SAIL DSP 2006-7 net up by 62% YoY

ET reported that Steel Authority of India Limited’s Durgapur Steel Plant has continued its march towards growth and profitability by posting a four figure net profit of INR 1,009 crores in 2007-08 fiscal, up by 62% YoY as against INR 624 crores in 2006-07 fiscal.

Since 2006-07, performances have improved to unprecedented levels. In the just concluded 2007-08 fiscal, DSP recorded all time best performances in all major areas of production. It has achieved best ever levels of production, techno economics and value added products both in 2006-07 and 2007-08 fiscals.

Mr V Shyamsundar MD of DSP said that "We have planned to achieve further substantial growth in production of hot metal, crude steel and saleable steel over the previous year."

DSP took strategic initiatives to increase value added products in its product basket which resulted in best ever production of special steels at 580,000 tonnes, a quantum jump of over 60% YoY over corresponding figures of 2006-07. It envisages growth, improved product mix and adoption of cost effective technologies has already got the approval of the SAIL board and requisite environmental clearances.

CMI Group completes acquisition of Flat Products Equipments

Cockerill Maintenance & Ingenierie of Belgium announced that it has completed acquisition of controlling shares of Mumbai based Flat Products Equipments (I) Ltd and NT Strips & Automation Pvt. Ltd on June 25th 2008.

The Purchase Agreement signed on January 14th 2008 gave the Belgium Company approximately 55% of Flat Products Equipments and 100% of NT Strips & Automation shares. Subsequent to that an open offer was made to the existing public shareholders of the FPE (I) Ltd to acquire upto 20% of the fully diluted voting capital at the same price as was offered to the promoter shareholders i.e. at a price of INR 517 per fully paid up equity share payable in cash in accordance with the SEBI regulations.

Flat Products Equipments (I) Ltd designs and manufactures Rolling Mills, Processing Lines and other Auxiliary Equipments for Rolling and Metal Processing Industry worldwide. FPE employs 720 people located in the Engineering Office in Mumbai and in the two workshops at Taloja and Silvassa near Mumbai.

Mr. Jean-Marc Kohlgruber president of CMI Industry said that “With the completion of the acquisition process, we are now looking at world as a market to supply complete Cold Rolling and Galvanizing Solutions to our customers. and it is a matter of extreme satisfaction that even when the process of acquisition was on customers continued to increase order position at the FPE (I) Ltd, with all manufacturing workshops being booked for next twelve months from domestic and international customer”.

FPE has post acquisition by CMI inducted Mr. Jean-Marc Kohlgruber president of CMI Industry, as the Chairman of the Board of Directors and Mr. Yves Honhon, CFO of CMI Group, as additional Director. Mr. T.R. Mehta has resigned as Chairman & Managing Director of the company, though he will continue to be associated with it, as a Director on the Board. Mr. Rob Johnson has been appointed as the Managing Director and Mr. Jean Gourp as Chief Operating Officer of the FPE (I) Ltd.

The CMI Group is an Industrial Group specializing in Engineering and Maintenance in the Energy, Defense and Industry sectors. Since its shareholders change in 2002, the CMI Group has been significantly increasing its order records, to reach closed to 900 millions in 2007. CMI employs more then 2700 people worldwide. Specific to steel engineering business, CMI is mainly present in Western Europe, Russia, China, USA and Brasil and provides steel makers with a range of products and technologies for the downstream of the Steel Industry.

SAIL likely to form a JV with SCI

ET reported that Steel Authority of India Limited is planning to run its own fleet of vessels in partnership with public sector as well as private players to ship imported coking coal. A MoU between the two firms is expected to be signed next week.

AS per report, SAIL is likely to form a JV with Shipping Corporation of India to own, operate and charter large and medium sized dry bulk carriers. The move is expected to benefit both the public sector companies as it would help SCI increase its capacity and SAIL cut its coal import cost.

The new JV is likely to take shape as a public private partnership project. While SCI and SAIL are likely to hold 25% stake each in the proposed venture, the remaining 50% is expected to be offered to private players including ship manufacturers or ship owners.

VVJM boycotts TATA Steel project meeting in Orissa

SNS reported that Visthapan Virodhi Jan Manch, the forum opposing TATA Steel’s proposed 6 million tonnes steel project in Kalinga Nagar steel hub, has boycotted a meeting convened by the Jajpur district administration to restore peace in wake of the fresh tension in the area.

The administration had invited the contractors engaged to erect the boundary wall which had led to a clash between pro project villagers and VVJM activists on June 25th 2008, the VVJM and others to try and resolve the dispute. The meeting was scheduled to be held on June 28th 2008 but the VVJM office bearers did not turn up.

Rejecting the peace move, VVJM leaders said that the administration has brought some outsiders in disguise of land losers. Mr Rabindra Jarika general secretary of VVJM said that "We are not prepared to discuss issues with rank outsiders and hired goons." He added that the district administration was trying to misguide the tribal who had been agitating for their lives and livelihood over resolving the issue.

It may be noted that on June 25th 2008, people of Khadihatia and Gadhapur village who back the VVJM had clashed and chased contractors away, who had gone to the trouble torn area to restart construction of the boundary wall of the TATA Steel project. The irate mob also set fire to eight motorcycles of the contractors and their supporters who had come to the area.

BHEL nay start sourcing from China to reduce costs

BS reported that rising input prices are forcing companies in India's power sector to look for new ways to bring down escalating project costs, including procuring raw materials from foreign markets. As per repot, Bharat Heavy Electricals Limited, for instance is planning to seal bulk purchase deals for critical raw materials from countries like China.

A senior BHEL official said that "We are now planning to procure bulk supply of raw materials from overseas countries, especially countries like China, where steel is available at cheaper prices."

Most of the companies admit that their margins would be under pressure against the backdrop of rising raw material costs specially steel. This price rise in addition to the rise in prices of other raw materials has led to project costs shooting up for companies like BHEL.

SAIL RSP BF resumes production after power cut

SNS reported that nature’s fury cost a huge amount to Steel Authority of India’s Rourkela Steel Plant as its production was halted for quite sometime.

Sources said that the 4 blast furnaces of RSP came to a grinding halt for more than 2 hours as the electricity supply from the dedicated power grid Central Power Plant I was disrupted. The CPP was hit by a thunder and lightning and the power generation stopped immediately thus cutting power supply from the four blast furnaces immediately. But the fourth BF Saraswati, the largest one was made functional by diverting power from other sources though it took sometime to start production in the other three.

The report cited Mr BN Singh MD of RSP as saying that "Of course we faced this problem but there is nothing to panic about as we managed to restore the power supply soon."

Punjab steel units contemplate diversification

BS reported that, for small and medium enterprises in Punjab, there seems to be no respite as they continue to suffer from one problem or another. Initially they faced labor shortage, subsequently rising steel prices led to a lot of them closing down and now the surging inflation.

According to Mr SC Rehlan regional chairman of Engineering Export Promotional Council, the issue of steel prices is still not settled. He said that even though the central government had taken various measures to break steel cartels and curb steel exports, industries in Punjab still failed to benefit.

He alleged that when the export duty on steel products was implemented, the steel supply to engineering industry was limited by the steel producers. With the export duty on steel items likely to be waived off, it once again could lead to escalation in steel prices. He added that with engineering industries in state not able to sustain them, many industrialists in state have started diversifying into other ventures, including real estate.

Mr DS Chawla former president of United Cycle & Parts Manufacturing Association Ludhiana said that it is not only the steel prices but prices of other raw materials that have gone up in past. He added that already the hike in steel prices had forced closure of many small enterprises based at Ludhiana, engaged in manufacturing bicycle parts. The rest have cut their production by 30% to 35%.

Another factor hampering growth of SMES in Punjab is the price of furnace oil. According to Mr PD Sharma president of Apex Chamber of Commerce & Industry (Punjab), the price of furnace oil that was INR 13 per liter two years back has now touched INR 38 per liter. He rued that while the centre had asked the state government to slash sales tax on petrol and diesel, no concrete steps were taken to bring down the sales tax on furnace oil used by forging industry and cycling industry.

Commerce and finance ministry differ over steel export tax for SEZs

BS reported that union commerce ministry and its finance counterpart are at loggerheads over allowing duty free supply of steel to special economic zones. As per report, commerce ministry is likely to approach cabinet secretary Mr KM Chandrasekhar over the matter.

Indian government on May 10th 2008 had imposed an export duty of 5% to 15% on various iron and steel products to boost the availability of the metal in the domestic market.

Finance ministry had stuck to its stand that the export duty would be applicable to supplies to SEZs, which is classified as exports. The commerce ministry has been demanding a clarification or amendment to the Central Board of Excise & Customs notification, which exempts steel supplies to the zones from duties.

On its part, the Directorate General of Foreign Trade, which is under the commerce ministry, has relaxed the ban on cement exports to SEZs. The ban was ordered on April 12th 2008.

NTPC to go ahead with Lohari Nagpala project – Report

BS reported that centre has ruled out the stopping of the construction of National Thermal Power Corporation's 600 MW Lohari Nagpala project in Uttarakhand.

Mr Jairam Ramesh union minister of state for power & commerce said that NTPC's project would not be allowed to fall prey to the pressure of environmentalists, who are against the dam on Bhagirathi in Uttarkashi district.

It may be noted that Lohari Nagpala project is facing the wrath of the fasting environmentalist Mr GD Agrawal who is on an indefinite fast to demand stoppage of construction activities.

AP to expedite Vadarevu and Nizampatnam Port works

BL reported that development of Vadarevu and Nizampatnam ports and industrial corridor in the coastal area of Prakasam and Guntur districts will boost the industrial growth and create employment opportunities.

Dr YS Rajasekhara Reddy chief minister of Andhra Pradesh, while reviewing the ‘Vadarevu and Nizampatnam Ports and Industrial Corridor’ project said that these projects need to be expedited as they would help attract more industries. He added that "Unlike the coastal regions of Visakhapatnam, East Godavari and Nellore that were already witnessing tremendous progress, Prakasam and Guntur districts are lagging behind. Through these projects, it would provide more employment opportunities and improve economic activity."

Mr Reddy said that there is scope in the backward regions of Prakasam and Guntur districts to woo companies in the pharmaceuticals, textiles and ship building sectors. He directed officials to expedite the land acquisition process for setting up of the hinterland of both the ports. The developers were asked to provide training for boys and girls at the industrial training centre.

The Vadarevu and Nizampatnam Ports and Industrial Corridor project is being developed by the government of Ras Al Khaimah, one of the Emirates of UAE, with their Indian partner, Matrix Enport Holdings Private Limited.

Chennai Port turnover up by 115.3% in 5 years

Exim News Service reported that the turnover of Chennai Port has more than doubled from INR 413.51 crore in 2003-04 to INR 890.40 crore in 2007-08, registering a growth of 115.3%, enabling it to take up a larger number of capacity augmentation projects.

Mr TR Baalu union shipping minister reviewed the progress of the proposed mega terminal at Chennai, which will have a draught of 22 meters. The INR 3,105 crore terminal will be able to handle ultra large containerships of even the Malaccamax 18,000 TEU ship that is still virtually a mirage on the horizon. The project has generated considerable interest among the prospective bidders and nearly 40 private players have participated in the pre-bid meeting, the Minister was told.

Regarding construction of a container freight station at Sriperumbudur, he directed the officials to get in touch with the state government for allotment of 100 acres of land. He also called for pursuing the feasibility study for construction of an elevated corridor from Maduravoyal to the proposed CFS for seamless cargo movement.

Chennai Port Trust’s other plans include a roll off roll on terminal and multi level car parking for export of cars, as well as a cruise terminal. With the operationalization of this container terminal, Chennai Port’s position as a hub port for containers on the East Coast would be fortified.

Essar plans terminal for LNG and container cargo at West Coast

Live Mint reported that Essar Group is planning to expand its logistics business by building a port terminal for liquefied natural gas and a container cargo facility as well as freight stations and depots under its arm Essar Shipping Ports & Logistics Limited.

The report cited an Essar official as saying that "We are planning to build a port terminal for LNG handling and storage. The group is looking at setting up this facility in the west coast."

He added that expanding into LNG would be a logical extension of the group’s existing port business.

Essar has a port and terminal facility at Vadinar in Gujarat providing handling, storage and terminalling services for crude oil and petroleum products to refineries and traders. It is also setting up a 30 million tonnes per annum all weather port and jetty at Hazira in Gujarat for import of iron ore, pellets, coal, limestone and export of finished steel products. It also proposes to build an integrated terminal at Salaya for handling coal and pet coke used in power plants.

Essar has also expressed interest in developing a fourth container terminal at JN Port. It has committed investments of more than INR 10,000 crore over the next 3 years.

Steel price hike stalls projects worth crores in Maharashtra

DNA reported that projects across Maharashtra, costing INR 2,000 crore, have either come to standstill or are delayed due to the hike in steel prices over the last few months and that the state government has now appointed a committee to consider increasing the contract price.

The Public Works Department contractors, unable to cope with the price rise, held up the projects for more than 6 months. Only some contractors, who are financially sound, have been able to keep the projects afloat, though the pace of these projects remains slow.

As per the government’s policies, the escalation of price given to contractors is according to the wholesale price index announced by Reserve Bank of India from time to time.

The WPI announced by RBI in February 2008 was not in keeping with the market price of the steel. The WPI announced by RBI in February 2008 was 282.5 against 277 in September 2007. The hike was less than 1%, while the steel price hike in this period was over 50%.

An official from PWD department said that "The price of steel went up to INR 49,275 per tonne in March 2008 from INR 30,900 per tonne in October 2007. In such a scenario, we cannot offer escalation as per WPI rate. RBI has not announced fresh WPI after February 2008, though it gave a provisional growth of 21% in WPI in March 2008. However, provisional index is not considered and contractors have been demanding escalation at market price."

Karnataka approves 65 proposals worth INR 1,062.20 crore

PTI reported that Karnataka government has approved 65 proposals with an envisaged investment of INR 1,062.20 crore in the sectors like steel, tourism and hospitals, which will generate 29,024 jobs.

As per report, state level single window clearance committee has examined various proposals and gave its nod to 65 of them.

The maximum investment would be in the steel sector with INR 350.42 crore, followed by tourism with INR 208.05 crore, engineering with INR 97.13 crore, flight training academy with INR 49.86 crore, ready made garments with INR 48.95 crore and hospital with INR 48.79 crore.

Mr V Umesh committee chairman and principal secretary in commerce & industry department said that "Some of the important proposals cleared include flight training academy in Mysore and super specialty hospital for dialysis in Bidar, Gulbarga, Bijapur, Davangere, Mangalore and Mysore."

Damodar Bachao Andolan demands clean water from CIL CCL

Ranchi Express reported that a delegation of the Damodar Bachao Andolan led by legislator Mr Saryu Rai met Mr RP Ritolia CMD of Central Coalfields Limited and submitted a memorandum demanding clearing the river of all pollutants. The memorandum also called upon Central Coalfields Limited to take steps for providing civic amenities including drinking water to residents of the Central Coalfields Limited areas.

Mr Ritolia informed the delegation members of the river’s cleansing and restoration of its ecology was a priority for the company. He said that section for filling up 7 quarries along the riverfront, have already been obtained and the work would take off once the allocated funds were released.

He assured of prompt action to embank the Chutua Nala near the Kedla Washery, when his attention was drawn to the problem. He also assured the delegation of prompt survey to study the deleterious effect on the environment and the ecology along the river caused by over burden, ejected coal and fly ash.

Cairn India and ONGC to jointly develop gas fields in Gujarat

Projects Today reported that Cairn India and ONGC have likely to finalize soon their plans to jointly develop the Ambe and North Tapti offshore marginal gas fields in the Gujarat coast.

The Cairn operated JV has pegged the estimated cost of developing Ambe at approximately INR 300 crore. ONGC is likely to pump in around INR 500 to INR 600 crore for development of North Tapti. ONGC proposes to build two platforms in North Tapti for production of 2 million standard cubic meters a day to 2.2 million standard cubic meters a day of gas and associated oil, which will be connected to Cairn's existing pipeline network for processing at Hazira.

The project will lead to natural gas production of 1.5 million standard cubic meters a day from Cairn operated Ambe field and 2 million standard cubic meters a day by ONGC's North Tapti.

Velankani Group plans silicon complex in Andhra Pradesh

Projects Today reported that Bangalore based Velankani Group is planning to set up a silicon complex at Visakhapatnam in Andhra Pradesh. The group will be investing INR 14,000 crore in the project the in next 7 years, of which INR 1,350 crore will be invested in the first 2 years of its operation.

The state government has already provided 150 acres of land for the purpose and is willing to provide another 80 acres of land.

The complex will be used for manufacturing chlorosilanes, polysilicon and other silicon compounds for semiconductor and photo voltaic solar markets. The first poly silicon product is expected to be rolled out by October 2009.

Domestic iron ore spot prices surge by INR 500 per tonne

We had reported on June 29th 2008, that after Orissa Mining Corporation’s latest quarterly tender on for sale of iron ore during July to September 2008, the market prices of iron ore in Orissa are expected to surge by INR 500 per tonne

As per reports received this morning, the prices of iron ore in Burwil area of Orissa have gone up by INR 500 per tonne.

1. Rates are in INR per tonne
2. Rates are Ex mines but include loading into rakes
3. VAT or CST is in addition
4. Royalty is INR 19 per tonne for Fe content of 63 and INR 27 per tonne for Fe content of 65%

(Sourced from www.steelprices-india.com)

L&T bags INR 1557 crore LoI from APPDCL

It is reported that Larsen & Toubro Limited has received a letter of intent for INR 1,557 crore for a steam turbine generator package of 1600 MW for the Sri Damodaram Sanjeevaiah Thermal Power Station at Krishnapatnam being developed by Andhra Pradesh Power Development Company Limited.

L&T will become the first Indian company to receive an order using supercritical technology as this is also the first order for supercritical 800 MW steam turbine generator island, including auxiliaries, in the country. APPDCL had floated a global tender for the project.

L&T officials said that "With this order, L&T has flagged off its journey into becoming a leading player in the area of thermal power, employing supercritical technology."

The steam turbine generator package includes engineering, procurement, manufacture, supply, erection, commissioning and performance guarantee tests of two sets of 800 MW supercritical steam turbine generators and auxiliaries. The steam turbine generators for the project will be supplied by L&T-MHI Turbine Generators Private Limited.

NTPC signs INR 100 billion loan agreement with PFC

National Thermal Power Corporation Limited recently announced that it has signed a loan agreement for INR 100 billion with Power Finance Corporation to fund its capacity addition.

NTPC said that the tenure of the loan is 16 years. There is a moratorium of four years, after which it will start making quarterly repayments.

Jai Balaji 2007-08 fiscal net revenue up by 29.7% YoY

Jai Balaji Industries Limited has announced its audited results for the year ended March 31st March 2008. During the year total revenue of the company was INR 1,347.28 crore up by 29.7% YoY. The net profit saw a significant rise to INR 118.87 crore up by 91% YoY.

During the year, company expanded organically and in organically. It has successfully completed two acquisitions namely steel division of HEG Limited at Chhattisgarh having a sponge iron plant of the capacity of 120,000 tonnes per annum, steel melting shop of the capacity of 100,000 tonnes per annum a 13 MW captive power plant and Nilachal Iron & Power Limited in Jharkhand having a sponge iron plant of the capacity of 100,000 tonnes per annum.

Mr Aditya Jajodia CMD of Jai Balaji Industries Limited said that "Although the cost of sale increased during the year due to raw material pressures, we were able to successfully maintain and improve margins. Its strategy of cost control, fine tuning its product mix, building the brand and focusing on the customers enabled the Company to increase the gross profit margin."

Announcing the results, Mr Aditya Jajodia CMD of Jai Balaji Group said that "In terms of relative standing, India is placed among the one of the top countries globally with reserves of iron ore and coal. Speedy allotment of captive raw material resources will enable the industry to harness the immense opportunity and potential to develop a scaled up, world class fully integrated steel industry. Speed of growth and execution skill will be the key factors that will determine the extent to which the available opportunity was exploited. At Jai Balaji we recognize this fact and with combined effort from all the stakeholders we will achieve the desired results."

JSW Steel inaugurates new showroom in Bangalore

It is reported that Mr YSS Rao joint MD & CEO of JSW Steel has inaugurated JSW Shoppe, an exclusive steel retail outlet in Bangalore on June 30th 2008. This exclusive showroom is JSW Steel's first in Bangalore.

Mr Rao said that "The concept of the Shoppe originates from the fact that we want customers to get the right quality of product at the right price and at the right place. Shoppe is an effort to create a customer friendly ambience. This interface with the customer will result in creating a strong relationship based on trust and reliability with JSW steel."

JSW Shoppe will have on display and sale all the products of JSW Steel ranging from hot rolled to color coated steels along with long products. It aims to provide a unique experience of buying steel products through a branded distribution channel. This novel marketing initiative will go a long way in creating brand awareness about JSW Steel’s superior product quality and will ensure that the customers get full value for money.

JSW Steel has two shoppes at Hubli in Karnataka, one at Jaipur in Rajasthan, one in Kolhapur in Maharashtra and one at Ahmedabad in Gujarat. It also plans to open around 25 such shoppes in a short span and subsequently will have a pan India presence with over 600 branded outlets.

Kamdhenu Ispat announced 2007-08 fiscal results

Kamdhenu Ispat Limited has posted a total income of INR 355.6 crore in 2007-08 fiscal up by 19.4% YoY as against INR 297.7 crore in 2006-07 fiscal. It registered profit after tax of INR 13.7 crore up by 20% YoY as against INR 11.2 crore.

With these results, the annual growth in total income from operations of Kamdhenu Ispat Limited for the respective year ended at March 31st 2008 was earmarked at 20%, which was figured out to be INR 38.2 crore as compared to INR 31.9 crore. The 4th quarter index also reveals a growth of 69% YoY in profit after tax that figured at INR 4.7 crore as compared to INR 2.7 million along with a huge raise in total income from INR 84.2 crore of last year to INR 132.6 crore in 2007-08 fiscal.

On the basis of its Franchisee Association Model, Kamdhenu Ispat Limited is also expanding its network outside India as well. It is targeting SAARC nations first to get a global identification.

Mr Satish Agarwal CMD of Kamdhenu Ispat Limited said that "We are not just the steel, rather a universal brand. We are growing everyday. We successfully made our first international venture by foraying into Nepal market. We are also targeting other SAARC member nations as the opportunities for growth and development are better in these countries."

WB plans rehabilitation policy for land losers

IANS quoted Mr Buddhadeb Bhattacharjee chief minister of West Bengal as saying that the state government will table its rehabilitation policy for land losers during the monsoon session of the assembly that opens on July 1st 2008.

Mr Bhattacharjee said that "We need to have an alternative policy on land acquisition, rehabilitation and compensation. We are in the final stage of discussion within our party about the policy and will place it in the monsoon session of the state assembly. We must come up with a comprehensive rehab policy and we have almost finalized it. There are lots of apprehensions among the land losers about the compensation package of the state government."

He said that "In 2007, West Bengal received major investments in steel and petroleum sectors. Seven steel companies are coming to the state and the petrochemical hub project at Nayachar is also in progress. We are giving importance to the manufacturing and the small and medium enterprises sector also. We are identifying newer investment areas. But all land acquisition issues need to be resolved fast. If the government fails to do that, people will have a wrong impression about us."

He further added that "We have achieved a growth rate of 8%. We can raise this figure to 9% in the coming 11th five year plan. Growth has taken place but we need to ensure whether the wealth created is reaching the poor. About 30% of our total population is still below the poverty line."

NINL production comes to a halt amidst agitation

SNS reported that production in Nilachal Ispat Nigam Limited in Kalinga Nagar industrial complex came to a grinding halt following the re launching of cease work agitation by the contractual workers reiterating fulfillment of their demands they had stated earlier.

Official sources said that many units of NINL had been shut down following the agitation. However, regular workers managed to run coke oven unit of the plant only. It is the second such agitation by the contractual workers in a week.

Mr Purna Chandra Sahu joint MD of NINL said that "Last week the contractual workers of our plant resorted to cease work for two days demanding to fulfill their demands following which blast furnace of our plant was shut down and production hampered badly. They had withdrawn the cease work after assurance that their demands would be looked into. A meeting with assistant labor commissioner at Jajpur Road has been scheduled to be held tomorrow to resolve their demands. Without waiting for the result, they are resorting to cease work."

It may be noted that nearly 1600 contractual workers of NINL plant have been demanding fulfillment of their 22 point charter of demands. The agitators alleged that they were being paid only one third amount of daily wages as regular workers are getting per day for the same work. This apart, the contractual workers’ demands include, minimum wage of INR 300 per day, permanency of their job, night shift allowance, weekly overtime allowance, inclusion in ESI scheme, heat allowance, safety measures, permanent gate pass and Provident Fund facility.

NINL sources said the agitators prevented the materials from entering into the plant premises by locking both of the gates following which many units of the plant had come to a grinding halt.

India Cements Q4 2008 net dips by 38% YoY

India Cements expects demand for cement to remain strong even as it reported a 38% drop in net profit at INR 104 crore for the last quarter of fiscal 2008 due to a non recurring expense, for a one time settlement of loan and tax expenses.

India Cement’s net profit for the fiscal increased by 33% YoY to INR 637.54 crore as compared to INR 478.83 crore in the previous year. The operating margin for the year was at 36.5% against 32.8% registered for the previous year. Net sales for the fiscal rose by 36% YoY to INR 3,554.47 crore as against INR 2,610.75 crore.

Mr N Srinivasan vice CMD of India Cements said that "Demand for cement is still strong despite skyrocketing land prices and high interest rates." He added that while demand grew 8% in Tamil Nadu, south registered a 10% increase for May to June 2008 period.

He said that "The cement industry is witnessing its best ever period with the domestic demand registering a 9.81% growth over and above the double digit growth for the previous year." He added that the rise in ocean freight rates and domestic as well as international coal prices during the year pushed cost of production up by INR 79 crore.

WBIDC identifies 1200 acres for Jai Balaji steel plant

BS reported that West Bengal Industrial Development Corporation has identified 1,200 acres in Purulia for the first phase of Jai Balaji group's 5 million tonnes plant.

Mr Aditya Jajodia CMD of Jai Balaji Group said that the government agency had identified 1,200 acres of which 600 acres had been acquired. He added that the first phase of 2 million tonnes steel plant, 1 million tonne cement and 400 MW of captive power would be completed in 36 to 40 months.

Mr Jajodia said that the investment in the first phase would be INR 5,000 crore and the total cost of the project is INR 16,000 crore. He added that the memorandum of agreement with the West Bengal government is for a 5 million tonnes integrated steel plant, 3 million tonnes cement plant and 1,215 MW captive power plant.

Mr Jajodia is expecting that the land for the first phase would be acquired over the next 6 to 7 months. He added that, in the wake of the high cost of funds, the company could look for foreign loans, especially for equipments from the overseas markets.

Price cut and costly ore to hit JSW Steel hard – Report

ET reported that JSW Steel expects its bottom line to take a hit of INR 450 to INR 500 crore in 2008-09 due to increasing input costs and a reduction in steel prices under government pressure.

Mr Y Siva Sagar Rao joint MD & CEO of JSW Steel said that it is trying to mitigate the impact by improving operational efficiencies. The removal of 5% to 15% export duty on flat products, used in auto and the white goods sectors, would benefit the company, but it would not be enough to fully compensate the revenue loss.

JSW currently produces about 5 million tonne of steel and lined up expansion plans to take output to 8 million tonne by March 2009 and 12 million tonne by 2010.

JSW Steel set to start work at Salboni

SNS reported that JSW Steel Limited is gearing up to start work on its 10 million tonnes steel plant at Salboni in West Midnapur district of West Bengal. It is readying to conduct bhoomi pooja for its plant, involving an investment of over INR 40,000 crore, in the next 3 months as the land has already been acquired.

This is perhaps the biggest ever investment in West Bengal so far by any company. Alongside, it is speeding up plans to set up another steel plant of similar capacity in Jharkhand for which availability of land though remains a major concern.

Mr Siva Sagar Rao joint MD of JSW Steel said that it had organized its raw material sources including iron ore for the Midnapur plant.

Credit crunch slows expansion plans by cement firms – Report

ET reported that costlier raw material and tight credit conditions have slowed down Indian cement companies’ ambitious INR 50,000 crore expansion plan to add 80 to 90 million tonnes capacity in 3 years.

Industry officials said that adverse economic factors and problems in land acquisition have made expansion almost impossible. Some of them said they will be happy if even half of the proposed expansion goes through.

According to the Cement Manufacturers’ Association, last year saw capacity addition of 27 million tonnes, taking the total to 170 million tonnes. The demand is estimated at around 200 million tonnes and is expected to grow at 8% to 10%. Some doubt the trend will continue.

Even Brownfield expansions are delayed 6 to 9 months and Greenfield projects are delayed by about 1 year as against an anticipated delay of 3 to 6 months.

Energy body calls for rural electrification thru renewable sources

BL reported that Society of Energy Engineers & Managers has unanimously resolved to accelerate efforts on rural electrification through off grid renewable energy generation using solar, wind, biomass, small hydro, geo thermal and other sustainable energy routes on account of the serious environmental and energy crisis faced by the whole world.

The three day international workshop on 'Cleaner production and energy conservations for sustainability' which held here was of the view that the present challenge faced by the Earth is to make it greener and cleaner before it is passed on to the next generation, without reducing the present level of energy services and certainly expanding on it through a less energy intensive route.

The workshop noted that the sustainable way of natural resources use at far greater rate than what the nature can replenish and the indiscriminate way it adds pollutants to the Planet Earth needs to be addressed with top most priority.

Ennore Port short listed consortiums in RFQ

BL reported that Ennore Port Limited has short listed 5 consortiums and an international container terminal operator in the request for qualification stage for developing a container terminal at Ennore at an estimated cost of INR 1,300 crore. The short listed companies, from a list of around 40 applicants, will now move on to the RFP stage.

APM Terminals B V, an international container terminal operator, has bid on its own, while the rest in the fray are biding as consortiums. Group Maritime JCBSL has partnered with Obrascon Huarte Lain SA, GE Mauritius International Holdings and Eredene Holding Capital Plc. An interesting combination was the consortium of 3 shipping lines namely NYK Line, Evergreen Marine, Hyundai Marine, partnering with ZIM Port.

There are two Indian consortiums in the fray. Gammon Infrastructure Projects has tied up with Dragados Servicious, Portuarilou Logisticos and Leighton Contract India Limited Larsen & Toubro has joined hands with John Keels Holdings. The surprise bidder in the list was Sterlite Industries along with Eurogate and KG Mota Engle.

Prominent names missing in the list are DP World and Port of Singapore Authority, both strong in the Indian container terminal operations, especially the South. The terminal, which got environmental clearance last year, will have a quay length of 1,000 meter and a capacity to handle around 1.50 million TEUs.

Work on the terminal is likely to commence before the year-end, and will be built on build, operate and transfer basis for a concession period of 30 years, said sources.
Bigger terminal

Ennore is seen as a potential container port in the South next to the established centre Chennai. The Port of Ennore is the only corporatized major port in the country. The port is connected to the national highways NH4, NH5 and NH45 without entering into the populated Chennai city area.

Eaton India gears up to set up second facility

BL reported that Eaton India is planning to set up its second manufacturing facility in Ranjangaon near Pune to meet the demand for transmission components from Eaton’s facilities across the globe and also to enable it to support emerging demand for such units from domestic commercial vehicle manufacturers.

Mr Shyam P Kambeyanda MD of Eaton Technologies Private Limited said that it currently makes 6 speed and 9 speed transmissions for TATA Motors for its world truck. He added that "Serial production has just commenced and the plant is in the stage of ramping up volumes, he said. Transmissions will also be supplied to Mahindra & Mahindra for its joint venture with International Truck & Engine Corporation."

At present Eaton makes gears and shafts at its Ranjangaon facility and assembles transmissions for medium and heavy duty commercial vehicles. It also exports gears and shafts to Eaton’s facilities all over the world. The capacity of the existing plant is 15,000 transmission units at present.

Globally Eaton manufactures heavy duty, synchromesh medium duty transmissions for trucks and light duty transmissions for agricultural applications. It has manufacturing facilities in the US, Brazil, China, Poland, Mexico and India and makes more than 100 manual and automated transmissions.

Dedicated freight corridor is answer to coal woes – CIL

Coal India Limited, together with its subsidiary coal companies, is the single largest producer of coal in the world with nearly 400 million tonnes annually. The projection is that the volume will rise by more than 50% in the next 8 to 9 years. Transportation of this huge volume is a major challenge not only to CIL but also other agencies.

Mr Partha S Bhattacharyya chairman of CIL in an interview said that "CIL is the single largest producer of coal in the world. Last year, we produced 380 million tonnes, likely to rise to 405 million tonnes in the current fiscal. Handling this huge volume is a big challenge to us. But I will answer your question in a slightly different way."

He added that "We handle the volume but we are not responsible for reaching coal to every nook and corner of the country. In fact, the coal producing companies are responsible for transporting coal from the pitheads to the nearest railheads or road heads."

He said that "We ourselves do not dispatch any coal by rail. But a large number of our consumers take delivery of coal by rail. But we are keen that more and more coal is transported by rail despite problems in rail transportation. Perhaps a dedicated freight corridor is the answer. We sincerely would like to see the work on the project taken up in right earnest, more so in view of the projected increase in coal traffic."

Ispat Industries announces 2007-08 fiscal results

Ispat Industries Limited has announced the following results for the quarter & year ended March 31st 2008.

The unaudited results for January to March 2008 quarter
Ispat Industries has posted a net profit of INR 488.90 million for January to March 2008 quarter down by 40.4% YoY as compared to INR 821.20 million for January to March 2007 quarter. Total income has increased from INR 21436.50 million to INR 26005.20 million, registering a growth of 23.1% YoY.

The audited results for the year ended March 31st 2008
Ispat Industries has posted a net profit of INR 348.00 million for the year ended March 31st 2008 as compared to net loss of INR 95.30 million for the year ended March 31st 2007. Total income has increased from INR 76022 million for the year ended March 31st 2007 to INR 87110 million for the year ended March 31st 2008, registering a growth of 14.5% YoY.

The consolidated results for the year ended March 31st 2008
Ispat Industries has posted a net profit of INR 307.90 million for the year ended March 31st 2008 as compared to net loss of INR 102.60 million for the year ended March 31st 2007. Total income has increased from INR 76020.50 million for the year ended March 31st 2007 to INR 87092.50 million for the year ended March 31st 2008, registering a growth of 14.5% YoY.

McNally Bharat bags INR 47.30 crore contract from MPSEZ

McNally Bharat Engineering Company Limited recently announced that it has received an order from Mundra Port & Special Economic Zone Limited for design engineering, manufacturing, supply, erection, commissioning and performance testing of four rail mounted bucket wheel stacker re claimer valued at INR 47.30 crore exclusive of all taxes and duties which are exempted under SEZ.

JSW Steel unveils INR 6,000 crore CAPEX plan

BS reported that JSW Steel all set to invest INR 6,000 crore in the current financial year to acquire iron ore mines in the American and African continents and increase existing capacity. It currently produces around 4.8 million tonnes of steel a year from its Vijayanagar plant in Karnataka and the Salem facility in Tamil Nadu.

Mr Y Siva Sagar Rao CEO of JSW Steel said that "By the end of this year, the capacity at these 2 plants will increase to around 8 million tonnes and by 2010 to 10 million tonnes. We will shortly be setting up steel plants in West Bengal and Jharkhand and this will increase our production to 32 million tonnes by 2020." He added that it has secured financial commitments for the capital expenditure.

Mr Rao said that "We had some problems with regard to land acquisition, but that has been solved now and we have the land. We are in the process of tying up with a mine owner in Orissa and have alerted coal suppliers too. The first phase of the plant will be completed in 30 months." He added that the plant will initially produce 6 million tonnes of steel each year, which will subsequently touch 10 million tonnes.

In Jharkhand too, JSW Steel is grappling with problems pertaining to land acquisition. The overall investment for these plants is INR 40,000 crore each.

Bogdan Corp bus production in 5 months up by 41% YoY

Bogdan Corporation has produced 1659 buses during January to May 2008 period up by 41% YoY. For 2008, it is scheduled to make 4800 buses.

Chartering demand in India four times its fleet size – Report

ET reported that India's demand for chartering ships is nearly four times its fleet size of 860 ships. This is the first impression that anyone looking at the long list of 3942 requests for chartering ships that directorate general of shipping received last year. The fact that there is a huge unmet need for ships and shipping in India is good news for those who want to enter the shipping sector and those fund houses that wait for deploying their monies into the sector. With more than 40% of existing fleet going for scraping in the next five years, there is also acute need to augment Indian tonnage. But that could be quite a different story, given Indian realities.

According to available data, there were 3942 applications in 2007 for chartering vessels. It included 1386 applications for tankers. On the other side, Indian fleet has about 860 ships of which 220 odd ships are engaged in overseas trade with the remaining in coastal and inland waters.

According to trade sources, there are various reasons for putting up requests for chartering. At times the requests are not genuine, while there could be multiple requests for a single cargo. It is also observed that parties do not proceed after getting the license. Shipping agents are also understood to use the mode for their recruitment purposes. In the given circumstances, what is important is to know more details about the requirements in the applications.

According to shipping administration sources, they distribute the requirements for ships on charter to all ship owners in the country. Only when no interested party turns up that they issue the license to charter a foreign vessel. Unlike major shipping companies, most of local ship owners are understood to be interested in such information as they want to corner more of Indian cargo. This is especially so today with the recent circular by the directorate making coastal shipping the preferred mode compared to cross ocean trading which is subjected to more cumbersome regulations.

Steel sector to suffer as students opt for IT

PTI reported that, with brilliant students opting for a career in the lucrative information technology sector, steelmakers fear that the steel industries could face shortage of talented engineers and skilled manpower.

As per report, the apprehension of shortage of skilled engineers in the steel sector came to light when captains in the industry, who were attending an international meet on iron and steel making, expressed fears about an impending crisis.

Mr Sanak Mishra CEO of ArcelorMittal's Greenfield projects in India said that "Inspite of having 1,600 engineering colleges in India, there is shortage of engineers required for steel industries. We do not have enough skilled manpower to operate steel industries. Most of the students find IT lucrative." He added that unless skilled manpower was generated in the country, it would be difficult to carry forward activities in steel sector which aimed to produce 290 MTPA steel by 2020.

ArcelorMittal, which proposed to set up a 12 million tonnes per annum capacity Greenfield steel mill in Orissa's tribal dominated Keonjhar district, is also planning to set up a model Industrial Training Institute close to its proposed plant.

Meanwhile, Mr Naveen Patnaik chief minister of Orissa said that "The industries have also been asked to set up ITIs near their plants to train locals."

Brazilian steel consumption to reach 40 million tonnes by 2015

According to a source at Usiminas, the company expects steel consumption in Brazil to rise to 40 million tonnes per year by 2015.

At present, the annual steel consumption is 22 million tonnes in Brazil’s domestic market, with an average consumption of 120 kilograms per capital. It would have to increase to 500 kilograms to reach the level of a developed country.

Brazil has spent USD 35 billion to build new plants which have all started to produce, and another USD 15 billion for new plants to produce flat product and long product.

(Sourced from YIEH.com)

BHPB bid for Rio – Mr Varin blasts merger move

Timesonline reported that Corus has stepped up its campaign against BHP Billiton’s attempt to take over mining rival Rio Tinto by complaining to the European Union about the deal.

Mr Philippe Varin CEO of Corus said that he is concerned the GBP 100 billion tie up would raise competition issues.

He said that “Steelmakers have been hit by steep price rises. The price of iron ore has soared in the past five years, driven by the construction boom in China.”

Mr Varin said that if they combined, the pair would control about 36% of the world’s seaborne trade in iron ore, which sets the price used in annual contract talks.

Mr Varin added that “If you link this with a spot price approach, what does a spot price mean when there is a very concentrated base of producers and when two producers of iron ore would have 70% of the market? Would it really be a spot price dictated by the market? I don’t think so.”

Rio Tinto last week sealed an agreement to nearly double the price of its iron ore shipments to China’s biggest steelmaker Baosteel. BHP and Rio Tinto have called for the traditional annual round of price talks to be replaced by an index pricing system that would give them much greater flexibility.

Fitch gives outlook for global steel prices

According to a new report from Fitch Ratings, Fitch expects that global steel prices will even out in 2008 once cost inflation of raw material is absorbed.

Fitch said that “Prices increases for steel have been rampant during the first six months of 2008 as companies seek to pass through increased raw material costs. The ability to increase steel pricing is essential to maintain margins for producers who do not control their sources of iron ore, coke, pig iron and scrap. Contract price increases for iron ore and coke have added approximately USD 185 per tonne to the cost of blast furnace steel without vertical integration. Energy, freight, scrap and labor cost increases can add another USD 100 per tonne far exceeding original expectations.”

Fitch said that “Growth in global steel demand is expected to run approximately 6% to 7% annually over the next 12 to 18 months and markets are expected to be fairly balanced. Excess production could drag on pricing and further pressure tight raw material markets, while short supply would be inflationary and may dampen steel demand. Regional variations in pricing and profitability have re-emerged, given high freight rates and protectionism.”

Fitch expects further consolidation in the steel space as steel producers have been acquisitive to diversify geographically, to rationalize production and to gain access to raw materials. Fitch added that the outlook on the industry is stable.

Steel sales in Vietnam in June down by 19% MoM

The Vietnam News Agency citing the Vietnam Steel Association reported that sales of domestically produced steel in Vietnam fell by 19% in June to 250,000 tonnes from May's 310,000 tonnes.

According to the news agency, a reduction in bank loans in Vietnam contributed to the slide and Vietnam's government has also tightened its control over state-funded investment projects.

The report said that the importation of cheaper steel from China has cut demand for local products. The beginning of the rainy season in the south of the country is also leading to fewer construction projects than in previous months.

Details of CSN USD 6 billion investment plans in new plant

BNamericas reported that Brazilian steelmaker CSN is planning to invest USD 6 billion in a long and flat products plant in the northeastern state of Pernambuco.

The report said that the new facility, targeting the construction industry is to be built on a 337 hectare site next to the Atlantico Sul shipyards, in the Suape port industrial complex 57 kilomater from state capital Recife.

According to Pernambuco's website, the announcement was made June 26 by governor Eduardo Campos and CSN's executive director Eneas Diniz Garcia.

The plant, to be called Usina Siderurgica de Pernambuco is to be constructed in three phases and should reach full capacity in 2014. Initial output is estimated at 500,000 tonne per year but two expansion projects could push production to 3.5 million tonne per year.

The first phase of the project should be completed in four years and is budgeted at USD 1.3 billion. The state government says 1,150 workers will be employed during the peak of construction.

Sumitomo Metals acquires railway brake business

Sumitomo Metal Industries, Ltd announced that it reached an agreement with Sumitomo Electric Industries Ltd and Sumitomo Brake Systems Inc to acquire their railway brake business on September 1st 2008.

In the railway vehicle industry, the demand of improvement in the speed shows a rise and new style type vehicles are developed in recent years. The development of highly efficient brake equipment that meets demand for improved speed has been indispensable to parts manufacturers.

Sumitomo Metals conducts development and design of railway products, such as bogie trucks, wheel sets and brake discs however, the Company aims to provide technical proposals to its customers along with its existing railway products as a whole brake equipment by acquiring this business. The Company will provide new technical proposals and contribute to society through its railway assets, which are in the limelight now from the viewpoint of reducing CO2 emissions.

Sumitomo said that this acquisition enables Sumitomo Metals to internally develop and manufacture brake equipment for railway. The Company aims to strengthen and expand its existing railway related business, specifically the manufacturing and sale of bogie trucks, wheel sets and brake discs.

Japanese rebar export price hits USD 1,000 per tonne FOB

JMB reported that Japanese concrete reinforcing steel bar export price exceeded USD 1,000 per tonne.

As per report, Japanese makers are receiving strong demand from South Korea, Taiwan, South Eastern Asia, North America and Middle East and the price increased to USD 1,028 FOB for USA for August shipment.

The international market is lifted by aggressive appetite from construction booming Middle East. The billet export market is also expected to rebound after temporally drop from peak of USD 1,074 for July to August shipment.

PT Krakatau Steel returns to profit in 2007

Reuters reported that Indonesia's state owned steel maker, PT Krakatau Steel, returned to profit last year on the back of stronger sales revenue.

PT Krakatau reported a net profit of IDR 313.81 billion (USD 34.07 million) in 2007, as compared to a IDR 135.40 billion loss a year earlier. Sales revenue climbed by 22.8% to IDR 14.84 trillion, while operating profit was IDR 793.10 billion in 2007 as compared to a IDR 216.64 billion loss in 2006.

Mr Taufiequrrahman chairman of Krakatau told Reuters that the firm, which had total assets of IDR 11.12 trillion as of last year, is likely to launch an initial public share offering in November or December.

Samchai Steel to boost pipe output as demand rises

Thai news paper Krungthep Turakij citing Mr Pachawat Kunchayangkul chairman of Samchai Steel reported that Samchai Steel Industries Pcl will increase production by 18% to meet higher demand.

The newspaper said that the company will increase its production to 200,000 tonnes a year from the current 170,000 tonnes as demand for construction materials rises.

Samchai Steel Industries Public Company Limited was established in 1997 and is now a leading steel pipes manufacturer in Thailand. Samchai Steel Industries products comprise of hollow structural sections round, square and rectangular, black and galvanized steel pipes, furniture steel tubes and hot rolled steel sheet.

POSCO asks SK Group to join bidding for DSME

Seatrade Asia online reported that South Korea's steel giant POSCO has approached SK Group with a proposal for joint acquisition of part of Daewoo Shipbuilding & Marine Engineering shares.

According to a local media report, POSCO had been seen to go it alone in bidding for the DSME shares held by two South Korean state run banks. The steelmaker is now looking for a possible partner, as the planned buyout would require an enormous amount of money. For potential bidders, the biggest problem is how to raise a huge buyout fund that could total up to 10 trillion won.

According to the report, POSCO has informally proposed that it and SK jointly acquire around 10% of the DSME shares held by the two banks, equivalent to 5% of the total outstanding shares. The two companies now appear to be engaged in working level consultations.

POSCO and SK have close mutual relations, engaging in cross-holding of shares. POSCO has apparently named SK as the latter's affiliates SK Shipping and SK Energy can generate synergetic effects with DSME.

Flat product prices in Italy maintained upward trend in June

It is reported that Italy’s flat market has kept firm and the price in June continued to rise. But the price rise is mainly due to reduced offers, and the requirements have not changed a lot.

It is expected some stockiest will start purchasing in September to October and the price will up further at that time.

It is reported that products in July and August, by Europe’s main manufacturers, including those in Italy, have already been sold out. Now the production line is arranged for September to October delivery and imported prices are not competitive enough at present.

French steel scrap export in 2007 remains flat

According to the related statistics, France exported 6.15 million tonnes of scrap in 2007, increased slightly by 13,000 tonnes or 0.2% YoY as compared to that of 2006.

Among those scrap exports 1.76 million tonnes of scrap was exported to Spain down by 7.5% YoY. Belgium accounted for 1.731 million tonnes up by 9.1% YoY. In addition, Italy decreased its intake by 3.5% YoY to 1.208 million tonnes.

(Sourced from YIEH.com)

CSC sees better profit outlook for the Q1 of 2008

Taiwan China Steel Corp has raised its price for the first three quarters of 2008, making for a total raise of TWD 10,000 per tonne. This means that CSC has successfully passed along its costs to its customers.

CSC is facing its steel making cost increase by over TWD 30 billion due to surge in iron ore and coking coal prices.
However, if there is no special change in the global economic situation, CSC might raise its price again for the fourth quarter and it will help the company to achieve better sales profit than they did last year.

Toyota considering price hike for cars - Report

Reuters reported that Toyota Motor has hinted that it might be forced to increase the prices of its passenger vehicles in the future, if the raw material costs continue to rise.

While the company believes that the tough global competition makes it unadvisable to take such a step, Toyota said that it may have to still go ahead and increase the prices.

Mr Paul Nolasco a spokesman of Toyota was quoted as saying that "Our basic principle is to continue to work on cost reductions within the company first. But we won't be able to avoid thinking about price hikes in the future considering a recent jump in raw materials costs.” He, however maintained that no decision had been made so far.

According to the Nikkei business daily, Toyota may raise the prices of all domestic vehicles at once and make a final decision in early July.

US ITC reports strong US performance in global services trade

US service firms were preeminent in global services trade in 2006, reports the US International Trade Commission in its report Recent Trends in US Services Trade, 2008 Annual Report.

According to the report, the United States remains the world's largest services market and also the world's leading exporter and importer of services.

US ITC compiles the report annually. The report presents a statistical overview of US trade in services and highlights the service sectors and geographic markets that contributed substantially to recent services trade performance. This year's report focuses primarily on infrastructure services that significantly affect an entire economy. Separate chapters on specific service sectors like banking, insurance, telecommunications, logistics and retailing analyze issues affecting global competitive conditions in the industry, examine recent trade performance, and summarize activities intended to remove sectoral trade impediments.

The 2008 report covers trade in services from 2001 to 2006. Highlights of the report follow.
1. The United States continues to have the largest services trade surplus of any country in the world. Infrastructure services were major contributors to the growing US services surplus, as evidenced by a surge in exports of telecommunications, banking, and insurance services. The U.S. services surplus grew to USD 96.6 billion in 2006, its highest level ever reported.

2. Sales of services by US parent firms' affiliates abroad are no less dynamic. Such sales reflect the importance to many US service sectors, including infrastructure services, of expanding a commercial presence abroad. In 2005, sales of services by foreign affiliates of US firms grew at approximately twice the average annual rate as in years 2001-04. In comparison, domestic sales of services by foreign firms' affiliates in the United States continued to grow slowly from 2001 through 2005.

3. Global markets have emerged in many service industries, led by multinational rather than national enterprises. Significant cross-border merger and acquisition activity in insurance, banking, logistic, and retail services illustrates the importance of suppliers' proximity to consumers abroad. Technological advancements, such as mobile services in telecommunications, tracking in logistics and supply chain management and customer databases in retailing, demonstrate the progress made by multinational firms in enhancing speed, efficiency, and reliability while managing operational costs throughout widened affiliate networks.

4. Unilateral efforts to liberalize impediments to services trade and less direct government intervention in regulating infrastructure services continue to have a favorable impact on the expansion of infrastructure services trade. During the period covered by the report, the United States continued to negotiate free trade agreements with certain trading partners to reduce market access and national treatment impediments for US companies seeking to expand services exports and/or increase their commercial presence abroad.

5. International agencies and national statistical offices are working to develop more detailed and internationally comparable data on services trade, largely in response to demand from trade negotiators and trade policy makers. Revisions to classifications and definitions and new regulations in the European Union should help many countries provide more detailed reporting of particular services industries and of services trade with particular trading partners.

Hyundai Heavy unit win USD 1.6 billion order from Maersk

The world's top shipbuilder Hyundai Heavy Industries Co Ltd said that it and a unit had won a combined USD 1.6 billion order to build 18 container ships for AP Moller Maersk.

A Hyundai Heavy spokesman said that Hyundai Heavy and unit Hyundai Samho Heavy Industries Co Ltd have received orders for 13 and five ships, respectively at USD 90 million per vessel.

Danish shipping and oil group Maersk, operator of the world's largest container shipping line, said on Tuesday it had signed a deal with Hyundai for delivery of 18 container vessels in 2011 and 2012. It did not disclose the value.

The Hyundai Heavy spokesman said that Hyundai Heavy and Hyundai Samho have won a total of USD 16.65 billion worth of orders so far this year, up by 27% YoY.

AK Steel named to S&P 500

It is reported that AK Steel will be added to Standard and Poor's S&P 500 Global Industry Classification Standard Steel Sub Industry index, aligning the company with the very best of America's most prominent corporations.

Mr James L Wainscott chairman, president & CEO of AK Steel said that "Being added to the S&P 500 is a proud milestone in the complete transformation of AK Steel since the fall of 2003. It reflects our ongoing efforts to create shareholder value by striving to continuously exceed our customers' expectations."

The S&P 500 is widely considered to be the single best indicator of the US equities market.

Daewoo Shipbuilding secures USD 2.3 billion orders in June

AP reported that Daewoo Shipbuilding & Marine Engineering Co has won USD 2.3 billion of orders in June, its biggest month this year as demand increased for moving fuel and commodities.

Daewoo Shipbuilding in a statement said that contracts were received for 12 vessels in the month and buyers ordered nine Very Large Crude Carriers, the biggest of their type, a deepwater drill ship and two bulk carriers for 2012 delivery Yards in South Korea.

According to London-based shipbroker Clarkson Plc more than half of the global ship orders by tonnage were won by South Korean yards in the first five months of this year.

ArcelorMittal acquires Astralloy

ArcelorMittal announced that it has acquired Astralloy Steel Products Inc a subsidiary of IMS International Metal Service.

Astralloy operates three warehouses and employs 60 people in North America. Its 2007 revenues were USD 34 million.

ArcelorMittal signs mandate with a bank for share buy back program

Further to ArcelorMittal's 44 million shares buy back program as announced on December 12th and on December 18th 2007 and pursuant to the Annual General Shareholders Meeting of May 13th 2008 authorizing a share buyback program, ArcelorMittal announced that Frecolux a Luxembourg subsidiary of ArcelorMittal has given a mandate on June 27th 2008 to EXANE BNP Paribas. The terms of this mandate are within the limits of the authorization given at the AGM and set out in an ArcelorMittal press release on May 13th 2008.

Purchases will be effected on Euronext Paris and off market and may be extended to other markets.

This share buy back mandate is expected to commence on July 2nd 2008 and shall end at the earliest of August 31st 2008 or the moment on which the number shares acquired by EXANE BNP Paribas since the start of this mandate attains 10 million shares, unless the mandate has been terminated by ArcelorMittal prior to such date.

In connection with the above mentioned share buy back program, ArcelorMittal had as of the close of business on June 27th 2008, repurchased a total of 22.7 million shares at an average price of EUR 50.69 per share. This number includes 440,372 shares repurchased by ArcelorMittal between June 23rd and 27th 2008 at an average price of EUR 62.5494 per share and for a total cost of EUR 27,544,989.

Schnitzer Steel Q3 revenue up by 37% YoY

Schnitzer Steel Industries Inc reported record quarterly net income of USD 62 million for the fiscal 2008 third quarter ended May 31st 2008 as compared to Net income of USD 44 million in 2007. Its revenues reached USD 972 million up by 37% YoY as compared to USD 709 in 2007.

Mr John D Carter president & CEO of Schnitzer Steel said that "We are pleased to report the strongest quarterly financial results in the Company's history, as each of our three operating divisions posted record revenues and operating income. Global demand for recycled metals remained robust, driven by economic growth in developing countries. In the Metals Recycling Business, our worldwide market visibility and flexibility to sell both domestically and internationally allowed us to take advantage of strong markets and significantly expand margins and operating income."

Mr Carter added that "In the Steel Manufacturing Business, tight domestic supply conditions resulting from a low level of imports affecting our product lines contributed to record quarterly sales volumes and record selling prices for finished steel products. The Auto Parts Business continued its focus on increasing vehicle purchases which led to its sixth consecutive quarter of year over year operating income growth."

Commenting on the third quarter results, Mr Tamara Lundgren executive vice president & COO said that "All three of the Company's operating divisions were able to maximize the benefits of the strong markets in which we operate through operating efficiencies and higher throughput. In the Metals Recycling Business, our capital investments to increase capacity allowed us to process the strong inflow of raw materials at all our major locations. Increased production capacity enabled the Steel Manufacturing Business to produce and ship record sales volumes, and in the Auto Parts Business our ability to process the increased car purchases while extracting more value from every car was a major factor in achieving record operating income."

ArcelorMittal enhances its distribution activities in United Arab Emirates

ArcelorMittal announced that it intends to acquire 60% of the entire issued share capital of DSTC FZCO, a newly incorporated company located in the Dubai free zone.

DSTC LLC is a Dubai-based privately owned entity, founded in 1986, which currently employs 50 personnel. It sells principally to the construction market, which represents more than 50% of its activity. DSTC LLC's distributes approximately 120,000 tonnes of products per year. In 2007 its revenues were about EUR 70 million.

The release said that “Together with DSTC FZCO, ArcelorMittal is widening its offering in the Middle Eastern area. DSTC FZCO will acquire the main business of a steel distributor in the United Arab Emirates, Dubai Steel Trading Company LLC.”

This new acquisition is the first step towards the creation of a fully-fledged distribution network in the Gulf Cooperation Council area for the distribution of long and flat steel products including beams, plates, hollow sections.

Mr Philippe Darmayan CEO of ArcelorMittal Steel Solutions & Services said that “This is an important partnership that will spearhead our distribution network in the Middle East Area.”

LISCO unveils USD 119 million CAPEX plan

Arab Steel reported that Libyan Iron & Steel Company has made 7 contracts worth USD 119 million to upgrade the company's mill. These contracts have been concluded with several world companies from Italy, China, Turkey and Bosnia, out of which the Italian companies have taken the biggest share of the value.

These contracts include construction of a station for separation of gases and compressed air. This contract has been concluded with the Chinese company Catic for the supply of machinery and equipment and with two Italian companies, Fritti and Tecnomontagi for the civil and various erection works.

The company has also signed a contract with the Italian Revass for supply and erection of equipment specifically for upgrading the light and heavy sections rolling mill to produce various sizes and qualities of IPE, UPN and IPU.

Libyan Iron & Steel Company has also concluded a contract with the Turkish TML company to extend the port quay as to be 1092 meters long and able to accommodate two ships of a load of 180,000 tonnes of iron ore each, another ship of a load of 50,000 tons of hot briquetted iron and a third ship of a load of 15,000 tonnes for exporting the remaining products. It has also concluded a contract with Key Technologies to set up the cold rolling stand. The Italian Techint company will carry out the erection works and internal transport.

The company has also signed a contract with the Bosnian Enregoinvest to set up a new electric power sub station with 10 to 30 KVA capacity. The completion of these projects is expected within or around 2009 to 2010.

PSM appoints Mr Sheikh as new chairman

Pakistan Steel Mills Corporation recently announced that it has appointed Mr Mueen Aftab Sheikh as its new chairman.

Mr Sheikh has served as a BS 22 officer in Pakistan Audit & Account Service and has also worked at various other important positions.

Flat steel import price levels for Turkey

Ukraine’s Ilyich Iron & Steel Works was quoting USD 1,200 per tonne CFR on hot rolled coils to Turkey, with late July or August 2008 shipments.

Another mill Zaporizhstal Iron & Steel in Ukraine was offering USD 1,260 per tonne CFR and USD 1,200 per tonne CFR for cold rolled and hot rolled coils to Turkey, increased by USD 110 per tonne and USD 120 per tonne, respectively.

Russia’s Severstal was offering USD 1,245 per tonne CFR for hot rolled coil and USD 1,300 per tonne CFR for cold rolled coil.

(Sourced from Yieh.corp)

Aramco awards Manifa pipeline deal to Valentine Maritime

MEED reported that Saudi Aramco has awarded a contract worth up to USD 500 million for pipeline and power cable equipment to UAE's Valentine Maritime as part of a series of major contracts on its 900,000 barrel a day Manifa oil field development.

The report said that Valentine Maritime beat competition from 5 other bidders, including Jebel Ali based J Ray McDermott, National Petroleum Construction Company, South Korea's Hyundai Heavy Industries, Italy's Saipem and Global al Rushaid.

The contract involves laying up to 300 kilometers of onshore pipeline, as well as power cables and associated equipment. It is a significant win for Valentine. Its Saudi subsidiary is expected to carry out the 14 month engineering, procurement and construction contract, with work scheduled to start this year.

Aramco is poised to award the three main EPC deals on Manifa to Italy's Snamprogetti, Japan's JGC Corporation and Spain's TR in the next few weeks.

Snamprogetti has won the main USD 1.8 billion package covering the construction of central processing facilities, including a gas oil separation plant. JGC is poised to take the second package, worth USD 800 million, covering the utilities, storage and shipping at the central processing facility. TR has secured the smallest deal, worth USD 500 million, covering power generation and the main substation.

In May 2008, US based Natco won a deal to provide equipment and technology for Manifa to front-end engineering and design contractor Foster Wheeler.

Qatar Inflation to stay around 13.75% in 2008 – Report

According to Mr Sheikh Abdullah Bin Saud al Thani governor of Qatar central bank, Qatari inflation is likely to stay about 13.75% in 2008 as food and oil prices remain high. He added that "Due to agricultural and commodity prices, it will stay around the same level of 13.75%."

Qatar's inflation, which accelerated to a record 14.8% in the first quarter, is the highest among the six GCC states, including Saudi Arabia and the United Arab Emirates. Inflation has risen across the region as oil fueled economic growth created shortages of real estate and services and the weaker dollar made imports more expensive.

Qatar Central Bank said that M2 money supply growth, an indicator of future inflation, accelerated to an annual 53% in March 2008 from 33% in December 2007.

Qatar has taken a number of measures, including raising the bank reserves requirement, in an attempt to slow money supply growth and inflation.

Khaleeji Commercial Bank enters building business

Arabian News reported that Khaleeji Commercial Bank is entering the building materials business. It is capitalizing on the Middle East's construction boom by setting up a construction supplies company called Binaa. The new entity is expected to have a cumulative investment value of more than USD 2 billion.

The new business will aim to have a capacity of more than 32 million cubic meters of ready mix concrete, pre cast and cement blocks per annum, in addition to trading in steel, aluminum, glass and various types of aggregates.

Mr Ebrahim H Ebrahim board member and CEO of KHCB said that "Due to a variety of factors, 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. Our intention is to build a first class, regional brand that will effectively reposition the building materials industry in the region. We will also be looking selectively at consolidation targets as a way to execute the company's growth strategy."

Khaleeji Commercial Bank and Binaa have been working with Gulf Organization for Industrial Consulting to develop the new entity's business strategy. China National Building Materials Company will be a strategic technical and trading partner in the new venture. Binaa also has strategic partnerships with construction, real estate and investment firms, including Sambu of Korea, Gulf Finance House, Abu Dhabi Investment House, Emirates Islamic Bank, Dubai Investment Company and Athman Investment Company.

Khaleeji Commercial Bank is a Bahrain based Islamic private bank, owned by a group of regional strategic investors and its founding shareholder, Gulf Finance House. It offers commercial and corporate banking services, wealth management, structured investment products and project financing facilities.

DP World accounts for 91% trading on DIFX – Report

The Business Weekly reported that DP World accounted for more than 91% of the traded value and 97.76% of the total volume of trading on DIFX during January to May 2008 period.

While the recently listed DEPA accounted for 7.91% of the total transactions, the remaining 10 shares do not have anything to claim so far, may be less than one per cent of the total traded value on DIFX during January to May 2008 period. While DP World has traded for a total value of USD 908.23 million the value traded in DEPA Limited was USD 78.672 million.

According to market experts and analysts, the market is unlikely to revive in the immediate future as on the one hand the sentiments are down globally and on the other, the shares are denominated in dollar on DIFX leaving the underlying price to follow the dollar value.

Though there have been talks about more companies looking at DIFX for their listing, the only company that has announced its plans of IPO and listing is Damas International Limited which is the parent company of Damas Jewellery LLC.

37 Saudi firms to establish a giant contracting company

Gulf News reported that Saudi contracting companies which do not have the financial capability to take advantage of the current economic boom in the Kingdom by winning contracts for mega projects are trying to merge. As per report, as many as 37 small contracting companies have agreed to establish a giant national contracting company specialized in all types of construction work and the company's initial capital will range between SAR 3 billion and SAR 5 billion. The founders will soon take a final decision regarding the headquarters of the company, which will start operation by the beginning of next year.

Dr Abdul Aziz Al Otaishan chairman of the board of directors of Al Otaishan Contracting Group said that about 37 contracting companies working in building construction and manufacturing of construction materials have taken the decision to create a big company capable of implementing mega projects. He added that "The company will most probably be headquartered either in Riyadh or the Eastern Province."

He said that more than 15 contracting companies in the Eastern Province have expressed their readiness to join the new company. He added that "We plan to bring all the contracting companies under the umbrella of the parent company."

Mr Al Otaishan further added that the Gulf region is witnessing the implementation of more than 1,000 giant projects worth a total of USD 1.9 trillion over the next 10 years. He said that "About 40% of these projects are in oil, gas, desalination, electricity and real estate are concentrated in Saudi Arabia. We plan to bring all the contracting companies under the umbrella of the parent company."

ICCI launches new firm to manufacture low cost cars

Arab News reported that Islamic Chamber of Commerce & Industry has launched an investment company called Foras Investment Company with the aim of manufacturing low cost cars, aircraft and satellites.

Mr Saleh Kamil chairman of ICCI said that "Foras will work in collaboration with the Organization of the Islamic Conference and the Islamic Development Bank with the aim of launching international companies specializing in strategic industries." He added that the limited joint stock company would have an initial capitalization of SAR 562 million with 20% IDBIDB stake.

Mr Kamil said that businessmen from Saudi Arabia, Kuwait, Egypt, Senegal and Mauritania will also invest in the company. He added that "The company will launch several industrial projects in OICOIC member countries with the aim of supporting the economies of those countries and solving their economic woes such as unemployment and poverty to a great extent."

He further added that the company will also strive to promote bilateral tourism, infrastructure development and establish free trade zones in the OICOIC member countries.

ONGC Videsh to relinquish Qatar block

Projects Today reported that, after ONGC Videsh Limited discovered the low reserves which seems to commercial unviable, it has decided to relinquish the Najwat Najem oil block in Arabian Gulf in offshore Qatar. It will also release the rig acquired for undertaking drilling activity in the block.

OVL had signed an appraisal, development and production sharing agreement with the government of Qatar during the year 2005 for appraisal of the Najwat Najem oil structure. The block is the first overseas project executed by OVL wherein the company has both 100% ownership and is the sole operator.

The first appraisal well in the Najwat Najem structure was spudded in July 2007. OVL had firmed up 2 locations for evaluating the structure and assessing and proving its commerciality. While the first well spud showed oil and gas, the second well showed encounter of gas.

GCC firms raise awareness of the unified law on AD

Gulf News reported that The Dubai Chamber of Commerce & Industry and the ministry of economy and the Technical Secretariat for Anti Dumping are working together to raise awareness of the unified law on anti dumping for the Gulf Cooperation Council.

Top officials of Technical Secretariat for Anti Dumping said that potential investors are allowed to file complaints against dumping activities which could harm their trade.

Mr Rihan M Fayez director general of the Technical Secretariat for Anti Dumping said that there has been an increase in the number of cases related to dumping in recent times, which has forced the UAE government to establish bodies to deal with the issue. He added that industries need to be aware of preventive measures that can be taken by anti dumping bodies.

Mr Fayez said that "The objective of the unified law is to combat harmful practices that threaten the industry." He added that potential investors who decide to not follow through on their intentions when they notice dumping in the market can file complaints with the correct authorities.

Mr Atiq Juma Nasib executive director (commercial services) of DCCI said that "Anti dumping has increased worldwide. East Asia accounts for a large and growing share of worldwide dumping."

In the recent past, Dubai Wire, a Jebel Ali based manufacturer of steel nails faced charges in the United States for dumping nails at less than fair value, which later was declared negative by US Department of Commerce. Department of Commerce determined that producers and exporters from the UAE have not sold steel nails in the United States at less than normal value. Therefore, the UAE investigation was terminated.

Aliya Co secures AED 1.3 billion contracts in Dubai and Ajman

Sharjah based Aliya Contracting Company has recently bagged AED 1.3 billion worth of projects in Dubai and Ajman.

Mr Nazir Ahmad chairman of Aliya said that "These include an AED 500 million triple towers project. Besides, we have been awarded an AED 140 million project in Saudi Arabia and another three buildings with a value of AED 250 million."

Mr Nazir said that it is planning to enter the real estate development market. He added that "We have already purchased some plots for our own projects. We are going to build two towers, each worth AED 165 million, at Park View on the Emirates Road. With the new projects at hand, we are planning to hire more people to manage the forthcoming projects. Right now, we are managing a total of 25 project sites in the UAE."

The UAE's construction sector is witnessing perhaps the fastest growth in three decades with thousands of projects currently being under execution. The fast track growth is also posing a stiff challenge to the contractors, who are finding it difficult to cope with rising prices of building materials, soaring operating cost and cost of manpower.

Mr Ahmad said that "Prices of steel doubled in 8 months while other raw materials have also become expensive. We could possibly absorb 5% to 7% price escalation, not anything beyond that. A lot of contractors are now fixing materials and are buying in advance to save them from the risks of price escalation."

Sidhar industrial area remains closed for 6th consecutive day

Business Recorder reported that all power looms units and sizing units remained closed in Sidhar industrial area on 6th consecutive day on June 29th 2008, where tension between workers and owners still prevailing due to non implementation of peace plan.

At the ill fated industrial area Sidhar, nor workers returned on duties, neither owners start their business. Meanwhile, in Lakar Mandi, Liaqatabad and Jhang Road industrial areas the situation become normal and more than 50% weaving units and sizing industries have started functioning.

Mr Muhammad Akram Ghouri VC of All Pakistan Cotton Powerlooms Association said that the disturbance has yielded approximately PKR 5 billion loss within a week. He demanded of the government for maintaining industrial peace in Sidhar in the best interest of the country. It may be recalled that the new labor rates for power loom industry will be implemented from July 1st 2008 under agreed peace plan.

Aramex introduces four hybrid vehicles in MEA

Aramex recently announced that it had introduced four hybrid cars to its ground fleet, thereby becoming the first logistics company to use hybrid vehicles in the whole of the Middle East.

While the move is part of Aramex's bid to help reduce its carbon foot print across the region, it is also a strategy to help the company cut down its fuel consumption levels amid rising fuel prices. Environmentally friendly cars are expected to reduce carbon emissions and fuel costs by 50 per cent to demonstrate the company's commitment to environmental sustainability.

Mr Raji Hattar chief sustainability officer of Aramex said that "Preserving our environment is part of Aramex's long term commitment to corporate social responsibility. By proactively identifying and investing in eco-friendly business practices such as the use of hybrid vehicles, we are helping build a truly sustainable business model. At a critical time when high oil prices are putting a strain on the industry, the use of hybrid vehicles not only helps protect the environment, but also provides a cost effective solution to soaring fuel costs."

Mr Hussein Hachem CEO of Aramex for GCC said that a number of transport companies in the region were likely to adopt hybrid technology not only as part of their social responsibility to the environment but also to reign on soaring prices of fuel. He added that "Operation costs for most companies have gone up significantly as a result of increasing prices of fuel. Companies in this line of business are now looking at better ways to reduce their operation costs without losing business."

Aramex has already converted its fleets to hybrid in Jordan and to run on natural gas in Egypt and will be conducting tests on its vehicles in the GCC. It has switched the majority of its fleet to unleaded fuel and is now looking at ways to make its entire fleet environmentally friendly.

Pakistan and Iran sign bilateral trade agreements

APP reported that Pakistan and Iran have signed four documents of co operation at the 17th session of their Joint Economic Commission. Mr Syed Naveed Qamar federal minister for finance & economic affairs led Pakistan's delegation in the meeting while Iranian side was led by foreign minister Mr Manouchehr Mottaki.

The four documents included MoU of 17th session of JEC between Pakistan and Iran, MoU between Iran Chamber of Commerce, Industries & Mines and Federation of Pakistan Chambers of Commerce & Industry, Agreement between two sides on international transport of passengers and goods and MoU between Pakistan Television Corporation, Pakistan Broadcasting Corporation and Islamic Republic of Iran Broadcasting.

Mr Qamar said that Pakistan Iran Joint Economic Commission is a useful institutional framework to regulate the economic relations and identify new areas of co operation. He highlighted that Pakistan and Iran needed to take positive steps towards greater economic integration. He added that both countries also need to take initiatives in order to open up their economies and explore possibilities of enhancing trade.

Mr Qamar said that "We look forward to starting the bus service between the two countries by the middle of August 2008 which will facilitate travel of Zaireen and other visitors."

Mr Mottaki said that the two countries were co operating on the gas pipeline project and expressed hope that the peace pipeline will benefit not only the two countries but other countries in the region as well.

Iran inks MoU with Serbia to boost transportation

Tehran Times reported that Iran and Serbia have signed a MoU on goods and passenger transportation. The MOU was signed between Mr Mohammad Bokharai Iranian deputy minister of roads & transport and Mr Miodrag Jocic Serbian deputy minister of transport & communications.

Mr Amir Mohammadi Iranian border transit & depot bureau official explained that this MoU specifies the methods of transportation for passenger and goods in both countries and will allow both countries transportation fleets to enter and pass the other sides territory without paying any taxes or tariffs. He added that "Before the conflicts started in the Balkan region, most of Iran’s transit routes to Western Europe passed through former Yugoslavia, these transits would sometimes reach over 5000 trips per year."

Mr Mohammadi went on to note that due to the importance of this route, MoUs were signed with the countries that were on it are countries such as Croatia and Slovenia. He added that "For this, two rounds of negotiations were held between the two sides and the MOU was finalized by an Iranian expert sent to Belgrade and the Serbian deputy minister of transport and communications was officially invited to Iran to sign this MoU."

However, the Serbian government in an official statement announced that all international contracts signed by the former government were still valid, but with the recent changes made in the Serbian government the need to resign a MoU was felt more than before.

Iran to increase export gas to Turkey

IRNA quoted Mr Gholam Hossein Nozari Iranian oil minister as saying that the export of natural gas to Turkey will increase in winter of 2008.

Referring to the recent meeting of oil importing and exporting countries which was held in Jeddah, Mr Nozari noted that negotiations have been held for increasing the volume of gas export to Turkey.

It may be noted that Turkey has been buying gas from Iran via a pipeline from the northwestern city of Tabriz to Ankara since December 2001 as per a contract signed in 1996.

Iran Khodro to export 50% of output by 2016 – Report

IRNA reported that Iran Khodro Auto Manufacturing Company has decided to export 50% of its total products by 2016.

Mr Manouchehr Manteqi MD of Iran Khodro Industrial Group said that Iran Khodro plays a key role in CNG powered engine production and design across the globe and it has decided to export more CNG powered engines mainly to Muslim countries. He added that "Some USD 60 million worth of cars have been exported in 2007."

Mr Shakor Sesker Iran Khodro Industrial Group's sales manager in Turkey said that Samand EL car would hit the Turkish market in May 2009. He added that "Up to now, Iran Khodro has sold 1,600 vehicles in Turkey."

According to the sales manager, Samand EL will be sold easily due to the Turkish market's need and the car's lower price in comparison with that of Samand LX.

Iran Khodro Company's product, Samand, has been widely welcomed by people in different cities of Turkey. Iran Khodro exports the country's first national vehicle, Samand, to a number of countries, including Syria, Tajikistan and Turkey.

NIOC to raise oil output to 4.28 MBPD by March 2009

Mehr News Agency reported that, by producing 4,230,000 barrels of oil per day, National Iranian Oil Company set a record during the 30 years after the victory of the Islamic Revolution.

Mr Seifollah Jashnsaz MD of National Iranian Oil Company said that the company is undertaken to raise the output to 4,280,000 barrels per day by March 2009. He said that the oil industry of Iran has been under global sanctions during the 30 years after the revolution, but this issue has not ever hindered us from attaining our pre defined goals.

Arak Refinery unveils EUR 2.7 billion CAPEX plan

Mehr News Agency reported that the production capacity of Arak refinery will increase to 249,100 barrels per day from the current 169,100 barrels per day through EUR 2.7 billion investment.

Mr Rashid Seyedian manager of project for qualitative improvement of Arak refinery products said that a consortium constituted of an Iranian company and the Chinese SEI Company has started the project progressing by 20% so far.

Hebei Steel Group officially established on June 20th 2008

According to Hebei Province's state owned asset supervision and administrative commission, Hebei Steel Group has officially established on Jun 30th marking birth of another 30 million tonnes grade steel company in China.

The new group has registered in Shijiazhuang with CNY 20 billion following a series of mergers and acquisitions like between Angang and Bengang, Baosteel with Guangzhou Steel, Shaoguan Steel, Wuhan Steel with Liuzhou Steel and incorporation of Shandong Steel Group in the recent period.

Hebei state owned asset supervision and administration commission invested CNY 50 million and transferred the state holdings in Tanggang and Handan Steel Group to the newly built group, and made them the two subsidiaries of Hebei Steel Group, which will take charge of development strategy, investment decision making, marketing, product research, capital operation and commodities purchase.

According to the report, Hebei Steel Group now boasts a capacity of more than 30 million tonnes per year. By the end of 2010, the annual steel output will further grow to 50 million tonnes per year while the placement moving toward Caofeidian, Jingtang port and Huanghua port.

Benxi Steel unveils CNY 6 billion CAPEX

It is reported that Benxi Iron & Steel Group will invest a total of CNY 5.99 billion in technology improvement of over twenty projects, including alterations in slab caster, first phase construction of super thin CR sheet and 3# heating furnace and relocation of blast furnace.

Among the total fund, CNY 5.2 billion will be put into items which have not yet been finished last year and CNY 760 million will go to newly commenced projects which required another CNY 30 million for its preparation work.

This investment mainly goes to three aspects.

1 The strategic key items of the 11th Five Year Plan including improvement of slab caster, relocation of blast furnace and coke oven, smelting and CR project for stainless steel, involving about CNY 3.2 billion and expected to be put into service in succession in the end of 2008 early 2009 and early 2010.

2. The funded area is supportive projects which need to enhance product quality, matching technologies and procedure completion. They are first-phase alteration of super thin CR sheet, HR procedure completion and improvement in 180 ton converter, upgrading of continuous caster and 1# CR galvanized streamline among over ten items, with a fund of CNY 1.87 billion and construction period of one or two years.

3. For energy saving and emission reduction, environment improvement and recycling industry development, involving CNY 530 million and expected to be completed within one or two years. These projects include 3# heating furnace improvement, dust removal of mixer furnace, energy saving and environment improving of reloading and converter, reclaiming and decoking of cokery and smoke decoking of 22# furnace for power generating.

Chinese domestic steel prices remain steady last week

It is reported that Chinese domestic steel prices have shown mixed trend in the week ended June 27th following the recent settlement for Rio Tinto's iron ore.

1. Price for medium plate has dipped last week. Price has dropped by nearly CNY 100 per tonne in Nanjing, Fuzhou, Guangzhou, Tianjin and Chengdu and dipped less than CNY 50 per tonne in other regions.

2. Price for HRC stabilized in most regions with price for thick steel coil slightly moving up in certain markets. Price for CRC declined some CNY 50 per tonne in Shanghai, Hangzhou and Tianjin. And price for large and medium sections also dipped some CNY 10 per tonne.

3. Slumping construction steel price has moderated last week amidst mixed price. And price for construction steel inched up CNY 30 per tonne to CNY 50 per tonne in East China's Shanghai, Hangzhou, Nanjing, Hefei and Jinan etc and dropped nearly CNY 50 per tonne in South China's Guangzhou.

4. Price in North China's Beijing, Tianjin and Shijiazhuang etc have edged up CNY 20 per tonne to CNY 50 per tonne following previous week's slump and declined CNY 70 per tonne to CNY 100 per tonne in Southwest and Northwest.

5. Last week, 15 rebar producers and 9 wire rod manufacturers have lowered their ex works prices, while 2 rebar makers and 23 wire rod producers lifted up EXW prices. And the construction steel stocks have stopped declining at the moment. Construction steel stock in Shanghai has increased slightly from last week to stand at over 280,000 tonnes.

6. Pig iron price keeps strong despite some raw materials' price decline from high level like scrap resulted from tight electricity supply. And price goes at CNY 4900 per tonne for pig iron in Shandong and CNY 5350 per tonne for billet in Jiangsu.

GSI acquires 99% stake in Maoming Hengda Steel Group Ltd.

General Steel Holdings Inc announced that it has acquired 99% of Maoming Hengda Steel Group Ltd a steel products processor located at Maoming city in Guangdong province, China’s southern coastal region. The Company entered into the purchase agreement with Hengda on June 25th 2008.

According to the release, production capacity at the facility is 1.8 million tonnes annually with the majority of production focused on high speed wire, an industrial steel product used in construction. The facility has been operating at approximately 10% of production capacity due to a redirection of corporate focus by the previous owners. The facility began production in 2005.

The release also added that through its subsidiary, Qiu Steel Investment Ltd General Steel paid CNY 50 million cash to purchase the company from private parties. Hengda has a Total Asset Value of approximately CNY 720 million and Equity of approximately CNY 80 million.

Mr Henry Yu CEO & Chairman of General Steel said ’’This acquisition is a strategic and important step in the growth of our company. He said that the Guangdong-Guangxi region is one of the most robust steel markets within China with demand soon to reach 50 million tonnes annually. Hengda’s state-of-art production lines and underutilized capacity mean we can quickly ramp-up production to exploit the strong demand. Long term, Hengda’s location adjacent to a deepwater port is key to allowing us to explore export opportunities to South East Asia. He added that owing to the on-going industry consolidation, we remain committed to our strategy of growing through aggressive mergers, acquisitions and joint ventures and are actively seeking additional target companies. Our goal is to become one of the largest and most profitable non-state owned steel companies in China."

Update on construction steel product price in China

In Shanghai
Large scale rebar that is exempted from inspection is offered at CNY 5170 per tonne to CNY 5180 per tonne down by CNY 20 per tonne
Other large scale rebar at CNY 5030 per tonne to CNY 5040 per tonne
Third grade rebar at CNY 5420 per tonne to CNY 5450 per tonne down by CNY 20 per tonne
Common carbon wire rod at CNY 5520 per tonne
High speed wire rod at CNY 5840 per tonne.

In Beijing prices rise by CNY 50 per tonne to CNY 70 per tonne.
High speed wire rod is sold at CNY 5950 per tonne to CNY 6000 per tonne
Second grade large scale rebar at CNY 5450 per tonne to CNY 5470 per tonne
Third grade large scale rebar at CNY 5670 per tonne.

In Tianjin
High speed wire rod is sold at CNY 5880 per tonne to CNY 5900 per tonne up by CNY 90 per tonne
Second grade large scale rebar at CNY 5470 per tonne to CNY 5480 per tonne up by CNY 20 per tonne
Third grade large scale rebar at CNY 5670 per tonne to CNY 5700 per tonne up by CNY 20 per tonne to CNY 50 per tonne.

In Guangzhou
8mm common carbon wire rod made by Shaoguan Steel is priced at CNY 5500 per tonne
8mm high speed wire rod at CNY 5750 per tonne
Large scale rebar at CNY 5480 per tonne to CNY 5500 per tonne
That provided by Yufeng at CNY 5320 per tonne to CNY 5340 per tonne
Third grade rebar provided by Ma'anshan Steel at CNY 5650 per tonne.

(Sourced from MySteel.net)

Baosteel takes 80% stake in newly formed Guangdong Iron and Steel Group

It is reported that Baosteel Group, China's largest steel producer, opens a CNY 35.86 billion joint venture with smaller rivals in the southern province of Guangdong.

As per report, the new steel mill merged Guangzhou Iron and Steel Enterprises and Shaoguan Iron and Steel Group. Baosteel paid CNY 28.69 billion for 80% stake in the newly formed Guangdong Iron and Steel Group. The two local rivals have a 20% stake.

Mr Xu Lejiang chairman of Baosteel's said the industry restructuring were starting to yield results. He said that the local steel industry had entered a critical period for growth. It must change growth mode, as the rising costs in iron ore and coal and penetration of overseas rivals squeezed the corporate profits.

Angang settles partnership with Yingkou Port

It is reported that Anshan Iron and Steel Group Corp has recently signed an agreement with Yingkou Port Group CORP for stabilizing the strategic partnership between the two state-owned enterprises.

The business cooperation between Angang and Yingkou port can date back to 40 years ago. Nowadays, Angang's raw materials and steel products that transported from Yingkou port occupy 10% of the total port's annual throughput in volume. Angang becomes the primary client for Yingkou port.

In particular, Yingkou port will seize more opportunities to accelerate its own development from the ongoing construction of Bayuquan project invested by Angang.

Neighboring Angang, Yingkou port was listed in the national top 10 ports in China with throughput broke 100 million tonnes last year. The port is aiming to reach 200 million tonnes of throughput by 2010.

As per report the cooperation between the two enterprises will help to perk up the declining old industrial base in Liaoning province.

Magang starts roll plating project

It is reported that Magang Company’s world hard chrome plating processing production line for rolls has started construction recently. The production line is expected to put into production by the end of this year.

The total investment of the project is more than CNY 30 million. Japan will provide related technology and service.

The new roll can extend four times life thus greatly reducing the energy consumption and cost.

Hubei’s largest scrap steel processing base locates in Dongxihu District

It is reported that, Wuhan Asia Iron and Steel Company and the office of Dongxihu District signed an agreement for building a largest scrap and scrap metal processing base.

As per reports, the project covers an area of 174 acres and the total investment is CNY 217 million and will be mainly in production, processing, sales, distribution of all kinds of scrap, scrap metal etc.

Baosteel commissioned Five CR No 2 HDG line

It is reported that Baosteel Branch Five CR Strip Project No 2 HDG line started trial production on 28th June and the first coil was rolled according to the contract.

Baosteel said that the commission of the line would further expand the capacity of auto steel and home electric appliance steel in Baosteel. The design capacity of No 2 HDG line is 350,000 tonnes per year and products are thin, high surface quality auto and home electric appliance galvanized sheet.

Baosteel’s No 2 HDG line has already successfully produced 600 tonnes of galvanized sheet and all index reach the standard of consumers.

Chenggang exported 39,000 tonnes of steels in May

It is reported that Tanggang Group Chenggang Company totally exported 39,000 tonnes of steel products in May and sold at an average price of CNY 6800 per tonne creating the highest monthly level.

Along with approaching Olympics, the nearest and largest selling market of Chenggang. Beijing market tends to be weak, which posed some impacts to its steel sales. Therefore, it started to turn to international market that has a robust mark