AS per media reports, JSW Steel Ltd is likely to raise prices in August after an agreed three month moratorium lapses but expects margins to remain under pressure on soaring input costs and a ceiling on selling price.

Mr Sajjan Jindal vice CMD of JSW told a news conference that "I do not think we can pass on all the cost. We are looking at a reasonable price increase. But how much, that I can not tell you now."

Mr Jindal said that with the cost of production rising over 60% or USD 350 a tonne he has to raise prices to remain competitive. The gap between global and domestic price is about USD 300 per tonne.

Mr Jindal said that "We have to be with the government. We understand the government is under tremendous pressure. But if the industry doesn't produce enough cash, then there wouldn't be any additional capacities.”

He said that margins will remain under pressure for at least four months but new capacities at JSW's Karnataka mill, expected late this year, will add huge profitability to the company's bottom line with around 2.8 million tonnes being added.

Mr Jindal said that "Our EBITDA margin in 2008-9 has seen a drop of 12% YoY, which is a very significant drop. If you remove the rupee devaluation, our EBITDA would have been higher.”

BS reported that Indian cement industry has expressed concern over increased cement imports from Pakistan, contending that the waiver of import duty has put domestic producers at a disadvantage.

The Indian cement manufacturers association said that most of the imported cement is utilized by bulk users, mainly the real estate sector, which consumes nearly 55%.

The association said that “At a time when the country is reeling under inflation it was unfortunate that the cement industry is being singled out for high pricing. The government had 'forced' the industry to commit to a three month freeze, leading to a dent in the profits of cement factories.”

Mr H M Bangur president of Cement Manufactures Association said that "There is surplus cement in the market leading to decline in bulk rates. Inflationary pressure and transportation as well as dealers margin have gone up, which kept retail prices intact.”

He said that the CMA demanded that the government offer domestic producers the same benefits as that for imported cement. This would automatically bring down the prices.

It said that “The industry, in a bid to reduce production cost, which had gone up by over 8% in the last five years, had focused on captive power generation as power constituted a major part of cost of production.”

Fitch Ratings has assigned a National Issuer rating of AA(ind) to India based Rashtriya Ispat Nigam Ltd. Fitch said that the Outlook is Stable. Fitch has also assigned a rating of 'AA (ind)'/'F1+(ind)' for its fund based working capital banking limits of INR 5153.5 million and a rating of 'F1+ (ind)' to RINL's non fund based limits of INR 22,540 million. For RINL's capacity expansion plans, Fitch has assigned a rating of 'AA (ind)' to the non fund based facilities of INR 24,600 million.

It said that “RINL's ratings derive their strength from its position as one of the largest producers of long product steel in India, a competitive cost structure with increasing presence in value added steel a favorable demand outlook for its products driven by infrastructure spend in the short to medium term and a healthy balance sheet with significant cash balances as of March 31st 2008. The ratings also draw comfort from RINL's 100% government ownership and its demonstrated financial support to RINL.”

It added that “The ratings reflect the significant turnaround in RINL's fortunes following its FY02 net losses which was a result of a combination of lower EBITDA and higher borrowings, with free cash flows being used to consistently deleverage the balance sheet. Fitch notes that the company has improved its cost structure and increasingly moved into valued added products to mitigate the impact of cyclicality. While Fitch expects growth in the company's end-user sectors which is driven primarily by the Indian growth engine, any slowdown in the Indian economy will affect RINL as its revenues are linked to economic growth.

It said that “The above positives are tempered by its lack of captive linkages for both iron-ore and coal which exposes it to significant volatility in EBDITA margins, considering the steep increase in iron ore and coal prices in the past year. With iron ore and coking coal prices expected to remain firm, RINL's ability to pass on the increased costs to end consumers could remain curtailed which in turn could have an impact on its overall profitability. The agency notes that cost efficiencies and a value added product profile would mitigate some of these risks for RINL, flexibility to maintain EBDITA margins would be limited relative to some of its peers who enjoy captive linkages in India. Fitch notes that captive linkages without impacting financial leverage could act as a positive trigger.”

Fitch notes the company is presently executing a CAPEX plan to double its long product capacity from 3 million tonnes per annum to 6.3 million tonnes per annum. The size of the CAPEX is significantly large and while RINL would continue to remain exposed to typical execution risks associated with such large projects, its Brownfield nature mitigates some of these risks. The impact on financial leverage is mitigated by the significant cash balances of INR 76.99 billion as on March 31st 2008. While RINL has drawn a vision to increase capacities thereafter to 16.7mtpa by 2017-2018, these remain at a preliminary stage and the additional CAPEX beyond 6.3mtpa has not been factored in the rating. Fitch expects RINL to phase out its projects to maintain a low financial leverage, however, margin pressures and/or aggressive CAPEX plans which impact financial leverage could act as negative rating triggers.

It is reported that BL reported that the six global players have bid for participation in the new INR 1,400 crore Rail Coach Factory at Rae Bareli in Uttar Pradesh.

1. Reliance Infrastructure - China South Railway
2. L&T - China North Railway
3. Texmaco-Kawasaki-Mitsubishi
4. Jessops-Siemens
5. CAF of Spain
6. Bombardier

The report added that the winning consortium will form a joint venture with the Railways, with the latter owning 24%. The Railways will buy at least 1,000 coaches a year for 10 years, valued around INR 1,200 crore.

Shree Precoated Steels Ltd has announced the following unaudited results for the quarter ended June 30th 2008:

Shree Precoated has posted a net profit of INR 232.00 million for the quarter ended June 30th 2008 as compared to INR 142.90 million for the quarter ended June 30th 2007. Total Income has increased from INR 3168.10 million for the quarter ended June 30th 2007 to INR 4528.90 million for the quarter ended June 30th 2008.

Prakash Industries Ltd a diversified business house with interests in steel, power and PVC pipe has last week announced its financial results for Q1 of 2009.

Its net sales and income from operations have increased by 43% YoY to INR 392.07 crores as against INR 273.06 crores reported in the corresponding period last year. The EBIDTA for quarter increased by 32% YoY to INR 880.20 crores in the current quarter as against INR 665.30 crores. Profit after Tax was up by 33% YoY to INR 66.88 crores as against INR 50.12 crores reported in the corresponding quarter.

Prakash Industries said that it has entered into a MoU with the government of Chhattisgarh to establish and operate a 600 MW Thermal Power Station in the State of Chhattisgarh with an investment of approximately INR 2400 Crores.

Sujana Metal Products Limited has registered an impressive 571% YoY rise in net profit at INR 206.547 million for the quarter ended on June 30th 2008 as compared to INR 30.792 million.

Sujana Metal in a statement said that its net sales registered an increase of 95% YoY to INR 4222.926 million for the quarter ended on June 30th 2008. The net sales in the corresponding quarter in the previous financial year were INR 21692% YoY.

For the year ended on June 30th 2008, the company’s net sales rose 99.5% YoY to INR 14982.018 million. The net sales for the year ended on June 30th 2007 were INR 7509.206 million.

Mr VSR Murthy director for Sujana Group of Companies said that “The company through its organic and inorganic expansion plans has achieved the status as the one of the largest steel company in the secondary steel sector. The results clearly indicated that the company is on the right track and it will improve upon its performance in the quarters to come.”

It is reported that Tube Investments of India Ltd’s first quarter profit more than tripled.

Tube Investments of India in a statement to the Bombay Stock Exchange said that its net income rose to INR 482.9 million in the three months ended June 30 from INR 140.9 million a year earlier. Revenue rose by 26% YoY to INR 5.4 billion.

Indian truck maker TATA Motors Ltd reported its biggest decline in quarterly profit in at least five years after raw material costs surged.

TATA Motors in a release said that its net income fell by 30% YoY to INR 3.26 billion in the three months ended June 30th 2008 from INR 4.67 billion. That matched the INR 3.32 billion median profit forecast in a Bloomberg survey of 11 analysts. Sales gained by 14% YoY to INR 69.28 billion from INR 60.57 billion.

The release said that TATA Motors' raw material costs, the biggest expense, rose by 26% YoY last quarter after steel prices gained. Chairman Ratan Tata needs to sustain demand amid seven year high interest rates in India to fund USD 2.4 billion of new projects in the next five years, including sales of the USD 2,500 Nano car.

PTI reported that Indiabulls Power Services a subsidiary of Indiabulls Real Estate said that it will set up a 2640 MW power project in Madhya Pradesh. However, the financial details were not disclosed.

Indiabulls Power In a filing to the Bombay Stock Exchange said that Indiabulls Real Estate said the subsidiary has entered into a MoU with the Madhya Pradesh Government.

The power project would be set up in two stages of 1,320 MW each. According to the MoU, the government would facilitate and extend all reasonable help and assistance to IPSL for setting up the project.

Power Grid Corporation of India Ltd has announced the following Un Audited results for the quarter ended June 30th 2008:

The Company has posted a profit after tax of INR 3056.90 million for the quarter ended June 30th 2008 as compared to of INR 4521.80 million for the quarter ended June 30th 2007. Total Income has increased from INR 10554.30 million for the quarter ended June 30th 2007 to INR 14079.10 million for the quarter ended June 30th 2008.

Exim News Service reported that the Haldia Dock Complex under the Kolkata Port Trust faces imminent closure because of massive shoaling in its channels.

HDC sources said that inadequate dredging had reduced the depths of Jellingham and Auckland to 4 meters and 4.1 meters respectively, as against the planned draught of 5 meters and 5.1 meters respectively thereby posing a major threat to the movement of ships.

Mr A K Bagchi KoPT’s Marine Department Director said that "The persistent shoaling trend is threatening total closure of shipping at HDC in the near future unless the shoaling trend is reversed immediately.”

Maytas Infra Ltd has announced the following unaudited results for the quarter ended June 30th 2008.

Maytas Infra has posted a net profit after tax of INR 200.471 million for the quarter ended June 30th 2008. Total Income is INR 3912.385 million for the quarter ended June 30th 2008.

It is reported that wind power major Suzlon Energy has appointed Mr Sumant Sinha as its COO.

Mr Sinha has over 10 years of experience in international finance which includes a career with Citicorp Securities in New York and London and ING Barings in New York. Earlier, Mr Sinha worked as CEO Aditya Birla Retail and has also held the position of CFO for the Aditya Birla Group.

Mr Tulsi Tanti CMD of Suzlon said that “Mr Sumant has an excellent track-record in both the Indian and international environments which will help Suzlon execute its global plans more effectively an important step for continued rapid growth and scale.”

GVK Power & Infrastructure Ltd recorded a total income of INR 141.37 crore with profit of INR 40.55 crore for the first quarter ended June 30th 2008 as compared to an income of INR 101.83 crore and profit of INR 13.17 crore for the corresponding quarter last year. This reflects a growth of 39% YoY in revenues and more than three fold rise in profit over corresponding quarter last year.

GVK Power said that during the quarter, the company acquired the entire equity share of GVK Energy and GVK Development Projects, both of which have become wholly owned subsidiaries.

National Aluminum Company Limited, a Navratna PSU and India's leading producer and exporter of alumina and aluminum, reported that its profit after tax of INR 525.33 crore for the Q1 ended June 30th 2008 registering an increase of 17.6% YoY over INR 446.66 crore achieved in the corresponding period of the previous fiscal.

According to the results taken on record at a meeting of the Board of Directors here on Thursday, the company has also reported a turnover of INR 1606.41 crore as compared to INR 1287.12 crore achieved in the corresponding quarter of the previous year, recording a jump of 24.8%. On the sales front also, NALCO has put up an impressive performance. The company sold 221,405 tonne of alumina in the Q1 which was 207,765 tonne in the corresponding period a year ago. Similarly, the aluminum sale increased from 75,858 tonne to 84,103 tonne during the comparable quarter.

National Thermal Power Corporation said that the 500 MW of Kahalgaon Super Thermal Power Project Stage II has commenced commercial operation August 1st 2008.

With the commercial operation of this unit, the commercial capacity of Kahalgaon Super Thermal Power Project would be 1340 MW.

ArcelorMittal SA has posted a 45% YoY rise in first half earnings per share, driven by buoyant global steel prices and a weaker rand. It said that it expected third quarter profit to be substantially higher than in the second quarter as demand and prices remained robust, but that earnings would be hit by higher costs and exchange rate swings.

ArcelorMittal SA said that headline EPS, which strips out certain one off, non trading and financial items, rose to 1,027 cents in the January to June 2008 period from 708 cents in the year ago period.

Headline earnings totaled ZAR 4.6 billion, boosted by higher international steel prices and strong demand at home from a construction boom. Income from its coke and chemicals and marketing and shipping businesses also lifted earnings, as did a weaker rand versus the dollar. But that was partially offset by lower sales volumes and higher costs.

Revenue rose by 26% YoY to ZAR 18.4 billion while profit from operations rose by 28% YoY to ZAR 5.4 billion.

Reuters reported that a fire that broke out at a Nippon Steel Corporation mill in southern Japan is unlikely to have a big impact on its earnings and shipments.

Mr Takashi Murata an analyst at the Daiwa Institute of Research said that repairs and purchases of coke and gas would mean higher costs but they were unlikely to be huge.

He added that "I am a bit worried about a special loss stemming from the repair of the conveyer belt and pipeline, but other costs would not be large."

It is reported that, Perwaja Holdings Bhd, which is en route for listing on the Bursa Malaysia main board on August 20th 2008, expects to fully settle its outstanding debts of MYR 250 million within 5 years.

Perwaja was saddled with about MYR 800 million debts when Kinsteel Bhd bought 51% stake in Perwaja Steel Sdn Bhd and its Gurun assets from Maju Holdings Sdn Bhd in 2005.

Mr Henry Pheng CEO of Perwaja Holdings said that it had signed an agreement with the finance ministry to make scheduled installments for the remaining debts starting early this year. He added that “The turnaround in Perwaja is now progressing well with gearing ratio at about 0.6 to 0.7, which is among the lowest in the local steel milling industry.”

Perwaja is an integrated upstream steel player and its subsidiary Perwaja Steel is involved in producing direct reduced iron and semi finished long steel products such as billets, beam blanks and blooms.

It is one of the four DRI producers with hot briquette iron plants in South East Asia and exports 30% of its total production to Vietnam, Thailand, China, Indonesia, the Philippines and South Korea.

The winners of the Corus Student Design Awards were announced at the prestigious Structural Steel Design Awards 2008 ceremony held at the Victoria & Albert Museum recently. Now in its 20th year, the Corus Student Design Awards were created to reward the architectural and engineering excellence of undergraduates helping them to develop the skills they will need upon graduation when it comes to entering the professional construction arena, as the competition briefs echo the challenges of the real world.

The winning teams are
1. University of Cardiff for Structures
2. University of Southampton for Bridges
3. University of Nottingham for Architecture

Structures
University of Cardiff students were challenged to provide a structural solution for a terminal building and a control tower at a new regional UK airport to support a growing economy and improve transport links.

Mr Alan Jones, one of the judges, said that “This was certainly a demanding brief as airport buildings by their very nature are highly charged and symbolic buildings that need to reflect the image of the nation. The entry from the University of Cardiff was expertly thought out - an innovative and effective design that would lend itself to future expansion.”

Bridges
University of Southampton’s budding engineers were asked to provide a pedestrian and cycle bridge over a river to link two halves of the major city centre Brownfield regeneration scheme.

Mr Barry Mawson, chair of judges, said that “University of Southampton’s winning design was a dramatic and integrated solution that added a real dimension of excitement to the design. A key feature of their design was the concept of a sweeping curved deck supported from an inclined pylon, essentially providing an elegant solution to the geometry of the site.”

Architecture
University of Nottingham designs a housing scheme for an urban community with a density of 150 to 500 homes per hectare. The master plan for the community will need to consider in detail how individual housing units might work within the context of sustainable waste use and or management.

Judge Mr Christopher Nash said that “The architectural awards are a celebration of excellence in architecture, rewarding talent and encouraging debate on the global issues that affect us today. Whilst this year we saw some truly inspirational designs the creative yet functional design by a student from the University of Nottingham ultimately demonstrates how practical and elegant solutions to waste can be easily integrated into everyday life.”

Mr Alan Todd GM of Corus said that “Corus is committed to fostering and developing the engineering and architectural talent of the future. Each of the 3 categories for this year’s competition received an unprecedented level of interest and the judges were impressed by the general high standard of entries. All of the successful teams demonstrated their design skills in an innovative and effective way painting a positive picture for the future of steel construction."

Steel Market Futures Briefing will cover billet, rebar, wire rod and related raw materials such as scrap, HBI and DRI. We believe that the upcoming launch of steel futures trading on the LME will increase the need for detailed analysis on all aspects of the long products sector.

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Rautaruukki Oyj rose the most in six months after saying full year profit will increase as demand is still growing. The shares jumped by 7.9% in Helsinki trading after it said it expects strong growth in construction demand in Eastern Europe and Russia. Rautaruukki reiterated its forecast that full year sales will gain more than 10%.

Rautaruukki said in a statement that second quarter net income fell to EUR 123 million from EUR 130 million a year earlier. That missed the EUR 128 million median estimates of 9 analysts surveyed by Bloomberg. Sales advanced 5.9% to EUR 1.07 billion.

It is reported that mining and freight services company Bradken Limited has agreed to acquire the 83% of Americast Technologies Inc that it does not already own for AUD 114 million. An additional AUD 21 million earn out is payable to Americast to energy and resources markets over the next 2 years subject to earnings hurdles.

The purchase price implies an enterprise value of AUD 258 million and represents 5.2 pro forma normalized fiscal 2008 earnings before interest, tax, depreciation and amortization.

Bradken said that the acquisition provided it with capital parts access to growing global energy and resources markets for the largest steel castings and also provides an American base for the company to expand some of its key mining consumable products.

Phoenix Business Journal reported that Industrial Metal Supply Company has created a new business unit to provide advanced laser cutting and fabrication for manufacturing firms.

As per report, Industrial Metal's new unit, with an investment of about USD 2 million, will be used on a 6 axis, 3 dimensional cutting systems, that will supply the company's customer base in Arizona and Southern California.

The division will be called Laser Services Group and use equipment from Mazak Optonics Corporation. The new equipment can cut large sizes of tubes and pipes in various shapes of steel.

Thai Sahaviriya Steel Industries has posted a net profit of THB 777.5 million in April to June 2008 quarter up by 115% YoY as against THB 361.2 million in April to June 2007 quarter.

The quarterly result included a foreign exchange loss of THB 10 million baht.

ArcelorMittal South Africa said that it will roll over its prices in September 2008, which would be inline with price movements occurring in other markets around the world.

Ms Nonkululeko Nyembezi Heita CEO of ArcelorMittal SA said that “Demand for steel in the South African market remained strong and the future price trajectory would, therefore, depend on price movements in the seven markets against which the company benchmarked its domestic prices, as well as movements in the local currency.”

It may be noted that ArcelorMittal SA has raised prices consistently for both flat and long steel products from January until August 2008, making the roll over in September a significant market development. However, this would be little comfort to steel consumers, who have experienced steel price increases of between 70% and 80% for the first half of 2008.

Hyundai Heavy Industries Company and Samsung Heavy Industries Company have posted record profits as they benefited from high prices amid a global shortage of vessels to carry goods and fuel.

Hyundai Heavy's net income rose by 57% YoY to KRW 655.2 billion in the April to June 2008 quarter while, Samsung Heavy's profit jumped by 24% YoY to KRW 168.3 billion. Sales at Hyundai Heavy rose by 21% YoY to a record KRW 4.71 trillion and Samsung Heavy was 24% YoY percent higher at KRW 2.58 trillion.

Hyundai Heavy received USD 19.8 billion in orders for ships, marine engines, offshore platforms and other products in the January to June 2008 period up by 62% YoY. It delivered USD 5.06 billion worth of ships during the period up by 81% YoY.

Samsung Heavy has won USD 10.3 billion of orders so far this year, achieving 66% of its annual target of USD 15.5 billion. That increased the backlog to USD 46 billion or about four years of work. Operating profit at Samsung Heavy more than doubled to KRW 192.6 billion from KRW 86.2 billion a year earlier.

It may be noted that shipyards in South Korea are racing to complete orders won at record prices, as shipping lines bet on rising trade led by China. Their demand for steel to make vessels pushed prices up as much as by 74% this year and may crimp profit growth.

Harsco Corporation recently announced that it has secured 3 new contracts valued at approximately USD 7 million to support large scale infrastructure and construction projects in Europe and the Middle East.

Under a new contract in Dubai from Todini, Harsco will supply a range of rental formwork systems for use in constructing roads and bridges in the Jumeirah Lake Towers area, a huge development consisting of 87 mid and high rise towers being built along the banks of a network of new man made lakes and waterways. The contract continues the succession of large scale project wins for Harsco within this strategically important and growing region.

Near Paris, Harsco has been awarded a large scale contract by French construction giant Bouygues to provide rental formwork for a new state-of-the-art office tower known as the Tour MOZART. When completed in 2010, the new offices will become the headquarters for Bouygues Telecom, one of the largest mobile phone companies in France. Bouygues is a long standing customer for Harsco's equipment and services.

In Germany, Harsco's rental formwork will be used for the cast in place concrete construction of the Rhein Galerie, a major new shopping mall being built in the center city district of Ludwigshafen on the banks of the Rhine River. Scheduled for completion in late 2010, the new mall will accommodate 120 shops and restaurants in nearly 325,000 square feet of floor space. Ludwigshafen is one of the most important industrial cities in southwestern Germany, home to BASF and the world's largest integrated chemical complex.

Mr Salvatore D Fazzolari chairman & CEO of Harsco said that "These contracts underscore Harsco's substantial international balance and major client relationships serving multiple market sectors. The inherent mobility of our rental stock allows us to redeploy our equipment wherever necessary to meet our customers' growing needs on an expanding geographic basis.''

Harsco's modern equipment and advanced engineering services to the global infrastructure sector are part of a balanced portfolio of businesses serving major industries that are fundamental to worldwide economic growth and development, including non residential construction, metals and minerals and railways.

Mr Shalabh Mittal CEO of Mercator Lines Singapore Limited commented on the outlook for shipping rates.

Mr Mittal said that "It is difficult to say whether shipping rates have peaked. The demand side looks strong. We are shipping more coal and iron ore than last year.''

On Mercator's profit, he said that "Our profit and revenue went up on the back of a higher number of ships and higher capacity, which was up by 68% YoY this year. Freight rates were also higher. For the next quarter and the rest of the year, we have more than 85% of our capacity locked in. Even though freight rates are correcting, they are still at a pretty healthy level.''

Norwegian engineering firm Aker Solutions said that it has been awarded a frame agreement for the delivery of sub sea umbilicals to BP offshore Angola, in a deal worth NOK 360 million.

Aker Solutions, in a statement, said that "The contract is for manufacturing and delivery of 48 kilometers of steel tube umbilicals."

The umbilicals will be manufactured at the firm's facility at in Moss in Norway, while delivery is scheduled for the third and fourth quarters of 2010.

Burlington Northern Santa Fe Corporation has reported quarterly earnings of USD 1 per diluted share, which included a USD 0.31 per share charge related to environmental matters in Montana and a USD 0.03 per share effect from additional personal injury accruals. This compares to second quarter 2007 earnings of USD 1.20 per diluted share.

Second quarter 2008 freight revenues increased by USD 613 million to USD 4.35 billion as compared with USD 3.74 billion in the prior year. Coal revenues of USD 902 million rose by USD 126 million or 16% YoY, driven by improved yields and contractual inflation escalators, partially offset by lower unit volumes due to weather-related challenges.

Mr Matthew K Rose chairman, president & CEO of BNSF said that “We experienced a number of challenges during the second quarter, including a soft economy, rapidly increasing fuel prices and significant damage to our network from flooding across the Midwest. I am proud of the efforts of our team to rebuild our network despite significant devastation. As of mid July 2008, network fluidity and service to our customers had been fully restored. Despite current softness in the economy, we continue to be optimistic about the long term given the strength of our diverse franchise, the value of our product offering and our continued focus on yield and productivity improvement.”

BNSF also announced that planned capital commitments for 2008 will be about USD 2.85 billion, or USD 275 million higher than previously disclosed due to

1. The acceleration of capital projects to take advantage of the Economic Stimulus Act of 2008

2. The acquisition of additional new locomotives which will enable the Company to take advantage of the significant fuel efficiency and other environmental benefits and the Economic Stimulus Act of 2008

3. Capital expenditures associated with significant flooding costs in the Midwest

Arabian Business reported that UAE Contractors Association has raised questions over claims by some steel firms that there is no shortage of steel.

As per report it also accused steel firms of hedging and manipulating the black market in a bid to force prices upwards. But the accusations have been denied by suppliers, who say there is enough steel and they are not to blame for project delays.

Mr Imad Al Jamal vice chairman of UAE Contractors Association said that "They are probably right in saying there is no shortage of steel. But there are guys who tend to go to the black market and block quantities of steel until the price goes up, and then they sell to the market. They also practice what we call warehousing or storing. They buy quantities of steel, and they keep it away for six months until the price checks up. It is called hedging in business terms."

He also said that steel suppliers are manipulating demand and supply. He added that "There is no proper regulation by the government to control these things.”

But Mr Samah Hassan CEO of steel trader and supplier Madar denied there was a shortage. He said that "There is no scarcity of steel.”

He added that "The industry does not have hedging tools available for it to use. We have the Dubai Gold and Commodities Exchange future contracts, which are a very good thing for the industry, but unfortunately, volumes are too small to enable anyone to use it for hedging. Until the futures contracts is big enough, hedging will remain unavailable for the steel industry."

He added that there are 160 projects in the UAE facing delays, according to an Al Mal Capital report released last month. The report said that "The UAE steel market has seen aggressive increases in selling prices in the last 12 months due to greater shortages in the Middle East.”

Gulf News reported that the massive bridge connecting Abu Dhabi city to the highways leading to Dubai and the northern emirates will enter final stages of construction next week. A pair of arches, 60 meters high will be installed on the bridge this week.

The arches, weighing about 2,000 tons, were manufactured in Jebel Ali and transported to the site. The other two arches were manufactured in Thailand. The three twin arches and supports of the bridge will recreate the shape of sand dunes.

Mr Juma'a Al Junaibi GM of Abu Dhabi Municipality said that "The gigantic bridge will symbolize the sand dunes of the desert. Motorists will be able to see an artificial sand dune next week on the bridge under construction.”

Mr Abdullah Al Shamsi director of roads and infrastructure at Abu Dhabi Municipality said that the already completed first and second stages of the bridge cost AED 264 million. He said that when the AED 910 million bridge is completed next year, it will help improve the flow of traffic to and from Abu Dhabi City and will be the main link to other emirates.

The first phase of the project was infrastructure for vehicles from Shahama-Dubai road and headed towards Mussafah and Abu Dhabi. The four-lane road is complete. The second stage of the project cost AED 107 million and includes two bridges on the west coast of the Maqta channel.

The first bridge is 290 meter long with four lanes in each direction along with hard shoulders. It links the two bridges over the channel and the eastern ring road. The second bridge is 300 meter long and links the bridge near Shaikh Zayed Mosque for the traffic from Mussafah, eastern and western areas. The third phase of the project, costing Dh646 million, consists of an 850m long section that includes the bridge over Maqta channel and will link the eastern ring road in the island with Dubai highway.

Gulf News reported that UAE energy experts have started the process of locating possible sites for the country's first three nuclear power stations.

Mr Khalid Malallah Al Awadi a UAE energy expert told the Gulf News that one potential site was along the sparsely populated coastline between Abu Dhabi and Ruwais. He said that "Two nuclear power plants could be built here, 50 kilometer apart. As well, there's room to put one up in Fujairah."

The paper added that current nuclear technologies require access to large quantities of water for production processes, cooling and venting mechanisms, and easy shipping access for both nuclear fuel and spent nuclear rods.

The paper said that A nuclear plants typically takes a minimum of seven years to become fully operational from planning to completion and by 2020, officials expect UAE demand to exceed 40,800 MW compared to current capacity of 18,000MW, based on projected growth rate of 9 percent, according to the paper. It added that each 1,500 MW reactor is expected to cost USD 7 billion at current prices, it added.

The paper quoted Al Awadi as recommending that the UAE government enter into power-purchasing contracts with nuclear power-generating companies based in the US, France, Russia and Japan.

It is reported that UAE based rig builder Maritime Industrial Servicest chosen to list in Norway.

Mr Peter Convery president and CEO of Maritime Industrial Services said that "There were a few reasons we chose Norway. One was that it's a very energy sector oriented country and stock exchange. Also, when we were getting into the ne -build business back in 2006, a lot of the companies interested in that type of business originated in Norway. Our first client was Norwegian."

He said that “The boom in offshore rig construction has helped Maritime Industrial Services raise revenues from USD178 million in 2006 to USD308 million last year. One year after listing its shares in Oslo, MIS has just sealed new rig building contracts worth USD 335 million for two offshore jack up drilling rigs for Mosvold Middle East Jackup. The deal took the company's mid 2008 confirmed order backlog to USD480 million up by USD 110 million from the corresponding period last year.”

Mr Convery said that "We are in an area that produces 61% of the world's oil reserves and production demands are going up all the time. The surge in orders has led MIS to hire an extra 1500 workers over the last year. The increasing price of oil is driving demand for more drilling, more production.”

Maritime Industrial Services founded in 1979 has its corporate office based in Jebel Ali Free Zone in Dubai and operates fabrication yards in Sharjah, Jebel Ali in Dubai, as well as in the Kingdom of Saudi Arabia and Kuwait.

MNA reported that twenty one development projects in the transport sector will be inaugurated by the end of the current Iranian calendar year.

Mr Sadegh Afshar MD of Iranian Construction and Development of Transportation Infrastructure Co referred to Tehran-Pardis and Qazvin-Rasht highways, Isfahan-Shiraz and Kerman-Zahedan railways and some beltways and byroads as the projects.

MENAFN reported that Iraq's daily oil production is at its highest level since the March 2003 US invasion in large part thanks to improved security.

Mr Stuart Bowen, the Defense Department's inspector general for Iraq reconstruction wrote in his 18th quarterly report to Congress on the expenditure of USD 50 billion in US economic aid that Iraq's oil output increase to 2.4 million barrels a day. Production fell to 1.3 million barrels a day during 2003.

Mr Bowen said that A USD 34 million security systems of ditches, fences and concertina wire has stopped attacks since July 2007 on the pipeline from Kirkuk in the north to a major refinery at Baiji in central Iraq. He said that the result has been a substantial rise in crude oil exports from the north.

Mr Bowen said that Iraq's increased production between July 2007 and May was especially noticeable in the north, where exports rose by about 91.3 million barrels or about USD 8.2 billion.

The Pentagon said that the Iraqi government plans to build similar protection systems for the pipelines between Baghdad and Karbala and between Baiji and Baghdad.

MEED reported that UAE based Quest Energy and an Iranian company are developing a project to build a 1,000 megawatt power plant in southern Iran.

Meed said that Iran Power Projects Management Company Mapna, a large local power developer, is participating in the project to set up the open cycle gas powered plant in Shiraz, which is due to be financed by Dubai Islamic Bank.

An official at Quest Energy Middle East Limited confirmed to Reuters that the company was involved in the project, but said he could not immediately provide further details.

Dubai Islamic Bank officials could not be immediately reached to comment.

Meed said that a power purchase agreement will be signed by the two developers and the state owned Iran Power Generation Transmission & Distribution Company to provide them with gas under a long term energy conversion agreement.

The weekly did not cite any sources for its report. Foreign investors have come under increasing pressure from the West to either halt or decrease the scope of their business in Iran as Western powers try to ratchet up sanctions on the Islamic Republic over its disputed nuclear program.

It is reported that export offers for Chinese cold steel coil have seen evident drop on decreasing domestic price and weak overseas demand.

On Shanghai market, 1.0mm CR sheet by Anshan steel goes at CNY 6950 per tonne, 1.2mm to 2.0mm material at CNY 6850 per tonne, a drop of CNY 220 per tonne and CNY 150 per tonne from last Tuesday. 1.0 CR coil by Maanshan steel drop by CNY 170 per tonne to CNY 6800 per tonne.

Export price for DC01 1.0mm CRC has dropped to USD 1120 per tonne fob from average level of USD 1140 per tonne FOB in middle and early July. Steel producers are eager to export more cargo due to dramatic drop in domestic market price and much less trading volume.

(Sourced from MySteel.net)

China Steel Industry Forecast till 2012 is the latest market analysis by RNCOS on the world’s largest steel producer, China’s steel industry. This analysis gives an overview of the global steel industry and discusses the Chinese steel industry in detail, including production and consumption pattern, type of steel products, and major exporting–importing countries. It also studies the growth drivers, opportunities, challenges, and future outlook of the industry.

China’s steel industry is among the world’s major industries and is registering the fastest growth rate not only in terms of production but consumption also (China is the world’s largest steel consumer). The country expanded its steel-making capacity to meet the demand of its rapidly growing economy. Basically, strong economic growth and cheap production base are the major driving forces for rise in steel consumption.

The steel industry of China has been witnessing phenomenal growth since the last few years. In 2006, total crude steel production in the country reached 422.7 Million Metric Tons. China accounted for approx 34% of total global crude steel demand in 2006. Government support and economic growth is propelling growth in the Chinese steel industry. During the period 2000-2006, demand for steel in China grew at a CAGR of 19.18%.

This section provides the overview and key financials of players like Shanghai Baosteel Group Corporation, Anshan Iron & Steel Group, Wuhan Iron & Steel, Shougang, Jinan Iron & Steel Co. Ltd., Alison Group etc.

Report Summary:
1. Published: Feb 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Number of Pages: 80

Price: USD 1100
(Additional Charges would be levied for delivery of file on a CD or in printed form)

You can order your copy to reports@steelguru.com

It is reported that in H1 of 2008, Jigang Group produced 5.974 million tonnes of steel, 5.519 million tonnes of iron and 6.013 million tonnes of steel products, while realized sale income CNY 26.91 billion, revenue CNY 3.46 billion and profit CNY 1.85 billion.

As per report, due to the closure of obsolete capacities, the production of steel and steel products were a little lower from those of the same period in 2007, but the sale income, revenue and profit increased by 9.97% YoY, 17.1% YoY and 16.3% YoY respectively from a year ago.

Jigang Group exported 525,200 tonnes of steel during January to June 2008 and earned foreign exchange of USD 430 million. Though the export volume went down by 26% YoY the foreign exchanges were up by 15.6% YoY.

It is reported that the production lines of Chengdu Southeast Steel Co Ltd with an annual output of 120,000 tonne of CCLI came into production. That marks the largest production base of CCLI was fully completed in Southwest district.

As per report, total investment fund of this project was CNY 150 million and the annual output value would be more than CNY 1 billion after completion.

It is reported that China’s production of welded pipe rose by 6.5% to some 2.21 million tonnes in June up by 4.7% YoY.

As a result, the stocks of weld pipe increased according, which may have great affection on the market of July. And the production of July is expected to be down because demand may decrease in northern China during the period of the Olympic.

It is reported that BaoSteel’s products have accounted for 99% of the new type F6 of BYD car body.

Before September of 2006, BYD depended totally on import, where the delivery period f is long and was effecting production of BYD. But in January 2007, BaoSteel’s galvanized sheet all instead of the imported products.

As per report, F6 is a sign that BYD enters into high end market from low end market, it has strict requirements on the quality for the car body.

It is reported that on Gamsu Baohui Group’s 160,000 tonnes zinc smelting project formally started working with total investment of CNY 600 million. After the completion of the project, Baohui Group has become the largest zinc smelting producer in Gansu province.

Baohui Group’s 160,000 tonnes zinc smelting project is in accordance with the national industrial policy and has adopted domestically developed advanced technology.

Baohui Group JV that is mainly on zinc smelting development, process, trade etc is one of the Gansu province’s top 100 enterprises and the leading enterprise in non ferrous metal industry in Longnan region.

It is reported that cargos that unloaded in Guangxi based Fangchenggang Port is reported to reach 3.885 million tonnes accounting for 41.4% of the total imported tonnages in H1 of 2008.

The 3.885 million tonnes of cargos including 1.237 million tonnes destined to Chengdu, 645,000 tonnes to Jiangxi, 592,000 tonnes to Hunan and 555,000 tonnes to Yunnan.

As per report, currently Fangchenggang port receives 745 train wagons and dispatches 44,700 tonnes of bulk cargos each day, far below its original estimated capacity of 1200 train wagons per day.

Industry insiders explain that weak harbor capacity is the universal bottle neck for ports through out the world. However, the dissatisfactory inland transport also contributes a lot to the congestion in Fangchenggang port.

Ukrainian Journal Staff reported that the European Bank for Reconstruction and Development has postponed until September 30th consideration of a USD 125 million loan for the construction of a cogeneration plant at Alchevsk steel mill.

The overall cost of the project is USD 191 million. The loan was originally planned to be considered on July 22nd 2008.

According to the report, the proposed project is to construct a third 151.5 MW combined cycle gas turbine generating facility at Alchevsk steel mill. The facility will use waste gasses from the mill and the adjacent Alchevsk coke works to generate electricity. Together with the first two CCGTs and will meet all the increased electricity demand of the mill after the current expansion program is complete and will also supply surplus electricity to the Ukrainian wholesale electricity market.

Bloomberg reported that Azovstal Iron & Steel Work’s steel production in July 2008 rose by 1.3% YoY to 525,900 tonnes.

Azovstal Iron & Steel Works in a statement said that rolled steel production rose 4.6% YoY to 479,100 tonnes but hot metal output declined 0.9% YoY because the plant is upgrading its plant.

It is reported that OAO Chelyabinsk Zinc Plant’s, producer of more than half of Russia's output of the metal, profit in Q1 of 2008 went down by 80%.

OAO Chelyabinsk said in a statement that it net income fell to RUB 109 million from RUB 550 million a year earlier. Sales fell 20% to RUB 2.91 billion.

Average zinc prices on the London Metal Exchange dropped 29% in the quarter from a year earlier as the US housing slump hurt demand for the metal used to galvanize steel.

Russia has about 45 million tonnes of reserves, 17% of the world total and Chelyabinsk owns the country's two biggest mines.

It is reported that Vyksa Metallurgical Plant plans in the 2008 to 2010 period to send about RUB 650 million to implement a program of energy conservation.

The program was developed by specialists on energy sectors and repair VMZ taking into account the recommendations of experts Ltd. InTehEnergo-Audit held in 2007 VMZ energy audits.

As per report, the program provides for the phased reduction of energy consumption of all kinds, including water, oxygen, compressed air and steam. This will enable during 2008 to 2010 year to reduce costs by 15% at VMZ purchased energy now reaching almost RUB 1 billion a year.

The bulk of the funding will be aimed at saving electricity, gas, compressed air and hot water. Major projects to reduce consumption of electricity will be automation of high pressure pump stations in the complex production of large diameter pipes, replacement drive in complex machines and compressors electricity in the workshop, to reduce gas consumption upgrading furnaces in the ring complex; to reduce the loss of compressed air Installation air drying system; reduction elaborate DRG include installing purification lubricating coolant into a centralized system DRG.

It is reported that TMK Neftegazservis, which is part of the Tube Metallurgical Company, received a certificate of compliance on the production of pump compressor pipes in accordance with the requirements of Russian Standard GOST 633-80 at JSC.

According to the results of certification tests, RosNITIsertitsent UpoRT confirmed the quality of these NCP, which demonstrates the readiness of the products in accordance with the technical standards and requirements. Production capacity UpoRT manufacturing and repair NCP is more than 40 thousand tons of pipes a year.

Mr Sergei Agafonov Director General of TMK Neftegazservis said that the main factor for long term cooperation with the consumer is the quality of products, so the certification the sine qua non of all activities nefteservisnogo directions.

It is reported that Diesel electric Arctic vessel Monchegorsk was handed over to its owner OJSC MMC Norilsk Nickel at the Aker shipbuilding yards and the flag of the Russian Federation was raised on the vessel. This is the second ship in the series of vessels being built for MMC Norilsk Nickel creating its own sea fleet.

As per report, Monchegorsk was first put afloat this January in Germany and successfully passed all sea trials. Now it will go on its first independent trip, already under the Russian flag. Murmansk is its port of registry.

Mr Yuri Golovin head of Transport and Logistics Department at MMC Norilsk Nickel said that “Today we may confirm that the Company’s decision to build its own sea fleet was strategically sound. This will ensure both its economic security and transport costs reduction by 25% to 30%. The remaining three vessels will be commissioned and handed over to the Company according to the previously approved schedule.”

Operation of these 14.5 DWT diesel electric vessels is based on the patented double action concept. They are able to break Arctic ice with thicknesses of more than 1.5 million. Approximate cost of one vessel is EUR 82 million.

UK based MEPS said that "US stainless steel consumption dropped by 12.5% YoY in second quarter and may have dropped even more when April to June quarter data is tabulated. In fact, global demand growth for stainless steel mill products slowed so much in the second quarter that there now is world oversupply, according to a market review by Finnish stainless steel producer Outokumpu, which produces stainless steel at plants in Finland, the United Kingdom and the US."

It added that global production of stainless steel in the second quarter increased by around 2% from the first quarter despite hefty production cuts in Asia, especially in China. Also, uncertainty about the global economic situation has affected buyer behavior and softened demand.

MEPS said that "Stainless steel prices have stabilized and are falling slightly in North America as distributors are delaying purchases during summer holiday period and are hoping that declining nickel prices will drive stainless lower. Bloomberg news service adds that buyers of the alloy, used in buildings because of its resistance to corrosion, also have reduced purchases as global construction slows in the face of the credit crunch."

MEPS said that "Demand is traditionally weak at this time of year, especially in Europe, as the stainless steel industry’s major customers close down for their summer holidays. This year, that traditional dip in consumption has been magnified by such external influences as the collapse in US construction, which reduced demand for furniture, kitchens and white goods and slowing motor vehicle manufacture in North America and Europe."

MEPS also said that “The current high price of stainless steel has slowed the growth in its consumption in emerging economies like India and China. The threat from substitution by other materials is greatest in these countries. All of these factors may undermine conventional projections of expanding global stainless use.”

It further added that “Underlying demand for stainless steel from most end-use segments is stable at a low level, As a result of the increasing uncertainty related to the global economic turmoil some weakness is evident in consumer-driven segments such as white goods and construction. Demand from investment-driven segments continues generally healthy but some projects have been postponed because of the economic uncertainties.”

Carpenter Technology has posted net sales of USD 556.3 million in April to June 2008 quarter up by 4.3% YoY as against USD 533.2 million in April to June 2007 quarter. Net surcharge was up by 12% YoY to USD 391.3 million

Financial highlights for the fourth quarter and full fiscal year are

In USD million

In USD million

Ms Anne Stevens chairman, president & CEO of Carpenter Technology said that “We finished the year with good growth momentum due to strong demand in the global energy and aerospace markets and improving demand in our industrial and consumer businesses. Our international sales also continued to grow at a double digit rate year on year, and now account for 34% of total annual sales. We were pleased to achieve record full year EPS results for the fourth consecutive year. We continue to drive operational excellence initiatives to improve our results, and expect to complete the expansion of our premium melt facilities by the turn of the calendar year, which will provide needed additional capacity.”

Timken Company has reported a big increase in second quarter earnings as strong sales in global industrial markets more than offset the impact of weaker North American automotive demand.

Its net income in the quarter climbed by 61% YoY to USD 88.9 million from USD 55.3 million. Sales at Timken rose by 14% YoY to USD 1.54 billion from USD 1.35 billion.

Timken said it benefited during the latest second quarter from its capacity expansion initiatives, as well as the favorable impact of pricing, surcharges and currency. It expects earnings per diluted share, excluding special items, to be in the range of 65 cents to 75 cents for the third quarter and in the range of USD 2.95 to USD 3.10 for the full year.

It added that industrial demand is expected to remain strong in 2008 as additional capacity comes online in key growth markets, while North American automotive demand is anticipated to decline.

Swedish stainless steelmaker Sandvik Materials Technology has announced that the demands for high value added products from energy, oil and gas, aerospace and nuclear power industries are strong in H1 2008.

Meanwhile, it also said that the orders and sales increased by 14% YoY as compared to H1 of 2007, however the operating profits down by 43% YoY because of nickel price dropping. Due to profit decline, the company is considering layoff of some employees.

DNA MONEY reported that Meghmani Organics Ltd has acquired controlling stake in the Orissa based ferrochrome maker Latasha Exports Ltd.

Latasha began operations in 1997 and in 2004, set up its high carbon ferrochrome manufacturing unit. The firm has a monthly production capacity of around 400 tonnes of ferrochrome, an alloy of steel and chrome, which is used in stainless steel production.
Mr Jayantibhai Patel executive chairman of Meghmani Organics said that "We have acquired 51% stake in Latasha Exports for INR 11 crore.”

Mr Patel said that "Stainless steel depends on chrome for its appearance and corrosion resistant properties. We will oversee the unit's operations for some time and later, depending on the export market, we plan to increase the capacity of ferrochrome. We expect INR 50 crore sales from Latasha, with net margins of nearly 15% in fiscal 2010.”

He also said that "The company's unit is 10 kilometer away from chromium mines, and this will also benefit Meghmani as the company is looking to produce some more chemicals from the mines and the company will also benefit from Orissa's lower power costs, at INR 2.75 per unit against around INR 5 per unit in Gujarat.”

He added that "Export markets including Europe offer attractive margins. We will focus on exports from the Latasha facility.”

It is reported that Xstrata Alloys’ ferrochromium and vanadium operations may be affected by the strikes by South African mineworkers in response to a call by the Congress of South African Trade Unions Cosatu for a general strike.

The report added that Cosatu has called for strike action on July 23rd, August 6th and August 23rd 2008. The strike has been called in order to protest against the price hikes by power utility Eskom and against rising food and petrol prices. Eskom has already increased prices by 27.5% and has forecast price rises of 25% per year for the next three years.

Independent Nickel Corp announced that it has agreed to terms of a USD 14 million financing with a private company in the Hunter Dickinson group.

Under the terms of the financing, Hunter Dickinson will subscribe for 40,000,000 Units of Independent Nickel at USD 0.35 per Unit, for gross proceeds of USD 14,000,000, on a non brokered basis. Each Unit will consist of one common share of Independent Nickel and one Warrant. Each Warrant will entitle the holder to acquire one common share of Independent Nickel for USD 0.45 in the first year and USD 0.50 in the second year following the date of the closing of the financing. The proceeds of the financing will be used to advance feasibility and other studies on Independent Nickel's Lynn Lake Nickel property.

Hunter Dickinson has completed all aspects of technical due diligence on the Lynn Lake Nickel property, as well as all corporate due diligence on Independent Nickel. In addition, the proposed transaction has been approved by the boards of directors of both Hunter Dickinson and Independent Nickel. The financing is subject to approval by the Toronto Stock Exchange and approval by Independent Nickel shareholders. Following the private placement, Hunter Dickinson will