the project with some even claiming that TATA Steel was trying to buy agricultural land. The state government had then dismissed these charges and said that less than 4% of the land area where TATA Steel proposed to mine came under agriculture. The state continues to support this stance.

It may be noted that TATA Steel has been able to do little to see the project off the ground since signing the MoU with the state government in June 2007 because it could not acquire the land on its own.

NMDC to pass on iron ore export tax to overseas buyers

The Telegraph reported that National Mineral Development Corporation would pass on the duty impact to overseas buyers.

Mr Rana Som CMD of NMDC said that "Our company will be largely unaffected by the imposition of the export duty on iron ore." He added that it exported to Japan and other countries on long term basis where the prices were lower than the spot market rates.

NMDC is currently negotiating with Japan Steel Mills to fix the price for this year’s contract. Brazil’s Vale has approved a 65% increase in prices. But BHP Billiton and Rio Tinto have asked for even more taking into account freight charges.

Mr Som indicated that NMDC would veer towards BHP and Rio rather than Vale.

Steel output to surpass requirements by 2011-12 – Mr Paswan

Mr Ram Vilas Paswan union steel minister said that steel production in India will achieve 124 million tonnes of steel capacity by 2011-12, which would be more than the domestic requirement leading to relenting pressure on its alloy prices. He added that India's requirement would be around 110 million tonnes at that point of time.

The annual demand for steel in India has been rising by about 13% but production is growing by over 6%. India's crude steel production was 53.9 million tonnes in 2007-08 fiscal and out of it about 5 million tonnes were exported. India imported nearly 7 million tonnes of steel.

Man Industries to foray into steel manufacturing

BS reported that, after re entering in the realty business, Man Industries has set its eyes on manufacturing of steel with an initial capacity of 1.5 million tonnes to 2 million tonnes per annum entailing an investment of INR 4,000 crore.

As per report, It is open to both setting up a Greenfield facility as well as outright acquisition of an operating firm having that kind of capacity.

Mr Ramesh Mansukhani chairman of Man Industries however said that there is no such proposal yet, but the company is certainly looking for opportunities to enter into the steel business.

Man Industries has recently announced its plans to locate a new manufacturing facility on a 162 acre site at the Little Rock Port, USA with an investment of USD 100 million. Production from the plant will start next year.

India plans to commercialize uranium mine exploration

It is reported that India’s Department of Atomic Energy is planning to commercialize exploratory uranium mines, for speeding up domestic mining efforts.

Under the proposal, private players may be allowed to invest in designated mines and extract uranium, with state owned companies such as Uranium Corporation of India. Mines that have been discovered and explored so far by the Atomic Minerals Directorate for Exploration and Research, which carries out the initial exploration of nuclear minerals in India, are likely to be commercialized.

This move comes in the wake of around 190 tonnes per annum of additional uranium resources being established recently in Sikar district of Rajasthan and Lostoin and Wahkyn in Meghalaya.

Significant mineralized bands have also been identified in Belgaum and Gulbarga districts in Karnataka, Nalgonda, Guntur and Kadapa districts in Andhra Pradesh, Mahendragarh district in Haryana, Durg district in Chhattisgarh and Jajpur district in Orissa.

Uttarakhand approves Delhi Dehradun expressway

Projects Today reported that Uttarakhand government has agreed to a proposal by Uttar Pradesh government to build an expressway from New Delhi to Dehradun.

As per report, the 200 kilometers long, eight lane expressway along the Hindon River will start from Delhi linking Saharanpur and Ghaziabad in Uttar Pradesh. From Saharanpur, the state government will further extend it up to Dehradun.

Submission of price bids for Tilaiya UMPP by November 2008

Power Finance Corporation has finalized the submission of price bids for the 4,000 MW Tilaiya ultra mega power project in Hazaribagh district of Jharkhand on November 4th 2008, after which short listing of the successful bidder will take place.

PFC had earlier short listed 11 of the 13 companies who had sought qualification. These are Reliance Power, TATA Power, NTPC, Torrent Power, Essar Power, Sterlite, Lanco, JSPL, GVK Power, L&T and AES. The two companies who have not qualified to bid are Citra Thermal Power and Dian Wijaya.

Of the 11 short listed companies, 7 have already bought the request for proposal documents.

IL&FS emerges lowest bidder for JNPT SEZ project

Infrastructure Leasing & Financial Services has emerged as the lowest bidder for Jawaharlal Nehru Port Trust's port based special economic zone at JNPT in Thane district of Maharashtra.

Three companies including IL&FS and Ernst & Young have submitted their bids, in which IL&FS had quoted INR 7.2 million and Ernst & Young quoted INR 2.5 crore.

It may be noted that JNPT has floated a tender in December 2007 to hire a consultant to draw up a master plan for the EPZ, which will come up on 1,200 ha of land.

Hirakud dredging work to be completed by June end

SNS reported that the much awaited dredging work inside Hirakud reservoir is in full swing and is expected to be completed by end of June 2008. The dredging has been undertaken to open a passage to Sasan canal and facilitate smooth flow of water for the summer crop.

Mr JB Mahapatra superintendent engineer of Hirakud dam project said that "Henceforth, water in the Sasan canal will not be a problem and farmers can get water for cultivation."

The dredging work began on April 28th 2008 and more than 100,000 cubic meters of earth have been excavated so far, he informed. Since the mouth of the canal remained higher than the water level in the reservoir during summer, there arose problems in discharge even if there was sufficient water in the reservoir.

Mr Mahapatra said that dredging is done in 1 kilometer main and 1 kilometer link canal inside the reservoir for smooth flow of water during all seasons including summer. He added that "Nearly 2.5 to 3 meter deep and 36 meters wide canal is dug inside and hence we expect a regular flow will be maintained to the canal. At the same time, water to the tail end will not be a problem if wastage of water is prevented."

Meanwhile, Dr RN Bohidar development commissioner cum additional chief secretary, Mr Pradipta Kumar Patnaik collector of Sambalpur and senior officers from water resources department have visited the work site and expressed satisfaction at the progress.

Deccan Cements unveils INR 432 crore CAPEX plan

BS reported that Hyderabad based Deccan Cements Limited has embarked on a INR 432 crore capital expenditure plan, which involves expanding the production capacity at its existing facility in Nalgonda district, setting up an 18 MW captive thermal power plant to cater to cement manufacturing, besides putting up a railway siding to reinforce its infrastructure in cement dispatches as well as inward materials like coal, slag and gypsum.

Mr MB Raju chairman of Deccan Cements said that "We are adding 1.3 million tonnes capacity to the existing 0.7 million tonnes, with special emphasis on blended cements, ordinary portland cement and specialty cements. The Brownfield expansion will be commissioned in August 2008 and commercial production would begin in September 2008, with an additional 500,000 tonnes to start with."

Mr Raju said that the captive thermal power plant, which was expected to be commissioned by this year end, would take its aggregate generating capacity to 27.5 MW. It currently has 4.5 MW hydel power and 5 MW wind power plants in Andhra Pradesh and Tamil Nadu. He added that "We require around 22 MW for captive use and the surplus will be earmarked for merchant sales."

Deccan Cement has clocked a net profit of INR 10.93 crore for the January to March 2008 quarter up by 37.14% YoY as compared with INR 7.97 crore during January to March 2007 quarter. Its total income during the quarter grew by 15.19% YoY to INR 54.51 crore as against INR 47.32 crore.

For the full year, its net profit touched INR 47.96 crore up by 68.75% YoY as against INR 28.42 crore, while total income was up by 22.24% YoY to INR 212.25 crore as against INR 173.62 crore.

SAIL ISP awards 2 contracts to Nagarjuna Constructions

Nagarjuna Construction Company Limited announced that it has secured three orders worth INR 575 crore.

The first order worth INR 284.64 crore is secured from Steel Authority of India Limited’s IISCO Steel Plant for structural works for basic oxygen furnace, continuous casting plant and lime & dolomite plant to be completed over a period of 24 months.

The second order worth INR 197.19 crore is also from SAIL ISP for structural works for re heating furnace and rolling mills to be completed over a period of 20 months.

JSW Steel to set up rebar mill in Georgia

JSW Steel decided to enter into a JV for setting up a steel plant for manufacturing of TMT bars in Georgia. The plant will cater to the needs of construction industry in Eastern European countries mainly in Georgia, Armenia, Azerbaijan, Russia and former CIS Countries.

The board of director of JSW Steel has decided to invest in Geo Steel LLC, to the extent of 49% of equity. Geo Steel LLC is incorporated under the laws of Georgia and is setting up a steel rolling mill facility in Georgia with an initial capacity of 175,000 tonnes per annum of rebars.

The estimated project cost is USD 42 million, which is proposed to be financed by way of debt of USD 28 million and the balance through equity of USD 14 million.

Out of the total equity capital of USD 14 million required for setting up of the project, JSW Steel will invest USD 6.86 million through its wholly owned subsidiary JSW Steel (Netherlands) BV comprising 49% of the equity. The remaining 51% will be funded by JV partner.

Steel makers in US see 2008 as strong year

According to Mr Andrew G Sharkey president of the American Iron and Steel Institute, US steel industry is on track to ship about 110 million net tons of steel products in 2008 up from almost 106 million tons in 2007.

Mr Sharkey at its recent annual meeting of AISI estimated that steel imports will be around 30.5 million tones in 2008 down from 33.2 million tons in 2007. He added that annualized first quarter imports are running at a rate of 33.9 million tons.

Mr Sharkey insists that imports will run below the 2007 import tonnage of 32.3 million. Exports, which this spring have been running around 11.7 million tons annualized, may exceed 12 million tons in 2008, which would be another record.

AISI numbers project that apparent steel supply in the US will increase to about 123 million tons in 2008, up just slightly from a revised 122 million tons in 2007. This is close to the end March annualized projection of 123.5 million tons for 2008.

Even though the AISI meeting was held in conjunction with the Chicago based Metals Service Center Institute, Mr Sharkey didn't address actual end use projections to compare with the 116 million tons in 2007 that includes distribution industry inventory adjustment calculations.

(Source: American Iron and Steel Institute)

Formosa Plastics to start building steel plant in Vietnam in July

Bloomberg reported that Taiwan’s biggest diversified industrial company Formosa Plastics Group would begin construction of a steel plant in Vietnam next month.

The report quoted Mr William Wong CEO of Formosa as saying that it is also studying building an oil refinery and ethylene plant in the country. But he didn't give details about the new projects being considered.

The Economic Daily News reported June 11th 2008 that Vietnam is trying contain an inflation rate that's the fastest since at least 1992. Pacific Hospital Supply Co and Taiwan Sugar Corp have postponed plans to invest in Vietnam.

Mr Wong said that “We will be careful, while investment in Vietnam will continue.” He added that “We remain confident.''

Mr Wong said that they are seeking to build factories overseas as there isn't much land for new plants in western Taiwan's Mailiao, the group's biggest production site.

Danieli Corus to design first new BF in US for Nucor

Danieli Corus announced that it has received an order from Nucor Corporation for the design and supply of a Greenfield Blast Furnace Plant and related installation parts for a new iron making facility, which may be built in St James Parish in Louisiana.

Danieli Corus has supported Nucor in the feasibility studies for this entire project in 2007 and has been awarded this project under commercial terms.

The Danieli Corus scope of the contract as part of the development of the entire Greenfield is as follows.
1. Furnace including lining and cooling systems
2. Hot blast system
3. Slag granulation plant
4. Gas gleaning plant
5. Pulverized coal injection system
6. Charging conveyor belt
7. Cast house
8. Stock house
9. Top gas recovery turbine
10. Automation
11. Training and operational assistance

All installation parts will be designed and built in full accordance with Danieli Corus’s design philosophies allowing for reliable low cost, high productivity ironmaking through process optimization and long campaign lives for e.g. the furnace proper and hot blast system.

Nucor has applied for a permit to build the facility on the banks of the Mississippi river near the town of Convent, which is the only US location still under consideration. The new Nucor Steel Louisiana would produce 3 million tonnes of pig iron per year, giving Nucor enhanced control over their raw material supplies.

This is a breakthrough for the North American steel industry, since at the time of completion the site would have the first new Blast Furnace commissioned on the continent in 30 years.

Construction starts on jobs center for ThyssenKrupp Mobile

It is reported that construction would begins on July 7th 2008 on a USD 12 million center that will train workers for jobs at the ThyssenKrupp steel mill being built in north Mobile County.

Once completed in June 2009, Alabama Industrial Development Training, a division of the state's two year college system, will manage the center.

The state's Department of Postsecondary Education in February approved USD 12 million to build and equip the center.

The USD 3.7 billion steel mill in Calvert is expected to employ about 2,700 workers at full production. The plant is expected to begin partial production in 2010.

Corus agrees for pay rise at Scunthorpe

It is reported that a 4% pay rise has been accepted for Scunthorpe's 4,000 Corus steelworkers. The deal, sealed in London by the industry's largest union Community, will boost average basic pay by about GBP 104 a month.

The 4% rise, to be backdated from April 1, is the first to be agreed with the Indian conglomerate since the GBP 6.2 billion TATA takeover 14 months ago and one of the fastest pay deals ever reached.

Corus agreed to increase a 3.25% offer, which was rejected by trade union negotiators last month. Other unions, including Amicus and the GMB, involved in the pay talks have decided to ballot their members over the deal.

Mr Mick Fell vice chairman of the Scunthorpe Works Multi Union Committee said that "I can confirm we were pleased to agree the deal. "Both parties were happy with it and we hope to work together to make the company a more successful business and one to be proud of in the future."

Mr Fell stressed that the 4% rise was a standalone agreement and was not linked to bonus consolidation.

Ms Rachel Cox a spokeswoman of Corus said that "We can confirm an agreement has been concluded." But she declined to discuss the details.

(Sourced from scunthrope.co.uk)

Pig iron plant in Argentina could cause environmental damage - Ms Alicia

BNamericas reported that the possible installation of a pig iron plant by Brazilian producer Vetorial Siderurgia in Argentina's El Chaco province could cause severe environmental damage.

Ms Alicia Terada a congresswoman from the province told BNamericas that "The plant would consume 180,000 tonne per year of charcoal from native forests. That would mean the destruction of about 400,000 trees each year.”

Ms Alicia said that "And in this case El Chaco province would contribute 100% of the charcoal resulting in major deforestation.”

She believes that the company's interest in the province stems from the amount of native forest available and the lack of regulation on behalf of forest management services and other entities.

BEAMA warns members of steel price increases

With short supply threatening steel prices yet again, BEAMA’s Steel Products Group is on record reporting rapidly increasing raw material prices and warning future price increases will impact.

A Group spokesperson said that “Steel is now traded on the London Metal Exchange and therefore a futures market exists. In this respect, its price now behaves more like that of copper. We therefore endorse the Steel Suppliers trade association’s price warning.”

The spokesman said that “Driven by supply factors, it’s a situation progressively worsening, echoing the situation of four years ago when the price of steel rose by 50%. With the UK likely to suffer more than mainland Europe, due to fewer suppliers, industry sources believe the UK will experience a supplementary increase of up to USD 140 per tonne. The implications for contractors and manufacturers are serious.”

The Group cites many factors for steel shortages and consequent price rises. Notably, home demand from Asia, previously a low cost exporter, has doubled in ten years making the region a net importer. However, other, more fundamental factors have emerged. For instance rising fuel costs, dearth of basic feed stocks iron ore, scrap, coke.

It said that “Steel making is a cyclical activity and is currently at a ten year high. Markets are strong. The problem is not just price, some stockholders have allowed stocks to diminish, worried by the financial risk of replacing them at current prices this has an impact on availability. For manufacturers and electrical contractors, all this means uncertainty, deferments, frustration, inevitable cost penalties.”

BEAMA’s Steel Products Group members, manufacturers of steel cable tray, ladder and support systems, are reassuring customers they are doing everything possible to get supplies through the distribution system on time, and at the most competitive prices. The Group urges contractors, wholesalers and specifiers to be aware of the difficulties manufacturers are laboring under in this current climate. Member companies include well-known names: Metstrut, Tyco-Unistrut, and Legrand Electric’s Cablofil, Swift and Arena products.

Harmony Gold less aggressive on steel price case with ArcelorMittal SA

It is reported that Harmony Gold is backing off from the battle to ensure that ArcelorMittal South Africa pays its ZAR 692 million fine for charging excessive steel prices and takes remedial action to ensure it charges fair steel prices.

Mr Graham Briggs CEO of Harmony said that while ensuring that ArcelorMittal SA's appeal for the competition tribunal fine was unfinished business for the gold mining company, Harmony is likely to be less aggressive in its approach to the matter.

Mr Briggs said that "It is a competition issue. We actually do not have anything more to win out of the case. We are not going to be subsidized for the steel we use. What is to win out of it now?"

By the beginning of next month, ArcelorMittal SA would have on average increased its local steel prices by 70 percent this year. Mr Briggs said that he believed the argument that Harmony had previously made: that Arcelor charged excessive prices for its flat steel valid.

An industry analyst said that Arcelor was likely to make a huge effort to appeal the fine and any remedial action.

(Sourced from www.busrep.co.za)

Recession reports - Ford may cuts more jobs as US market slumps

AP reported that with the US auto market worsening for Ford Motor Co almost daily the company will have to further reduce its factory work force in the coming months.

United Auto Workers union officials were told in a meeting that Ford needs to make additional cost cuts. Ms Anne Marie Gattari a spokeswoman of Ford said that “So that we can make the vehicles in an efficient way that customers are buying.”

At the meeting, attended by about 300 executives, plant managers and union officials from across the US Ford reiterated previous statements that it would make buyout and early retirement offers at targeted factories as it tries to further pare its payroll. Union members declined to comment as they were leaving the meeting.

Ms Gattari said that Ford is still trying to determine which factories would get the offers, but prefers to use them over more dramatic steps such as closing factories. She said that "We have a lot of cost-cutting elements that we can work on together. We are looking at doing those kinds of things before we do anything more drastic that no one wants to do."

Ford announced in May that it would cut production of trucks and SUVs, but increase factory output of cars and crossovers through additional shifts and overtime and the realignment of some of its manufacturing capacity. The company also said it plans to accelerate the North American introduction of some of its small cars from Europe and South America, although it didn't reveal which vehicles.

The slumping US economy has cut US auto sales by 8% during the first five months of the year, but it's been a double hit on Ford, General Motors Corp and Chrysler LLC as consumers shun their high profit pickup trucks and sport utility vehicles for more fuel efficient models as they cope with USD 4 per gallon gasoline.

Agriculture protests slowing down metal sector in Argentinean

BNamericas reported that a number of metalworking companies in Argentina's Córdoba province have been forced to temporarily stop operations due to the ongoing conflict between the government and the country's agriculture sector.

A metallurgical industry executive told BNamericas that "The conflict with the agro sector has been going on for more than three months and has slowed investments in the metallurgical sector. Now add to that the protests being carried out by the transport sector, which are causing us to not receive the supplies we need for our processes.

The executive said that without raw materials or demand for its products, many metalworking plants have been forced to partially suspend workers' duties and minimize activity. The executive added that “If the situation continues, some 2,200 workers could be affected.”

The agriculture sector in Argentina is demonstrating to demand that the government repeal taxes recently applied on the export of its products.

In May, Córdoba's metalworkers expressed concern about a possible lack of industrialization in the sector sparked by inflation, a loss of competitiveness and economic uncertainty.

SilMag to provide alternative magnesium supply for hot market

JMB reported that magnesium smelter, SilMag of Norway starts former Norsk Hydro's Porsgrunn plant in 2011 at annual 35,000 tonnes output through the acquisition from Hydro.

SilMag launches secondary magnesium alloy production at annual 15,000 tonnes in 2009. The firm tries to expand the operation to compete with Chinese suppliers under the surging international market.

Recession reports - South Korean growth could fall to 4%

A top executive of the International Monetary Fund said that South Korea's economic growth rate could slow to as low as 4% in 2008 citing such challenges as the global slowdown coupled with surging oil and commodities prices.

The executive in an interview with Yonhap News Agency said that “IMF staff is currently in the midst of our regular annual Article IV discussions with Korean officials and their projections could be revised as a result of those discussions. But we do expect growth to slow this year, most likely to somewhere in the range of 4% to 4.25% before beginning to recover in 2009, hinting that Asia's fourth largest economy will hit a trough this year.”

The forecast on South Korea is more conservative than a 4.3% gain that the Organization for Economic Cooperation & Development predicted earlier this month. It is also the latest downbeat growth projection for South Korea, as the government struggles to attain its target of 6% growth for this year in the face of toughening conditions at home and abroad.

Dry docks in short supply - Diana Shipping CEO

According to Mr Simeon Palios chairman & CEO of Diana Shipping, dry docks were not expanding fast enough to match the growth of the global shipping fleet, delaying repairs and possibly bolstering hire rates.

Mr Palios said that “Ships need to dry dock routinely for repairs to remain acceptable for customers including grain shippers. A shortage of dry docks would cause delays and reduce the number of ships available, buoying rental costs. The size of the fleet has doubled but the brand new ships don’t dry dock.”

He added that “When these vessels come to dry dock, it’s going to be a problem.”

The Baltic dry index, a measure of shipping costs for commodities, has risen 31% this year due to port congestion in nations such as China and Australia. Demand for commodities is rising, with the UBS Bloomberg CMCI index of 26 raw materials up for the seventh day in a row.

Alcan Lynemouth Smelter to upgrade duct system of Potline 2

Danieli Corus announced that it has received an order from Alcan UK for the Basic and Detailed Engineering of the inlet duct system of the Potline Nr 2 at their Lynemouth Smelter.

This includes a provision for the proprietary Dual Duct Boosted Suction system, which improves the performance of the duct system and consequently the environmental performance in the Smelter Potline.

The Lynemouth Smelter is currently equipped with FTC and GTC as well as URT technologies from Danieli Corus.

IMF to investigate oil market - Report

The International Monetary Fund said that it would investigate the surge in crude oil costs after the G8 club of rich nations called for a probe into wild swings in energy prices.

Mr Dominique Strauss Kahn chief of International Monetary Fund said that the tight demand and supply conditions were the key reason for soaring oil prices, which are up fivefold since 2003, but added that may not be thought to explain all the surge.

Mr Strauss Khan told reporters that “One may think some financial considerations are at stake and that’s the reason why the G8 asked the IMF to work for the next meeting in October to produce a report on this question.”

He said that some members of the Group of Eight thought that probably there would be some influence of financial factors, let’s call it speculation if you want, while others disagreed.

He added that “It is totally unclear so we need to have this study to answer this question after the G8 ended two days of talks about the economic threat from a doubling of food prices in three years and sky high oil costs.”

The ministers in their communiqué asked the IMF and International Energy Agency to investigate the real and financial factors behind the recent surge in oil prices and volatility and the effects on the global economy.”

World oil prices soared to record levels of nearly USD 140 per barrel earlier this month, with some blaming speculators for the swing. The G8 also urged oil producing nations to open the taps to curb the feverish rise in crude costs, which has stoked protests worldwide over rising fuel prices.

RWE Innogy takes over Czech wind projects

RWE Innogy is taking over six proposed wind energy projects in the Czech Republic with a total volume of 100MW from project developer Aufwind Energie as well as acquiring its local project development company AFE Bohemia.

The German utility has said that building permission for the six locations in Bohemia and North Moravia is expected between 2009 and 2011.

RWE Innogy noted that renewable energy reportedly accounts for 4.7% of power generation in the Czech Republic. By 2010, this share is expected to increase to 8%. The European Commission has set a target of 13% for the year 2020. At present, less than 100MW of wind power capacity is installed in the country.

Mr Fritz Vahrenholt chairman of RWE Innogy said that "The Czech Republic has long numbered among RWE's core markets. With the current transaction, we are securing a good starting position, which will allow us to substantially grow in the area of renewable energy here.”

OGX to raise USD 3.58 billion through IPO in Brazil

Bloomberg reported that OGX Petroleo e Gas SA, the Brazilian oil company controlled by billionaire Mr Eike Batista raised BRR 5.87 billion (USD 3.58 billion) from what could be the country's biggest initial public offering.

OGX in filling said that it has sold 5.19 million shares or 16% of outstanding stock for BRR 1,131 apiece. It added that “If banks exercise options to buy 741,800 more shares, the sale will be worth BRR 6.71 billion making it the largest Brazilian IPO ever.”

OGX said that it is capitalizing on soaring interest in Brazilian offshore oil after state controlled Petroleo Brasileiro SA's November 8 announcement of the 5 billion to 8 billion barrel Tupi field, the largest discovery in the Americas since 1976. The sale values OGX at USD 21.8 billion or 8.4% of Petrobras, as its Brazilian rival is known.

Mr David Pursell managing partner at Tudor Pickering & Holt Co a Houston based investment bank said that “Outside the OPEC oil cartel, Brazil is one of the few places building oil reserves. OGX is also one of the few pure, non state, oil plays you can buy. In this environment there is a lot of room for it in people's portfolios.''

ArcelorMittal to acquire Bayou Steel

ArcelorMittal announced that it has signed an agreement to acquire Bayou Steel, a producer of structural steel products with facilities at LaPlace in Louisiana and Harriman in Tennessee in US for USD 475 million. The transaction is subject to regulatory approval.

Bayou Steel is an independent producer of medium and light structural steel and bar size products. The Louisiana facility produces billets, equal leg angles, unequal leg angles, flats, channels, standard beams and wide flange beams. The Tennessee rolling mill produces merchant bar shapes, including angles, channels, flats, rounds, and squares, as well as rebar.

Through its Mississippi River Recycling division, Bayou Steel operates an automobile shredder at the LaPlace facility, as well as barge wrecking and full service scrap yards at LaPlace and its facility in Harvey, Louisiana. The company also has a deep water dock and distribution network, including four stocking locations in the United States.

Total prime finished product shipments for fiscal year 2007 were about 510,000 tons which generated revenues of approximately $US 331 million. The company employs 630 people.

Mr Jos Jacqué CEO of ArcelorMittal Long Carbon North America said "We are excited by the opportunity that this acquisition represents as it further strengthens our long product portfolio, customer base and distribution network in North America. We look forward to welcoming our new colleagues and to capture the synergies generated by integrating these operations into the ArcelorMittal group."

ArcelorMittal stake in Erdemir reaches 24.989%

ArcelorMittal announced that following purchases of 11.31% on June 13 it now owns 24.989% of the Turkish steel company Erdemir.

The shares were acquired in transactions with Société Générale, Nextgen Capital Limited and Credit Suisse International. The acquisition price was YTL 8.4 (USD 6.69) per share. The value of the acquired stake is USD 869.25 Million.

Mr Sudhir Maheshwari senior executive VP of ArcelorMittal and a member of the company’s Group Management Board said that "We are pleased to be making this strategic investment in Erdemir, which we see as a very attractive company in a rapidly growing economy with excellent prospects for further growth.”

Rising tin price shoot up can price in advertisement

Philippines consumers can expect another increase in the prices of canned goods next month after tin can manufacturers recently adjusted their prices by 10%. Data from the Department of Trade and Industry showed canned goods became more expensive by 25 to 35 centavos this month following an increase in the price of tin cans in April.

Mr Henry Tañedo chairman & president of the Tin Can Manufacturers Association of the Philippines said that “Higher prices of raw materials are pushing them to increase prices by 10% next month. 202 cans, which is used for packaging sardines, is now at PHP 3.40 and is expected to go up to PHP 3.74 a piece in July. At the beginning of the year the 202 cans were sold at PHP 3.05.”

Reports said canned goods makers recently implemented another PHP 2 increase, which was not reported to the DTI. Retailers and canned goods manufacturers were given until early next week to explain the alleged price increase.

Imported tin plates comprise 70% of tin can production costs. Tin can costs make up about 20% to 45% of the total retail price of canned goods. DTI’s latest price report showed a 155 gram could of sardines costs between PHP 10 and PHP 11, while a 165 gram can of luncheon meat is sold at PHP 23 to PHP 26.

NASA finds new manganese silicide in comet dust

NASA researchers and scientists from the United States, Germany and Japan have found a new mineral in material that likely came from a comet.

The mineral, a manganese silicide named Brownleeite, was discovered within an interplanetary dust particle, or IDP, that appears to have originated from comet 26P/Grigg-Skjellerup. The comet originally was discovered in 1902 and reappears every 5 years. The team that made the discovery is headed by Mr Keiko Nakamura Messenger, a space scientist at NASA's Johnson Space Center in Houston.

The mineral was surrounded by multiple layers of other minerals that also have been reported only in extraterrestrial rocks. There have been 4,324 minerals identified by the International Mineralogical Association, or IMA. This find adds one more mineral to that list.

The IMA-approved new mineral, Brownleeite, is named after Donald E. Brownlee, professor of astronomy at the University of Washington, Seattle. Brownlee founded the field of IDP research. The understanding of the early solar system established from IDP studies would not exist without his efforts. Brownlee also is the principal investigator of NASA's Stardust mission.

Since 1982, NASA routinely has collected cosmic and interplanetary dust with high-altitude research aircraft. However, the sources of most dust particles have been difficult to pin down because of their complex histories in space. The Earth accretes about 40,000 tons of dust particles from space each year, originating mostly from disintegrating comets and asteroid collisions. This dust is a subject of intense interest because it is made of the original building blocks of the solar system, planets, and our bodies.

Qatar Steel to maintain prices in third quarter of 2008

Doha Times reported that Qatar Steel will maintain steel prices in the third quarter with retail price ranging between QAR 3,250 per tonne and QAR 3,300 per tonne.

Mr Ali bin Hassan al Muraikhi manager commercial division of Qatar Steel said that the prices for the next quarter would be the same as those existed in April, May and June 2008.

He added that "Our initiative is in line with the government efforts at tackling inflation. Inflation has an adverse effect on the economy in general and construction industry in particular. The global demand for steel is rising. Also, the prices of steel and other raw materials as well as shipping costs are shooting up. But we are committed to maintaining steel prices and support Qatar’s rapid expansion under the leadership of Mr Emir Sheikh Hamad bin Khalifa al Thani and Mr Sheikh Tamim bin Hamad al Thani."

Mr Al Muraikhi said that the prices of steel in Qatar are the lowest in the Gulf region. The price difference exceeds QAR 2,500 per tonne. He added that "We give our contractors required quantities of steel through our distributors. Nevertheless, we have taken steps to ensure they faced no difficulty in securing steel in future."

Turkish scrap import buying slows down a bit

It is reported that Turkish scrap buying activity has remained quiet since the middle of May 2008, with prices remaining stable as of last week.

Turkish mills were buying big quantities from the beginning of May 2008, while the prices were rising. Since the second week of May 2008, they halted their buying due to relief stocks.

Import price of H1& H2 mixed scrap was quoted at a peak of USD 728 per tonne CIF, but it dropped to USD 721 per tonne. In terms of Black Sea A3 scrap, suppliers are seeking to maintain cost at USD 710 per tonne CIF.

According to a market player, scrap prices will see a minor downward correction if freight costs are reduced,

Ezz Steel blames stockiest for rebar price crisis in Egypt

Arabsteel reported that the difference in prices of producers in the Egyptian market which reached about EGP 1000 between Ezz Steel and the other competitors has created a crisis in the rebar market in Egypt.

Ezz Steel's officials think that their announced price amounting to EGP 5.990 gives good profits and that most companies are selling at the prices expected after several months and not at the real production cost. The responsibility of this crisis has been laid on the traders and contracting companies which resorted to storing big quantities of rebars to avoid any new price increases.

It is worth pointing out that Ezz Steel has achieved profits in 2007 which amounted to EGP 3.6 billion. These profits are mainly achieved due to the rising steel prices at the international level during 2007 to which the impact of the high prices of raw materials and the growing demand have contributed, either in the domestic market or in the world markets.

Stroytransgaz to complete welding of SHBAB 2 pipeline

PJSC Stroytransgaz has completed welding work for the new SHBAB-2 oil pipeline. The facility, 217 kilometers long and 30 inches in diameter, is part of a project to increase the transmission capacity of the Sheiba Abqaiq oil pipeline in the Kingdom of Saudi Arabia. Saudi state oil company Saudi Aramco is the customer for the project, which is being realized on EPC terms.

Under the terms of the contract for the new oil pipeline, Stroytransgaz will assemble 5 valve units with surge relief skids and launching and receiving stations, leak detection, cathodic protection and electrical systems. It will also make improvements in the SHBAB 1, adding 21 units for surge relief skids and leak detection system. The scope of work also included building storage facilities for chemical reagents and biocides for the operating GOSP 2 refinery, located at the Shaybah field. Work on the Abqaiq pumping station will include two hot taps and assemblage of two valve units.

This is the first large project that a Russian construction company has undertaken to build facilities for Saudi Arabia’s oil and gas industry. Stroytransgaz won a tender for the contract in March 2007, confirming again the world market’s recognition of the experience and qualifications of Russian specialists in this field.

A large portion of the welding was done with a CRC Evans automatic welding unit. The quality of welded joints was tested with a unit that uses automatic ultrasound control, delivering results quickly and providing high accuracy where defects in the welded joints are revealed. Modern welding technologies and quality control have enabled Stroytransgaz to make significant increases in the pace of welding and to ensure the high quality of its welding work.

The SHBAB 1 oil pipeline runs from the Shaybah field in the Rub al Khali desert on the border with the United Arab Emirates to a refinery in Abqaiq, 70 kilometers from Dammam in the eastern province of Saudi Arabia.

Measures to curb rebar prices in Middle East

Arabsteel reported that, in order to control the successive price increases of reinforcing steel which reached record figures, countries in Middle East are unveiling various measures

1. Qatar announced freezing the steel prices within the set of basic construction materials for 3 years.

2. The Saudi ministry of trade took measures to restrict steel exports.

3. In Egypt, ministry of trade & industry ordered producers to announce the steel selling prices to consumers and to be bound to the announced price. All restrictions and customs imposed on importing steel from abroad, either on the finished product or on the raw materials have been abolished.

Habshan Fujairah pipeline to start operation by March 2010

Abu Dhabi based International Petroleum Investment Company said its planned 1.5 million barrel per day Habshan Fujairah oil pipeline will begin operating in March 2010, about a year later than originally planned.

No explanation was cited for the new start up date for the 320 kilometers long, 48 inches diameter pipeline, which will join state owned Abu Dhabi National Oil Company's Habshan fields with the Port of Fujairah. The project also includes oil storage and terminal facilities for crude exports at Fujairah.

According to analysts, the pipeline will greatly enhance Abu Dhabi's supply security, bypassing the busy Strait of Hormuz, which generally is recognized as a strategic oil transport choke point.

In April 2008, IPIC awarded contracts worth USD 460 million to 3 companies namely Sumitomo of Japan, Salzgitter Mannesmann International of Germany and the Jindal Group of India to supply 225,000 tonnes of coated steel pipe for the line. Pipe delivery will begin in July 2008, with the contract expected to be completed in January 2009.

OPEC cuts estimate for world oil demand in 2008

OPEC has cut its 2008 estimate of growth in world oil demand, as high prices and slower economic growth brake demand in major industrialized countries and the United States in particular. Global oil demand was now projected to grow by 1.28% in 2008 as compared with the previous estimate of 1.35%.

OPEC said that "World oil demand growth in 2008 is forecast to grow by 1.1 million barrels per day to average 86.88 million barrels per day, a downward revision of 0.1 million barrels per day from the previous report."

OPEC said that the slowing world economy and mild winter is weighing on demand in industrialized countries belonging to the Organization for Economic Cooperation & Development. At the same time, oil demand remains strong in non OECD countries. It added that "In the OECD, especially in the US, demand for transport fuel did not grow as expected as a result of slow economic activities and higher oil prices."

At the same time, China, the Middle East, Latin America, and India are expected to show healthy growth in oil demand for the remainder of the year. Despite the recent removal of price subsidies in some Asian countries, non OECD is expected to show strong oil demand growth to some degree, partially offsetting the decline in the US, Europe, and the Pacific.

Arabtec in negotiations to acquire major piling contractor

Gulf News reported that Arabtec is in close negotiations to acquire a major piling contractor, which will help it to consolidate its construction business.

Mr Riad Kamal chairman of Arabtec said that Arabtec, which is constructing Burj Dubai, has an order backlog of AED 34 billion, including AED 24 billion worth of construction projects within the Middle East & North Africa region.

He added that "We are in the final negotiations for acquiring a major piling company that will help us to manage the entire supply chain and help us to undertake projects on turnkey basis. We are continuously on the lookout for opportunities that add value to our shareholders at the same time create synergies with our existing business."

Arabtec is a consortium partner with Samsung Corporation and Besix in constructing Burj Dubai, which rose to 160 floors, the highest habitable floor in any tower in the world.

Nakheel prepares to issue tender for Palm Jebel Ali bridge

MEED reported that Nakheel is preparing to issue tender documents for the contract to build the landmark bridge that will connect the Palm Jebel Ali with the mainland.

The bridge will be 450 meters long in total and its longest span will be 225 meters. Its deck will be 50 meters wide and will hang between 135 meter high pylons.

Royal Haskoning of the Netherlands has been appointed by local developer Nakheel to design the bridge.

Capacity crunch to hit Abu Dhabi developers

MEED reported that major awards and strategic alliances cause shortage of contractors that is set to hinder future projects. A string of major awards and alliances between developers and contractors in Abu Dhabi are using up virtually all spare contractor capacity in the capital.

Lebanese Arabian Construction Company secured the latest large contract earlier in June 2008, after being selected by local Sorouh Real Estate to build the Gate District at Shams Abu Dhabi. The AED 6.5 billion contract involves the construction of 6 mixed use towers.

It followed just a week after Sharjah based Tameer Holding formed an alliance with Al Habtoor Engineering Enterprises, South Africa's Murray & Roberts Contractors and Al Rajhi Contracting for the AED 7 billion Tameer Towers. Al Habtoor also won the AED 1.2 billion contract for the Sorbonne University campus in May 2008.

The 3 projects take the value of work secured by the 4 biggest contractors in the capital namely Al Habtoor, ACC, Arabtec Construction and Al-Jaber Group, to more than AED 22 billion in the past year.

The majority of large deals have been with major Abu Dhabi developers such as Aldar Properties, Sorouh Real Estate, and the Tourism Development Investment Company. Given the large number of projects planned by these clients, it is likely that more work will follow for the contractors. In some cases the relationships have been formalized through partnerships.

Qatari Diar and Hochtief to form construction JV

MEED reported that Qatari Diar Real Estate Investment Company has signed an agreement with Germany's Hochtief to form a JV to provide construction services on Qatari Diar projects.

Qatari Diar is building the Lusail development in Qatar, a 35-square kilometers master planned community that will accommodate 200,000 people. It also has projects in Yemen, Seychelles, Mauritania, Morocco, Oman and Egypt.

In 2006, Qatari Diar formed a similar joint venture with France's Vinci Construction Grand Projects.

Vinci and Hochtief are also part of the consortium that was awarded the construction contract for the Qatar Bahrain Causeway in May.

Pakistan directs Sindh to build 28 small dams on war footing

The News reported that Sindh government has been directed by Pakistan People’s Party co chairman Mr Asif Ali Zardari to build 28 small dams and water reservoirs on a war footing basis to accumulate rain and additional water for agriculture purposes. He also urged the government to complete the projects within the stipulated time period.

This was the first executive meeting at Bilawal House after the PPP came into power. The meeting was attended by Sindh governor Dr Ishratul Ebad, chief minister Mr Syed Qaim Ali Shah and city nazim Mr Mustafa Kamal. The meeting discussed the water crisis and construction of water reservoirs as it was anticipated that the province would get more water following the expected scrapping of the Kalabagh Dam project.

It was decided that the construction of 14 small dams and water reservoirs would be started after the announcement of the provincial budget. Feasibility studies of these dams and reservoirs have already been prepared while feasibility studies of another two dams are also underway. The feasibility of 12 more dams including two canals would be prepared after the budget.

The proposed small dams were the part of the PPP manifesto to boost agriculture and to provide more employment to farmers. It was also decided that the land surrounding these dams and water reservoirs would be distributed amongst poor farmers.

Dr Ebad confirmed the decision taken after the meeting. The irrigation minister Mr Jam Saifullah Dharijo told the media that funds for the projects would be allocated in the provincial budget for these dams while it was also expected that the federal government would provide funds.

Privatization stimulating investment in Iran- Report

Mr Manouchehr Mottaki Iranian foreign minister said that privatization has created substantial investment opportunities in Iran.

Mr Mottaki said that privatization in Iran is a significant process, which has recently gained momentum.

He explained that Iran and Qatar have great potential to increase cooperation in various sectors.

Erdemir to start flat products production at Iskenderun in August

Reuters reported that Turkish steel maker Erdemir is expecting to start producing flat steel products at its Iskenderun plant in southern Turkey in August 2008. It has invested some USD 3 billion to start producing flat products at the Isdemir plant at Iskenderun.

An Erdemir official said that "This investment is about to be completed. In the second half of July 2008 we will start trial production and we aim to get the first flat products from there towards the end of August 2008."

Amana secures AED 85 million contract from ADNOC

Amana Contracting & Steel Buildings said that it has been awarded an AED 85 million contract by Abu Dhabi National Oil Company for the construction of a new research centre for Takreer. The research centre is part of the Petroleum Institute Campus, being developed by ADNOC at Sas Al Nakhl in Abu Dhabi. The total built up area for the facility is 6,000 square meters and is scheduled for completion in June 2009.

A senior executive at Amana Contracting said that "ADNOC is one of the highest profile clients. The reason why we have won this project is because we have delivered all our previous projects on time and within budget while meeting all the quality standards. There were no accidents on site when we executed projects for ADNOC, previously. This new contract from ADNOC will definitely enhance our reputation in the market."

The contract encompasses construction of a 3 storey research centre building, comprising laboratories, workshops, pilot plant, gas bunker and offices in addition to all related services and infrastructure. The centre also aims to provide employment opportunities for UAE nationals.

Mr Awaidha Murshed A Al Murar civil projects division manager of ADNOC said that "Amana's competitive offer coupled with a commitment to high quality standards and delivery resulted in our decision to award them this contract."

Amana Contracting has constructed more than 1,500 buildings across the Middle East.

Erdemir sees profit of TRL 1 billion in 2008

Reuters reported that Turkish steelmaker Erdemir is expected to show a net profit of around TRL 1 billion in 2008 up from TRL 679 million in 2007. In the first quarter, Erdemir’s profit rose by 57% YoY to TRL 226.6 million.

Mr Coskun Ulusoy CEO of parent company Oyak Group said that "This year we expect Erdemir to have net profit of around TRL 1 billion."

Mr Ulusoy said that "Erdemir and Renault are the main pillars of the business. The sale of our other companies could be considered. The companies for which there is most demand are the cement companies. There is not a day when we do not get an offer. When we talk we say we have no intention to sell but we do sit down and look at the offers."

Oyak Group, which bought Erdemir in 2006, is Turkey's army pension fund with interests ranging from an auto partnership with France's Renault to financial services. Oyak Group has liquid assets of USD 3.5 billion and wants to be in areas such as infrastructure, industry, energy, mining and commodities.

Pakistan to set up 5,000 MW coal fired power generation

Associated Press of Pakistan quoted Mr Tahir Basharat Cheema director general EMC WAPDA Lahore as saying that the government is planning to set up 5,000 MW power generation facilities using coal as fuel within next few years.

He expressed concerns that while contribution of coal in power generation in India was 55% and 74% in China, Pakistan was generating only 0.1% electricity from coal. He disclosed that three rental power houses would start generating 1,067 MW of electricity from September, October and November 2008 respectively to combat electricity shortage. The fourth rental power house will start generating 192 MW power from December 2008 at Piran Ghaib power station Multan. Another 350 MW power plant will also be set up at Piran Ghaib later.

Mr Cheema said that hydel power projects are under execution which will produce 516 Megawatt of electricity during next 3 years. He added that in addition to rental power houses, the power generation capacity of some independent power producers will be enhanced from existing 309 MW to 600 MW next year.

He disclosed that agreements had been signed with China to establish power plants at Nandipur and Chichu Ki Malian while tenders had been issued for two 500 MW power plants at Dadu and Faisalabad which would be run by gas and furnace oil.

He further added that Muzaffargarh thermal power house was not generating power up to its full potential of 1350 MW. It is generating 1000 MW of electricity at present which will be enhanced up to 1,350 MW by overhauling its turbines.

Maaden inks USD 3.7 billion loan deals with SABIC

Arab News reported that Maaden Phosphate Company and Saudi Basic Industries Corporation have signed agreements worth USD 3.7 billion to develop the substantial phosphate deposits at Al Jalamid and utilize local natural gas and sulfur resources to manufacture diammonium phosphate.

The syndicated facilities comprise USD 2.06 billion 16 year conventional and Islamic facilities, a USD 200 million 16 year Korean Export Insurance Corporation covered facility, a USD 400 million 16 year facility provided by the Export Import Bank of Korea and a USD 100 million revolving working capital facility. Direct funding will also be provided by the public investment fund for USD 1.067 billion and the Saudi Industrial Development Fund for USD 135 million.

Dr Abdallah Dabbagh president & CEO of Maaden and also chairman said that operation are being developed in a JV with SABIC, through a limited liability company called Maaden Phosphate Company incorporated in Saudi Arabia.

The project involves the development, design, construction and subsequent operation of two primary sites. The first is the Al Jalamid mine site in the north of the Kingdom which will comprise a phosphate mine and a beneficiation plant. The second is the Ras Az Zawr. This will have a fertilizer production facility consisting of DAP, ammonia, sulfuric acid and phosphoric acid processing plants. Each site will be supported by an appropriate industrial and social infrastructure and provide a substantial number of jobs in the area.

The total cost of the project will be in the region of SAR 20.70 billion taking account of projected annual inflation and estimated financing costs and including engineering, procurements and construction costs of SAR 17.03 billion.

TAQA inks strategic pact with THEOLIA for power plant in Morocco

Abu Dhabi National Energy Company PJSC has inked a strategic partnership agreement with THEOLIA on June 10th 2008 for a renewable energy project in Morocco. This agreement aims to create a consortium of these two pre qualified companies to respond jointly to the international invitation to tender for the construction and operation of a 300 MW wind farm located in Tarfaya in Morocco.

Mr Peter Barker Homek CEO of TAQA said that "Today’s announcement is a real milestone for TAQA, it marks our first step into renewable energy. Our strategy is to diversify across the energy value chain in different territories, and by joining forces with THEOLIA in CED we feel that we are in a good position to bid for the new wind farm capacity. This is truly in line with our growth strategy and my vision for the company."

Mr Jean Marie Santander chairman & CEO of THEOLIA said that "This alliance confirms the development strategy of THEOLIA in emerging markets. Together, THEOLIA’s expertise and TAQA’s strength will give birth to a major player in the production of electricity from renewable energy in Morocco and the emerging markets in general."

TAQA and THEOLIA further agreed a 50:50 partnership in the Compagnie Eolienne du Détroit, including studying the possibility of optimizing wind sites in Morocco. This site, located in the North of Morocco and enjoying excellent wind conditions, offers a double opportunity, the possible re powering of the 84 turbines commissioned in 2000 and the possible extension of the wind farm by several hundred additional MW.

TAQA and THEOLIA are two major players in the production of electricity in Morocco: TAQA owns and operates a 1,356 MW thermal power station, providing about half of the annual electricity production of the Kingdom; THEOLIA, with its 50.4 MW wind farm, is the leading producer of electricity from wind energy in Morocco. With this alliance, TAQA and THEOLIA display their confidence in the potential of the renewable energy sector in Morocco and the emerging markets in general.

Pakistan to set up SME industrial estates in Punjab

Business Recorder reported that Punjab government has evolved a strategy for establishment of SME industrial estates aimed at mitigating the problems confronting the SME sector engaged with various industries in the province.

Reliable sources said that SME industrial estates would be set up in major industrial towns including Sialkot and work on the plan would be executed in upcoming financial year. The proposed plan would surely help reduce the problems being confronted by the SME sector, as basic facilities would be ensured in the proposed industrial estates.

It added that special attention would be accorded on the development of industrial sector on modern and scientific lines aimed at enhancing export volume and bringing industrial revolution through setting up large scale industries including agro based industries in the province.

The government would also introduce various schemes for the development of small and medium industries and loan facilities would be extended to the small and medium businessmen enabling them to upgrade their industrial units besides setting up new industrial projects in the Punjab.

Abyaar Qatar to embark on QAR 1 billion projects

The Peninsula reported that Abyaar Qatar Real Estate Development Company has received permission from Qatari Diar to convene work on projects worth an estimated QAR 1 billion.

Mr Yousef Al Hashemi chairman of Abyaar Qatar said that "Abyaar Qatar has been established with a capital of QAR 205 million. Main shareholders in Abyaar Qatar include Aayan Leasing and Investment Company, Securities House, Abdul Aziz Al Dakheel, Aljaber Group, Al Rashdan Group and Abyaar Real Estate Development Company. The official announcement of the company in Qatar will take place towards the end of this year."

Mr Al Hashemi said the company’s board will set the quota for the distribution of shares to new shareholders, as well as the regulations for capital call. He added that "The cost of our projects in Qatar is estimated at QAR 1 billion. We have recently obtained permits from Qatari Diar, main developers of the Lusail project, to start working on our projects in Qatar on the land that we bought."

Comoros seeks good trade relation with Iran

IRNA reported that Mr Abdullah Sambi President of Comoros has called for presence of investors from this northeastern Iranian province in his country's development projects. In a meeting with Mr Mohammad Javad Mohammadizadeh governor general of Khorassan Razavi province, he called on the provincial businessmen and industrialists to make investment in different projects in his country.

Mr Sambi also voiced his country's readiness to make investment in the areas of production of construction materials and cement in Iran. Referring to Iran as a friendly country, he called for further expansion of all out ties with the Islamic Republic of Iran.

Meanwhile, Mr Mohammadizadeh has announced readiness of provincial businessman to construct a cement factory in Comoros. He added that Iran is among the ten world countries enjoying the technology of constructing cement factory.

Iran mulls over opening EUR 500 million LC for Cuba

IRNA reported that Mr Ali Akbar Mehrabian Iranian minister of industries & mines has proposed to the government to increase the LC between Iran and Cuba to EUR 500 million.

Mr Mehrabian said that "The current approved LC by Iranian banks for Cuba is EUR 200 million, but considering the volume of contracts signed between the two sides recently Iran’s ministry of industries & mines has forwarded a proposal to the government to increase the figure to EUR 500 million."

Referring to the growing economic cooperation between Tehran and Havana in the past two years, he noted that currently the trade volume between the two countries stood at about EUR 213 million. He also talked about the complaints made by Cuban officials regarding bureaucracy and stated that Iran was trying to remove this issue and hoped that with the elimination of bureaucracy bilateral economic cooperation and trade volumes would increase.

China CR export prices still on upward trend

It is reported that Cold rolled steel coil prices are still moving up in China and export offers keep firm. On Shanghai market, price for 1.0 cold rolled sheet by Anshan steel is being offered at CNY 7450 per tonne to CNY 7480 per tonne while that for 1.0mm CR coil by Maanshan steel is at CNY 7330 per tonne up by CNY 100 per tonne and CNY 80 per tonne respectively.

Mysteel forecasts that “Shanghai price for 1.0 sheet by Anshan steel has reached our target of CNY 7400 per tonne to CNY 7500 per tonne and the next one probably will be CNY 7700 per tonne to CNY 7800 per tonne if it could go past CNY 7500 per tonne. Otherwise, we do not exclude the possibility of downward correction.”

Export offer for 1.0mm CRC is prevailing at USD 1120 per tonne to USD 1130 per tonne FOB and some are tagging at higher level. Allocation is still tight and most steel producers only set aside 10,000 to 20,000 tonnes for exports.

As a matter of fact, only a few steel makers are exporting CRC at moment. Among others, Anshan and Benxi steel, Tangshan steel, Baotou steel, Maanshan steel, Wuhan steel and Handan steel are major exporters.

(Sourced from MySteel.net)

Shanxi to eliminate 10 million tonnes steel capacity in 2008

Shanxi Province announced that it would eliminate 10 million tonnes capacity in steel industry and 14.5 million tonnes capacity in coking industry this year.

In 2007, the province eliminated 908 obsolete equipments from 600 enterprises, covering industrial output of over CNY 100 billion. It washed out 470 iron making blast furnaces with total capacity of 20.9 million tonnes, 62 coke furnaces with capacity of 11.31 million tonnes and 61 submerged arc furnaces with capacity of 429,000 tonnes.

The province has set up compensation fund to promote obsolete capacity elimination during 2007 to 2010.

Chinese HDG export prices likely to go up further

It is reported that hot dipped galvanized coil price is still creeping up in China. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7650 per tonne, 0.5mm material by private steel mills is quoted at CNY 7950 per tonne up by CNY 50 per tone from last week.

As already forecast last month, Shanghai price for 1.0mm HDG by Anshan Steel has reached CNY 7600 per tonne. As long as Shanghai price for 1.0mm HDG remain above CNY 7500 per tonne ton the next target would be CNY 7800 per tonne to CNY 7900 per tonne.

Export offers remain at high level and the range is between USD 1100 per tonne and USD 1160 per tonne FOB for 1.0mm HDG Z120. Quotation for 0.5mm HDG Z120 is at about CNY 1200 per tonne to CNY 1260 per tonne FOB.

A tier two steel maker in North East China has raised its quotation for 1.0 HDG to USD 1360 per tonne CFR for shipments to eastern coast of the United States of America and the equivalent FOB price is about USD 1260 per tonne FOB.

An East China based trader said price is really high and it is mainly due to tight supply. The steel producer probably has no enough allocation for exports and it shot up offer substantially to scare away buyers.

Chinese HDG price is expected to remain strong in June as a result of a combination of robust domestic and international demand and short production.

(Sourced from MySteel.net)

Steelmakers in Jiangsu raise scrap prices

It is reported that scrap market now start to climb in East China after a period of firm operation. Some steelmakers in Jiangsu Province raise purchase prices twice within three days.

1. Xigang Group has pulled up prices by accumulatively CNY 100 per tonne with price standing at CNY 4060 per tonne delivered to mill for high quality scrap

2. Wuxi Xuefeng by CNY 100 per tonne, CNY 4050 per tonne for charging quality scraps 1

3. Suzhou Steel by CNY 100 per tonne, CNY 3950 per tonne delivered to mill for heavy scrap 1

4. Changzhou Zhongtian by CNY 110 per tonne, CNY 4040 per tonne delivered to mill for charging-quality scrap.

5. Yonggang also hikes price by CNY 100 per tonne. Latest purchase price is offered at CNY 4120 per tonne for heavy scrap.

As per report purchase price offered by Baosteel has reached CNY 4200 per tonne for quality scrap in Wuxi. Traders thus intend to raise prices for other steelmakers. Besides, buyers are now on the hip and have to pull up prices to replenish resources.

On the other hand, besides local market, scrap resources in Jiangsu also feed traders from Fujian, Hunan, Hubei and so on. As supply becomes tight and busy season for agriculture in southern regions steps near, traders are likely to scramble for resources in South China but cross-provinces shipments will stay at a low level due to high costs.

(Sourced from MySteel.net)

Tianjin Steel developing new products

It is reported that recently, Fourth Construction Electric and Instrument Company and Tianjin Steel Company cooperated to develop new products.

In order to exploit international and domestic market, Tianjin Steel Company and Hedong Wuxiajie jointly introduced into advanced high tech steel stand projects from Italy Fricepio Company.

The product has high intensity, high toughness, low relaxation, corrosion resistance and other advantages is widely used in the construction of overhead road, long span bridges and high rise buildings etc.

As per report, cooperation with Tianjin Steel to develop new products is another test for the staff of the Fourth Construction Electric and Instrument and is also the new model of embodiment for Tianjin Steel’s development.

Chinese auto sales down for 2nd consecutive month in May

Xinhua quoted China Association of Automobile Manufacturers said China's motor vehicle sector realized a production against sales ratio of 97.82% in May. Both output and sales, however, declined MoM for the second consecutive month.

China produced 854,100 motor vehicles in May down by 12.96% from April but up 20.2% over the same month of last year. It sold 835,500 vehicles down by 9.44% MoM but up by 17.04 YoY.

The total output included 591,400 passenger vehicles down by 10.2% from the previous month but up by 20.03% over a year earlier. The output of commercial vehicles was 262,700 units down by 18.61%MoM but up by 20.58% YoY.

The monthly sales included 564,600 passenger vehicles down by 6.66% from a month ago but up by 15.59% over a year earlier. Monthly sales of commercial vehicles were 270,900 down by 14.74% MoM but up by 20.18%YoY.

According to the report May saw 434,700 cars produced and 415,200 cars sold nationwide down by 11.49% and 6.6% respectively from April.

Chinese FDI in first 5 months 2008 up by 55% YoY

Xinhua quoted China Ministry of Commerce said China used USD 42.78 billion of foreign direct investment in the first five months this year up by 54.97% YoY from the same period last year.

The report said the growth was lower than a YoY growth rate of 59.32% used in the January to April period this year. Meanwhile, the number of newly approved foreign funded enterprises shrank 20.95% to 11,915 in the first five months.

Mr Hao Hongmei an analyst with the Academy of International Trade and Economic Cooperation under the Ministry of Commerce said "The quality of China's FDI use has improved as a raft of new measures was introduced to regulate foreign investment."

He said that foreign companies now tend to have more interest in investing in high tech and high value sectors which need vast financial input, than in labor-intensive and lower value industries.

Mr Hao said "China remained a favorite destination for overseas investment especially big investors like the top 500 multinationals."

Mr Chen Deming commerce minister said earlier in a press conference that the steadily-increasing FDI reflected the optimism of foreign companies about their returns from the Chinese market and their intention to accelerate investment in the country to profit from the appreciating Chinese currency.

Chalco shares mark 3 month low on earnings fears

Reuters reported that shares in Aluminum Corp of China Ltd dived by 8% t to their lowest since March as investors fled on fears of mounting costs including for electricity and dwindling margins.

Analysts this week called attention to soaring production costs, particularly for alumina Chalco's main product and falling prices as supply swells. The surprise move raised the possibility that other provinces would follow suit in relaxing state set electricity prices.

According to the report Chalco shares dived nearly 8% its biggest percentage loss since January 22nd to a low of HKD 10.88 before bouncing back to stand 6.9% lower at midday, underperforming a slightly weak market.

Investment bank CICC's Shenwei Ding said "China's alumina refineries could see their gross margins further squeezed by surging bauxite import prices, ocean freight rates, coal prices and other input prices."

Shandong to improve aluminum fabrication capacity by 2012

Interfax China reported that China's eastern Shandong Province, a major aluminum producing region plans to optimize the structure of its local aluminum industry so as to boost its capacity to produce high value added products by 2012.

Under the government's plan 70% of Shandong produced alumina and 100% of its primary aluminum output is to be processed locally by 2012. The province's capacity to produce high value added aluminum products such as aluminum plate, foil and industrial aluminum profile, is also to expand to account for more than 60% of total local aluminum fabrication capacity.

The government said technological upgrades and product development in the aluminum fabrication sector will be encouraged by government policies, while capacity expansion projects for alumina and primary aluminum will be strictly controlled.

According to the report projects that manufacture aluminum products for aviation, aerospace, transportation, packaging, home appliance and military uses will be given priority for development.

Furthermore, local alumina producers will be encouraged to develop overseas bauxite mineral deposits or sign long term supply contracts with international mining companies in order to alleviate bauxite shortages in the province. At present, more than 80% of the bauxite fed to Shandong's alumina producers each year is imported.

In 2007, Shandong produced 6.36 million tonnes of alumina 1.22 million tonnes of primary aluminum and 1.63 million tonnes of aluminum product.

PetroChina and Sinopec to expand refined oil supplies in June

Xinhua reported that PetroChina and Sinopec, China's two leading oil producer’s plans to increase the production and import of refined oil products in June, to ensure supply for wheat reaping and quake relief efforts.

PetroChina said it would keep its operation at full steam this month to jack up its oil processing by 6% over last month. The oil group would also import 600,000 tonnes of oil products. Sinopec will cut its ethylene production by 65,000 tonnes or 11% of its monthly production capacity in June to expand oil product supplies by 200,000 tonnes. It will also reduce arena production to raise oil products supplies.

Mr Wang Tianpu president of Sinopec said measures such as expanding processing, adjusting product mix and suspending exports, would betaken to ensure refined oil supplies for the disaster relief, wheat reaping and the coming Olympics.

China stands firm on energy price reforms

China has reiterated that it would push forward with energy price reforms and use economic incentives to encourage energy saving in the world's second largest energy user.

According to the report, China has resisted raising pump prices for gasoline and diesel since November amid concern over inflation, even though nearly half of its crude oil demand is met by imports and crude costs have surged some 40% since the end of last year.

The National Development and Reform Commission said that “China would safely push forward with energy price reforms and choose a proper time to align prices of refined oil products as well as natural gas.”

NDRC added that “Differential power tariff policies should be implemented and preferential power treatment to energy intensive enterprises should be halted.”

Beijing has ordered local governments to stop providing favorable power rates to these sectors and even charge higher rates or stop power supplies during shortages to discourage expansion in energy ntensive, polluting industries and those with excess capacity.

Jigang Steel predicts H1 net profit up by 50% YoY

China Knowledge reported that Jinan Iron and Steel Co Ltd, a major domestic steel producer in East China's Shandong Province, expects that its net profit in H1 2008 would be up by 50% YoY. It had reported a net profit of CNY 672.14 million last year.

Jinan Iron and Steel Co Ltd attributed the improving performance expectations to outstanding achievements of structural adjustment and the development of energy saving. Meanwhile, the significant rise in steel prices in the H1 2008 comparing to the same period of 2007 will also be a contributing factor for the profit surge.

Jinan Iron and Steel an oversize steel corporation issued 220 million A shares and listed on the Shanghai Stock Exchange in June 2004. The company now has net assets of CNY 3.44 billion with 11,926 employees.

Baoshan Iron & Steel assigned ‘A’ sustainability rating - RepuTex

Sustainability ratings and index firm RepuTex has announced an international 'A' rating for Baoshan Iron & Steel Company Limited China's largest iron and steel maker. The rating reflects the company's satisfactory progress in the development of effective sustainability practices.

According to the release Baoshan's 'A' rating places it in the top 7% of companies globally and in the top 3% of companies in the China market. The rating reflects RepuTex's view that Baoshan Iron & Steel Co Ltd has implemented positive controls to address key risks in its corporate governance systems, including risk management and audit committees along with environmental protection and health and safety.

Ms Martha Grossman General Manager of RepuTex China said "Our rating on Baosteel reflects the on-going development of the company's risk management practices and its management focus on systems to address key risk areas. She said that "The Company has established dedicated strategies to address strategic planning, environmental protection and audit. She added that these strategies are backed by policy and systems, as well as compliance and oversight processes."

Ms Grossman also expressed the view that Baosteel is well positioned to face a range of new challenges as market pressure continues to rise with respect to reduced carbon emissions. She said that "Negative impacts may materialize through higher costs of energy, raw materials and technology, likewise opportunities present if the company can continue to innovate and develop new markets. Baosteel's 'A' rating provides assurance to local and international markets that it is actively working towards that end."

A RepuTex Rating is an independent assessment of a company's capacity to address sustainability risks according to governance, environment, social and workplace factors.

Chinese steelmakers led to