SAIL to set up processing unit in Rajasthan

ET reported that Steel Authority of India Limited will set up a processing unit for steel manufacturing at a cost of INR 250 crore at Guddha in Rajasthan's Jhunjhunu district.

Mr Ram Vilas Paswan union steel minister announced on Sunday that "Though the BJP government in the state is reluctant due to the availability of water in the area on the setting up of the unit, but it is not a new problem in Rajasthan. It would be managed anyhow.”

He said that the input materials for the processing unit would have to be brought from other places and that the plans for unit will take final shape in a couple of months.”

ISPI shows up ward trend in WEEK 30

LPPI – Long Product Price Index
FPPI – Flat Product Price Index
ISPI – Indian Steel Price Index

You may like to know more about pricing trends in India, MEA, China and Black Sea and read the following articles

1. Monday Market Monitor – India (WEEK 30) – Upward trend

2. Monday Market Monitor – Ukraine (WEEK 30) – Stabilizes at low levels

3. Monday Market Monitor – MEA (WEEK 30) – Stable

4. Monday Market Monitor – China (WEEK 30) – Down trend

To know more about prices and trends in these locations, please visit www.steelprices-india.com

JSPL net profit in Q1 up by 61% YoY

Jindal Steel & Power Limited has announced unaudited financial results for April to June 2008 quarter.

Highlights
1. Net profit after tax up by 61% YoY to INR 402.30 crore
2. Net sales up by 55% YoY to INR 1895.31 crore
3. Exports up by 19% YoY to INR 336.62 crore

JSPL has posted a net profit of INR 4023.00 million for the quarter ended June 30th 2008 as compared to INR 2501.10 million for the quarter ended June 30, 2007. Total Income has increased from INR 12327.30 million for the quarter ended June 30th 2007 to INR 19027.40 million for the quarter ended June 30th 2008.

JSPL has shown growth in production of all its major products. Details of growth in production for the quarter ended June 30th 2008 with the corresponding quarter in the previous financial year are as under

In tonnes
* Slabs/Bloom/Billets/Structurals & Rails/Universal Plate/Coil

Details of increase in sales for the quarter ended June 30, 2008 with the corresponding quarter in the previous financial year are as under

In tonnes
Slabs/Bloom/Billets/Structurals & Rails/Universal Plate/Coil

JPL has also commissioned 3 units of 250 MW each. 4th unit of 250 MW is under trial production and expected to be commissioned in the second quarter

Welspun to expand capacity of Vikram Ispat

FE reported that Welspun Power and Steel Limited, a flagship company of the Welspun Group, is all set to invest more than INR 4,000 crore in Brownfield expansion of its recent acquisition of sponge iron business, Vikram Ispat, revealed. The company will increase INR 4,000 crore through its tie ups with banks along with promoter’s contribution through equity.

As per report, Welspun Power and Steel will now manufacture slabs that are required to make steel plates and coils by its other entity Welspun Gujarat Stahl Rohen Limited which is the second largest pipe producer in the world.

Mr Jindal president of Welspun told FE that “Vikram Ispat already produces 1/3rd of what we require. Going forward balance two to third is what we are planning and working out the final details.”

He added that “We expect to achieve financial closure in 3 months' time and expect the expansion to be fully operational by FY2011. We are targeting the first slab to be out by October 1st 2008. This expansion will make us self sufficient and will make us the largest integrated pipe manufacturer in the world.”

Welspun Power and Steel Limited had acquired Vikram Ispat for INR 1,030 crore from Grasim an Aditya Birla Group company last month.

Monday Market Monitor - India (WEEK 30) - Upward trend

After winning the no confidence motion in the parliament, Indian government has come out strongly on steel prices and has warned that although it would not resort to price control, but would monitor the hike by Indian steel majors including private sector players to ensure that inflation is kept within check.

To read full article, please visit www.steelprices-india.com

Steel ministry announces steps taken to contain steel prices

Indian steel ministry announced that “During the last fortnight steel prices in respect of pig iron, ingots, rounds, TMT, Angles, plates, GP sheets and sponge iron have come down in the range of 3% to 6%. Retail prices of HR coil, CR coil and wire rods have shown a slight downward trend mainly in view of strict vigilance exercised over the dealers.”

The release said that “Major steel producers namely SAIL, Essar, JSW and Ispat have published advertisements in the newspapers giving the range of prices, their channel of distribution and other relevant details.”

It added that “Small and medium pipe manufacturers have informed that they have reduced the price of steel tubes & pipes up to 16 mm diameter by 10%.”

The release outlined that major steel companies have initiated action as follows for improvement of steel availability in the domestic market:

1. SAIL has a wide dealer network covering almost all the districts in the country. Recently SAIL has issued instructions fixing a maximum retail price for its dealers, which gives them a margin of INR 1000per tonnes to 1200 per tonne of material. SAIL has also planned to open retail outlets. Currently, the retail sale of flat products is restricted to bonafide consumers only.

2. Essar Steel limited has established hyper marts in almost all the States for sale of flat products of common categories of HR & CR coils. The retail prices at such hypermart are as per the price, published by the company in their official website. The material is sold to bonafide consumers on production of Excise Registration Certificate.

3. TATA Steel has a wide dealers network for its TMT & GP or GC products. The flat products of TATA Steel are sold through the marketing department of the company.

4. JSW Steel does not have any retail outlet but it has arrangement with franchise dealers who arrange to stock the materials and provide the logistic arrangements. The actual sale and billing is however, done by the company at the dealers premises at company rates.

JSW Steel to establish deep sea port at Bhadrak in Orissa

It is reported that JSW Steel is planning to set up a deep sea port in Orissa for which it has begun talks with the state government to help import raw materials for the proposed steel projects in West Bengal and Jharkhand.

Mr Sajjan Jindal vice CMD of JSW told reporters that although initially the company was interested in locating the project in West Bengal, it had to abandon the plans on grounds of high maintenance cost that would have been required at the location chosen by the government for the project.

He said that “We have now begun discussions for a similar project in Orissa in Bhadrak district.”

IEEMA urges finance minister to reduce ED on steel

It is reported that Indian Electrical and Electronics Manufacturers Association has urged the Union Finance Minister to reduce excise duty on ferrous and non ferrous metals from 14% to 8%. This will substantially reduce input cost as well as reduce leakage of revenue.

Mr Vijay Karia cable division chairman of IEEMA said that “After the submitted the memorandum to the union government, the detail of solutions that the government would consider to reduce import duties on steel, copper and aluminum from 5% to nil and to increase import duties on cables to 10% from the current rate of 7.5%.”

He said that the government should encourage local established industries to grow through proper framing of tender guidelines and discouraging usage of recycle metals and polymers through stringent quality checks.

Mr Karia said that “IEEMA is implementing a quality rating program through CRISIL LLOYDs. Overall electric equipment growth rate has maintained 15% in the last few years. However, power cable growth rate is highest 21% in all other sector like transformer, switch gear and others. Electric industry is facing acute shortage of people with engineering expertise and Managerial skills. There would be huge manpower required by utilities, equipment vendors and service providers in the sector. If there is a limiting factors here, it is skilled manpower. There would be target engineering institutions for upgrading syllabus.”

Mr M Gandhi senior member of IEEMA said that “There is lack of implementation of quality standards leads to usage of recycled or commercial grades of copper, aluminum and PVC, thereby leading to higher electrical losses and higher failures. India is faces some of highest electrical losses in the world. This can be substantially reduced by usage of proper quality of cables and conductors. He added that Indian cable industry is till facing the most unfavorable terms of payment from the local users and electricity boards. Foreign suppliers are favored with letters of credit.”

Indian Steelmakers Directory 2008

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CLP to Build 1320 MW plant at Jhajjar in Rajasthan

Bloomberg reported that Hong Kong's biggest power utility CLP Holdings Ltd has won a bid to develop and operate a USD 1.2 billion coal fired power project in India. The first unit of the coal-fired plant will be completed by December 2011 and the second by April 2012.

CLP Holdings Ltd in a statement on its web site said that “The plant with a total capacity of 1,320 MW in Jhajjar district will be CLP's largest investment in Indian the nation and reinforces its position as one of the largest foreign investors in the Indian power sector.”

CLP, a 107 year-old business controlled by the family of Chairman

Infrastructure sector hit by attrition - ASSOCHAM Study

The Associated Chambers of Commerce and Industry of India reported that attrition rate to the extent of 40% is now being reported in key infrastructure like energy and steel which provides for greener pastures for qualified professionals since these sectors are in to absorb fresh capacities even with borrowings cost going.

ASSOCHAM analysis said that this has created good and sound employment prospects for over 40,000 professionals and others in energy and steel sector which would also witness fresh investments in thousands of crores.

Mr Sajjan Jindal president of ASSOCHAM while releasing the finding said that a large number of ASSOCHAM constituents in energy sector and the entire steel alliance are reporting shortages of experienced, skilled and qualified professionals to an extent of 40% as these sectors are commissioning addition in capacities.

Mr Jindal said that “Opportunities have galored for most of energy and steel professionals. The major companies are experiencing the unprecedented attrition rate which is also significantly contributing in increasing the cost.”

Mr Jindal said that rural electrification program would also receive a fillip in view of forthcoming states and parliamentary elections and would also require personnel to achieve 100% electrification program for the corporation. This sector is likely to create job opportunities for thousands of workforce and add to attrition rates.

Referring to petroleum sector, the ASSOCHAM assessment said that domestic hydro carbon discovery and its refining sector would witness large capacity additions from 2008 onwards in view of growing shortages of crude oil. The target for the capacity expansion in the refining sector would take off from 149 million tones to 235 million tones in next couple of years which will require recruitment of petroleum engineers, drillers, physicians, geologists, geo physicists besides executives.

Mr Jindal further added that as far as steel sector is concerned, almost each company whether in state or private sector has drawn up capacities expansion plan and finding it extremely difficult to engage professionals as they are in utter shortages, who himself is the 3rd ranking steel maker.

TATA Power announces Q1 results

TATA Power Company Ltd has announced the following audited results for the quarter ended June 30th 2008.

TATA Power Company Ltd has posted a profit after tax of INR 1905.50 million for the quarter ended June 30th 2008 as compared to INR 1902.00 million for the quarter ended June 30th 2007.

Its total Income has increased from INR 15799.40 million for the quarter ended June 30th 2007 to INR 20744.40 million for the quarter ended June 30th 2008.

Excise authorities to increase scrutiny of steel units

ET reported that manufacturers and dealers of iron, steel and plastic products are under intensive scrutiny of the central excise authorities for evading tax and claiming higher Cenvat credit. Units availing area based exemptions are also under the close watch of the Central Board of Excise and Customs.

The action follows a report by the Central Economic Intelligence Bureau about rampant tax evasion by these entities and misuse of Cenvat credit scheme and area based exemptions. The board has now prepared a special action plan to ensure that the field formations go after such entities.

The department is also building a data base of iron, steel and plastic articles based on which dealers and manufacturers will be selected for intensive scrutiny.

As per the report, records are being verified to detect dealers passing substantial Cenvat credit. Manufacturing units showing adverse personal ledger account and Cenvat credit utilization ratio are also under the scanner. Units doing poor value addition to take advantage of the area based exemptions are also being looked at.

Ground breaking for Sical iron ore terminal at Ennore

It is reported that Sical Logistics has initiated work on the new 12 million tonnes per annum iron ore terminal at Ennore Port with the groundbreaking ceremony being held on the site on July 16th 2008.

Jaisu Shipping bags dredging contract at Kochi Port

Project today reported that Kandla based Jaisu Shipping bagged a combined contract for maintenance dredging and capital dredging at Kochi Port in Kerala till October 2008.

As per report, the board of trustees of the port approved the proposal of the company at a cost of INR.19 crore. The company has to carry out the work on quantity basis.

The work involves deepening of the outer and inner channels leading to the Rajiv Gandhi Container Terminal to a draft of 12.5 meters as well as annual maintenance of the port. The port currently has a draft of 11 meters.

Though Dredging Corporation of India was requested to undertake the maintenance dredging for the period on nomination basis the company expressed its inability to undertake the work due to other commitments.

SCI Q1 net up by 36% YoY

It is reported that Shipping Corporation of India posted a net profit growth of 36% in the first quarter ended June 30th 2008 on account of high freight rates from liner division bulk and tanker segments.

The net profit stood at INR 279.60 crore against INR 206.10 crore in the same quarter in 2007. The total income was up by 18% to INR 1,126 crore

Income from operations stood at INR 1,066 crore with revenues from bulk recorded at INR 815 crore and liner INR 209.5 crore. Others contributed INR 41.4 crore.

According to Mr BK Mandal director finance of SCI, income has grown on account of improved utilization of vessels and freight rates. C

He added that with the increase in oil prices, the bunkering cost has gone up. In terms of value of expenditure, we have incurred 20% to 25% more in this quarter compared to the corresponding quarter last year.”

Uttarakhand government announces new power policy

Project today reported that Uttarakhand government has announced a new power policy favoring privatization that gives priority to the local people for constructing hydel projects unto 25 MW in the state. Besides locals gram panchayats and cooperative federations will be preferred in these projects.

As per report, there is also proposal to set up four small hydel projects with USD 41.6 million aid from Asian Development Bank.

The government has recently decided to hand over 35 year old hydro power projects to privatize companies to renovate and modernize them.

SCI CAPEX plans for 2008-09

Mr BK Mandal director finance of SCI said, “It will be in the range of INR 2,000 to INR 2,300 crore which will be deployed for buying ships. We will take delivery of one very large crude carrier this year and 2 container vessels will be added to our fleet.”

Eicher Q1 profit down by 44.47% YoY

Commercial vehicles manufacturer Eicher Motors reported a fall of 44.47% YoY in its profit after tax for the quarter ended June 30th 2008 at INR 5.27 crore compared to INR 9.49 crore in the same quarter in 2007.

Eicher Motors said that total income up by 16.20% at INR 561.23 crore during the quarter against INR 483 crore in the same period last year.

Mr Siddhartha Lal MD & CEO of Eicher Motor said that “We have seen a significant growth in sales volumes across each of our 4 business units resulting in a growth of over 16% in the top line. However, due to the unprecedented increase in steel prices, the Q1 margins have always been under pressure resulting in the material cost as a percentage of net sales going up by 71.6% to 76.2%.”

He added that during the Q1, the company's market share in the light and medium cargo segment moved up by 30% from 25% in the corresponding period last year.

Eicher had formalized its JV with Swedish truck maker Volvo to manufacture and carry out commercial vehicle business in India.

Underground excavation completed for Rampur power project

Project Monitor reported that Sutlej Jal Vidyut Nigam implementing the 412 MW Rampur hydroelectric power project achieved a milestone by completing underground excavation of 149.4 meters deep, 7.15 meters diameter pilot of 38 meters diameter surge shaft ahead of schedule.

Last blast of pilot for the power plant was performed on 24th July 2008 at Bayal.

The construction of surge shaft was one of the most critical activities of Rampur power project which required excavation of Pilot of 7.15 meters diameter first from the top to facilitate the excavation of 38 meters diameter surge shaft.

Open excavation of about 100,000 cubic meter in surge shaft was started during April 2007 and completed during September 2007. Underground excavation of pilot was then taken up on 14th September 2007 and depth of 149.4 meters was completed in 11th month time.

Foundation laid for sewage treatment plant in Lucknow

It is reported that Ms Mayawati CM of Uttar Pradesh laid the foundation of the country's largest sewage treatment plant in Lucknow district under Gomti Action Plan.

As per report, the plant entailing an investment of INR 170 crore will have a capacity of 345 MLD. Work on the plant has begun and is expected to be completed by July 2009.

Mr Jai Ram Ramesh to visit Lehra Mohabbat Thermal Plant

Punjabnewsline reported that Mr Jai Ram Ramesh minister of state for Power visited Lehra Mohabatt thermal plant to synchronize the unit no 4 on oil firing.

According to the report, the oil firing of 250 MW unit no. 4 of Lehra Mohabatt thermal plant was done on Sunday by Mr Jai Ram Ramesh.

He has been invited by BHEL the company constructing the thermal units of second stage on turn key basis. The unit no. 3 of thermal plant was synchronized on oil firing on January 3 this year .The synchronization of unit on coal firing was done in April this year but unit has not yet stabilized.

The unit when put to commercial run would produce 6 million units per day giving much needed relief to PSEB. Even during transit period PSEB would be getting 1 million to 2 million units per day.

Reliance Infra Q1 net jumps 14% at INR 252.54 crore

Reliance Infrastructure Limited recently announced a 14% increase in its net profit to INR 252.54 crore for the Q1 ended June 30th 2008 against INR 221.56 crore in the year ago period.

Reliance Infrastructure a filing to the Bombay Stock Exchange said that total income of the company up by INR 2,618.43 crore for the quarter ended June 30th 2008 from INR 1,983.93 crore in the same period last year.

Railways supplies passenger coaches to Tanzania

BL reported that Golden Rock Railway Workshop won another feather in its cap when 23 refurbished MG passenger coaches were flagged off to Tanzania.

According to report, the coaches along with 2 refurbished meter gauge diesel locomotives were flagged off by Mr Raj Kamal Rao member of Railway Board in New Delhi at a function held at the workshop premises.

Refurbished at a cost over INR 5 crore the coaches have been provided with air brake system for better braking power, fire retardant upholstery, enhanced buffer couplers, improved PVC flooring and UIC vestibules among other passenger friendly features.

Mr Rao said that the workmanship of the technical personnel of the workshop and underscored the need to adopt new technologies in the backdrop of technological changes. He added that substantial amount had been sanctioned to the workshop for its modernization plan.

Mr V Carmelus chief mechanical engineer of Southern Railway said that the coaches and locomotives would exemplify the quality of Indian Railways.

Mr S Rangarajan chief Workshop manager of Golden Rock Railway Workshop said that the workshop had made a mark on the export front, he adding that efforts were on to ramp up the capacity of the workshop to manufacture 1,000 wagons a year.

Siemens to make metro train coaches in India

BL reported that engineering and electrical goods major Siemens may soon set up a facility to manufacture coaches for trains and metros in India, thereby launching a completely new business segment in the country.

According to report, the Indian arm of the German company has nearly completed the acquisition of land at Aurangabad in Maharashtra to put up a Greenfield plant for the manufacture of engineering goods including rolling stock.

The report said that the Siemens intends to begin with the manufacture of metro coaches, it adding that work on developing the land which is adjoining the Skoda plant in the Shendra industrial estate in Aurangabad is expected to begin in a few weeks. The facility will go on stream by the middle of 2009. Interestingly, the first assemblies of Skoda cars began at one of Siemens’ existing facilities at Aurangabad.

The initial financial outlay of the new factory part of what is pegged as a mega project is understood to be around INR 500 crore. It is not clear whether this investment will be made by Siemens India or as foreign direct investment from the German parent Siemens AG.

Ms Kavita Ghatge vice president Corporate Communications of Siemens Limited said that “We are intensifying our presence in India. We already have a significant presence in Aurangabad with 2 manufacturing facilities, 1 for high voltage switchgear and the other for low voltage switchgear. We are looking at Aurangabad as a location for supporting our expansion and growth plans in the Industry sector, which includes transportation.”

The Siemens Transportation Systems business unit has been building trains for nearly 150 years and is a leading manufacturer of complete metro systems.

In India the division supplies equipment to the railway coach factories at Chennai & Kapurthala and also offers solutions for the railway sector in the field of automation, traction equipment and electrification.

As of now, there is no manufacturing facility for coaches in the country. Should Siemens begin manufacturing them indigenously, it will be the second multinational in the fray. Canadian firm Bombardier Transportation is already setting up the country’s first metro coach factory at Vadodara.

Karnataka move to set up maritime board welcomed

BL reported that the maritime activity along the 300 kilometer long Karnataka coast is all set to get a boost, if the announcement of the Karnataka Government on the establishment of a maritime board is any indication.

Mr BS Yeddyurappa CM of Karnataka said that the State will establish Karnataka Maritime Board.

Mr JP Menezes president of Kanara Chamber of Commerce and Industry and a marine surveyor said that “Establishment and implementation of the board will bring Karnataka on par with other maritime States. He added that this is the best thing that could have happened to the Karnataka maritime constituency.”

Mr P Tamilvanan chairman of the New Mangalore Port Trust said that establishment of such a board will help boost the maritime activity in the State.

Mr Shekar Pujari president of the Association of New Mangalore Port Stevedores said that such a board will create more job opportunities. Minor ports in the State will get a boost and the trade will see further improvement. Mr K Narasimha Prabhu president of KCCI said that the establishment of the Karnataka Maritime Board is 1 of the oldest demands of the KCCI. The proposal in the State Budget is a welcome move in this matter.

It is to be noted that the Karnataka maritime constituency consists of 1 major port and 10 minor ports. New Mangalore Port is the only major port of the State. The 300 kilometer long Karnataka coast line consists of minor ports such as Karwar, Belekeri, Tadri, Honnavar, Bhatkal, Kundapur, Hangarkatta, Malpe, Padubidri and Old Mangalore.

Meet on welding and painting technology

It is reported that the Confederation of Indian Industry organized a conference on welding and painting technology that threw light on the emerging trends in the 2 fields.

During the conference speakers underlined the fact that the 2 fields were of great importance to the industrialized Karur town that has a huge population of bus body building activity.

The Convener, CII Automotive Panel Mr P Thangaraju outlined the theme of the meet. Mr A Raja senior deputy GM of Welding Research Institute delivered the special address detailing the salient features of modern day welding and the recent advances made in the field. It said that technical sessions which were organized as part of the meet touched on aspects such as welding productivity, cost effective welding and cost reduction.

OTPCL plans thermal power plant in Angul

Project monitor reported that Orissa Thermal Power Corporation Limited a 50:50 JV between state owned entities Orissa Hydro Power Corporation Limited and Orissa Mining Corporation has initiated the process to set up a 2,000 MW thermal power plant in Angul district.

According to GR Panda manager who is part of the project implementation team, OTPCL would require about 2,000 acres out of which only 300 acres is private land. He said that "We will not have much problem in land acquisition since major portion of the land belongs to the state government. The land acquisition process would be over within 6 months."

As per the report, OTPCL has recently identified 1 site near Rengali hydroelectric power station in Angul district. Water linkage for the project is readily available near the proposed site. Meanwhile, the company has received coal allocation from the Centre at 2 coal mines namely Baitarni West & Mandakini B. According to the company, the estimated coal reserve is 500 million tonnes.

OTPCL has recently invited bids for infrastructure development at the project site. The selected developer would be required to prepare detailed feasibility report, finalise site for the project, preparation and approval of ToR, EIA & EMP obtaining approval for land acquisition and carrying out R&R activities and other statutory clearances. The developer will also require to prepare infrastructure and water management plan, basic engineering, manpower planning, logistics for coal handling and ash management plan, among other responsibilities.

According to the OTPCL official, bids will be invited for selecting civil and EPC contractors only after completing the above process which is expected to end within 12 months. He said that "We are already in talks with Bhel."

Mr SS Dalpati chief GM of OTPCL’s part of the new thermal power project team said Projectswire over phone that the power from the new 2,000 MW project would be diverted to state owned Gridco and that there was no tie up with other parties or states for power purchase.

JSW Steel hopes to acquire United Coal by August

BS reported that JSW steel is likely to complete the deal for acquisition of US based United Coal within August 2008.

The market has widely speculated that the deal is expected to cost anywhere between USD 1.5 billion USD 2 billion.

Mr Sajjan Jindal chairman of JSW steel said that "We are in discussion and the bidding process is on. We hope to sort of finalizing the deal within August 2008."

Mr Jindal said that "We will be quite aggressive to acquire United Coal. Apart from United Coal, we are looking at Australia for acquiring coal mines."

A privately held firm United Coal is a metallurgical coal company that owns mines in Virginia and Kentucky having a total reserves of 165 million tonnes.

High steel prices restrict steel future transactions

Reuters reported that the current high steel prices provide no incentive for producers to hedge risks leaving newly launched futures badly short of liquidity and it may be months before a bear market returns to stimulate trade. Record price hikes for key steelmaking raw material iron ore and coking coal prices more than doubling have pushed steel to fresh highs this year. On the LME, the billet price has risen more than 50% since the end of February.

So far, LME's billet contracts have traded a total of 1,759 lots since the launch of electronic trading at the end of February. In Dubai, daily volumes on the DGCX's rebar futures which rose above 200 lots in December, slipped to 20 lots to 30 lots in July.

Mr Michael Overlander MD of UK based Sucden a major ring dealing broker at the LME said that "We probably need a bear market. The success of a new commodity market is depends on key participants adopting an active hedging or trading strategy. For this to happen producers of raw materials would probably need to see the value of their assets falling before they would be inclined to try and hedge their risk.”

Mr Ugur Dalbeler GM of Colakoglu one of Turkey's leading steelmakers, which is also approved by the LME said that "The producers are not very interested at the moment, as the price keeps going higher and higher. Supply is scarce. The producers can sell at whatever price they want.” He added that "No market could continue to go up forever. When it starts to come down they will consider using the contracts more seriously."

Major bourses like the London Metal Exchange and the Dubai Gold and Commodities Exchange have launched steel futures over the past year with the aim of creating benchmark prices for the USD 800 billion industry. But participation has so far been limited, mainly because record prices have given producers unprecedented pricing power over their customers and with demand for steel robust, producers can sell their products at increasingly higher prices.

Japanese firms to develop carbon fiber auto bodies - Nikkei

The Nikkei business daily reported that Nissan Motor Co, Honda Motor Co and Toray Industries will join hands to develop a new carbon fiber material for auto bodies.

The newspaper said that the companies, along with textile firms Mitsubishi Rayon and Toyobo aim to be able to mass produce the material by mid 2010s and to make vehicles 40% lighter than steel use cars.

It said that the Japanese government is also helping the project in the hopes of staying ahead of the global race to develop eco friendly vehicles and the Ministry of Economy, Trade and Industry plans to provide JPY 2 billion (USD 18.5 million) for the project over five years.

The newspaper said that one of the issues is the high price of carbon fiber, but it is expected that the cost gap between carbon fibre and steel will narrow over time as steel prices continue to rise. It said that the use of carbon fiber will also likely improve fuel efficiency and reduce carbon dioxide emissions by 30%.

The newspaper added that plastic parts maker Takagi Seiko Corp and researchers from the University of Tokyo are also participating in the project.

TKC Steel to build blast furnace

Manila Bulletin Online reported that after decades of dreaming to have an integrated steel industry, the country is given a glimpse of a dream fulfilled with the construction of over PHP 1 billion blast furnace and beneficiation plant for the production of pig iron, a primary steel product, by the TKC Steel Group, which is expected to put on stream its small scale integrated steel operation in October this year.

Mr Elmer C Hernandez trade and industry undersecretary and board of investments managing head said that this after making a side trip to the TKC plant during the recent inauguration of the plate mill operation of Global Steel Philippines Inc in Iligan.

He said that "I’ve seen the new equipment and facility when I visited the site. This new unit of TKC is being constructed adjacent to the billet shop, which its sister company Treasure Steelworks Corp. is currently leasing from GSPI in Iligan and is now producing billets.”

He added that TKC Steel which had already applied for registration with the BoI but withdrew it later, is expected to refile its application.

Mr Hernandez said the project may be entitled to pioneer incentives considering that the technology is considered new as there is no commercial operation of this kind yet in the country.

According to Mr Hernandez, the company is also in the midst of construction and the installation of equipment imported from China. An estimated PHP 300 million to PHP 400 million in capital has been poured already into the project.

Mr Hernandez said the company would utilize local supplies of iron laterite to be processed in the beneficiation plant to come up with beneficiated iron or iron concentrate iron, which in turn becomes the raw material for the blast furnace to produce pig iron, a primary steel product.

Tight logistics hurting US ferrous scrap processors

Platts reported that US scrap processors are facing a logistics squeeze as rail, truck and barge transportation are all suffering capacity shortages. The rail and truck shortage comes against the backdrop of a tight barge situation exacerbated by the extensive flooding in the Midwest along the Mississippi River.

One large southeast scrap processor said that rail capacity was constrained and there are not enough gondolas for scrap. He said that "Many are tied up at the East Coast export yards, owing to the strength of the ferrous scrap export market. The railroads are not doing a very good job at furnishing the necessary equipment. Railcar shortage was having a trickle down effect. The shortage of rail cars is squeezing trucks. Skyrocketing diesel fuel prices are also hurting truck availability, driving some truckers out of work because they can no longer operate profitably.”

Another Eastern processor agreed saying that there is a shortage of rail cars and it is very hard to get trucks.

Another processor said "The market was already short barges and the flooding has made things worse."

According to the most recent data from the American Association of Railroads, shipment of metals and products declined 2.6% during the week ending June 21st. For the 25 weeks ending June 21st, such shipments are up a scant 1%, even amidst the booming scrap markets of the past few months.

US steel imports in May dip by 17.8% YoY

Based on preliminary reporting, US’s steel imports plummeted nearly by 18% YoY in May 2008.

Total Steel imports in May 2008 were 2.45 million tons as compared to 2.98 million tons in April 2008, a 17.8% decrease and a 25.0% decrease compared to May 2007. According to year to date figures, imports decreased 11.0% compared to 2007 or from 14.772 million tons in 2007 to 13.151 million tons in 2008. The data show that imported semi finished products increased by 2.1% in May 2008 as compared to May 2007. For the year to date period, semi finished imports increased from 2.667 million tons in 2007 to 2.68 million tons in 2008, a 0.5% increase, based on preliminary reporting.

(In ‘000 tonne)

Mr Dave Phelps president of AIIS said that “Final imports in April were almost 3 million tons, providing some relief to steel starved American steel consumers, who have been living with rapidly escalating prices and low inventories in 2008.”

Mr Phelps said that clearly, the weak dollar along with high shipping rates in late 2007 and early 2008 negatively impacted the ability of importers to bring needed imports to the US market. He said that “The most disturbing element of this month’s data are the recent ITC and DOC decisions on new cases and Sunset reviews such as the decisions on Chinese pipe and tube and wire rod that will remove or keep needed steel out of the market. For an industry that is, by its own statements, restructured, profitable, healthy and enjoying the best five years in history, this cynical use of the trade laws only damages American steel consumers, themselves struggling to compete in tough international markets.” Mr Phelps concluded that “We hope that import levels will improve in future months and benefit all steel consumers.”

Japanese June crude steel production down by 1.7% MoM

According to the Japan Iron & Steel Federation, Japanese crude steel production totaled 10.371 million tonne in June 2008, down by 175,000 tonne or 1.7% MoM. As a result, Japanese crude steel production hit a cumulative 61.897 million tonne in January to June 2008 up by 4.2% from the same period of 2007.

In the breakdown by steelmaking furnaces, LD converters accounted for 7,571,000 tonne in June 2008, down by 2.9% MoM and electric arc furnaces 2.800 million tonne up by 1.7%MoM.

Japanese production of blast furnace pig iron totaled 7.260 million tonne in June 2008, down 235,000 tonne or 3.1% MoM. Cumulative production amounted to 44.111 million tonne in January to June 2008 up by 3.9% YoY.

Japanese manufacture of HR steel products totaled 9.316 million tonne in June 2008 up by 50,000 tonne or 0.5% MoM. Of the total, ordinary steel products accounted for 7.451 million tonne up by 78,000 tonne or 1.1% MoM and specialty steel products 1.865 million tonne down by 28,000 tonne or 1.5% MoM.

EIA projects 50% growth in world energy use by 2030

According to US government energy statistics released in “International Energy Outlook 2008” by the Energy Information Administration, if current laws and policies remain the same, world energy consumption is projected to grow by 50% by 2030.

The report said that global energy demand will grow despite the projections of long term sustained high world oil prices. According to the report, total world energy use will rise from 462 quadrillion BTUs in 2005 to 563 quadrillion BTUs in 2015 and to 695 quadrillion BTUs in 2030.

It said that average world oil prices have been higher than the previous year’s average every year since 2003 and prices in 2007 were nearly double the 2003 prices in real terms.

The report also said that coal’s share of world energy use has increased sharply over the past few years, and without significant changes in existing laws and policies robust growth is likely to continue.

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Moody sees merger moves by ArcelorMittal and Russian steelmakers

According to Moody's Investors Service, Russian steel companies and ArcelorMittal are likely to remain active in seeking mergers.

Mr Matthias Hellstern a Frankfurt based analyst for the debt rating company in a note said that “Ongoing strong cash flow performance and reasonably solid demand fundamentals will continue to provide an impetus for consolidation in 2008 and 2009.” He added that consolidation will be slower than last year.

ArcelorMittal has invested in mines in Russia, Africa and the US to bolster its coking coal resources after prices tripled. It also plans to produce iron ore in Mozambique and is working on a South African manganese project to supply half its needs for the metal.

Severstal, Russia's biggest steelmaker, is seeking to expand production in the US. It outbid India's Essar Steel Holdings Ltd. last month for Wheeling, West Virginia-based Esmark Inc paying USD 775 million. Severstal earlier this year spent USD 950 million on ArcelorMittal's Sparrows Point plant near Baltimore and WCI Steel Inc becoming the US's fourth largest steel producer.

The report said that the European steel sector remains stable, with strong global demand supporting prices.

Moody's said that demand has been solid in mature markets and has continued to strengthen in the emerging markets of Eastern Europe.

Malaysian contractors seek intervention on steel prices

According to a joint statement from Malaysian industry members, prices of steel bars and cement have continued to soar to an all time high although the price of building materials was liberalized recently.

The industry members said that before the liberalization, steel prices were around MYR 3,200 to MYR 3,300 but now they have reached MYR 4,000 depending on quantity, credit term and location.

The Master Builders Association Malaysia, Real Estate Housing and Developers Association of Malaysia, Persatuan Kontraktor Melayu Malaysia and Persatuan Kontraktor India Malaysia in the statement said that "This unhealthy development will definitely delay the implementation of Ninth Malaysia Plan projects if the government does not act immediately. As it is, contractors can no longer absorb the rising cost of building materials and is facing cash flow problems.”

The associations said although steel bars were liberalized on May 12 2008, the liberalization process was not well implemented. Therefore it is difficult to import steel bars into the country and there are still cases of custom department officers demanding for Approved Permits and or impose import duty on certain steel bars.

The associations requested the government to simplify and make clear the process to import steel bars for local construction use. The liberalization should also be complete by allowing all items under HS Code 7214 which should include all steel bars to be liberalized. They said that "In other words, the government should liberalize all steel bars and wire rods. The liberalization of steel bar and cement has created an immediate price increase by millers for steel bars by about 12% and for cement by about 22%

In their statement, the associations also pleaded manufacturers of building materials and suppliers not to take advantage of the higher tariffs as this would definitely hurt the construction industry and the nation in general. They also suggested that the government steps in and implement 15% export tax for steel bars ad billets, cement and clinkers should the situation continue to worsen. They also called to ban export of steel bars and clinkers to ensure building materials manufacturer would supply the needs of the local construction industry first.

POSCO to bid for Daewoo shipyard

Reuters reported that POSCO frustrated in bidding against global rivals over costly iron ore assets, it is taking a different approach to diversification looking to buy up one of its biggest customers to secure future demand.

This contrarian bet at a time of soaring raw material prices and looming overcapacity in the steel sector risks riling investors, who say the world's No 4 steelmaker needs to put its USD 4 billion cash pile to better use. But with possible mining targets limited and expensive after a multi year bull market for commodities, POSCO may have little option as it seeks to boost returns.

Cash rich but resource poor, POSCO is one of at least five bidders circling Daewoo Shipbuilding and Engineering. POSCO joined its big peers this year in snapping up mining assets but its investment is dwarfed by heavy spending by its Western and Chinese rivals.

Mr Park Hyun wook analyst of Hyundai Securities said that "POSCO needs to be rather more aggressive in buying mining assets but its decision reflects the reality that resource assets are already too expensive and scarce.”

Mr Lee Jong hyung a Dongbu Securities analyst said that "POSCO definitely needs to boost mining assets but adding too much could be negative because when the cycle shifts to downturn, it will be a big burden and drag down performance.”

Harmony may import steel for SA mines - CEO

Mr Graham Briggs CEO of Harmony Gold responding to recent Competition Commission raids on steel groups said that steel costs for the mining industry have gone up 85% in the last year.

Mr Briggs said that high steel price had added 30% to 45% to capital costs such as the sinking of shafts and we are fighting costs on all fronts. South Africa is in danger of becoming uncompetitive.

He said that “When we buy steel locally, we have a situation where they either don’t quote, all quote the same or just say the price is high.”

Mr Briggs said that Harmony is considering importing steel products.

The Competition commission, which has raided Cape Town Iron and Steel Works, South African Iron and Steel Institute and Highveld Steel, has alleged there is a pricing cartel fuelling increases of up to 100%.

Last year, complaints levied by Harmony Gold and peer DRDGOLD saw the Competition Tribunal levy a ZAR 69.2 million penalty against Africa’s largest steel maker, ArcelorMittal SA.

However, Mr Gavin Maile of KPMG industrial, automotive and petrochemicals and industrial markets partner said that “You can’t blame South African companies because the international price of steel is rising at a higher rate. South African steel is still slightly cheaper. High prices were essentially a factor of globalization. If the Competition Commission succeeds in forcing the price down, you could see local steel manufacturers sell overseas, at present only around 40% of their sales are to the international market.”

Greek LPG carrier blast kills eight

AP reported that Greece has launched an investigation into fatal blast on board a liquefied petroleum gas carrier that killed eight men, but workers are calling for a wider probe into shipyard safety standards at the country’s crowded Perama ship repair zone.
A blast ripped through the 1981 built FriendshipGas at about 4 PM local time but the resulting blaze prevented rescuers boarding the ship for another five hours. It is not clear how many of the ship’s regular crew were on the LPG carrier at the time of the incident, but the ship had at least two crews of workers on board, undertaking painting and welding.

Apart from the dead, who were believed to include the ship’s Filipino first officer, according to a number of sources, another four workers were hospitalized and treated for burns and respiration problems.

Three people have already been arrested in connection with the latest tragedy including the vessel’s master. A safety officer and a marine chemicals supervisor have also been arrested, according to the ministry, but the investigation is continuing.

The 4,965 DWT Friendshipgas is one of seven LPG vessels in the fleet of Athens based Magnus Carriers, which also manages several container vessels and product tankers for Nasdaq listed Aries Maritime Transport.

Armco Steel and others named in asbestos suit

It is reported that the estate of a former Armco Steel worker filed a wrongful death asbestos suit against the steel plant and 36 other companies, seeking damages after the worker died of esophageal cancer.

As per report Ms Mary Kathryn Black filed a suit against the companies on June 6th 2008 in Kanawha Circuit Court, on behalf of her husband, Mr Steve Black.

According to the suit, Mr Steve Black was a steelworker at Armco Steel, where he was exposed to asbestos. As per report, while on the job, Black installed and tore out insulation, where he inhaled the deadly fibers, which caused him to develop esophageal cancer. Mr Black suffered medical expenses, great pain of body and mind, embarrassment, inconvenience and loss of quality and enjoyment of life.

Ms Black claims she and her family lost the financial support of her husband, as well as his general services, companionship and society. In the nine count suit, Ms Black seeks compensatory and punitive damages.

STX Shipbuilding bags USD 212 million order

Reuters reported that South Korean shipbuilder STX Shipbuilding won a USD 212.1 million order to build two bulk carriers for an undisclosed European firm.

According to Reuters, the vessels will be delivered by mid 2010.

Philippine local prices of rebars continue to rise - DTI

According to Department of Trade and Industry, the Philippine domestic prices of steel bars are still on the uptrend as the costs of raw materials continue to rise.

In an interview, Ms Zenaida Maglaya trade undersecretary of Philippine told The STAR that the price of steel has gone up 40% since the beginning of the year.

However, she said that prices of construction materials may ease as the rainy season begins. She noted that “Of course when it rains the demand decreases. This may affect the price.”

Mr Antonio Lorenzana executive vice president of PhilSteel Holdings said that the increase in the price of steel bars has little to do with oil prices. The rising price of crude oil in the world market has been blamed for the continued price increase of other commodities. He said that “The cost of making steel and the global demand are the main reasons why the price went up.”

Mr Lorenzana said all the raw materials needed to produce steel are imported. Philsteel normally gets its raw materials from neighboring countries like Taiwan and China.

Kenya bans scrap metal export to establish local steel plant

Business Daily reported that the recent ban of scrap metal exports could offer a lifeline to the Nyayo Motor Corporation, the maker of Pioneer cars in the 1980s, as the Government seeks to make the firm profitable before privatizing it. Locally collected scrap metal is being considered by the Industrialization ministry as a steady source of raw material that can help transform the corporation into a steel processing plant.

Mr Henry Kosgey minister during a tour of the corporation’s Numerical Machining Complex in Nairob said that “We intend to set up a steel plant that will add value to locally available scrap metal and sell it as steel to local manufacturers.”

Mr George Onyango GM of Nyayo Motor Corporation said that even in the new venture, however, the foundry with a capacity to process 15 tonnes of molten metal per hour is under utilized. He said that “Only a third of the capacity is in use. The low operation capacity has also delayed the recycling of heaps of railway materials at its compound which continue to corrode yet the country and the world lack steel.”

Mr Kosgey said that the corporation spends KES1.5 billion to keep the complex running. He added that the establishment of the steel plant would generate another 50 MW of power to be added to the national grid as Kenya strives to remain the regional industrialization hub.

Mr Kosgey said that the corporation will begin marketing its products aggressively among industries setting up under the Kenya Industrial Estates incubation scheme. The banning of scrap metal is also likely to benefit Rift Valley Railways, Kenya Power and Lighting Company and Telkom Kenya which suffer from vandalism meant to sustain unabated trade in second hand metal products.

HG Metal Q3 profit soars on steel boom

The boom in Singapore's construction and marine sectors has rubbed off on HG Metal Manufacturing Ltd. As per report the main board listed steel product stockiest and manufacturer unveiled a near quadrupling in net profit to USD 28.5 million for the third quarter ended June 30th 2008 from USD 7.6 million for the previous year's third quarter.

HG Metal riding on robust demand and higher steel prices reported a solid 90% YoY rise in Q3 revenue to almost USD 234 million. In the nine-month period, net profit more than trebled to USD 55.8 million from USD 15.2 million and revenue climbed 58% to USD 533.6 million.

The company said that following the strong demand for steel products, it expanded its warehousing capacity last year and is keeping a relatively high level of inventory. At the end of the third quarter this year, the inventories stood at USD 220.9 million. Higher inventories during the steel price increase helped gross profit margin to improve from 15.3% in the third quarter of last year to 18.3% this year.

It said that major upcoming developments in the form of integrated resorts, hotel projects and new expressways, as well as government spending in new MRT lines will continue to prop up steel prices.

HG Metal in the marine sector said that high demand for steel is coming from record rig and ship building order books with visibility of projects till 2011 and the regional yards operating almost at full capacity'.

Mr Wee Piew CEO of HG Metal said that “The demand for steel products both domestically and globally is staying strong and we would position ourselves accordingly to reap maximum benefits from this opportune situation.”

HG Metal said that it is aiming to keep adequate levels of inventories in tandem with the strong demand in the construction and marine industries. It added that it is 'seriously considering merger and acquisition opportunities and is in the midst of discussions with specific parties.

FTI executive hopes to see Thai steel industry leading ASEAN

TNA reported that Thailand's steel industry could stand in the forefront of the ASEAN market in future if it has been developed in terms of technology and human resources.

Mr Payungsak Chatsuthipol president of Federation of Thai Industries' Steel Industry Club conceded that many operators in the steel industry were concerned over news reports that Industry and Deputy Prime Minister Suwit Khunkitti planned to end the required industrial standard for steel products because it could have repercussions on the steel and construction industries and related sectors.

Consequently, he had sought clarification from the ministry and received an affirmation that it would not cancel the criteria. He said that Thailand's steel producers represented by the grouping met and voiced agreement that Thailand come up with an approach to enforcing an agreed standard for locally-manufactured steel products.

Mr Payungsak said the private sector was confident Thailand's steel industry could stand at the forefront of the ASEAN market if operators cooperated with foreign strategic partners to produce upstream steel products and develop technologies and human resources in the industry.

He said he was not worried about the liberalization of the steel industry because he believed that the local industry had a competitive edge. Should local operators be able to produce both upstream and downstream steel, he said that concerns over heavy fluctuations of steel prices in the world market would ease.

German carmakers may raise prices in coming months

Thomson Financial reported that German carmakers may raise their prices in the coming months as a result of strong increases in steel prices.

Mr Matthias Wissman president of VDA German Automotive Industry Association told Euro am Sonntag newspaper that the car industry is also expected to hire more people this year compared with last year.

He said in the past 12 months, the number of people employed in the German car industry rose by 2% to a total of 756,000.

ABB eyeing for big automation acquisitions – Report

Reuters reported that Swiss engineering group ABB sees room for large acquisitions in the automation sector.

Mr Michel Demare interim CEO of ABB said that it had been wise to leave its USD 6 billion cash pile untouched in recent months, when stock prices slid and made previously highly valued targets more affordable. He added that "Big acquisitions will be more related to automation than energy. In automation, the oil, gas, metals and minerals sectors are seeing very strong growth. ABB's good fortune is that we are much more oriented to those industries than to construction and consumption."

Mr Demare said that ABB has a number of small and medium sized acquisitions in the pipeline and that larger transactions were also possible. He added that "Our strategy to put on hold those larger deals is paying off. Valuations are coming down and some of the larger transactions may become attractive from a shareholder value point of view as the prices have come down."

It may be noted that ABB, which sells equipment to utilities and to oil and gas companies, has been shielded from the worst of the global credit crisis because demand for power infrastructure has been very resilient in emerging markets like China and India.

Malaysian contractors urged for temporarily ban of steel exports

It is reported that many property developers and contractors have urged Malaysian government to impose a temporary ban on the exports of steel and allow it to be imported to stabilize rising prices and meet growing local demand.

Although there is currently no serious shortage of steel in Malaysia, industry players fear that this situation might not hold on for too long as there are currently many projects being undertaken by the public and private sectors. They also claimed that some steel traders and suppliers were manipulating steel prices.

Mr Ng Kee Leen president of Master Builders Association of Malaysia said that it was important that the government allowed all steel bars that met the Malaysian standard MS146 or its equivalent the BS4449 standard to be imported tax free. As it is, he said not a single steel bar had been officially imported since the government lifted the ceiling price of steel about two months ago.

Mr Leen said that “The government must fully liberalize and clarify the process and procedure in the importation of steel.” He added that international steel traders have lost confidence in Malaysia as they found the process and procedure of importing steel vexing.

He said if the government did not take action now, more than 140 related industries including the tin mining, timber, electrical, air conditioning and joinery industries might collapse.

Meanwhile, Mr Datuk Richard president of Fong International Real Estate Federation, Malaysia chapter said that many developers were facing a double squeeze from increased construction cost and falling sales.

Malaysia consumes some 2 million tonnes of steel per year or about 150,000 tonnes a month. Steel prices have soared from about MYR 3,000 per tonne two to three months ago to MYR 4,200 per tonne depending on the term of payment.

Japan ferrous scrap price in downward trends

JMB reported that ferrous scrap price dropped around Osaka for 2 weeks in a row when local steel makers get more scrap arrivals. Local electric furnace steel makers reduced the purchase price by JPY 500 to JPY 1,000 to JPY 71,000 to JPY 72,000 per tonne for H2 grade last week, which was JPY 1,250 or 2% lower than recent peak.

Toyota may raise price for Prius and luxury vehicles

Jiji Press reported that Toyota Motor Corporation is considering raising prices in Japan of its Prius gasoline electric hybrid car and luxury models.

As per report, Toyota Motor is expected to raise prices by 1% 3% on average due to soaring costs of raw materials such as steel. It is likely to make a final decision as early as August and start introducing new pricing by the end of 2008.

It will be the first time for Toyota to raise its vehicle prices without model changes since 1992, when the company increased prices for some commercial vehicles. Toyota seems to be finding it easy to raise the prices of the Prius and luxury models because their sales are apparently less vulnerable to a price increase than other lineups including smaller cars.

The Prius is in short supply because of its strong demand. Higher materials prices take a heavier toll on the Prius than on other models because the hybrid car uses a lot of rare metals, of which prices are rising steeply.

Daewoo International Q2 net dips by 23% YoY

Daewoo International Company has posted net profit of KRW 29.9 billion in April to June 2008 quarter down by 23% YoY as against KRW 38.7 billion in April to June 2007 quarter due mainly to a weaker local currency. Sales soared by 39.8% YoY to KRW 2.75 trillion, while operating income surged by 62.8% YoY to KRW 46 billion.

A company official said that "Daewoo International suffered a setback in the second quarter bottom line as the won's slide against the US dollar increased the burden of its foreign-debt payments."

MAN blames for steel sector’s decline

It is reported that the steel manufactures group of the Manufacturers Association of Nigeria has blamed the Power Holding Company of Nigeria for the slump in steel production in the country.

Mr Felix Okojie chairman of Steelman Nigeria Limited said that "The installed capacity of the steel industry in Nigeria is 3 million tonnes of iron rods. The national demand is about 650,000 tonnes. This means the Nigerian steel industry can cater for the West African sub region. Unfortunately, PHCN has hindered such development because most of the surviving steel companies are producing at less than 30% of installed capacities."

He implored the PHCN to give regular power supply to the industry, noting that cement manufacturing industries already enjoyed 24 hours power supply from PHCN. He added that "The steel and cement industries, complement each other."

Mr Jide Mike director general of MAN said that the manufacturing sector was the engine of growth of any economy. MAN had plans to establish a independent power plants so that its members could have adequate and cost effective power supply. He added that "It has been registered and a board is already in place. It will take about three years to build the proposed plant."

Mr Mike said that most steel companies operating outside the existing gas pipeline network in Lagos. He added that “Some of our members near the network are already utilizing gas.”

Turkish scrap market quiet as mills holding high inventories

It is reported that Turkish steel mills are still holding high stock levels and they will keep far away from scrap market before the stock quantity dropped to a definite level.

As per report, European HMS I/II mixed scrap is being quoted at USD 645 per tonne on CFR basis last week, a little bit down from previous weeks but buyers still cannot accept.

The report added that the major suppliers have not reduced their price since they predicted that the price will be increased again and they forecast that the price of American HMS 80:20 might again reach USD 640 per tonne to USD 680 per tonne on CFR basis.

(Sourced from Yieh)

Monday Market Monitor - MEA (WEEK 30) - Stable

Domestic prices remained stable in most of the markets, except for Saudi Arab, which saw dip in some of the products.

In addition a sever jump is reported in HDG prices in Abu Dhabi.

To read full article, please visit www.steelprices-middleeast.com

Steel shortages not behind project delays in UAE

Emirates Business reported that the head of a leading manufacturer of steel rebar in the region feels that shortage of steel can hardly be the reason for construction projects in the UAE getting delayed by over six months.

Mr Sameh Hassan CEO of Madar Holding while speaking to Emirates Business said that "There has been a lot of talk of scarcity of steel but that is not true. There is steel available. Maybe sometimes there is a shortage of a particular size or source. But otherwise, in the three years that I have been in this market, there has been no shortage of steel maybe a shortage of cement.”

He said that “In an open market such as the UAE, you can address any shortage within three weeks. That does not delay a project by six months."

Madar opened its AED 74.9 million factory in Dubai in May last year. The 700,000 square feet rebar processing plant, located in Dubai Investment Park, has a capacity of around 300,000 tonnes of steel annually and sources its reinforcement steel from Turkey, Qatar, China, Spain, Saudi Arabia and the UAE.

Rebar prices in UAE stable for now

Emirates Business reported that the head of a leading manufacturer of steel rebar in the region feels that high prices of steel are here to stay.

Mr Sameh Hassan CEO of Madar Holding while speaking to Emirates Business said that "No one is anticipating a crash. All the fundamentals are in place to maintain the current trend of prices.”

He added that “Unfortunately, the industry does not have hedging tools. We have the DGCX futures contracts launched since November 2007 and we think it good for the industry but unfortunately the volumes are too small. So until the future contracts are big enough and there is enough liquidity, hedging will be mainly unavailable for the steel industry.”

He added that to cope with fluctuating prices the company keeps an ear to the ground and analyses trends. Mr Hassan said that "Our sales force keeps us in touch with what is happening out there in terms of projects and its requirements and we work accordingly. It is all about trend reading. People are buying and the prices are not going up. The trends can be analyzed by looking at four factors – raw materials, demand from other parts of the world like India and China, energy prices and freight."

Mr Hassan said that “Right now, it is a pause period in terms of prices.

Iran to setup 30 FEB factories with the help of private sector

IRNA reported that factories for pre fabricated houses will be established soon with investment by Iranian Industrial Development and Renovation Organization.

Announcing this Mr Ahmad Qalebani head of the organization further said that the entity has on its agenda the establishment of pre fabricated housing factories and has undertaken initial steps to this end since March.

He said that "Some 30 factories will be set up in the preliminary stage adding that to implement the project some 70 agreements have been signed with the private sector so far.”

He also said that with the allocation of USD 1 billion by the government, the factories will soon go on stream in cooperation with the private sector.

Referring to facilities for establishing such factories, Mr Qalebani also a deputy minister for industries and mine, further said that one of the incentives is lands made available by the Housing and Urban Development Ministry with a down payment of 20% of the total price in cash and the rest in five year installments. The other initiative is extending engineering, expert and financial assistance by IDRO.

Stating that pre fabricated houses are the best option for those registered under the Mehr Housing Scheme, he said that based on a deal with Housing and Urban Development Ministry, some sections of the factories are scheduled to be built near new satellite townships such as Parand and Hashtgerd.

Noting that some 1.5 million residential units are currently required in the country, he said that the demand can only be met by using modern construction methods.

Pakistan plans USD 12.4 billion investment in power sector

Daily Times reported that Pakistan is eying USD 12.4 billion investment in the power sector to generate 13,335MW power by 2016.

Sources said that Pakistan’s government is encouraging the private sector to make investment in the power sector and is hoping that the private sector would invest USD 12.4 billion by 2016 on the 51 power projects that are under process by Private Power Infrastructure Board.

According to the power projects under process in PPIB, the focus is being laid on the hydel power generation and as many as 20 hydel power projects would be operational that would generate 4,478MW power by 2016. In the said sector, first project would start generating hydel power of 84MW in the year 2011 and three additional power projects would be added to hydel power generation that would generate 332MW by 2012.

As per reports, in the year 2013, two more hydel power projects of 251MW would be operational. Three hydel projects of 422MW would be operational in the year 2014 and as many as 8 hydel power projects would be operational by 2015 that would generate 2,047MW power. Three hydel power projects of 1,342MW would be operational in the year 2016.

The report added that PPIB is processing as many as 14 projects that would be running on oil to be operational by 2016 that would generate 2,919MW power. The electricity being generated by oil use would be dearer as compared to the power generation by other sources including hydel, coal and dedicated gas. Three projects of 575MW would be operational in the year 2009 and six projects of 1,429MW would be generating electricity by 2010.Three projects of 600MW would be operational in 2011 and one project of 150MW would be added by 2012.

The report further added that the country would be having five power projects of 1050 MW electricity that would be run on dual fuel. One project of 225 MW would be operational in current calendar year whereas two other projects of 450 MW would be added to national power grid. The country would have two more power projects of 375 MW by 2010.

The report said that PPIB is processing six projects to add to the national power grid that would generate 1,338MW power and these projects are gas based. Two projects of 429MW would be operational by 2009 and one more project would be generating 205MW power in the year 2010. PPIB is processing three more projects out of which two power projects of 584MW would start generating power by 2011 whereas one project of 120MW would be added to the existing national power grid.

The report further said that the government is encouraging the utilization of coal based power plants and six coal based power projects of 3,550 MW would be operational by 2014.

Qatar Q1 economy to grow by 15%

According to estimates of the Qatar Statistics Authority, Qatar's economy expanded in the Q1 of 2008 by 15% to QAR 84.3 billion in nominal terms.

The authority did not provide comparative figures for the Q1 of 2007. In June, Qatar revised upward its 2007 current price GDP growth to 25% from 12.5%.

MIS wins USD 355 million contract in Sharjah

A statement released by Maritime Industrial Services said that the company has won contracts worth USD 335 million to build two offshore jack up drilling rigs for Mosvold Middle East Jackup.

The two firm rigs, Hull 106 and Hull 108, will be supplied by MIS on a turnkey basis and will be built at the company's shipyard in Sharjah. The two rigs will have an operating water depth capability of 300 feet and with accommodation for 110 people on each rig.

Mr Jerry Smith MD of MIS said that "We expect the interest in our new-build program to continue over the next few years and we are continually looking for opportunities to expand our yard facilities by seeking out ideal locations in the UAE.”

Mr Roy Mosvold chairman of MEJU said that "Our strong relationship with MIS continues with this new contract. With their reputation as a professional yard and their performance on the first two rigs, our decision to build at MIS was made easier.”

MIS said that its confirmed order backlog is now worth USD 480 million, an increase of USD 110 million on its firm backlog at this time last year, excluding the two Orion rigs subsequently deleted from backlog.

(Sourced from Gulf News)

UAE oil revenues to exceed USD 100 billion in 2008

Arabianbusiness.com reported that the official selling price of Abu Dhabi crude oil grades from January to June 2008 averaged USD 108.32 per barrel, a 73.6% rise on the year in line with soaring global oil prices.

UAE daily Gulf News reported recently that if the price momentum of the H1 of 2008 persists in the H2, the UAE’s oil export revenues are expected to exceed a record USD 100 billion mark in 2008.

Oil prices reached record highs in July, despite Saudi Arabia pledging to pump more oil into the market to dispel fears of a supply shortfall.

According to latest estimates the UAE’s oil reserves are predicted to last 92 years at current production levels.

The country’s sustainable crude production capacity could rise 9.1% to 3.11 million barrels per day by 2013. At present, oil is being produced at only 18 of the 67 potentially known fields in the UAE.

Ian to double aluminum production capacity

MNA reported that Iran’s aluminum production capacity will be doubled by the end of the current Iranian calendar year ending on March 20th 2009.

Mr Harati Nik MD of Iranian Mines and Mining Industries Development and Renovation Organization said that by launching aluminum production plants in the cities of Arak and Bandar Abbas, 240,000 tonnes will be added to the country’s annual aluminum production capacity, reaching up to 500,000 tonnes a year.

Not much room for domestic steel price slide in China

China Securities Journal reported that China's domestic steel market has seen soft demand recently with coming of a dead season for construction steel consumption, dragging the prices slightly down. But according to the analysts, the enterprises' production cost, international price surge and other factors would restrict the downward room for future steel price.

Based on a survey conducted by Ministry of Commerce, the China's domestic steel prices averaged CNY 6284 per tonne in the first half month of July down by 0.4% from the second half of June. In specific, wire rod price went down by 0.2%, sheet & plate down by 0.1% and pipes & sections down by 1.5%.

The seasonal weak consumption of construction steel leads to relaxed supply and demand. Also, the downstream enterprises appear thin interest in purchasing. But in a long term, production cost augment, rising international price would continue bolster the domestic price on a high track.

Price of coke, the steelmaking fuel, kept increasing recently. The first grade metallurgical coke was about CNY 3250 per tonne EXW in mid July up by CNY 500 per tonne from mid June or CNY 1400 per tonne from the year start. The international composite steel price index by CRU also climbed 3.3% to 291.4 points during this period. Both support the ministry's prediction.

Monday Market Monitor - China (WEEK 30) - Down trend

Chinese domestic steel price continue to go down last week.

Export offers were also on downward trend in general

To read full article, please visit www.steelprices-middleeast.com

Directory of Stainless Steel Supply Chain in China

China remained the world's number one producer of stainless steel in 2007 accounting for more than one quarter of 27.6 million tonnes of global output. China had overtaken Japan as the world's biggest stainless steel producer in 2006 with 6.6 million tonnes in 2006 up by 21.7% YoY. Japan followed China as the second largest producer in 2007 with an output of 3.7 million tonnes. In 2006, China's per capita stainless steel consumption hit 4.6 kilograms, rising above the world average of 4.3 kilograms.

China produced 7.206 million tonnes of stainless steel in 2007 up by 1.906 million tonnes or 35.96% YoY. Import volume hit 1.698 million tonnes down 32.08% YoY and export volume reached 1.303 million tonnes up by 44.78%. Thus net imports totaled 395,000 tonnes including 204,000 tons of semi products and 115,000 tons of narrow plate and exports of HR sheet reached 328,000 tonnes resulting in self sufficiency rate climbing by 15.6% to 75.6%. However, growth of apparent consumption slowed down. Apparent consumption recorded 6.58 million tonnes in 2007 up 630,000 tonnes or 10.59% YoY but 3.61% lower than that in 2006.

As one of the world's fastest growing economies, China has become the most happening place among world steel market over last few years and thus is in the radar of most of global players associated with stainless steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.

Published in July 2008, “Directory of Stainless Steel Supply Chain in China” is one of the top sources of information available on stainless steel related companies in China. It is one of the most comprehensive and accurate directory of Chinese companies that have ever been published. This powerful report is your connection to the entire Chinese stainless steel industries sector.

This report will be extremely useful to businesses that deal specifically with companies from stainless steel industry, ferroalloys, consumable suppliers, raw material sellers, equipment makers and others. 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 Chinese stainless steel industries, this directory will save you time and effort in finding the information you need.

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This report covers name and product details of 246 of Chinese stainless related firms in Alphabetical order and product category based. Look at the information you'll get in this directory

• Company name - 246 entries
• Address – 246 entries
• Contact person – 241 entries
• Mobile number – 168 entries
• Phone number - 246 entries
• Fax number - 246 entries
• Email - 246 entries
• Web site - 243 entries
• Category
• Products & Services

Report Summary:
1. Published: July 2008
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China major steel product price index (Jul 14 - Jul 18)

(Sourced from MySteel.net)

Chongqing forecasts over 60% hike in net profit for H1 of 2008

It is reported that Chongqing Iron & Steel Co Ltd has predicted a net profit hike of more than 60% for the first half of 2008 in accordance with Mainland China's accounting standard.

In the first three months of this year, its major revenues amounted to CNY 4.089 billion and net profits CNY 186.41 million.

Chongqing Iron & Steel Co had reported net profits of CNY 263.925 million and earnings per share of CNY 0.16 in the first half of 2007 under the mainland accounting standard, while the figures stood at CNY 262.744 million and CNY 0.163 respectively under Hong Kong's.

Previously, the steelmaker forecast that it would produce pig iron of 2.96 million tonnes, steel of 3.4 million tonnes and steel billet and steel products of 3.25 million tonnes in 2008.

Chinese CR export price changes slightly

It is reported that there is no little change with export offer for Chinese cold steel coil despite further softening of domestic market prices. But export activities are said to be

On Shanghai market, 1.0mm CR sheet by Anshan steel goes at CNY 7100 per tonne, 1.2mm to 2.0mm material at CNY 6970 per tonne a drop of CNY 130 per tonne from last week. 1.0 CR coil by Maanshan steel drop by CNY 120 per tonne to CNY 6920 per tonne.

Export price for 1.0mm CRC remain at about USD 1130 per tonne FOB to USD 1140 per tonne FOB, but there is not many contracts now. However, there seems to be not great pressure of decrease in price since allocation for exports are at low levels.

A certain traders in Shanghai say some steel makers even require HRC booking before taking CRC. The current dull period is expected to sustain for several weeks and export volume is likely to see further decrease.

(Sourced from MySteel.net)

Baosteel and Shanghai Jiao Tong University commence strategic agreement

It is reported that the signature ceremony of one more round of Strategic Cooperation Agreement between Baosteel and Shanghai Jiao Tong University plus the reciprocal engagement of the part-time professors was held in the Minhang Campus of Shanghai Jiao Tong University.

Mr Xu Lejiang, Mr Liu Guosheng, Mr He Wenbo, Mr Zhao Zhouli, Mr CuiJian, Mr Chu Junsheng etc, leaders from Baosteel and Mr Ma Dexiu, Mr Zhang Jie, Ms Su Ming, Mr Lin Zhongqin etc. leaders from SJTU attended the ceremony. On behalf their own respective parties, He Wenbo, General manager of Baosteel and Zhang Jie, President of SJTU appended their signatures on the Agreement. Liu Guosheng, vice chairman of the board of directors of Baosteel Group and secretary of The Communist Party Committee of Baosteel Group and Mr. Zhang Jie, President of SJT awarded the engagement letters to the part-time professor and the tutors.

Strategic cooperation between Baosteel and SJTU is to establish a permanent talent training mechanism through cooperation to enhance the reciprocal high level part-time talent employment between. In the field of multi branches of knowledge, both parties will conduct the joint training and selection of doctoral students and graduate student and the undergraduate students and in addition, create favorite conditions and space for those excellent special talents to serve and help the enterprise to develop. Furthermore, both parties will take the UNISPAR as the important software topic to perform joint research so as to explore and find a new effective path for establishing a national technological innovation system.

Mr Ma Xiude, secretary of the communist party committee of Shanghai Jiao Tong University said that taking the new round of cooperation as a starting point, SJTU will continue to expand the cooperation scale with Baosteel to struggling to search for new fields for cooperation, to make SJTU into a world top level university and to work hard for Baosteel's new splendid development and create a new chapter for the development of University-Industry Partnership.

Mr Xu Lejiang chairman of board of directors of Bosteel Group, expressed that, with the Baosteel's the bigger-stronger development of the iron and steel as the major task with synergistic development of multi elements, The extent and profundity of cooperation with SJTU will be surely further pushed forward. In order to realize the great leap for development, the social talents and technical sources must be sufficiently utilized, the approach of UNISPAR must be adopted. While pushing forward the technological innovation, Baosteel will launch the full scale of innovation including the idea, management, system and enterprise culture at the same time, Baosteel is eagerly looking forward to the vigorous support from SJTU so as to materialize the win-win development.

Prior to agreement signature, cordial talks between Baosteel leaders and SJTU leader, accompanying with the leaders of SJTU, Baosteel leaders visited the university planning display and Minhang Campus of SJTU.

Review on nonferrous industry momentum through May - NDRC

It is reported that in January to May 2008, ten non ferrous metals output adds to 10.2 million tonnes up by 12.2% YoY from same time of last year. But the growth rate drops 11.4 percentage points.

(In ten thousand tonnes)

In January to May 2008 the industry has recorded a total investment of CNY 61.3 billion up by 41.3% YoY from same time of last year, 0.5 percentage points higher than the growth rate of last year.

(In CNY 100 million)

Non ferrous metals import and export value adds up to USD 39.6 billion in January to May 2008 up by 13.1% YoY from same time of last year. Of this year, import value climbs 16.9% to USD 28.3 billion and export gains 2.5% to USD 11.2 billion. The trade surplus jumps 31.4% YoY to USD 17.1 billion.

(In ten thousand tonne)

(In ten thousand tonnes)

In May, spot price of copper, aluminum and zinc continues to slide.

(In CNY 10,000 per tonne)

(Sourced from MySteel.net)

Sinosteel and Zhangjiakou city ink cooperation agreement

It is reported that on July 16th Mr Zhang Hanguang the vice-president of Sinosteel Group, and Mr Zheng Xuebi the mayor of Zhangjiakou city signed strategic cooperation agreement.

As per report, Zhangjiakou city has a long history and is rich of mineral resources, the current proven mineral resources is 97 kinds, lead, uranium molybdenum, phosphorus, zeolite, fluorite, quartz stone, and other mineral resources reserves occupy an important position in the country even in the world.

The cooperation between Sinosteel Group and the people’s government of Zhangjiakou city is the important step for the national enterprises and the local enterprises to realize win-win in resources. Sinosteel Group will fully play its own resources to cooperate with Zhangjiakou city.

Output of coated products in China in H1 of 2008

It is reported that the production of coated sheet and strips during June 2008 total 0.33 million tonnes up by 16.2 % YoY as compared to 0.29 million tonnes and in January to June 2008 total 1.68 million tonnes up by 9.8% YoY as compared to 1.53 million tonnes.