ET reported that the government is considering re-imposition of 15% export duty on flat steel products, including hot rolled coils and cold rolled coils to curb their exports and boost domestic supply.

The report said that a final decision on the proposed move will be taken by the committee of secretaries reviewing the prices of essential commodities.

The report cited some sources as saying that the finance ministry has already finalized a scheme for flat steel products that includes re-imposition of export duty. But, a final call on the move would be taken by the CoS before it is notified. The CoS has asked the finance ministry to prepare a scheme for flat steel products as suggested by the steel ministry. As per the scheme, a uniform 15% duty would be re imposed on HRC and CRC. The duty would not be re-imposed on steel pipes and tubes and galvanised products.

The report added that “It has been decided that the new levy would not be applicable on steel products that are manufactured using imported inputs under the advance licensing scheme. As under the scheme, duty free import is permissible against an export obligation, it was decided to keep it out of export duty.”

Indian government had imposed 5% to 15% export duty on various steel products in May to improve supply in domestic market and contain their prices. However, later it withdrew the duty on flat steel products, galvanized sheets and steel pipes and tubes and retained export duty only on long steel products, pig iron, semis and sponge iron. HRC had attracted 15% export duty while CRC drew 10%.

The decline in Steel Price Index continues for the 15th consecutive day, since August 5th 2008, with the fall in long products being 128 points whereas flat products firmed up a bit. However the overall Indian Steel Price Index fell by 45 points.

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

Long products

Flat products

To know more about these indices please visit
http://steelprices-india.com/spi_services/spi.html

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The downtrend in prices of input material continued yesterday at major trading centers. It is likely to put further pressure on long product prices in coming days

Melting scrap
80:20
HMS

Change is on August 22nd as compared to August 21st
Change is in INR per tonne

Sponge iron

Change is on August 22nd as compared to August 21st
Change is in INR per tonne

Pencil ingot

Change is on August 22nd as compared to August 21st
Change is in INR per tonne

If you want to know the prevailing prices and changes across the week on daily basis, please subscribe to services of www.steelprices-india.com

PTI reported that Mr Ram Vilas Paswan union minister of steel threatened to bring an ordinance if the Jharkhand government did not act as per the law and allot iron ore mines for enhancing steel production in the country.

He said that “Steel production will not stop just because of non allotment of iron ore mines by the Jharkhand government. If Jharkhand government does not act on allotment of mines, the Union government will be forced to take over the issue and bring an ordinance.”

He said that "We have repeatedly urged the Jharkhand government to allot iron ore mines as SAIL have plan to enhance its capacity at Bokaro but the state government's lackadaisical approach was delaying the process. SAIL has announced that we want to set a 12 million tonne plant and others have also expressed their interest to set up plants in Jharkhand but the state government is not allotting iron ore mine.”

He said that there are 10 iron mines in Gua and Chiria in West Singhbhum district but the state government has renewed only one mine even after Dr Manmohan Singh laid the foundation for expansion at Bokaro Steel Plant.

The state government has the power to allot mines but unfortunately the Jharkhand government has taken no initiative in this direction despite repeated appeal to allot iron ore mines.

TMT
Fe415
12mm

Change is on August 22nd as compared to August 21st
Change is in INR per tonne

ANGL
Tested
65x6

Change is on August 22nd as compared to August 21st
Change is in INR per tonne

ET reported that Welspun Gujarat Stahl Rohren has decided to increase the capacity of its pipe plant by 75% to 1.75 million tonnes to meet growing demand for oil pipelines.

Mr Akhil Jindal president of Welspun Group said that the expansion is estimated to cost the company INR 1,100 crore which will be funded through a mixture of debt and internal accruals. He said that “About INR 800 crore will be through debt while the rest will come from our accrual.” He added that their borrowing cost has been pegged at about 10%.

Prices of line pipes have grown sharply over the past year to USD 1,900 per tonne from the previous USD 1,600. Even the rates of steel plates, which the company recently started producing has gone up to USD 1,600 per tonne from USD 1,300 over the past year. Mr Jindal said that “Our current order book, which is worth INR 7,700 crore has been decided on previous steel prices. So, our current order book will not be affected this year.”

The company expects to temporarily shut its plate production in October & November for 15 to 20 days to start production of coils.The report further added that the company will export 40% of its plates to Europe due to growing construction demand, while the rest would be used for internal purposes. Out of the total capacity of plate and coil production at Anjar in Gujarat, 80% will be used for plates and 20% will be used for coils.

BL reported that Tulsyan NEC Limited the flagship company of INR 680 crore Tulsyan group signed a JV agreement with Budhrani group in Nigeria to set up a steel making and rolling mill. Tulsyan will hold 51% in the JV.

Tulsyan in a statement said that the proposed plant in Nigeria would manufacture long products. The plant would have an annual capacity of 60,000 tonnes of steel at an investment of INR 68 crore. The turnover for this venture is expected to be around INR 350 crores.

Budhrani Group has interests in various segments such as commerce, automobiles, constructions, electronics and exports while Tulsyan NEC manufactures Thermo Mechanically Treated bars and billets.

Mr Sanjay Tulsyan MD of Tulsyan NEC’s said that “We chose Nigeria as it has shortage of steel and surplus of raw materials.”

Reuters reported that Rathi Steel and Power Limited sees core margins at least doubling to 8% in the year to March 2009, aided by production of value added steel products at a new plant.

The report quoted Mr Udit Rathi CEO of Rathi Steel & Power said that assaying that Rathi Udyog, had spent INR 2.5 billion on a steel mill in Orissa, which came on stream in March with an annual capacity of 150,000 tonnes. He told Reuters that "With the chain of value added products, the EBITDA is going to be healthy, even without captive mines.”

He said that Orissa expansion is part of a INR 25 billion project which will take the plant's annual capacity to 1.6 million tonnes in 5 to 7 years, to boost financials by producing more high margin steel products.

Mr Rathi said that before this expansion, Rathi Steel used to produce low-margin steel bars in a mill in Ghaziabad, on the outskirts of New Delhi. Its core margins in 2007-08 were 4.4%. In the next 18 months, Rathi Steel will invest another INR 900 million in Orissa and in Ghaziabad. These expansions will boost margins to 10% to 12% in 2009-10. He added that the capital expansion will be funded through debt and internal accruals.

Mr Rathi further added that the firm will raise INR 400 to INR 500 million in debt this fiscal year. The expansion would also boost 2008-09 profit by 150% from INR 90 million rupees in 2007/08, while revenue will grow by 60% to INR 8.5 billion. He said that Rathi Steel has been allotted a coal mine in Chattisgarh, and has applied for iron-ore mines in Orissa. It currently sources all of its raw materials from the open market.

Mr Rathi said that "We will not put our expansion plans on hold for want of captive mines. We foresee strong demand for our end products mainly from infrastructure projects."

ET report reported that TATA Group Chairman Mr Ratan Tata on Friday threatned to pull put of Singur if violance continued.

Mr Ratan Tata said that “We will move out of Singur whatever the cost if distress continues.”

He added that “The plant could not continue under police protection. We could exit to protect the safety of the employees.”

BS reported that Kedhar Groop is planning to set up an integrated steel plant at Jadcherla in Mahabubnagar district of Andhra Pradesh at an investment of INR 400 crore.

At the integrated steel plant, Kedhar will be setting up two concast furnaces with a combined capacity of 500 tonne per day, two structural mills with a 400-tonne per day capacity, a tower division having a capacity of 300 tonne per day, five sponge iron plants, which will produce 100 tonne each per day, and two induction furnaces of 130 tonne each per day, which will be the raw material for the company’s existing TMT plant.

Mr Gopal Agarrwal proprietor of the family enterprise told mediapersons that the company plans to commence work on the 150 acre greenfield project in the next two months and expects to start production by 2010.

He said that “We plan to pump in 25% of the funds through internal resources and the rest via debt. The financial closure of the project will be completed in a couple of months adding that the company had applied for SEZ status for the project.”

Mr Agarrwal said the company would also set up a 25MW power unit at the integrated plant to cater to its internal requirements. He said that “Once the integrated plant is completed, the company’s production capacity will touch 800,000 tonne per year, as against the present 60,000 tonne.”

IANS reported that Indian government ruled out any upward revision in the prices of steel products in the near future, in line with the situation in the global markets.

Mr P K Rastogi Steel Secretary said that “Since the global price of steel is softening, we do not see any immediate reason to go for any upward revision. Instead, the companies should think in terms of further reduction in the prices of steel.”

Agreeing with him, Mr SK Rungta chairman Steel Authority of India Limited said that the company would maintain the current price. He told reporters that “We will maintain the current prices.” He added that there is no immediate plan to hike the prices.

BS reported that aiming to become the largest integrated zinc lead producer in the world, Hindustan Zinc Limited recently said that it will invest INR 3,600 crore for its expansion projects.

HZL in a statement said that the total investment in phase III expansion plan is estimated at INR 3,600 crore and would be funded from internal accruals to keep the company debt free.

Under the phase III expansion, the company has announced a 210,000 tonnes per annum zinc smelter, 100,000 tonnes per annum lead smelter and 160 MW captive power plant with fully integrated mining capacity.

It added that the commencement of these plans will increase the company’s total integrated zinc lead capacity to 1.65 million tonnes per annum making it the largest zinc lead producer.

It is reported that the Centre on Thursday informed the Bombay High Court that National Thermal Power Corporation has not signed any contract with Reliance India Limited. While representing the government on the RNRL-RIL case the government’s counsel said the contract between NTPC and RIL has not been formalized into an agreement.

As per the report, this contradicts the government owned power company’s stand in its legal tussle with RIL. NTPC had moved the Bombay High Court 3 years ago, alleging violation of gas supply agreement by RIL. RIL had a contract to supply gas of 12 million metric standard cubic meters per day in 2004 at USD 2.34 per million British thermal unit for 17 years. But the contract is now stuck in a legal row over the issue of cap on liability in case of breach of contract.

The outcome of the NTPC-RIL case is important for RNRL as it is supposed to get 12 million metric standard cubic meters per day of additional gas if RIL-NTPC contract fails. The RNRL counsels reacted sharply to the statement of the government’s counsel TS Doabia.

Meanwhile, RNRL has sought the permission of the Bombay High Court to trade gas till it’s proposed 7,800 MW power project in Dadri comes up. Mr Jethmalani said that “RNRL could not be ready with its plants for lack of bankable gas sales purchase agreement with RIL.”

The RNRL counsel also argued that the signing of agreement in January 2006 between RIL and the resulting companies of the demerger, including RNRL was a criminal breach of trust on the part of Mr Mukesh Ambani and liable for prosecution under the Indian Penal Code.

It is reported that Mr Thiru TR Baalu union minister of shipping, road transport and highways has approved road improvement works on 3 different stretches of NH-45 A in the State of Puducherry at a cost of INR 75.45 million.

Mr Baalu said that INR 42.423 million has been approved for Improvement of Riding Quality from Madagadipet to Ariyur in NH-45A and similarly an amount of INR 33.027 million has been approved for Improvement of Riding Quality from Ariyur to Villianur in the same National Highway.

The National Highways stretch of NH 45A originates from Villupuram runs through Puducherry region and terminates at Nagapattinam in Tamil Nadu. After declaration of the road as National Highways, the volume of traffic has increased manifold on the stretch of Puducherry-Villupuram road. It also provides main access to the surrounding town of Villupuram. A large number of people including the workers, traders, officials as well as school childern coming to the Puducherry town from Villupuram side regularly use this road. Therefore, the approval has been granted to improve the riding quality on the dilapidated stretches to make the journey comfortable for people of the area.

BL reported that the country’s largest cargo handling port, Kandla port has been without a full time chairman since February 2008.

The operations of the port are being looked after by the Chairman of Mormugao port as an additional charge. Kandla port recently got a new Deputy Chairman, but again as an additional charge. He is the full time Deputy Chairman of New Mangalore port. Which means Gujarat’s premier port is being headed by acting Chairman and Deputy Chairman and each of them is being required to divide their time between the two ports, one of them outside Gujarat.

The position of Chairman of Chennai port will fall vacant this month. However, inquiries reveal that the present Chairman might get an extension.

It might be interesting to note that from time to time the Chairman of Chennai port was also required to handle, as an additional charge, the operations of the ports of Ennore and Tuticoirn.

It is learnt that the present Chairman of Visakhapatnam port will complete his term towards the end of next month. The process has been initiated to locate his successor. In all probability an Indian Administrative Service officer belonging to Andhra Pradesh cadre will be selected for the post.

BL reported that the State Cabinet has approved the report on the restructuring of the Kerala State Electricity Board prepared by a committee constituted for the purpose and headed by the Secretary for Power.

As per the report, the board will be converted into a company and reforms will be carried out in the power sector. However, the company will remain in the public sector.

Mr VS Achuthanandan CM of Kerala after a Cabinet meeting told newspersons that the Power Department had been entrusted to take the necessary steps to implement the recommendations contained in the committee’s report.

Mr Achuthanandan said that referring to the fuel surcharge imposed by KSEB on the consumers it was necessitated by the crisis in the power sector in the wake of weak monsoon rains. The Government was unable to provide any subsidy to the board to tide over the crisis.

Mr Achuthanandan in a reply to a question he said that the question of giving permission for establishing special economic zones in the State would be referred to the central leadership of CPI and would also be discussed with the partners within the ruling Left Democratic Front.

Amidst the currently prevailing volatile and speculative steel price scenario in India, SteelGuru.com has started the much needed barometer to track and measure the price movements on daily basis.

Steel prices being an issue at the forefront in the context of inflation, drawing significant government attention, making up for about 4 per cent in the Wholesale Price Index(WPI), has been media's most favorite and hot topic at the moment. Unfortunately, the facts are misrepresented very often due to complexity in the structure and the dynamics of the steel market, leaving the users of the information mostly in a state of confusion.

In order to provide an index for steel prices, we call it SENSEX for steel, SteelGuru.com decided to work on both long products and flat products for respective category indices as also a composite one for steel. We call them LPPI, FPPI and SPI and have started releasing these indices with effect from July 1st 2008, after taking June 30th 2008 as base.

LPPI is based on daily market prices of three benchmark products rebars, wire rod and sections in 4 metros, whereas FPPI is based on HRC, plates, CR and HDG. These indices have been built considering their respective weights in the composite categories as also in the shares of sales in the regional markets.

The pricing input is from www.steelprices-india.com, which publishes market transaction prices of benchmark products among select locations 5 days a week.

These price indices outline the way domestic steel market is moving day by day and will help producers, agents in the supply chain, steel buyers, bankers and analysts in their respective businesses.

To know more, please visit
http://steelprices-india.com/spi_services/spi.html

It is reported that Power Finance Corporation has set up 2 special purpose vehicles, Sakhigopal Integrated Power Company Limited and Ghogarpalli Integrated Power Company Limited to facilitate the development of additional ultra mega power projects in Orissa.

This will be in addition to one UMPP in Sundargarh district for which a shell company, Orissa Integrated Power Limited has been formed and for which land acquisition is under way.

PFC has asked the Orissa government to identify the sites for the projects and forward the details to PFC and Central Electricity Authority. Senior CEA officials visited Bhubaneswar in May 2008 to discuss the project details. The state government has also been asked to confirm the availability of water for the projects.

PFC has also taken up the issue of coal block allocation for the projects with the coal ministry. Ghogarpalli, Dip side of Ghogarpalli, Sakhigopal-B, Alaknanda and Bankhui are the coal blocks earmarked for the projects. The blocks are expected to produce a total of 2,240 million tonne per annum of coal. Adequacy of these blocks for meeting the requirement of the UMPPs will be taken up for examination by the SPVs in consultation with the ministry.

Project Today reported that Raheja Developers is planning to set up an engineering SEZ in Gurgaon with an investment of INR 4,500 crore. The proposed SEZ will spread over an area of 255 acres of land.

As per report Raheja SEZ will be implemented in several phases, with the first phase being expected to be completed within three years. The engineering SEZ will cater to both international and domestic engineering companies.

Union Minister for Steel Ram Vilas Paswan on Friday announced a slew of cash rewards for the Olympians who brought laurels for the country by winning medals in the Beijing Games.

Mr Paswan announced a cash reward of INR 1 million for boxer Mr Vijender Kumar, who settled for a bronze on Friday after going down to Cuban Mr Emilio Correa Bayeaux in the semifinals of the 75 kilogram category.

One can have an idea about the importance of the construction industry in India from the fact that it is the second largest contributor to the GDP after agriculture. The industry provides employment to more than 3% of the population. Its market size is around USD 55 billion and is growing at around 7% to 8% per annually, faster than the GDP growth. As the Construction sector is growing faster than the country’s project GDP growth, there exist a tremendous potential for development in the related area.

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Project today reported that NHPC has proposed a capacity addition of 5,233 MW with an investment of INR 28,000 crore in 11th plan period. The company plans the proposed capacity addition of 5,233 MW with 10th projects which include the Teesta V, Parbati II, Sewa II, Teesta Low Dam III, Subansiri Loweer, Uri II, Chamera III, Parbati III, Teesta Low Dam IV and Omkareshwar.

NHPC said that in addition, 2 more projects, Nimoo Bazgo 45 MW and Chutak 44 MW are also being targeted. Against the proposed capacity addition, NHPC has already commissioned 2 projects worth 1,030 MW in 2007-08.

On the issue of Gross Budgetary Support, NHPC has submitted the revised 11th plan requirement of INR 28,000 crore but has no budgetary support towards equity. NHPC has only proposed INR 1,103 crore as fund requirement through subordinate debt under the head gross budgetary support. The subordinate debt provision is for Nimoo Bazgo, Chutak and Kishanganga projects in J&K and the same has been agreed by the centre due to strategic reasons.

The Centre has proposed a total capacity addition of 78,700 MW of which 16,553 MW will come from hydro sector in the 11th plan.

ET reported that Maharashtra's electricity distribution firm will meet officials of TATA Power which is supplying power for Pune, Thane and Navi Mumbai under the Pune model and consumer groups on August 25 to thrash out the issue of load-shedding in these areas.

Mr Ajay Bhushan Pandey MD of Maharashtra State Electricity Distribution Company Ltd told reporters that "TATA Power will be asked to give a commitment of providing firm power. In the event that they are not able to do so, we will then ask citizens if they are willing to face variable load-shedding and also pay higher prices at the same time.”

Before MSEDCL or Mahavitaran suspended the Pune and Navi Mumbai model on August 19, the supply of power by the Tatas differed each day, thus leading to erratic load shedding.

A chart prepared by Mahavitaran for six days from August 14 to 19, when the so called Pune model was in force, the supply by TATA power to these regions was anything between 40% and 99%.

Reuters reported that Nippon Steel Corporation and a unit of JFE Holdings Inc are bidding together with a Japanese trading house for Brazilian steelmaker CSN's Namisa iron ore unit.

As per report, Nippon Steel and JFE Steel are keen to launch the bid on their own without the help of a foreign mining major. That would give them the most leverage against mining companies in procurement of raw materials.

CSN said this week that it expected to reach a deal to sell part or its entire Namisa iron ore mine by the end of September or early October 2008. It has hired Goldman Sachs for the deal and said it had recently finished analyzing several non biding offers and expected to receive a few final bids in the first half of September 2008.

Jiji Press reported that Japan's Sumitomo Metal Industries Ltd and Taiwan's top steelmaker, China Steel Corp have signed an accord to establish a steel sheet making joint venture in Vietnam.

The new company, China Steel Sumikin Vietnam Joint Stock Co is slated to start operations in early 2012, annually producing 1.6 million tonnes of high quality steel sheet products, including galvanized steel, using hot rolled steel provided by Sumitomo Metal and China Steel.

CSVC will be set up in the My Xuan A2 industrial park, located 60 kilometers southeast of Ho Chi Minh City. Investment in the joint venture will total USD 1.15 billion of which 51R% will be put up by China Steel and 30% by Sumitomo Metal.

The steel sheets produced by CSVC will be supplied mainly to automakers and consumer electronics makers in Vietnam and other Southeast Asian nations.

Reuters reported that prices of long steel will bounce back from a recent 30% fall once construction work in the Middle East picks up after the summer lull, but weaker global economic growth rules out a return to record highs soon.

It may be noted that the price of long steel has fallen sharply since July 2008 in major consumer the Middle East as work slows due to hot weather and ahead of the holy month of Ramadan in September. However, this year's summer lull and seasonality was not the whole story. Lack of demand from Europe and the United States and China because of the Olympics, also fuelled the fall.

So far in 2008, demand for steel seems to have decoupled from the slowdown in the United States and in Europe as a construction and infrastructure boom in the Middle East and emerging economies buoyed demand.

This, coupled with the sky high cost of steelmaking raw materials such as iron ore and coking coal, has allowed steelmakers to raise prices several times, pushing them to all time highs. It may not be so easy to raise prices in the second half of 2008.

Dnevnik reported that Bulgaria's cabinet will ask local steel maker Kremikovtzi to pay back the state aid it received before it was put in private hands 8 years ago.

As per report, the cabinet will ask for its money back before September 8th 2008, the date by which all Kremikovtzi creditors have to submit their claims to the interim receiver appointed after the steel maker was declared insolvent.

The next step will be to determine the size of the claims that will be approved and the votes that the creditors will be assigned for the September 24 creditor meeting.

The state aid principal alone is estimated at over BGL 430 million. If Kremikovtzi's outstanding payments to various state owned service providers are factored in, the amount that the government could claim from Kremikovtzi would rise to over BGL 900 million, ensuring that the government will have the decisive vote as a creditor.

The cabinet has said that Kremikovtzi started this week the implementation of a subcontractor agreement with Vorskla Steel, a company controlled by Mr Konstantin Zhevago, the Ukrainian billionaire interested to buy the steel maker. Under the agreement, gas supplies to the steel plant should be resumed this week so that monthly output could rise to 60,000 to 70,000 tonnes. Production should reach 100,000 tonnes within two months after an upgrade of the plant's converters.

Some Korea importers have already decided to cancel hot-rolled procurement contracts after mid July because of internal weak demand.

In July the demand of hot rolled became weak. The price also started to decrease.

(Sourced from Yieh.com)

It is reported that China’s ship plate prices are expected to soften.

The down stream’s demand for ship plates decreased this year as the shipbuilding industry was not as strong as before. The international shipping industry has weakened as well.

Besides, China’s production of ship plate has increased sharply, which led to an oversupply situation.

According to related statistics, China produced 1,757,800 tonnes of ship plate in June, a rate that soared by 67.7% YoY. Total production in the first half year was 10,507,200 tons, a jump of 121.4% YoY.

(Sourced from Yieh.com)

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It is reported that due to recent decrease in exports South Korean cold rolled mills have planned to cut production to keep the profit.

Except for the low international price, the insufficient supplies of raw materials are another main reason to cut production.

Nowadays, cold rolled mill’s hot rolling raw materials stock is very low. It is expected that raw materials purchasing problem will last until next year.

(Sourced from Yieh.com)

It is reported that South Korea's GS Group and POSCO are entering a new round of feuding in their bid to take over the government's stake in Daewoo Shipbuilding & Marine Engineering, after Doosan Group dropped out of the race to takeover Daewoo Shipbuilding to focus on its core businesses.

A GS spokesman said that "Daewoo Shipbuilding has many business units that have the potential to boost the future growth of our group as a new cash cow, and we are fully ready to join, and win, the bidding race. Capital raising is the biggest issue in this race. GS has already secured stable strategic and financial investors." He also did not rule out the possibility of joining hands with the National Pension Service.

According to GS officials, the group's relatively lower debt ratio, currently only 26%, is giving the group a competitive edge over its rival in the bidding race.

GS is positive that given the market situation, GS Engineering & Construction holds a good position in the overseas plants sector, which will enhance DSME's competitiveness.

It may be noted that the government plans to sell its 50.4% stake in Daewoo Shipbuilding by the end of 2008. KDB holds 31.3%, while 19.1% is owned by Korea Asset Management.

It is reported that Taiwanese importers of scrap are going to face a crisis that their imported scrap containers will be charged the deferment fee due to containers undischarged in the field. Meanwhile, shipping companies could no longer accept any business about imported scarp to Taiwan.

According to market sources, Vietnam and Indonesia are also two countries that are unacceptable to import scrap by shipping companies owing to further deferment of payment. Thus, the imported scrap could be deficient in those countries in the next few months.

(Sourced from yieh.corp)

The Northern Echo reported that up to 40 people are facing redundancy at a North East engineering plant after ThyssenKrupp Tallent was forced to reorganize its operation due to the economic conditions.

ThyssenKrupp Tallent has recently confirmed possible job losses in its staff and support divisions, although it said it was trying to minimize redundancy numbers by finding alternative work in different areas of the business. However, it admitted that up to 40 people could lose their jobs at its flagship Newton Aycliffe plant, in County Durham, as a result of the internal restructuring program.

In a statement recently, TK Tallent, which supplies chassis structural products, said that its growth over the past 60 years had been thwarted by the economic climate. It added that “This setback to the company’s record of growth reflects the reduced demand being experienced by some of its customers and the relentless increase in costs of raw materials and energy. Whilst this action is very much regretted, the company and its employees recognize that it is essential in order to meet the challenges of the current economic climate to secure their long term future.”

ThyssenKrupp Tallent is one of the biggest employers in the area, with 900 people working at the plant. It is understood the shop floor workers, who account for the vast majority of the workforce, will be unaffected by the redundancies and reorganization.

It is reported that the property market of Thailand is likely to improve in the second half of 2008 as pressure from inflation and from oil and steel prices will ease while higher interest rates will not stop homebuyers from seeking loans.

Due to strong liquidity in the financial sector, Noppadol Buranathanung, division executive for supply side economic analysis at the Bank of Thailand, forecast that competition among commercial banks for loan customers would rise. He said that a fall in world oil prices and the government's raft of economic measures to relieve hardship over the next 6 months would prevent inflation rates rising as quickly as previously forecast. He also expected a more optimistic outlook to emerge in 2009.

At the end of July 2008, the central bank forecast that general inflation rates would fall from between 7.5% and 8.8% to a range of 5% to 7.5% in 2009 and that gross domestic consumption growth would be 4.8% to 5.8% in 2008 and 4.3% to 5.8% in 2009.

Mr Tawarat Sutabutr director of energy ministry's strategy & policy office said that oil prices would fall, but probably to around USD 100 and not beyond USD 50. He added that while the Olympics had cooled oil prices, the only factor that could push prices up in the near future would be the situation in Iran.

Mr Atip Bijanonda president of Thai Condominium Association said that oil prices in the second half of 2008 are likely to fall but that oil prices could continue to affect costs because contractors might not rely on the downward trend. He added that ''We are worried about higher construction costs and the lack of labor force for construction jobs as the workforce has shifted to agriculture.''

Meanwhile, Mr Staporn Phettongkam secretary general of Siam City Cement Plc said that in contrast to the trend in oil and steel, cement prices are tending to rise as falling demand makes it difficult to achieve economy of scale in production. He added that ''The property sector needs to do market research, find alternative lower cost materials, innovate in products and construction technology and find niche markets to succeed.''

Reuters reported that Swiss engineering group Sulzer has raised its mid range margin targets when it posted a 20% rise in first half net profit as the group benefits from upbeat demand in the oil and gas market. Net profit rose to CHF 158.2 million, ahead of the average estimate of CHF 150 million. Operating profit rose by 28% YoY to CHF 227.4 million on sales up by 6.3% YoY at CHF 1.758 billion.

Sulzer, which makes pumps for the oil and gas industry as well as surface coatings for jet engines, said that it expected strong demand for the rest of the year despite uncertainties in the general economic environment. It added that "Growth is supported in the oil and gas market by the high oil price. High project activity in the power generation market, in particular in China, Europe and USA, is expected to continue."

Sulzer, in which Russian billionaire Mr Viktor Vekselberg holds a roughly 30% stake, has benefited from increased investment to replace ageing oil field equipment as well as investment in the power generation industry.

It hiked the mid range return on sales target for Sulzer Pumps to above 12% from above 11% and for Sulzer Chemtech to above 16% from 15%. It also raised its combined divisional return on sales target to above 12% from above 11%, while the combined target for return on capital employed was raised to above 25% from above 20%.

Taiwanese oil refiner Formosa Petrochemical Corporation said that capital expenditure in 2009 will fall to TWD 4 billion from TWD 14 billion in 2008 because it is awaiting government approval for a new petrochemical complex on the island.

The new project has been on the drawing board for more than a year and the initial investments would total more than TWD 100 billion. It was planned to be developed in central Taiwan.

Mr Wilfred Wang chairman of Formosa Petrochemical said that "We don't know when we can start this new complex project."

Mr Wang also said that refinery margins in the Singapore benchmark market will fall by USD 2 to USD 3 a barrel in 2009 from about USD 8 to USD 9 in 2008 because of increasing refining output in China and India. He also attributed the drop to the global economic slowdown but added that Formosa had no plans to cut production this year.

Formosa is the top ethylene producer in Asia, operating three naphtha crackers with total production capacity of 2.93 million tonnes per year. Currently, Formosa operates 3 crude units totaling 540,000 barrels per day at the Mailiao Refinery.

Goldenport Holdings Inc announced that it has entered into contracts for the construction of 2 additional bulk carrier vessels of 57,000 DWT each with Qingshan Shipyard of China for a total consideration of USD 91.66 million, with estimated delivery in December 2010.

The initial deposit of USD 27.36 million was paid with USD 8.82 million from cash reserves, USD 10.00 million through an existing credit facility and USD 8.54 million through the draw down of a new loan facility, specifically arranged for this project. The remaining payments will be made to the yard based on the construction process schedule and will be financed by a mixture of cash reserves and the new loan facility, as follows

In USD million

Upon delivery, the first vessel will be immediately employed under an agreed time charter at the rate of USD 27,000 per day for 3 years with a high quality charterer. Both vessels are fuel efficient, geared bulk carriers with extensive trading flexibility and of similar design to the other 6 new build Supramaxes already on order.

Iranian customs announced that the slab has become the second largest imported products in Iran. The largest import product is still petroleum. From March to July in 2008, Iran has imported totally 120,000 tonnes of steel slabs.

The annual gross output of private steel rolling mills in Iran can be up to 10 million tonne but the utilization ratio of production capability is only in 30%. Those private mills are often short of slab steel, because they don't have enough finance to import large slab steel. Moreover, United Nations' punishment to Iran makes Iran hardly import slab since 2007.

At present, the mills and distributors in Iran must use cash or letter of credit not form Iranian bank to purchase slab. Both payment type caused the enormous economic pressure to the Iranian buyer.

Mr Sheikh Bandar Tarek Bin Laden CEO of the company Middle East Development LLC and Mr Vaclav Svetik president of CZMT Invest AG company and Mr Petr Zeman president & CEO of the company CZMT Invest AG signed a framework contract for the supply of three industrial units as the first phase of the larger Al Noor Cities program.

Mr sheikh Bandar Tarek Bin Laden said that “The company CZMT has gained our confidence during the realisation of a cement plant in the Yemeni and therefore we have decided to entrust it with the construction of additional industrial project as part of the Al Noor overall program and to provide an opportunities for Czech industries.”

He added that under this contract, CZMT Invest will deliver a cement plant, steel mill and a power plant in the approximate value of 700 million Euros. About 40 to 50 percent of this volume will go to Czech companies participating in these projects. According to CZMT´s preliminary inquiry, about 50 Czech companies intend to participate in the first phase of Al Noor program.

The cement plant should have an annual capacity of 1.2 million tons cement, the steel mill one million tons construction steel. The coal-fired power plant will supply not only these two production units, but later also the area. Preparatory work is already underway, construction will start in next year. The cement plant, steel mill and power plant are expected to be commissioned in three years.

Mr Petr Zeman head of the company CZMT Invest AG said that “By participating in the Al Noor program, Czech companies may appropriately distribute their exports in times when economic growth in the European Union and US is slowing down. Czech industries are strong in the European Union and in Eastern Europe markets, and we are again entering Middle East area where we were successful in the second half of the 20th century.”

CZMT Invest AG is an international company based in Berlin with branches inter alia in the Czech Republic, Great Britain, Russian Federation, the United Arab Emirates and Tajikistan. The company first acquired a strong position in Eastern Europe Today it is a globally operating company, which has gained a strong reputation of a reliable, experienced and transparent partner. Its main fields of business include construction of plants for the manufacture of building materials, construction of new mines, power plants, petrochemical complexes, heavy engineering firms, transportation technology and alternative technologies, such as the production of biofuels.

Amidst the currently prevailing volatile and speculative global steel price scenario, SteelGuru.com has started the much needed barometer to track and measure the price movements on daily basis in Middle East.

In order to provide an index for steel prices, we call it SENSEX for steel, SteelGuru.com decided to work on both long products and flat products for respective category indices as also a composite one for steel. We call them LPPI, FPPI and MEASPI and have started releasing these indices with effect from July 1st 2008, after taking June 30th 2008 as base.

LPPI is based on daily market prices of three benchmark products rebars, wire rod and sections in 5 countries, whereas FPPI is based on HRC, plates, CR and HDG. These indices have been built considering their respective weights in the composite categories as also in the shares of sales in these countries.

The pricing input is from www.steelprices-middleeast.com, which publishes market transaction prices of benchmark products among select locations 5 days a week.

These price indices outline the way domestic steel market is moving day by day and will help producers, agents in the supply chain, steel buyers, bankers and analysts in their respective businesses.

To know more, please visit
http://steelprices-middleeast.com/spi_services/spi.html

Press TV quoted a Malaysian official as saying that his country's private and state owned firms are to increase investment in Iran's building and construction sector.

Mr Zulkifli Abdullah a political and economical advisor at Malaysian Embassy in Tehran said that "The Iranian construction sector is a lucrative business that attracts Malaysian investors." He added that the total investment by his country in Iran has reached USD 60 billion, 20% of which has been in building and construction sector.

As per the report, Iran needs to build 1.5 million new residential units per year and the government has ambitious plans for investment in the sector.

Mr Mohammad Saeidikia Iranian Minister of Housing and Urban Development recently invited domestic and international firms to invest in 30 different regions in the country.

It is reported that Indonesia and Pakistan are actively engaged in negotiations to sign Free Trade Agreement which would help in raising the volume of bilateral trade up to one billion dollars mark.

On the occasion of 63rd anniversary of Independence Day of Indonesia, Mr Ibnu Prispermana Charge d' Affaires of the Embassy of the Republic of Indonesia said that the bilateral trade between Indonesia and Pakistan stood at USD 919.46 million during 2007 reflecting significant increase in import or export between the 2 countries.

Mr Prispermana said that the governments of both the countries are committed to raise the bilateral trade volume up to USD 1 billion. Both the countries have already singed the Comprehensive Economic Partnership and now the negotiations are underway to sign a FTA which will be a significant landmark.

He said that the trade figures between both countries have significantly increased mostly in favour of Indonesia. In 2007, trade volume between Indonesia and Pakistan reached USD 919.46 million whereas the export value of Indonesia to Pakistan was USD 846.62 million. Similarly, Indonesia import from Pakistan was USD 72.84 million.

The News reported that Pakistan Refinery Limited announced more than 740% increase in net profit for fiscal year 2007-08 just days after the government acted to limit the profitability of refineries to save subsidy on petroleum products.

Analysts told The News PRL’s profit increased to PKR 2.1 billion compared to previous year’s PKR 250 million primarily on the back of inventory gains which represent the worth of crude oil stocks the refineries maintain.

Mr Farhan Mahmood analyst at brokerage JS Research said that “Another reason is the improved refining margin, which reflects an increase in the price of petroleum products in relation to that of crude oil.”

Mr Mahmood said that this does not mean, reduction in deemed duty will not affect the profits of refineries in the coming months. He said that “Recent downward revision in deemed duty will negatively impact earnings by more than 15%.”

The government made sweeping changes in a controversial oil pricing mechanism, saying it could not afford to bear huge subsidies and wanted the industry to share some burden of the rising oil price. Consequently, margins of OMCs have been capped at USD 100 per barrel of the price of crude oil, deemed duty on diesel reduced and price calculation method for petrol has also been altered.

Gulf daily quoted Mr Raouf Ghabbour CEO of Ghabbour Auto as saying that Ghabbour Auto one of Egypt's biggest carmakers and importers expects net profit to grow comfortably over 50% in 2008

The company said that strong passenger car sales last month helped it make a net profit of 237.2 million Egyptian pounds in the first 6 months of this year, while total revenue grew by 33% to 2.62 billion pounds.

Mr Ghabbour said that he also expected revenue to grow by about 34% shrugging off the possibility of any negative impact from the country's rising inflation rate. He added that "We expect the bottom line which means net profit to exceed 50% over last year's results."

Mr Ghabbour, however said that "Company sales until this moment has not seen this.” He said earlier while inking a deal with Brazil's Marcopolo to build a bus assembly factory in Egypt that "But may be what inflation could do is that instead of expecting the auto market to grow by 28% or 30% in 2009 growth rates could be around 20% or 22%."
Mr Ghabbour said that under the USD 70 million JV a subsidiary of Ghabbour Auto will own 51% of the new company while the Brazilian manufacturer will have the remaining 49%.

Mr Ghabbour further added that he saw more business opportunities from a new traffic law passed recently in Egypt, which allowed the licensing of small 3 wheel scooters used for commercial transportation and known in Egypt as the tok-tok. He added that "Before the traffic law was passed we had a very difficult time selling tok-toks because they were impossible to licence and the users were harassed by polices.”

Press TV quoted an Azeri official as saying that Baku may export its oil via Iran after explosion and conflict disrupted its routes through Turkey and Georgia.

An official with the State Oil Company of Azerbaijan told Bloomberg that Baku had awarded a tender for 300,000 tonnes of Azeri Light crude to Middle East Petrol a Dubai based oil trading and shipping company to load the oil in a month or so.

The official added that the export through the country's southern neighbor depended on the status of the Baku-Tbilisi-Ceyhan pipeline would. If the BTC is operating there'll be no need to export via Iran.

BTC pipeline the world's second largest has been shut down since early August after Kurdish separatists bombed a section of it that stretches through Turkey.

As per report, the military conflict between Russia and Georgia has also led to the closure of the Baku-Supsa oil pipeline that normally transports a daily 90,000 barrels of crude from the Azeri capital to the Georgian port in the Black Sea.

According to a report by International Oil Daily, if Socar decides to go through with the export through Iran, Middle East Petrol will take delivery of the oil at the Sangachal Terminal, situated to the south of Baku.

The report added that from then on the Swiss Vitol company will load Iran's light crude as it has a long term contract with Iran's Nikoo Consulting Inc. under which it delivers Azeri oil to Iran at the Caspian Sea port of Neka and load an equal amount of Iranian oil at Khark Island in the Persian Gulf.

It is reported that the Canadian International Trade Tribunal August 21st found that the dumping and subsidizing of carbon steel welded pipe originating in or exported from the People's Republic of China had caused injury to the domestic industry. Anti-dumping and countervailing duties will therefore be collected by the Canada Border Services Agency. The complainant in this case was ArcelorMittal of Montreal, Quebec.

The Tribunal will issue the reasons for its finding on September 4th 2008.

The Tribunal is an independent quasi judicial body that reports to Parliament through the Minister of Finance. It hears cases on dumped and subsidized imports, safeguard complaints, complaints about federal government procurement and appeals of customs and excise tax rulings. When requested by the federal government, the Tribunal also provides advice on other economic, trade and tariff matters.

It is reported that Chinese construction steel prices speed up its drop and this is also the case with export prices.

Domestic market prices are still on the decrease .Shanghai market prices for HRB335 20mm rebar is being quoted at CNY 4940 per tonne to CNY 4960 per tonne, HRB400 grade material is being quoted at CNY 5000 per tonne to CNY 5030 per tonne down by CNY 200 per tonne to CNY 230 per tonne from last Tuesday. Commercial wire rod is at CNY 4840 per tonne to CNY 4850 per tonne that for hi speed material goes at CNY 4900 per tonne to CNY 4910 per tonne a decrease of CNY 470 per tonne and CNY 480 per tonne from early last week.

Mysteel forecasts, taking Shanghai price for HRB335 20mm rebar as benchmark, it is going to reach CNY 4900 per tonne in the short term. If it falls below CNY 4900 per tonne, the next target would be CNY 4700 per tonne or even CNY 4500 per tonne. However, there would be rebound if it could remain above CNY 4900 per tonne.

Export offers for rebar are about USD 920 per tonne to USD 930 per tonne for 10mm to 25mm. While BS4449 Grade 460 rebar with CARES certification at USD 1200 per tonne FOB to USD 1250 per tonne FOB. Quotations for wire rod are being exported at USD 960 per tonne to USD 950 per tonne FOB and that for material with boron is about USD 15 per tonne to USD 20 per tonne lower.

(Sourced from MySteel.net)

Bayi Steel has announced a plan of investing CNY 475 million in building a new bar and wire rod project, which is scheduled to produce 600,000 tonnes round steel and HR rebar and 600,000t high speed wire rod a year.

The Xinjiang based steelmaker aims to meet the increasing demand for construction steels from the nearby markets, based on larger production and better quality of the products, to which the bar and wire project can be an impetus.

Bayi Steel interim report tells in H1 of 2008, it has generated curde steel of 2.3561 million tonnes up by 19.01%YoY; steel products of 2.2412 million tonnes up by 18.88% and realized an operating income of CNY 10.416 billion up by 74.54% including CNY 411 million net profit rising 205.48%.

Good performance of the Xinjiang based steelmakers is a result of rising materials cost, strong demand and clear slowdown of the nation's crude steel output amid the ongoing macro-control and backward capacity elimination. On account of secured revenue growth by steel price gain, coupled with effective measure on cost cut, the steelmaker expects net profit of the year to more than double that in 2007.

(Source: Securities Times)

It is reported that Liaoning