June, 08 2008
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.
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.
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."
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.
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.
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.
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.
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.
GMR 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.
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
POSCO hopes for a miracle in May 2008 for Orissa project
BL reported that, when POSCO signed an agreement with the Orissa government in June 2005 for a 12 million tonne integrated steel plant, its officials were hopeful of commissioning 3 million tonnes in the first phase, between 2007 and 2010. But a message from Mr Soung sik Cho CMD of POSCO India, published in the May 2008, shows how the company has been waiting for various clearances for 3 years after inking the MoU.
Mr Cho said that "May is a month which tests our endurance. It signifies a long wait, amidst soaring temperature and sweltering heat, for the cool rains and lovely smell of wet earth. For our project also, this month is going to be one of patience, perseverance and enduring hope."
In his message, Mr Cho refers to the company’s wait for the state government’s re recommendation of its case to the centre for grant of prospecting license for iron ore mines, diversion of forest land for the steel plant site, clearance for water supply pipeline and acceptance of the benefits of the project by all the people in the proposed site area. He added that "Though it is a difficult month for us, I advise the prudent use of time for polishing future plans and systemization of all current process."
Out of the 4,004 acres required by POSCO for the steel plant, forest diversion clearance was required for 3,097 acres. State government has not been able to hand over any land to the company so far primarily due to opposition from the local people.
APTEL denies captive status to TATA Steel power plant
ET reported that Appellate Tribunal for Electricity Bench has dismissed a petition filed by steel major TATA Steel challenging an order of Jharkhand's electricity regulator JSERC turning down the company's request to grant status of captive power plant to its two power generating units.
TATA Steel, having 3 power generating units at Jojobera, had sought status of captive power unit for its two later plants of 240 MW that have come up in the same area. However, the tribunal rejected it be saying that as per the Electricity Rules, 2005 a power plant could qualify as captive power plant only if more than 26% ownership is held by the captive user and more than 50% of the production is consumed by it.
As per report, APTEL, headed by Justice Ms Manju Goel, observed that TATA Steel failed to prove that its two units were sole captive units of the company and consumed more than 50% power produced by it. She said that "We have found that on facts TATA Steel failed to establish that units were captive generating units of TATA Steel nor can it be said that the two units are captive units for steel works of the TATA Steel."
The APTEL bench said that "The appellant claim that the entire generation of the two units are consumed by them in the steel plant. But TATA Steel does no hold 26% share in JAPCOL or TPCL or in the two units in the question."
The tribunal further observed that although JAPCOL was owned by TPCL but TSL do not have any share in that. The company claimed before the tribunal that electricity produced by the two plants were primarily and essentially used for the activities associated with manufacture of steel at TATA Steel and to supply in the residential colonies of the plant.
Earlier also Jharkhand State Electric Regulatory Commission had rejected TATA Steel's application on the same ground that the two power plants did not fulfill the criteria of captive power plant under the Electricity Act, 2003.
Permionics bags INR 25.89 crore order from RINL
Permionics Membranes Private Limited has bagged an order worth INR 25.89 crore from Rashtriya Ispat Nigam Limited sewage treatment plant & associated reverse osmosis membranes system to produce recycle water quality at its Vizag Steel Plant.
Mr Satyajai Mayor director of Permionics Membranes said that ''Permionicns is a leader in the membranes segment with a strong presence in India and abroad this gives us the unique advantage of combining our expertise. This project is the fifth order to be executed by us on a turnkey basis and is scheduled to be commissioned by September 2009.”
Mr Mayor said that in April 2008, Permionics had bagged its first order worth INR 36.75 crore to supply waste water treatment & recycling plant for the Vizag Steel Plant. This repeat order is a testimonial to Permionics' commitment to quality and innovation.
Permionics has recently supplied reverse osmosis membranes system at Barmer in Rajasthan for Cairn India's offshore oil field through Larsen & Toubro Limited's ECC division.
Indian government policies may hamper USD100 billion investments in steel – Mr Jindal
Mr Sajjan Jindal vice CMD of JSW Steel, after taking over as president of ASSCHAM, said that India runs the risk of losing USD 100 billion investment in steel if the government persists with restrictions like export duty.
He said that "We are talking about USD 100 billion over the next 5 to 6 years to be invested in the steel industry. Now if the government of India levies duties on exports, all these investments will not come."
Mr Jindal said that imposition of up to 15% export duty on steel may bring apprehensions in the mind of global investors who have announced their mega plans for India. He added that "One has to talk to POSCO and ArcelorMittal and ask if there is an export duty and restrictions, will they still be investing."
He said that as of now, both domestic and foreign steel players have signed 193 MoUs with states for setting up new units with a total planned capacity of around 243 million tonnes and a total proposed investment of over INR 514,000 crore. He added that "While the ASSOCHAM would try and convince the investors about the temporary nature of the measures arising out of 45 month high inflation, "investors fear that even if the government withdraws the duty today, what is the guarantee that tomorrow it will not put it at 50%."
Mr Jindal said that rise in raw material prices, strong demand in international and domestic markets are some of reasons for the sharp increase in rates. If the fears expressed by ASSOCHAM come true, the ambitious targets of 290 million tonne capacity by 2020 will be difficult to achieve.
No SPV for Bangalore Metro Rail project – Planning Commission
The Planning Commission has decided that the Bangalore Metro Rail Corporation should finance the project with grants from the government instead of going through the 50:50 equity model that involved setting up a special purpose vehicle for the funds.
The project, estimated to cost INR 6,395 crore, has a debt equity ratio of 70:30. As per the current funding model, the centre and the Karnataka government are to contribute 15% each to the equity portion. For the debt portion, 45% will be taken care of by the BMRC in the form of borrowing from the Japanese Bank for International Cooperation and the remaining 25% will be raised through subordinate debts. The JBIC is providing the loan at an interest rate of 8.75% per annum.
According to the MoU signed with JBIC, the Japanese bank will give a loan of INR 1,795 crore for the project under a special rate of interest. While the bank charges an interest rate of mere 1.3% per annum the project will have to bear a rate of 3.6%.
The proposed metro project envisages a 33 kilometers elevated and underground rail network with 32 stations in the first phase. The proposed gauge will be standard gauge, unlike the broad gauge in the Delhi Metro network. The BMRC, executors of the project, has the Delhi metro as its consultant.
Construction work, which was scheduled to start in 2005, was delayed due to change in the coalition government in the state and continuous debate over the feasibility of the project.
Gujarat plans incentives for shipbuilding to boost industry
BL reported that Gujarat government has made provisions in the new industrial policy to boost shipbuilding and ship repair industry in the state. As per report the state government is planning to offer special incentives for the sector with a vision to augment and enhance efficiency in ports related services and make Gujarat a logistic hub.
The government task force has made recommendations to offer capital and interest subsidies for shipbuilding industry in the state and also offering land at concessional prices.
Reimbursement of stamp duty and 5% interest subsidy for 5 years is also on the cards. The task force has recommended a greater focus on customer's needs, support door to door inter modal transport, stimulate mode shift, increase efficiency apart from innovativeness and exploitation of technology and utilization of newest information and communication technology
A senior government official said that "Shipbuilding is a very high risk and high cost industry. So the government is mulling capital subsidy." According to him special provisions will be made for capacity building in ship building and institutes and training centers will be encouraged by giving concessional land.
While the state government is on its way to develop 10 ports, it is essential to make its ancillary services at par with the international standards. Gujarat has been emerging as a major shipbuilding destination. At the global investors' summit last year, logistics and shipping companies in the port sector had signed MoUs worth INR 13,500 crore. The state, which aims to account for 50% of the nation's shipbuilding activity, has decided to come up with a shipbuilding policy.
Road transporters to go on strike from July 1st 2008 on service tax
Exim News Service reported that, besides the staggering 10% hike in diesel and petrol prices, the truck owners face the dismal prospect of shelling out a higher service tax and to oppose the service tax hike, truckers have warned of an indefinite strike from July 1st 2008 unless the finance ministry rescinds the proposal.
Mr Deepak Sachdeva president of Delhi Goods Transport United Front said that "We are planning to go on an indefinite strike from July 1st 2008 and have given notice to the government and informed our member associations. The service tax department has served recovery notices on truckers, raising tax incidence from 3.09% to 12.5% which is not acceptable."
He said that All India Motor Transport Congress, to which his association is affiliated, would now decide the course of action to be taken. He added that already AIMTC has hiked the road freight rates by a hefty 15% to 20%.
Road freight rate inevitable – TCI
Exim News Service reported that, reacting to the fuel price hike, Mr Vineet Agarwal ED of Transport Corporation of India said that the hike of INR 3 in diesel price will have an impact on the freight cost.
He said that "Fuel constitutes 50% to 60% of the total cost therefore, this time it will be difficult for logistics companies to absorb the hike. The cumulative increase of INR 4 translates into a 5% increase in freight rates."
Mr Agarwal said that "However, due to seasonal low demand, as of now, the freight rates will witness an increase of 3% to 4%. As 70% to 75% of our customers operate on a contractual basis, the hike will be passed on to them immediately unlike retail clients, who are likely to feel the pinch only after one or two months."
He further added that "We do not expect any fall in overall demand due to existence of alternative modes such as rail freight, which has not witnessed any hike. However, the shift to rail freight will be marginal due to the absence of last mile connectivity as in the case of road freight."
Indian government approves Kolkata metro extension
Exim News Service reported that union cabinet has given its approval for the implementation of the East West Metro Corridor project in Kolkata covering a length of 13.77 kilometers on standard gauge. The cabinet also gave its approval for the constitution of a special purpose vehicle, high power committee, empowered committee, empowered group of ministers and the legal framework for the corridor project.
The project begins at Howrah Station to the Salt Lake Sector V involving a cost of INR 4,676 crore and is to be executed through a JV company that is to be formed by the union government and the state government.
The SPV will be constituted for successful execution of the project as well as its operation and maintenance. Such an SPV will be a JV of the government of West Bengal and the Union government. Equity participation of the Bengal government and the union government will be on 50:50 basis.
The objective of the project is to provide the much needed additional transport infrastructure to Kolkata. The project will be completed in six and half years in 2 stages, the first stage of 5.77 kilometers elevated section to be commissioned in five and half years.
Maruti Suzuki emerges as fourth most reputed auto carmaker
PTI reported that Maruti Suzuki has emerged as the fourth most reputed among auto companies in the world, even ahead of its parent Suzuki Motor Company of Japan.
According to the "Global 200: The World's Best Corporate Reputations" list, compiled by US based Reputation Institute, Maruti Suzuki India is fourth amongst the automakers list, headed by Toyota. With a 'Global Pulse' score of 74.38, Maruti Suzuki leaves behind its parent Suzuki Motor Company, which scored 70.44 and came 8th amongst the automobile manufacturers.
In the overall best corporate reputed rankings, Maruti Suzuki occupied the 77th position, while Suzuki Motor Company is ranked 139.
Remarkably, Maruti Suzuki also leaves behind other renowned global auto brands. Only Toyota, Honda and China FAW Group Corporation are ahead of it. In the overall reputed rankings, Honda is in 39th position and China FAW Group Corporation occupies the 41st position. Germany's BMW emerged 5th best amongst auto companies and 88th overall with a score of 73.90. Daimler AG was 6th and 99th overall with a score of 72.85. France's Puegeot emerged 7th best among the auto companies and 110th overall with a score of 72.32. The 9th position amongst the auto companies is taken by Renault of France with a score of 70.26, an overall reputed rank of 142. Volkswagen of Germany was the 10th most reputed amongst the vehicle manufacturers and 162nd overall with a score of 69.64.
Gontermann Peipers 2007-08 turnover up by 18% YoY
It is reported that the board of directors of Gontermann Peipers India Limited has recommended a dividend of 15% on equity shares and 6% on cumulative preference shares of the company for the fiscal 2007-08.
It recorded a turnover of INR 173.99 crore in 2007-08, up by 18% YoY as against INR 147.74 crore in 2006-07. The profit before tax in 2007-08 stood at INR 24.03 crore as against INR 20.26 crore in 2006-07. The profit after tax in 2007-08 was INR 15.11 crore up by 24% YoY as against INR 12.21 crore recorded in 2006-07.
Gontermann Peipers is engaged in the manufacture of high precision rolls for hot rolling mills, cold rolling mills and the capital goods industry.
Charkop Bandra Mankhurd Metro Rail to be taken on PPP basis
It is reported that Mumbai Metropolitan Region Development Authority's Charkop Bandra Mankhurd Metro Rail project will be implemented on a public private partnership basis.
Earlier, the government had planned to develop the remaining metro lines on its own. The first corridor linking the eastern suburb of Ghatkopar to western Versova is already under construction and is being built by the Mumbai Metro One on the PPP model.
The Mumbai Metro One was formed by a consortium led by Reliance Energy Limited.
NHPC may sign pact with J&K for power projects
BS reported that National Hydroelectric Power Corporation Limited is likely to sign an agreement with Jammu & Kashmir Power Development Corporation for harnessing 2,100 MW of power from Chenab basin in the state at an estimated cost of INR 15,000 crore.
As per report, NHPC and J&K Power Development Corporation are negotiating a MoU for setting up power projects with capacity to generate 2,100 MW power in Chenab basin in the state.
Mr Jairam Ramesh union minister of state for power said that the draft for the MoU has been prepared and work on the projects would be started by the proposed JV company immediately after it has been signed by the two sides. The JV would construct 3 projects in Chenab basin. He added that "I hope that the MoU will be signed by the end of June 2008."
Mr Ramesh said 1,200 MW Pakaldul power project would be the biggest among the projects to be constructed under the JV between NHPC and JKPDC. The other 2 projects are to be set up at Kiru and Kawar in Chenab basin and would have almost identical generation capacities. The total cost of the projects would be around INR 15,000 to INR 16,000 crore. Once completed, the projects would benefit J&K immensely as the State is guaranteed to get a minimum of 62% of power generated from these projects.
POSCO hopes for a miracle in May 2008 for Orissa project
BL reported that, when POSCO signed an agreement with the Orissa government in June 2005 for a 12 million tonne integrated steel plant, its officials were hopeful of commissioning 3 million tonnes in the first phase, between 2007 and 2010. But a message from Mr Soung sik Cho CMD of POSCO India, published in the May 2008, shows how the company has been waiting for various clearances for 3 years after inking the MoU.
Mr Cho said that "May is a month which tests our endurance. It signifies a long wait, amidst soaring temperature and sweltering heat, for the cool rains and lovely smell of wet earth. For our project also, this month is going to be one of patience, perseverance and enduring hope."
In his message, Mr Cho refers to the company’s wait for the state government’s re recommendation of its case to the centre for grant of prospecting license for iron ore mines, diversion of forest land for the steel plant site, clearance for water supply pipeline and acceptance of the benefits of the project by all the people in the proposed site area. He added that "Though it is a difficult month for us, I advise the prudent use of time for polishing future plans and systemization of all current process."
Out of the 4,004 acres required by POSCO for the steel plant, forest diversion clearance was required for 3,097 acres. State government has not been able to hand over any land to the company so far primarily due to opposition from the local people.
APTEL denies captive status to TATA Steel power plant
ET reported that Appellate Tribunal for Electricity Bench has dismissed a petition filed by steel major TATA Steel challenging an order of Jharkhand's electricity regulator JSERC turning down the company's request to grant status of captive power plant to its two power generating units.
TATA Steel, having 3 power generating units at Jojobera, had sought status of captive power unit for its two later plants of 240 MW that have come up in the same area. However, the tribunal rejected it be saying that as per the Electricity Rules, 2005 a power plant could qualify as captive power plant only if more than 26% ownership is held by the captive user and more than 50% of the production is consumed by it.
As per report, APTEL, headed by Justice Ms Manju Goel, observed that TATA Steel failed to prove that its two units were sole captive units of the company and consumed more than 50% power produced by it. She said that "We have found that on facts TATA Steel failed to establish that units were captive generating units of TATA Steel nor can it be said that the two units are captive units for steel works of the TATA Steel."
The APTEL bench said that "The appellant claim that the entire generation of the two units are consumed by them in the steel plant. But TATA Steel does no hold 26% share in JAPCOL or TPCL or in the two units in the question."
The tribunal further observed that although JAPCOL was owned by TPCL but TSL do not have any share in that. The company claimed before the tribunal that electricity produced by the two plants were primarily and essentially used for the activities associated with manufacture of steel at TATA Steel and to supply in the residential colonies of the plant.
Earlier also Jharkhand State Electric Regulatory Commission had rejected TATA Steel's application on the same ground that the two power plants did not fulfill the criteria of captive power plant under the Electricity Act, 2003.
Permionics bags INR 25.89 crore order from RINL
Permionics Membranes Private Limited has bagged an order worth INR 25.89 crore from Rashtriya Ispat Nigam Limited sewage treatment plant & associated reverse osmosis membranes system to produce recycle water quality at its Vizag Steel Plant.
Mr Satyajai Mayor director of Permionics Membranes said that ''Permionicns is a leader in the membranes segment with a strong presence in India and abroad this gives us the unique advantage of combining our expertise. This project is the fifth order to be executed by us on a turnkey basis and is scheduled to be commissioned by September 2009.”
Mr Mayor said that in April 2008, Permionics had bagged its first order worth INR 36.75 crore to supply waste water treatment & recycling plant for the Vizag Steel Plant. This repeat order is a testimonial to Permionics' commitment to quality and innovation.
Permionics has recently supplied reverse osmosis membranes system at Barmer in Rajasthan for Cairn India's offshore oil field through Larsen & Toubro Limited's ECC division.
Indian government policies may hamper USD100 billion investments in steel – Mr Jindal
Mr Sajjan Jindal vice CMD of JSW Steel, after taking over as president of ASSCHAM, said that India runs the risk of losing USD 100 billion investment in steel if the government persists with restrictions like export duty.
He said that "We are talking about USD 100 billion over the next 5 to 6 years to be invested in the steel industry. Now if the government of India levies duties on exports, all these investments will not come."
Mr Jindal said that imposition of up to 15% export duty on steel may bring apprehensions in the mind of global investors who have announced their mega plans for India. He added that "One has to talk to POSCO and ArcelorMittal and ask if there is an export duty and restrictions, will they still be investing."
He said that as of now, both domestic and foreign steel players have signed 193 MoUs with states for setting up new units with a total planned capacity of around 243 million tonnes and a total proposed investment of over INR 514,000 crore. He added that "While the ASSOCHAM would try and convince the investors about the temporary nature of the measures arising out of 45 month high inflation, "investors fear that even if the government withdraws the duty today, what is the guarantee that tomorrow it will not put it at 50%."
Mr Jindal said that rise in raw material prices, strong demand in international and domestic markets are some of reasons for the sharp increase in rates. If the fears expressed by ASSOCHAM come true, the ambitious targets of 290 million tonne capacity by 2020 will be difficult to achieve.
No SPV for Bangalore Metro Rail project – Planning Commission
The Planning Commission has decided that the Bangalore Metro Rail Corporation should finance the project with grants from the government instead of going through the 50:50 equity model that involved setting up a special purpose vehicle for the funds.
The project, estimated to cost INR 6,395 crore, has a debt equity ratio of 70:30. As per the current funding model, the centre and the Karnataka government are to contribute 15% each to the equity portion. For the debt portion, 45% will be taken care of by the BMRC in the form of borrowing from the Japanese Bank for International Cooperation and the remaining 25% will be raised through subordinate debts. The JBIC is providing the loan at an interest rate of 8.75% per annum.
According to the MoU signed with JBIC, the Japanese bank will give a loan of INR 1,795 crore for the project under a special rate of interest. While the bank charges an interest rate of mere 1.3% per annum the project will have to bear a rate of 3.6%.
The proposed metro project envisages a 33 kilometers elevated and underground rail network with 32 stations in the first phase. The proposed gauge will be standard gauge, unlike the broad gauge in the Delhi Metro network. The BMRC, executors of the project, has the Delhi metro as its consultant.
Construction work, which was scheduled to start in 2005, was delayed due to change in the coalition government in the state and continuous debate over the feasibility of the project.
Gujarat plans incentives for shipbuilding to boost industry
BL reported that Gujarat government has made provisions in the new industrial policy to boost shipbuilding and ship repair industry in the state. As per report the state government is planning to offer special incentives for the sector with a vision to augment and enhance efficiency in ports related services and make Gujarat a logistic hub.
The government task force has made recommendations to offer capital and interest subsidies for shipbuilding industry in the state and also offering land at concessional prices.
Reimbursement of stamp duty and 5% interest subsidy for 5 years is also on the cards. The task force has recommended a greater focus on customer's needs, support door to door inter modal transport, stimulate mode shift, increase efficiency apart from innovativeness and exploitation of technology and utilization of newest information and communication technology
A senior government official said that "Shipbuilding is a very high risk and high cost industry. So the government is mulling capital subsidy." According to him special provisions will be made for capacity building in ship building and institutes and training centers will be encouraged by giving concessional land.
While the state government is on its way to develop 10 ports, it is essential to make its ancillary services at par with the international standards. Gujarat has been emerging as a major shipbuilding destination. At the global investors' summit last year, logistics and shipping companies in the port sector had signed MoUs worth INR 13,500 crore. The state, which aims to account for 50% of the nation's shipbuilding activity, has decided to come up with a shipbuilding policy.
Road transporters to go on strike from July 1st 2008 on service tax
Exim News Service reported that, besides the staggering 10% hike in diesel and petrol prices, the truck owners face the dismal prospect of shelling out a higher service tax and to oppose the service tax hike, truckers have warned of an indefinite strike from July 1st 2008 unless the finance ministry rescinds the proposal.
Mr Deepak Sachdeva president of Delhi Goods Transport United Front said that "We are planning to go on an indefinite strike from July 1st 2008 and have given notice to the government and informed our member associations. The service tax department has served recovery notices on truckers, raising tax incidence from 3.09% to 12.5% which is not acceptable."
He said that All India Motor Transport Congress, to which his association is affiliated, would now decide the course of action to be taken. He added that already AIMTC has hiked the road freight rates by a hefty 15% to 20%.
Road freight rate inevitable – TCI
Exim News Service reported that, reacting to the fuel price hike, Mr Vineet Agarwal ED of Transport Corporation of India said that the hike of INR 3 in diesel price will have an impact on the freight cost.
He said that "Fuel constitutes 50% to 60% of the total cost therefore, this time it will be difficult for logistics companies to absorb the hike. The cumulative increase of INR 4 translates into a 5% increase in freight rates."
Mr Agarwal said that "However, due to seasonal low demand, as of now, the freight rates will witness an increase of 3% to 4%. As 70% to 75% of our customers operate on a contractual basis, the hike will be passed on to them immediately unlike retail clients, who are likely to feel the pinch only after one or two months."
He further added that "We do not expect any fall in overall demand due to existence of alternative modes such as rail freight, which has not witnessed any hike. However, the shift to rail freight will be marginal due to the absence of last mile connectivity as in the case of road freight."
Indian government approves Kolkata metro extension
Exim News Service reported that union cabinet has given its approval for the implementation of the East West Metro Corridor project in Kolkata covering a length of 13.77 kilometers on standard gauge. The cabinet also gave its approval for the constitution of a special purpose vehicle, high power committee, empowered committee, empowered group of ministers and the legal framework for the corridor project.
The project begins at Howrah Station to the Salt Lake Sector V involving a cost of INR 4,676 crore and is to be executed through a JV company that is to be formed by the union government and the state government.
The SPV will be constituted for successful execution of the project as well as its operation and maintenance. Such an SPV will be a JV of the government of West Bengal and the Union government. Equity participation of the Bengal government and the union government will be on 50:50 basis.
The objective of the project is to provide the much needed additional transport infrastructure to Kolkata. The project will be completed in six and half years in 2 stages, the first stage of 5.77 kilometers elevated section to be commissioned in five and half years.
Maruti Suzuki emerges as fourth most reputed auto carmaker
PTI reported that Maruti Suzuki has emerged as the fourth most reputed among auto companies in the world, even ahead of its parent Suzuki Motor Company of Japan.
According to the "Global 200: The World's Best Corporate Reputations" list, compiled by US based Reputation Institute, Maruti Suzuki India is fourth amongst the automakers list, headed by Toyota. With a 'Global Pulse' score of 74.38, Maruti Suzuki leaves behind its parent Suzuki Motor Company, which scored 70.44 and came 8th amongst the automobile manufacturers.
In the overall best corporate reputed rankings, Maruti Suzuki occupied the 77th position, while Suzuki Motor Company is ranked 139.
Remarkably, Maruti Suzuki also leaves behind other renowned global auto brands. Only Toyota, Honda and China FAW Group Corporation are ahead of it. In the overall reputed rankings, Honda is in 39th position and China FAW Group Corporation occupies the 41st position. Germany's BMW emerged 5th best amongst auto companies and 88th overall with a score of 73.90. Daimler AG was 6th and 99th overall with a score of 72.85. France's Puegeot emerged 7th best among the auto companies and 110th overall with a score of 72.32. The 9th position amongst the auto companies is taken by Renault of France with a score of 70.26, an overall reputed rank of 142. Volkswagen of Germany was the 10th most reputed amongst the vehicle manufacturers and 162nd overall with a score of 69.64.
Gontermann Peipers 2007-08 turnover up by 18% YoY
It is reported that the board of directors of Gontermann Peipers India Limited has recommended a dividend of 15% on equity shares and 6% on cumulative preference shares of the company for the fiscal 2007-08.
It recorded a turnover of INR 173.99 crore in 2007-08, up by 18% YoY as against INR 147.74 crore in 2006-07. The profit before tax in 2007-08 stood at INR 24.03 crore as against INR 20.26 crore in 2006-07. The profit after tax in 2007-08 was INR 15.11 crore up by 24% YoY as against INR 12.21 crore recorded in 2006-07.
Gontermann Peipers is engaged in the manufacture of high precision rolls for hot rolling mills, cold rolling mills and the capital goods industry.
Charkop Bandra Mankhurd Metro Rail to be taken on PPP basis
It is reported that Mumbai Metropolitan Region Development Authority's Charkop Bandra Mankhurd Metro Rail project will be implemented on a public private partnership basis.
Earlier, the government had planned to develop the remaining metro lines on its own. The first corridor linking the eastern suburb of Ghatkopar to western Versova is already under construction and is being built by the Mumbai Metro One on the PPP model.
The Mumbai Metro One was formed by a consortium led by Reliance Energy Limited.
NHPC may sign pact with J&K for power projects
BS reported that National Hydroelectric Power Corporation Limited is likely to sign an agreement with Jammu & Kashmir Power Development Corporation for harnessing 2,100 MW of power from Chenab basin in the state at an estimated cost of INR 15,000 crore.
As per report, NHPC and J&K Power Development Corporation are negotiating a MoU for setting up power projects with capacity to generate 2,100 MW power in Chenab basin in the state.
Mr Jairam Ramesh union minister of state for power said that the draft for the MoU has been prepared and work on the projects would be started by the proposed JV company immediately after it has been signed by the two sides. The JV would construct 3 projects in Chenab basin. He added that "I hope that the MoU will be signed by the end of June 2008."
Mr Ramesh said 1,200 MW Pakaldul power project would be the biggest among the projects to be constructed under the JV between NHPC and JKPDC. The other 2 projects are to be set up at Kiru and Kawar in Chenab basin and would have almost identical generation capacities. The total cost of the projects would be around INR 15,000 to INR 16,000 crore. Once completed, the projects would benefit J&K immensely as the State is guaranteed to get a minimum of 62% of power generated from these projects.
ArcelorMittal South Africa opposes subsidy for proposed steelmaker
Bloomberg reported that ArcelorMittal South Africa Ltd, Africa's largest steelmaker, is opposesing state subsidies for a rival plant the government wants to help establish and questioned the viability of the venture.
Ms Nonkululeko Nyembezi-Heita CEO of the Vanderbijlpark, South Africa based Company said that “The playing fields would have to be level and that means no subsidies. One just needs to question the viability of such an initiative.''
The state run Industrial Development Corp said Chinese and US companies are interested in operating the steel mill. The SA government began studying last year at locations in South Africa and neighboring Mozambique. The government wants the plant which may cost at least USD 2 billion to spur competition in a bid to lower prices and boost manufacturing output.
ArcelorMittal South Africa is fighting a record penalty after antitrust regulators found it guilty of excessive pricing last year and had supplied 68% of the 5.81 million tonnes of steel sold in South Africa in 2007.
Vietnam government urged to ban re export of steel
Bernama reported that the HCM City People’s Committee petitioned the Government to ban re exports of steel to avoid a crisis in the domestic construction market.
The committee also suggested that the government ask the Ministries of Construction, Industry and Trade, Transport and Viet Nam Steel Association to help solve the current pile up of imported goods at ports.
A meeting to discuss the matter was attended by authorities of the State Bank of Viet Nam HCM city branch, the Customs Department, the Ministry of Industry and Trade and businesses chaired by Ms Nguyen Thi Hong deputy chairwoman of the HCM City People’s Committee held recently.
According to the Customs Department till now 1,244,179 tonnes of steel have been imported to HCM City worth USD 632.5 million of which 236,789 tonnes of steel have been re exported recently to other countries valued at USD 190.4 million.
Scrap prices continue their ascent in Europe and Turkey
It is reported that the price of HMS 1/2 (80:20) scrap in Germany has surged by 110% to USD 655 per tonne in May, continuing its upward trend.
According to a trader, it is expected that the highest price yet, will appear in the next half year, as demand for scrap remains strong.
Global market price of scrap remains firm, as the export price of mixed scrap 80:20 from Europe to Turkey has reached USD 750 per tonne CFR.
(Sourced from YIEH.com)
ArcelorMittal Frýdek Místek to increase electrical steel production
CTK reported that Czech based ArcelorMittal Frydek Mistek formerly know as Valcovny plechu, a producer of cold rolled steel products, sold 143,000 tonnes of sheet metal in 2007 as compared with 138,000 tonnes in 2006 and sale of special transformer sheets increased by 6,500 tonnes to more than 21,600 tonnes.
Mr Tomas Mischinger CEO and board chairman of ArcelorMittal Frydek Mistek said that “This year it will invest over CZK 890 million of the earlier announced CZK 1 billion investment it pledged to the European Commission.”
He said that “New lines will make it possible to raise the quality of transformer sheets very considerably and we expect to reach the level of 46,000 tonnes next year.”
Construction of steel plant begins in Quang Binh
VNA reported that construction of a steel plant began in Quang Phu commune in central Quang Binh province on June 3rd 2008.
The plant has a total investment capital of VND 1 trillion (USD 62.5 million) and will be built in two phases over 18 months.
The report added that in the first phase, the plant will be capable of producing 250,000 tonnes of products a year, including 231,600 tonnes of steel ingots. The second phase will help bring the plant’s capacity to 500,000 tonnes a year with automation technology.
The plant will mainly use iron ore from mines in Quang Binh province and its neighboring province Ha Tinh and the rest will be imported.
Indonesian tin shipments in May down by 9% MoM
According to Indonesia Ministry of Trade figures released, the volume of tin checked for export from Indonesia in May 2008 was 7,150 tonnes. The May ready for export figure valued at USD 160.8 million is down by 9% as compared to the corresponding April volume of 7,858 tonnes.
The released added that the cumulative total volume reported for the first five months of the year is 40,959 tonnes while the 12 month rolling total is 106,516 tonnes.
Japanese rebar exports in April
It is reported that Japanese exports of rebar totaled 69,126 tonnes in April 2008 and the price on average was JPY 72,883 per tonne.
South Korea, the top destination for Japanese rebar, imported 52,007 tonnes and the average price was JPY 73,868 per tonne.
US ranked the second with 14,726 tonne, and the price on average was at JPY 68,851 per tonne.
Guam imported 1,828 tonnes of rebar from Japan and the average price was JPY 80,301 per tonne.
(Sourced from YIEH.com)
South Korean ship exports in April jump up by 20% YoY
A South Korea’s government report showed that South Korea's exports of ships jumped over 20% during the January to April 2008 period on increased global demand.
According to the report compiled by the Korea Customs Service, South Korean shipbuilders exported a combined USD 10.3 billion worth of ships during the January to April 2008 period up by 22.8% YoY.
The report showed that the amount accounts for 7.5% of the nation's total exports of USD 137.2 billion during the cited period. Exports of cargo ships amounted to USD 9.76 billion, while those of others including drill ships totaled USD 550 million.
According to industry sources, South Korea has received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world.
Peruvian tin production dips in April 2008
Peru’s official figures released by the energy and mines ministry at the start of the week showed that Peru’s mine production of tin fell slightly in April 2008, in contrast to growth in production of most other base metals.
April production of tin in concentrate was 3,164 tonnes down by 3.3% YoY compared to April 2007. All of Peru’s tin production comes from Minsur’s San Rafael mine. Cumulative output in the first four months of this year was 12,839 tonnes down by 0.5% lower than in January to April 2007.
(Sourced from ITRI.co.uk)
Tenaris confirms dividend payment for 2007
Tenaris SA in its annual general shareholders meeting approved the consolidated financial statements and the report and accounts of the Company for the year ended December 31st 2007, as well as the payment of an annual dividend of USD 0.38 per share or approximately USD 450 million.
Tenaris in a statement said that “The amount approved includes the interim dividend previously paid on November 22nd 2007, in the amount of USD 0.13 per share.”
Tenaris added that “It will pay the balance of the annual dividend amounting to USD 0.25 per share or approximately USD 295 million, on June 26th 2008 with a record date of June 25th 2008 and an ex dividend date of June 23rd 2008.”
South Korean builders preparing to lobby against steel prices
It is reported that a group of Korean construction materials buyers under the Construction Association of Korea held a meeting on May 29th 2008 to decide how to persuade the South Korean government to help curb rising construction steel prices, especially those of rebar.
SKW Metallurgie included in SDAX
Deutsche Börse AG has informed that SKW Stahl Metallurgie Holding AG shares will be included in the SDAX with effect from June 23rd 2008. The SDAX comprises of 50 small cap companies in the Frankfurt Stock Exchange’s Prime Standard.
According to Deutsche Börse AG’s statistics, SKW Metallurgie ranked 101st in terms of its market capitalization at the end of May 2008 and 85th in terms of its trading volume, thus clearly meeting the criteria for inclusion in the small cap index.
As a result, the company can continue the on track operating growth that it has enjoyed since going public on December 1st 2006 also on the capital market.
At its General Meeting in München, SKW Metallurgie forecast record breaking figures for revenues and earnings in fiscal year 2008. In addition, the General Meeting also confirmed the first-time distribution of a dividend of EUR 0.50 per share for fiscal year 2007.
SKW Metallurgie is the global market leader for chemical additives for hot metal desulphurization and for cored wire used in secondary metallurgy. The Group’s products enable steel makers to efficiently manufacture high quality steel products.
Maritime pollution now a crime in Europe
Exim News Services reported that the European Union’s highest court has upheld a law that makes maritime pollution a crime. This is expected to increase pressure on shipping companies to control waste and avoid spills and other accidents.
The report added that the Court here rejected arguments by the shipping groups that the EU legislation is invalid in the light of the international law covering use of the sea.
The EU law on ship source pollution which provides for penalties in the event in particular of accidental discharges remains valid a 13 judge panel of the court ruled.
According to industry groups, shipping companies face the greater risk of being held criminally liable for polluting under the EU rule, even for accidents caused by foul weather.
The EU law was introduced partly in response to oil spills caused by the sinking of tankers off Spain’s North West coast in 2002 and France’s Atlantic coast in 1999.
World oil output to reach 95 million barrel per day by 2020
According to Mr Christophe de Margerie CEO of Total SA, worldwide oil production will stabilize at about 95 million barrel per day before 2020, including extra heavy crude from Venezuela and Canada.
Mr De Margerie said it was production and not reserves that are failing, production limited by both geological and geopolitical uncertainties that are slowing down the development of new capacities.”
Mr Jean Jacques Mosconi Total's head of strategy and economic intelligence said the 116 million barrel per day supply assumption by 2030 given out by the International Energy Agency is too optimistic.
Mr Mosconi said the world's remaining known oil reserves amount to 1,000 billion barrel as much as has already been produced with 60% of conventional reserves concentrated in the Middle East. He said that there are 200 billion barrels still to be discovered and potentially 300 billion barrel more reserves if recovery rates are increased to 37% from the current 32%. To gradually bring these oil resources into production, more cutting edge technology will be required as well as higher investments.
Total's energy vision is that by 2030 the share of fossil energies in the energy mix would still be about 75%. While in 2005 energy fossils accounted for 81% of the mix of which 35% was for oil and 21% for gas by 2030 oil will account for 30% and gas for 22%. Coal, nuclear, hydro, biofuels, biomass outside biofuels and renewables will account for the rest.
Siemens positive on Q3 turnover - CFO
Reuters quoted Mr Joe Kaeser the finance chief of German industrial giant Siemens as saying that he is relatively pleased with turnover in the third quarter of the company's current fiscal year ending September 30th 2008.
Talking to reporters in Frankfurt, Mr Joe Kaeser said that the automation unit A & D was one of the most important value drivers. He said that there was increased interest in the corporate telecoms network unit SEN and competition about it had also intensified.
Mr Kaeser said that his company was also looking tentatively at disposing of cordless phone unit SHC if a reliable partner could be found but did not feel under pressure to act there.
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.
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."
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.
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.
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.
UAE GOVERNMENT not to interfere to curb rebar prices
Emirates Business reported that UAE government has ruled out any intervention in the markets to curb the price of reinforced steel, which is on an upward spiral.
Mr Mohammed Abdul Aziz Al Shehi undersecretary of the ministry of economy said that the ministry will not move to fix the price of a tonne of steel, which currently ranges from AED 5,400 to AED 5,700 according to the country of origin. He added that the steel price hike is not a local or regional occurrence but a global phenomenon.
Mr Al Shehi said that "We will not fix the prices since they change each day and price fixing will lead to an absence of steel from the markets, which would be very damaging to the real estate and infrastructure projects underway in all emirates."
He added that the shortage of cement will disappear in a few days and the ministry will this week announce a list of 30 suppliers of cement nationwide who are selling at AED 18 a bag. Moreover, cement is sold for AED 16 a bag at cement factories and there is no need for contractors to buy at higher prices since availability is not a constraint at the factories.
Dubai to issue revised code of safety standard for construction
Emirates Business reported that construction companies in Dubai have been warned that they will face severe penalties if they do not meet new safety requirements.
As per report, Dubai Municipality will soon issue a revised code of safety standards, which will be binding on all construction projects in the emirate. The code specifies stringent penalties and calls for the formation of a safety management committee at each construction site prior to the start of work.
Mr Ahmed Khalil Abdul Karim safety engineer at Dubai Municipality's building department said that the new code had been approved and is being printed. He added that "Within 2 weeks it will be distributed to all contractors, consultants and subcontractors in Dubai. The code specifies the minimum safety measures and mechanisms that need to be implemented. It is left to the contractors to implement any additional measures."
Mr Mohammed Hamed El Oupy manager of health, safety, environment & quality at Mirdif Security and Safety Consultants said that the code incorporates the UK and US standards. He added that "Unlike the old system the new code will be binding on all developments, irrespective of whether it comes under Tecom, Jafza or Dubai Civil Aviation."
Mr Oupy said that "In future safety managers will not be solely responsible for accidents at construction sites, it will be the responsibility of the whole committee. The safety program prepared by the committee before any construction work starts will have to be approved and signed by the consultants and the project managers."
Airbus identifies Abu Dhabi as potential site
Bahrain Tribune reported that commercial aircraft maker Airbus has identified Abu Dhabi as a potential site for future Airbus manufacturing facilities.
Mr Tom Enders CEO of Airbus said that Abu Dhabi is under consideration as it worked to cut costs and move operations outside of Europe. He added that "We do consider Abu Dhabi. This is something under discussion."
He said that Abu Dhabi has identified high technology manufacturing, particularly within the aerospace sector, as a strategic opportunity to diversify its economy away from its dependence on the hydrocarbon industry. He added that "Plans include the creation of a new port and industrial free zone, as well as billions of dollars in new infrastructure projects."
Abu Dhabi's aerospace plans involve a multibillion dollar plant to produce carbon fiber, a lightweight and durable material increasingly used as a component in aeroplanes by Boeing and Airbus. The plant could be built as early as 2010 in the emirate.
Mr Enders said that "Among that obviously is off shoring major parts of the work in manufacturing and also in engineering, because cost is a very serious problem for us at current exchange rates."
Dubal 2007 aluminum output up by 12.6% YoY
Reuters reported that Dubai Aluminium has posted output of 889,548 tonnes in 2007 up by 12.6% YoY, spurred by robust domestic and global demand.
Mr Khalid Buhumaid GM of Dubal said that "The most recent expansions of the company's production facilities have contributed to the increased output. We have also continued to see strong demand in the first quarter of 2008 and accordingly our output was up by 5% YoY."
Mr Buhumaid said that "In 2007, 22% of our total sales volume was consumed in the Middle East. This region is currently Dubal's third largest market, after Asia and Europe." He said Dubal is also expected to ship 100,000 tonnes of aluminum to Japan to meet demand for the material. About 52% of the shipment will be billet, while high purity aluminum will account for about 25%.
In 2006 Dubal produced 789,341 tonnes of extrusion billets and foundry alloys, used mainly in construction, transport and electrical industries. Dubal is expected to increase its production capacity to more than 950,000 tonnes by the end of 2008.
Bahrain cement crisis ends as Saudi supplies arrives
Gulf Daily News reported that a cement shortage that threatened to plunge Bahrain's construction industry into crisis ended recently as trucks carrying cement from Saudi Arabia started to arrive through the King Fahad Causeway after several days of hold ups.
Dr Esam Fakhro chairman of Bahrain Chamber of Commerce & Industry confirmed the flow of cement had resumed following the intervention of high level officials.
He said that "The chamber will continue its efforts to co ordinate with officials in both countries to reach a lasting solution. The efforts being executed will no doubt result in permanently excluding Bahrain from any such procedures that we have been facing in the past few days."
Custom officials said that the first trucks were allowed to cross the border into Bahrain at around 10 AM local time. They added that more than 3,000 tonnes of cement also arrived in Bahrain by sea to further ease the strain.
It may be noted that full supplies of cement have been disrupted, creating a crisis in Bahrain's construction industry, which requires between 8,000 and 10,000 tonnes of cement a day.
DP World gets approval for London Gateway project
Dubai based port operator DP World has received the final seal of approval to build a USD 3 billion shipping port and logistics park on the banks of the River Thames in southeast England.
The London Gateway project, which DP World inherited following its acquisition of P&O in 2006, involves the development of an 1800 acre form oil refinery in Essex into a deep sea port and the biggest logistics park in the United Kingdom. Construction work is scheduled to commence later this year, following a harbor empowerment order from the department of transport.
DP World's plans include a 2300 meter long container quay with a fully developed capacity of 3.5 million standard container units a year. In addition, the logistics park will offer 9.5 million square feet for the distribution, manufacturing and high tech sectors.
Mr Sultan Ahmed Bin Sulayem chairman of DP World said that "DP World is planning to invest approximately USD 3 billion to develop London Gateway over a 10 to 15 year timeframe. This represents our long term commitment to bringing benefits and value to our customers and to the UK economy. We are very pleased with the government's approval of the harbor empowerment order, which is a significant milestone for the project."
Mr Simon Moore CEO of London Gateway said that "This is an historic day for the shipping industry and the economy as a whole. We will be the UK's first major port for more than 25 years. London Gateway will be a port centric logistics platform of a size and scale unique in the UK. Our customers will be able to cut costs from their supply chains, increase efficiency and reduce their environmental footprints."
Final approval of the project follows a long battle for P&O to develop the site, including a public inquiry and a number of amendments to the original plans, in addition to measures to cope with extra road traffic.
Gazprom to invest USD 200 million in Iran Armenia gas pipeline
Armenian news agency Arminfo quoted Mr Armen Movsisyan minister of energy & natural resources of Armenia as saying that by the end of 2009, the Russian gas giant Gazprom will invest more than USD 200 million in the construction of the Iran Armenia gas pipeline.
Mr Movsisyan said that after the completion of construction work, Armenia will have access to another alternative gas pipeline along with the current one from Russia and based on the prices that are offered, will decide which of them it should use. He added that currently, Armenia pays Russian Gazprom USD 110 per 1,000 cubic meters of gas, however, the price will change from January 1st 2009.
Mr Movsisyan added that it is planned to build a new nuclear block in Armenia in 2016 when the existing energy block of the nuclear plant expires. Even though Armenian legislation allows foreign investors to own 100% of stocks, the government intends to control half of the project stocks. He added that "If the government does not take part in the project, then this project has no real significance for us. However, the operation of the current nuclear block will not be suspended until the new one is built."
UAE GOVERNMENT not to interfere to curb rebar prices
Emirates Business reported that UAE government has ruled out any intervention in the markets to curb the price of reinforced steel, which is on an upward spiral.
Mr Mohammed Abdul Aziz Al Shehi undersecretary of the ministry of economy said that the ministry will not move to fix the price of a tonne of steel, which currently ranges from AED 5,400 to AED 5,700 according to the country of origin. He added that the steel price hike is not a local or regional occurrence but a global phenomenon.
Mr Al Shehi said that "We will not fix the prices since they change each day and price fixing will lead to an absence of steel from the markets, which would be very damaging to the real estate and infrastructure projects underway in all emirates."
He added that the shortage of cement will disappear in a few days and the ministry will this week announce a list of 30 suppliers of cement nationwide who are selling at AED 18 a bag. Moreover, cement is sold for AED 16 a bag at cement factories and there is no need for contractors to buy at higher prices since availability is not a constraint at the factories.
Dubai to issue revised code of safety standard for construction
Emirates Business reported that construction companies in Dubai have been warned that they will face severe penalties if they do not meet new safety requirements.
As per report, Dubai Municipality will soon issue a revised code of safety standards, which will be binding on all construction projects in the emirate. The code specifies stringent penalties and calls for the formation of a safety management committee at each construction site prior to the start of work.
Mr Ahmed Khalil Abdul Karim safety engineer at Dubai Municipality's building department said that the new code had been approved and is being printed. He added that "Within 2 weeks it will be distributed to all contractors, consultants and subcontractors in Dubai. The code specifies the minimum safety measures and mechanisms that need to be implemented. It is left to the contractors to implement any additional measures."
Mr Mohammed Hamed El Oupy manager of health, safety, environment & quality at Mirdif Security and Safety Consultants said that the code incorporates the UK and US standards. He added that "Unlike the old system the new code will be binding on all developments, irrespective of whether it comes under Tecom, Jafza or Dubai Civil Aviation."
Mr Oupy said that "In future safety managers will not be solely responsible for accidents at construction sites, it will be the responsibility of the whole committee. The safety program prepared by the committee before any construction work starts will have to be approved and signed by the consultants and the project managers."
Airbus identifies Abu Dhabi as potential site
Bahrain Tribune reported that commercial aircraft maker Airbus has identified Abu Dhabi as a potential site for future Airbus manufacturing facilities.
Mr Tom Enders CEO of Airbus said that Abu Dhabi is under consideration as it worked to cut costs and move operations outside of Europe. He added that "We do consider Abu Dhabi. This is something under discussion."
He said that Abu Dhabi has identified high technology manufacturing, particularly within the aerospace sector, as a strategic opportunity to diversify its economy away from its dependence on the hydrocarbon industry. He added that "Plans include the creation of a new port and industrial free zone, as well as billions of dollars in new infrastructure projects."
Abu Dhabi's aerospace plans involve a multibillion dollar plant to produce carbon fiber, a lightweight and durable material increasingly used as a component in aeroplanes by Boeing and Airbus. The plant could be built as early as 2010 in the emirate.
Mr Enders said that "Among that obviously is off shoring major parts of the work in manufacturing and also in engineering, because cost is a very serious problem for us at current exchange rates."
Dubal 2007 aluminum output up by 12.6% YoY
Reuters reported that Dubai Aluminium has posted output of 889,548 tonnes in 2007 up by 12.6% YoY, spurred by robust domestic and global demand.
Mr Khalid Buhumaid GM of Dubal said that "The most recent expansions of the company's production facilities have contributed to the increased output. We have also continued to see strong demand in the first quarter of 2008 and accordingly our output was up by 5% YoY."
Mr Buhumaid said that "In 2007, 22% of our total sales volume was consumed in the Middle East. This region is currently Dubal's third largest market, after Asia and Europe." He said Dubal is also expected to ship 100,000 tonnes of aluminum to Japan to meet demand for the material. About 52% of the shipment will be billet, while high purity aluminum will account for about 25%.
In 2006 Dubal produced 789,341 tonnes of extrusion billets and foundry alloys, used mainly in construction, transport and electrical industries. Dubal is expected to increase its production capacity to more than 950,000 tonnes by the end of 2008.
Bahrain cement crisis ends as Saudi supplies arrives
Gulf Daily News reported that a cement shortage that threatened to plunge Bahrain's construction industry into crisis ended recently as trucks carrying cement from Saudi Arabia started to arrive through the King Fahad Causeway after several days of hold ups.
Dr Esam Fakhro chairman of Bahrain Chamber of Commerce & Industry confirmed the flow of cement had resumed following the intervention of high level officials.
He said that "The chamber will continue its efforts to co ordinate with officials in both countries to reach a lasting solution. The efforts being executed will no doubt result in permanently excluding Bahrain from any such procedures that we have been facing in the past few days."
Custom officials said that the first trucks were allowed to cross the border into Bahrain at around 10 AM local time. They added that more than 3,000 tonnes of cement also arrived in Bahrain by sea to further ease the strain.
It may be noted that full supplies of cement have been disrupted, creating a crisis in Bahrain's construction industry, which requires between 8,000 and 10,000 tonnes of cement a day.
DP World gets approval for London Gateway project
Dubai based port operator DP World has received the final seal of approval to build a USD 3 billion shipping port and logistics park on the banks of the River Thames in southeast England.
The London Gateway project, which DP World inherited following its acquisition of P&O in 2006, involves the development of an 1800 acre form oil refinery in Essex into a deep sea port and the biggest logistics park in the United Kingdom. Construction work is scheduled to commence later this year, following a harbor empowerment order from the department of transport.
DP World's plans include a 2300 meter long container quay with a fully developed capacity of 3.5 million standard container units a year. In addition, the logistics park will offer 9.5 million square feet for the distribution, manufacturing and high tech sectors.
Mr Sultan Ahmed Bin Sulayem chairman of DP World said that "DP World is planning to invest approximately USD 3 billion to develop London Gateway over a 10 to 15 year timeframe. This represents our long term commitment to bringing benefits and value to our customers and to the UK economy. We are very pleased with the government's approval of the harbor empowerment order, which is a significant milestone for the project."
Mr Simon Moore CEO of London Gateway said that "This is an historic day for the shipping industry and the economy as a whole. We will be the UK's first major port for more than 25 years. London Gateway will be a port centric logistics platform of a size and scale unique in the UK. Our customers will be able to cut costs from their supply chains, increase efficiency and reduce their environmental footprints."
Final approval of the project follows a long battle for P&O to develop the site, including a public inquiry and a number of amendments to the original plans, in addition to measures to cope with extra road traffic.
Gazprom to invest USD 200 million in Iran Armenia gas pipeline
Armenian news agency Arminfo quoted Mr Armen Movsisyan minister of energy & natural resources of Armenia as saying that by the end of 2009, the Russian gas giant Gazprom will invest more than USD 200 million in the construction of the Iran Armenia gas pipeline.
Mr Movsisyan said that after the completion of construction work, Armenia will have access to another alternative gas pipeline along with the current one from Russia and based on the prices that are offered, will decide which of them it should use. He added that currently, Armenia pays Russian Gazprom USD 110 per 1,000 cubic meters of gas, however, the price will change from January 1st 2009.
Mr Movsisyan added that it is planned to build a new nuclear block in Armenia in 2016 when the existing energy block of the nuclear plant expires. Even though Armenian legislation allows foreign investors to own 100% of stocks, the government intends to control half of the project stocks. He added that "If the government does not take part in the project, then this project has no real significance for us. However, the operation of the current nuclear block will not be suspended until the new one is built."
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 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)
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.
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 grade less. 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)
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.
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 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%.
Ukraine abolishes quota for export of steel products to EU
Ukrainian News Agency reported that Ukraine Cabinet of Ministers has abolished the quota for export of steel products to the European Union. It removed semi finished nonferrous metal products and goods produced from such metals from the list of products that are subject to export quotas.
The report added that the Cabinet of Ministers made the relevant amendments to its resolution No 1411 of December 29th 2007, entitled "On Approving the List of Products that are Subject to Export and Import Licensing and the Quota Volumes for 2008."
The European Commission abolished the quota for importation of steel products from Ukraine in late May. It abolished the quota because of Ukraine's accession to the World Trade Organization.
The Cabinet of Ministers initially set the quota of 1,353,000 tonnes for export of steel products from Ukraine to member countries of the European Union in 2008.
Illich looses USD 20 million in May due to hryvnia appreciation
Ukrainian Journal reported that Ukraine’s second biggest producer of steel, Illich Steel has lost an estimated USD 20 million in May on the sharp appreciation of the local currency the hryvnia, against the US dollar.
The figure highlights the adverse affect of the hryvnia’s 4% appreciation against the dollar overnight on May 21st 2008 and its affect on Ukraine’s steel sector, the country’s biggest earner of hard currency.
Evraz Vitkovice increases 2007 profit to CZK 3.2 billion
Czech News Agency cited Mr Jaromir Krisica a spokesman of Vitkovice Steel, the third largest Czech steel maker, as saying that it made a pre tax profit worth a record CZK 3.183 billion in 2007 after CZK 3.1 billion a year earlier. Mr Krisica said that net profit fell to CZK 2.128 billion in 2007 from CZK 2.347 billion in 2006.
Mr Vladimir Bail CEO of Evraz Vitkovice said that the inclusion of the Czech firm into the Russian group had a positive influence from the production point of view. He said that "There are considerable synergy effects in the group and it meant a significant boost to our position on the market."
Total production reached 891,200 tonnes in 2007, an increase of 95,000 tonnes YoY. The rolling mill produced 896,112 tonnes in 2007 after 848,294 tonnes in 2006. Output of cut shapes added 2,957 tonnes to 28,374 tonnes.
Evraz Vitkovice Steel is a unit of Russian steel and mining company Evraz Group. Evraz Vitkovice Steel was established in 2007 through a merger of company Vitkovice Steel and its only shareholder ABA Assets. It became the only owner of the Nikom foundry at end-2007.
Norilsk-RUSAL merger inevitable – Mr Prokhorov
Reuters recently cited billionaire Mr Mikhail Prokhorov as saying that a merger between Russian metals giants Norilsk Nickel and United Company RUSAL is inevitable.
Mr Prokhorov, who sold his stake in Norilsk to UC RUSAL this year, told reporters at the St Petersburg Economic Forum that he also saw no obstacles to a three way merger including Metalloinvest, the iron and steel firm founded by billionaire Mr Alisher Usmanov.
Mr Prokhorov also said he had no plans to raise his stake in UC RUSAL beyond his current 14% which he acquired in part exchange for his one quarter stake in Norilsk.
NLMK gets recertification of IS 14001
NLMK announced that it has successfully passed a recertification audit of its Environment Management System by TÜV CERT, the certification authority, for compliance with the requirements of ISO 14001-2004.
The release added that the scope of the audit included the inspection of the company’s production activity and of its technical service operations, as well as current documents on environment management system.
The auditors have confirmed that NLMK meets its international obligations in terms of environmental protection. Over the course of the audit a positive evaluation was given to the company’s environmental activity in 2007 as well as its environment oriented programs which are to be implemented this year.
The release said that “Based on the recertification audit results, it has been decided to extend by three years the NLMK’s certificate of compliance with the requirements of ISO 14001-2004.”
Stroytransgaz to begin construction of Skovorodino oil pumping station
It is reported that Stroytransgaz has begun constructing the Skovorodino pumping station along the route of the Eastern Siberia-Pacific Ocean main oil pipeline.
The new station is located at the terminus of the first line of the ESPO pipeline system, not far from the village of Bolshoi Never in the Skovorodinsk region of Amur Oblast.
As per report in its first stage, the pumping station will be able to handle 30 million tonnes of oil per year. When the ESPO project is fully elaborated, the Skovorodino facility will have capacity to pump 80 million tonnes of oil per year. Operating press at the station will be 10 million per annum. Its tank farm will contain six reservoirs each having capacity to store 50,000 cubic meter of oil and three reservoirs each having capacity to store 5,000 cubic meter of oil.
Giprotruboprovod and its Ufa branch and InzhGeo developed plans and specifications for the Skovorodino oil pumping station.
NLMK AGM elects new board
It is reported that shareholders of Novolipetsk Steel voted at their annual general meeting on June 6th 2008 to elect the board members and chairman.
NLMK shareholders have elected nine members to the board of directors
1. Mr Vladimir Lisin – Chairman
2. Mr Oleg Bagrin
3. Mr Bruno Bolfo - independent director
4. Mr Igor Fyodorov
5. Mr Nikolai Gagarin
6. Mr Dmitry Gindin - independent director
7. Mr Karl Doering - independent director
8. Mr Randolph Reynolds - independent director
9. Mr Vladimir Skorokhodov
Thus, NLMK currently has four independent directors.
OMK Gubahinsky Coke update for May 2008
It is reported that OAO Gubahinsky Coke has summed up the results of production activities in May 2008.
In May 2008, it produced 49,000 gross tonnes of coke almost 9,000 tonnes more than in May 2007. In the five months of this year, production amounted to 219,500 coke tonnes which exceeded the figure for the same period last year by 28%.
Gazprom to build gas pipelines in Nigeria
RIA Novosti reported that Russian energy giant Gazprom and the Nigerian National Petroleum Corporation agreed to jointly build a unified pipeline system in Nigeria.
Mr Abubakar Yaradua director of NNPC's and Mr Alexei Miller CEO of Gazprom's discussed issues of bilateral cooperation including the establishment of a joint venture for producing oil and gas and utilizing associated gas, and the construction of electricity generating facilities.
Nigerian National Petroleum Corporation also proposed Gazprom participates in the construction of a gas pipeline from Africa through the Sahara desert and Mediterranean Sea to Europe.
Gazprom said "The Nigerian party expressed interest in Gazprom's taking part as a partner in the construction project for a trans-Saharan gas pipeline."
Nigeria is one of the largest hydrocarbon producers in Africa with confirmed deposits of natural gas over 5.2 trillion cubic meters and annual production of liquefied gas of 22 million tonnes.
Tractor plants buys stake in German foundry Luitpoldhutte
RIA Novosti Russia's Tractor Plants has clinched a deal to buy a 74% stake in the German foundry Luitpoldhutte AG from the auto component producer Farina. Tractor Plants financed the deal itself, but is not disclosing the sum.
Mr Mikhail Bolotin president of Tractor Plants said the purchase will enable Russian producers to improve the quality of their products in a short time, letting such Russian engineering brands as CHETRA occupy a worthy place among world brands.
Tractor Plants produces industrial, military and agricultural equipment, and is among the world's top ten heavy machine building giants. Luitpoldhutte is the company's second foreign asset. Its first was Denmark's Silvatec Skovmaskiner AS which it acquired in 2006.
NLMK to pay 2007 dividends at 2006 level
It is reported that shareholders of Novolipetsk Steel voted at their annual general meeting on June 6th 2008 to pay dividends for 2007.
NLMK’s shareholders approved the final dividend for 2007 of RUB 3.0 per ordinary share. Taking into account the interim dividend of RUR 1.5 per ordinary share already paid for the first six months of 2007, the AGM approved the payment of an additional RUB 1.5 per ordinary share.
Payment of the dividend in relation to the ordinary shares will be made before September 3rd 2007. NLMK will transfer funds for dividend payments on Global Depositary Shares to the depositary bank on July 25th 2008.