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.

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.

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.

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.

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.

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."

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.

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.

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.

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.

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.

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.

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."

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."

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.

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.

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.

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)

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.

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 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."

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 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."

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."

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 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.

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.

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.

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.

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.

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.

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.

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.

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 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 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.

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

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.

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."

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)

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.

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.

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.

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 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.

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.

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.

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.

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.

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.

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)

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.

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 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.

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.

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.

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 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.

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 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 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.”

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.

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.

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)

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.

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.

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.

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.

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."

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.

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 Persian 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.

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.

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."

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 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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."

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)

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.

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.

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.

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.

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.

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 market demand and rising prices so as to market shares.

Chenggang involves itself into the research of global steel market in a view to avoid the risks brought by adjustments of national tariff to foreign trades. Additionally, it also strengthens cooperation with import companies and makes some measures resolutely for signing short term export contracts with customs but not long term and bimonthly agreements.

The company is gradually optimizing its management, strengthen the connection of all procedures, enhancing coordination and communication with production departments and ensure the delivered steel products to meet customers’ requirement.

It is reported that the purchasing price of scrap in Jiangsu began to drop since last week and the scrap purchasing price of Xingcheng Steel and Nantong Baori Steel dropped by CNY 20 to CNY 100.

Seeing from scrap market data, price in Changzhou dropped by CNY 80 down by CNY 40 for Jiangyin and CNY 50 for Nanjing. The tumbled price brings more pressure to the local scrap distributors. Scrap price hit new high continuously since this year, and the sharp rising price made scrap distributors at a loss.

The main reason for this was the domestic inflation, goods price rising especially the raw material price rising. Pig iron price began to climb continuously pulled by coke and iron ore price rising, then the steel price climbed all the way, followed by scrap price hike.

It is reported that recently, China Erzhong and Fujian Sangang Group signed 3000mm thick steel rolling equipment supply contract. On the signing ceremony, the deputy of China Erzhong Group thanked to the Sangang’s support after the 5.12 earthquake.

Mr Chen Guanqun vice GM of Fujian Sangang Group said that after the earthquake, Sangang had all long concerned about the situation of China Erzhong. Sangang has full confidence of the cooperation between China Erzhong.

It is reported that construction steel export prices remain at high levels in China despite downward correction in domestic market. However, the price gap between steel makers has been widened again. The market is actually in chaos.

The report added that Chinese domestic market prices are still in downward correction and the dull period is expected to maintain for some time.

Shanghai market prices for HRB335 20mm rebar is being quoted at CNY 5170 per tonne to CNY 5180 per tonne down by CNY 30 per tonne from last Friday. HRB400 grade material is being quoted at CNY 5420 per tonne to CNY 5450 per tonne a decrease of CNY 20 per tonne. Commercial wire rod is at CNY 5520 per tonne that for hi speed material is tagged at CNY 5840 per tonne flat with last week.

According to Mysteel, taking Shanghai price for HRB335 20mm rebar as benchmark, the strength above CNY 4900 per tonne would bolster the price to CNY 6000 per tonne in the end. There would be another round of increase following the correction. However, export offers by steel markers are quite different at moment due to different quality and different export channel. Shagang is said to be offering rebar at USD 1350 per tonne FOB, which compares with prevailing level of USD 1120 per tonne to USD 1150 per tonne FOB by medium and small sized steel mills.

An east China based trader said that "Shagang's high offer is due to its entry to Dubai market and it could enjoy a sky high level of USD 1400 per tonne CFR. As far as my knowledge, only Shagang is allowed to sell its rebar in the local market of Dubai and other Chinese steel makers are still waiting for the approval of certifications."

Most contract price for common carbon rebar to South East Asia is at USD 1080 per tonne USD 1100 per tonne FOB despite transaction price of USD 1250 per tonne to USD 1300 per tonne FOB for shipment to Middle East. Quotations for wire rod with boron is being exported at USD 1000 per tonne FOB and offers for material without boron are at around USD 1180 per tonne USD 1200 per tonne FOB. Transactions for wire rod are described to be quite good and there is less allocation than expected.

According to China’s National Bureau of Statistics, Chinese industrial enterprises with annual operating revenue in excess of CNY 5 million reaped a combined profit of CNY 1.0944 trillion in January to May 2008 up by 20.9%YoY

The Bureau said that despite an overall rise in profits across the 39 sectors listed in the report, the crude oil processing and coking sectors reported a loss of CNY 44.3 billion (USD 6.46 billion) over the January to May period, slipping from a profit of CNY 35.2 billion (USD 5.13 billion) during the same period last year.
The below table shows the

Annual profit growth recorded by major Chinese sectors during the first five months of 2008.

(Change in YoY)
(Source: National Bureau of Statistics)

It is reported that two Chinese steel companies Tangshan Iron & Steel Group and Handan Iron & Steel Group combined recently to form the world's fifth largest producer.

As per report, the new state owned company was called Hebei Iron and Steel Group Co and replaces Baosteel Group Co as China's biggest steel company.

Mr Wang Yanjun a Tangsteel spokesman said that "The new group is officially set up and it would be based in the northern city of Shijiazhuang in Hebei province, which encircles Beijing.”

According to the Chinese financial press Tangsteel's steel output last year was 22.75 million tonnes while that of Hansteel was 9 million. Their combined total would rank fifth worldwide after South Korea's POSCO which produced 32.8 million tonnes.

It is reported that Tangshan Steel Group's Chengde Iron & Steel Company exported 39,000 tonnes of steel products in May with average export price of CNY 6800 per tonne both hit its monthly record.

As per report export goes up steadily in previous months for the steel mill and export prices are CNY 800 per tonne to CNY 1000 per tonne higher than those distributed in domestic market.

It is reported that Jiangxi based Pingxiang Iron & Steel Co Ltd has achieved sales revenue of CNY 10.51 billion up by 75.11% YoY in the H1 of 2008 with pre tax profit of CNY 834 million up by 26.61% YoY out of which profit accounts for CNY 356 million up by 14.5% YoY and tax of CNY 478 million up by 37.43% YoY respectively.

As per report the mill produced pig iron of 1.8 million tonnes up by 11.9% YoY converter steel of 2.16 million tonnes up by 10.3% YoY and finished products of 2.18 million tonnes in the H1 of 2008 up by 11.8% YoY.

RIA Novosti reported that Russia's electricity monopoly will cease to exist when wide ranging reforms to the electricity market come into effect. The changes are aimed at attracting investment in the country's power sector and establishing a competitive electricity market.

Mr Anatoly Chubais CEO of UES in an interview with the Vedomosti said the new power control system combining government and self government elements, as well as market and private ownership mechanisms, would ensure stable electricity supplies and boost the efficiency of the power sector.

Mr Chubais refused to comment on potential risks related to the reform, saying its major results and consequences could only be assessed within the next three to five years. He said that "One thing is clear. The risks facing the electric power reform cannot be compared to the large scale crisis that the sector and the country would face without the reform." He added that such a crisis would hamper the country's economic growth and pose serious social and political risks.

Mr Chubais said Russian and foreign direct investment in the country's generating companies' assets reached RUB 945 billion over the past 18 months. He said that "A detailed investment program has been drafted as a suitable response to the growing electricity demand for 2008 to 2012. Under the document, RUB 4.3 trillion will be invested in the sector's development, including RUB 1.8 trillion in the construction of power plants with a total capacity of 43,000 MW."

Mr Putin Prime Minister of Russia has said in the longer term, an additional RUB 20 trillion will be required by 2020 for the construction of power facilities, adding that the bulk of the funds would come from extra budgetary sources. He said that the construction of new power plants should increase Russia's electricity generation by at least 40% by 2020.

RIA Novosti cited Mr Sergei Bogdanchikov CEO of Rosneft as saying that Russia's state controlled oil producer Rosneft is considering setting up a full cycle joint venture in Eastern Europe

Mr Sergei Bogdanchikov said "We are drafting a transition plan from a joint venture in extraction to a full cycle enterprise with operations from extraction to refining and, possibly, transportation. He said that Rosneft was drafting plans for crude extraction and refining in Asia.”

Rosneft emerged as Russia's largest crude producer after taking over most of the assets of bankrupt oil firm Yukos through liquidation auctions in 2007.

RIA Novosti quoted business daily Vedomosti reported that Russia's largest diamond producer Alrosa plans to sell two oil and gas assets in Western Siberia worth USD 400 million to USD 700 million.

According to the paper, the Geotransgaz and Urengoi Gas Company have total reserves worth USD 1 billion in oil equivalent. Prospective buyers for the oil and gas assets are yet unknown, but Gazprom is not believed to be among the list of bidders.

Vedomosti said Alrosa and J.P Morgan which is assisting the diamond producer in the search for buyers have declined to comment on this information.

Analysts say companies like Russian independent gas producer Itera and Novatek that have the possibility of transporting natural gas via Gazprom's network of pipelines may be interested in the purchase.

Alrosa, which accounts for 97% of Russian and 25% of global diamond output, produced diamonds worth USD 2.37 billion in 2007.

Kazakhstan Today cited Mr Sauat Mynbayev Minister of Energy and Mineral Resources of Kazakhstan as saying that Kazakhstan has refused Agip KCO consortium to change final term of development of Kashagan deposit scheduled for 2041.

He said that "The consortium brought up the question of postponing the final term for later than 2041. Kazakhstan has refused point black. He added that final term of the beginning of development of Kashagan deposit 2041 remains.”

It is reported that shareholders of Zaporizhkoks at their AGM held on June 27th 2008 decided to reinvest profit of 2007.

As per report the AGM shed little light on future plans of ZACO. One of the issues mentioned was ZACO's readiness to produce the premium coke that will be needed by Zaporizhstal once it installs PCI technology in the next one two year. Another issue is the intention to reconstruct coke battery#1 which is almost 100% depreciated.

The report also added that the reinvestment of profits is logical since ZACO is ahead of a massive capital expenditure on reconstruction of its coke batteries. The reconstruction of CB#1 is expected to start in 1H2009, and we estimate the underlying cost at USD 100 million to USD 150 million. Another value driver of the stock is the construction of electricity generation units which will allow ZACO refusing purchases of electricity from aside. We look positively at the plant and recommend buying the stock.

RIA Novosti reported that the duty on Russian oil exports will rise by USD 97.8 to a record USD 495.9 per tonne as of August 1st in line with world market trends

Mr Alexander Sakovich deputy head of the customs payment department at Russia's Finance Ministry said that "The average price was USD 123.36 per barrel for the May to June monitoring period, which puts the maximum duty rate at USD 495.94 per tonne. Therefore we will reach a record export duty on Russian oil that will be fixed at USD 495.9 per tonne from August 1st 2008"

According to the report, the Russian government adjusts export duty on crude and petroleum products every two months, depending on changes in the Urals blend price on world markets.

Interfax reported that Russia's trade surplus in January to May 2008 up by 60% YoY to USD 84.3 billion.

RIA Novosti reported that Gazprom consolidated net profit to International Financial Reporting Standards up by 7.3%YoY to RUB 658 billion in 2007.

According to the report the state natural gas monopoly's revenue increased 11.1% in the reporting period to RUB 2.39 trillion. Gas sales rose by RUB 116.1 billion to RUB 1.528 trillion mainly as a result of gas price increases for post Soviet countries as well as domestic consumers.

The report also added that base prices on foreign markets rose on average 27%, which was partially compensated by a 4% drop in net sales. Domestic gas prices rose 15%, while net sales declined 3%.

In 2007, Gazprom produced 548.6 billion cubic meters of gas, and plans to produce 563 billion cu m in 2008, up 14.4 billion cubic meters on 2007.

Ukrainian News Agency reported that Ukraine is not pleased with the price of USD 400 per 1.000 cubic meters for imported gas from 2009.

Mr Yurii Prodan Fuel and Energy Minister of Ukraine said that "This price cannot please the Ukrainian side. We will negotiate a gradual change of the gas price. He said that Ukraine worked out its proposals on a formal approach for the formation of gas price, and gas transportation.”

Mr Prodan said that in the course of today's visit of the Ukrainian delegation to Moscow, a concrete price for gas and its transportation will be discussed from 2009. He said that concrete talks about the price must proceed at the level of branch ministries and committees.

UK based MEPS said that demand for stainless steel is weakening in most parts of the world and it forecasts that global crude production virtually unchanged at 28 million tonnes in 2008 and that the Western World output is expected to decline by 300,000 tonnes this year.

MEPS said that “Domestic supply by the EU mills was down in the first quarter by almost 4% compared to the same period in 2007. Inventory building in the second half should lead to a figure for the full year at a similar level to that in the previous twelve months.”

MEPS added that “Japanese production was 10% lower, year on year, in the first trimester. Further output curbs are being put in place in mid year. However, inventory replenishment may occur in the latter months leaving the annual crude outturn 4% down on 2007.”

MEPS said that “US domestic output held up quite well during the first quarter. This situation should continue for the remainder of this year. The import threat was limited in the early months but may increase slightly. Nevertheless, we predict a similar outturn in 2008 to that recorded in the previous year.”

MEPS also said that “South Korean stainless steelmaking fell significantly in the first quarter. POSCO will reduce output in July. Further curbs are anticipated later in the year because domestic demand is weak and export potential lacklustre. Taiwanese producers are also decreasing the level of supply to the market. A 5% reduction is forecast for 2008 relative to 2007.”

MEPS said that “Crude output from Brazil and India should be higher this year as domestic demand increases. However, production in South Africa is expected to be lower, due to the restrictions on power supply. The net result of these factors is likely to be a modest increase in total production from the others category in our table.”

MEPS added that “Chinese mills are likely to restrict output in the third quarter. New capacity continues to come on stream. Output curtailments should contain this year's total domestic crude supply to a figure below 8 million tonnes.”

It is reported that Tangshan Stainless Steel Project would be formally put into production in September and it should mainly produce 400 series HRC after the commission.

Tangshan Stainless Steel Company is a joint venture that is invested by Tangshan Iron and Steel Group, China 22nd Metallurgical Construction Company, Kailuan Group, Hengshui Jinhua Pipe Company etc.

The new company began to be constructed in 2003, so far has formed as a steel joint venture with sintering, iron smelting, steel smelting, and steel rolling.

Taigang Stainless Steel Co adjusted Jul EXW price Jun 27th 2008 according to the market circumstance

CR sheet/coil
1. Regardless of specifications, 304, 301, 321 prices are maintained in line with last month
2. 316, 310S prices are cut down by CNY 1500 per tonne
3. 309S, 1Cr20Ni14Si2, 305, 370 are cut by CNY 3000 per tonne.
4. Prices for 430, 0-3Cr13, 409L, 410L, 436L keep stable
5. 444 and TTS439 are cut by CNY 3500 per tonne and CNY 800 per tonne respectively.
6. Other grades hold the price flat with last month.

Medium plate
1. 304 series 6mm to 12mm plate is down CNY 1000 per tonne
2. 304 series 14mm down CNY 2000 per tonne
3. 304 series 16mm to 20mm down CNY 2500 per tonne
5. 304 series 21mm to 40mm down CNY 3000 per tonne
6. 304 series 41mm to 80mm flat
7. 316series, 310S, 1Cr25Ni20Si2 are cut by CNY 1500 per tonne
8. 309S, 1Cr20Ni14Si2 cut by CNY 3000 per tonne.
9. Prices of 400 series and other breeds keep flat with last month.

HRC
1. 304, 301, 321 series hold the price flat
2. 316 series, 310S, 1Cr25Ni20Si2 are cut by CNY 1500 per tonne3. 309S, 1Cr20Ni14Si2 cut by CNY 3000 per tonne.
4. 400 series and other breeds hold the price unchanged.

Above prices include tax, for cash payment and will be executed for contracted shipment in July.

(Sourced from Mysteel.net)

PSI has been awarded contract by the Brazilian Villares Metals SA for the delivery of the Manufacturing Execution Systems PSI metals for the company’s plant in Sumaré.

Villares Metals will employ the Production Execution System and Advanced Line Sequencing components to optimize the efficiency of the production processes and the quality of the products. The start of operations is planned for mid 2009.

Mr Bruno Ramos GM Meltshop at Villares Metals said that “Attaching great importance to quality aspects in production is a main competitive advantage of our company. We selected PSI and PSI metals to standardize the production of each steel grade and to ensure quality by higher automated processes. We have been convinced by PSI’s strong experience in the area of ensuring quality in steel making and their PSI metals solution as well as highly pleased customers.”

Villares Metals is the largest Latin American producer of non flat highly alloyed specialty steels, which, amongst other areas, are used by the automobile and aerospace industries.

With its new customer Villares Metals, PSI is expanding its position as a leading international provider of vertical market solutions for the steel industry in South America as well.

Philippine Daily Inquire reported that mining firm Platinum Group Metals Corp is set to ship 450,000 tonnes of nickel ore to Australia from its mine sites in Surigao del Norte and Isabela in the third quarter.

PGMC in a statement said that of the total, 300,000 tonne of nickel ore would come from its Cagdianao, Surigao del Norte mine site and 150,000 tonne would be shipped by its Isabela mine.

PGMC signed a five year contract with Queensland Nickel Ltd, a subsidiary of BHP Billiton, covering the annual supply of at least 1.2 million tonne of nickel ore from its mine sites in Isabela and Surigao. The supply agreement with QNI is renewable for another five years and the Isabela mine will start shipments in August.

The Surigao mine site has started its shipments, with the first 50,000 tonne made in June.

According to PGMC, this mine site is set to load the second 50,000 tonne before the end of this week. It will complete the shipment of the 300,000 tonne before the end of the third quarter.

It is reported that import price of chrome ore at Tianjin port is as under

Price in CNY per MTU

(Sourced from MySteel.net)

Danaher Motion has introduced Thomson Stainless Steel MultiTrac Ball Bushing bearings, which are constructed of 440 series stainless steel components to resist corrosion and to thrive in harsh environments with temperatures up to 180ºF.

Danaher Motion said that machine builders will benefit from extended service intervals and longer bearing life, increased machine reliability and reduced service and support costs.

They feature a patented multiple track design that delivers up to twice the load carrying capacity, or 8 times the operating life, of conventional linear bearings. When combined with Thomson stainless steel 60 Case shafting the shaft life is also extended when compared to conventional shafting. Most sizes are available with same or next day delivery.

Ms Ellen Steinbrunner product line manager of Thomson Shafting and Linear Ball Bushing Bearings said that "With a coefficient of friction as low as 0.001, these Ball Bushing bearings allow machine builders to use smaller, less expensive motors, belts, gears and ball screws when replacing high friction, plain bearings, to help them build a better machine, faster, and more cost effectively.”

She said that "Users will also benefit from patented ball control technology that ensures optimum rolling element transition while eliminating the binding and chatter common to plain bushings and sliding-way bearings. Wear resistant, engineered polymer retainers further reduce inertia and noise levels for extremely smooth, quiet machine operation.”

It is reported that POSCO has agreed to buy a 10% stake in Australian firm Macarthur Coal Ltd for KRW 420 billion (USD 402 million), in a bid to secure a stable supply of the material used as fuel.

POSCO in a statement said that it has agreed to pay AUD 20 per share to Macarthur's former director Mr Ken Talbot for the stake purchase and the deal is expected to be approved by its board of directors in July 2008.

POSCO currently has stakes in six coal mines and two iron ore mines in Australia.

Reuters reported that Magnitogorsk Iron and Steel Works will invest USD 1.8 billion developing the Prioskolskoye iron ore deposit as it seeks to become self sufficient in raw materials.

Magnitogorsk, the only Russian steel major depending on outside suppliers for the bulk of its iron ore, said it planned next year to start construction of a plant at Prioskolskoye that would be processing 35 million tonnes a year of ore by 2016.

Magnitogorsk said in a statement that "The capacity of the processing plant and reserves at the deposit will be enough to meet MMK's iron ore needs in full for over 60 years."

According to the report, MMK paid RUB 630 million at an auction in November 2006 to acquire the Prioskolskoye deposit in Belgorod region, which has reserves of 45.2 million tonnes of high grade ore and 2.2 billion tonnes of unoxidised iron quartzite.

The planned investment is higher than the USD 1 billion that analysts had forecast would be required to develop the large iron deposit near the Ukrainian border.

Bloomberg reported that Sinosteel Corp, China's second biggest iron ore trader bought a small amount of shares in Australian takeover target Midwest Corp after the stock fell.

Midwest, a Perth based iron ore mining company fell 0.3% on June 27th 2008 to AUD 6.38 on the Australian stock exchange equal to the offer price made by Beijing based Sinosteel.

Mr Andrew Stokes spokesman for Sinosteel's said “We were able to buy a small amount of shares on market. It is the first time this has happened since we announced our takeover bid.''

The report added that Sinosteel is offering AUD 1.36 billion in cash for Midwest, competing with an all stock offer made by Australia's Murchison Metals Ltd as rising Chinese demand for iron ore sent prices up for six years.

According to Australian securities rules Sinosteel can't buy Midwest shares on market at prices higher than its takeover bid without raising the offer. The Chinese company increased its stake in Midwest to 43.6% on June 13th more than four times the size of its competitor's holdings.

Bloomberg reported that thermal coal prices at Australia's Newcastle port jumped to a record for a fifth week as demand for the fuel surged in countries including India and China.

According to the globalCOAL NEWC Index, coal prices at the New South Wales port rose AUD 9.44 or 5.8% to AUD 172.10 a tonne in the week ended June 27th 2008.

The price of coal more than doubled in a year as Australian ports become congested and China, the world's biggest producer and consumer of the fuel, cut exports to meet soaring domestic demand. Xstrata, the world's largest exporter of power-station coal, BHP Billiton Ltd and Rio Tinto Group are among mining companies that ship coal through Newcastle.

Xinhua reported that a Chinese cargo ship carrying iron ore capsized off its east coast before dawn last Saturday, killing five sailors and leaving five missing.

According to the report, the ship Haoping with 14 sailors and 4,000 tonnes of iron ore on board overturned at 3:27AM in the southern Yellow Sea.

Ships in the area and a helicopter saved four of the sailors.

Bloomberg reported that Rostekhnadzor, Russia's industrial safety watchdog, halted operations at two Siberian coal mines owned by OAO Raspadskaya and OAO Siberian Coal Energy Co because of violations of technological and environmental regulations.

The watchdog in a statement said that operations at Siberian Coal's Yegozovskaya mine were halted for five days while Raspadskaya's largest mine was closed until the court decision. Rostekhnadzor initiated inspection of 72 mines in the region on June 23rd 2008 after a series of fatal accidents in coal mines.

Mr Alexander Andreev Chief of Strategy said that the court recently ordered some operations halted at Raspadskaya's biggest mine for 15 days. Raspadskaya will comply with the order and the partial closure won't affect sales.

The China Chamber of Commerce of Metals, Minerals and Chemicals Importers and Exporters has released the average reference prices for import transactions of Fe 63.5% Indian iron ore concluded last week on June 30th 2008

Delivery Price Charge

The change is with respect to prices posted on June 23rd 2008

The CCCMC reference prices are average prices for import transactions of Fe 63.5% Indian iron ore concluded the week prior to issuance date of such reference prices. The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry.

TEX reported that the benchmark price of Australian manganese ore for shipments to Japan in July to September quarter of 2008 is thought to be settled on USD 12.42 per Manganese 1% FOB by a rise of 10.9% compared with that fixed for the preceding quarter of April to June quarter.
Since the price of manganese ore for shipments to China in July to September quarter of 2008 has been decided to rise by 32.7% from that in April to June quarter, an influence of this settlement is anticipated to spread over the price of manganese ore to be shipped to Japan in October December quarter and accordingly, the price of manganese ore for shipments to Japan in the fiscal year of 2008 will certainly rise successively for the two quarters of July to September and October December.

The benchmark price of Australian manganese ore for shipments to Japan in the fiscal year of 2008 has been set on the basis of USD 11.20 per Manganese 1% FOB but it has been agreed upon by both parties that, by taking into consideration of the world movements of price for manganese ore, the benchmark price as mentioned above is adjusted in every quarter in accordance with factors for fluctuation.

Therefore, it was marked to see on which level is the price of manganese ore for shipments to regular consumers of China in 2008 settled and as a matter of fact, the price of manganese ore for April June quarter has been fixed on USD 12.20 per Manganese 1% CIF China with Australian ore. This price of USD 12.20 CIF for April June quarter has risen by 11% in comparison with that for January March quarter and this settlement of price for manganese ore to be shipped to China in April June quarter has influenced on FOB price of manganese ore for shipments to Japan in July September quarter.

For a reference, the price of Australia manganese ore for shipments to regular consumers of China in July September quarter of 2008 has been settled on USD 16.20 per Manganese 1% CIF by a rise of USD 4.00 per Manganese 1% compared with that for the preceding quarter of April June and this settlement with China on price of manganese ore for July September quarter will certainly put a substantial influence on price of manganese ore to be shipped to Japan in October December quarter in form of a rise. In view of the fact that the price of manganese ore settled with China for July September quarter has had a considerable rise of 32.7% from that for April June quarter, this impact is anticipated to be put directly on price of manganese ore to be settled with Japan for October December quarter.

(Sourced from TEX Report)

IANS reported that, after incessant rains and floods, West Bengal is now reeling under severe power cuts, with wet and poor quality coal impacting the state’s thermal power stations.

Mr PK Chakraborty ED corporate of West Bengal Power Development Corporation Limited said that most of its units have been functioning much below their capacity. He added that "Work in almost all the units have been hampered due to the supply of wet and poor quality coal."

Mr Chakraborty said that with the supply falling way below demand, the state’s power utilities have been forced to resort to phased power cuts all over West Bengal to spread the shortage evenly. The daily demand from WBPDCL is 2,200 MW to 2,300 MW. He added that "At present, we can supply only 1,900 MW. Power cuts are the only option left."

Of the four thermal power stations run by WBPDCL, Kolaghat has been the worst affected. It has a total installed capacity of 1,260 MW. One of the units is now non operational. With the coal problem standing in the way of smooth functioning of the other 5 units running at present, the thermal power station is able to produce only 720MW to 730 MW. Thus there is a huge deficit every day.

Similarly, the Bakreswar power station with 3 units and an installed capacity of 630 MW is producing only 550 MW to 580 MW. The other two relatively small power stations in Bandel and Santaldih are not experiencing many problems.

It is reported that since the hike of international iron ore price, five enterprises in the city of Chongqing including Chongqing Iron & Steel Group invest CNY 200 million together to build Chongqing Steel Resources Company Limited in order to exploit Taohua Iron Mine in Wushan County. Iron ore reserves in Taohua Iron Mines are over 100 million tonnes.

With a total investment of CNY 1.4 billion, the project is expected to be commissioned in 2012.

Meanwhile, Chongqing Steel signed an agreement with Shaanxi Ankang Iron Mine and the company would purchase 1.5 million tonnes to 2 million tonnes of iron ore concentrate from the mine.

At the same time, Chongqing Steel is accelerating the exploitation of Chongqing Qijiang Iron Mine and Banan Jielong Iron Mine.

In the coming years, Chongqing should be able to explore more than 5 million tonnes of iron ore each year by itself, taking over 50% in total demand.

Reuters reported Mr Frank Timis the chairman of African Minerals Limited as saying that the company will invest more than USD 300 million to develop a deep water port and reinvigorate Sierra Leone's railway over the next two years.

African Minerals in a statement said that the development, which includes upgrading the defunct narrow gauge railway to standard gauge, will link the company's two iron ore mines in the north of the country to the deep water port site at Pepel, 180 kilometers away.

Mr Timis said that “The railway has not worked since the 1970s so this is big. It will be finished within 18 to 22 months, depending on the supply of steel from countries like India, China, Ukraine and Romania." He said that the two iron ore sites are a 209 square kilometers concession at Tonkolili in the north of the country about 180 kilometers from Pepel and a larger site nearer to the port at Marampa, which operated for about 30 years until it closed in 1970.

Mr Timis, talking of the Tonkolili site said that we estimate conservatively that it's potentially over 2 billion tonnes. He said the iron ore mine had an expected lifespan of 40 to 60 years and would be operating within three to four years once the infrastructure, including a power plant is in place.

Mr Timis said we have invested USD 110 million since it started in 2003. The whole thing will cost more than USD 3 billion. We have the backers.

It is reported that Japanese major ferroalloy makers are in talk with their buyers for the price hike of high carbon ferromanganese.

According to the report, the makers are intending to raise the price of JPY 90,000 per tonne to JPY 100,000 per tonne at the new price level of JPY 370,000 per tonne to 390,000 per tonne for July to September shipments.

The new price is to meet the higher international price. Because of the strong demands and the higher cost for ore and electricity, the manganese ferroalloy price is moving up in higher path.

(Sourced from YIEH.com)

It is reported that South African black economically empowered coal miner Nucoal Mining has increased the production capacity at its Woestalleen colliery at Middelburg in Mpumalanga from 90,000 tonnes a month run of mine to 200,000 tonnes per month, following the successful completion of a ZAR 60 million plant expansion project that kicked off in February 2007.

Mr Paul Erskine COO while speaking at the opening of the new plant said that the company had taken the colliery from a wash plant capacity of 400,000 tonnes life of mine, when it bought Woestalleen as a junior mining house with 33,800,000 tonnes of coal reserves and a 14 year life of mine through various strategic joint ventures.

Nucoal Mining acquired Woestalleen in November 2006, when the Richards Bay Coal Terminal index had just broken into the USD 40 per tonnes to USD 50 per tonne trading range. Today, it is hovering around USD 130 per tonne.

The Woestalleen colliery has been producing coal since 1986 and exports some 660,000 tonnes per year through Swiss marketing house Glencore International. The colliery has been exporting coal through the RCBT for more than two years.

The report added Mr Erskine saying that the next project at Woestalleen will be the implementation of a phase which should take the ROM production up another 100,000 tonnes to 300,000 tonnes per month and that project is weeks away from signing and should be complete in 11 months.

Welshpool based NRW Holdings has won a USD 43 million contract from Rio Tinto Ltd subsidiary Hamersley Iron for its Brockman 4 iron ore project.

In a short statement to the market, the mining contractor said the contract includes the construction of Brockman rail line extension with works to include rail formation, culverts and tunnel overpasses.

Construction is expected to take around 38 weeks.

It is reported that US Senator Robert C Byrd has again moved to block Bush administration efforts to reduce funding for coal enforcement by the US Mine Safety and Health Administration.

The West Virginia Democrat pushed the Senate Appropriations Committee to reject a USD 10 million cut Mr Bush proposed for MSHA coal enforcement in the 2009 financial year budget and, Mr Byrd succeeded in increasing MSHA coal enforcement spending by USD 4.4 million over the current year. That replaces money that the Labor Department had transferred from MSHA's coal unit to the agency's metal or nonmetal unit and the MSHA solicitor to defend agency citations appealed by the industry.

The appropriations panel approved a USD 155 million budget for MSHA's coal unit in its spending bill for the 2009 financial year, which starts October 1st. The legislation now goes to the full Senate.

Mr Byrd also said that as long as there are miners in the field, we share a moral responsibility to do all that we can to make sure they return home safely to their families. I am hopeful that we will look back on this period and see that mine safety took a major leap forward.

It is reported that, Pangang Group Chengdu Iron and Steel Company Wangcang 600,000 tonnes coking project held the ceremony in Wangcang County, Guangyuan City. It is another important cooperation project between Guangyuan City and Pangang Group.

In the second half of last year, Pangchenggang and Guangyuan City signed a cooperation agreement to establish 600,000 tons coking project. The total investment of the project is expected to reach CNY 780 million.

The related people from Pangang expressed that Pangang put the project as an important project, they will strictly implement the national environmental policy, and accelerate the construction, strive to put it into production as early as possible.

As per reports, Wangcang, located in the core areas of coalfield, has coal reserves of about 400 million tonnes.

According to special analysts in China, the profit in Chinese coal industry should keep increasing at a high rate this year.

Chinese coal price has been climbing up rapidly since this year. Take the spot price of coal in Qinhuangdao as an example, the growth rate of price is over 60% in this year. If the price could be stable to the end of 2008, the price increase would bring high profit in Chinese coal enterprises.

Mr Wang Shuai chief analyst in coal industry from Oriental Securities said that there are many reasons for coal price rise in 2008, including the decline of growth rate of coal output, the slow down of growth rate of coal supply and the hike of international coal price.

Mr Tian Shuhua a bank securities analyst predicted that the growth of net profit in coal industry in 2008 should be over 30% and total achievement in listing companies in coal industry should surge up by around 40%.

Ranchi Express reported that Coal India Limited is reeling under shortage of manpower, particularly executives, mainly because of stagnation at different levels.

It may be noted that over 500 executives of CIL have so far left the company and the resignation of another 1000 executives are pending before the chairman for acceptance.

There is acute crisis of chief general manager and general manager rank officers. One executive is holding 2 to 3 additional charges. The recommendations of the 2nd pay panel too do not hold promise and may to prevent the exodus from the company.

In 2007, CIL management was forced to go in for campus selection and out of the 60 candidates who were appointed, many left in search of more cushy jobs elsewhere.

It is reported that import price of manganese ore at Chinese port is as under

Price in CNY per MTU

(Sourced from MySteel.net)

ABC News reported that the Environmental Protection Authority has approved the development of a AUD 1.5 billion iron ore project on Western Australia's south coast.

EPA has recommended the Environment Minister approve the project.

As per reported that Grange Resources is planning to produce up to 7 million tonnes of magnetite concentrate from the Southdown mine at Wellstead by 2012. The ore will transported to the Albany port via a slurry pipeline and exported to Malaysia where it will be made into pellets.

Grange still needs mine and port approval to get the project off the ground.

It is reported that the new coke oven heating model of Meigang was formally put into operation recently and used in the production control through two months of on line debugging.

It is the first mathematical model participating in the production control for Meigang. Previously, the automation level of the steel system of Meigang was not high, the application of mathematical model subjected to certain restriction.

The using of the model can significantly optimize the way of coke oven heating, realize the effective switch among manual, automatic, and cluster three heating ways, effectively enhance the various technology indicators for coke ovens. At the same time, the model can automatically adjust the valve’s control.

It is reported that James River Coal Co has signed an agreement to buy coal reserves and permits from Lexington based Cheyenne Resources Inc for USD 40 million.

The purchase price consists of about USD 24 million in cash and USD 16 million in cash or stock. The deal includes about 10.2 million tons of proven and probable surface reserves and 3.6 million tons of proven and probable underground reserves.

The new mines at Cheyenne are expected to produce about 500,000 tons of coal per year by the end of 2008. James River expects about 90% of the coal mined from the Cheyenne reserves to be a utility grade steam coal.

James River said that it has secured permits to start mining part of the reserves. No equipment, employees or other assets will be purchased in the deal.

'Iron Ore in India: The Present and the Future of It', authored by prominent author Dr AS Firoz provides you the valuable information on Indian iron ore market and is scenario. The report covers the reviews of the developments in Indian iron ore industry.

This report critically looks at the current situation in the industry, potential of the iron ore market growth in the medium term, growth plans of the individual major companies, demand and supply issues related to raw materials like coal and iron ore, competitive positioning of steel production in the country, socio economic and political factors which may have direct and indirect impact on the growth dreams of the Indian steel makers, etc among a large number of other relevant issues of strategic importance.

This report is the product of extensive and in depth analysis with incredible amount of time spent to put the numbers in perspective. There are neutral and frank expert views on matters which have drawn attention of the industry in the recent period.

The phenomenal rise in iron ore prices and their continued shortages worldwide have raised many important questions on the future of the iron and steel industry globally especially in the context of the changing dynamics in the environment surrounding especially in respect of raw materials to this industry. The steel makers are undergoing a phase of uncertainty, volatility and speculation amidst a supply side crisis looming large over raw materials, importantly iron ore and coking coal.

The Indian story is no different. A country having over 25 billion tonnes of officially declared iron ore resources and producing over 210 million tonnes of them annually and exporting nearly 95 million tonnes of them is important from all angles to the world of iron ore business.

Publish Date: April 2008
No. of Pages: 178 (103 analytical perspective + 25 Tables + 50 Charts)
Price: INR 100,000 plus 12.36% service tax for Indian buyers
USD 2800 for overseas buyers
Delivery Format: PDF Format

You can order your copy to reports@steelguru.com, who will send you an invoice of INR 100,000 for the report

It is reported that China will cut the rate of value added tax on dimethyl ether a coal based alternative to oil, to help boost the development of alternative energy amid soaring world energy prices.

China’s ministry of finance and state administration of taxation jointly announced on Monday that the government will cut the VAT rate on DME by 4.0 percentage points, to 13% effective on Tuesday.

The experts said that the adjustment removes the gap between the VAT rate levied on DME and other fuels, including liquefied gas and natural gas. The move will help the development of the DME industry.

China is accelerating the use of DME powered buses. Shanghai, for example, planned to put 90 more such buses into operation this year, up from 10 last year. It expected to have 1,000 such vehicles running in the city by 2010.

It is reported that a coke joint venture, funded by Pingdingshan Coal Co Ltd and Wuhan Iron & Steel Corporation was officially set up bringing the annual coke output to 10 million tonnes, the largest coke base in China.

Mr Chen Jiansheng chairman of Pingdingshan Coal Co said that establishment of the joint venture is an important step toward enhanced cooperation between the two parties and has far reaching influence on building a new type energy resource & chemical group.

Mr Jiansheng said that the two sides decided to form the joint venture this April on the basis of WISCO's coking company. Pingdingshan Coal Co then injected CNY 1.5 billion and holds 50% shares in the new corp.

Thomson Financial reported that Polo Resources Limited has intersected coal in all 28 drill holes on its Khasaat coal project at Sayshand Province in Mongolia.

Polo Resources Limited said Khasaat coal is typically good quality thermal coal much in demand in China and the project's thick seams and low stripping ratios indicate attractive extraction costs.

Interfax China reported that Iron ore stockpiles at China's 23 major ports sat at 62.15 million tonnes down by 0.3% from June 20th, while Indian iron ore stockpiles down by 0.56%YoY over the same period to stand at approximately 17.9 million tonnes.

China Daily reported that the supply of coal used in power generation will continue to face a shortage.

Ms Xue Jing director of the department of statistics and information under the China Electricity Council said "The supply of coal, which fuels over two thirds of China's power plant, is still tense nationwide, causing big pressure for the country's power plants as well as the total power supply in the country."

She said that as a kind of primary energy source, coal supplies will continue to face difficult times in the future. She added that the relatively limited capacity of China's coal companies and transportation also caused the shortage.

Ms Xue said the summer, which is China's highest energy consumption period, will also bring about intense pressure on coal supplies. She said that although the country announced it will raise the power tariff in July, this cannot totally offset power companies' losses mainly caused by rising coal price.

She added that "To power companies, this price hike can offset some CNY 50 increase in the coal price per ton, however, in some regions coal prices have increased by as much as CNY 100 per tonne."

It is reported that Jizhong Energy Group that listed recently was consolidated by Hebei Jinniu Energy Group Co Ltd and Fengfeng Group Co Ltd with aggregate assets of about CNY 28.3 billion and registered capital of CNY 4.37 billion.

As per report, the newly built group has a reserve of coal resource of 15 billion tonnes and recoverable reserve of above 2 billion tonnes.

According to the relative source with State owned Assets Supervision and Administration Commission of Hebei province by 2010, the company will develop into a modern energy giant and step into China's top ten powerful coal enterprises, with an annual coal output of 50 million tonnes, sales revenue topping CNY 45 billion and profit and tax reaching above CNY 8 billion.

Shanghai Securities News reported that Wuhan Iron & Steel Corp has got an approval of borrowing USD 169 million from a foreign bank group for buying iron ore. This is the largest loan registered in China this year featured with a biggest number of lending banks and lowest lending rate in USD

According to the report, the bank group consists of 9 foreign banks, Banque de l'Indochine and Royal Band of Scotland as the lead banks, NanYang Commercial Bank, Commerzbank, KBC Bank NV, Swedbank, Westpac Banking Corp, Bangkok Bank Public Company Limited and Public Bank Limited.

Mr Xavier Roux director of branch bank in China of Banque de l'Indochine said in the current situation of weakening economy over the world as well as badly limited USD liquidity, so many foreign banks joined to invest in WISCO was a sign of their acknowledgement of the achievements the steel maker has obtained during past years and the confidence in the company' ability to win the future.

As reported, under the circumstance of tight monetary policy and declining USD to CNY exchange rate, WISCO adjusted the capital structure for maximization in due time and enhanced ratios of USD liability and medium and long term debts among efforts to cut down capital cost, while controlling the debt scale. It adopted vehicles like choosing financial products which combine CNY with foreign currency, expanding direct investment ratio and making good use of functions of finance house in financing and hedge to guarantee forex value.

MyIris reported that Usha Martin and BHP Billiton have inked a definitive pact to set up a JV company called Bharat Minex to explore for minerals in Jharkhand.

Usha Martin is engaged in manufacture of wire, wire ropes, steel with captive mineral linkages of iron ore and coal and cables and has manufacturing facilities in Ranchi, Jamshedpur, Sivassa, UK, Thailand and UAE. While, BHP Billiton is the world’s largest diversified natural resources company.

According to East Coast Railway sources, heavy rains have badly affected loading and movement of iron ore rakes in Chhattisgarh, Andhra Pradesh and Orissa.

As per report, the iron ore loading at National Mineral Development Corporation’s mines in Chhattisgarh has been badly hit as a result fewer rakes than normal are being moved on the 450 kilometer long Kirandul to Kottavalasa line. Right now, on an average, 8 to 10 rakes are being loaded and moved on the route against 15 to 16 in normal situation.

Mr K Raghuramaiah chairman of Paradip Port Trust said the rains have not stopped operation of the port, but have only slowed it down. He added that "Despite a plethora of problems thrown up by the inclement weather, about 4 to 6 iron ore rakes are being loaded and that many rakes are being used for loading imported coal."

According to the ECoR sources, iron ore loading in Daitari Banspani area and transportation of it to Paradip port for exports too, has been hit as rains have affected normal operation in the mines as well as the port. As many as 13 rakes, earlier loaded with iron ore for exports, have been detained at various points on the route from the mines to the port. The iron ore rakes already in the port are discharging cargo slowly because of the rain. This has also slowed down back-loading of imported coal as the same rakes, which carry iron ore to the port for exports, are used for back loading of imported coal.

In order to enhance India’s energy security, central government had offered 57 exploration blocks under the 7th round of NELP. This has been the highest number of blocks offered so far under NELP covering an area of 171,000 square kilometer. With the above award, the exploration coverage of Indian sedimentary basin is likely to go up to 55%.

The government had undertaken intensive promotional efforts to promote the 57 blocks on offer. A special web site was created which had online availability of data, bid documents including terms and conditions for NELP VII and other promotional material. Further, the government held promotional road shows in Mumbai, London, Houston, Calgary, and Perth. Data centers were also opened at Noida, Houston, London and Calgary to facilitate companies to view data for NELP-VII blocks. Besides above promotional activities, an Investor meet and an E&P Service Provider’s meet were also organized at Singapore and Oslo, Norway respectively.

The response of E&P industry throughout the world has been overwhelming and the road shows saw the largest participation so far. The sale of data packages to 64 numbers of companies, including a large number of non E&P companies has been an indicator of the enthusiasm in the hydrocarbon potential of India. The bid evaluation criteria under NELP are fully quantitative and transparent which has gone a long way to usher investor confidence in this policy.

Indian government has received 181 bids for 45 blocks by the bid. 7 deep water blocks, 2 shallow water blocks and 3 on land blocks have not received any bid. A total of 96 companies including 21 foreign companies and 75 Indian companies have bid either on their own or as consortia. The government’s desire to enhance the number of players in the E&P sector has been achieved as is evident from the fact that 42 new players have bid for the nine S type blocks either on their own or in consortium.

As per the quick assessment carried out by DGH, on the basis of information provided by the bidders along with their formal bids, 45 blocks out of the offered 57 blocks are likely to be awarded to the bidders. This will include award of 12 deep water blocks, 7 shallow water blocks and 26 on land blocks. As per the bids received, the award of blocks is likely to be fairly balanced in favor of public sector E&P companies and private sector including Indian and foreign companies.

NELP VII, by far, has been successful as may be seen from the following facts

1. 181 bids, highest ever received for 45 blocks under NELP VII against 165 highest bids received for 52 blocks in last round of NELP VI

2. A total of 535 data packages amounting to INR 85 crore were sold as against the previous best sale of INR 78.60 crore in previous round in NELPVI

3. A total of 96 companies have bid against the previous best of 66 companies in the NELP VI round

4. A total of 9 new foreign companies out of 21 foreign companies submitted bids under NELP VII

5. 26 blocks out of the bid 45 blocks attracted multiple bids

6. 2 S type blocks received 17 bids each

7. 19 blocks received single bid

One of the major achievements of NELP VII has been that besides having received bids for 12 deep water blocks, bids have also been received for 9 frontier on land blocks out of a total of 12 frontier blocks offered. This is a major achievement and the interest shown by E&P companies in undertaking exploration in these blocks shows the maturity of the Indian sedimentary basin. Exploration activity in these blocks is likely to enhance the understanding of Category III basins.

It is also a major achievement of the present round that 9 deepwater blocks in the western offshore have been received which is the maximum number awarded for this region in any round. The intensified E&P activity in the western offshore will go a long way in exploration along with the west coast of India. The receipt of bids for both the Kerala Konkan Blocks, where no discovery has taken place so far, is also a satisfactory development. Out of a total of 39 blocks carved out of relinquished older exploration blocks and those which were offered earlier, bids have been received for 27 blocks. This is again a sign of renewed confidence amongst the bidders.

Evaluation of the bids will be undertaken by the government and the blocks are expected to be awarded within 2 months. The entire process would take just about 2 months from bid receipt to the award of contracts and the contracts are expected to be signed by September 30th 2008.