SAIL takes Velagapudi Steels on wet lease for rebars

It is reported that Velagapudi Steels Limited has signed a 3 year wet leasing agreement with Steel Authority of India Limited to produce steel rebars.

According to the wet lease agreement, SAIL would convert billets into rebars at Velagapudi's steel mill and these would be sold in the market under the SAIL brand. Velagapudi Steels will get conversion charges. SAIL will convert over 50,000 tonne of billets into rebars every year.

Velagapudi Steels is operating a 60,000 tonne capacity steel mill at Anakapalli near Visakhapatnam since the last 2 years. It uses billets as the main raw material to produce different grades of rebars. Of late, it has been facing a shortage of raw material, which has affected its business. In 2007-08 fiscal, it achieved a turnover of INR 40 crore with a profit of INR 1 crore.

ArcelorMittal team forced to return from project site in Jharkhand

ET reported that ArcelorMittal's proposed 12 million tonnes steel project in Jharkhand seems to have run into trouble as a company team comprising of Mr Vijay Bhatnagar CEO for India, Mr Sanka Mishra CEO of Jharkhand & Orissa projects and Mr PS Prasad GM technical of ArcelorMittal has been made to retreat from the survey work after protests by a local group.

According to Torpa Block Development Officer Mr RB Singh, around 500 people of Rania, Karra, Torpa, Kamdara and Basia blocks in Jharkhand's Khunti and Gumla districts, under the banner of Adivasi Moolvasi Astitva Rakhya Manch, forced the 6 member ArcelorMittal team to retreat. Mr RB Singh said "When the crowd gathered, we asked the team to return."

He added that the manch submitted a memorandum demanding stopping of survey or acquisition of land for the company's proposed multi crore steel project.

Mr Dayamani Barla convener of Adivasi Moolvasi Astitva Rakhya Manch said that the villagers asked the team members who gave them permission to ArcelorMittal to survey the land. He added that "We also informed them of the strict Chotnagapur Tenancy Act which does not permit transfer of tribal land."

Road freight to go up by 5% to 6% due to oil price hike

BL reported that, with the prices of diesel and petrol revised on June 4th 2008, logistics operators said that the increase in freight charges would vary from 5% to 6%, going up to 10% to 12%.

Mr Vineet Agarwal executive director of Transport Corporation of India said that "The revision of diesel prices in February 2008 by INR 1, along with this hike of INR 3, means that the price of diesel has gone up by 10% to 12% in the last 3 months."

He added that fuel accounts for 50% to 60% of the operating cost of trucks and with this hike the freight charges would typically be up by 5% to 6%.

Mr AK Agarwal director of DRS Logistics said that the hike in freight charges will be in the range of 10% to 15%. He added that "This is not the right time to increase charges as the demand for all commodities is growing."

Meanwhile, Mr Vineet Kanaujia head of marketing & sales at Safexpress Logistics said that "It would be difficult to say how much we are going to increase the charges as the rates are customized according to the contacts that we have with our clients. We did not increase the freight charges at the time of the last hike. It would not be substantial this time too, maybe less than a rupee a kilogram."

TATA Steel to reduce carbon dioxide emission

Mr B Muthuraman MD of TATA Steel said that it has set a target of reducing carbon dioxide emission from its Jamshedpur plant to 1.5 per tonne of liquid steel by 2012 from the present figure of 1.8.

"Accelerated Drive for Carbon Dioxide Reduction" on the occasion of World Environment Day in Jamshedpur, Mr Muthuraman underlined the need for preserving environment and adopting energy conservation methods.

He said that "We must take definitive steps to reduce carbon dioxide and energy consumption."

Oil prices hike a sensible decision - Mr Sajjan Jindal

Mr Sajjan Jindal president of ASSOCHAM has welcomed the decision of the government to raise the prices of petrol and diesel by INR 5 and INR 3 a liter respectively, appealing all stakeholders including political parties not to take undue advantage of the price rise.

ASSOCHAM also welcomed the price rise in LPG cylinder by INR 50 saying that though it will have some inflationary impact on Indian economy but the price rise had become absolutely unavoidable in view of sky rocketing crude oil prices globally.

Mr Jindal said that as a result of the price rise, the Indian petroleum companies’ margins will not shrink to the anticipated extent as a good sense has prevailed and the government affected the price rise.

He further pointed out that its adverse impact would be on inflation as the price rise in petroleum products would have cascading effect but the time has come when each one of us should bear the burnt of the increased prices of petroleum products.

TATA Group inks JV with Steel Asia for rebar plant in Philippines

MyIris reported that TATA Group has tied up with Steel Asia of Ben Yao for a PHP 3.88 billion JV that would operate the idle Bacnotan Steel Mills in Calaca for the production of reinforcing steel bars. The plant has an annual capacity of 300,000 tonnes.

The vehicle entity being formed by the JV is initially called High Street (SPV-AMC) Inc. The PHP 3.88 billion investments would be used to acquire, modernize and rehabilitate the rolling mill and melt shop for billet making and for the production of reinforcing bars.

Bacnotan Steel Industries Inc is the anchor locator of Batangas Union Industrial Park in Calaca. It used to be a JV with Japanese firms Kawasaki Corporation, Mitsui of Japan and a number of banks in 1997.

Indian Railways examining further cuts in freight rates

Mr Lalu Prasad Yadav union railway minister said that Indian Railways is examining the possibility of further reduction in freight rates to leverage its competitiveness over road transportation in the wake of the latest hike in diesel prices.

He added that reduction in freight rates is also being examined keeping in view the competitive position of the Railways in the transport market to attract more traffic and increase earnings.

The move is in line with Indian Railways’ strategy during last few years wherein it increased freight tariffs through various surcharges for long distance movement of bulk commodities like ores and minerals which do not have road transportation as a financially viable option.

RIL successfully test fires some section of East West pipeline

BS reported that Reliance Industries Limited has tested part of East West gas pipeline recently.

As per report, RIL successfully test fired gas into the first section of the pipeline from Valsad to Ankot in Gujarat after many weeks of experimental dry runs and testing using liquids. Gas will flow into the next section from Valsad to Kalyan in Maharashtra within the next 20 days.

A RIL official said that "The entire pipeline will be tested with gas and ready for operation in 2 to 3 months. We are trying to synchronize it with completion of our refinery at Jamnagar."

The 1,440 kilometers long pipeline is India's longest gas transportation pipeline from Kakinada in Andhra Pradesh to Bharuch in Gujarat. The pipeline will transport gas from the world's largest gas discovery at the Krishna Godawari basin in the Bay of Bengal to Jamnagar in Gujarat.

Deepak Fertilizers eying contract mining business

It is reported that Deepak Fertilizers & Petrochemicals Corporation Limited, which makes fertilizers and specialty chemicals, plans to foray into contract mining operations as part of a strategic growth initiative.

As per report, Deepak Fertilizers is looking at third party mining contracts in India, which will involve drilling and blasting rock on ground, mining chemicals and related products. Deepak Fertilizers is looking to secure mining contracts from coal companies that outsource the digging and blasting works. It is looking to enter into third party open cast mining of coal, limestone and other minerals, which has massive growth potential.

The new venture would be front end integration for Deepak Fertilizers, which has expertise in manufacturing mining explosives such as ammonium nitrate. It manufactures 130,000 tonne of ammonium nitrate per annum and is expanding capacity further.

Mild steel ingots rules firm in futures market

BS reported that prices of mild steel ingots were trading firm in the futures market on the back of strong international scenario and fresh buying by traders.

In June 2008 contract, mild steel ingots were trading up by 0.3% at NR 32,800 per tonne. In July 2008 contract it, was up by 0.45% at INR 33,420 per tonne and in August 2008 contract, it was up by 1.81% at INR 33,370 per tonne.

Mr Vishal analyst at Karvy Comtrade said that international prices are strong, especially in the US and China, which is supporting the movement of mild steel ingots on the futures market. He added that the upward movement is also due to rise in volume and open interest resulting in fresh buying by traders and speculations over state run NMDC likely to hike iron ore prices at the month end.

According to Mr Tarun Satsangi head of brokerage firm Bonanza's Commodity Research, the upward movement is in continuation with last week. He said that the overall fundamentals are bullish pushing the prices of mild steel ingots further.

Suzlon Energy acquires 30% more stakes in REpower

Suzlon Energy Limited recently announced that it has signed a share purchase agreement with Areva for acquisition of Areva's total stake of approximately 30% in REpower Systems AG of Germany, totaling holding in REpower to approximately 66%.

With this acquisition and through voting pooling agreement with Martifer of Portugal, Suzlon enjoys voting rights of approximately 89% in REpower subject to certain minority protection and other rights.

Punj Lloyd secures INR 649 crore contract for Barauni Refinery

It is reported that Punj Lloyd Limited has bagged a contract worth INR 649 crore from Indian Oil Corporation Limited for the motor spirit quality up gradation project at its Barauni Refinery in Bihar.

Indian Railways fuel bill to increase by INR 559 crore

BL reported that train fares for passenger and freight movement will not go up immediately on account of INR 3 increase in diesel price. The high speed diesel bill of Indian Railways, which is almost INR 8,000 crore at present, will go up by about INR 559 crore for the remaining part of this year because of the price hike.

A railway ministry spokesperson said that Indian Railways, which uses a mix of diesel and electric traction, moves about half the passenger traffic and 38% of freight traffic using diesel. He added that "There will be no increase in passenger and freight tariffs as of now."

While in the short run Indian Railways will be hit on account of increase in diesel prices, on a long term basis it has planned several steps towards energy cost management. The steps include increasing bio diesel blending for controlling fuel costs, procuring high powered and more efficient locomotives and increasing electrification while trying to reduce the unit cost for electricity supply.

Gujarat to set up logistics parks along freight corridor

Exim News Service reported that the government of Gujarat has announced plans to set up logistics parks along the Delhi Mumbai Freight Corridor. As per report, Gujarat Industrial Development Corporation will be coordinating with the DMIC project administration in this respect.

The state government proposes to establish 3 new economic corridors that will incorporate 4 special investment regions, 10 logistics parks among other industrial parks, along the dedicated corridor route. The three economic corridors identified by the state government are
1. Bharuch Dahej Umbergaon
2. Vadodara Mehsana Palanpur
3. Surendranagar Rajkot Morbi Kandla

The logistics parks will be created around the following areas
1. Palanpur Mehasana
2. Ahmedabad Surendranagar
3. Gandhidham Samakhiyali
4. Dahej Bharuch
5. Hazira Surat

Sources indicated that Gujarat Maritime Board proposes to ensure rail connectivity to its ports and will undertake to prepare a blueprint for this purpose.

Essar to develop marine ecosystem in Gujarat

BS reported that, marking the World Environment Day, Essar Group has committed to undertake development of a marine ecosystem through mangrove afforestration in Gujarat. Spanning an area of 100 hectares, the ecosystem will be developed on the coast adjoining Dandi village in Surat district. The project will be executed by the group through Gujarat Ecology Commission.

Initially, as part of the project, around 2,500 mangrove saplings were planted on the coast on June 5th 2008. However, the entire proposed afforestation project will involve creation of a nursery that will nurture the 250,000 saplings needed to completely cover the 100 hectares. On its part, once the saplings are planted in a designated area after 3 months, GEC will maintain the plantation over 3 years.

Patel Engineering bags dam construction project in US

ET reported that Patel Engineering has bagged the USD 280 million Taum Sauck Upper Reservoir Dam reconstruction project in USA.

The project will be executed by Patel Engineering’s wholly owned subsidiary ASI RCC. The Taum Sauk Plant is owned and operated by Ameren UE, a subsidiary of Amren Corporation.

The scope of work involves rebuilding the existing inoperable upper reservoir with the construction of a concrete-faced symmetrical roller compacted concrete dam.

Mr Rupen Patel MD of Patel Engineering said that "This project is a landmark event in the Indian construction sector as it is for the first time that an Indian construction company has penetrated the most stringent and demanding western market."

Mr Patel added that "Successful implementation of projects demands latest technology solutions and cutting edge project management skills. These skills, coupled with inexpensive and experienced labor from India, will help us compete against some of the existing giants in the global infrastructure arena."

ASI RCC is a multi state general contractor with prime focus on roller compacted concrete dam construction. Patel Engineering acquired ASI RCC for their specific engineering expertise in roller compacted concrete used in construction of dams.

Punj Lloyd inks pack with ST Kinetics for defense equipments

It is reported that Punj Lloyd Limited has signed a collaboration deal with Singapore Technologies Kinetics for the manufacture of defense equipment.

Punj Lloyd has been issued a license by the government of India for the manufacture of guns, rockets and missile artillery systems and related equipment in addition to other defense equipment. Under this agreement, both ST Kinetics and Punj Lloyd will be pooling their resources in the execution of supply contracts for union ministry of defense.

This tie up augurs well for the high growth Indian defense sector. The combined capabilities of both the companies can help the Indian army to scale up its modernization programs. This strategic collaboration to jointly provide for the requirements of the Indian defense sector is in synchronization with current government views of achieving self reliance by involving active participation by the Indian industry in the defense sector.

Essar Steel may raise offer for Esmark - Report

ET reported that Essar Steel Holdings is ready to increase its offer price of USD 17 per share to acquire US based steel maker Esmark.

The Essar bid was earlier approved by the Esmark board but failed to gain support from the United Steelworks Union. Essar had also agreed to provide a loan of USD 100 million to restructure Esmark’s debt.

A similar offer from Severstal was supported by USW but not approved by the Esmark board.

The board of directors of Esmark is expected to meet before June 13th 2008 to take a call on the Severstal offer. The Esmark board has advised its shareholders to stay away from the Severstal offer for the time being.

Franklin Mutual Advisors, which owns 60% of Esmark’s equity, however, did not pay heed to the Esmark board’s advice. It has sent a letter to the Esmark board, informing the latter that it is tendering all its shares to the Severstal offer. It said the decision was taken in view of the uncertainty related to the opposition of USW to the Essar bid.

Mr Peter Langerman CEO of FMA had said in May 2008 that an expeditious conclusion of the Severstal offer will maximize shareholders’ value. He added that "It is our judgment that this inescapable element of the Essar proposal, both because of the delay it will involve under the best circumstances, as well as the serious level of uncertainty it poses to the ultimate consummation of the deal, represents a very significant infirmity of the Essar transaction that could only be cured by obtaining USW support."

Jharkhand steel firms look for alternative fuel source

Ranchi Express reported that the mining and steel industry in Jharkhand is gearing up to face the heat generated by the hike in diesel and petrol prices and many of them are milling on finding alternate sources of energy to meet fuel requirements.

The management of SAIL Bokaro Steel Limited has confirmed that the hike will put an additional burden of INR 3 crore on the company annually. The office of the corporate communication of BSL informed that the plant consumes 9500 kilo liter of diesel and 2000 kilo liter petrol per annum.

Meanwhile, the Heavy Engineering Corporation Limited management did not foresee any direct impact. However, Mr Bharat Prasad GM of HECL said that an indirect impact could not be ruled out. He added that the prices of raw materials like steel, nickel and molybdenum are bound to go up due to the rise in transport cost.

Foundation stone soon for Cuddalore refinery project

BL reported that Mr M Karunanidhi chief minister of Tamil Nadu is soon scheduled to lay the foundation stone for Nagarjuna Oil Corporation's 6 million tonnes per annum refinery project at Cuddalore in Tamil Nadu.

In the proposed INR 5,000 crore project, Nagarjuna Group will have a 51% stake, TATAs will have a 30% stake, TIDCO will have a 5% stake, Cuddalore Port will have 10% stake and the rest will go to a few selected companies.

The project delayed by many years, had faced various hurdles, thus increasing the project cost sizably. The project is expected to be completed in the next 30 to 33 months.

RIL signs MoUs with 9 fertilizer & power companies

BL reported that Reliance Industries Limited has signed agreements with 9 fertilizer and power companies for gas sales from its field in the KG basin over the past 3 months. The MoUs were signed with Nagarjuna Fertilizers, GVK Industries, Konaseema Power, Kribhco, Chambal Fertilizers, IFFCO, Torrent Power, TATA Power and Rashtriya Chemicals & Fertilizers.

On May 7th 2008, Bombay High Court maintained the status quo by restraining RIL from selling gas to third parties to protect RNRL's interests, but did not mention anything about informal agreements, which allows RIL to sign MoUs.

These MoUs will be converted into commercial agreements only if the court order is favorable. RIL plans to sell about 30 million standard cubic meters per day of gas to selected companies when it starts production. As RIL plans to produce 40 million standard cubic meters per day at the initial stage, there is room for some more agreements. An additional 10 million standard cubic meters per day gas will be supplied to the highest bidders after the court order.

TATA Motors explores market for JLR launch in India

BS reported that, days after completing the acquisition of Jaguar & Land Rover, TATA Motors is exploring the feasibility of launching the two marques in India.

TATA Motors will be conducting a study on the demand for the models of Jaguar & Land Rover, which are priced between INR 2 million and INR 7 million in UK. Prices will double if the models are sold in India through direct imports as completely built up units since they will attract import duties of 114%.

Analysts believe that India is a developing market for luxury automobiles with global luxury brands like Porsche, Mercedes, BMW and Audi already here. Sales of luxury car brands priced above INR 4 million in the January to May 2008 period have already exceeded 2007's whole year numbers.

The launch of Jaguar & Land Rover will certainly be a positive step for TATA Motors, which is increasing its market base internationally even as it explores markets like China and Russia.

In the UK, Jaguar mainly sells 4 models including X Type, XF, XJ Series and XK Series, in estate, saloon, open top and coupe forms. Land Rover sells 4 models including the Defender, Discovery, Freelander and Range Rover.

NMDC mines paralyzed after Naxal blew up power towers

It is reported that production in Dantewada mining facilities of National Mineral Development Corporation was paralyzed after Naxalites blew up power towers in the area, plunging the entire Bastar region into darkness.

The incident hit supply of power to Dantewada, Bijapur, Bastar and Narayanpur districts of Chhattisgarh, besides plunging more than 1,500 villages into darkness. Water supply in region also remained shut.

Meanwhile, work to restore the towers has started on a war footing. Chhattisgarh power board officials said that restoring the supply would take at least 10 days. The state government is also in talks with the Orissa government to get power for emergency services. A number of generator sets have been sent to Bastar to restore power for emergency services, including hospitals.

This is the second time in the past one year when production in NMDC's mines has been hit following disruption of power supply by Naxalites. Last year's attack had kept the region in the dark for 11 days and caused a loss of around INR 100 crore to NMDC.

Indian Railways invites EoI for equity in freight links

Indian Railways is set to invite expressions of interest for equity in 2 rail port connectivity projects and 1 iron ore site connectivity in the coming weeks. These include Reliance Industries Limited’s Hamrapur Rewas, Balaji Infrastructure’s Dighi Indapur and Angul Sukhinda stretches. The investment involved in the projects is INR 2,000 crore. The railway lines will cater to coal, petroleum, fertilizers, iron ore and containers.

The estimated investment for Hamrapur Rewas line is INR 700 crore and involves connecting the two via pen. The freight line will be designed to carry petroleum products, coal, fertilizers and containers. The connectivity project is planned as an important freight link for RIL’s 35,000 acre Navi Mumbai SEZ. This will be one of the first rail links to pass through 8 km of backwaters in the Arabian Sea.

The Dighi Indapur project cost is estimated at INR 550 crore for the 42 kilometers long stretch. Dighi port is being developed by Balaji Infrastructure with an investment of INR 1,500 crore. It is being developed over 1,000 acre with a possibility of expanding into another 1,000 acre where an SEZ is planned.

The Angul Sukhinda line is being designed to carry iron ore and involves an investment of INR 1,000 crore. The length of the stretch is 100 kilometers and has a completion target of 2009-10. The railway line is being developed in Orissa to connect Jindal Steel and Bhushan Steel aluminum park.

In addition, the government plans to begin work on the Bharuch Dahej and Surat Hazira lines. The two projects involve an investment of INR 200 crore each. Hindalco has offered to pick 13.33% balance stake in the Bharuch Dahej line, which is to be approved by RVNL. After the special purpose vehicle has serviced debt involved in financing the project, the profits will be distributed among the stakeholders depending on their holdings.

Era Infra bags INR 85.2 crore EMU coach shed contract

BL reported that Era Infra Engineering Limited has bagged an INR 85.20 crore contract from the Mumbai Railway Vikas Corporation Limited for the construction of an EMU maintenance car shed between Nallasopara and Virar stations of the Western Railway.

The project, funded by International Bank for Reconstruction Development, is part of Mumbai Urban Transport Project.

ONGC to supply gas to Tripura power plant by NEEPCO

BL reported that ONGC will supply 0.5 million standard cubic meters a day of gas for a period of 15 years to North Eastern Electric Power Corporation Limited’s gas based power plant coming up at Monarchak in Tripura.

NEEPCO officials said that "This is the first agreement to be signed by ONGC at market price in Tripura." They added that NEEPCO plans to produce 104 MW power by 2010 end from this combined cycle power plant.

Officials said that the term sheet, which was signed on March 25th 2008, has now been regularized with this agreement. They added that the first drawl is slated by September 25th 2010, within 30 months from the date of signing of Term Sheet.

ONGC shall be transporting gas from its various new fields in Tripura.

NHPC invites bids for Dibang hydro power project

Projects Today reported that National Hydroelectric Power Corporation has invited bids for the 3,000 MW Dibang hydro project in Lower Dibang Valley district of Arunachal Pradesh. The project cost is estimated at INR 16,425 crore.

NHPC invited pre qualifications for appointment of consultants for construction, planning, design and engineering, project management for the hydro project.

After completion, the project will generate 11,330 million units of electricity. The project will construct 288 meters high concrete gravity dam, which will be the highest dam in India with 6 head race tunnels.

Himachal Pradesh changes bidding policy for hydel projects

BS reported that Himachal Pradesh government has revised its competitive bidding policy for the allotment of hydel projects in the state.

A new hybrid policy will be followed under, which projects will be allotted on the basis of free power based bidding along with an upfront premium of INR 2 million per MW. This replaces the earlier policy, which was solely based on upfront premium.

MR Energy inks PPA with KPTC for power sale

BL reported that GMR Energy, the 100% subsidiary of GMR Infrastructure, has entered into a power purchase agreement with Karnataka Power Transmission Corporation for sale of power for a period of 7 years.

The power purchase agreement was later assigned to Bangalore Electricity Supply Company and Mangalore Electricity Supply Company.

The power purchase agreement expires on June 7th 2008. GMR Energy board has approved relocation of the 220 MW barge mounted power plant to Kakinada in Andhra Pradesh. The relocation of plant will take maximum of nine months and the plant is expected to be re commissioned at new location by April 2009 and will operate on gas.

Cairn India wins offshore block in Lanka

Cairn India has won an offshore exploration block in Sri Lanka's latest round of bidding for oil and gas blocks.

The offshore block, SL 2007-01-001, lies in at water depths of 200 meters to 1,800 meters.

Cabinet clears Tuticorin port channel deepening project

BL reported that, in a move that would allow Tuticorin Port to handle larger mainline vessels and bulk carriers, the Cabinet Committee on Economic Affairs has approved a proposal for undertaking INR 538 crore channel deepening project at the port.

With the implementation of this project, Tuticorin Port will be able to handle mainline, fourth generation container vessels of 56,000 DWT or 3,000 to 4,000 TEUs with overall length of 290 meters and bulk carriers of up to 75,000 DWT with maximum draught of 12.8 meters.

Mr PR Dasmunsi union information & broadcasting minister said that "It will also reduce the sea freight for bulk cargo and boost the Exim trade to save time and transhipment cost of vessels."

Kannur Airport to be built on BOO basis

It is reported that Leela Group is likely to secure the new Kannur international airport deal with the state government deciding to execute the project on the build own operate basis. It had offered to take up the Greenfield airport project through a JV with Singapore’s Changi airport.

Kerala government had been maintaining that it was interested only in build operate transfer mode so that the state government could take over the airport at the end of the limited period concession.

The new decision came at the cabinet meeting chaired by Mr VS Achuthanandan chief minister of Kerala. The state government will be a minority shareholder in the airport company holding 26% stake.

The airport with a land bank of 2,000 acres is expected to provide huge boost to the textile as well as tourism industry in northern Kerala. Recently, the Leela Group brought nearly 20 aviation experts here to study the feasibility of the project.
It may be noted that Mr Priyaranjan Dasmunshi union IB minister had announced in January 2008 that the airport, initially with one runway, would come up on 2,000 acres at an estimated INR 9.29 billion at Moorkanparambu near Mattannur, some 20 kilometers away from Kannur city.

European steelmakers raise fresh alarm on CO2 policy

Reuters reported that European steelmakers raised the alarm anew over European Commission proposals to make electricity producers buy permits to emit greenhouse gases blamed for global warming.

The European Confederation of Iron and Steel Industries said that the plans, to be debated by EU environment ministers could cost the sector more than EUR 50 billion between 2013 and 2020 and put thousands of jobs at risk.

The steelmakers have already demanded special treatment along with other energy intensive industries that fear they will be put at a severe disadvantage in international competition if there is no global agreement to greenhouse gas emissions.

Mr Gordan Moffatt director general of EUROFER said that the sector is particularly worried the proposed system would require steelmakers to buy CO2 emissions permits for electricity which it produced by recycling waste gases from blast furnaces. He said that "This would add a huge additional burden on us.”

Mr Moffat said that the Commission's plan to make power generators buy 100% of their emissions allowances at auction from 2013 would particularly raise costs for the most environmentally efficient electric arc furnaces that produce steel from scrap. He added that "If the power sector passes through 100% of the cost to end users, the cost to our sector will be huge.”

EUROFER said that the EU steel industry represents 200 million tonnes of annual output and EUR 140 billion in turnover, with 370,000 staff and providing up to 1 million jobs including indirect employees.

EU diplomats said Germany, with the largest steel industry in the 27 nation bloc, was demanding that the Commission bring forward the date for defining which energy intensive industries require special treatment and how they can be helped. The EU executive said that it was aware of the concerns but first had to assess the risk to the steel sector from producers in countries with lower environmental standards, known as carbon leakage.

Ms Stavros Dimas a spokeswoman for Environment Commissioner said that "The Commission will first assess whether steel is suffering from unfair competition and carbon leakage. A report on that is due from the Commission by 2010 at the latest. Any issue would be taken account of in the degree to which steel makers must buy their permits through auctioning."

EU to review AD duty on tube fittings from China and Thailand

It is reported that the European Union threatened to prolong for five years tariffs on steel tube fittings from China and Thailand to protect EU producers from cheaper imports. The duty rates are 58.6% against China and as high as 58.9% against Thailand and were imposed in June 2003.

The EU's review will determine whether the expiry of the measures would be likely, or unlikely, to lead to a continuation or recurrence of dumping and injury.

EU's said that the duties were due to expire this week after five years and will now stay in place during the probe, which can last as long as 15 months.

EU added that European producers include Siekmann Fittings GmbH of Germany, Erne Fittings GmbH of Austria and Virgilio CENA & Figli SpA of Italy, when it imposed the tariffs in June 2003.

Steel tube fittings are used to join tubes or pipes mainly in the chemicals, oil refining, energy generation, construction and shipbuilding industries.

Nucor raises profit forecast on global steel demand

US’s largest steelmaker by market value, Nucor Corporation announced that strong shipments and higher margins have increased the earnings guidance for its second quarter ending June 28th 2008.

Nucor expects second quarter net earnings to be in the range of USD 1.75 to USD 1.80 per diluted share, significantly better than the USD 1.55 to USD 1.60 per share that Nucor had previously forecast. By comparison, Nucor earned USD 1.14 per share in the second quarter of 2007 and USD 1.41 per share in the first quarter of 2008.

Nucor said that “Continued strength in our sheet, plate, beam and bar businesses due to the solid global demand for steel and better than expected margins have favorably impacted the second quarter. Our upstream and downstream businesses also continue to perform well.”

It added that “The forecasted range of USD 1.75 to USD 1.80 per share for the second quarter reflects an increase in the diluted average shares outstanding over the first quarter of more than 3% due to Nucor's common stock offering of approximately 27.7 million shares that closed on May 29th 2008. While the additional shares will be outstanding only for a portion of the second quarter, they will be outstanding for all of the third quarter, resulting in an increase of more than 9% in diluted average shares outstanding from the first quarter of 2008 to the third quarter of 2008.”

Vallourec withdraws poison pill defense proposal - Echos

Les Echos citing Mr Bertand Cantegrit CEO of Vallourec SA reported that Vallourec SA has withdrawn a proposal for poison pill defense measures because management did not think they would get support from shareholders.

Mr Cantegrit was quoted as saying that “After measuring market reaction to the proposal, the company considered it would not get the required support in a shareholders vote.”

The newspaper said that the Paris based Vallourec had planned to ask shareholders to approve a resolution for distribution of free certificates to existing shareholders redeemable for new shares to thwart a hostile takeover.

Bekaert to sell its DLC business to Sulzer

Bekaert and Sulzer announced their intention to sign a take over agreement for NV Bekaert SA’s Diamond like Carbon coating activities. Diamond like carbon coatings are used to reduce wear and friction in a wide range of industrial applications such as machine parts, automotive components and molds for plastics and metals.

The Diamond like Carbon business is part of Bekaert’s advanced coatings business segment and hosts six production plants in Belgium, France, Germany and the United States. The potential deal with Sulzer covers all 164 people now working for Bekaert Diamond like Carbon.

The release said that “The Diamond like Carbon business accounts for less than 1% of Bekaert’s consolidated sales in 2007. Within the Bekaert Group, Diamond like Carbon’s growth opportunities and technological synergies have proven to be limited over time. An in depth analysis showed that the further growth potential of the DLC business could best be secured by entrusting its future development to a significant player in the broader tribological thin films 1 market.”

Sulzer is active in machinery and equipment manufacturing and surface engineering in over 120 locations worldwide. In 2007 Sulzer generated a turnover of more than CHF 3.5 billion and employed more than 11 500 people. The divisions of Sulzer are global leaders in their respective customer segments, which include the oil and gas, hydrocarbon processing, chemical process, power generation, pulp and paper, aviation and automotive industries.

Cosipa restarts modernized BF at Cubatao

BNamericas reported that Blast furnace 1 at Brazilian steelmaker Usiminas' subsidiary Cosipa in Cubatão in São Paulo state of Brazil has restarted after a USD 117 million modernization process that expanded daily pig iron capacity to 4,500 tonne from 3,500 tonne.

The report added that the project applied updated technology to improve the furnace's productivity, speeding up the raw material loading process and creating a computerized control system, among other initiatives. It further added that the modernization also improved the furnace's environmental performance.

The works form part of a larger development plan underway at the Cubatão operation, which includes a new USD 1 billion cost 2.3 million tonne per year hot strip mill that will later expand to 4.7 million tonne per year. Works are due to begin in August and wrap up in April 2011. In addition the company recently started up a new continuous casting facility.

Usiminas and Cosipa have combined installed steel capacity of 9.5 million tonne per year.

The Tinplate Guide

“The Tinplate Guide” provides you the basic but valuable information on tinplates and its uses.

Tinplate is totally recyclable and all tinplate cans contain approximately 25% recycled metal. World wide, an estimated 355 million tons of steel is recycled every year. Both types of steelmaking, Basic Oxygen Steelmaking and Electric Arc steelmaking use steel scrap as an essential ingredient, in fact Electric Arc Furnace production uses steel scrap for virtually 100% of its charge. The use of scrap steel saves up to 70% of the energy & 40% of water required in production of steel from virgin materials and it saves precious natural resources. For every ton of steel cans recycled, 1.5 tons of iron ore, 0.5 tons of coal is saved

Tinplate has four layers of different materials on steel base, starting from Tin iron alloy, Free Tin, Tin Oxide film and oil film and adaptability for a specific purpose depends upon the properties of a given layer and steel base. For a part of a toy, where deep drawing is done, the controlling factor is the quality of steel base. Oil film plays an important role in feeding in automatic equipment for fabrication of auto parts and the layer of tin oxide influences the adhesion of lacquer and enamels. However, the optimum properties of each layer are standardized due to mass production facilities.

Tinplate is low carbon mild steel, coated on both top and bottom surfaces with an electrolytic deposition of tin. The deposited tin exists as alloyed and free tin and has a passivated surface as well as a coating of oil. It is known as Electrolytic Tinplate (ETP) but is more accurately called the Electrolytic Tin Coated Steel (ETCS)

Publish Date: October 2007
No. of Pages: 147
Price: USD 2000
Delivery Format: PDF Format

You can order your copy to reports@steelguru.com, who will send you an invoice of USD 2000 for the report

Steel for packaging industry launches sustainability positioning in Europe

The European Steel for packaging industry launched its sustainability positioning in Brussels, showcasing its unique position as an enabler for a sustainable 21st century.

During EU Green Week, which takes the sustainable use of natural resources as its theme, focusing on waste management, sustainable consumption and production, steel for packaging will be outlining its natural credentials in each of the three pillars of sustainability:
1. Caring for the Environment – Thanks to its natural properties, steel, infinitely recyclable, is the world’s most recycled material, contributing to the lowering of CO2 emissions.
2. Protecting products – Steel is robust and offers 100 % protection against light, water and air. It therefore preserves naturally and offers the highest packaging integrity.
3. Delivering for Business – Steel is the most reliable and eco-efficient packaging solution offering a trusted experience for business operators.

Mr Philippe Wolper MD of APEAL, the Association of European Producers of Steel for Packaging, said that “Steel’s natural properties, being magnetic, infinitely recyclable and 100% protective, mean that it is uniquely placed to meet the sustainability challenge.”

Mr Wolper added that “The launch of the ‘Steel for packaging Naturally’ positioning in the presence of some of our most important stakeholders shows the growing confidence and industry cooperation in communicating the role our material can play in a sustainable future for our society. In the forthcoming weeks we will further reach out to all the actors of the packaging market.”

The steel for packaging initiative is timely in the context of the Sustainable Consumption and Production Action Plan due to be released by the European Commission shortly and addresses some of the key issues likely to be contained within it including the optimal use of natural resources, the role of recycling and the lowering of CO2 emissions.

ArcelorMittal Frydek Mistek posts record profit in 2007

CTK reported that Czech based ArcelorMittal Frydek Mistek formerly know as Valcovny plechu, a producer of cold rolled steel products, raised before tax profit to a record CZK 530.5 million in 2007 from CZK 416 million in 2006 and sales to CZK 3.5 billion from CZK 3 billion.

ArcelorMittal Frydek Mistek representatives told journalists that the firm benefits from the very profitable special transformer sheets that it manufactures as the only company in the Czech Republic. He added that profit after tax decreased to CZK 399 million from CZK 410 million which was caused by a settlement of a deferred tax.

Stomana Industry opens a new steels facility

Bulgarian National Radio reported that Bulgaria's steel maker Stomana Industry officially opens a new facility for the production of special steels. With the new facility the production of Stomana Industry will reach 1.4 million tonnes.

Mr Sarados Mihios of Stomana at a press conference during the opening ceremony said that EUR 130 million have been invested so far since 2001. Mr Mihios added that another EUR 400 million are slated to be invested in the company in the next five years for new special steel, sheet and rolled iron productions of the highest quality.

The new facility opening comes just days after Stomana Industry's announcement about plans for future partnership with the US company Nucor Inc.

Simec closes acquisition of Grupo San - Report

BNamericas reported that Mexican steelmaker Grupo Simec has closed the acquisition of all of the shares representing the capital stock of steel company Corporación Aceros DM and some of its affiliates collectively known as Grupo San.

Grupo San is a long products steel mini mill and the second largest corrugated rebar producer in Mexico, with operations based in San Luis Potosí State. The company produces some 700,000 tonne per year finished products and employs nearly 1,500 people.

Through the transaction, Simec owned by Mexico's Industrias CH looks to become the second largest producer of rebar and the largest steel producer in Mexico, with a production capacity of some 4.5 million tonne per year liquid steel and 3.8 million tonne per year finished products.

Grupo Simec is a mini mill steel producer that makes an array of non flat structural steel products. The company describes itself as the largest producer of special bar quality steel in North America.

German crude steel output in May 2008 up by 2.6% YoY

The Germany’s Federal Statistical Office said that Germany crude steel production in May was 4.15 million tonnes up by 2.6% YoY, while pig iron output increased by 2.1% YoY to 2.62 million tones.

On a month on month basis, crude steel production was up by 3.4%, while pig iron production increased 6.3%.

Adjusted for seasonal and calendar effects, crude steel production grew by 2.7% in May from April.

Transpetro to buy SBQ plates from Usiminas

Bloomberg reported that Petrobras Transporte SA, the transport arm of Brazil's state controlled oil company Petroleo Brasileiro SA, is in final negotiations to purchase steel plates from Usinas Siderurgicas de Minas Gerais SA.

Mr Sergio Machado president of Transpetro said that “Transpetro as the unit is known is in talks to buy 12,000 tonnes of heavy plates at competitive prices.”

He added that the company will need 690,000 tonnes to build 49 tankers for Petrobras owner of the Western Hemisphere's largest oil discovery in three decades.

Mr Machado said that “Demand for steel should grow even more as Brazil is becoming a world player both in oil and in shipbuilding.”

Petrobras said that it plans to begin pumping oil by April 2009 from its Tupi field 250 kilometers off the Atlantic coast. The field may hold 8 billion barrels of recoverable oil. Mr Luiz Inacio Lula da Silva president of Brazil last month said that as much as 80% of the materials used to build the ships will be purchased from Brazilian companies.

Hyundai Heavy and Daewoo bag USD 4.9 billion orders

Korae.net reported that Hyundai Heavy Industries Co and Daewoo Shipbuilding & Marine Engineering Co have won a combined USD 4.9 billion worth of deals in the past week to build 30 vessels, including oil tankers and bulk carriers.

During an international shipping exhibition held in Greece last week, Hyundai Heavy Industries received deals valued at USD 2.4 billion to build 22 ships, including 16 oil tankers. So far this year, the shipyard has won deals worth USD 12.3 billion to build 94 vessels, up 37% YoY.

Daewoo Shipbuilding & Marine Engineering, the world's third largest shipyard, won USD 2.5 billion of orders in the past week to build 8 vessels that can carry oil and commodities as well as drill for crude.

Daewoo Shipbuilding has received USD 5.6 billion worth of orders this year, achieving about a third of this year's target of USD 17.5 billion. Its backlog reached USD 41.5 billion.

Shipyards in Korea, the world's largest shipbuilding nation, are building new docks and expanding facilities to meet increased global shipbuilding demand.

OECD reduces South Korean growth forecast to 4.3%

It is reported that the OECD has lowered Korea's economic growth forecast for 2008 to 4.3%, down about 1 percentage point from a forecast of 5.2% made last December.

In its semi annual Economic Outlook report released on Wednesday, the OECD predicted the Korean economy will slow down this year on sluggish demand from depressed export markets such as the US and soaring oil prices.

The OECD's new forecast of 4.3% is lower than predictions by Korean think tanks such as the Korea Development Institute of 4.8%, the Samsung Economics Research Institute of 4.7% and the LG Economic Research Institute of 4.6%.

The government had originally set a growth target of around 6% for 2008, but it will reportedly lower its forecast to around 5% in its Economic Policy Direction for the Second Half of 2008 report due in early July.

The OECD, meanwhile, hiked its forecast for inflation in Korea for this year from 2.8% to 4.0%. Although high household debt might pose a threat to the Korean economy, the new government's business friendly policies including deregulation, free trade pacts and encouragement of foreign investment should have a positive effect toward a rapid recovery.

Enel buys control of Electrica Muntenia Sud in Romania

It is reported that Italy's biggest utility by revenue Enel SpA has finalized the deal giving it control of Romania's Electrica Muntenia Sud or EMS, under a 2007 accord as it expands into fast-growing Eastern Europe.

EMS is the sole electricity distributor for residential and industrial customers in the Romanian capital Bucharest.

Enel said that it bought a 64.4% stake of EMS from the Romanian state in a deal worth EUR 820 million. The Rome based utility purchased a 50% stake in April for EUR 395 million and agreed to subscribe to an EMS share increase for EUR 425 million. It added that the remaining 23.6% stake in EMS is held by state owned Fondul Proprietatea.

Mr Fulvio Conti CEO of Enel said that "We will focus on becoming a vertically integrated energy player in Romania, pursuing generation projects in renewable, nuclear and clean coal technologies.”

He added that the utility plans to invest EUR 1 billion in EMS over the next 15 years.

CSC and Feng Hsin post record profit in May 2008

Bolstered by rising steel prices and resuming production, Taiwan’s China Steel Crop and Feng Hsin Iron & Steel Co Ltd reported record revenue in May.

CSC said that its revenue in May increased by 34.09% to record YWD 22.836 billion from the same period last year and up by 11.79% MoM from April 2008. The company’s revenue from January to May amounted to TWD 100.616 billion.

Feng Hsin posted its revenue in May has exceeded TWD 4 billion for the first time to hit TWD 4.566 billion. The company’s revenue in the first five months totaled TWD 18.688 billion, increased by 47.53% YoY

(Sourced from YIEH.com)

Rio Tinto to start Saudi aluminum smelter by 2012

Arab News reported that Rio Tinto Group is expecting to produce aluminum from its planned smelter in Saudi Arabia by late 2011 or early 2012.

Mr Tom Albanese CEO of Rio Tinto said that the first stage of the project, developed in a JV with state owned Saudi Arabian Mining Company, will produce 740,000 tonnes of aluminum.

Nexans to set up a cable company in Qatar

Nexans recently announced that it has signed a JV agreement for the creation of a cable company in Qatar.

The new JV will generate revenues of about USD 150 million by 2010 at actual copper price on a market which is globally expected to grow by 10% per year. The related new manufacturing plant, located in the industrial city of Mesaieed will be Qatar’s first cable plant, employing 210 people.

Abu Dhabi plans special workers city

UAE daily The National reported that Abu Dhabi government has unveiled plans to build a series of large cities to provide housing for hundreds of thousands of limited income workers.

The cities are being planned by the government backed Higher Corporation for Specialized Economic Zones, which said in a statement that it expected half of the accommodation to be complete by the end of 2010. The government has already given approval to the project. The developments would make Abu Dhabi one of the leading destinations worldwide in terms of providing high standard accommodation for limited income workers.

The cities will have competitive rents and will be linked electronically to the ministry of interior, civil defense, the armed forces and the ministry of health for emergency response. The developments will include recreational areas, restaurants, health clinics, parks, public areas and mosques. There will also be offices where residents can access services related to visas, labor cards, health insurance and driving licenses.

The project is the result of directives from Sheikh Khalifa bin Zayed, the UAE president and ruler of Abu Dhabi and has been closely followed by Sheikh Mohammed bin Zayed, the crown prince of Abu Dhabi.

Drilling costs in MENA may reach USD 12.4 billion per year by 2012 - Report

According to 'MENA Oilfield Services Report 2008-2012' by energy analysts Douglas Westwood, expenditure within the Middle East & North African drilling and work over segments amounted to some USD 7.7 billion in 2007 and is forecast to rise to USD 12.4 billion per year by 2012.

The report said that, in order to attain forecast production levels, drilling activity, both on and offshore must grow at a dramatic rate thus increasing demand for rigs and associated drilling services.

Mr Andrew Reid MD of Douglas Westwood said that "MENA accounts for two thirds of proven global oil reserves and is regarded as the world’s most influential oil province, eclipsing all other regions by some margin. Over the next 5 years, the region will see strong growth in hydrocarbon production as the world becomes increasingly reliant on oil supplies within the region."

Mr Steve Robertson oil & gas manager at Douglas Westwood said that "The underlying modeling process on which the report’s drilling and market forecasts are built is the result of months of data collation from key industry players and represents a likely scenario for MENA oilfield services activity. This process has also enabled us to build a good understanding of the current active players in the market. The region exhibits a fascinating mix of service companies from National Oil Company subsidiaries to indigenous providers to international oilfield service companies."

The new report is based upon months of in depth research carried out first hand by Douglas Westwood’s oil & gas team.

The research has enabled an assessment to be made of each of the key sub sectors and underlying cost centers that together form the market. Whilst expenditure growth is forecast to varying degrees in all MENA countries, Saudi Arabia is set to remain one of the most prominent regional cost centers over the next 5 years.

MIS Q1 2008 revenue up by 40% YoY

UAE based Maritime Industrial Services has posted a revenue of USD 82 in January to March 2008 quarter up by 40% YoY as against USD 58 million in January to March 2007 quarter.

The main factors contributing to the reduction in profits on the first 2 new build rigs were the increased number of man hours over the original budget, impact of higher cost in man hours than originally estimated and increasing freight, inspection and coordination costs of the procured items.

Other increased costs impacting MIS in first quarter were interest and non revenue costs on Hull 106 and Hull 108, for which slots remained unsold at the end of the quarter. These increasing costs were partially offset by increased margins on the traditional works.

MIS reported that both Seawolf rigs (Hull 104 and Hull 105) remain on schedule for delivery in August and December 2008 respectively, while the 3rd rig, for KSAM2 Petrodrill (Hull 107), is well ahead of progress and contractual delivery schedule.

According to MIS, there are continuing demands for all MIS business lines. From pressure vessel fabrication, with orders currently in progress for both local and international markets; continuing land based petrochemical facility expansions throughout the Gulf area, a steady stream of offshore drilling rig refurbishments or repair, reflecting the increased level of offshore drilling and development activities in the area, all competing for available capacity with new build jackup rigs.

Nabucco pipeline may get delayed due to Turkish conflict

Bloomberg reported that Nabucco pipeline may face further delays unless a transit agreement with Turkey is reached later this year. Nabucco, which already postponed its start date by a year in February 2008, now risks missing an opportunity to bid for natural gas from Azerbaijan, slated as the project's most likely first supplier.

Mr Jeremy Ellis head of business development for the trading unit of Nabucco shareholder RWE AG said that "The key is getting a transit agreement with Turkey. The competition for gas supplies is starting and getting more intense. If Nabucco misses out, the consequences are big.''

Turkey, one of the six Nabucco partners, is located at the start of a 3,000 kilometers long pipeline designed to bring non Russian gas to central Europe. As the only partner outside the European Union, Turkey has to reach an agreement on how to price the gas going into the pipeline.

Nabucco has a timeline that foresees a market sounding this month to take a snapshot of buyers' interest, followed by a so called open season of 6 months to book capacity. A final investment decision will then be made in early 2009 and operations are scheduled to begin in 2013.

Without the completion of the open season process, Nabucco's partners won't be able to discuss financing for the project, which saw its cost estimate revised by 58% to EUR 7.9 billion last month because of higher steel prices.

Pakistan may impose gas development levy

The News reported that Pakistan government is likely to impose gas development levy on gas sale to consumers that would cause a further increase in gas tariff.

Sources in the petroleum ministry said that the Economic Coordination Committee of the cabinet would consider as an option of possible imposition of gas development levy for approval that would meet under the chairmanship of Prime Minister Mr Syed Yousuf Raza Gilani.

It may be mentioned that the development levy on oil has been very controversial, which was the major reason behind the hike in oil prices in the country. The government is also charging 15 per cent general sales tax on oil and gas products and the development levy is an additional duty on oil products.

At present, the government is charging petroleum development levy on JP-4, JP-8 fuel at PKR 3 per liter, premier motor gasoline PKR 2.23 per liter and HOBC PKR 2.61 per liter.

Official sources informed that the petroleum development levy was being misused, as it was supposed to be invested in the development of the petroleum sector by developing its infrastructure. But the government was charging the development levy for controlling the budget deficit. Sources feared that the gas development levy would also be used for controlling the budget deficit and would not help in any way for the development of the gas sector.

Saudi Kayan signs USD 6 billion financing agreements for new complex

Saudi Kayan Petrochemical Company has entered into USD 6 billion financing arrangements for 15 years with a group of banks and financial institutions to finance part of the cost of its new complex in Jubail Industrial City. The complex will be the world's largest integrated petrochemical complex.

Mr Mutlaq Hamad Al Morished chairman of SAUDI KAYAN had signed the agreements on behalf of SAUDI KAYAN.

SAUDI KAYAN was advised by Arab Banking Corporation, BNP Paribas and Samba. The initial mandated lead arrangers are ABN AMRO Bank NV, Arab Banking Corporation, BNP Paribas, HSBC Bank plc and Samba Financial Group. The export credit agencies are ECGD, KEIC, K EXIM and SACE. The Public Investment Fund of Saudi Arabia is also financing the project. Al Rajhi Banking & Investment Corporation is providing an Islamic working capital facility.

The SAUDI KAYAN complex, currently under construction, is expected to go on-stream in the fourth quarter of 2010 with a total annual capacity of approximately 6 MTA of a variety of petrochemical products including ethylene, propylene, polyethylene, polypropylene and ethylene glycol. It will also manufacture a series of specialized products that will be produced locally for the first time. They include aminoethanols, aminomethyls, dimethylformamide, dimethylethanol, dimethylethanolamine, ethoxylates, polycarbonate and acetone.

SABIC holds a 35% of the shareholding in SAUDI KAYAN with a private shareholder Al Kayan Petrochemical Company holding a further 20%. The remaining 45% is held by Saudi shareholders following an initial public offering last year.

Pakistan approves PKR 541 billion PSDP for 2008-09 fiscal

APP reported that Pakistan’s National Economic Council has approved PKR 541 billion for the public sector development program 2008-09, more than 11% of the last fiscal year and also set a GDP growth target of 5.5% for the financial year 2008-09.

Mr Salman Faruqi deputy chairman of Planning Commission said that the total size of the public sector development program for the financial year 2008-09 is PKR 541 billion in which the share of federal PSDP is PKR 371 billion. The provincial PSDP is PKR 170 billion while the allocation for the earthquake reconstruction & rehabilitation authority is PKR 27 billion which is over and above the PSDP 2008-09 of PKR 541 billion.

Mr Faruqi added that the NEC has set a GDP target of 5.5% which is realistic and achievable and it could be even grow higher depending upon the economic situation of the country. He regretted that in the past including the outgoing financial year the Public Sector Development Programs were not properly implemented against the allocations announced in the Budgets but also did not release them.

Power sector has been allocated PKR 14 billion which is over and above PKR 51 billion to be spent by WAPDA from its own resources. Water sector has been allocated PKR 75 billion or 20% of the total, while food, agriculture and livestock have been earmarked PKR 20 billion.

GGICO opens aluminum extrusion plant in Dubai

It is reported that Gulf General Investment Company has officially inaugurated one of the largest aluminum extrusion factories in the region in an opening ceremony attended by Mr Ahmed Humeid Al Tayer VC of DUBAL. National Aluminium Extrusion Llc is 400,000 square feet factory with a production capacity of 15,000 tonnes per annum.

Mr Mohammed Abdalla Al Sari MD of GGICO said that the inauguration signifies the beginning of phase one for the NALEXCO project. He added that "We are expecting an annual turn over of AED 200 to AED 220 million during this first phase, which we expect to jump to AED 330 million by the end of the second and final stage. Along with this, we are currently employing 150 staff, made up of western and Arab experts, which will rise to 200 at the final phase."

NALEXCO’s third phase will see a third extrusion line installed, raising the factory’s capacity to 22,000 tonnes per year accompanied with a double vertical powder quoting line of 25,000 tonnes capacity per year.

Located at Dubai investment Park, NALEXCO utilizes the latest in cutting edge aluminum extrusion technology with a focus on quality. Outside of the UAE, GGICO have another factory of a similar size being prepared in Jordan and it is studying market opportunities and requirements in the greater GCC area, particularly in Saudi Arabia and Qatar.

Salalah Port Services inks MoU wit Oman for expansion project

Oman Observer reported that Salalah Port Services Company, the operator of the Port of Salalah, has signed a MoU with the government of Oman to expand the present container handling facilities by constructing additional 1350 meters of quay wall. This will extend the total container terminal quay length to 3,555 meters with an annual capacity to handle around 9 million TEUs annually by 2013.

Mr Tiemen Meester outgoing CEO of Port of Salalah said that this project is part of an effort to prepare the terminal for the future. In 2004, the port handled 2.2 million TEUs of containers. He added that "Nonetheless, we worked hard optimizing our operations and gearing up for future growth. We handled about 2.4 million TEU in 2006 and the numbers so far show that we are on track for further solid growth during this year."

Salalah Port Services Company is listed on the Omani stock market. Net profit announced for the first quarter of the year 2008, amounted to OMR 1.56 million up by 143% YoY.

El Sewedy Cables to set up cables factory in Qatar

Egypt's El Sewedy Cables has announced the establishment of a power cables factory in Qatar with a total investment cost of USD 150 million and production capacity of 30,000 tonnes per year. Operations are expected to commence by end of 2009 or beginning of 2010.

The project, which will produce low, medium and high voltage cables, will be financed 40% through equity and 60% by medium term loans. El Sewedy Cables will hold 50% of the venture while Qatar’s Aamal Holding will own the remaining half.

El Sewedy Cables is the largest public producer of power cables & electrical products in the Middle East. Its current total production capacity hits 124,600 tonnes per annum and its sales amount to some of USD 1 billion per year.

El Sewedy Cables was floated in May 2006 through a USD 224 million international offering. Today, t is one of the most actively traded stocks on the Cairo and Alexandria Stock Exchanges.

IPIC 2007 net profits up by 48% YoY to USD 1.2 billion

The board of directors of International Petroleum Investment Company has announced record profits of USD 1.2 billion for 2007 up by 48% YoY.

IPIC also approved plans for a new refinery project in Pakistan with a capacity of 250,000 barrels per day. The refinery is the company's second largest project after the USD 5 billion Parco Refinery in Pakistan. Parco will have a capacity to refine 102.7 million barrels of crude oil per annum. IPIC will hold 74%, while the Pakistan government will own 26% stake in the project.

IPIC said that it is considering the awarding of the project management consultancy services contract for the new refinery. It also approved Mr Al Jarf Al Asfar refining project in Morocco and work is under way to establish a company with competent Moroccan authorities.

Saudi Arabia offers USD 300 million special grant to Pakistan

Khaleej Times reported that Saudi Arabia will offer USD 300 million special grant to help improve Pakistan's ailing economy in the wake of rising fuel prices.

Mr Ali S Awadh Asseri Saudi Ambassador to Pakistan said that "Saudi Arabia fully realizes the difficulties being faced by Pakistan following rising fuel prices and food crisis and would disburse this USD 300 million shortly."

Mr Asseri also said that during the upcoming visit of Mr Yousuf Raza Gillani Prime Minister of Pakistan to the kingdom, several matters will be discussed to further improve economic relations between the two countries. He added that "The amount of USD 300 million would be gift to Pakistan as we are committed to Pakistan and would do whatever we can whole heartedly."

Earlier, addressing the members of Rawalpindi Chamber of Commerce & Industry, Mr Asseri called for greater partnership of private sectors of the two countries. He said that "Though there is continuing interaction at the level of governments, I want to encourage the interaction at the private sector level so that economic relations between our two countries could expand at a faster pace."

He said there were currently 264 independent foreign projects of Pakistani origin in Saudi Arabia and there remains a dire need for Pakistani businessmen to enhance and expand their interaction with their Saudi partners. He added that "We must not lose any time to expand economic relations and immediately initiate measures to enhance the scope of trade and commerce between the two countries."

Mr Asseri regretted that there is no direct trade between the two countries and this lacking is a matter of great concern for Saudi Arabia. Currently, most of the trade between Saudi Arabia and Pakistan is transacted through other capitals.

Saudi Aramco set to award USD 3 billion Manifa work

MEED reported that 3 international contractors have emerged as frontrunners to win more than USD 3 billion worth of engineering, procurement and construction contracts on Saudi Aramco's 900,000 barrel a day Manifa oil field.

The firms understood to have submitted the lowest bids for the 3 main packages are
1. Snamprogetti – Italy
2. JGC Corporation – Japan
3. TR – Spain

Snamprogetti is in pole position for the first package, worth about USD 1.8 billion, covering the construction of central processing facilities including a gas oil separation plant, edging ahead of JGC, TR, South Korea's Hyundai Engineering & Construction Company, France's Technip, Japan's Chiyoda Corporation and Italy's Techint.

JGC is the favorite for the second package worth USD 800 million, covering utilities, storage and shipping at the central processing facility. It is thought to have won the deal over Techint, Snamprogetti and Hyundai Engineering & Construction.

TR is expected to take the USD 500 million final package, covering power generation and the main substation, from South Korea's Hyundai Heavy Industries and Italy's Technimont.

Global US oil service giants Schlumberger and Halliburton have been awarded separate drilling deals on Manifa worth up to USD 1 billion in total, covering horizontal drilling, stimulation and cementing.

Aramco is investing heavily in oil production and refining over the next 5 years, with much of that spending expected to consolidate existing fields and more effectively develop downstream production opportunities.

Sahara Centre to construct steel bridge across Al Nahda road

It is reported that Sahara Centre, the leading family shopping and entertainment destination in the UAE, is to construct a covered pedestrian bridge across the busy Al Nahda road. The bridge would provide safe crossing for pedestrians and allow easy access into Sahara Centre. The bridge is expected to be ready for use by September 2008.

The AED 7 million bridge has a clear height of 6.5 meters and is to span 48 meters across the Al Nahda road. Made of a structural steel frame with steel deck flooring, and a metal panel wall with roof cladding, the bridge will be accessible from the sidewalk by either panoramic lift or staircase. The bridge has been designed by architectural and engineering consulting company Khatib & Alami and built by Al Nimr Contracting.

Mr Jean Pierre Nammour MD of Sahara Centre said that "The Al Nahda area in Sharjah where the mall resides is developing at a very fast pace and we foresee a steep rise in visitor traffic. Considering the location of the mall, this pedestrian bridge will provide an ideal walkway solution for visitors living on the opposite side of the mall and will provide them with a safe and easy access to the mall. We at Sahara Centre have always been extremely vigilant as to the safety and security of our shoppers and the bridge is just another aspect of Sahara Centre's social awareness."

The construction of the pedestrian bridge forms part of the 'Sahara City' project, an AED 4 billion expansion plan that will more than double the size of the emirate's landmark shopping mall and will provide a major boost to the emirate's plans to increase tourism and attract further investment.

Khaleeji plans USD 2 billion building material supplies firm

Arabian Business reported that Bahraini Islamic lender Khaleeji Commercial Bank is setting up a USD 2 billion building materials company. The new company, expected to be called Binaa, will trade in cement mix, steel, aluminum, glass and other materials.

Mr Ebrahim Ebrahim CEO of Khaleeji Commercial Bank said that "There is a huge opening in the market at the moment for a building supply company that can serve both the institutional and retail segments."

Baoshan cancels Q3 price hike on quake - Report

Bloomberg reported that Baoshan Iron & Steel Co China's biggest steelmaker canceled plans to charge customers more in the third after the government ordered domestic mills to hold prices at the same level as before the May 12 earthquake.

Mr Chen Zudong a sales official at Baoshan said “We will keep prices for all grades unchanged at the second-quarter level.''

Mr Xu Lejiang chairman of Baoshan's parent company said the steelmaker had planned to raise prices for the three months starting July 1st 20087 to keep pace with global levels. The China Iron and Steel Association this week ordered members to hold prices at levels prevailing before the quake and ensure sufficient supplies of products such as color coated sheets.

Chinese HRC export price further increase

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 recently and there is an extra of CNY 100 per tonne for thickness under 3.5mm and width above 1300mm.

As per report on Shanghai market, price for commercial 4.75mm to 12mm thick HRC in 1500mm width has risen to CNY 5850 per tonne to CNY 5900 per tonne and that for 1800mm width to CNY 6200 per tonne.

Most export offers for commercial 4.75mm to 12mm HRC have exceeded USD 1000 per tonne FOB this week. A tier two steel makers 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 middle May.

Small Chinese steelmakers seeking foreign investments

It is reported that smaller or medium sized Chinese steel companies are wooing foreign investors in a bid to gain technology and bulk up their balance sheets, seeking to fend off the threat of getting scooped up by the country's larger state run groups.

The search for outside capital by China's smaller steel groups comes amid government calls for steel makers to consolidate, a drive that could see smaller steel mills bulldozed into the arms of the top five national firms.

These smaller steelmakers face several obstacles in their growth strategies. The government does not permit foreign control and is not keen on foreign investment in steel in general, fearing an already sprawling sector may grow out of control.

An investment banker in the sector who declined to be named for commercial reasons said "China has a policy of already having picked the winners. Everyone who's not on that list is frantically trying to expand like mad, with the view that size matters."

Yangzhou Chengde Steel Tube Co Ltd 49% owned by US private equity giant Carlyle Group has hired Lehman Brothers to help it seek strategic options which might include an outside investor.

The South China Morning Post Newspaper reported last week that Singapore listed FerroChina hired Merrill Lynch last month to find it a suitor. And Shanxi based Haixin Iron and Steel Group is also looking for a strategic investor.

Baosteel to build second set of COREX-C3000 in 2010

It is reported that recently, Baosteel has defined the construction progress of the second step work of Pugang Luojing relocation project, it ascertained to build the second set of COREX-C3000 in 2010.

As per reports, COREX iron making project has made the detailed timetable for foreign related negotiations, contract signing, preliminary design review, equipment order and manufacturing etc.

According to the plan, 2009 will be the peak period of construction of COREX iron-making project, and is fully completed in 2010.

Shougang awards 5000mm plate mill order to China Erzhong

It is reported that recently, China’s first indigenously designed wide and heavy plate rolling mill order contract was awarded to China Erzhong by Shougang Group.

As per report plate mill is the major project for Shougang in its relocation process and has great significance for the development of Shougang Group. After the completion of the equipments, it will play an important role in adjusting Shougang’s steel industrial structure and improving the steel products quality.

The signing of this contract broke the monopoly that such equipments were all long designed by foreign countries, and speed up the realization of the own country localization of China’s major technology and equipments.

Chinese HDG export price still increasing

It is reported that hot dipped galvanized coil price are still on the rise in China. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7600 per tonne, 0.5mm material by private steel mills at CNY 7950 per tonne up by CNY 300 per tonne and CNY 200 per tonne respectively from last week

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

As per report there are few export offers on the market since most steel mills are asked to produce HDG for building temporary houses for people in earthquake hit area. In general, the range is from USD 1060 per tonne to USD 1160 per tonne FOB for 1.0mm HDG. Quotation for 0.5mm HDG Z120 is at about USD 1240 per tonne FOB. A tier two steel maker in north China has concluded a deal at about USD 1070 per tonne FOB for DX51D/SGCC 1.0mm HDG, June production and July shipment. There is an extra of USD 100 per tonne for 0.5mm to 0.54mm material respectively.

Some steel makers told Mysteel that Chinese HDG price is expected to remain strong in June as their production will be affected for at least two to three months.

Bekaert and Ansteel to build steel cord plant in China

Reuters reported that Belgian steel cord and wire manufacturer Bekaert and China's Anshan Iron and Steel Group Corp would build a steel cord plant in China for EUR 150 million.

Bekaert and Ansteel announced last month that they had formed a strategic partnership, but did not disclose a specific project.

The companies said "The first phase is scheduled to enter production in 2009 and involves a capital investment of EUR 40 million."

The report added that the 50/50 joint venture will be located in the Shuangqiao district within the Chongqing municipality in central China.

2nd iron ore shipment from FMG heading for TangShan Steel

It is reported that the second iron ore shipment, totaling some 170,000 tonnes is on the way to China's Tangshan Steel and is expected to reach the Chinese client on June 8th 2008

Based on the supply agreement made last May between Tangshan Steel and FMG, the annul iron ore tonnage contracted will be increased gradually year on year to up to 20 million tonnes. As scheduled, FMG will start shipments to the Chinese mill as of 2008.

Mr Andrew Forrest chairman of FMG said that they will continue to meet the demand of Chinese steelmakers with reasonable prices and stable supply.

As per report a carrier loaded with 170,000 tonnes iron ore from FMG set off from Port Healand of Australia May 18th 2008 and were unloaded May 29th 2008 at Baosteel Majishan Harbor. According to the agreement signed between Baosteel and FMG in February 2007, the iron ore producer will provide up to 20 million tonnes resources to Baosteel annually for ten years given the ever growing capacity of FMG.

(Sourced from MySteel.net)

Jigang commissions new coil center

It is reported that China's Jinan Iron & Steel has commissioned its first stripping line and cutting line at the new coil center.

As per report China's Jinan Iron & Steel is capable to produce hot rolled coils of 3mm to 12mm thick and up to 2,200mm wide for customers in machinery and shipbuilding sectors.

Jinan Iron & Steel is still engaging in the construction of two shearing lines and one flame cutting machine at the Weifang plant, which will work for its CRC, HDG, pre-painted steel and plate. These lines are scheduled to be started in next year.

Linggang purchases group assets for CNY 19.75 million

Linggang announced that the company and its shareholder Lingyuan Iron and Steel Group have signed stock transfer agreement.

The company purchased 100% stock right of Linggang Dalian Steel Distribution Company, Linggang Jinzhou Steel Distribution Company, and 60% stock right of Beijing Lingyuan Materials Supply and Marketing Company which are under Lingyuan Iron and Steel Group by CNY 19.753 million.

The released added that the four companies that planed to be purchased will mainly sell Linggang Stock’s products, the intention of acquisition is to standardize the company’s operations, reduce the relevancy transaction, improve the company’s sales system.

Shahepu County to build seamless pipe base

It is reported that Shahepu County, adjacent to two expressways and an airport, plans to build the largest seamless pipe base in northeastern China with an annual production value of CNY 10 billion this year.

The county plans to build 60 seamless pipe projects within this year, 12 of which have been approved, each with a capacity of 150,000- tonnes per year to 200,000 tonnes per year. It created an annual production value of CNY 5 billion from seamless pipe industry in 2007.

Seamless steel pipe for the transportation of water, LNG and oil has become increasingly popular for its corrosion resistant property amid rising demand on liquid energy because of a shortage of solid energy, secretary of the party committee of the county Yangming has told to reporters.

HDG and PPGI price update for China

Boxing
0.35mm galvanized sheet made by Hengtong is quoted at CNY 7750 per tonne
0.4mm galvanized sheet is quoted at CNY 7650 per tonne
0.5mm galvanized sheet is quoted at CNY 7300 per tonne
1.0mm galvanized sheet is quoted at CNY 6950 per tonne.

Shanghai
1.0mm galvanized sheet made by Anben Group prevails at CNY 7600 per tonne up by CNY 50 per tonne to CNY 100 per tonne
0.5mm galvanized sheet made by private makers at CNY 7950 per tonne up by CNY 100 per tonne
0.5mm color-coated sheet made by Baosteel is quoted at CNY 9400 per tonne to CNY 9450 per tonne.

Beijing
1.0mm galvanized sheet made by Anben Group is priced at CNY 7350 per tonne up by CNY 50 per tonne
0.5mm galvanized sheet made by private makers is quoted at CNY 7760 per tonne up by CNY 60 per tonne
0.476 color coated sheet made by private makers is quoted at CNY 8300 per tonne.

(Sourced from MySteel.net)

Qingdao Steel produces 250,000 tonnes steel products in May

It is reported that Shandong based Qingdao Iron & Steel Group produced nearly 300,000 tonnes of sintered ore, over 240,000 tonnes of pig iron, 246,000 tonnes of crude steel and 258,000 tonnes of steel products in May of which high tech and high value added steel products amount to over 210,000 tonnes.

As per report Qingdao Iron & Steel Group achieved record financial performance in May by adjusting product mix and improving internal productivity.

Qingdao Iron & Steel Group has donated CNY 14.85 million to build anti quake schools for the disaster-hit Sichuan province.

Chinese steel mills cautious on further export price increase

It is reported that steel export prices have been kept at high level for most part of May and there is no great increase recently. Most Chinese steel makers dare not raise prices substantially again since transactions have been softening.

Prevailing export quotations for commercial 14mm to 30mm plate by tier two steel makers are at USD 1140 per tonne to USD 1160 per tonne FOB which compares with USD 1180 per tonne to USD 1220 per tonne FOB for similar products by tier one steel producers. But there is also much lower offer on the market.

An east China based trader tells Mysteel that "It is harder for us to concluded business now even at USD 1030 per tonne to USD 1050 per tonne FOB. Few people dare to take material at such high level. As a matter of fact, there is meaning to set price at USD 1140 per tonne FOB since there is few contract."

As per report steel makers are of the similar opinion and are weighing market situation before adjusting price for July or August shipment. Both steel mills and traders are worried that prices are peaking out in coming weeks.

In ship plate exports the tonnages are said to be going down due to less international demand and worry on possible price correction. Nanjing steel is offering ship plate at about USD 180 per tonne to USD 1290 per tonne FOB as base and has yet to announce its new price. While Tianjin steel has also shot up price for 16mm to 30mm ship plate to USD 1250 per tonne FOB.

Shandong based steel mill tells Mysteel that it has raised its ship plate export price by USD 50 per tonne and the latest level is between USD 1320 per tonne to USD 1340 per tonne FOB.

(Sourced from MySteel.net)

Scrap price continue rising on tight supply

Shihua Financial Information reported that domestic scrap price continues strong upward momentum lately and analysts believe the uptrend would extend due to tight availability and rising global scrap price.

Scrap market posts overall upswings with latest mainstream offer price goes at CNY 3950 per tonne to CNY 4080 per tonne for charging quality scrap in Jiangsu and CNY 3850 per tonne to CNY 3950 per tonne for heavy scrap in Jiangsu and Shandong.

Mainstream transaction price for heavy scrap prevails at
1. Jiangx transaction price prevails at CNY 4000 per tonne to CNY 4100 per tonne
2. Hebei transaction price prevails at CNY 3850 per tonne to CNY 4000 per tonne
3. Hunan transaction price prevails at CNY 3900 per tonne to CNY 4000 per tonne
4. Guangdong and Hubei transaction price prevails at CNY 3950 per tonne to CNY 4100 per tonne
5. Henan transaction price prevails at CNY 3850 per tonne to CNY 3980 per tonne
6. Liaoning transaction price prevails at CNY 3700 per tonne to CNY 3850 per tonne

Mainstream offer price reaches CNY 3600 per tonne to CNY 3830 per tonne for quality premium scrap in Jilin and CNY 3500 per tonne to CNY 3620 per tonne for premium scrap in Heilongjiang. Heavy scrap price was offered at CNY 3450 per tonne to CNY 3600 per tonne in Northwest and CNY 3850 per tonne to CNY 3900 per tonne in Chongqing.

Purchase prices offered by Guizhou Steel posts at CNY 3780 per tonne for medium scrap, CNY 3680 per tonne for small scrap and CNY 3580 per tonne for gradeless. And mainstream offer price stands at CNY 3650 per tonne to CNY 3750 per tonne for medium scrap in Liupangshui. Local steelmakers report tight availability.

Tight scrap availability in domestic market has been lasting for a period and is one of the reasons behind the continuous price rise lately. The condition is more severe in Southwest regions due to the strained transport resulted from quake, and local prices move higher following the overall upswings in domestic market.

(Sourced from MySteel.net)

Baogang supplies 3,300 tonnes of steel for Olympic Games

It is reported that Baogang has accumulatively supplied 3,300 tonnes of steel for construction of buildings for Olympic Games including seamless pipes and cold rolled galvanized sheets. Seamless pipe is the strategic product of Baogang and most of the seamless pipes supplied by Baogang are low alloy steel pipes to upholding the steel structure.

As per report in 2003, Baogang won a deal of 1,000 tonnes of seamless pipes for Beidaihe Soccer Training Center through tender. Meanwhile, the company’s pipe won fame for its stable quality and ready supply among the users, including Pingpang Gym in Beijing University and Wukesong Gym Center.

Cold rolling galvanizing line launched operation recently, the products from which are utilized to construct the ventilation channel of Water Cube for its corrosion resistance, smooth surface and so on. Water Cube has a collection of many high tech and new materials.

Chinese rebar and wire rod export prices see correction

It is reported that Chinese construction steel prices seem to have finished downward correction. 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 B30 per tonne recently. HRB335 and HRB400 16mm to 22mm rebar price are largely unchanged at CNY 5570 per tonne and CNY 5770 per tonne respectively.

Mysteel forecasts taking Shanghai price for HRB335 20mm rebar as benchmark it is expected to approach CNY 6000 per tonne if it could go past CNY 5500 per tonne. Otherwise, the downward corrections would continue.

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. That for rebar without boron is at USD 1100 per tonne FOB. Shanggang, Maanshan steel, Chengde steel are said to be exporting rebar with vanadium. While Rizhao steel is exporting rebar with manganese and most of them go to South Korea. As a matter of fact, rebar with manganese is regarded as alloyed bar and is not subject to 15% export tariff but enjoy 5% tax rebate.

Chinese plate export prices keep firm

It is reported that steel export prices have been kept at high level for most part of May and there is no great increase recently. Most Chinese steel makers dare not raise prices substantially again since transactions have been softening.

Prevailing export quotations for commercial 14mm to 30mm plate by tier two steel makers are at USD 1140 per tonne to USD 1160 per tonne FOB which compares with USD 1180 per tonne to USD 1220 per tonne FOB for similar products by tier one steel producers. But there is also much lower offer on the market.

An east China based trader tells Mysteel that "It is harder for us to concluded business now even at USD 1030 per tonne to USD 1050 per tonne FOB. Few people dare to take material at such high level. As a matter of fact, there is meaning to set price at USD 1140 per tonne FOB since there is few contract."

As per report steel makers are of the similar opinion and are weighing market situation before adjusting price for July or August shipment. Both steel mills and traders are worried that prices are peaking out in coming weeks.

It is also the case with ship plate exports. The tonnages are said to be going down due to less international demand and worry on possible price correction. Nanjing steel is offering ship plate at about USD 180 per tonne to USD 1290 per tonne FOB as base and has yet to announce its new price. While Tianjin steel has also shot up price for 16mm to 30mm ship plate to USD 1250 per tonne FOB.

(Sourced from MySteel.net)

US ITC to review AD on cast iron pipe fitting from China

It is reported that the US International Trade Commission voted to expedite its five year review concerning the antidumping duty order on imports of non malleable cast iron pipe fittings from China.

As a result of vote, the Commission will conduct an expedited review to determine whether revocation of the order concerning this product would be likely to lead to continuation or recurrence of material injury within a reasonably foreseeable time.

The Uruguay Round Agreements Act requires the Department of Commerce to revoke an antidumping or countervailing duty order, or terminate a suspension agreement after five years unless the Department of Commerce and the ITC determine that revoking the order or terminating the suspension agreement would be likely to lead to continuation or recurrence of dumping or subsidies and of material injury within a reasonably foreseeable time.

Chinese car sales in 5 months of 2008 up by 17% YoY

Xinhua reported that passenger car sales in China in the first five months of 2008 up by 17.41% YoY over the same period a year earlier.

According to the China Association of Automobile Manufacturers car sales reached 3.02 million units including 2.23 million sedans, 179,200 sport-utility vehicles and 93,200 multi utility vehicles in the period.

The report added that sales of passenger cars, SUV and MUV in May alone totaled 564,600 up by 16% MoM over the same month of 2007. The growth rate was quicker than April's 11%.

China Association of Automobile Manufacturers said auto sales in China were expected to exceed 10 million units this year which would represent a full year sales growth of 14%.

FDI into China in 4 months 2008 surges by 59%YoY

Xinhua quoted China Ministry of Commerce said that China saw USD 35.02 billion worth of foreign direct investment utilized in the first four months up by 59.32%YoY from the same period of 2008.

The report added that the number of newly approved foreign-funded enterprises, however, shrank 23.15% to 9,490 in the January to April period.

Mr Zhang Hanya director of the Research Institute of Investment with the National Development and Reform Commission said the latest figure showed that China remained a favorite destination for overseas investment, especially big investors like the top 500 multinationals, which saw the market potential as the most important priority.

He said that China's new policies on foreign investment and rising labor costs may have deterred the establishment of some small scale foreign funded companies, but large companies could have accelerated their investment in China recently to beat the appreciation of the yuan.

China's FDI utilization has been rising steadily this year, despite a fall in the number of newly approved foreign funded enterprises, since a raft of new measures were introduced to regulate foreign investment.

ArcelorMittal Temirtau plans 10 million tonne capacity

Reuters reported that ArcelorMittal is planning to double annual steel output in Kazakhstan to 10 million tonnes through a USD 4 billion expansion project.

Mr Frank Pannier CEO of ArcelorMittal Temirtau said that the project would include a new steel plant, mine upgrades and additional power generation facilities.

Mr Pannier said that "This would be done in a timeframe of 5 to 8 years. The target is to make Temirtau self sufficient in terms of coal, iron ore and energy."

He added that the new plant, to be built from scratch, will allow his company to sell new steel products such as profile widely used in construction and rails.

He added that ArcelorMittal and the Kazakh government hope to complete their joint study of the project by the end of 2008.

ArcelorMittal expects to sell about a third of its increased output on the Kazakh market and export the rest to neighboring countries. It would also spend USD 1.3 billion within 5 years, including USD 265 million in 2008, on improving safety at its facilities.

Mirininvest Libala to buy Alphasteel

Thomson Financial reported that administrators of collapsed Welsh steel maker Alphasteel Limited have agreed to sell the company to a Russian steel investor. The administrators, Begbies Traynor South) LLP said that they have agreed on terms to sell the Newport-based plant and some of its assets to Libala Ltd, a company linked to Moscow-based investment vehicle Mirinvest.

Alphasteel employed 420 people before it was put under administration and had sales of about 150 million pounds in its last reported financial year.

As per the information on its website its has following facilities
1. One continuous bar mill - 500,000 tonnes year
2. One strand wire rod mill - 300,000 tonnes per year
3. One Hot Strip Mill - 1,600,000 tonnes
4. Two 100 tonnes electric arc furnace
5. One 100 tonnes ladle furnace
6. Two 4-strand billet caster - For billet 120x120 – 130x130 mm
7. One 1-strand slab caster - For slab 170 x 800 – 1550 mm

Mr Chris Morris joint administrator said that the sale to Libala should yield significant returns for creditors. He said that "It is our understanding that Libala intends to re commence production at the plant in due course and that some of the jobs will be restored."

Alphasteel Limited entered into administration on 20 December 2007 and Mr Simon Robert Thomas and Mr Christopher Morris of Begbies Traynor (South) LLP were appointed as Joint Administrators. By order of the court dated 7 May 2008, Mr Mark Fry and Mr David Hudson were appointed as Joint Administrators in place of Simon Thomas

Ukraine steel output in 5 months 2008 up by 4.2% YoY

According to ugmk.info, Ukrainian steelmakers increased crude steel output to a total of 18.6 million tonnes up by 4.2% YoY in January to May 2008 while rolled steel production reached 15.8 million tonnes up by 5.3% YoY.

The highest crude steel growth in YoY terms was posted by Alchevsk Steelworks which is up by 37.4% YoY and EMZ Group up by 13.9% YoY. ArcelorMittal Krviy Rog was the only plant that decreased steel output in January to February down by 5.3% YoY.

Crude Steel

In million tonnes

Rolled Steel

In million tonnes

(Sourced from Millennium Capital)

TMK to supply pipes for Turkmenistan-China pipeline

TMK announced that it was awarded a large diameter pipe supply contract for the Malay-Bagtiyarlik pipeline in Turkmenistan. The pipes are intended for the Turkmen part of the Turkmenistan-China gas pipeline; the 188 kilometer long Malay-Bagtiyarlik pipeline.

The release said that TMK is to supply 28,000 tonnes of 1420mm, 18 meter long, 0 pipes with 15.7 mm wall thickness. The pipes will be produced at the Volzhsky pipe mill and supplied with external anti corrosive coating, effectively increasing pipe strength, reliability and pipeline service life.

Shipments of pipes to Stroytransgaz, general contractor for the pipeline project will run from June to September 2008.

With a total length of 7,000 kilometer the Turkmenistan-China gas pipeline will stretch across Turkmenistan, Uzbekistan, Kazakhstan and China. The pipeline will span 188 kilometer in Turkmenistan, 530 kilometer in Uzbekistan, 1300 kilometer in Kazakhstan and over 4500 kilometer in China.

Ukrainian pig iron output in 5 months up by 4.4% YoY

According to ugmk.info Ukrainian pig iron output grew to 15.5 million tonnes up by 4.4% YoY

In million tonnes

(Sourced from Millennium Capital)

Gazprom and Naftogaz Ukrainy discuss gas supplies

Itar-Tass reported that Mr Alexei Miller CEO of Gazprom’s and the Mr Oleg Dubina chief of the administration board of Ukraine’s Naftogaz Ukrainy Company held a working meeting in Moscow recently.

Sources at Gazprom said “The two men discussed the current gas supplies to Ukraine and progress in the implementation of the bilateral agreement on the development of relations in the gas industry.”

Earlier Mr Valentin Zemlyansky deputy chief of Naftogaz Ukrainy’s public relations office said plans for and terms of gas supplies to Ukraine next year and in the longer term were to be discussed, too.

Earlier, the Ukrainian government instructed Naftogaz to conclude contracts with Gazprom for natural gas supplies and transit for a period of fifteen years. Dubina then said that direct purchases by Naftogaz from Gazprom, bypassing the current mediator RosUkrEnergo would be the optimal solution.

Naftogaz CEO said he would like too see a European price of gas for Ukraine only in five years’ time from now. For the transitional period the contract would set a fixed rate of indexing the price of gas, starting from the current level of USD 179.5 per 1,000 cubic meters. Last year Ukraine imported gas for USD 130 and in 2006 for USD 95 dollars. The transit tariff went up this year from USD 1.6 for 1,000 cubic meters per 100 kilometers to USD 1.7.

Rosneft studying oil refinery purchases in Asia and Europe

RIA Novosti cited Mr Sergei Bogdanchicov CEO of Rosneft while speaking at an annual meeting of company shareholders recently said that Rosneft is looking to increase its oil refining capacity in Asia and Europe.

He said that "We are carrying out such work in both the Asian and European markets. To enter the foreign market for filling stations only makes sense if we buy an oil refinery there, adding that otherwise the company could sustain financial losses.”

Mr Bogdanchikov said Rosneft presently exports about 60% of oil produced, but is trying to reduce this share. The company's strategy up to 2020 will see refining capacity double in Russia through the modernization of existing plants and the construction of a new refinery in the Far East.

He said that Rosneft's capitalization hit USD 129 billion as of May 30th 2008. He added that Rosneft considered further increases in its market value and also dividend growth a priority.

In 2007, Rosneft boosted oil output 25% YoY to 100.9 million tonnes.

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