PTI reported that Steel Authority of India’s Rourkela Steel Plant has made record production in May 2008. Hot metal production in May 2008 stood at 180,105 tonnes up by 6.7% YoY, crude steel at 169,103 tonnes up by 8.7% YoY and total saleable steel at 165,125 tonnes up by 22.3% YoY.

RSP achieved all time best performance for any month of April to May 2008 since inception in several areas. These include hot metal production of 359,430 tonnes, crude steel production of 338,314 tonnes and saleable steel production of 321,400 tonnes which besides being highest compared to any month of April to May also represents capacity utilization of 109% YoY, 107% YoY and 115% YoY.

The best April to May period production was also recorded in the finishing units of the steel plant with hot rolled coils at 264,933 tonnes, hot rolled coils at 127,754 tonnes, hot rolled plates at 52,055 tonnes and cold roll non oriented steel from silicon steel mill at 14,720 tonnes.

It is reported that Steel Authority of India Limited will open an INR 300 crore plant in Pulwama.

Mr Ram Vilas Paswan union minister for steel said that construction of the steel plant will begin as soon as SAIL bags a no objection certificate from the pollution control board of the J&K state government. He said that "We are waiting for a no objection certificate from the PCB. As soon as we receive it, we will lay the foundation stone for the project.''

Mr Paswan said that the plant, set up at a cost of INR 300 crore, would open a lot of direct and indirect job opportunities for local youth. He added that "We began a railway project from Qazigund to Baramulla in 1996 with the aim of providing employment to locals. I am keen to open the steel plant for the same reason.''

He further added that Kashmir needed special government focus owing to its lack of train connectivity, industry and employment opportunities. He said "There are geographical challenges to be overcome but there will be a way.''

PTI reported that Neepaz Infrastructure & Developers Limited of Adhunik Group has applied to the Jharkhand government for a MoU for setting up a 16 million tonnes pellet plant to meet the raw material requirement of steel producers in and around the state.

Mr Chandra Bhusan Sharma spokesman of Adhunik Group said that it has proposed to also develop a 2500 acre industrial park at Padampur in West Singhbhum district, which has major iron ore mines.

Mr Sharma said that the application for the MoU was made recently. He added that Jharkhand was deemed by the company as an ideal location as the project, estimated to cost INR 5,850 crore, required significant quantities of iron ore fines and would serve the growing raw material requirement of steel mills in the state.

About the proposed industrial park, Mr Sharma said that Adhunik Group would develop the land and provide it to players interested in setting up units there. He added that power would be provided at a concessional rate for an arrangement of 25 years through group company which is setting up a 1000 MW thermal power plant in the state.

The other facilities of the proposed project are a beneficiation plant and a township. The industrial park if developed would attract huge investment in the state and generate direct and indirect employment for around 20,000 people.

BL reported that, at a meeting called recently by the union steel secretary in Bhubaneswar, representatives of the steel industry, covering both private and public sector plants, emphasized the need for early implementation of certain rail, road and port projects, keeping in view the requirement of the new steel plants due to come up in the state in next few years.

The railway projects identified for immediate implementation include doubling of the 180 kilometers long Daitari Banspani line, 170 kilometers long Sambalpur Talcher line and 450 kilometers long Kottavalasa Kirandul line, which covers regions in Orissa, Andhra Pradesh and Chhattisgarh. The 62 kilometers long rail link between Dhamra port and Bhadrak being implemented by Dhamra Port Company also came up for a review.

Among the road projects discussed were 4 laning of National Highway 215 between Barbil and Keonjhar, NH 42 between Cuttack and Sambalpur and NH 400 between Jharsuguda and Raigad. The work on the 4 laning of NH 5A between Chandikhol and Paradip is nearing completion.

Indian Railways revealed that the decision to undertake survey of all the 3 doubling projects, as demanded by the steel industry, has been made. Besides, several other projects, under both East Coast Railway and South Eastern Railway, are in various stages of implementation and these include construction of Haridaspur Paradip line, a third line between Jakhapura and Haridaspur, doubling of Cuttack Barang line, construction of a third line between Barang and Khurda Road, doubling of Barang Rajatgarh line, construction of a second railway line over Mahanadi river, a third line between Goelkhera Monohorpur and a second line between Jaruli and Dongaposi. Besides, keeping in view the commissioning of Gangavaram port in Andhra Pradesh shortly, a third line is being constructed between Kottavalasa and Vizianagaram and a fourth line between Kottavalasa and Simhachalam.

It may be noted that Orissa government has signed as many as49 MoUs for setting up steel plants and sponge iron units in the state, with a total capacity of more than 75 million tonnes. About 28 of them, totaling 3.8 million tonnes of steel making capacity and 5 million tonnes of sponge iron capacity, are already at various stages of production. The indication is that by 2012, about 40 million tonnes of capacity will be created in the state.

BL reported that Midhani has firmed up plans to invest a further INR 100 crore to expand its facilities and to meet growing supply orders. With an order book of over INR 750 crore, Midhani is upbeat about the opportunities from the strategic sectors like space, defense and nuclear.

Mr M Narayana Rao CMD of Midhani said that it has decided to establish a new electro slag refining facility and a forge press with a combined investment of nearly INR 100 crore. This would be in addition to the INR 160 crore expansion plan, which is under way to augment the company’s existing facilities. He added that it also wants to set up a new rolling mill, which costs about INR 60 crore, to boost its infrastructure and execute orders faster.

Mr Rao said that "We are also inclined to seek support from the ministry as well as financial institutes, if necessary." He added that the department of space, atomic energy and other customers have also supported in funding. Midhani’s orders comprise of defense supplies with 48%, space with 29%, power with 10%, commercial with 7% and nuclear with 6%.

He further added that the large projects taken up by the defense ministry, launch and development initiatives and the nuclear power expansion program of the department of atomic energy, have fuelled big orders up to 2012 already.

Mr Sajjan Jindal vice CMD of JSW Steel has taken over as new president of the industry body Assocham, replacing Mr Venugopal Dhoot chief of Videocon Group.

Mr Jindal said that he would promote 5 causes during his tenure as president in the current fiscal which includes making Latin America as Indian Inc's major business partner, suggesting measures to Indian government to tame the inflation and cause agricultural growth to go up to about 5%.

PSL Limited announced that Florida Gas Transmission Company has released an order on both PSL North America LLC and PSL Limited for 543 miles of pipes and associated coating, for value of USD 418 million.

BL reported that prices of semi finished steel such as ingots and billets have increased in the range of INR 2,500 to INR 3,000 a tonne in Indian market.

Market sources revealed that overall, in major north Indian wholesale markets like Mandi Govindgarh, Bhiwandi and Ghaziabad, billet prices have gone up by around INR 2,500 a tonne, ingot by INR 2,000 to INR 3,000 a tonne and unbranded TMT bar prices by INR 1,500 to INR 2,000 a tonne.

Branded TMT bar manufacturer Kamdhenu Ispat has increased prices by INR 3,400 a tonne taking the present selling price to around INR 44,000 a tonne, sources said. Simultaneously Rathi Ispat has also raised prices by approximately INR 2,000 a tonne.

Industry officials attribute the increase to rise in international prices which have gone up significantly across all products and because of depreciating rupee value against dollar.

The report cited steelmakers as saying that "International prices of steel melting scrap have increase by around USD 110 a tonne from USD 630 a tonne last week to USD 740 a tonne on Monday. It is the main raw materials for ingot makers, mostly using the electric furnace route. Added to that is the depreciation in rupee leading the companies to raise prices of semi finished steel products like ingots."

BL reported that corporate social responsibility initiatives taken up by Steel Authority of India’s Salem Steel Plant was highlighted in a meeting organized by National Institute of Personnel management, Salem Chapter, in association with the Vysya Institute of Management Studies in Jairam College of Arts & Science.

Mr Prabhakara Rao deputy GM of SSP explained various concepts such as the triple bottom line people, planet and profit and the difference between shareholder and stakeholder.

The SSP had implemented a number of schemes as a part of its CSR initiatives and was developing Thirumalaigiri village as Model Steel Village. Human Resource officials and representatives from various industries attended the meeting.

Planning Commission said that an acute shortage of skilled workers is posing a major threat to the Indian economy. It estimates that only 20% of the 12.8 million entering the work force annually get some formal training.

Planning Commission added that "In an economy growing at the rate of over 9%” skill development poses major challenges. At the same time, it opens up unprecedented doors of opportunity if the process of skill enhancement is carried out in an integrated manner."

Mr Montek Singh Ahluwalia deputy chairman of Planning Commission said that "Time is just running out. The task of skill development must be taken seriously." He added that public private partnership is needed to meet the requirement of skilled workers.

Planning Commission has estimated that the ageing economy phenomenon would globally create a skilled manpower shortage of about 46 million by 2020. It added that "If India can get its skill development act right, it will have a skilled manpower surplus of around 47 million. Skilled workers not only mean enhanced output but also increase their employability manifold. They can go overseas looking for jobs, as all of them may not get one in the country. Or they can be self employed."

Meanwhile, Indian government had approved the setting up of a National Skill Development Corporation on May 15th 2008 to cater to the needs of skilled personnel of the private sector in different fields. A total of INR 10 billion has been provided for the initiative. This will later go up to INR 150 billion.

National Skill Development Corporation, created at the recommendation of the Planning Commission, will put special emphasis on nearly 2 dozen high growth, high employment sectors like automobile, heath care services, banking, organized retail, insurance, construction, pharmaceuticals, food processing, textile, media, entertainment and tourism.

BL reported that Rashtriya Ispat Nigam Limited has introduced reverse e auction for finalization of road transport contracts. The arrangement was earlier in force for the dispatch of scrap and now it includes dispatch of finished goods also.

Earlier, the auction was conducted once in a year and now it is conducted every two months, to take into account various elements in fluctuating road transportation costs.

The bulk of Vizag steel plant’s output of finished steel is transported by road, a part of it directly to consumers and the remaining to various stockyards in different parts of India. There were occasions in the past when coastal movement of finished products did take place, mostly on an experimental basis. In the absence of non availability of rakes in sufficient numbers, the coastal option will be exercised vigorously once the Gangavaram port is commissioned. RINL will be the major user of the port.

It is reported that Jindal Steel & Power Limited is planning to build an INR 5,000 crore thermal power plant in Orissa.

Mr Sushil Maroo whole time director of JSPL said that it plans to build a 1,080 MW coal fired captive power plant to fuel its 6 million tonnes steel plant in Orissa. He added that about 70% to 80% equity worth over INR 4,000 crore will be raised through debt and the company has already approached a consortium of banks. The project is slated to take off simultaneously with the first phase of the INR 13,500 crore steel plant by February 2011.

Mr Maroo said that "Now, we have 330 MW of capacity up and running for our steel plants. In the near future, we will set up 550 MW for the upcoming steel plant in Chhattisgarh and 1080 MW in Orissa for captive usage."

He added that “The power plant will comprise eight 135 MW units. The first unit is slated for commissioning by 2009. Orders for the 135 MW units have been placed with Shanghai Electric Company of China. The project capacity may be raised to as much as 1,410 MW, with six 135 MW and two 300 MW units.”

Official sources said that land acquisition is on and the ministry of environment has cleared the power project. A few weeks ago, JSPL had written to the ministry of coal to allocate long term coal linkages for 4 million tonnes of steel. The ministry has already given coal linkages for 2 million tonnes of steel capacity by allocating coal blocks in Utkal.

As announced earlier, JSPL is also setting up a 6 million tonnes per annum steel plant and captive power plant in Patratu in the Hazaribagh district of Jharkhand. It also has plans to set up 2 power plants with a total production capacity of over 2,500 MW in Jharkhand.

TATA Motors recently announced that it has completed its acquisition of Jaguar and Land Rover from ailing US carmaker Ford for USD 2.3 billion in an all cash transaction.

In a statement to BSE, TATA Motors said that the deal includes the ownership of Jaguar and Land Rover, all necessary intellectual property rights, manufacturing plants and two Britain based advanced designing centers.

Mr Ratan Tata chairman of TATA Motors said that "Jaguar and Land Rover are 2 iconic brands with worldwide growth prospects. These brands will retain their distinctive identities. We plan to work closely to support the Jaguar Land Rover team in building the success and preeminence of the two brands. Jaguar and Land Rover will retain their distinctive identities and continue to pursue their respective business plans as before."

TATA said in the statement that Mr David Smith acting CEO of Jaguar and Land Rover will be the new CEO.

Mr Smith said that "We are very pleased with the association with TATA Motors and we look forward to a sustained bright future for the company and its stakeholders."

BL reported that Alstom is planning a major expansion of its manufacturing activities in India.

As per report, Alstom’s Switzerland based arm Alstom Power is likely to enter into a USD 500 million JV with Bharat Forge to produce high value, super critical turbine generator sets for thermal and nuclear power plants. The two companies are expected to sign an agreement soon to set up a manufacturing facility with an estimated capacity of 5,000 MW per annum.

The proposed JV is also expected to enter into a MoU with BHEL for manufacturing super critical boilers. The JV is looking for 1,000 acres of land for the production facility and is in talks with the state governments of Maharashtra, Gujarat and Tamil Nadu. After finalization of site, the proposed JV plans to roll out power equipment within 3 years.

While, the JV company is expected to manufacture equipment for thermal power plants initially, Alstom could bring in its expertise in nuclear equipment as and when the segment opens up.

Hyderabad based Sujana Metal Products Limited has announced its plan to invest INR 1,600 crore for acquisition of 3 steel units and establishment of a sponge iron and billet plant.

Mr VSR Murthy director of Sujana Group said that Sujana Metal has planned to invest INR 800 crore in the first phase by the end of 2008. A similar amount would be invested in the second phase expansion by the end of 2010 that includes establishment of a sponge iron unit and a billet casting plant besides expansion and modernization of the existing units. The funds would be raised through a mix of promoters’ contribution, debt and internal accruals.

Sujana Metal had already acquired 3 units namely Saritha Steels, Glade Steels and Sree Ganga Steels, located at Visakhapatnam, Hyderabad and Chennai, respectively. It would also complete the formalities for acquiring 2 more units in Hyderabad and Chennai within a couple of months.

Nagarjuna Construction Company has posted net sales of INR 1,254.07 crore for the January to March 2008 quarter up by 44.9% YoY as against INR 867.88 crore in January to March 2007 quarter.

Mr YD Murthy VP finance of Nagarjuna Construction Company said that the profits were depressed due to the exorbitant rise in steel prices. He added that the there were orders worth INR 2000 crore in the oil and gas and the metals segment.

Mr Murthy said that "In the January to March 2008 quarter, we have done a turnover of INR 1,258 crore up by 41% YoY as compared to INR 895 crore in January to March 2007 quarter and we have booked a net profit of about INR 52.6 crore up by 6.9% YoY as compared to INR 49.19 crore. The profits were a bit depressed mainly because of the exorbitant increase in the steel prices in January 2008."

About oil &gas and metal sector, he said that "We started 3 new verticals in 2007 and power is the third, but we have cut it and bagged orders in oil and gas and metals, combining at around INR 2,000 crore, which is approximately about 18% to 19% of our order backlog and last year the order accretion has been very strong. We have fresh orders of about INR 7,400 crore and the order book of the company as of March 31st 2008 is at around INR 11,380 crore."

Neyveli Lignite Corporation Limited has informed BSE that Mr S Jayaraman has relinquished as its CMD on May 31st 2008 on attaining the age of superannuation.

JSW Steel Limited has informed BSE that UTI Asset Management Company Private Limited has, vide its letter dated May 15th 2008, withdrawn the nomination of Mr S Jambunathan as its nominee director on the board of the company with effect from May 15th 2008.

Usha International Limited has informed BSE that the High Court vide its order dated May 26th 2008 has ordered the amalgamation of the company and Shriram Fuel Injection Industries Limited with the Jay Engineering Works Limited.

It is reported that Hyderabad based Nagarjuna Construction has received 4 orders aggregating INR 250 crore. The details of the order are as follows

1. INR 88.60 crore contract for construction of the office complex at Delhi, to be completed in two years
2. INR 65.70 crore contract for construction of the weight lifting auditorium at Delhi, to be completed within 15 months
3. INR 68.70 crore contract to develop and construct water supply system at Dhanbad in Jharkhand
4. INR 26.9 crore contract from Brahmani River Pellets to construct pelletization plant within 10 months

BL reported that Maharashtra government is likely to finalize bids for the INR 6,000 crore, six lane Mumbai Trans Harbor Link between Sewri and Nhava Sheva by mid June 2008.

As per report, Maharashtra State Road Development Corporation, which is a nodal agency for the project, is considering the option of asking the consortium of Reliance Energy and Hyundai to pay a surety of INR 5,000 crore.

The state government is reconsidering the consortium's bid on grounds that it had quoted a concession period that was too low and unrealistic. The consortium had quoted a concession period of 9 years and 11 months and was declared the preferred bidder by the state government in February 2008.

BL reported that, in its fourth global acquisition, electrical equipment major Crompton Greaves Limited has bought French power transformers repairing leader Societe Nouvelle de Maintenance Transformateurs for EUR 1.30 million.

Crompton Greaves in a regulatory filing said that the acquisition would help its capabilities in the services segment of its transmission and distribution business. Though Crompton Greaves has been focusing on 3 segments of power systems, industrial systems and consumer products, it is mainly identified with its fans and lighting business.

This is the fourth acquisition for the firm in the international arena. It acquired Belgium based transformer manufacturer Pauwels. Thereafter, it acquired Hungary based Ganz, a leading manufacturer of extra high voltage transformers, gas insulated switchgear and other related components. In 2007, it acquired Ireland based transmission and distribution focused Microsol Holdings Limited and its associate companies.

Sonomatra is engaged in providing on-site maintenance, repair of power transformers, on load tap changers, oil analysis, oil treatment and retrofilling.

BS reported that Industrial Infrastructure Development Corporation is facing serious law and order problem in its developmental work at Kalinga Nagar Industrial Complex in Jajpur district of Orissa.

This industrial complex has been developed by IDCO for facilitating the establishment of mega industries in steel and metal sectors. It has taken up special repair work of old military road near village Ravana lying within the KIC. It faced a major problem last week when one of its supervisors Mr Harmohan Nayak was physically assaulted by some unidentified persons.

The incident occurred when Mr Nayak reportedly pointed out about certain specification deficiency in the work to the field staff of the contractors. He was allegedly assaulted by the field staff of the contractor, who has been entrusted with this work. The local divisional head of IDCO has lodged a FIR with the Jakhapura police station.

The same day, Mr PK Panda junior engineer working with IDCO, was abducted from the work site by a group of people belonging to the nearby village while inspecting the water supply work of Gobarghati rehabilitation colony. He was kept in confinement till he was rescued by the officials of IDCO.

The matter was reported to the superintendent of police, Jajpur by the managing director, IDCO for taking necessary remedial measures.

Sunil Hitech Engineers Limited recently announced that it has awarded Occupational Health & Safety Management System certificate by international certification services DNV on May 23rd 2008. As per report, Sunil Hitech Engineers Limited is amongst the very few companies in the power and infrastructural sector which have been awarded prestigious OHSAS certification 18001:2007.

Mr Ratnakar M Gutte CMD of Sunil Hitech Engineers said that "Sunil Hitech Engineers has emerged as an aggressive player in the power sector. Being an OHSAS company, SHEL should strive to reduce accident and injuries to a minimum through collective involvement knowledge sharing and up gradation of all activities."

Mr Sunil R Gutte joint MD of Sunil Hitech Engineers said that "We are committed to protect the employees and those under the influence from Occupational ill health and injuries."

Sunil Hitech is also ISO: 9001-2000 certified company, specializes in the area of civil, mechanical, fabrication, erection, electrical works pertaining to energy, power sector and other infrastructural projects, testing & commissioning of thermal power plants with high precision quality and timeliness. Sunil Hitech Engineers' list of client includes big players like BHEL, NTPC, Reliance Energy, Jindal Steel & Power, TATA and state electricity board Maharashtra, Chhattisgarh, Madhya Pradesh and Tamilnadu. It also undertakes projects in the transmission and distribution segment.

Ranchi Express reported that Jharkhand State Electricity Board owes INR 950 crore to the Tenughat Vidyut Nigam Limited. While hit by fund church Tenughat Vidyut Nigam Limited is holding up payment to Central Coalfields Limited in turn. The consequence may be worse if Central Coalfields Limited stops supply to TNNL demanding its dues that has spiraled up to INR 157 crore.

Mr DK Singh coal advisor of Tenughat Vidyut Nigam Limited said that "We are holding payment to CCL for coal purchase because we lack funds." He added that it is not in position to pay CCL bills till the Jharkhand State Electricity Board made regular payments on TVNL.

The coal consumption of Tenughat Vidyut Nigam Limited is likely to double once the unit starts generation. The unit is expected to start generation from June 12th 2008 after a gap of one year.

Meanwhile, the CCL Board has referred the matters of coal ministry after repeated reminders.

BS reported that Punj Lloyd Group has acquired a strategic 74% stake in Technodyne International Limited of UK for an undisclosed amount.

Punj Lloyd, in a statement, said that "This acquisition is a strategic fit and further strengthens Punj Lloyd's existing tankage and terminal business. The acquired capabilities enable it to provide end to end solutions for complete delivery of complex cryogenic, high pressure LNG, LPG, ethylene, ammonia and other similar storage tanks, a significant growth area in oil & gas sector. The capabilities will also be leveraged for design of refinery and petrochemical projects."

Punj Lloyd has been the only company to be involved in all three LNG terminals in Dahej, Dabhol and Hazira in India. It has also completed the cryogenic storage tank package at the Reliance Jamnagar refinery, among other notable tankage projects in South Asia, Asia Pacific and the West Asia successfully in the past.

Technodyne is a specialist engineering, design and consultancy company specializing in large scale cryogenic and high pressure tanks. With projects executed across the world, Technodyne carries out the basic design and detailed engineering for complete steel and steel plus concrete tanks including associated piping, instrumentation and electrical systems.

It is reported that ABB in India has won orders worth INR 295 crore to provide power solutions for JSW Energy for its upcoming 1200 MW thermal power plant in Ratnagiri in Maharashtra.

The orders are for a range of power solutions including, electrical balance of plant, 400kV gas insulated switchgear substation and generator transformers.

Mr Biplab Majumder country manager & MD of ABB India said that "We are proud of our long standing partnership with the JSW Group. With this order we continue to build on this relationship. ABB’s power products and systems will ensure safe and reliable operation of the plant while optimizing energy consumption of the equipment."

ABB’s solutions for the project comprise several leading edge power technologies for improved system efficiency. The modular environmental business opportunities program solution for 300MW generating units will provide optimized and integrated solutions for complete plant electricals including shunt reactors, bus ducts, control and relay panels, MV and LT switchgear, other auxiliary systems and four 20kV generator circuit breakers, thus providing a further boost towards GCB scheme usages by thermal power plants in India.

The 400kV GIS substation will provide substantial space saving due to its compact design. With all live parts enclosed and protected against negative influences the gas insulated switchgear ensures enhanced operational reliability and safety.

ABB’s scope of delivery also includes 20/420 kV generator transformers. ABB’s transformers are designed and manufactured for high reliability, reduced life cycle costs and optimized electrical design for minimized losses.

According to a report by financial services firm Edelweiss, India's mining industry is projected to touch over USD 30 billion accounting for about 2.5% of the GDP in the next 4 years.

The report said that "Considering India's mineral resources, we believe there is strong potential for further development and scaling up of India’s mining industry. We believe that the mining industry could grow to USD 30 billion plus by 2012 fiscal and reach 2.5% of GDP, if India develops a conducive regulatory framework and attracts significant investment in exploration, mine development and infrastructure."

The report pointed out that India has immense natural resources and is ranked among top 10 globally for deposits in iron ore at 25.2 billion tonnes, coal at 257.4 billion tonnes and bauxite at 3.3 billion tonnes, which constitute 3%, 10% and 4% respectively of the world's resources. India also holds leading position globally in mica, barytes, chromite, kaolin and manganese.

The report said the proposed National Mineral Policy and the allotment of captive coal blocks are the key triggers for future development of mining in India. It added that "As the Indian mining industry scales further, we see both new and existing mining players offering significant wealth creation opportunities to investors."

In September 2005, the Hoda Committee under the chairmanship of Mr Anwarul Hoda was constituted to review the National Mineral Policy, 1993, with an aim to improve the investment climate for mining in India. Some of the highlights of the Hoda Committee report are
1. Prioritizing critical infrastructure needs of the mining sector
2. Review existing procedures for granting reconnaissance permits
3. Prospecting license
4. Mining lease
5. Identifying ways of augmenting state revenues among others

Mr Sajjan Jindal former vice CMD of JSW Steel, after taking over as president of Assocham, said that Indian steel makers will honor their commitment to Dr Manmohan Singh to hold prices for 3 months, but rates will go up thereafter.

He said that "Prices have to go up. We have to go into the global price regime. What can you do if raw material prices have gone up?"

Mr Jindal said that there is a big gap between global and Indian prices. He added that "Today for hot rolled coils, the international price is close to USD 1,200 per tonne. In India, we are selling it at USD 850 per tonne."

He said that the raw material prices, both of iron ore and scrap, are going up. Scrap is being imported at USD 800 per tonne, while the selling price is fixed at USD 850 per tonne. He added that "Either that part of the steel industry will close, creating shortages or price has to go up."

Essar Group has issued a press release on May 30th 2008 indicating that it plans a ground breaking this summer for the USD 1.65 billion mining, processing and steelmaking Minnesota Steel plant.

Mr Ravi Ruia VC of Essar Group said that "We are committed to moving as quickly as possible to bring steelmaking to the iron range. Minnesota Steel plays a key role in our North American steel strategy."

Essar said that it planned to develop the operation that would produce high quality and low cost steel through ore processing, direct reduced iron production and steel making all on one site. Estimated annual production from the plant is expected to be 2.5 million tonnes of steel product.

Essar indicated it will internally finance the entire USD 1.65 billion price tag including technical, managerial and financial resources. It described itself as a USD 50 billion company with assets in steel, energy, power, communications shipping and logistics and construction. Meanwhile, the project’s public face has changed since Essar’s purchase of Minnesota Steel.

SNS reported that CPI has demanded an all party meeting to take decision on ArcelorMittal's proposed Greenfield steel mill in the state.

Mr Dibakar Nayak CPI state secretary said that half of the 8,000 acre land identified for its site is arable land. He said that it is necessary to identify suitable land for the mill so that minimum number of people was displaced.

He add that “The government should also avoid using cultivable land for setting up plants.”

SNS reported that Orissa government’s high level clearance authority, headed by Mr Naveen Patnaik chief minister, has cleared several investment proposals in the state. The proposals for capacity enhancement of capacity from various steel and power companies were also cleared at the meeting

The list includes

1. Essar Steel’s proposal to set up a 6 million tonnes per annum plant and an 8 million tonnes per annum iron ore beneficiation plant. Essar had signed a MoU to set up a 4 million tonnes per annum plant through the sponge iron route. Now, the revised proposal for 6 million tonnes per annum will be through the blast furnace route.

2. Welspun Power & Steel’s proposal to set up a 5 million tonnes per annum iron ore beneficiation plant and a 3 million tonnes per annum pellet plant.

3. 2000 MW thermal plant of Bhushan Energy Limited

4. 1000 MW thermal projects of Monnet Ispat & Energy Limited

5. 1000 MW thermal projects of Visa Power Limited.

6. INR 2200 crore ship building yard & ship repairing project of Apeejay Shipping Limited. The project will come up at the Dhamra Port. Apeejay Shipping had agreed to complete the project within 5 years of acquisition of land.

7. Capacity expansion proposals of SMC Power Generation Ltd, MSP Metaliks and Bhushan Steels were also cleared. The HLCA approved

8. Petrochemicals & petroleum project, one of the five such projects to be developed in India, will be located in Paradip region covering 2 districts of Jagatsinghpur and Kendrapada. Indian Oil Corporation will be the anchor tenant for the project.

BS reported that Chinese firm Long Jian Road & Bridge Limited will build an 80 kilometers long two lane road from Theog to Rohru in the Himachal Pradesh's Shimla district. The project will cost INR 228 crore and to be completed in 3 years. Mr Gulab Singh state PWD minister and Mr Li Guangsheng director of Long Jian Road & Bridge Limited have signed the agreement.

Mr Singh said that "The contract envisaged execution of the work in difficult mountainous terrain and harsh climatic conditions. It involves construction of 15 bridges, 280 culverts and 6.5 kilometers high retaining walls, 5.5 kilometers of covered foot path and 30 rain shelters on the 80 kilometers road."

He said that the widening of the road will benefit fruit and vegetable growers of the fertile Shimla district. He added that "The project will be completed within the specified period of 36 months."

ET reported that Larson & Toubro has outbid BHEL for supply of main power equipment for a proposed 1,600 MW power project in Andhra Pradesh.

As per report, against a bid of about INR 2,000 crore placed by BHEL, L&T bid just over INR 1,500 crore.

The project being developed by Andhra Pradesh Generation Corporation at Krishnapatnam would be the first project in India based on 800 MW supercritical thermal generation sets. The total cost of Krishnapatnam project is about INR 8,000 crore.

Mr Jairam Ramesh union minister of state for power said that "The Krishnapatnam project would be the first contract given to a non BHEL domestic manufacturing company. It is a very significant development that would kick start L&T’s own power equipment manufacturing program. India needs to step up manufacturing to keep pace with its ambitious capacity addition program and an additional domestic manufacturer here would definitely help."

According to the Cement Manufacturers’ Association, India’s cement sales in May 2008 have grown up by 7.9% YoY as an increased focus on infrastructure projects has pushed up demand for the building material in India. Cement sales grew to 167.67 million tonne from 155.26 million tonnes in the previous year.

Cement sales of Aditya Birla group rose by 0.8% YoY in May 2008 to 2.66 million tonnes while its production grew up by 2.5% YoY to 2.70 million tonnes. The Birlas’ cement production comes from flagship Grasim Industries and UltraTech Cement, with a combined capacity of more than 31 million tonnes.

ACC said that its January to March 208 quarter sales rose by 7.1% YoY to 5.29 million tonnes. April 2008 production totaled 1.77 million tonnes while sales was 1.74 million tonnes. ACC has the capacity to make 22.4 million tonnes of cement a year.

Shree Cements said that its May 2008 sales grew up by 20.3% YoY to 556,000 tonnes.

BS reported that Ispat Industries will buy a 40% stake each in three overseas mines of Global Steel Holdings. Global Steel owns 70% stakes in iron ore mine in Brazil and two coal mines in Columbia and Mozambique.

Global Steel is setting up 3 special purpose vehicles for isolating financial and regulatory risks. Ispat will purchase the stakes in these SPVs, which are held by Global Steel.

The iron ore mine has an estimated reserve of 500 million tonnes while the coal mines hold reserves of 120 million tonnes.

It is reported that Adhunik Metaliks Limited has decided to take its wholly owned subsidiary Orissa Manganese & Minerals public.

AS per report, the initial public offer, to be launched in the next 4 to 6 months, is expected to unlock value for Orissa Manganese and the promoters are looking to mop up INR 200 to INR 250 crore from the share sale.

It is reported to have 80 million tonnes of iron ore and 50 million tonnes of manganese reserve. Orissa Manganese has begun the mining of manganese recently, while iron ore production is expected to begin later this year.

Adhunik had bought Orissa Manganese for INR 60 crore sometime back.

The Telegraph reported that Jindal Power Limited has signed a MoU with the Bihar government for setting up a 2,640 MW coal based power plant. Mr Sushil Maroo director of Jindal Power and Mr Aditya Swaroop energy secretary of Bihar have signed the MoU.

The final site of the project would depend on the availability of coal blocks and water.

JPL commissioned 500 MW of 1,000 MW project in the year 2007-08. The third and fourth units of 250 MW each were likely to be commissioned in June and July 2008 respectively.

It is also in process of setting up 2 power plants in the Dumka and Godda areas of Santhal Pargana where the company had been allotted coal blocks.

BS reported that TATA Steel is considering the option of shifting its INR 2,500 crore titanium dioxide projects to Andhra Pradesh or Orissa as it has failed to initiate the process of land acquisition in Tamil Nadu even as a year has gone by since the announcement of the project.

Mr S Asokan head of the project said that "We will talk to the Tamil Nadu government first before taking a decision. The mining project, which was announced in June 2007, needs an estimated 10,000 acres of land. However, the state government has failed to help the company in the land acquisition process."

Initially, sections of the local population, particularly those with strong political leanings, accused TATA Steel of attempting to acquire agricultural land for mining. TATA Steel is now facing trouble in acquiring land since small pieces of land aggregating to its needs are scattered among several hundred owners.

Triveni Engineering & Industries Limited recently announced that it has signed an agreement of understanding with TGM Turbinas Industria e Comercio Ltda of Brazil, wherein both parties are undertaking to make all their best efforts to conclude a license agreement for the manufacture and sale of impulse and reaction steam turbines of 25 to 45 MW at its Bangalore facility.

Bloomberg reported that ArcelorMittal South Africa Ltd plans to charge customers as much as 6% more next month for steel as global demand and world prices are increasing.

Mr Tami Didiza a spokesman for ArcelorMittal SA said that prices for both long and flat steel products will climb by ZAR 450 (USD 58.38) a tonne or 4% to 6%. He added that the increase is valid for all steel deliveries confirmed from July 1st 2008.

Mr Didiza said that “Steel prices internationally are still firming up. With this increase, we are at least on a par with the Black Sea market and below Europe and the US.''

It is reported that European FeSi users have expressed their objection to the anti dumping duties on imports from China, Egypt, Kazakstan, Russia and Macedonia.

Producers in Russia and Kazakstan agree EU intends to impose AD duties as it fails to correctly calculate the negative influences brought by other factors.

Besides, European importers believe the duties are based on the false estimation of EU benefits and EU has not checked the objections.

As international FeSi market shoots up, all the supports and functions of the AD duties will be proven wrong.

Worthington Industries announced that its subsidiary, Worthington Integrated Building Systems has acquired the assets of Sharon Stairs, a designer and manufacturer of steel egress stair systems for the commercial construction markets.

Sharon, previously owned by Willow Grove has approximately 180 employees. The company has experienced significant growth over the last three years with 2007 sales of USD 32 million.

Mr Ralph Roberts president of Worthington IBS said that “This is a great fit for Worthington as we look to bring a package of solutions to the architectural community through our framing system, Dietrich building products and now Sharon Stairs. Sharon Stairs has a national brand, manufacturing know how, a strong management team and an experienced sales network, all of which fits nicely within our Worthington culture.”

Worthington Integrated Building Systems is part of Worthington Industries, integrating best in class products and methodologies to deliver superior turnkey framing solutions for both the residential and the mid rise construction markets. Worthington IBS has two facilities and approximately 500 employees.

Bloomberg reported that the largest Brazilian producer of refractory tiles, Magnesita Refratarios SA will sell a stake to Krosaki Harima Corp as part of a plan to issue as much as BRR 186.4 million (USD 114.3 million) of new shares.

Magnesita in a statement said that it will sell as many as 9.64 million voting shares for BRR 19.34 each. Krosaki will buy 5.74 million of the shares, equal to 3% of Magnesita's outstanding capital and controlling shareholder GP Investments Ltd will have 30 days to exercise its right to acquire a bigger stake.

Mr Adriana Fernandes Magnesita investment relations manager said that “This operation aims to consolidate Magnesita's partnership with Krosaki which has been providing technological transfer to Magnesita for more than 20 years.”

Mr Fernandes said that Magnesita may expand its production capacity beyond the current 590,000 tonnes a year as Brazilian steelmakers, the biggest buyers of the tiles, boost output to meet domestic demand.

BNamericas reported that employees at Venezuelan iron briquette manufacturer Matesi have asked the government to draw up a collective contract similar to the one recently signed with steelmaker Sidor and steel tube manufacturer Tavsa.

A union leader told BNamericas that "We are part of Sidor and now that negotiations are finished with Tavsa we believe it's fair to expect similar treatment.”

In early May, the government agreed to raise Sidor salaries by VEB 53 a day (USD 24.70) which, according to Venezuela's President Hugo Chávez will increase operating costs at the recently nationalized company. Later, employees at steel tube manufacturer Tenaris and its subsidiary Tavsa reached an agreement to boost salaries by VEB 55 per day.

The leader added that Matesi employees have been negotiating their collective contract since last year without success.

The Matesi plant, located in Venezuela's Guayana region, has production capacity of 1.5 million tonne per year and was purchased in July 2004 for USD 120 million by Venezuela's Materiales Siderúrgicos a company formed by Tenaris and Sidor.

A main rebar mill in southern Taiwan has announced to increase prices this week by TWD 600 per tonne on its rebar. Consequently rebar new price is increased from TWD 31,700 per tonne to TWD 32,300 per tonne.

Taiwan’s long product prices soared as a whole last week and continue its upward trend. The price of rebar has been rose by TWD 700 per tonne last week, as the price was between TWD 31,200 per tonne and TWD 31,700 per tonne.

(Sourced from YIEH.com)

Taiwan’s Dragon Steel has also announced its new price for June, followed by Tung Ho Steel.

Dragon Steel decided to raise its price of H beam by TWD 2,800 to TWD 3,000 per tonne. The price of billet will be raised by TWD 2,400 per tonne. However Dragon’s price is still lower than market price.

Tung Ho Steel has raised its H beam prices by TWD 3,000 per tonne. The company’s benchmark prices have been raised from TWD 32,500 to TWD 32,800 per tonne to TWD 35,500 to TWD 35,800 per tonne.

(Sourced from Yieh.com)

According to the French Steel Federation, French exports of steel products to third countries in the first quarter rose by 8.2%YoY to 159,000 against the same period last year.

The federation said that flat products export increased by 7.1% to 136,000 tonnes, long products up by 15% to 23,000 tonnes.

The federation added that import in France dropped by 59.5% to 32,000 tonnes and that of long products fell by 33.3% to 14,000 tonnes compared to the same time of last year.

It is reported that Japan imported 824,000 tonnes of steel products in April up by a 40.8% MoM compared to March 2008 and down by 2% YoY

Among them, imports of common steel products totaled 317,000 tonnes. South Korea was the main provider with 196,000 tonnes, Taiwan took 57,000 tonnes and China provided 44,000 tonnes.

Malaysian Yung Kong Galvanizing Industries Berhad announced that its board of directors has approved to purchase manufacturing facilities amounting to MYR 2,695,500 from a related party, Chuanmeng Design & Decor Sdn Bhd.

The manufacturing facilities consist of 27 sets of roll forming machines with supporting equipments to produce roll formed sheets of various profiles and accessories and 1 unit of forklift.

Reuters reported that Hyundai Heavy Industries Co has secured a KR 852.0 billion (USD 824.3 million) order to build nine oil tankers for a European company.

Hyundai in a filing to the Korea Exchange said that it would deliver the ships by the end of March 2012, without identifying the European shipper.

The Canadian Steel Producers Association and Canadian Vehicle Manufacturers’ Association are supporting and funding a national program to remove mercury containing switches from end of life scrapped vehicles before they are recycled into new steel.

This national program builds on the successful Switch Out initiative delivered by the Clean Air Foundation, a national not for profit organization. With this new funding, CAF will expand Switch Out to all provinces and territories in Canada, providing the infrastructure for the collection, removal and management of the mercury containing switches as well as practical educational materials to recyclers across the country.

Mr Mark Nantais president of the Canadian Vehicle Manufacturers’ Association said that “This program will ensure that the mercury containing switches in end of life vehicles are properly removed and managed so mercury is captured and prevented from entering the environment. As of January 1st 2003 the use of mercury switches in new automobiles has been voluntarily and completely phased out.”

Mr Ron Watkins president of the Canadian Steel Producers Association added that “Removing mercury containing switches from end of life vehicles represents the most effective way to reduce mercury releases to the environment. Canada’s steel producers are committed to the continued success of the Switch Out program, and are pleased to be working with the auto industry and the Clean Air Foundation to expand it into a truly national program.”

The program partnership is supported by Canadian automotive recyclers and dismantlers and their respective associations the Automotive Recyclers of Canada and the Canadian Association of Recycling Industries. The collaborative effort among the steel, auto and recycling/dismantling industries is unprecedented and is essential to the success of the program, which will assist the steel and auto industries to meet the new federal pollution prevention requirements regarding mercury containing switches.

AK Steel has advised its customers that an USD 820 per ton surcharge will be added to invoices for electrical steel products shipped in July 2008.

July 2008 surcharges for the broad range of stainless steel products that AK Steel produces can be found on the company's web site at www.aksteel.com. Due to continued increases in raw material costs, AK Steel will add a new surcharge for copper, effective with shipments on June 29th 2008.

AK Steel's surcharges are based on reported prices for raw materials and energy used to manufacture the products, with the May 2008 purchase cost used to determine the July 2008 surcharges.

Northwest Pipe Company announced that it has received a letter of intent from Don Kelley Construction Inc to supply pipe for the Lewis & Clark Regional Water System.

Northwest Pipe will supply approximately 57,000 feet of 54" steel pipe valued at approximately USD 19 million for an engineered and custom fabricated piping system. The pipe is expected to be manufactured in the Company's Saginaw in Texas division with delivery scheduled to begin in the third quarter of 2008.

The release added that “The Lewis and Clark Rural Water System developed a groundwater supply adjacent to the Missouri River and a water treatment facility in southeast South Dakota near Vermillion. Treated water will be piped to member municipalities and rural water systems. When complete, the project will provide safe, reliable drinking water to approximately 200,000 people in South Dakota, Minnesota and Iowa. The Lewis and Clark Rural Water System represents a unique regional approach by the three states to address common problems with area water resources in a more effective and cost-efficient way than each state could do alone. This supplemental water supply will allow the Water Service Area to maintain the existing quality of life and will sustain the present rate of growth in the Water Service Area.”

JMB reported that Hitachi Metals targets around JPY 1 trillion of consolidated sales in or after fiscal 2015 ending March 2016 through sustainable growth effort in 2 step 3 year plans.

As per report Hitachi Metals tries to expand the business opportunity in USA, China and Asian countries. The firm also launches new products with high performance and environmental friendly property for the next growth.

The American Iron and Steel Institute, the primary source of statistical information on the North American steel industry announced the release of its 2007 Annual Statistical Report.

The 126 page book, the most comprehensive reference of its kind for the American steel industry, provides statistical data for the United States steel industry plus a variety of selected statistical data on the Canadian, Mexican and world steel industries.

The ASR has proven to be an indispensable reference tool for the industry, media, academia, steel analysts and others who are interested in tracking steel industry trends. The most popular charts, in terms of inquiries received by the Institute, include Selected Statistical Highlights on shipments, apparent supply, imports, employment and raw steel data over a 10 year period; Selected Financial Highlights on income and cash flow data; Shipments by Products and Markets over a 10 year period; Raw Steel Production and imports and exports data.

NAFTA charts, which are included as part of a series for the seventh consecutive year, were compiled from US Department of Commerce, Bureau of the Census, Statistics Canada and CANACERO data. The charts show raw steel production, steel mill product shipments and imports and exports data.

The report is the longest running statistical publication series in all of manufacturing, dating back to 1868. The ASR has been published without interruption since 1914.

Standard & Poor's ratings services placed its BB corporate credit rating on Brazilian steel maker Companhia Siderúrgica Nacional on positive watch.

S&P cited improving cash flow protection measures that may allow it to comfortably finance its aggressive capital expenditures program in the next several years.

S&P noted that production at CSN's proprietary iron ore mine, the Casa de Pedra mine is expected to firmly ramp up from 2008 under a sanguine price and market environment which will contribute to CSN's cash flow diversity and resilience.

S&P added that the positive watch also reflects improving market and economic conditions in Brazil, that allows CSN to tap the market to refinance existing debt maturities and finance expansion plans.

Bloomberg reported that Austria's biggest steelmaker Voestalpine AG rose the most in eight days in Vienna trading after Steubing AG forecast profit will increase on higher demand.

As per report Voestalpine rose as much as 3.2% after Steubing analyst Mr Michael Broeker said that earnings before interest and tax will increase to EUR 1.13 billion from EUR 1.01 billion a year earlier.

Sources said that “Voestalpine benefits from higher demand from its key clients in the automotive, mechanical engineering and energy related industries. Notably in special steel, capacities will be extended to meet growing demand.''

The board of directors of Nucor Corporation declared the regular quarterly cash dividend of 32 cents per share on Nucor's common stock.

In addition to the 32 cents per share base dividend amount, Nucor's board approved the payment of a supplemental dividend of 20 per share for a total dividend of 52 cents per share.

This cash dividend is payable on August 11th 2008 to stockholders of record on June 30th 2008 and is Nucor's one hundred forty first consecutive quarterly cash dividend.

The supplemental dividend of twenty cents per share is based primarily on Nucor's continued strong results. The payment of the supplemental dividend in any future period will depend upon many factors, including Nucor's earnings, cash flows and financial position.

JMB reported that Japanese integrated steel makers try to increase the steel supply for automakers.

As per report, Japanese steel makers are studying potential higher output to keep stable supply when automakers are accepting around JPY 28,000 per tonne of price hike for fiscal 2008 started April from previous year.

The supply is estimated to increase by around 200,000 tonnes in April to September 2008.

The US International Trade Commission determined that revoking the existing countervailing duty order on carbon and certain alloy steel wire rod from Brazil and the existing antidumping duty orders on imports of that product from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago and Ukraine would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time, but that revoking the existing antidumping duty order on imports of that product from Canada would not.

As a result of the Commission's affirmative determinations, the existing orders on imports of carbon and certain alloy steel wire rod from Brazil, Indonesia, Mexico, Moldova, Trinidad and Tobago and Ukraine will remain in place.

As a result of the Commission's negative determination, the existing order on imports of that product from Canada will be revoked.

The Trade Commission said that “With respect to Brazil, Indonesia, Moldova and Ukraine, all six Commissioners made affirmative determinations. With respect to Trinidad and Tobago vice chairman Shara L Aranoff and Commissioners Charlotte R Lane, Irving A Williamson and Dean A Pinkert voted in the affirmative; Chairman Daniel R Pearson and Commissioner Deanna Tanner Okun voted in the negative. With respect to Mexico, Vice Chairman Aranoff and Commissioners Okun, Lane, Williamson and Pinkert voted in the affirmative; Chairman Pearson voted in the negative. With respect to Canada, Chairman Pearson, Vice Chairman Aranoff and Commissioners Okun and Williamson voted in the negative; Commissioners Lane and Pinkert voted in the affirmative.”

BNamericas reported that mining giant Vale is committed to building a new 2.5 million tonne to 5 million tonne per year steel mill in northern Brazil's Pará state regardless of whether it secures a partner.

Mr Roger Agnelli president & CEO of Vale said that the project is still in the feasibility study phase. He added that at the First Brazilian Steel Gathering organized by steel institute IBS in Rio de Janeiro.

Mr Agnelli said that "We are building a plant with or without partners. Northern Brazil also needs steel."

Mr Agnelli also mentioned that Brazil as the best place to produce steel today due to its abundant iron ore mines. Vale is the owner of the Carajas iron ore mine, which churns out some 100 million tonne per year.

BNamericas reported that Venezuelan steelmaker Sidor has added 890 subcontracted employees to its payroll as part of a collective contract agreement reached with the government in May.

Mr José Meléndez secretary of Venezuela's steelworkers union Sutiss told BNamericas that "This is to comply with the specifics of clause 97 of the collective contract which establishes that 1,300 employees must be incorporated within one month.”

He explained that however, the agreement does not call for all of Sidor's external workers to be contracted. Only the ones directly involved in the production process will be integrated.

In May, Sutiss signed the collective contract with Venezuela's government for employees at Sidor where they received a pay raise of VEB 53 per day (USD 24.70), among other improvements.

Reuters reported that Japan's fifth biggest steelmaker Nisshin Steel Co said that it would make an announcement on improper testing for its stainless steel pipes at today.

Nippon Steel Corp and JFE Holdings Inc last week confirmed that that they had fabricated strength data on their steel pipes.

Bizedge.com reported that Master Builders’ Association of Malaysia while has called for the removal of the 10% levy imposed on imported cement.

Mr Patrick Wong president of Master Builders’ Association of Malaysia said the levy could only mean higher costs for the construction industry. He said that “This 10% tax does not make sense, as it contradicts the Asean Free Trade Area rule, where cement will only be taxed at 5% and 0% come 2010.”

He added that “Portland cement, which is no longer under price control, makes up the bulk of cement used in the local construction industry, hence the removal of the levy would help reduce our costs. This is unlike the liberalization of the steel industry which does cover many categories of steel.”

Malaysian government has recently lifted the ceiling prices for cement.

Bizedge.com reported that Sumatec Resources Bhd subsidiary Sumatec Engienering & Construction Sdn Bhd has secured two contracts totaling MYR 69.98 million from Petronas subsidiary Malaysian Refining Company Sdn Bhd for works related to the Melaka Refinery PSR-2 revamp project.

Sumatec said that the contracts involve the steel structure fabrication and erection and general civil, piling concrete foundation, pavement and other associated works.

Reuters reported that China's No. 3 coal producer by market value Yanzhou Coal Mining Co Ltd announced that the government of its home province of Shandong had introduced a temporary price cut for some thermal coal in the next three months. The move aims to ensure power supply in the booming eastern province during the summer peak season for usage.

Yanzhou supplies Shandong's power generators with coal on a contractual basis but the government has told the province's coal mines to supply an extra 2.56 million tonnes each month in July, August and September at a CNY 10 per tonne discount to the June price, whereas the spot thermal coal price is around CNY 650 per tonne now, about 25% higher than the contract price

Yanzhou said that the lower price would apply to about 1.5 million tonnes of its production, implying a total reduction in revenue of about CNY 15 million yuan.

Yanzhou's total revenues of CNY 15.1 billion in 2006

Reuters reported that German engineering conglomerate Siemens is planning to sell a benchmark three part euro bond.

A banker familiar with the sale said that it would consist of a long 3 year bond, a 6 year bond and a 10 year bond, with pricing expected later on Wednesday.

Deutsche Bank and Goldman Sachs are joint book runners, with BNP Paribas and Royal Bank of Scotland as joint lead managers.

The bond will be issued via Siemens Financieringsmaatschappij NV, guaranteed by Siemens AG.

The US International Trade Commission has voted to institute an investigation of certain automotive parts. The products at issue in this investigation are various parts of the Ford Mustang.

The investigation is based on a complaint filed by Ford Global Technologies, LLC of Dearborn on May 2nd 2008. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States of certain automotive parts that infringe patents owned by Ford GTL. The complainant requests that the ITC issue an exclusion order and a cease and desist order.

The ITC has identified the following as respondents in this investigation:
1. Keystone Automotive Industries, Inc of Pomona
2. LKQ Corporation of Chicago
3. US Autoparts Network, Inc of Carson
4. Jui Li Enterprise Co. of Taiwan
5. YCC. Parts Manufacturing Co Ltd of Taiwan
6. TYC Brother Industrial Co Ltd of Taiwan
7. Taiwan Kai Yih Industrial Co Ltd of Taiwan
8. TYG Products, LP of McKinney

By instituting this investigation, the ITC has not yet made any decision on the merits of the case. The case will be referred to the Honorable Theodore Essex and the ITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation.

Newell Recycling announced that it has been granted final approval and received all necessary permits to build and operate a shredder facility at the Savannah in Georgia area. The facility is expected to be opened by the end of this year.

Newell Recycling of Savannah, LLC is expected to initially employ 75 people in Garden City, with plans for around 100 employees once the plant is fully operational. It said that the Savannah operation, the company’s third shredder plant and eleventh location overall will feature a 6000 horsepower Newell MegaShredder

The company held a grand opening at the 40 acre site the middle of last month. The company has made an initial investment of USD 17 million and has asked for no tax abatements. In keeping with the corporate tradition of environmental responsibility, Newell Recycling is preserving many specimen trees on the site, while planting nearly 100 new trees on the property.

(Sourced from Recycling Today)

It is reported that South Korea's Doosan Heavy Industries & Construction Co Ltd has secured an order worth USD 820 million to supply equipment for a coal fired power plant in Thailand.

Doosan Heavy Industries in a filling to stock exchange said that the contract from Thailand's Gheco One Co Ltd a joint venture between French utility Suez's unit and Thai developer Hemaraj will last until October 2011.

The 700 MW power plant is to be located in Thailand's Rayong Province.

The United Steelworkers announced that it has reached a groundbreaking agreement with ArcelorMittal to improve health and safety standards throughout the company. The global agreement covers ArcelorMittal workers represented by unions throughout the world.

In addition to recognizing the vital role played by unions in improving health and safety conditions, the unprecedented agreement establishes universal minimum standards at every site the company operates. Many safety improvement measures such as plant specific joint management union health and safety committees are standardized, and training and education programs are instituted in order to immediately address current health and safety issues in North America and elsewhere in the company.

The agreement also included the creation of a joint management union, global health and safety committee that will target plants in the group in order to work to dramatically improve their performance.

Mr Leo W Gerard president of USW International said that "This agreement is an obvious signal to companies everywhere that unions are vital to safe and healthy workplaces. It is the most important issue for our members and we are pleased to be able to come to this agreement with the world's number one steel company."

Mr LN Mittal CEO of ArcelorMittal said that "This agreement will build on the work that we have already undertaken in the company. Health and safety is our number one priority and in signing this agreement we hope to set a new benchmark for the industry."

The USW represents 850,000 workers in North America. Approximately 20% of them work in the steel industry.

DP World recently announced that it has completed the full acquisition of the Chennai Container Terminal after buying the shares of Chennai Terminal Private Group's partners Chettinad Logistics and Jakari Group.

DP World's announcement of the buyout came amid reports that its subsidiary DP World Chennai has to pay compensation to Chennai Port for not achieving the minimum container throughput.

A statement from DP World said that a focus on expansion of its terminal business in Chennai combined with a strong growth trend in South Indian trade and the partners' desire to reinvest resources in their respective core businesses were the main drivers of its decision to acquire 100% ownership.

Mr Ganesh Raj senior VP & MD of the Indian Subcontinent region DP World and also chairman of Chennai Container Terminal said that the company remains committed to realizing its objective of expansion of the terminal in the near future.

Mr Ennarasu Karunesan CEO of Chennai Container Terminal said that the move for 100% ownership reflected the great commitment and belief by DP World in the terminal development in particular and to the employees of Chennai Container.

Reuters reported that a unit of Indian group Zoom Developers is planning to build a USD 130 million plant for aluminum products near Oman's port of Sohar.

As per report, work on the downstream aluminum plant is to start in the third quarter of 2008 by Zoom Aluminium Development.

A spokesman at Indian embassy at Oman said that "Zoom has leased land from the government near the port to build the USD 130 million plant."

Zoom Developers is a Mumbai based private group with interests in sectors including energy, engineering and real estate.

Gulf Daily News reported that Bahrain will not renew the work permits of thousands of Bangladeshis, in a ban expected to heavily impact the nation’s construction industry. The decision not to renew work permits follows announcement from the interior ministry that permits would no longer be issued to Bangladeshis.

Mr Samir Nass chairman of Bahrain Chamber of Commerce & Industry said that small contracting companies’ dependant on Bangladeshi labor will be hit the hardest by the ban. He added that "There are many contractors who rely on the cheap labor from Bangladesh. We hope a mechanism is put in place where the ban would be done in a way that minimizes the impact on ongoing projects."

Meanwhile, Bangladesh Embassy head Mr Saif Al Islam said that the move had left him and his colleagues in shock and the embassy would appeal against it. He added that "For one person the government is punishing a whole nation, which is not acceptable to us. We will appeal to the government to reconsider this. We will ask them at least to delay implementing this restriction."

Mr Sheikh Rashid bin Abdulla Al Khalifa Bahraini interior minister has ordered authorities to stop issuing work permits to Bangladeshis, after the alleged brutal murder of a Bahraini national by a mechanic from Bangladesh.

Mr Abdulla JM Kalban CEO of Dubai Aluminium Company said that it will expand the output capacity to annual 2.5 million tonnes by 2015, which is 2.5 times of current volume. He added that it tries to become world top 5 positions through the expansion.

Meanwhile, Mr Walid A Al Attar GM sales of Dubai Aluminum Company said that it tries to increase the supply for Japanese market to 300,000 tonnes in 2010 from current 100,000 tonnes.

MEED reported that Burullus Gas Company has awarded Italian oil field services company Saipem a contract for the development of Egypt's Sequoia field, located offshore from the Nile River Delta.

The contract follows the award by Burullus of a USD 400 million offshore expansion package to Saipem in August 2006 and a contract to provide offshore drilling services on its West Delta Deep Marine concession in the Mediterranean in December 2006.

Saipem said that the contract covers the engineering, procurement, installation and commissioning of the sub sea development system for the Sequoia field in water depths of 70 to 570 meters, along with a new 22 inch gas export pipeline. The work will be completed in the second half of 2009.

Burullus is a JV of the UK's BG Group, Egyptian Natural Gas Company and Malaysia's Petronas.

(Sourced from MEED)

Abu Dhabi Chamber of Commerce & Industry in its latest report on the emirates said that Abu Dhabi has attracted nearly AED 300 billion in cumulative investments over the past 5 years and the capital is projected to triple to more than AED 1 trillion in the next 5 years.

Abu Dhabi Chamber of Commerce & Industry said that the total value of projects to be carried out in the emirate could exceed AED 1.3 trillion in the next few years and more than half of them would be in the construction sector.

In a 50 page report on Abu Dhabi's economy, Abu Dhabi Chamber of Commerce & Industry said that the emirate's gross domestic product soared by at least 18% in 2007 and is projected to swell by more than 14% in 2008. The GDP of the UAE also surged by more than 16% in 2007 and the report forecast growth this year at more than 14%.

Between 2001 and 2007, cumulative investments in Abu Dhabi totaled nearly AED 300 billion, including about AED 55 billion in the oil and gas sector, AED 130 billion in construction and real estate, AED 56 billion in manufacturing, AED 30 billion in tourism and about AED 29 billion in water and electricity.

The report said such projects would give a strong boost to the country's economy, which is already galloping at double digit growth rates because of strong oil prices, high public spending and a sharp increase in private investments.

The figures showed both the oil and non oil sectors in Abu Dhabi and the whole UAE were recording high growth rates as the country is stepping up a drive to attract investment and diversify its economy away from volatile oil sales.

Emirates Business 24-7 reported that Saudi Arabian government is assessing plans to almost double its refining capacity regardless of the sharp increase in investment requirements.

As per report, the Kingdom has already approved of 2 mega refining ventures with foreign partners in June 2008 despite a minimum increase of 60% in costs. The amount of capital investment required for the 2 plants was initially estimated at around USD 6 billion each and is now expected to have increased by at least 60% on rising cost structures.

Saudi Arabia's domestic refining capacity is estimated at around 2.1 million barrels per day, however it also controls more than 1 million barrels per day in joint refining ventures abroad.

The statement concluded that from roughly USD 33 billion in 1998, Saudi's oil revenues jumped to nearly USD 143 billion in 2005 and USD 165 billion in 2006 before swelling to a record USD 170 billion in 2007. In addition, the income is projected to surpass USD 200 billion in 2008.

MEED reported that two companies have submitted bids for the 2,400MW Ras al Zour captive power plant project. The bidders for the lump sum turnkey engineering procurement and construction contract are China Harbor Engineering Company and South Korea's Hyundai Heavy Industries.

China Harbor plans to procure six 350 MW turbines from its compatriot Harbin Turbine Company for the plant, while HHI would use four 600 MW turbines from Siemens China.

The 54 month long contract also includes a 3.4 million gallon a day reverse osmosis desalination plant. An award is expected by the end of July 2008.

The USD 3 billion oil fired captive power plant will serve an integrated aluminum complex at Ras al Zour on the Gulf coast. Saudi Arabian Mining Company and Canada's Alcan are the clients.

(Sourced from MEED)

Mr Chakib Khelil president of OPEC said that oil prices may continue to rise because of the weak US dollar and market speculation. He added that "International markets need refined products not crude oil, of which there is enough in the market."

Mr Khelil said that OPEC will not review the market situation until it meets in Vienna on September 9th 2008.

He added that "OPEC does not have the control of the majority of production and we cannot do much for prices. We may see another devaluation of the dollar which will drive prices up again."

He further added that the market tightness exists more for refined oil products, such as gasoline and diesel, not crude oil.

Bahrain Tribune reported that OPEC members will invest USD 160 billion in oil development projects in the next 3 years to increase their production capacity by 15% in response to growing demand.

The announcement by Mr Abdalla Salem el Badri secretary general of OPEC sought to put high oil prices at the top of the agenda for a summit in July 2008 of the Group of Eight most powerful nations.

Mr Badri said that "Even though we see no shortage of oil in the market, since the middle of 2007 we have seen a major disconnect between oil prices and market fundamentals. A number of factors have contributed to this, but primarily it is the massive role that speculators now play in the oil market." He added that OPEC countries would add 5 million barrels per day of extra crude production capacity by 2012.

OPEC pumped about 32 million barrels per day in April 2008, equivalent to 40% of world oil consumption and has about 2 million barrels per day of spare capacity.

Saudi Kayan Petrochemical Company recently announced that it had signed a USD 6 billion loan agreement with a group of banks to partly finance its complex in Al Jubail industrial zone. Kayan is 35% owned by SABIC.

Saudi Kayan said that ABN Amro, Bahrain's Arab Banking Corporation, France's BNP Paribas, HSBC Holdings and Samba Financial Group will lead manage the 15 year loan agreement.

Mr Mutlaq Al Morished CFO of SABIC said that the Kayan project will start commercial production in the fourth quarter of 2010.

Al Watan reported that Saudi Arabia has for the third time delayed a tender for bids for a 200,000 barrel per day oil refinery in the southern province of Jizan.

The report quoted a source from one of the consortiums bidding for the project as saying that "We were informed of the delay and we are awaiting more clarifications."

Spiraling costs have cast doubt over the viability of new oil refineries worldwide and industry observers have been sceptical over the Jizan plan as it is a long distance from crude production facilities.

US Bechtel and Foster Wheeler, France's Technip and Italian Snamprogetti are among foreign companies that have set up consortiums with Saudi firms such as Tasnee to bid for the project.

Mehr News Agency reported that twenty four petrochemical projects costing USD 13.3 billion are underway having been completed from 4% to 98% in Iran.

Mr Gholamhossein Nejabat deputy oil minister for petrochemical affairs and also MD of National Petrochemical Company said that 5 of the projects will come on stream in the current Iranian year and the rest will be launched by the end of the fourth 5 year economic development plan.

Me Nejabat said that 33 projects costing USD 15.5 billion have also been planned for the fifth 5 year development plan, for which the executive operations will be started within the next 2 years.

It is reported that Larsen & Toubro Limited is planning to bid for building a new airport in Muscat.

Mr KV Rangaswamy president of L&T's construction division said that "The government of Oman is in the process of inviting bids and we will be submitting bids. The contract could be worth up to INR 30 billion. We will look for foreign airport modernization contracts and Greenfield airports as and when they come up."

L&T, which has built two new airports in India, is also involved in modernizing the Delhi and Mumbai airports.

Muscat's current international airport can handle 4.2 million passengers, while the new one planned 15 kilometers away would have a capacity for 12 million passengers that would eventually go up to 48 million.

PTI reported that the bodies of six Indian workers, killed when an under construction building collapsed on them in the UAE, have been pulled out. Police said that the rescue units with the aid of sniffer dogs recovered the bodies of all the six Indian workers who went missing after the collapse.

The victims were working with Seidco General Contracting, which was building the Laguna Beach Hotel in Ajman emirate of the UAE. The accident occurred on Monday when the workers had gone to plug a leakage in the concrete ceiling of the basement of the building.

Police said that "The workers, all carpenters, were trying to add more support to the columns that hold the ceiling when the freshly laid concrete and steel pipes collapsed.”

Colonel Ali Abdullah Alwan chief of Ajman Police said that 11 officials of the construction company have been detained for questioning.

It is reported that Essar Group has expressed its keenness to invest in Pakistan's economy, especially in the energy, steel and shipping sectors. The offer was made by Mr Sashi Ruia chairman of Essar Group during a meeting with Mr Yousuf Raza Gilani prime minister of Pakistan, who said Pakistan is open to business and foreign direct investment.

Mr Gilani said that almost all sectors of Pakistan's economy allow FDI, which is fully protected under the country's laws and there is no discrimination between foreign and local investment as no government sanction is required in either case. He added that "Since Pakistan is deficient in electricity, it would welcome investment in power generation, especially in developing the Thar coal reserves."

Mr Ruia told Mr Gilani that Essar group has made investments across the world and would be keen to invest in energy, steel and shipping sectors.

Mr Asif Ali Zardari co chairman of Pakistan People's Party, whose party heads the ruling coalition, has been pushing for greater business ties with India to drive economic growth within his own country. He recently offered to set up economic zones along the border with India and to source gas and fuel supplies for India. Mr Zardari has also suggested that India and Pakistan could collaborate to exploit the Thar coal reserves in Sindh province for generating power that could be supplied to both countries.

Today's Zaman reported that contractors affiliated with the All Contractors Federation have halted their ongoing projects to protest sharp hikes in steel and iron prices in recent months.

Mr Tahir Tellioğlu president of TMF said that the contractors who are part of the federation, which has around 30,000 members in eight cities, had stopped their construction projects on June 1st 2008 and would not resume until June 15th 2008.

He added that they had decided to halt ongoing projects at a special general assembly meeting as a reaction to the neutral stance adopted toward the high prices by both the ruling and opposition parties.

He also said that the contractors are also protesting recent moves by the Housing Development Administration of Turkey, which they say is becoming a professional company that aims to maximize profits, contrary to its major duty of producing low cost houses for low income groups.

Dana Gas and Emirates General Petroleum Corporation have jointly inaugurated Middle East's first common user gas pipeline, located in Sharjah.

Dana Gas and Emarat each have a 50% stake in the construction, ownership and operation of the pipeline. Phase I was completed in May 2006 and has since been delivering gas to the SEWA power station at Hamriyah.

The main pipeline of the joint Hamriyah Gas Pipeline Project is a 48 inch gas pipeline that connects the Sharjah gas hub at Sajaa to the fast growing industrial area at Hamriyah and covers a distance of 32 kilometers, with a capacity of 1 billion cubic feet per day. The new 48 inch pipeline is now ready to receive gas supplies from Sajaa and deliver them to the premises of the 3 end users at Hamriyah.

Mr Rashid Al Jarwan GM of Dana Gas said that "This strategic partnership has set an example for further regional co operation."

Mr Jamal Abdul Rahman Al Medfa acting GM of Emarat said that the project has a great deal of importance for Emarat and is in line with the company's strategic plan.

It may be noted that Dana Gas and Emarat, along with the 3 end users namely Federal Electricity & Water Authority, Sharjah Electricity & Water Authority and Dana Gas affiliate Crescent Natural Gas Company, agreed in January 2006 to build and use the pipeline.

Daily Star Egypt reported that Mr Hisham Talaat Moustafa chairman of General Section of Real Estate Investment has lauded Egypt government’s recent decisions taken to cool rapidly spiraling prices.

Mr Moustafa said that "I believe the government introduced effective procedures to contain the relentless leaps in prices of construction material including the cement export ban and steel price caps."

He pointed out that after the government banned cement exports, prices slid back to around EGP 500 per tonne as compared to the previous EGP 700 to EGP 800 per tonne. He added that "The same is true for steel, placing price limits on wholesalers and retailer has helped push prices down."

It may be noted that, since the beginning of the year, a series of upsurges raised construction costs in Egypt some 30% pressured by continued spikes in input costs such as iron ore, scrap metal, billets and coal.

Record high price leaps brought steel prices to roughly EGP 7,800 per tonne and cement to nearly EGP 800 per tonne. Hikes in production prices have prompted the ministry of trade & industry to ban cement exports in late March 2008. The government also amended last April customs duties and lifted tariffs on cement and steel.

Mr Moustafa said that GSREI would not overlook escalating prices in steel and cement that will eventually affect not only the building and construction industries, but also domestic economy and society in general. He particularly named Al Ezz Steel Rebars prices as being cheaper than international ones despite angry accusations the heads of the two companies exchanged in April over their respective annual financial results.

Saudi Aramco has raised prices of cargoes loading in June 2008 to a record after global crude oil benchmarks climbed to all time highs last month. It increased the price of propane cargoes by USD 50 or 6% MoM from a month ago to USD 895 a tonne.

Aramco raised the price of butane by USD 60 or 7% MoM to USD 920 a tonne from a month earlier.

Aramco sells LPG under one year contracts and individual cargoes for immediate delivery. The cargoes are sold free on board, requiring the buyers to pay for shipping costs.

Mr Hilmi Guler energy & natural resources minister of Turkey said that Turkey might re invent coal if oil and natural gas prices continue to soar. He added that "Not only developing but also developed countries may be affected by the rising oil prices."

Mr Guler underlined importance of other energy resources such as wind, solar, water, geothermal and energy efficiency and said that Turkey would use those resources. He added that Turkey is working on new projects on energy independence that might be an example for other countries.

Mr Mohammad al Olaim oil minister of Kuwait has declared that Kuwait is to start its production of free gas from its gas fields. He added that production will start with a 50 million cubic feet per day of non associated gas and will increase to 175 million cubic feet 10 days later.

He said that Kuwait ultimately plans to boost daily production to 1 billion cubic feet per day of gas by 2015. Plans had been to start in late December 2007, but were stymied by technical hurdles. He added that besides free gas, Kuwait will also be producing 50,000 barrels per day of light oil and condensates.

In March 2006, Kuwait announced the discovery for the first time of 35 trillion cubic feet of free natural gas and about 10 billion barrels of light oil in its northern oilfields.

It is reported that classification agency DNV Maritime has won 50% of Middle East and Indian market for new vessels on order or being built. It sets classification rules for ships, verifies compliance and issues survey reports and certificates.

Cash rich oil companies are driving the demand for offshore support vessels of various types, of which DNV has classified 300 currently on order worldwide.

Mr Eivind Grostad senior VP & regional manager of DNV Maritime said that "The regional offshore sector is exceptionally buoyant. We have 125 offshore support vessels currently being built to DNV class in local shipyards such as Drydocks World, Seaspray and Nicocraft as well as at Hindustan, Bhrati and Mazagon on the Subcontinent."

Besides the offshore support vessels, DNV has received a number of recent orders from local owners that include very large crude carriers for Vela International, chemical carriers for the United Arab Chemical Company and bulk carriers for Shipping Corporation of India. And the Abu Dhabi National Tanker Company has ordered several Aframax tankers.

Oman Observer reported that Omani government has signed a MoU with Port of Salalah for the construction and operating of 3 additional deepwater container berths, which will give the port a total of 9 berths totaling 3,555 meters in length.

Mr Gary Lemke CEO of Port of Salalah said that "The signing of this MoU is a clear indication of the government's intent to be at the forefront of regional port development and will enable the Port of Salalah to keep up with the growing demands and allow us to meet our customer expectations as a modern and efficient terminal."

As per report, berths 7, 8 and 9 are the first stage of terminal two and will encompass 1,350 meters quay wall and add additional 3 million TEU to the annual capacity. Berth 7 is expected to be operational in the first quarter of 2011, with berth 8 and 9 scheduled for completion in 2012.

Terminal 1 comprises 6 berths along 2,205 meters of linear berth operated with 17 super post panamax gantry cranes. Additional 8 super post panamax cranes and 4 mobile harbor cranes are on order. With the delivery of the new equipment, the capacity of berth 1 to 6 increases from 4.5 to 6 million TEU. The completion of Berth 7 to 9 will take the annual capacity of the port to 9 million TEUs with a total berth length of 3,555 meters.

Reuters reported that France's Lafarge and Iraqi partner Asiacell is planning to invest around USD 550 million to raise cement capacity in Northern Iraq to help meet a shortage in the region.

Mr Faruk Mustafa Rasool chairman of Asiacell said that Lafarge already has a 65% stake in an existing 7,500 tonne a day plant at Bazyan in Iraq's Kurdish region. He added that "We will build a second line with capacity of 7,500 tonnes a day and the cost would be similar to the USD 550 million spent to build the first line."

Iraq has been working for the past 3 years to bring foreign investors to invest as much as USD 2 billion in its cement factories, but political interference and instability has delayed the effort.

The Iraqi cement industry's total annual production, from 17 factories, is between 4 million and 5 million tonnes, a fraction of its capacity of 25 million tonnes. Iraq imports around 6 million tonnes a year of cement from neighboring Syria and Lebanon to cover consumption.

Bloomberg reported that Tangshan may sell shares to help finance a USD 29 billion industrial park, the centerpiece of the nation's largest land reclamation project.

Mr Xue Boxun the project's deputy director said that ownership of the Caofeidian Industrial Zone, including a port, may be transferred to two city owned investment companies that would then offer stock to local or overseas investors. He said that “We are looking for the quickest way to go public. He didn't give a timetable for completing a stock sale.”

Mr Xue said the city has not submitted any application to the securities regulator for a share sale as it is still working out planning issues. Officials are studying ways to get around the regular stock sale process because it would take three years.

The report added that Tangshan is seeking to reduce its reliance on state loans after the central bank pushed borrowing costs to a decade high.

It is reported that Chinese steel makers have shot up export offer for hot rolled steel coil again citing the robust domestic market prices. The substantial rise in ex works price for Q3 is believed to be the major reason for this increase.

Steel producers have been raising Q3 price successively. Wuhan Steel lifted its HRC price by CNY 400 per tonne and there is an extra of CNY 100 per tonne for thickness under 3.5mm and width above 1300mm.

On Shanghai market, price for commercial 4.75mm to 12mm HRC in 1500mm width has risen to CNY 5850 per tonne to CNY 5900 per tonne and that for 1800mm wide at CNY 6200 per tonne. SPHC 2.5mm HRC goes at CNY 6500 per tonne.

Most export offers for commercial 4.75mm to 12mm HRC has exceeded USD 1000 per tonne FOB this week. A tier two steel maker in North China is offering its SS400 HRC at USD 1030 per tonne FOB up by USD 40 per tonne to USD 50 per tonne from mid May.

(Sourced from MySteel.net)

It is reported that in order to meet the urgent demand for galvanized plate and color coated sheet for building movable houses in the quake hit areas, major steel makers in China have actively adjusted their production, focusing on producing color coated sheet.

China's largest steel maker Baosteel has put all of its three color coated sheet production line into full load production, producing 600 tonnes of sheets daily on average, the peak level of the production line. It has suspended the export of color coated sheet and maintained the price unchanged to ensure the supply, despite of the big rise of raw materials and fuels. In a bid to not touch off a price wave of rolled steel, Baosteel Group has also decided to delay the release of its price adjustments in the coming quarter, which had been scheduled for May 20th 2008.

Another large steel maker, Wuhan Iron and Steel Corporation is working on producing 20,000 tons of color coated sheets to support the reconstruction of the quake hit areas.

Meanwhile, Panzhihua Iron and Steel Corporation, the large steel make located in Sichuan has gradually resumed production since May 22nd 2008. With the gradual recovery of Pangang's production capacity, the price hike of rolled steel triggered off by the quake in Sichuan will be obviously checked in the near future.

Bloomberg reported that Anhui Conch Cement Company and Panzhihua Iron & Steel Group will receive loans from Bank of China Ltd to aid rebuilding efforts in areas stricken by the country's strongest earthquake in 58 years.

China third biggest bank said formal agreements for credit lines will be signed tomorrow, Beijing based Bank of China but terms weren't disclosed.

Conch company officials including Executive Director Mr Guo Jingbin were in a shareholder's meeting this morning and unavailable for comment.

The report added that Panzhihua Steel southwest China's biggest steelmaker had to halt production at two units after the May 12 earthquake damaged factories and killed workers.

Bank of China said on May 26th 2008 granted a CNY 30 billion credit line to Deyang, Sichuan based Dongfang Electric to restart production after the earthquake caused CNY 5 billion of damage at one of its factories.

It is reported that most Chinese pipe exporters have to give up the US market as US Department of Commerce announced to impose astonishing retaliatory duty.

DOC has decided to levy a 700% import duty on standard pipes from China including a record high 615% countervailing duty. China's Shuangjie Group got a CVD of 615.92% besides an anti dumping duty of 85.55%. DOC also announced to impose separate rates on other 31 Chinese exporters.

The International Trade Commission is scheduled to make its final injury determination on or about July 14th 2008. However, as the CVD is based on Chinese government, enterprises can hardly prepare any defense.

Mr Zhong Qing chief counsellor of Beijing WTO Affairs Center said CVD investigation mainly involves the government, including taxation, land use, infrastructure and so on and China is less experienced in this aspect,

US said it decided to impose the high duty because these companies withdrew their participation and did not cooperate to the best of their ability in these investigations. But most Chinese enterprises believe further responses would be of no avail, given the US unreasonableness.

It is reported that Valin Lianyuan Iron and Steel has successfully produced 300 tons of plate for train carriage whose all performances can meet the user’s demand, it indicated that the company has the ability to produce train carriage plates by batch.

The plate for train carriage produced by Valin Lianyuan Iron and steel got the authentication from the Certification Center of Ministry of Railway, in February this year.

Valin Lianyuan Iron and Steel joins Baosteel, Pansteel, WISCO and Anshan Steel, who have this production license.

At present, the company is organizing technology and research personnel to improve the product’s performance, and make preparation for large batch production.

It is reported that recently, Baoshan Iron and Steel formally joined in the United States Colorado Mining Institute’s advanced steel technology and product research center and become the first domestic steel enterprise that has joined in the center.

The center was established in 1984, with focus on the steel production and technology, has close cooperation with many global well known companies. The members are mainly from steel mills, auto plants, heavy equipment companies, suppliers etc including Mittal, POSCO and United States AK etc.

After joining into the center, Baosteel can share its research results, equipments and other resources, as well as participating in the research and development projects and undertaking some research work.

It is reported that Fushun Special Steel Company purchased fixed assets including Fushun Hongji Refractory Company and environmental reconstruction project of Fushun Special Steel Corporation.

The purchase price is based on the assessed net capital. As of October 31, 2007, the assessed value in the capital purchase is CNY 47,311,490.09. Fushun Special Steel spends CNY 47.311 million to buy the above capital.

It is reported that Tiantie successfully produced 50 coils of TT510L auto crossbeam coiled sheet with a total weight of 1,087 tonnes.

As per report there are four specifications including width of 1.35 meter and 1.34 meter and depth of 6.5mm and 6.75mm. After the examination by technology center the capacity of is better than TT510L and is approaching to TT610L.

Auto crossbeam steel is one of the popular types of steel in the market and has higher profit margins and technical difficulty compared with the past hot-rolled products.

It is reported that Mr Paul Harton Governor of Espirito Santo, Brazil recently visited Baosteel. Mr Xu Lejiang Chairman, Mr He Wenbo President, Mr Zhao Kun Vice President and Mr Dai Zhihao etc of Baosteel Group Corporation met the delegation. Baosteel also inked "Letter of intent on shipping terminal project" with VALE which accompanied the delegation

As per report, the business visit of the delegation led by Governor Mr Harton to Baosteel was for the purpose of in depth exchange with Baosteel on the construction of Baosteel Victoria Iron & Steel Company Limited and its supporting shipping terminal, etc.

The "Letter of intent on shipping terminal project" specifies that the shipping terminal project after its construction is completed will provide raw material loading and unloading and product delivery etc service for Baosteel Victoria Iron & Steel Company Limited.

During the meeting, Mr Xu Lejiang said that thanks to the support of Brazilian Government and Espirito Santo Government, Baosteel Victoria Iron & Steel Company Limited is progressing in an orderly way. Baosteel appreciates very much the support given by Espirito Santo to the project of Baosteel Victoria Iron & Steel Company Limited. The development of this project will not only bring opportunities to Baosteel but also contribute to the development of local Brazilian economy.

China Precision Steel has announced that Mr Wo Hing Li its Chairman, President & CEO will donate USD 19.9 million to the University of Hong Kong. The donation will be funded through the sale of a portion of Mr. Li's shares of the company's common stock.

Mr Li said ''We strongly believe in the growth of China and would like to promote higher education. All of the proceeds from the sale of common stock under the stock purchase agreement will be donated to the Chinese University of Hong Kong, which plans to use the funds to build a new college.''

As of May 29th 2008 Mr Li is the beneficial owner of 16,349,240 shares of common stock of the Company. He is holding represents 35.6% of the outstanding shares assuming 45,896,288 shares of the Company's common stock outstanding as of May 15th 2008 as reported in the Form 10-Q filed on May 16th 2008.

Reuters reported that Central China's Hubei, Henan and Jiangxi provinces will likely face worse than usual power shortages this summer as earthquake-hit Sichuan may need to import electricity.

Mr Yu Yanshan deputy chief of the General Office under the State Electricity Regulatory Commission said Sichuan will probably need to import 2 gigawatts of electricity after the devastating May 12 tremor damaged some hydropower dams.

He said that China's power supplies in general will meet demand that is expected to grow around 12% from last year, though shortages will occur in some areas.

Mr Yu said shortfalls will emerge in east China, central China and some provinces in the south during peak demand time in summer, and deficits will be most prominent in southern China. He said that the key to guarantee steady power supply in the summer is to have enough coal supplies, though water stocks and weather will also play a role.

The State Council, China's cabinet urged local governments to speed up the approval process for small mines whose production had been suspended while mines were renovated to ensure safety.

Shanghai
Large scale rebar that is exempted from inspection is offered at CNY 5400 per tonne to CNY 5410 per tonne up by CNY 30 per tonne
Other large scale rebar is posted at CNY 5220 per tonne to CNY 5230 per tonne up by CNY 10 per tonne
Third grade rebar is posted at CNY 5670 per tonne to CNY 5700 per tonne up by 50 per tonne
Common carbon wire rod is posted at CNY 5850 per tonne up by CNY 30 per tonne
High speed wire rod is posted at CNY 6020 per tonne to CNY 6030 per tonne up by CNY 20 per tonne.

Beijing
High speed wire rod is sold at CNY 5960 per tonne
High speed wire rod provided by small producers is posted at CNY 5900 per tonne
Second grade large scale rebar is posted at CNY 5570 per tonne
Third grade large scale rebar is posted at CNY 5770 per tonne.

Tianjin
Wire rod price remains firm whilst rebar price gains CNY 50 per tonne
High speed wire rod is quoted at CNY 5900 per tonne
Second grade rebar is posted at CNY 5600 per tonne
Third grade large scale rebar is posted at CNY 5800 per tonne.

Guangzhou
8mm common carbon wire rod made by Shaoguan Steel is priced at CNY 5600 per tonne
8mm high speed wire rod is posted at CNY 5830 per tonne
Large scale rebar is posted at CNY 5650 per tonne
Large scale rebar provided by Yufeng is posted at CNY 5550 per tonne
Third grade rebar provided by Ma'anshan Steel is posted at CNY 5810 per tonne
Third grade rebar provided by Shaoguan Steel is posted at CNY 5900 per tonne.

(Sourced from MySteel.net)

Reuters reported that Mr Li Xiaopeng chairman of Huaneng Power International Inc China's largest independent power producer has resigned.

Huaneng Power said in a statement that Mr Huang Yongda its Vice Chairman will serve as acting chairman until a new chairman is elected

The report added that Huaneng Power International Inc did not disclosed why Mr Li had resigned, but it added that Mr Li had no disagreement with the company and that he was not aware of any matter relating to his resignation that needed to be brought to shareholders' attention.

It is reported that US International Trade Commission determined that revoking the existing antidumping duty order on brake rotors from China would not be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.

As a result of the Commission's negative determination, the existing order on imports of this product from China will be revoked.

All six Commissioners voted in the negative. Its action comes under the five year review process required by the Uruguay Round Agreements Act.

The five year review concerning Brake Rotors from China was instituted on July 2nd 2007.

It is reported that reconstruction of the quake hit areas involving 15 million people to be settled down is becoming a focus nowadays with the rescue and relief work gradually winds up. It is estimated that the overall reconstruction will need about 50 million tonnes steel products in next 5 to 10 years.

Industry insider said that the reconstruction will also witness a process of urbanization. If per capita steel consumption is 0.33 tonnes per year the reconstruction work will require at least 5 million tonnes each year adding up to 50 million tonnes in ten years.

Mr Zhou Xizeng an analyst with CITIC Securities contended that considering the proximity factor, the steelmakers to directly benefit from this quake will include Chongqing Steel, Pangang Steel & Vanadium Co, Valin Pipe & Wire, Maanshan Steel and Anyang Steel etc.

He however warned that "But a strong market does not mean fat profits. Steel prices in the disaster affected areas are intervened."

It is reported that China Iron & Steel Association has advised its members to stop increasing prices of steel products destined for reconstruction and relief operation in quake hit areas.

CISA has forwarded the top planning body's directive to all its members and urged them not to increase the price of hot rolled coil, color coated coil and structural tube above levels prior to the devastating earthquake. The mills have been told that any price rises already implemented would be rescinded.

The move has come after the price limit order issued by National Development & Reform Commission. According to NDRC's CISA members are also required to supply materials directly to the quake stricken areas and prevent any price bidding in the circulating process.

(Sourced from MySteel.net)

It is reported that recently Chinese HDG and PPGI price have been surging despite slow domestic steel market. Supply is reported to be quite short and prices are continuously on the rise.

As per report the price increase is across the board and there has been an average increase of CNY 200 per tonne for HDG and PPGI since late May.

On Shanghai market 1.0mm HDG by Wuhan steel is being quoted at CNY 7100 per tonne. 0.5mm HDG at CNY 7500 per tonne,1.0mm HDG by Anshan steel goes at CNY 7050 per tonne to CNY 7100 per tonne, 0.5mm PPGI by Baosteel is at CNY 8600 per tonne, Guangzhou market has witnessed a substantial rise of CNY 500 per tonne to CNY 600 per tonne during the past two weeks

The major reason for the price surge is the reconstruction in earthquake hit Sichuan province. The constructions for 1.5 million temporary houses require at least 700,000 tonne of PPGI. Such a great demand has put great pressure on steel makers and most steel makers have to set aside capacity for PPGI production. This has really led to tension in supply and price surge.

(Sourced from MySteel.net)

It is reported that Pangang Group and Bank of China signed a CNY 20 billion worth of financial agreement for supporting the post quake reconstruction in the Southwest part of China.

As per report the earthquake substantially damaged the highways, bridges, infrastructures and houses in the Southwest, causing total direct economic losses of over CNY 150 billion. For reconstructing, it may need more than 6.5 million tonnes steel products as calculated. And the value is close to CNY 20 billion if per tonne steel product costs CNY 3000 on average.

Mr Fan Zhengwei chairman of Pangang Group said they will struggle to resume operation as soon as possible and devote into steel supply for the quake relief.

Bank of China has already granted credit of CNY 8.3 billion and provided load of CNY 4.4 billion to Pangang. And its branch in Sichuan donated CNY 300,000 in quake rescue. The bank said Pangang will play an important role in post quake reconstruction by supplying construction steels like vanadium-contained rebar.

According to Mr Sun, owner of a private steelmaker, small and medium scale steel makers in Qian'an have generally cut production by 30% to meet the environmental standard."

As Qian'an is close to Qinhuangdao, one site of the 2008 Olympic football game and adjacent to Beijing-Shenyang superhighway, many small and medium scale steel mills in the town have had to reduce steel output since early May.

Facing the pressure of environmental protection, Mr Sun's mill has cut down production from 5000 tons to 3500 tonnes per day which is up to the standard for pollution discharge. Moreover, the company will invest more in environmental conservation equipments, which normally account for 10% of the total fixed assets.

Numbers of steel mills alike present fairly high initiative in acquiring such equipment In order to survive. Meanwhile, large state owned steel mills like Tangshan Steel and Shougang have not been seriously impacted from the output control factors.

Xinhua reported that China's oldest shipbuilder, the Jiangnan Shipyard Corp completed the move to a new home to make room for World Expo 2010.

The report said that work on the CNY 16 billion new shipyards started in 2005. It is the first phase of the Changxing base and has a production capacity of 4.5 million DWT with a 3.8 kilometer coastline, four docks and three production lines.

Mr Guo Xiwen China State Shipbuilding Corp chief economist told Xinhua that work on the second phase, with a 3.5 million DWT capacity is to start in 2009 and finish in about 2012.

China is the world's third largest shipbuilder after the Republic of Korea and Japan. It accounted for 23% of the world market with a production capacity of 19 million DWT in 2007.

It is reported that Xinyu Steel has commissioned a dust catcher as a part of its plan for improving environmental protection.

Girth washing equipment is the environmental facility, which matches with Xinyu Steel’s 3 million tonnes sheet plate converter project. The diameter of the equipment is 5 meters, 21 meters high, 86 tonnes weight, is the largest one in similar equipments. The equipment is constituted by washing tower, girth syringe, wet spin evaporator etc; the total investment is about CNY 6 million.

The equipment will play the remove dust cooling role for the converter production as well as creating favorable conditions for recycle of coal gas.

According to WISCO Group that since May, high strength auto sheets from Wugang launched commercial production and have been utilized to manufacture cars by Dongfeng and Chery and so on.

It is reported that this high strength auto sheet could cut steel consumption by 10% or so a car, compared with common auto sheets, and therefore it will reduce the weight of the car and decrease the fuel consumption while driving.

WISCO expressed that it is committed to help the downstream users by cutting costs through technology innovation, and make efforts to realize the auto industry’s environmental protection, economization.

Bloomberg cited Mr Guo Jingbin executive director of Anhui Conch Cement Co as saying that Chinese government will cap cement prices to curb inflation.

Mr Guo said “I don't think the government will impose nationwide price controls on cement. Cement was one of the first few products for which price controls were relaxed in China, so the government won't control its price in the absence of extenuating circumstances.”
He said that “China's National Development and Reform Commission have said it will place limits on the prices of basic materials used during the post earthquake rebuilding phase, including cement steel and glass. The specifics haven't been announced yet.

Mr Guo said “The price of cement in Sichuan province was around CNY 600 per tonne before the earthquake, compared with a national average of about CNY 300.

He said that “Cement prices in that region were the highest in the country even last year. Without government controls, the price there could exceed CNY 1,000 per tonne after the earthquake.''

It is reported that Mr Huang Huahua governor of Guangdong, Mr Li Ronggen deputy governor and Mr He Wenbo of Baosteel jointly visited Zhanjiang port and learned the details about the evolvement of the Zhanjiang steel project's preparation work.

After the visit, Mr Huang Huahua made positive comments on the project's prophase work by saying the work is in smooth progress, the Longteng logistics pellet item an independent project supportive to the steel base also gets on well and the land levy and resettling work is carried on in steps.

Mr Huang said that incorporation of the Guangdong Steel Group should be picked up. He said that a good scheme has been made on the group incorporation, and called all parties to continue to push it forward and insure the unveiling within this year.

He said that further efforts should be made to strive for a quick approval for the overall construction. Supported infrastructures, like highway, railway, bridge and water supply is expected to be planned as soon as possible.

Zhanjiang project is designed with 10 million tonnes per year capacity in the first phase with total investment of CNY 69.6 billion.

It is reported that more regional governments have intervened in the price limits of steel products and cement for use in post quake relief. A host of mills have pledged to freeze their color coated steel at pre quake levels.

Central China’s Wuhan Steel has kept the June delivery price for color coated steel unchanged as promised in spite of the weekly price rally of CNY 100 per tonne to CNY 400 per tonne in the spot market. Moreover, the company has volunteered to produce 20,000 tonnes of color coated steel for fulfilling Hubei's commitment of providing 85,000 pre-fabricated houses for the disaster zones.

In the mean time, nine steel mills in Hebei producing color coated steel for use in quake relief have also issued a joint statement that they would ensure sufficient supply and frozen prices. Hebei has been assigned to 80,000 pre fabricated houses which would require 10.84 million tonnes of color coated steel, mainly supplied by Tanggang and Handan Steel.

It is reported that Chinese construction steel prices seem to have finished downward correction and start another round of increase. Less output, higher production cost and robust demand are believed to be bolstering the upward trend.

Shanghai market prices HRB335 20mm rebar is being quoted at CNY 5420 per tonne to CNY 5430 per tonne, HRB400 at CNY 5700 per tonne to CNY 5730 per tonne up by CNY 70 per tonne to CNY 100 per tonne from last week. Price for commercial wire rod is at CNY 5870 per tonne that for hi-speed material is tagged at CNY 6100 per tonne to CNY 6110 per tonne up by CNY 100 per tonne

Rebar and wire rod prices in Beijing market have seen remarkable rebound. 6.5mm hi speed wire rod by Tangshan steel is being quoted at CNY 5980 per tonne up by CNY 30 per tonne. HRB335 and HRB400 16mm to 22mm rebar price are largely unchanged at CNY 5570 per tonne and CNY 5770 per tonne respectively.

Export offer for rebar with boron is being quoted at about USD 1000 per tonne FOB and most are from such South China based steel makers as Guangzhou Steel, Xiangtan Steel and Liuzhou Steel. Rebar without boron is at USD 1100 per tonne FOB.

(Sourced from MySteel.net)

It is reported that 5,000 tonnes of HR coiled sheet and 1,000 tonnes of color coated sheet was shipped from Yingkou Port. This was the first batch of steel products manufactured by Anshan Steel for earthquake disaster areas.

As per report Anshan Steel received the announcement from State owned Assets Supervision and Administration Commission on 23rd May and was ordered to produce 30,000 tonnes of HR coiled sheet for Guangdong Huaguan Steel Co to manufacture earthquake prefabs. On 27th May, the company accepted the production mission from province Liaoning of 20,000 tonnes of color coated sheet and 10,000 tonnes of galvanized sheet for the manufacture of earthquake prefabs.

Anshan Steel has already completed the production of 1,000 tonnes of galvanized sheet and 7,500 tons of color coated sheet. After active communication with consumers in both domestic and international market, Anshan Steel has successfully delayed color coated contracts for June delivery to August.

Interfax quoted the Industrial Policy Ministry as reporting that Ukraine's steel industry raised finished roll output by 5% YoY in January to May to 15.799 million tonnes.

The ministry said Ukraine produced 18.601 million tonnes of crude steel up by 4% and 15.467 million tonnes of pig iron up by 4% YoY.

Mittal Steel Kriviy Rih

(In tonnes)

Azovstal

(In tonnes)

ISTIL

(In tonnes)

Dniprospetstal

(In tonnes)

Ukrainian Journal Staff reported that Ukraine mini steel mill which has been part of Estar Holding has submitted documents to the National Electricity Regulatory Commission of Ukraine to receive a permit to import 2 billion cubic meters of natural gas per year under a non regulated tariff.

Mr Hennadiy Andreyev Chief power engineering specialist at the mill during a meeting of the commission recently said that the mill plans to import natural gas from Russia to use for its own needs, and some to sell to Ukrainian consumers.

RIA Novosti reported that Ukraine increased its transit of natural gas to Europe in January to May 2008 to 55.7 billion cubic meters up by 26% YoY due to a growth in Russian energy giant Gazprom's gas exports to Europe in order to meet the demand of its customers.

The report added that Gazprom paid a total of USD 665 million for gas transited through Ukraine from December 2007 through March 2008.

A gas row between Ukraine and Gazprom in early March saw Kiev accuse Gazprom of not paying gas transit fees, while Gazprom blamed Ukraine for failing to send invoices.

It is reported that Internet portal Tube Metallurgical Company entered the first competition of the Best Internet project in 2008 among metallotorgovyh and metallurgical companies in Russia and CIS countries. As a result of competition corporate Internet agency TMK took second place in the category of steel companies.

Expert jury, consisting of authoritative experts in the field of advertising and marketing on the Internet said diplomas contest such parties Internet presence TMK as the best organization and presentation of its sections.

Internet portal TMK which includes sites OAO "TMK" and the sites comprising the company's manufacturing companies was established in 2007. It contains extensive information on the activities of TMK and manufactured products Businesses Company, includes a number of services that increase the convenience of its use by visitors. Corporate Internet portal plays an important role in the development of communications companies with external and internal audiences, enhancing the transparency of its activities.

Mechel OAO a leading Russian integrated mining and steel group announced power segment results for 2007 last week

Highlights

1. Revenue in Mechel’s power segment from sales to 3rd parties totaled USD 503.3 million or 8% YoY of consolidated net revenue up by 917.6% YoY over revenue from sales to the third parties of USD 49.5 million or 1% YoY of consolidated net revenue in the 2006.

2. Operating income in the power segment in 2007 was USD 12.6 million, up by 46% YoY compared to operating income of USD 8.6 million, or 7.0% YoY of total segment revenues a year ago.

3. EBITDA in the power segment in 2007 up by 191.2% YoY totaling USD 26.8 million compared to EBITDA of USD 9.2 million in 2006.

(In USD million)

Mr Igor Zyuzin CEO of Mechel said “Mechel began to develop its power business in 2007 and the acquisition of the coal fired Southern Kuzbass Power Plant and Kuzbass Power Sales Company made Mechel one of the main players in the energy market in the Kemerovo region, Russia’s principal coal mining area. In 2007, Mechel also developed its power segment abroad by acquiring a 49% share of Toplofikatsia Rousse JSC, located in Bulgaria to extend its presence into new steam coal markets. Our power assets will require significant efforts to modernize the production facilities and integrate them into the Group’s production chain. The segment’s profitability in 2007 was primarily affected by interest payments of in group loans obtained to make the strategic acquisitions during the year. Looking forward, we are very optimistic about the prospects for power generating facilities in Russia, where many regions lack energy. We expect that the forthcoming deregulation of the electricity market will drive the development of the Russian power industry and benefit Mechel. Based on these factors, we plan to continue developing Mechel’s power segment, which will increase the Group’s stability, decrease costs due to the generation of our own electric energy and build value for the shareholders of the company.”

Interfax reported that Shareholders in Karelsky Okatysh an iron ore pellet producer from Karelia which is part of the Severstal steel group voted at their annual meeting recently to waive dividends for 2007 and to reinvest last year's net profit.

The report added that net profit soared 48% last year to RUB 5.583 billion.

Severstal's Karelsky reinvested its 2006 profit as well.

RIA Novosti quoted International Monetary Fund that Russia's GDP will grow by around 7.8% this year boosted by high oil prices and that inflation is likely to exceed the government target.

Mr Paul Tomsen IMF Mission leader said "We expect demand to remain brisk and GDP to grow 7.75% in 2008. He said that high world oil prices, a large inflow of capital and an increase in crediting had provided dynamic growth in investment, productivity, incomes and consumption in Russia.

He added that inflationary pressure on the Russian economy is expected to remain and consumer prices could rise by 14% in 2008. The Russian government's inflation target for 2008 is 10.5%.

Russia's GDP grew 8.1% in 2007 and expanded at an annualized rate of around 8% in the first four months of the year compared to the government's forecast of 7.6%.

Itar-Tass reported that Mr Alexei Miller CEO of Gazprom has offered to buy Azerbaijani natural gas at a market price under a long term contract.

Gazprom said Mr Miller met with Mr Ilkham Aliyev president of Azerbaijani recently and during the negotiation Mr Alexei Miller offered to buy Azerbaijani gas at market prices on the basis of a long term contract.

Mr Miller said “Being a major producer of hydrocarbons, Azerbaijan is an objective partner of Russia. We have common interests. We are bound by a developed gas transportation infrastructure. He said that “We are interested in the development of mutually advantageous cooperation between Gazprom and Azerbaijan in the energy sector.”

Azerbaijan’s explored gas reserves are estimated at 1,500 billion cubic meters, including the Shakh-Deniz offshore field in the Caspian with recoverable reserves of 1,300 billion cubic meters.

RIA Novosti reported that Iran will start work this year to build a pipeline as part of the Western backed Nabucco project designed to pump gas from the Caspian Sea to Europe bypassing Russia.

Mr Reza Kasai Zadeh Deputy Oil Minister of Iran said "The study of Iran's possibilities in this project has almost been concluded. The Iranian gas pipeline will become a part of the Nabucco project, to supply natural gas to Europe from Iran's largest Southern Pars gas field."

Meanwhile, the board of the Nabucco Gas Pipeline Company decided on May 31st 2008 to raise the project's cost from EUR 5 billion to EUR 7.9 billion due to growth in oil prices and strong demand for steel for the implementation of large-scale international projects.

The Nabucco project is intended to pump 20 billion cubic meters to 30 billion cubic meters of natural gas annually from Central Asia, under the Caspian Sea, then through Azerbaijan, Turkey, Bulgaria, Romania, Hungary and Austria. The construction of the Nabucco gas pipeline is expected to begin in 2010 and be completed by 2013.

Ukrinform reported that the Odesa Sea Trade Port has become a member of the Association of Mediterranean Cruise Ports. The decision was taken during the 32nd General Assembly of the Association of Mediterranean Cruise Ports in the Italian city of Trieste. Over hundred representatives of maritime cruise ports and cruise companies that are members of MedCruise participated in the assembly.

The report added that the participants in the assembly showed interest in the presentation of the Odesa port and expressed desire to take part in the Black Sea Cruise 2008 conference in Odesa on September 24th to 25th 2008.

The state owned enterprise Odesa Sea Trade Port is located in the southwestern part of the Odesa Bay on an artificially created area of 109.5 hectares. The enterprise annually reprocesses over 14 million tons of dry cargo and 24 million tonnes of bulk cargo. The annual turnover of goods is 30 million tonnes.

RIA Novosti reported that TNK-BP International Ltd the parent company of Russia's third largest oil company TNK-BP reported US GAAP net profits of USD 5.3 billion for 2007 down by 21% YoY.

TNK-BP International Ltd gross earnings in the reporting period grew by 9% YoY to USD 38.7 billion. EBITDA is down by 16% YoY to USD 9.4 billion.

The company's capital investment rose by 53% YoY to USD 3.5 billion. Dividend for 2007 is down by 48% YoY to USD 2.6 billion.

LSE listed leading Russian steel producer Novolipetsk Steel announces its consolidated US GAAP results for Q1 of 2008.

Key financials for Q1 2008 ended March 31st 2008

LSE listed leading Russian steel producer Novolipetsk Steel while announcing its consolidated US GAAP results for Q1 of 2008 has given the following outlook

“Prices for steel products continued to grow in Q1 and Q2 2008 following an increase in raw material costs and consistently high demand in the world market. We currently anticipate a mid-year flattening of steel prices.”

“In 2008, steel production volume at our main production site in Lipetsk is expected to reach 9.4 million tonnes up by 4% YoY. Total steel production volume of NLMK’s Russian steelmaking assets is expected to reach 11.6 million tonnes up by 26% YoY. As a result of the increase in production volumes, price growth and the consolidation of Maxi-Group we expect revenues to grow by up to 60% YoY. According to our preliminary estimates, EBITDA could exceed the 2007 level by 35% to 40%.”

Gazprom OJSC claims that Naftohaz Ukrayiny NJSC owed no overdue debt to the Russian company.

Mr Alexey Miller CEO of Gazprom and Mr Oleg Dubyna CEO of Naftohaz Ukrayiny NJSC met in Moscow recently and discussed the fulfillment of a bilateral gas agreement on promoting cooperation in the gas industry.

The parties noted that, on the whole, the key terms of the agreement were observed. The heads of the companies said that they were ready to discuss the terms of long term cooperation.

The agreement signed on recently stipulates the terms of Gazprom’s gas supplies to Ukraine.

RIA Novosti reported that Russia and Saudi Arabia signed a protocol on the conclusion of bilateral talks on Russia's accession to the World Trade Organization.

Russia, the only major economy outside the WTO has been seeking membership in the organization since 1993. So far, Moscow has concluded bilateral talks with over 60 states but still needs to complete discussions with two WTO members Georgia and Ukraine.

The document was signed by Mr Alexei Kudrin, Russia's finance minister and deputy prime minister, and Mr Abdallah bin Zainal ali Reza Saudi Commerce and Industry Minister.

The protocol contains arrangements on traditional Saudi exports, such as dates, cement, oil and petroleum products, fertilizers, carpets, glassware, aluminum and aluminum products and cables.

RIA Novosti reported that Russia's largest independent crude producer LUKoil owned Caspian oil and gas condensate field reserves had been estimated at 300 million tonnes of conventional fuel.

Mr Vagit Alekperov CEO of LUKoil CEO said "We have discovered a large deposit estimated at around 300 million tonnes of oil equivalent. It is not unique, but it is large."

In May 2008 TsentrKaspneftegaz a joint venture established on a parity basis between Russian energy giant Gazprom and LUKoil discovered a large oil and gas condensate deposit at the Tsentralnaya structure in the central part of the middle Caspian Sea on the border between Russia and Kazakhstan. The deposit was discovered within Russia's sector of the sea, 150 kilometer to the east of the city of Makhachkala.

The deposit is expected to be brought into production in 2017 to 2018.

TMK, one of the world’s largest oil and gas pipe producers, announced the signing of a syndicated bridge facility agreement of up to USD 1.2 billion to finance the acquisition of the US tubular companies and assets of IPSCO.

The facility agreement was signed on May 30th 2008.

Mandated Lead Arrangers are
1. ABN AMRO Bank N.V.
2. The Bank of Tokyo-Mitsubishi UFJ, Ltd
3. Barclays Capital
4. BNP Paribas
5. ING Wholesale Banking
6. Natixis
7. Sumitomo Mitsui Banking Corporation
8. Nomura International plc

The released added that the term of the facility is 12 months with a 3 month extension option. This Syndicated Facility is secured by TMK subsidiaries Volzhsky Pipe Plant, Seversky Tube Works, Sinarsky Pipe Plant and Taganrog Metallurgical Works.

The interest rate of the Syndicated Facility is the aggregate of LIBOR and a step up margin which increases during the lifetime of the Facility.

RZD Partner reported that Vagonmash and Minsk Car Repair Plant signed a long term agreement to manufacture and deliver 135 passengers car units within 2009 to 1011. The sum of the contract is USD 8000 million.

Platts reported that Michigan based Severstal NA has returned to the spot market for the first time since January with limited tonnage for July orders.

As per report, mill's offers for hot rolled coil are priced at USD 1,060 per tonne ex works the same as the upper end of the Platts current price assessment ex works Indiana basis. Severstal's offers for spot cold-rolled coil are reported at USD 1,160 per tonne ex works Detroit and base grade galvanized material is USD 1,180 per tonne ex works.

The report added that “Sources at Severstal NA would not confirm the pricing levels as reported by buyers, but did say the plan was to be in the spot market every month from now on. The Detroit area steelmaker may later this year gain an edge over larger mills US Steel and ArcelorMittal USA, which are starting labor talks with the United Steelworkers since their contracts with the union expire September 1st 2008. Severstal's labor pact, on the other hand, is with the United Autoworkers and does not expire until 2012.”

Severstal did not specify how much spot tonnage was available, but an East Coast steel consumer speculated. Platts was told "It could be just 5,000 tonnes or 15,000 tonnes to 20,000 tonnes; however Severstal's availability would be in excess of 5,000 tonnes.

Delegates attending the recent International Chromium Development Association conference in Paris have agreed that ferrochromium prices will remain strong in the third quarter of 2008, backed by strong demand and tight supplies from South Africa.

Bullish market players, including sources at major producers, pegged the third quarter’s charge chrome contract prices at USD 2.20 to USD 2.50 per pound. Very few stainless steel mills are reducing their orders for the third quarter and reports of two major Chinese producers cutting production are not being taken seriously.

However, some market players cautioned that, while demand remains good, it is not sufficiently strong to override concerns about the high price of both nickel and ferrochromium. Consumers could limit their buying in the third quarter, making a rollover in prices more likely.

Stainless steel buyers, especially in Europe, are already baulking at the rising costs of stainless, sparking concerns over just how resilient the stainless steel market is. However, while volatile chromium prices pose a threat to the stainless steel market, it is the continuing volatility in the nickel price that is the real problem.

If the nickel price were to stabilize around USD 20,000 per tonne stainless producers would be tempted back into producing austenitic grades of stainless steel which would help to cap ferrochromium prices.

(Sourced from Metal Bulletin)

It is reported that POSCO has stopped producing series 200 stainless steel.

A POSCO spokesperson said that some traders were selling POSCO’s series 200 stainless as series 300 stainless. He added that as this is damaging for the company’s reputation, POSCO has decided to stop producing series 200 material.

(Sourced from Metal Bulletin)

Benxi Iron & Steel Group Company Limited is planning to invest more than CNY 10 billion to construct a new stainless steel sheet and strip project, and then enters stainless steel market.

The new plant will have hot rolling capacity of 3 to 3.5 million tonnes per year, including 700,000 tonnes of hot rolling, stainless steel output of 700,000 to 800,000 tonnes per year. The main products include 200 and 300 series austenitic stainless steel and 400 series ferritic stainless steel.

It is reported that the price of high carbon ferrochromium continued to fall in the Chinese market during the past week as a result of slow demand.

The price has fallen by an average of CNY 800 per tonne since early in May 2008 to CNY 15,300 to CNY 16,200 per tonne.

Earlier in the year, ferrochromium prices soared, especially after power shortages in South Africa disrupted ferrochromium production.

(Sourced from Metal Bulletin)

It is reported that China’s Lianzhong Stainless Steel will continue to cut its supply of series 201 stainless steel to the market by 50% in June 2008 in an attempt to boost the market.

A Lianzhong Stainless official said that the market for series 201 stainless appears to have stabilized since the company decided to control output and supplies to the market in May 2008. He added that however, the market remains weak and this has necessitated further production cuts.

(Sourced from Metal Bulletin)

It is reported that the battle over the name of a Kimberley nickel mine is continuing, with an indigenous family launching defamation proceedings against the company.

Sally Malay Mining Limited and the Sally Malay Nickel Project were named after an Indigenous stockman who was born and worked near Halls Creek. His daughter Ms Maria Malay had been fighting to have the name changed, arguing it went against strict Aboriginal protocols about naming people who have died.
Ms Malay has also been seeking compensation for personal distress. In March 2008, Sally Malay Mining Limited said that it would change its name.

Earlier in May 2008, lawyers for Ms Malay launched a defamation writ in the Supreme Court, alleging the company's CEO Mr Peter Harold, had made defamatory remarks about her to her family and to the wider community.

Meanwhile, Mr Harold said that the company will rigorously defend the allegations.

Jiji Press reported that Nisshin Steel Co confirmed that it had shipped 550,000 stainless steel pipes without conducting required nondestructive testing for detecting defects and tests for ability to withstand hydraulic pressure and air pressure.

It said that “Nisshin Steel plant in Amagasaki of the western Japan prefecture of Hyogo failed to carry out the testing, mandatory under Japanese Industrial Standards and fabricated test data for some steel pipes manufactured at the plant in the past five years.”

A Nisshin Steel in house investigation of test data for April 2003 March 2008 found that a total of 480,665 stainless steel pipes were shipped without nondestructive inspections or tests on hydraulic pressure out of 4,311,205 subject to such tests. Tests were also not conducted on 71,756 stainless steel pipes of 2,485,458 subject to air pressure resistance testing.

Nisshin Steel is the third Japanese steelmaker at which testing data fabrication has been revealed, following similar cases late May at JFE Steel Corp and Nippon Steel Corp.

Price in CNY per MTU
(Sourced from Mysteel.net)

Price in CNY per MTU
(Sourced from Mysteel.net)

It is reported that China’s domestic prices for chrome series alloy continue weakening with big price gap between offer price and transaction price. Demand remains low amidst thin transactions.

Price for imported chrome ore also eased. And Baosteel is reportedly quoting latest purchase price for FeCr 55C1000 at CNY 14500 per tonne, weighing on the current market price.

Price for FeCr 55C1000 is mainly offered at CNY 14800 to 15300 per tonne in northern and northeast regions and high carbon ferrochrome was quoted at CNY 15000 to CNY 15500 per tonne in southwest and CNY 15700 to 16000 per tonne in Shanghai.

Price for trace carbon ferrochrome is quoted at CNY 25000 per tonne in Zhejiang Jiande and contract price for low carbon ferrochrome goes at CNY 27000 per tonne in Gansu.

(Sourced from Mysteel.net)

JMB reported that Japanese stainless steel scrap imports amounted to 13,576 tonnes in April 2008 up by 26.5% MoM as against 10,727 tonnes in March 2008.

South Korea was the biggest provider with 5,653 tonnes, followed by United States with 4,722 tonnes.

Meanwhile, stainless steel scrap export totaled 40,527 tonnes, reaching a record high.

Ferromanganese producer Assmang said that it does not believe that any of its workers at its Cato Ridge smelter are suffering from manganese poisoning. Assmang said that its opinion is based on expert medical diagnoses and that it would consider a number of options in this regard.

Assmang stated that it had previously accepted the original manganism diagnoses at face value, but on later medical advice the company disputed the original diagnoses and the manner in which the incidents had been reported to the compensation commissioner.

This follows an ongoing department of labor inquiry into exposure of its workers to toxic manganese fumes and dust at its Durban smelter. The investigation was launched in November 2006, after it was reported that workers were suffering from manganese poisoning.

Mr Bernard Randolph, a labor inspector who visited the Assmang ferromanganese smelter in Cato Ridge near Durban in 2006, said that interviews with 5 employees afflicted with manganism and 3 workers in the smelter had revealed that workers were not provided with protective gear or training in using protective gear. He said that at the same workers told him that they were not obliged to wear masks in the plant.

Mr Pekka Pera CEO of Talvivaara Mining plc said that the first metal from the world's first bioheapleaching nickel mine would be produced on October 1st 2008.

Talvivaara uses the bioheapleaching method to extract nickel from one of the largest known sulphide nickel deposits in Europe and a significant polymetallic resource which presents major zinc, copper and cobalt credits.

Mr Pera said that Talvivaara, headed by non executive chairperson Mr Ed Haslam was achieving 96% to 98% recovery rates using the naturally occurring process of bacteria catalyze leaching other metals from ore to solution.

Leaching was accelerated in industrial mining processes by crushing the ore to increase surface area and bacteria were fed with nutrients to improve productivity.

Irrigation and aeration were the only additional processes, substantially lowering capital expenditure and operating expenditure than in traditional smelting and refining processes. The cleaner and more environmentally friendly process compared to smelting by-pass process stage was already widely used for copper and gold.

Sumitomo Metal Mining has revised the nickel surplus estimation downward to 37,000 tonnes for 2008 as compared with original 54,000 tonnes.

It expects the output is 1.42 million tonnes, which is 20,000 tonnes lower than original mainly due to output reduction by BHP Billiton's Cerro Matoso ferronickel plant in Colombia. The firm keeps the demand estimation at 1.383 million tonnes.

Outokumpu’s board of directors has approved plans to expand its ferrochrome production capacity in Tornio. The EUR 420 million investment will double the plant’s annual capacity to 530 000 tonnes. The investment project starts immediately and the new capacity is scheduled to be available during the first quarter of 2011.

The expanded ferrochrome capacity will make Outokumpu comfortably self sufficient in its primary chromium needs. The ferrochrome smelter is supplied by the Group’s adjacent chromium mine in Kemi. The main benefit for Outokumpu is its ability to source the material at cost while selling it at prevailing market prices.

It is estimated that when the expanded ferrochrome capacity is in use, the positive effect of a 5 cents per pound increase in the contract price of ferrochrome on the group’s operating profit will increase from the current EUR 10 million to some EUR 20 million annually.

Mr Juha Rantanen CEO of Outokumpu is pleased with the ferrochrome expansion project. He said that "After a thorough evaluation, we are ready to proceed with our investment plans. Doubling the ferrochrome production is an exceptionally attractive and profitable project. Already today, Outokumpu Tornio Works is the most integrated stainless steel mill in the world. The investment will support Outokumpu’s strategy realization, maintain cost leadership, secure raw materials and capitalize on our own chromium asset. We have estimated that with current prices the expansion will bring additional annual operating profits in the order of EUR 200 million."

He added that as a result of the expansion, Outokumpu’s electricity consumption will increase considerably. The ferrochrome expansion will increase the group’s annual CO2 emissions by some 270 000 tonnes, because of the use of coke which cannot be substituted in the ferrochrome

The Japan Iron & Steel Federation released a statement on Monday reiterating its opposition to the potential merger of resources giants BHP Billiton and Rio Rinto, ahead of the launch of a study by the European regulatory body on the issue.

The statement said that the federation learned last Friday that BHP Billiton plans to apply for approval of the European competition regulatory body for its proposed merger with Rio Tinto.

The statement said that "Since BHP's announcement to merge with Rio Tinto last November, we have expressed our opposition and this stance has not changed, as we believe the merger will prevent healthy competition in the seaborne trade of iron ore and coking coal.”

Mr Masaki Ishikawa director of steel at Japanese ministry of economy, trade and industry told Platts that if an official merger application was filed, Japanese fair trade commission would look into the issue in detail. He added that although there is little the Japanese fair trade commission can do outside of Japan, the Japanese steel federation is urging the Japanese competition watchdog to provide data to its overseas counterparts.

European steelmakers appear to share the Japanese industry's concerns over consolidation in the mining sector. The European Commission should dismiss BHP Billiton's competition filing for its proposed acquisition of Rio Tinto. On April 7, the Japanese steel federation met in Tokyo with Mr Roelof Plijter advisor on industry for the EC directorate general for trade and officials of ArcelorMittal, Corus, Dillinger Hutte and the European Confederation of Iron and Steel Industries.

It is reported that Coal Ventures International is likely to get access 6to coking coal mines in New South Wales in Australia.

Mr Jitin Prasada union minister of state for steel was assured of coking coal linkages from NSW during his meeting with Mr Ian Macdonald NSW minister for primary industries, energy, mineral resources & state development. Mr Prasada emphasized allocation of mineral resources for Coal Ventures International and Mr Ian Macdonald assured full cooperation in meeting the requirement of CVI.

Mr Prasada is currently leading a 5 member delegation to Australia. The delegation visited some coal mines near Sydney and Port Kembla Coal Terminal from where a large chunk of NSW coking coal destined for India is shipped.

Coal Ventures International is a JV of SAIL, RINL, Coal India Limited, NMDC and NTPC.

Pike River Coal Limited announced that it has settled the sales price for its premium hard coking coal with two Japanese steel mills and its Indian shareholders Gujarat NRE Coke Limited and Saurashtra Fuels Private Limited at USD 300 per tonne for deliveries in the current Japanese Fiscal Year ended March 31st 2009.

Mr Gordon Ward CEO of Pike River said that "We are pleased to sell our first coal at record prices which are in line with price settlements announced by Australia's major hard coking coal producers for their premium quality hard coking coal.”

He added that "The development of Pike River represents a timely diversified source of supply of ultra low ash metallurgical coal into the world market."

First shipments of Pike River premium hard coking coal to Japan and India are expected in the first quarter of 2009.

It is reported that four international mining companies have expressed interest in operating the Bong Range iron ore deposit, formerly Bong Mines.

Last week, Liberia’s ministry opened the sealed bids for the exploration of the Bong Range iron ore deposit with four bidders contesting. The bidders include
1. Vandanta Resources PLC from India
2. China Union Investment Ltd
3. Beleh Resources Company Liberia Ltd
4. Israeli Firm, BSG Resources

Mr Ernest CB Jones head of the Inter ministerial Mineral Technical Committee said that the bidders were requested to submit two sealed envelopes. He added that the bidders' package marked “A” contained all technical, financial and marketing proposals, while another marked “B” contained the pledge of the amount the bidder would offer government to mine the Bong Range iron deposits.

According to Dr Shannon mines & energy minister of Liberia, the investment into the Bong Range is estimated at USD 1.6 billion. He said that "We are responding to the economic pillar where we continue to bring in more resources to reverse the migration pattern as well as resolve the crisis of migration from rural to urban areas.”

Interfax quoted the Industrial Policy Ministry as reporting that Ukraine's iron ore concentrate production grew 8% to 26.823 million tonnes and prepared iron ore rose 1% to 30.55 million tonnes including pellets up by 2% to 9.432 million tonnes and sinter ore up by 1% to 21.118 million tonnes. Crude iron ore production rose 6% to 33.694 million tonnes.

Poltava Mining

(In tonnes)

Suha Balka

(In tonnes)

Zaporizhiya Mining

(In tonnes)

It is reported that a coal mine flood in northeastern China has left 13 miners missing for three days.

The reported added that the flood happened early on Saturday at Jixi in Heilongjiang province and rescuers were pumping water out of the pit as fast as possible.

China, the world's largest producer and consumer of coal and home to the world's deadliest mining industry, has been trying to improve safety, but accidents are common as owners push production beyond safety limits to meet robust demand.

Bloomberg reported that Malaysia's government will scrap price controls on cement and exempt some importers from licensing requirements after removing similar controls on steel.

Mr Abdullah Ahmad Badawi PM of Malaysia in a statement said that “Cement importers will only have to pay a tax of 10% on shipments from overseas.”

According to the statement, importers in Sabah and Sarawak, Malaysia's eastern most states would not need a license.

Malaysian government last month lifted the ceiling price on steel bars and billets and eased import and export rules to curb a supply shortage.

It is reported that a criminal investigation has been launched into the incident at the Tentek mine in Karaganda Region of Kazakhstan.

According to Mr Stanislav Sytnik deputy head of the regional emergency situations department that "There is no fire at the mine, which is why it would not be right to speak of a blast".

He said that the five missing mine workers are still trapped underground.

The Tentek mine is part of the coal branch of the ArcelorMittal Temirtau joint-stock company, Kazakhstan's largest steel plant which belongs to the multinational steel concern ArcelorMittal

It is reported that till the close of last week of May 30th 2008, iron ore stockpiles at China's 23 major ports decline to 62.41 million tonnes, out of which Indian spot ore reduced to 18.25 million tonnes. Rizhao, Dalian, Qingdao and Caofeidian have recorded ore inventory reduction at 200,000 tonnes, while Lanshan and Lianyun have seen rising ore stock.

(Stocks in million tonne)

The ports are to implement the new warehousing charge from June however it remains to see how that would help move down the heavy ore stock.

The offer price has kept flat this week amid sluggish market transactions. The exporters have lowered quotation price slightly on back of sliding freight rates. However, the iron ore traders have shown little interest in weakening offer quoted by exporters due to tight liquidity.

The new arrivals of ore imports have been quite few during the week. Currently, the off take price for benchmark Fe 63.5% Indian ore fine goes at CNY 1430 to CNY 1450 per tonne FOB, while spot prices for grades of Fe 58% and Fe 62.5% goes at CNY 1030 to CNY 1040 per tonne FOB and CNY 1360 to CNY 1380 per tonne FOB respectively.

It is reported that that the ex work price of coke in Shanxi province climbed CNY 300 per tonne for June once again which is followed by the price hike from January to May, CNY 100 price hike in March, CNY 200 for April and CNY 200 for May.

The first class metallurgical coke price in Shanxi after the adjustment will reach to CNY 2680 per tonne. The coke purchasing price in Shanxi at present reached to CNY 2000 per tonne, but the tight supply was still confused the coking plants.

In addition, Hebei coke association also decided to raise CNY 300 per tonne. The price of second class coke in Hebei after the adjustment will reach to about CNY 2850 per tonne, some first class coke price including taxes will break CNY 2900 per tonne to CNY 2950 per tonne.

Interfax quoted the Industrial Policy Ministry as reporting that Ukrainian coke production rose 10% to 9.294 million tonnes.

ABC News reported that a study commissioned by the Australia’s Council shows another 90,000 workers will be needed in the mining industry by 2020, an increase of 70% on the current workforce.

The Minerals Council of Australia said that skilled migration and better training programs are needed to ensure the sector can meet growing demand.

Mr Mitch Hooke CEO of the Minerals Council of Australia said that the sector needs to service the long term demand for Australian resources. He said that "We see skilled migration as an acute response to a chronic problem.”

Mr Hooke added that "By that I mean, this is the way in which we can fill the gaps up front, but if you're going to have something that's sustainable long term, you need to correct the systemic problems you've got in the current education and training system.”

Mr Hooke said that "We spend three times more than any other sector in the country on training but mostly it's in house because the systems that support our industry just are not there. We need reform of the Vocational Education and Training sector, it's got to respond to the needs of industry, not just have a supply push of institutions putting out people that they actually think suits their whole itinerary."

Interfax quoted the Industrial Policy Ministry as reporting the following production update for Ukrainian ferroalloy major Nikopol Ferroalloys

(In tonnes)

Bloomberg reported that BHP Billiton Ltd, the world's largest mining company, may begin producing coking coal from a mine in Indonesia's part of Borneo next year after securing a forest use permit.

Mr Halind Ardi head of the energy and mining agency in Central Kalimantan province said that Indonesian forestry ministry has granted a license to BHP's local unit PT Lahai Coal.

Mr Ardi said that BHP is also applying for another permit for a mine in the province operated by its unit PT Maruwai Coal. He added that “We are waiting for a recommendation from the governor for the permit after July.”

According to a source from Shanxi Coal Industry Bureau, Shanxi province will take measures to increase coal supply and ease shortages.

An official from Shanxi Coal Industry Bureau said that the province will strive to increase supply under three priorities, namely, prioritize power coal shipment, prioritize supply to quake hit area and key users and prioritize fulfillment of key contracts, adding that supply for power generation and reconstruction in quake zone is an overriding task.

The bureau is also urging large mines that have formed their production capacities but yet to complete construction as per requirements to step up work for an earlier approval.

The official said Shanxi produced 181.31 million tonnes of coal in the first four months, growing by 19.05 million tonnes or 11.74% YoY. Coal sold out of the province reached 181.02 million tonnes in the same period, an increase of 19.26 million tonnes or 11.91% YoY from a year earlier.

Bloomberg reported that coal exports from Australia's Newcastle Port jumped by 71% last week while the number of ships waiting outside the port fell amid record coal prices.

Newcastle Port Corp said that the volume shipped in the week ended climbed to 2.01 million tonnes from 1.3 million tonnes a week earlier. It said that a total of 27 ships, waiting to load 2.5 million tonnes of coal, were lined up outside the port, down from last week's 39.

Newcastle Port said that coal ships waited 13.74 days to load coal in the week ended June 2 up from 13.5 days a week earlier. It said that the waiting time compared with 0.45 day for general cargo vessels last week. A total of 30 vessels carrying coal left Newcastle in the week ended May 31st 2008, 1 more than a week earlier.

Newcastle Port said that fourteen ships were bound for Japan, three for South Korea, two for Turkey and one each for China, Taiwan, Malaysia and Noumea.

Mr Mark Pervan a commodity strategist with Australia and New Zealand Banking Group Ltd said that the price of coal surged to a record last week as bottlenecks at ports constrained shipments a week earlier and as supplies in China and India dwindle. He said that “Ongoing infrastructure constraints in Australia and rising demand throughout Asia, is likely to keep a high floor on prices. Prices should firm this week, despite the temptation to profit take.''

Pilbara iron ore developer Aurox Resources Limited announced that it has increased the JORC compliant Ore Reserve Estimate at Balla Balla by 49% to 155 million tonnes.

As announced on April 29th 2008, the Mineral Resources for the Central Pit and the Eastern Block deposits were re estimated by Golder & Associates Pty Ltd to include new infill and extension drilling undertaken between October and December 2007.

The updated resource models were delivered to Orelogy Pty Ltd for economic optimization and calculation of new JORC compliant Ore Reserve estimates for these areas. The new Central Pit and Eastern Block areas are now contained within a single pit design and their reserve numbers reported together. The new Central East Ore Reserves were added to the Western Pit Ore Reserve estimate to increase the total reserves from 103 to 155 million tonnes grading 45% Fe and 0.64% V2O5.

Mr Charles Schaus MD of stated that "The Ore Reserve at Balla Balla will continue to grow this year, with these latest results representing only about one third of the deposit's full reserve potential."

Reuters reported that Indonesian miner PT Antam and its partner, China's Shenzhen Zhongjin Lingnan Nonfemet Co Ltd have raised their offer for Australian listed Herald Resources Ltd valuing the company at as much as AUD 523 million.

The board of Herald, which is looking to develop a zinc mine in Indonesia, has recommended the higher offer and asked shareholders to reject a rival offer from Indonesian coal producer PT Bumi BUMI.

Herald directors have also agreed to sell their 8.27% stake in Herald immediately in favor of the revised offer, which would give the consortium a relevant interest of 19.45% in Herald.

Under the revised offer, the Antam consortium is offering AUD 2.60 per share in cash to Herald shareholders, with the offer rising to AUD 2.65 each if the consortium secures over 90% of Herald. The Antam consortium has also declared its revised offer final in the absence of a superior proposal.

Herald is being advised by Euroz Securities Ltd while the Antam consortium is being advised by Macquarie Capital.

Interfax reported that shareholders in Russian coking coal producer OJSC Raspadskaya accepted a final dividend of RUR 3.75 a share for 2007 at their annual meeting on Monday. The dividends will be paid by August 2.

The company paid RUR 1.25 a share for the first nine months of 2007. So the overall dividend, combined with the interim dividend, will be RUR 5 a share or 160% more than for 2006.

Raspadskaya pays its shareholders at least 25% its net profit to International Financial Reporting Standards. The overall 2007 dividends are 64% of net profit to IFRS. Net profit to IFRS last year jumped 120% from 2006 to USD 240.2 million.

Morgan Stanley said that it downgraded Brazil's largest steelmaker, Gerdau to equal-weight from overweight and set a 77 real price target for the company's shares, citing limited upside.

The US investment house said in research note said that "The stock has strongly outperformed its peer group and we think valuation has become fair."

Morgan Stanley said that fundamentals remain positive.

Teck Cominco and the union representing workers at its British Columbia zinc-lead smelter are continuing to negotiate, following the expiry of a labor agreement, the company said on Monday.

A spokesman of Teck Cominco said that the agreement, which covers about 1,100 employees at the Trail smelter, expired on May 31. But there was no indication the union would threaten a work stoppage.

Mr Dave Splett investor relations director said that "It is still business as usual. They are still well into negotiations and no indication of a deal being reached."

Negotiators for the United Steelworkers union, which represents the workers, could not be reached.

The smelter produced 291,900 tonnes of zinc last year, or a bit more than 2% of global output, as well as 76,400 tonnes of lead.

Peabody Energy announced that it promoted Mr Robert C Hammond to the position of chief operating officer of Australian Operations. Mr Hammond recently served as group vice president of Southwest Operations in the United States and he will reports to Ms Julian Thornton MD of Australian Operations.

Mr Hammond has more than 27 years of international experience in mining engineering and operations in the Western United States, Australia and Chile. His career includes operations and management positions with Rio Tinto and engineering management positions with BHP Billiton.

Mr Eric Ford executive vice president & COO said that "Australia represents an enormous growth platform for Peabody as we serve growing high margin, high growth markets. Mr Rob's extensive international mining experience will be extremely valuable as we further expand our thermal and metallurgical coal operations in coming years."

Ukrainian Journal Staff cited Mr Yuriy Bochkariov chairman of the company's board as saying that Dniproenergo a fossil burning power generator plans to import up to 800,000 tonnes of coal in 2008 for its own electric power stations.

Dniproenergo is planning in June to December 2008 to import 400,000 to 450,000 tonnes of coal from Russia. The use of coal by the company's power stations this year is planned at the level of 7.2 million tonnes.

The Wall Street Journal citing an unidentified person familiar with the situation said Sinosteel Corp wrote to Harbinger Capital Partners Ltd and Murchison Metals Ltd to argue their stakes in Midwest Corp violating Australia's rules regarding takeovers by foreign companies.

The newspaper citing Sinosteel's letter said that Harbinger's 19.9% stake in Murchison could make the pair associates. Harbinger and Murchison's holdings in Australian iron ore producer Midwest should be viewed together and so they would have a combined stake of about 19%.

The Wall Street Journal said such a case would breach Foreign Investment Review Board rules that limit overseas ownership to 15% unless approval is received. Sinosteel wants Harbinger's recent Midwest share purchases reversed or the regulator's approval sought.

Sinosteel, China's second biggest iron ore trader and Australian iron ore producer Murchison are rivals to acquire Midwest. Harbinger is a US based hedge fund.

Reuters reported that Rio Tinto’s Australian iron ore operations are so far unaffected by a disruption in gas supplies caused by an explosion at an Apache Energy gas plant.

A Rio spokesman said that Rio was taking steps to curtail gas usage in non-essential operations at its mines and shipping terminals to conserve gas during the crisis.

ITRI reported that negotiations to convert lease arrangements by a Glencore subsidiary on several mines in Bolivia into a joint venture with the state mining company Comibol have been successfully concluded.

Ms Katherine Alvarez a spokeswoman for Comibol said that the agreement involves Glencore's Sinchi Wayra tin assets. But she declined to provide details of the agreement.

Sinchi Wayra produces tin and zinc at the Colquiri mine. Current production is some 2,500 tonne per year of tin in concentrate, but there is potential to both increase the mining rate and treat mine tailings. Other news reports state that the joint venture is on a 50:50 basis.

The deal was concluded at the same time as Bolivia’s President Evo Morales issued a decree to seize Transredes Transporte de Hidrocarburos SA, a natural gas pipeline partly owned by Europe's Royal Dutch Shell Plc and Ashmore Energy International. Bolivia nationalized the Vinto tin smelter formerly controlled by Sinchi Wayra in February 2007.

(Sourced from www.itri.co.uk)

It is reported that Western Australia lost a third of its gas supplies on Wednesday after a blast at a gas distribution plant operated by Apache forcing customers to curb usage to maintain production runs.

The biggest buyers of Apache's gas, including Rio Tinto, BHP Billiton and Alcoa Inc said that they are so far keeping up with production by conserving their own gas inventories and in some cases switching to diesel.

The gas was cut off after the explosion late on Tuesday at the Varanus Island gas processing plant operated by Apache Energy a unit of US based Apache Corp, ruptured two gas pipelines transporting gas from offshore fields to the plant.

Mr Tim Wall MD of Apache Energy told reporters that Apache has since declared force majeure on supplies of gas to customers adding there were no injuries and workers had been evacuated safely from the island.

Mr Wall said that a small fire was still burning at the facility and it would be several days before a clear picture of damage emerged. He added that "Once you find the pipe you can get a repair fairly quickly I would think, but we have to get in and make sure there is no other damage.”

Western Australia is one of the world's biggest suppliers of iron ore, gold, nickel and alumina, much fed to burgeoning Asian industrial and consumer markets.

It is reported that Yanzhou Coal Mining Company Limited has finished coal export price negotiation for 2008.

As per report, Yanzhou Coal intends to export 500,000 tonnes of coal 2008 down by 50,000 tonnes or 9.1% YoY from that in last year at an average export price of USD 151.67 per tonne up by USD 72.7 per tonne or 92.1% YoY.

Yanzhou Coal Mining Company Limited has also signed a 7.3 million tonne domestic supply contract with Huaneng Power International Inc up by 52% YoY in terms of volume. The order’s net price is CNY 470.15 per tonne up by 37.9% YoY of CNY 129.12 per tonne.

Apache Corp has declared force majeure on gas supply contracts after a fire forced the closure of its Varanus Island gas plant off the coast of Western Australia state.

The rupture of one pipeline at the plant more than 100 kilometers off the coast on Tuesday sparked a fire, which then lead to the rupture of two other pipelines.

Mr Tim Wall MD of Apache Energy said that “A small fire is still burning at one of the ruptured pipelines. The company is still assessing the impact of the fires and it is too early to say how long the plant will be closed for. Once you find the pipe you can get a repair fairly quickly, I would think, but we have to get in and make sure there is no other damage.”

The Varanus Island plant supplies about a third of Western Australia's gas, with most of its output going to commercial customers. A number of companies in the state's booming mining sector are now facing disruption, including Alcoa Inc, BHP Billiton Ltd, Newcrest Mining Ltd, APA Group and Burrup Holdings Ltd. Also affected are companies with stakes in the upstream gas fields that feed the Varanus Island plant, including Santos Ltd and Tap Oil Ltd.

BHP Billiton Ltd announced that its Worsley Alumina operation is facing reduced gas supplies due to the fire at an offshore gas plant, but that the impact on production is not yet known.

A BHP spokeswoman said the main impact is reduced output from the calcination process at the plant and the short-term solution to this is to store additional alumina hydrate on site.

She added that "The long term impact on production is not know at this stage.”

BHP said its Nickel West and iron ore operations, which also use gas from the damaged plant, are operating as normal and discussions are continuing with suppliers to ensure an adequate supply of gas.

The Nikkei newspaper, without citing sources, reported that Nippon Steel Corp and JFE Steel Corp plan to use very large ore carriers or VLOCs to drive down shipment costs and boost the competitiveness of their steel products in the global market. The Nikkei said that by switching to 300,000 tonne class VLOCs, the two steelmakers will likely save around JPY 10 billion (USD 95.1 million) a year per vessel in shipping costs.

Nippon Steel has been using Mitsui OSK Lines Ltd's Brasil Maru, one of the largest ore carriers in the world, with a 300,000 tonne capacity, since December under a 22 year contract. The newspaper said that Nippon Steel now plans to sign long term contracts for three additional vessels of the same type with shipping companies such as Kawasaki Kisen Kaisha Ltd and Nippon Yusen KK, between this year and 2010. The paper added that four VLOCs operating for a full year would be able to handle about 10% of all of Nippon Steel's iron ore imports.

The paper said that JFE Steel will start using two 300,000 tonne class VLOCs by this summer, following the signing of 15 year contracts with Kawasaki Kisen and Mitsui OSK. These vessels will carry iron ore from Brazil to a Filipino subsidiary for pre processing.