Indian government to monitor steel price hike, if any

With the 3 month moratorium by Indian steel majors on holding to their reduced price line slated to expire early next month, Indian government has made it clear that any sharp increase in prices by the producers could attract fiscal measures as the inflation is still high and has again urged steel makers to be reasonable.

Mr Ram Vilas Paswan union minister of steel told media that government will discourage steel firms from increasing prices after a 3 month freeze, which the companies had agreed to ends early next month.

Mr Paswan said that "I have instructed the steel secretary to see that steel companies do not raise prices according to their own will. There must be a reason behind price increase. They must explain their compulsion to increase prices.

Steel firms say they need to increase prices as the cost of inputs is rising, but Paswan said the government would verify this on the basis of the experience of state run firms.

As per a report in ET, the steel ministry is understood to have asked state run Steel Authority of India Limited to maintain prices at current levels for a few more months. With SAIL controlling over 30% of domestic market, this decision would mean that other companies would also have to resist any price rise.

The report added that the steel ministry is also likely to meet companies next week seeking extension of the price moratorium for a few more months.

TATA Metaliks to post surge in revenue in 2008-9 on high pig iron prices

It is reported that TATA Metaliks Limited expects its revenue in 2008-9 to grow by 15% to 20% on firm pig iron prices and diversified products.

Mr HM Nerurkar chairman of TATA Metaliks recently said that in 2007-8 it earned about INR 11.85 billion in revenue when pig iron prices were reining at INR 3,500 a tonne. He said that “We expect prices to remain firm in the year on stable demand. The company also plans to focus on making castings used by automotives and engineering industry.”

He added that it expects revenue from castings to grow to 300 million rupees in 2008-9.

The company also plans to set up a separate castings unit in West Bengal to meet demand. Mr Nerurkar said that "We will firm up further investment plans for castings business in 5 & 6 months. It will also set up a sinter plant in its existing unit in the eastern state at a cost of INR 750 million.”

He added that the ductile iron pipe JV with Japan's Kubota Corp. & Metal One Corp. will commence operations from early 2009.

TATA Metaliks recently posted a 31.70% increase in June quarter net profit to INR 202.3 million on good price realizations. Net sales also up by INR 3.14 billion in April to June quarter from INR 2.11 billion in the year above period.

Indian steel majors may hold capacity expansion

DNA recently cited Mr B Muthuraman MD of TATA Steel’s as saying that Indian steel producers may not be able to expand production capacity to meet burgeoning demand if their operating margins remain at current levels.

Mr Muthuraman said that “Our margins are not good even as Mr RS Pandey steel secretary said that profit margins for some producers are as high as 20% in June.”

As per report, Mr Pandey secretary steel had said that the range of profit margins is as wide as 15% to 45% for different companies.

Mr Muthuraman maintained that steel prices in India were INR 15,000 to INR 20,000 lower than international prices despite increasing input costs. He said “I have seen consumer prices increasing disproportionately to steel prices.”

He added that the benefits of low steel prices here hadn’t reached end users.”

UBS cuts Indian GDP forecast for 2008-9 to 7.1%

Reuter report that UBS cut its forecast for Indian economic growth in 2008-9 to 7.1% from 7.7% earlier as high inflation and increasing interest rates bite into consumer spending.

According to Mr Philip Wyatt economist at UBS that Light and heavy industry absorb around 47% of commercial bank credit and high interest rates coupled with soaring raw material costs have also hit the industrial side hard economist at UBS.

He said that “Industrial production, which accounts for 20% of GDP, expanded by 5.8% in the March quarter slower than 8.6% in the previous quarter."

Mr Wyatt said that "The average rate of inflation will remain higher. There is increasing risk that the government would have to deregulate prices which would hit discretionary spending and encourage policy interest rates to stay higher for longer."

He said that "In shorter term, the government needs to take more affirmative action to rein back the fiscal deficit and the central bank needs to keep monetary policy tighter for longer. Both these policies have negative implications for GDP growth."

Kirby to build Renault Nissan car plant in Chennai

Project Monitor reported that winning its largest pre engineered building contract so far, Hyderabad based Kirby Building Systems Ltd will build Renault Nissan's car manufacturing unit in Chennai.

The INR 190 crore fast track orders to be executed in phases will be completed by April in 2009. The plant will come up by 300,000 square meters of land and will consume some 20,000 tonnes of steel. Components for the contract will be manufactured at Kirby's facilities in Hyderabad in Andhra Pradesh and Hardwar in Uttarakhand.

As per report, Kirby is also planning to expand its manufacturing capacity from the current 200,000 tonnes per annum by 50%

A company official cited Project Monitor that the Hyderabad facility currently had a capacity of 125,000 tonnes per annum with the other having 75,000 tonnes per annum. Capacity expansion could also involve facilities at newer locations.

Part of Kuwait's Alghanim Industries, Kirby has so far executed 2,500 PEB projects in India. Its current order book of INR 700 crore is targeted to reach INR 1,200 crore by this year end.

Directory of Autoparts Makers in India

'Directory of Autoparts Makers in India' is one of the top sources of information available on auto part makers in India. It is one of the most comprehensive and accurate directory of auto part makers in India.

Published in May 2008, 'Directory of Autoparts Makers in India' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian auto part makers. This report will be extremely useful to businesses that deal specifically with companies in auto part makers segment.

Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Indian auto part makers, this directory will save you time and effort in finding the information you need.

This report will enable you to profile auto part makers in India, build new business prospects, generate new customers, discover who your competitors are and make vital contacts. You would save the time, money and effort of doing your own research. This directory has been especially compiled to assist with market research, strategic planning, as well as contacting prospective clients or suppliers.

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This report covers name and product details of 431 of Indian auto part makers in alphabetical as well as location wise order.

Look at the information you'll get in the 'Directory of Autoparts Makers in India'

• Company name -431 entries
• Address-431 entries
• Phone number-431 entries
• Fax number -418 entries
• Email -403 entries

Report Summary:
1. Published: May 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 241

Price: USD 625 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

Indian Railway Q1 volume for steel plant raw material dips

BL reported that Indian Railways has taken up the issue of drop in the movement of raw materials with the major steel producers after iron ore loading in Q1 dropped by about 20% YoY.

As per report, the hot metal production in some of the major steel plants too declined during the period. According to Joint Plant Committee, the hot metal production in SAIL plants dropped by 8% and in Rashtriya Ispat Nigam Limited’s by 7%. While TATA Steel’s Jamshedpur plant posted more than 3% growth in production, the overall production by major steel producers slumped by nearly 4% during the period.

The causes concern to the Railways is that even in 2007-8 the crude steel production by major steel producers decreased, marginally though as compared to 2006-07.

In 2007-8 the total crude steel production of major producers was 22.10 million tonnes as compared to 22.17 million tonnes in 2006-07. But other steel producers, posted increase in production as Essar, Ispat and JSW, together produced 9.6 million tonne sin 2007-08 as against 8.4 million tonne in 2006-7. In addition, a large number of sponge iron units too contributed to higher production of crude steel at 22.2 million tonnes in 2007-8 as compared to 20.02 million tonne sin 2006-07.

Indian Railway to step up Pakistani cement import to curb shortages

It is reported that shortage of cement in the domestic market thereby keeping its price under check, Indian Railways is facilitating the import of cement from Pakistan through Attari border in a big way.

As per report, the number of rakes being exchanged between India and Pakistan has been steadily increasing to facilitate more and more import of cement from Pakistan.

According to the report, Railways have also improved its handling capacity at Amritsar goods shed making it work round the clock. The approach roads to the goods shed have also been improved substantially.

In the recent meeting between Indo Pak Railway delegation held in New Delhi, it was emphasized that Pakistan will provide 8 wheeler rakes instead of 4 wheeler rakes to ensure faster movement of goods across Railway network.

So far, India has imported 173,000 tonnes of cement from Pakistan by rail during April to June 2008. The import of cement from Pakistan is still continuing. Presently 2 rakes per day are being exchanged which will be gradually increased to 3 rakes per day subject to adequate traffic demands.

JSPL to import 1 million tonne of coking coal in 2008-9

Reuters quoted Mr Sushil Maroo director of Jindal Steel & Power Limited as saying that Jindal Steel & Power Limited plans to import 1 million tonnes of coking coal in the year to March.

As per report, JSPL imports all of the coking coal it requires.

Directory of Tin Plate Users in India

'Directory of Tin Plate Users in India' is one of the top sources of information available on tin plate users in India. It is one of the most comprehensive and accurate directory of Indian tin plate users that have ever been published. This powerful report is your connection to the entire Indian tin plate industries sector.

Published in May 2008, 'Directory of Tin Plate Users in India' has been comprehensively researched and prepared, to bring you a fully up to date guide to India's rapidly growing tin plate makers. This report will be extremely useful to businesses that deal specifically with companies in the tin plate industry, consumable suppliers, raw material sellers, equipment makers and others.

This report will enable you to profile tin plate users in India, build new business prospects, generate new customers, discover who your competitors are and make vital contacts. You would save the time, money and effort of doing your own research. This directory has been especially compiled to assist with market research, strategic planning, as well as contacting prospective clients or suppliers. It is also an indispensable guide to India’s tin plate industries.

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Look at the information you'll get in the 'Directory of Tin Plate Users in India'

• Company name -147 entries
• Address-147 entries
• Phone number-143 entries
• Fax number -110 entries
• Email -90 entries

Report Summary:
1. Published: May 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 87

Price: USD 625 or equivalent in INR
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

Reliance secures USD 1 billion funding from Chinese banks for Sasan UMPP

It is reported that Reliance Power Limited has secured USD 1 billion funding from 3 Chinese banks for the 4,000 MW Sasan ultra mega power project in Madhya Pradesh.

As per report, Reliance Infrastructure is tying up with Chinese banks to fund its proposed USD 3 billion JV with Shanghai Electric that will manufacture boilers, turbines and generators in India. The company is talking to 2 Chinese banks that will help it ensure equipment supplier performance guarantees and also better finance terms with longer repayment tenure.

The report added that the 2 banks include China Development Bank & China Exim Bank while the project will be guaranteed by China Export and Credit Insurance Corporation or Sinosure. The tenure is shorter than what could have been achieved under conventional local banking norms. The rates are also competitive as Chinese banks are keen to be involved in a Sino Indian power project where the equipment supplier is a Chinese company.

The fund increase from China Exim Bank, Chinese Development Bank and China Export & Credit Insurance Corporation will help the company to achieve financial closure of the Sasan plant. The project cost is estimated to be around INR 15,000 crore and financial closure is expected by September 2008.

Mumbai monorail project gets 2 techno commercial bids

Project Monitor reported that 2 of the 3 pre qualified bidders have submitted technical and financial bids for Mumbai monorail project.

While consortia led by Reliance Infrastructure Ltd and Larsen & Toubro submitted their bids, Bombardier led consortium refrained.

MMRDA had pre qualified seven consortia in January this year.

As per report, the monorail project will start off as a 25 kilometer pilot project connecting Wadala & Mahalakshmi in central Mumbai. The developer will design and build the project and also undertake operations & maintenance. The contract will be for 3 years including construction time.

The first phase of the monorail envisages a 70 kilometer network with four corridors. Apart from Wadala to Mahalakshmi stretch, there will be 2 independent 10 kilometer lines connecting Wadala to Chembur and Bandra to Kurla Complex respectively. The fourth is the 25 kilometer corridor between Thane, Kalyan and Bhiwandi.

The monorail aims to connect areas that are not covered by the upcoming Mumbai metro rail project. Plying at speeds of less than 20 kilometer per hour, a monorail bus will ferry 10,000 passengers per hour in peak direction.

Cochin Shipyard to get Mini Ratna status

It is reported that public sector Cochin Shipyard Limited is set to achieve the Mini Ratna status conferred by the Ministry of Shipping.

As per the guidelines issued by the Department of Public Enterprises, the grant of Mini Ratna status would empower the Board of Cochin Shipyard Limited to take speedy decisions on capital expenditure.

Cochin Shipyard Limited needs to create additional capacity in order to sustain the present growth momentum in future too. The conferring of the Mini Ratna status would help the company to achieve this at a faster pace.

It has proposed for setting up of a dry dock to cater to building and repairs of large sized ships. Besides the yard's proposal to create a separate division for small commercial ships have received the nod of the Central Government and this facility is expected to be commissioned by mid 2009.

Cochin Shipyard Limited achieved a record turnover of INR 967 crore during the year 2007 or 2008. The profit before tax for the year was INR 149 crore which is higher by 74% from 2007. The net profit for 2007 or 2008 was INR 93 crores as compared to INR 58 crores for 2006 or 2007 a growth of 60%.

New regulations to give boost to coastal movement

ET reported that latest notification issued by directorate general of Shipping for construction, survey, certification and operation of river sea shipping will prove to be a shot in the arm of inland waterways and coastal shipping operators. Accordingly, the notification has put in place systems that would lead to seamless flow of cargo across inland, coastal and mainline shipping modes.

The regulation exempts Indian ships other than passenger vessels, oil tankers and offshore vessels support and supply vessels, operating along the Indian coast and within the territorial limits of India from the provisions of the MS Act 1958. It amends and dispenses with the requirements to observe the MS Act provisions which have been found unnecessary for inland and coastal shipping while at the same time keeping the integrity of the Act in protecting the interests enshrined in those very provisions.

Coastal shipping was found to be uneconomical due to high cost of construction and operation, the new rules not only make constructing of vessels cheaper and more affordable, it also offers flexibility to manning norms. The legislative move is also seen as a very important step forward towards augmenting Indian fleet which would invariably go to contribute more Indian ships carrying more Indian cargo.

Mr SS Naphade ex nautical advisor said that “The cost of constructing an average coastal vessel will stand reduced to INR 8 crore from INR 12 crore to 13 crore by dispensing with a lot of regulations which are superfluous and not required for such vessels which operate only in Indian territorial waters and subject to Indian jurisdiction."

Nr Naphade said that "Costs of manning and bunker costs are the main costs in operation of these vessels. With this legislation capital expenditure stand substantially reduced. Who also represents Jaisu Shipping Company 1 of the leading local companies in dredging?”

Mr Ajoy Chatterjee chief surveyor with the government of India cum additional director general of shipping said that the set of rules would open up a totally new area for ship builders, ship designers, port operators, small and big Tran shippers, etc.

Reliance Power announces Q1 results

Reliance Power Limited has announced the following unaudited results for the quarter ended June 30th 2008

According to the release, Reliance Power Limited has posted a profit after tax of INR 597.069 million for the quarter ended June 30th 2008. Total Income is INR 776.797 million for the quarter ended June 30th 2008.

The consolidated results for the Quarter ended June 30th 2008 are as under

Reliance has posted a profit after tax & minority interest of INR 612.226 million for the quarter ended June 30th 2008. Total Income is INR 805.536 million for the quarter ended June 30th 2008.

Bid submission extended for Tipaimukh hydroelectric power project

Project monitor reported that North Eastern Electric Power Corporation has extended the submission date of technical bids for the engineering, procurement and construction contract for its upcoming 1,400 MW Tipaimukh hydroelectric power project in Manipur to July 31st.

According to the report, the project has been held up for a long time due to agitation in the area and insurgency threat. The state government has agreed to provide additional security to officials at the project site for early implementation.

As per report, Neepco has made good progress along with the state authorities on diversion of NH 53 Makru and Barak river points and NH 150 in Mizoram sector. The diversion of roads is essential to supply machinery at the project site.

Neepco has gained statuary clearances for the project except environment clearance. As such, the Cabinet Committee on Economic Affairs' clearance for the project is pending. The price bids for the project will only be called for after the project receives CCEA clearance.

The project is envisaged to be located near Manipur to Mizoram border 500 meter downstream of Barak River. The project will involve construction of a 162.80 meter high rock fill dam and it will have annual estimated generation of 3,805.7 million units in a 90% dependable year.

Indian Green Building Council launches Ahmedabad chapter

BS recently reported that Indian Green Building Council has launched its Ahmedabad chapter to enable faster and deeper reach of green building concepts to wider sections of stakeholders and to provide a platform for networking at the regional level.

This is the 7th chapter launched by IGBC after Bangalore, Chennai, Delhi, Kolkata, Mumbai and Hyderabad.

Mr Sameer Sinha director of Savvy Infrastructures Limited who took over as chairman of the Ahmedabad chapter said that it would make efforts to catalyze construction of at least 25 green buildings in the city by 2009.

Dr Prem C Jain chairman of Indian Green Building Council said that as against 20,000 square feet in 2002 about 147 million square feet of LEED rated green buildings are now being constructed in India. He added that more than 250 such buildings are coming up in the country. The Council aimed at having 1 billion square feet of green footprint by 2012.

Uttarakhand to revamp of old hydel projects on PPP model

Project today reported that Uttarakhand government is planning to invite private players for renovation of the state's old hydel projects.

There are total 12 projects in the state that are more than 35 years old and 4 are lying closed. The total capacity of these projects is 500 MW.

As per report, in the first step, 3 to 5 projects will be handed over to the private sector.

TRF bags CHP order from DVC Raghunathpur power plant

Project Monitor reported that TATA Group Company TRF Limited has won INR 413.85 crore turnkey order from Damodar Valley Corporation for supply of a coal handling plant for the 2x600 MW Raghunathpur power project in Purulia district of West Bengal.

This is the single largest order won by TRF with respect to coal handling plants for power projects,

Mr RC Nandrajog executive director of TRF Ltd said that 1,760 tonnes per hour coal handling plant will be completed in 2 phases by January 2011.

The scope of work will involve design, engineering, manufacture, supply, erection, testing and commissioning of the CHP on turnkey basis. Major equipment to be supplied will include a wagon tippler with side arm charger, 4 crushers and screens, 2 stacker cum reclaimers, belt conveyors etc. He said that we see a substantial investment being made in the power sector.

In January 2008, TRF had won a similar order valued at INR 305 crore for the 3x500 MW Indira Gandhi super thermal power project in Haryana promoted by Aravali Power Company Pvt. Ltd a JV between NTPC, Haryana Power Generation Company Ltd and Indraprastha Power Generation Company Ltd.

BHEL and NPCIL to float EoIs for nuclear technology partner

It is reported that JV between the Bharat Heavy Electricals and the Nuclear Power Corporation of India has decided to float EoIs to search for a technology partner for 700 MW, 1,000 MW and 1,600 MW turbine technology by August 2008.

As per report, the JV will explore and evaluate various technology options available for steam turbine generation sets of 700 MW rating and above and also enable BHEL to develop as an indigenous source capable of designing and manufacturing steam gensets of such ratings to meet the needs of various nuclear projects proposed to be set up in future.

The JV was formed in May 2008 to provide services for nuclear plants in India and abroad. The JV entity will carry out EPC activity for nuclear power plants on mutually beneficial terms.

German steel users join hands to attack steelmakers

It is reported that Germany's biggest steel consumers banded together last week to send a warning to producers that high prices are driving a dangerous wedge between them.

A group of seven German industry associations in a joint statement said that "In the past, the partner like relationship between our members and the steel industry was an element of our mutual success. This partnership is now being put to the test with incalculable risks for the health of the entire German industry."

The German steel industry in a statement said that it only sought tariffs to restore fair trade and not to wall off competition. The seven industry associations acknowledged that part of the upward pressure on steel prices stemmed from rising costs for key raw materials like iron ore and coking coal that result from an oligopoly in the mining industry.

The associations including the influential lobbies for the German automotive, engineering, electronics and construction industries attacked steelmakers for campaigning to erect trade barriers in Europe against Asian rivals.

Brussels is currently investigating wire rod from China, Turkey and Moldova, hot dipped steel from China, cold rolled stainless steel products from China, South Korea and Taiwan and certain seamless pipes and tubes of iron or steel from China.

Zinc prices could slide to USD 1.05 per long ton in 2008

Purchasing.com reported that too many zinc mining and smelting operations worldwide have caused the supply pipeline for zinc to be more than plentiful.

The International Lead Zinc Study Group projects a zinc surplus this year of 215,000 tonne. Mr Gayle Berry analyst at Barclays Capital Research in London said that with June’s US zinc price at 90¢, the analysts see USD 1.05 as the probable full year average for 2008. The forecast average for 2009 also is USD 1.05 because analysts such as Bart Melek at BMO Capital Markets in Toronto sees no chance demand will outpace supply anytime soon.

Another Toronto based mining analyst, Mr Kerry Smith at Haywood Securities said that production is fragmented among a large number of companies, with the biggest, Xstrata at 800,000 ton per year, controlling only 7% of supply. Even this year’s merger of Zinifex with Oxiana that created OZ Minerals only gives the Melbourne firm control of 6% of world supply.

In a recent interview with Platts Metals Daily.com, Mr Smith said that “You never see much producer discipline in the zinc market. If prices come down and a mine starts losing money, you don’t often see it shutting down production because nobody else follows suit.” He said that what’s more, a company with a profit-draining mine still faces costs associated with a shutdown, such as holding costs, environmental expenses and worker severance pay. He added that “So even if the mine is losing a little money, it’s sometimes better to keep it operating than to shut down due to these costs.”

Recently, 29 small to medium size Chinese firms with total zinc smelting capacity of around 900,000 tonne per year accounting for 20% of total Chinese zinc smelting capacity met in Shanghai to discuss cutting production by 10% due to tight power supply in 2008. However, a Macquarie Research Commodities report said that the proposed production cut appears unlikely, since it lacks the support of bigger Chinese producers.

Moody keeps stable outlook for European steel

Moody's Investors Service has retained its stable outlook for the European steel sector despite the global economic slowdown, since improved pricing power means firms can pass on higher costs to customers.

Moody's Investors Service in a statement said that the outlook represents Moody's forecast of fundamental credit conditions in the sector over the next 12 to 18 months. It said that "Strong overall global demand has supported pricing in the region since 2007 and especially since the beginning of Q2 2008.”

Companies have been able to boost prices as a result of industry condolidation and high capacity utilization.

Moody's said that "Even weaknesses in the US construction and automotive industries have not prevented steel prices in North America from rising, mainly because of a sharp reduction in steel imports from China and other markets into North America."

It said that vertically diversified firms such as ArcelorMittal and steel groups in the Commonwealth of Independent States, such as Evraz, Severstal and NLMK are expected to perform relatively well during the rest of 2008 and the first half of 2009.

It added that "The industry's overall liquidity will probably remain solid, reflecting both the strong cash flow generation ability of steel companies and their ability to secure alternative funding."

US players see lower scrap pricing for August

Platts reported that scrap market sources in the US have begun talking about lower ferrous pricing for August 2008 as the Platts price assessment of shredded scrap remained at a midpoint of USD 600 per long ton delivered to Midwest mills. Most processors reported having completed July transactions in a range of USD 590 to USD 610 per long ton.

Though most transactions will likely take place the first week of the month as is customary in the US scrap market processors, consumers and analysts expected August to be flat to down for most grades. Prime industrial scrap is expected to show the most resilience, but is unlikely to repeat the double and triple digit pricing gains of the past few months.

One scrap supplier in the South said he heard obsolete grades, including plate and structural as well as heavy melting scrap, would be down USD 35 per long ton from current prices in the mid USD 500 per long ton range, depending on specific grades.

He said that "I agree with Busse referring to comments made Monday by Mr Keith Busse CEO of Steel Dynamics, that obsolete scrap prices for August delivery would be down and that the price of prime industrial scrap may have plateaued.

A Northeast scrap processor saw a similar situation developing. He said that "My guess is that prime will be sideways, but all other grades will give back what we got in July.”

Subdued export activity and potential summer slowdowns at domestic mills have eased the upward pressure on ferrous scrap pricing. "The export pressure has been relieved that will probably last through the end of August”. He added that "If the sheet mills see some seasonal slowing, that impacts the prime grades.”

(Sourced from Platts)

IKL pipeline to offset reduced Russian oil supplies to Czech Republic

It is reported that the current Russian oil shortfall will be fully offset by the IKL pipeline leading to the Czech Republic from Germany. The IKL pipeline transports oil to the Czech Republic from Germany, which receives oil through the TAL pipeline from the Caspian Sea area, Near East and North Africa.

TAL is owned by eight oil companies, including Shell, OMV, ExxonMobil and Eni. The media reported earlier this year that the Czech Republic is in talks on the purchase of a stake in TAL.

Mero fully owned by the state, is the sole transporter of oil to the Czech Republic and the most important company securing the storage of strategic oil reserves. Mero is the owner of the Czech part of the Druzhba pipeline, which leads to the Czech Republic from Russia, and of the entire IKL pipeline.

The Russian oil company Tatneft, one of the two key suppliers of Russian crude oil to the Czech Republic, has reduced supplies to the Czech Republic recently. It allegedly redirected these supplies to Turkey due to higher profits.

Russian oil supplies were falling over the past week and on Friday the Russian side said supplies in July will be reduced to a greater extent.

In reaction to this, there have been speculations about the shortfall being a reaction by the Russian side to the signing of the Czech-US treaty on locating a US radar base in the Czech Republic. The Russian side has denied such allegation.

Japanese H2 scrap average prices drop

During the third week of July, Japanese H2 scrap average price reached a record high of JPY 67,852 per tonne in the Kanto region, middle part and Kansai region decreased by JPY 261 per tonne than last week.

Among them, H2 scrap price was JPY 68,583 per tonne in the Kanto region, down by JPY 750 per tonne than last week; H2 scrap price was JPY 65,740 per tonne in the middle part up by JPY 300 per tonne; JPY 69,233 per tonne in the Kansai region down by JPY 334 per tonne.

At the same time, Japanese H2 scrap average price was JPY 68,108 per tonne dropped by JPY 112 per tonne than previous week.

Kinsteel to invest proceeds from Perwaja listing

It is reported that Kinsteel Bhd will be able to reap up to MYR 97 million cash raised from the proposed listing of Perwaja Holdings Bhd.

Mr Henry Pheng CEO of Perwaja Steel Sdn Bhd said that it would not undertake a capital repayment exercise for its shareholders, as the proceeds raised would be use to develop its downstream steel mills and other capacity expansion activities.

Mr Peng said that based on the initial public offering price of MYR 2.90 per share, the listing of Perwaja Holdings will give the company a market capitalization of MYR 1.6 billion, which is one of the largest IPO exercise among the country’s listed steel millers.

Mr Pheng who is also the son of Kinsteel’s managing director Tan Sri Pheng Yin Huah, said that post listing of Perwaja Holdings, there would be no changes to the shareholding structure of Kinsteel’s major shareholders. He said that “Kinsteel will still own 37% in Perwaja after the listing, which will allow the company to reap high returns from Perwaja’s operations.”

He added that Kinsteel would have the option to up its stake in Perwaja Holdings to 51% by converting its irredeemable convertible unsecured loan stock of 10 sen a piece.

Mr Pheng also said that “We do not plan to convert them to stocks immediately, as we can do that within 10 years’ time.”

Siemens VAI benefits from investments in energy and steel

About three years ago Siemens acquired the Austrian Voest Alpine Technologies following many similar moves in the process industries.

Voest Alpine Industrieanlagenbau, part of VA Tech, was an engineering and construction company of steel plants. Specialized in blast furnaces and continuous casting, they became the kernel of a world wide network, Siemens VAI, with capabilities to engineer, build, modernize, replace, commission and service any virtually any technology in the value chain from iron ore mining to finished steel products.

Siemens VAI is today a EUR 3.5 billion business of the Industry Solutions division, one of six divisions in the Industry sector. Of a total market of EUR 30 billion that has grown a little over 2 percent annually in the past years, Siemens VAI had a market share of 12% in 2007 and it enjoyed an increase of 33% in order intake compared to the previous year. The steel E&C market grows at a little more than 2%, considerably less than the growth in demand for steel, since modernization and maintenance of existing plants create a lot of additional capacity with limited investments.

Boliden falls most in seven years after profit misses estimates

Bloomberg reported that Boliden AB, the second largest producer of zinc in Europe, fell the most in seven years in Stockholm trading after profit missed analyst estimates.

As per report the Swedish company declined as much as 14% after saying second quarter net income dropped to SEK 259 million (USD 43.5 million) as compared with the SEK 348.5 million median of four analyst estimates compiled by Bloomberg.

World Bureau of Metal Statistics last month said that zinc used to galvanize steel, has almost halved since trading at a record in November 2006 amid a global surplus of the metal. Production exceeded demand by 64,000 tonne in January through April

Zinc for delivery in three months on the London Metal Exchange averaged US$2150/t in the quarter, 41% less than a year earlier. Copper, also mined and smelted by Boliden averaged USD 8323 per tonne up 9.8%

Venezuela to supply Ecuador with cheap steel - Mr Correa

Bloomberg quoted Mr Rafael Correa Ecuadorean President as saying that Venezuela will supply Ecuador with steel at prices below the going market rate.

Mr Correa who said that he's a personal friend of Mr Hugo Chavez president of Venezuelan said the deal will help fight inflation.

Ahrestry to expand offshore operation for growth

JMB reported that Tokyo based die cast maker, Ahresty tries to expand the offshore operation especially in China and USA while the firm launches new operation in India.

As per report Ahresty starts the supply from Indian plant to Suzuki Motor as early as autumn. Ahresty expects the Guangzhou plant could get order from Shizuoka based auto-parts maker, JATCO, which starts new plant operation in Guangzhou in fiscal 2009.

Ahresty also got order for the North American plant from Toyota Motor for fiscal 2009.

Alumina raises Brazil mine investment costs

Alumina Ltd said that the cost of its joint venture investments in a Brazilian refinery and bauxite mine would rise due to a rising Brazilian currency and higher materials costs.

Alumina said the AWAC joint venture's investment in the refinery would rise to USD 1.62 billion from USD 1.3 billion, while the cost of the Juruti bauxite mine will increase to USD 2 billion from USD 1.2 billion.

Enarsa PDVSA receives 3 technical bids for LNG project

Platts reported that Enarsa PDVSA a joint venture of Argentina's and Venezuela's state oil companies has received three technical bids for a contract related to the construction of Argentina's first onshore LNG receiving terminal.

Mr Carlos Davidson institutional relations manager of Enarsa said that in addition, economic bids are to be opened in 10 days or so. He said that the contract is for consulting, engineering studies and bidding documents for a subsequent auction to find a builder of the terminal.

Mr Davidson said that possible locations for the facility are in the ports of Bahia Blanca, Ensenada, Quequen and San Antonio Oeste. It would have initial capacity of 10 million cu m/d of gas and later may be expanded to 20 million cu m/d of gas. But he declined to name the bidders.

Argentina is stepping up energy imports in the face of sagging production of oil and gas at its fields and limited exploration and refining capacity, as well as lower than expected gas deliveries from Bolivia, its only source of foreign gas delivered via pipeline.

It said that now in a fifth straight year of energy shortages, Argentina is importing increasing amounts of diesel, fuel oil and gas to feed a robust economy. This year it began importing LNG for the first time, bringing in the equivalent of 8 million cu m/d of gas that is unloaded at a floating regasification terminal in Bahia Blanca.

DP World to invest USD 239 million in Australian port

Reuters reported that Dubai Ports World DPW.DI has signed a 40 year lease deal with the Port of Brisbane and is looking to invest AUD 250 million in the port in response to market demand.

Mr Jeff Coleman CEO of Port of Brisbane in a statement said that “Under the deal, DP World will lease a container only terminal for an initial 20 year term, with a 20 year option.”

It said that DP World currently leases three container terminals at the port.

Mohammad Sharaf CEO of DP World in the statement said that "DP World is looking at investing around 250 million Australian dollars at Fisherman Islands over time to expand and to re-engineer the terminal in response to market demand.”

Pakistan sees more economic sense with India on board in IPI

Zeenews portal reported that Pakistan has said the ambitious multi billion dollar Iran gas pipeline project makes more economic sense if India is on board and argued that it could also serve as an incentive for stability in the region.

Mr Shah Mahmood Qureshi Foreign Minister of Pakistan recently after delivering a lecture while answering questions at the International Institute for Strategic Studies in London said that if India is on board the Iran Pakistan India gas pipeline project, it makes all the more economic sense.

Mr Qureshi stated that India is also deficient in energy so both stand to gain from the pipeline. It can be used as a confidence building measure.

Mr Qureshi in his address said that “South Asia is also gravely affected by the energy crisis. The worldwide quest for accelerated growth in industry, services and agriculture gives rise to increase in demand for energy. In this context Pakistan is seeking to pursue international gas pipeline options, with which we hope we will position ourselves as an energy hub for South Asia and possibly China through the port of Gwadar.”

He further added that we have a planned gas pipeline from Iran, crossing Pakistan and heading on to India. This project offers not just energy to both nations but could also serve as an incentive for stability in the region. Another pipeline project is from Turkmenistan through Afghanistan into Pakistan and, possibly, onward to India.

4 firms bid for green line contract of Dubai Metro

Meed reported that Dubai's Roads & Transport Authority has received bids from four firms for the consultancy contract on the extension to the green line on the Dubai Metro.

According to the report the bidders are Hyder Consulting, Mott MacDonald, both UK based, US based Parsons Brinckerhoff and the JV of US based Parsons International and France's Systra.

As per the report, the project involves preparing designs for an 11 kilometers extension that is expected to have five stations running from Al Jadaf to International City. It will cross the creek on the planned sixth crossing and interconnect with the planned blue line that will run along Emirates road. It will also connect with bus and marine transport terminals.

The report said that the Dubai Rapid Link consortium was awarded the AED 4.1 billion contract for the first phase of the green line in 2006. The contract was placed as an option to the AED 12.5 billion contract awarded to DURL in June 2005 for the red line.

The report added that the works for the green line are now under way and involve the construction of the 20 kilometers line running in a loop from Dubai International Airport through Deira and Bur Dubai to Rashidiya.

The report further added that the DURL consortium is led by Japan's Mitsubishi Corporation and includes Mitsubishi Heavy Industries, Obayashi Corporation and Kajima Corporation, all of Japan and Turkey's Yapi Merkezi. France's Systra and the US based Parsons International is the engineer.

Chairman of DP World visits DP World Darkar

Sultan Ahmed Bin Sulayem chairman of DP World and Dubai World, recently visited DP World Dakar, Senegal’s busiest container terminal.

DP World was formally handed responsibility for operating and developing the current Dakar container terminal, Terminal à Conteneur, earlier on this year at which time we committed to investing in the region of EUR 100 million for developing civil infrastructure and equipment

Sultan Ahmed Bin Sulayem chairman of DP World and Dubai World said that “I am delighted to visit DP World Dakar and see first hand how our expertise in operational excellence has contributed to a more productive container port in Senegal. DP World Dakar is well positioned as a strategic gateway to West Africa and several major trade lanes. We look forward to continuing our positive contribution to future of Dakar, as a major trading hub, and also to the economy and the people of Senegal.”

He added that DP World has also committed to a second phase project in Senegal to design, finance, construct and manage a brand new container terminal at Port du Futur. This terminal is designed to have potential capacity of 1.75 million TEUs and is expected to be operational by early 2011.

Iranian cement production capacity hits 55 million tonne

MNA citing Mr Ali Akbar Mehrabian Iran’s Minister of Industries and Mines reported that 15 million tonne of cement have been produced in Iran within the past three months putting the country’s production capacity at 55 million tonne.

He added that the amount of investment in this sector within the past three years has been 170% more than that of its preceding three year period.

SAIPA and PROTON ink MoU

IRNA quoted Mr Ali Akbar Mehrabian Iranian Industry and Mines Minister saying that among 56 Muslim countries Iran, Malaysia and Turkey have the best situation to produce car.

Mr Mehrabian while speaking in a ceremony to sign a MoU on cooperation between SAIPA and PROTON said that taking advantage of Islamic countries big market had been underlined in the Organization of Islamic Conference meeting.

He added SAIPA and PROTON can take advantage of their common potentials and capacities in the field of car manufacturing to access to the new markets.

He welcomed the signed MoU between the two companies as a good start for joint cooperation and added, it is expected that the move could be a strategic step toward continuation of joint activities in the field of car manufacturing.

Mr Mehrdad Bazrpash MD of SAIPA and Mr Zeinolabedin Seyyed Muhammad Taher MD of PROTON signed a MoU on cooperation in the presence of Mr Mehrabian.

SAIPA exported cars to 29 countries and PROTON also exported around 20,000 cars to different countries in the year 2007.

UAE and Bahrain plan projects to cut greenhouse gas emissions

The Peninsula reported that Abu Dhabi's Masdar has signed a deal with Bahrain's Gulf Petrochemical Industries Co for a project to cut greenhouse gas emissions and sell the credits under a United Nations scheme.

Masdar said that the project aims to capture carbon dioxide from flue gas and use it as feedstock to produce urea and methanol at GPIC's fertilizer facility in Bahrain. It added that the project is expected to cut around 100,000 tonnes per year of carbon dioxide equivalent as of 2010.

Masdar was set up by the Abu Dhabi government to develop sustainable and clean energy. Masdar plans to manage the process of registering the project under the UN's clean development mechanism to generate carbon emissions reduction certificates.

Under the Kyoto Protocol, developing countries can sell emissions reductions from their energy intensive industry to help rich countries offset their own contribution to climate change.

According to the report the project aims to put the emirate of Abu Dhabi, holder of 90% of the United Arab Emirate's oil reserves, at the forefront of the future energy industry. UAE is one of the largest per capita greenhouse gas emitters in the world. Masdar is developing plans to build the world's first nationwide carbon capture and storage network, which aims to trap emissions and pipe them to oilfields. Pumped into the ground, the carbon is kept out of the atmosphere and helps to maintain pressure and boost output at oilfields. CCS has yet to be proven on a commercial scale.

As per the report GPIC is a JV producing petrochemicals and fertilizer, owned by Saudi Basic Industries Corp and Kuwait's Petrochemical Industries Co.

Agility buys stake in Indian Bumi Geo Engineering

Reuters reported that Kuwait's Agility, the Gulf's biggest logistics provider by market value, has bought a stake in Indian engineering company Bumi Geo Engineering Private Limited for USD 9.4 million.

Agility, which bought the stake through investment subsidiary Alcazar Capital Holdings Limited, did not give the size of the stake.

Agility has been expanding in Asia and the Middle East to lower dependance on US government deals to feed US troops in Iraq and Afghanistan.

Amana bags new construction contract from SNC Lavalin Gulf

Khaleej Times quoted a spokesperson for Amana Contracting and Steel Buildings as saying that Amana has recently been awarded a landmark project by the SNC Lavalin Gulf Contractors.

The spokesman further added that the contract is for the construction of the Tabreed Cooling Plant at the Dubai Metro's Project located at Al Rigga in Union Square of Dubai.

The development valued at USD 9.1 million is expected to be completed by April 2009. Moreover, the development is spread across over 800 square meters of land.

Chinese plate export price remain high

It is reported that export offers for Chinese steel plate remain at high level this week.

Domestic plate prices have started to go down. On Shanghai market, commercial 16mm plate by Yingkou steel is being quoted at CNY 6550 per tonne, commodity grade 16mm to 20mm plate by Chunye and Feida steel are tagged at CNY 6060 per tonne to CNY 6080 per tonne down by CNY 50 per tonne to CNY 100 per tonne and CNY 40 per tonne to CNY 50 per tonne respectively. Low alloyed 40mm plate goes at CNY 7300 per tonne flat with last week

Quotations for commodity grade plate by tier one steel mills are at around USD 1300 per tonne to USD 1320 per tonne FOB as base, but there is not much export volume. Those by tier two steel makers are USD 1140 per tonne to USD 1170 per tonne FOB September shipment.

Ship plate by tier two steel mills are between USD 1360 per tonne to USD 1380 per tonne FOB as base, while those by tier one producers have jumped to USD 1430 per tonne to USD 1440 per tonne up in September or October shipment. Contract prices are about USD 10 per tonne to USD 15 per tonne lower.

(Sourced from MySteel.net)

Chinese engineering industry hit by steel price hikes

The Securities Times reported that based on the H1 performance forecast of a list of mechanical engineering enterprises lately released, profiting ability of some of them is a worry.

XuGong Science & Technology Co, Zoomlion and Shanhe Intellectual Machinery Inc have given a sluggish outlook due to adverse factors mainly steel price rise.

According to a research by Mr Shenyin Wanguo among the costs of mechanical engineering products, steel is important and often takes up 13% to 15% directly or over 30% if including the purchased components.

As per report, the mechanical engineering enterprises would be able to offset the cost by improving productivity and tapping internal potentials. But the steel price rise is wild this year and this has posed great challenge to this downstream industry.

A researcher with Citic Securities told the Securities Times that with the purchased low priced steel stock is being worked out, many mechanical engineering enterprises would face considerably increased cost pressure, esp. those who have low concentration rate, face fierce competition and make low value-added products.

In 2007 medium plate and HR plate prices gained 24.65% and 8.83%respectively. From 2008, the steel price is taking on an accelerated upward path. By end May, medium plate and HR plate price had risen 28.1% and 24.2%, with other products also seen bigger growth than in whole 2007.

Benxi-Beiying orders for 3rd desulphurization unit

It is reported that Danieli Corus Inc has signed a contract for a third Hot Metal Desulphurization station for Benxi-Beiying Iron and Steel Group Co Ltd. The scope of work includes engineering, equipment supply and site services.

As per report this is a repeat order from Beitai for the hot metal desulphurization technology after the first contract signed in 2004. The order award demonstrates the excellent relationship between Beitai and Danieli Corus Inc established during the previous project. This brings the total number of Danieli Corus desulphurization stations in China to 36.

Beitai is located in Benxi, Liaoning Province and has an annual production capacity of 6 million tonnes of pig iron, 6 million tonnes of con casting billets and 4.5 million tonnes of steel.

Chinese HDG export price remain week

It is reported that there have been less Chinese hot dipped galvanized steel export activities since early July. Domestic market prices have seen evident drop in last two weeks and export offers are also softening.

Domestic market prices are still on the decrease. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7400 per tonne that for 0.5mm HDG by private steel makers is at CNY 7580 per tonne down by CNY 60 per tonne and CNY 100 per tonne respectively from last Wednesday. The downward corrections are expected to spread into next month.

Export quotation for 1.0mm HDG Z120 by tier two steel mills is at USD 1130 per tonne to USD 1150 per tonne FOB. By comparison, offers by tier one steel makers are at around USD 1160 per tonne to USD 1170 per tonne FOB for 1.0 HDG Z120. Transaction prices are said to be US$20-30/ton lower and steel makers are more willing to negotiate on export prices as long as there is real order.

(Sourced from MySteel.net)

Chinese real estate threatens construction steel market

China Business News reported that poor selling in China's real estate market is dragging down the investment growth and consequently affecting the whole industrial chain from upstream steel and other sectors to downstream industries.

According to the trader, the construction sites are slow paying back the money for buying steel products, often in 20 to 30 days after the delivery and they replace cash with commercial note.

Mr Zhu manager with Shunchao Steel a Shanghai based trading company said that the second grade rebar, most commonly used in construction, was posted below CNY 4300 per tonne at the year start, and then surged CNY 5600 per tonne by end May and early June.

He said that "Now the second grade is about CNY 5200 per tonne the lowest hit some CNY 5100 per tonne by end June and early July but the steelmakers' prices are not that low and we are often selling the products CNY 20 per tonne cheaper than we buy in."

Mr Zhu said the present pricing power remains in the steelmakers' hand, who only ensure a certain volume of the not high value added products; coupled with fine export situation, producers' ex-works price for the traders haven't been cut down.

On the other hand, the traders are faced with financial stress also because of slow payback of the real estate developers. They are thus worried and hope to sell more products, dragging down the construction steel price or even leading to losses.

According to another Shanghai based trader, despite further hike in steelmakers' ex-works price bolstered by lofty oil, power and transport costs, which has highlighted the price reversal with market price, the inventory remains slowly being eaten amid slack demand and the price is lacking of real support.

Baosteel awarded "Prize for Enterprises Fulfillment of Social Commitment"

It is reported that China Productivity Research Institute and Pudong Administration jointly sponsored the forum on “Harmonious Society construction and Enterprise’s Social Commitment 2008" as to further carry out the tenet of CCPs 17th Session and take on a in depth study of the Scientific Mentality for Development as well as to push forward the Enterprises Social Commitment on the new stage

During the forum Baosteel was granted with award for "Enterprises fulfillment of Social Commitment" Mr He Wenbo president of Baosteel group attended the forum and delivered a speech entitled "On Baosteel’s Social Commitment and Practice."

Mr He Wenbo President of Steel Group while speaking made an overall introduction to Baosteel practice in carrying out enterprises fulfillment of social commitment. He said that in the long run, Baosteel has been taking the fulfillment of social commitment as its duty and essential opportunity for development with regard to aspect of strategy, economy growth, environment and social harmony.

He said that especially in recent years, Baosteel has been discarding outdated technologies and equipment and working out and applying the new ones as well as convincing customers of the environmental friendly products in a gradual pace, to form up a new situation for the fulfillment of social commitment in a way of a entire chain length of the supply has taken shape and always put her employees as the most priceless property of the Corporation and in an active manner the harmonious productive integrity has been set up; encouraging her workers and staff earnestly to pace with the Cooperation towards public welfare establishments. In the past long years a total amount of CNY 0.3 billion has been put for the public welfare establishments. So after the nightmare earthquake occurred in Wenchuan this year, Baosteel has donated materials and fund accounting CNY 0.117 billion further.

Mr He Wenbo expressed that Baosteel will keep tracking on the strategy for the fulfillment of social commitment in an active manner to probe for a frame structural system of it, to push forward and update the construction of the social commitment system and Baosteel will initiatively undertake social responsibility and contribute to the construction of the harmonious society.

ThyssenKrupp Elevator wins major metro contracts in China

ThyssenKrupp Elevator has received an order to supply a total of 337 escalators and 115 elevators for the extension of the metro network in the city of Shenzhen.

The work is scheduled for completion in 2010 and involves the construction of 87.4 kilometers of new lines and 58 stops. Products from ThyssenKrupp Elevator will be used in almost all stations to ensure fast and safe passenger transportation. One line will be the first metro line in the province, situated in southern China, to run mainly above ground.

1. Elevated metro project in Wuhan
In the central Chinese city of Wuhan ThyssenKrupp Elevator is installing 45 elevators and 91 escalators for the extension of metro line 1. After completion of the work in 2010 the 28 kilometer elevated line will run through the center of the city. With a population of nine million, Wuhan is one of China’s largest cities and lies around 1100 kilometers south of Beijing on the Yangtze – China’s longest river at over 6,000 kilometers. The city’s metro network consists of seven lines covering 215 kilometers.

2. Innovative transit system in Xiamen
ThyssenKrupp Elevator has also won a contract to supply 81 escalators for the new bus rapid transit system in the city of Xiamen. The city’s forward looking infrastructure project combines the advantages of a metro system with those of bus transit. The aim is to alleviate Xiamen’s massive traffic problems and boost the image of the coastal city in southeastern China.

ThyssenKrupp Elevator has supplied passenger transportation systems for transit projects in other Chinese cities in the past. For example, a total of 340 elevators and escalators were awarded for the metro in Shanghai. Products from ThyssenKrupp Elevator are also in use in public transportation systems in Beijing and Chongqing.

ThyssenKrupp Elevator is one of the leading elevator companies in the world and represented at over 800 locations in more than 60 countries. With approx 40,000 employees.

Output of seamless steel tube in China by province in H1 2008

It is reported that production of seamless steel tube during June 2008 total 1.73 million tonnes up by 5.6% YoY as compared to 1.64 million tonnes and during January to June 2008 reached 9.37 million tonnes up by 9.5% YoY as compared to 8.56 million tonnes in January to June 2008.

In million tonnes

(Sourced from MySteel.net)

Chinese output of electrical steel in H1 of 2008

It is reported that production of silicon steel sheet during June 2008 total 0.39 million tonnes up by 12%YoY as compared to 0.35 million tonnes and during January to June 2008 reached 2.30 million tonnes up by 15.2%YoY as compared to 2.00 million tonnes in January to June 2008.

In million tonnes

(Sourced from MySteel.net)

Evraz IUD combine to become 5th largest steel maker in the world

Kommersant reported that Russia’s Evraz Group is negotiating the takeover of Industrial Union of Donbass. If the deal is clinched, Evraz holders and Mr Roman Abramovich is the biggest of them will control the consolidated giant, which worth will reach USD 50 billion and which will be one of five biggest steelmakers of the world.

A few sources with Russia’s and Ukrainian investment banks said Evraz Group and Industrial Union of Donbass have progressed to the final stage of takeover negotiations and Credit Suisse is the deal’s adviser.

Mr Pyotr Antropov executive director of Ukrainian KBC Securities said the forthcoming consolidation has been talked over at the meeting of IUD’s Alchev Iron & Steel Works. He said that “Evraz was said to have completed finance and industrial audit of all metal assets of IUD. According to data available to us, the deal will be closed in the near future.”

The source said without elaborating that Evraz declined to comment on the deal, but a source close to its holders confirmed they had agreed on consolidating with IUD. Evraz will control the united giant and the deal won’t cover non-core assets of IUD.

Mr Alexander Pilipenko vice president at Industrial Group that manages IUD’s assets said that “Everyone is in talks to familiarize with the assets of 30 leading metallurgical companies. And we are involved in it with NLMK and with Evraz and with Mittal.”

People in Russia’s, Ukrainian and London divisions of Credit Suisse and in Millhouse Capital of Mr Abramovich refused to comment on negotiations. Millhouse Capital holds 36.44% in Evraz.

Russian FAS to hear Mechel pricing case on August 26th

According to the head of the regulator's social sector and trade control department that Russia's Federal Anti-Monopoly Service will hold on August 26th the first proceedings against Mechel Trading House, Yuzhny Kuzbass and Yakutugol on account of abuse of a dominant market position, Timofei Nizhegorodtsev.

Nizhegorodtsev said the case was opened on July 11th due to signs of a violation of Russia's anti monopoly legislation, such as economically and technologically unreasonable suspension of supplies of coal concentrate to Novolipetsk Steel.

Among other claims made by the antitrust watchdog against Mechel are sales on external markets at prices that are less than the true cost.

If the violations are confirmed, the company will have to pay a penalty in the amount of 1% to 15% of its coking coal sales, but not more than 2% of its total sales.

Mr Putin visits OMK VMZ

It is reported that Mr Vladimir Putin prime minister of Russia on July visited with the working visit of the United Metallurgical Company’s izhny Novgorod region based Vyksa Metallurgical Plant on 24th 2008.

He was accompanied by Mr Igor Sechin Deputy Chairman of the Government of Russian Federation, Mr Viktor Khristenko Minister of Industry and Trade of the Russian Federation, the Russian President's plenipotentiary representative in the Volga Federal District, Mr Grigory Rapota, the governor of Nizhny Novgorod region Mr Valery Shantsev.

As per report, during the inspection of the complex Mr Anatoly Sedykh chairman of the Board of Directors of JSC "OMC" said the first stage complex is scheduled for launch in September 2008 and will annually produce 1.5 million tonnes of high quality hot rolled rolls, which will allow VMZ to provide plates for manufacturing of large diameter pipes.

Mr Putin and his accompanying delegation have visited Welding complex production of large diameter pipes the world's largest manufacture of pipes for main oil and gas pipelines with capacity of 2 million tonnes a year. He also visited Kolesoprokatny Complex the world's largest production tselnokatanyh rail wheels. Every year he produces more than 820,000 pieces of wheels for OAO CFR and foreign customers.

Russian regulations on scrap exports

Interfax cited Mr Vladimir Putin PM of Russia as saying that he is opposed to setting up a tax and tariff regime to stimulate exports of scrap metal and nonferrous metals.

He said "Let's decide already. Are we going to stimulate the export of this raw material or do we want to keep it on our own market?"

Mr Vladimir Putin said "I am also aware of the proposals from our metals producers about the possible purchase of all the ferrous scrap metal on the domestic market, including for future reserves. I feel it would be fully grounded to raise this issue."

He said that "I ask that the appropriate agencies submit proposals on the creation of controlling mechanisms as well as adjustments to export duties and the tax regime in this sphere."

Mr Prokhorov sues Mr Potanin to protect business reputation

RIA Novosti reported that the president of the Onexim investment vehicle has filed a lawsuit with a Moscow court to defend his business reputation against Interros holding company head Mr Vladimir Potanin.

Mr Mikhail Prokhorov's suit, filed with the Moscow Arbitration Court, was also against United Press, the publisher of The Moscow Times, an English language newspaper distributed for free in the Russian capital.

In an interview with The Moscow Times on June 11th Mr Potanin reportedly accused Mr Prokhorov of failing to observe agreements during procedures to sell a blocking stake in metals giant Norilsk Nickel. The two businessmen have only recently completed the division of their joint assets the process lasted about a year.

A court representative told RIA Novosti that the lawsuit, filed on July 21st could be adopted for consideration within five days. It has been known since mid June that Mr Prokhorov's lawyers were preparing the lawsuit.

Mr Prokhorov's representatives said they would submit to the court copies of documents refuting Mr Potanin's accusations.

Ukrainian industrial production growth up by 7.5% YoY

Ukrinform reported that volumes of the Ukrainian industry production grew by 7.5% YoY from January till June against the same period of 2007 at the same time the growth was received by all types of industrial activities.

According to the report, in the metallurgical complex the volumes of production increased by 3.3% YoY an increase of cast iron makes up 5% YoY, steel 5% YoY, total rolled metal 6% YoY and coke 10% against the same period of 2007.

The machine-building complex has been working with a 29.3% growth in the first half of the year.

ZALK may suspend money losing aluminum plant operation

Ukrainian Journal Staff quoted Russian Aluminum company also known as RusAl said Zaporizhia Aluminum Plant, also known as ZALK may suspend work because of its unprofitable operation.

At a meeting with Mr Zaporizhia Mayor Yevhen Kartashov, RusAl Deputy Director for international and special projects Mr Aleksandr Livshits said the Russian company considers it more advantageous to stop ZALK than to work at a loss.

Mechel says did not make statement

Reuters reported that Russia's largest coking coal miner Mechel did not make a statement on dialogue with the government on raw materials prices which was reported on Russian news agency RIA on Friday.

A spokesman for the mining company said the RIA report was a technical error and Mechel would comment soon.

Mechel shares fell from their intraday high of USD 27.91 in New York trade.

Globe Specialty Metals files registration statement for IPO

Globe Specialty Metals, Inc announced that it has filed a registration statement with the US Securities and Exchange Commission for a proposed initial public offering in the United States of its common stock.

A portion of the shares of common stock to be offered are proposed to be issued and sold by the Company and a portion are proposed to be sold by certain stockholders of the Company.

Credit Suisse Securities (USA) LLC, Jefferies & Company, Inc and J P Morgan Securities Inc will act as joint book-running managers for the proposed offering.

Anglo American Barro Alto nickel project to be completed by 2010

Anglo American plc announced that it is on schedule to complete its Barro Alto nickel project by early 2010.

Barro Alto is the company's largest investment in Brazil, with a capital cost of USD 1.5 billion.

SNC Lavalin was awarded the engineering, procurement and construction and management contract.

Fletcher Nickel company rediscovering former property

North Bay Nugget reported that a junior mining company Fletcher Nickel is hoping a dormant property could help it become the next big nickel producer in the country.

Fletcher Nickel is focusing on the former Texmont property, 45 kilometres south of Timmins which has been dormant since the 1970s.

Mr Frank Smeenk CEO of Fletcher Nickel Inc said that “We are redrilling the old deposit. It was a developed underground nickel mine that operated at 500 tonnes a day for most of 1971 and 1972."

Five years ago, when the price of nickel started to move up, the company started looking at the Timmins area since it had nickel potential.

Mr Smeenk said that “We thought we should talk to some prospectors up there to see if we could put some properties together. And properties in Timmins were somewhat more available because of the long and nasty market for junior companies. Guys that had held on to these properties were starting to let them go.”

He said that in our search for sulphide nickel properties, we kept bumping into the Texmont property. It was well known in nickel mining but it had been hidden in a corner for 30 years because it was controlled (by one person).

China ferromolybdenum export in H1 of 2008

It is reported that China ferromolybdenum export to different countries during June 2008 total 628 tonnes while in January to June 2008 reach 4,223 tonnes.

Holland topped among the provinces with 1,349 tonnes in January to June 200 and Taiwan region stand second position with export of 1,349 tonnes

In tonnes

(Sourced from MySteel.net)

Update on Creston molybdenum deposit

Canadian mineral exploration company Creston Moly Corp announced analytical results from the final 9 holes of a 52 hole infill drilling program, completed on the Main Molybdenum Zone of its 100% owned Creston Molybdenum deposit located in Sonora State of Mexico.

Creston Moly said that the results confirm the continuity of breccia hosted, high grade mineralization in the eastern sector of the Main Zone. Significant intersections include 241.86 meters of 0.11% Mo in hole EC08-046, 199.52 meters of 0.10% Mo in hole EC08-044, 24.05 meters of 0.27% Mo in hole EC08-045 and 148.05 meters of 0.11% Mo in hole EC08-048.

Mr Jonathan George president & CEO of said that "The new style of mineralization found in hole EC08-054 is very encouraging and it may support a previously held theory by past operators that the Red Hill Zone could possibly add new tonnage to the Creston Deposit."

Harbinger urges Cleveland-Cliffs to sell out - WSJ

The Wall Street Journal reported that the chief of US hedge fund Harbinger Capital Partners, the largest shareholder of Cleveland Cliffs Inc has begun pushing the iron ore pellet maker to put itself up for sale.

The paper citing a person close to Harbinger as saying that Mr Phil Falcone, who wants Cleveland-Cliffs to take advantage of the steel boom, reckons the company could fetch as much as USD 130 a share or about USD 14 billion.

The move comes a week after Cleveland-Cliffs said it agreed to acquire coal miner Alpha Natural Resources Inc for about USD 8.3 billion to expand its coal assets and capitalize on the boom in the global steel industry.

In a regulatory filing made after the deal announcement, Harbinger Capital, which owns about 18.36% of Cleveland Cliffs common stock, expressed concerns about whether the Alpha deal was in the best interests of shareholders.

Mr Steve Baisden a Cleveland-Cliffs spokesman said that "Cleveland Cliffs believes that its agreement to acquire Alpha Natural Resources is in the best interest of Cleveland-Cliffs shareholders.”

He added that "Management has been meeting with shareholders to discuss the merits of the transaction and will continue to do so and has generally received positive feedback from investors and the financial community. Cliffs has not heard from Harbinger since it filed its 13D last week."

Mr Palmer to build AUD 18 billion resources titan

Perth based Australasian Resources has confirmed last week that its majority shareholder Mr Clive Palmer has launched a takeover bid for the company, as part of his plans to build a resources giant listed on the Hong Kong Stock Exchange.

Mr Palmer, who holds 66.4% of the company's total issued shares, launched the bid through unlisted company Resource Development International, offering to acquire the remaining shares through a scrip deal.

Australasian in an announcement said that the offer placed a notional price of AUD 2.20 on each of its shares, with the number of Resource Development shares to be issued determined by dividing that price by the equivalent price of an RDI share offered under the firm's future initial public offer.

Resource Development has announced plans to raise up to AUD 5 billion through its initial public offer, planning to list on the Hong Kong bourse, with an Australian Securities Exchange listing also under consideration, the Australasian announcement said.

The company has also briefed Chinese giant Shougang, Australasian's development partner for the Balmoral South iron ore project, on the RDI bid.

NMDC Q1 net soars by 56% YoY

BL reported that National Mineral Development Corporation Ltd has reported a 56.81% increase in the net profit for the first quarter ended June 30th 2008.

The net profit of the first quarter of the current financial year was at INR 981.31 crore against INR 625.77 crore in the corresponding previous quarter. NMDC’s net sales during the quarter under review increased 54.68% to INR 1,673.15 crore.

Mr Rana Som CMD of NMDC told Business Line that “We were expecting the sales to cross the INR 2,000 crore mark during the quarter. But due to the naxal attack on our mines located in Chhattisgarh in June this year work was affected for 10 days due to which the production dipped slightly resulting in the loss of revenues slightly.”

According to Mr Som, the growth in the revenues was mainly due to the improvement in the productivity and not increase in the prices. He said that “We have not implemented the usual rate hike, normally done with effect from April 1 each year, this year. But it is because the productivity per employee has gone up from 26 tonnes per man shift last year to 30 tonne per man shift.”

MMX plans sevenfold iron production increase by 2013

BNamericas reported that Brazilian company MMX Mineraçao is projecting a sevenfold increase in its iron production to 40 million tonne per year by 2013, with 6.3 million tonne coming from its operations at Corumbá and 33.7 million tonnes from new unit MMX Sudeste.

MMX in a statement said that this and other expansions will require investments of USD 1.5 billion in the 2008 to 2015 period, which have been approved by MMX's board of directors.

Currently MMX Sudeste made up of MMX's Serra Azul unit and a Greenfield project called Bom Sucesso produces 4.3 million tonne per year and Corumbá 1.9 million tonne per year.

MMX added that the projects at MMX Sudeste will require USD 1.1 billion and Corumbá USD 62 million. Most of MMX Sudeste's production is headed overseas.

MMX is also planning to build a USD 333 million billet plant in Mato Grosso do Sul state that will start up at 34,000 tonne per year in 2010 and reach 452,000 tonne per year in 2012.

China coal supplies still critically low - Reports

XFN-Asia reported that coal supplies are still at critically low levels across China. Figures from the China Coal Transport and Distribution Association show that China is currently facing a supply shortfall of 40 million tonnes, and some regions are suffering more than others.

The report said some plants only had one day of coal left. It said that it was also proving impossible to increase deliveries from outlying provinces like Shanxi because they had to deal with shortages of their own.

Mr Li Fulong head of the province's pricing bureau, during an interview with the Shanghai based China Business News said that "This is the major reason for current electricity shortages in Shanxi."

Mr Li Chaolin an expert with the China Coal Trade and Development Association said that imports were a good option for power plants in the south, where transportation bottlenecks were hindering deliveries from production centers in the north, but there is little chance that foreign supplies will substantially ease domestic supply problems.

He said that international supplies are already insufficient and prices are rising rapidly. There are also considerable trade barriers in the sector.

Indian coal production in the month of June 2008

The coal produced during the month of June 2008 by Coal India Ltd and Singareni Collieries Company Ltd was 31.32 million tonne as against the AAP target of 34.26 million tones up by 4.64% YoY as compared to 29.93 million tonne.

Coal dispatches to power sector during June 2008 was 24.90 million tonnes. During the month of June 2008, E auction was held in all coal producing companies of CIL. The provisional result of the E-auction in CIL indicates that during June, 2008 the total quantity offered was 15.592 million tonnes as against which 4.906 million tonnes was allocated. Average floor price in June, 2008 was INR 946.60 per tonne against the average Bid price of INR 1233.49 per tonne indicating a percentage increase of 30.31%.

Monthly and progressive Plan Expenditure of Coal Companies

(In INR Crore)

The report added that two more captive coal blocks viz. Rohne coal block was allocated to JSW Steel Ltd, Bhushan Power & Steel Ltd. and Jai Balaji Industries Ltd on 05.06.08 and Lohara (East) coal block was allocated to Murli Industries Ltd and Grace Industries Ltd on June 27th 2008

PT Bumi and PT Bayan to halt operations in part of Borneo areas

Bloomberg reported that PT Bumi Resources and PT Bayan Resources were ordered by a local government to halt operations in parts of their mining areas in East Kalimantan province in Borneo.

Mr Isran Noor acting regent of East Kutai area in the province said that PT Kaltim Prima Coal, the larger of Bumi's two coal producing units, did not have the forestry permits to operate in 2,200 hectares or 2.4% of its total area.

Mr Noor said that “They should get permits to cut down the trees and use the forests.”

He issued a letter to shut mining activities in an area that includes an eight kilometer road to Kaltim Prima's Bengalon mine and several security posts on July 11th 2008.

Mr Dileep Srivastava head of investor relations at PT Bumi said that “Kaltim Prima operates under a contract that's signed with the central government. Anything that impacts our production must be conveyed through the energy ministry.'' He added that operations at Kaltim Prima are running as normal.

Production disruptions in Indonesia, the world's largest thermal coal exporter, may further tighten a market where supply is already limited as China cuts export of the fuel to meet domestic demand. Infrastructure bottlenecks in Australia and increased Asian demand have pushed prices to records this year.

Brazilian iron ore exports in April

Brazil's iron ore exports totaled 17.735 million tonne in April.

China remained the main export destination at 6.919 million tonne accounting for 39% of total exports.

Brazil exported 1.381 million tonne to Japan, accounting for 7.8% and shipments to Germany totaled 992,000 tonne accounting for 5.2%. Brazil exported 887,000 tonne to Belgium accounting for 5% and shipments to France totaled 765,000 tonne to France accounting for 4.3%

(Sourced from YIEH.com)

Peabody Energy completes expansion of Wambo Coal

Peabody Energy announced it has completed the USD 50 plus million expansion of its Wambo Coal Preparation Facility, the final phase in a multi year build out of Peabody's Wambo complex.

The plant serves the North Wambo underground and Wambo open cut mines in New South Wales, Australia, which export thermal and PCI coals to Asian customers through the Port of Newcastle.

The complex expansion includes development of the North Wambo Mine, which was commissioned in the fourth quarter of 2007 and is among three major Australian mines Peabody completed this past year. North Wambo is ramping up to produce more than 2.5 million tonne per year. The Wambo Mine produced more than 4 million tons last year.

Ms Julian Thornton MD of Peabody Australia said that "Peabody continues to expand its capabilities to serve record world coal demand. After nearly doubling Australian coal sales last year, we are increasing our throughput again this year and will continue to expand over time as coal chain throughput climbs in the next several years."

The new preparation facility doubles blending capacity and incorporates a 180-meter skyline conveyor system that moves coal from the preparation plant to a railroad loadout facility for transportation to the port.

Angry farmers torch mining machinery in Karnataka

Express News Service reported that farmers went on a rampage at the Chikkanayakanahalli iron ore mining area in Karnataka and destroyed about 20 machines worth more than INR 20 crore that belonged to different mining companies on Thursday.

The farmers were demanding the stoppage of mining in the area as their areca and coconut crops were being affected by the activity in the area; they wanted their crops insured. They also demanded an irrigation project that would cater to their needs for water. Two miscreants were taken into custody. Only two weeks ago, farmers had staged a protest, demanding compensation for the crops they lost because of the mines.

Following that protest, the administration and the miners had promised that their demands would be met. However, there was no action on their demands, and mining activity resumed on Thursday, enraging the farmers.

More than 2,000 farmers gathered at the Abbigegudda hillock, where mining was under way. As the farmers started ascending the hillock, police, interestingly, pelted stones at them. But the mob walked on, despite being pelted. They reached the top of the hillock, even as four farmers were injured in the stone pelting. Later the farmers set afire excavators and screening machines.

Superintendent of Police Dr P S Harsha held negotiations with the agitators and miners. He promised the farmers that their demands would be fulfilled. Deputy Commissioner Dr C Somashekar, speaking to Express over the phone, clarified that illegal mining will be stopped.

Chinese second export quota for rare metals

The Central Government of China has recently announced the second export quota for such rare metals as molybdenum, tungsten and so on to be shipped from China.

According to this announcement, the quantities of rare metals allocated for exports as the second time are 10,161 tonnes on material base of molybdenum for metallurgical use specified for 19 companies and 5,126 tonnes on W content base of tungsten and its relative products.

The second export quota includes 1,360 tonnes on material base of molybdenum for chemical use compared with 3,179 tonnes for the first export quota specified for 10 companies and 1,303 tonnes on material base of molybdenum products compared to 3,039 tonnes for the first export quota specified for 15 companies.

The first export quota for shipments in 2008 was announced on the 27th December of 2007 with 23,711 tonnes on material base of molybdenum for metallurgical use and 13,666 tonnes on W content base of tungsten and its relative products. Consequently, the total quantities allocated for exports in the calendar year of 2008 as announced in the first and second times come to 33,872 tonnes on material base of molybdenum for metallurgical use and 18,792 tonnes on W content base of tungsten and its relative products.

The quantities on material base of molybdenum exported from China in the calendar year of 2007 were,
1. Ferromolybdenum 21,133 tonnes
2. Molybdenum oxide 24,834 tonnes
3. Total 45,967 tonnes.

In view of the actual quantity of molybdenum exported from China in the calendar year of 2007, the export quota of molybdenum allocated for the second half of 2007 was inefficient.

The total quantity of molybdenum allocated for exports from China in 2008 as announced in the first and second times comes to 33,872 tonnes on material base, which is a considerable decrease of 26.3% compared with that exported by China in the preceding year of 2007.