ET reported that Indian government is considering a ban on export of flat steel products and tubes & pipes.

The report said that according to a recent proposal by the Committee of Secretaries, reviewing prices of essential commodities, exports of steel products would be allowed only if imported raw materials are used.

The report cited an official source as saying that “The finance ministry is considering a plan which has been approved by the CoS. Once this plan comes into effect only exports using imported raw material would be allowed.”

Indian government had earlier in May 2008 imposed 15% export tax on HR, 10% of CR, 5% on coated products and 10% on pipes & tubes but subsequently withdrew after the industry offered price reduction and a commitment to hold prices.

The variation in newly developed indices for steel products in India reflects that on the whole, steel prices are on down ward trend during the first 7 days of August 2008.

Long products have been sliding everyday but flat products have been more or less constant

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

To know more about these indices please visit http://steelguru.com/priceindex/spi

(Sourced from www.steelprices-india.com)

BL reported that the Andhra Pradesh government is keen on the proposed merger of Rashtriya Ispat Nigam Ltd with the National Mineral Development Corporation (NMDC), as there is synergy between the two public sector units.

Dr YS Rajasekhara Reddy chief minister of AP at a recent press meet said that the state government had taken up the issue with the union government and that he has spoken to the prime minister on the need to expedite matters.

He announced that “We will pursue the matter.”

LPPI – Long product price index

PI is product index

To read the full article, please visit to www.steelprice-india.com

It is reported that JSW Steel has posted 24% YoY growth in crude steel production in July 2008

JSW Steel in a statement said that it produced 0.333 million tonnes up by 24% YoY as compared to corresponding period in the previous year. Production of flat rolled was at 0.209 million tonne down by 10% YoY while long rolled products production stood at 0.012 million tonne down by 60% YoY.

The production of flat steel rolled products was lower as the hot strip mill after re commissioning following the modernization was under stabilization. Similarly, production in rolled long product segment also was lower due to shut down of bar mill at Salem unit for capital repairs for 17 days during July 2008.

CONTENT

Topics
1. Indian steel: an introduction to its structure and growth
2. Capacity: crude and finished steel: growth trends by major producers and segments.
3. Production trend analysis, crude and finished steel, for major producers and segments.
4. Consumption trends by products and in different regional markets.
5. Detailed status of the steel market in India, by products and with specific details such as size and shapes for HR Coils, CR Coils and Sheets, Galvanized sheets, Rebars, Sections, Wire Rods and Plates.
5. New investments in steel: latest status of the projects.
6. Expected production of steel year wise till 2015, by products. Different scenarios.
7. Latest forecasts of annual steel demand by products till 2020.
8. The alloy and stainless steel market: trends in investment, production, consumption.
9. Forecast of alloy and stainless steel demand till 2020.
10. Specific opportunities in alloy and stainless steel.
11. Steel price trends and short term forecasts.
12. Costs of production of steel in India: past trends and forecasts.
13. The iron ore factor in Indian steel. Advantages and opportunities.
14. Details of captive mines with Indian steel producers and new prospecting and mining leases granted to them.
15. Coal and energy issues for the Indian steel industry: how is the industry placed today?
16. What is the impact of the rise in raw materials prices on major Indian companies or segments of the industry?
17. How are the merchant pig iron and sponge iron producers shaping up?
18. What is the steel scrap scenario? Estimates of domestically generated scrap and imports.
19. What are the M&A opportunities in Indian steel?
20. India’s external trade in pig iron, sponge iron, steel, iron ore and coal. What is the future for each of them?
21. Strategic Options and Recommendations

190 pages with more than 70 charts and tables

Scheduled for release on 1st September 2008

Price on release: USD 5000 or equivalent in INR

You can order your copy to reports@steelguru.com

Indian Hume Pipe Co Ltd recently announced that to meet the requirements of orders on hand, the company is in the process of enhancing its pipe production capacity by setting up three plants at Chillamuthur, Anantapur district and another in Kurnool district in Andhra Pradesh at an outlay of about INR 20 crore.

It added that “The value of orders on hand is INR 1,256 crore as against INR 592 crore as on date last year. For about 83 per cent of balance orders, requirement of steel and cement is covered under escalation clause with the clients, thereby providing protection against the risk of higher cost due to increase in the prices of materials.”

FE reported that Essar Steel has appealed to the petroleum ministry to consider it on par with fertilizer units for gas allocation for the purpose of gas utilization policy. As per the report, this is in context of over 40 million standard cubic meters per day of gas to be available from Reliance Industries KG Basin shortly, that Empowered Group of Ministers has laid down distribution policy.

As per this policy, the existing gas based urea plants which are now getting gas below their full requirement would be supplied gas on first priority so as to enable full capacity utilization.

Essar requested that “Being the only gas based steel manufacturing unit and there is an opportunity for the government to set right the wrong done to it by way of reducing the committed firm allocation of gas from GAIL India, Essar Steel be considered on par with the existing urea plants for allocation of gas on first priority.”

The report added that Essar’s current requirements is 8 million standard cubic meter per day which is being sourced from various suppliers such as GAIL India, India Oil Corporation, Bharat Petroleum Corporation and Gujarat State Petroleum Corporation. Out of this requirement, the Gas Linkage Committee constituted by the petroleum ministry had allocated 3.11 million standard cubic meter per day of gas to Essar against which GAIL India is currently supplying 0.70 million standard cubic meters per day only, resulting in a gap of 2.41 million standard cubic meters per day.

PTI reported that the Indian government appointed the Indian Institute of Technology Roorkee as consultant for the next 3 Ultra Mega Power Projects of 4,000 MW each in Maharashtra, Orissa and Tamil Nadu. The report added that IIT Roorkee has replaced Ernst & Young which was disqualified for irregularities in the award of the first UMPP in Sasan in Madhya Pradesh.

IIT Roorkee has been asked to conduct a pre feasibility study on the 3 UMPPs and submit a report to the power ministry by August 10th. The 3 UMPPs of 4,000 MW each would be located at Cheyyur, Munge and Bedabahal.

Under the pre feasibility report, IIT-Roorkee would make sure the availability of coal, water linkage, environment impact assessment and possibility of notification under Section 4 of Land Acquisition Act 1894. Centre would approve the first report after getting the nod of the state governments concerned.

The official said that “After getting the state governments’ consensus on the first pre feasibility report, we would move ahead. In case of any objection, we would wait for the final report next month.”

A team comprising officials from the Central Electricity Authority and Power Finance Corporation would visit the 3 locations in a day or 2. The Special Purpose Vehicles for the UMPPs have been formed. These 3 UMPPs would come under the bidding process by early next fiscal.

Elecon Engineering Company Limited has announced 5 major orders bagged by their Material Handling Equipment division totaling to INR 5.24 billion.

1. Orders from Indian Companies

(I) Bramhani Industries Limited
Two orders totaling to INR 4 billion for supply of plant and equipment for Raw Material handling System Package for designing, engineering, manufacturing, procurement, inspection, assembly, painting, shop testing, supply of plant and equipment including additional equipment, commissioning spares, freight and transit insurance on for site basis.

(II). Bharat Heavy Electricals Limited
Two orders totaling to INR 686.9 million for designing, engineering, supply and transportation of Mechanical Equipments and receipt, storage, transportation, erection, testing, commissioning & PG test for 2X250 MW SIKKA TPS Project.

(III). Tecpro Systems Limited
Order worth INR 312.4 million for supply of equipments for integrated coal handling plant unit 3 & 4 for 2x300 MW Rosa Thermal Power Project.

2. International Orders

(I). Sponge Iron and Steel Company of Egypt
Order worth INR 215.4 million for 2 Stackers / Reclaimers for DRI plant to be installed in Sadat City, Arab Republic of Egypt.

(II). PT Tecgates Engineering of Indonesia
Order worth INR 27.3 million for Project PLTU 1 Jawa Tengah 12000 MW coal fired power plant at Rembang, JawaTengah, Indonesia.

Mr Prayasvin Patel chairman & MD of Elecon said that “We are delighted to have procured prestigious orders worth INR 5.87 million. These large orders reflect growth in both national and international market and are a result of Elecon’s increasing marketing efforts. We look forward to continuing this trend.”

The fast developing Indian steel industries are continuing beyond what most believed was possible. As one of the world's fastest growing economies, India has become the most happening place among world steel market over last few years and thus is in the radar of not only Indian but most of global players associated with steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.

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BL reported that Kolkata based Manaksia Group is incorporating a subsidiary company in Mauritius and step down subsidiaries in other countries for consolidation of its holdings in various projects in countries such as Nigeria, Ghana, Georgia and Dubai. The subsidiary company in Mauritius will be named Manaksia Global Ltd.

Mr BK Agrawal MD of Manaksia Ltd told Business Line through its Nigeria based subsidiary MINL, the Manaksia Group is investing USD 35 million in a facility that will produce 200,000 tonnes a year of steel rebars for the construction industry in Nigeria. The investment in the Nigeria project will be made from internal accruals. It is expected to go on stream by December 2009.

Mr Agrawal said that MINL would get the Jebba Paper Mills operational within the current fiscal. The paper mill was acquired from the Nigerian Government some time back. To begin with, it will manufacture 40 tonnes of paper a day using waste paper as raw material.

Mr Agarwal said that the group is also setting up a 200,000 tonnes a year long products manufacturing facility in Georgia at a total investment of USD 35 million. He said that “While USD 14 million would be invested in the first phase, the balance would be invested in the second phase. ICICI, Bahrain has sanctioned a loan of USD 25 million for the project, while the balance USD 10 million would be generated from internal accruals.”

Manaksia Group is India’s largest secondary producer of value added aluminum rolled products with 15 manufacturing facilities in the country and three abroad.

Steel Exchange India reported a phenomenal increase in its standalone net profit for the Q1 ended June 2008. During the quarter, the profit of the company increased 2.24 times to INR 68.52 million from INR 30.55 million in the same quarter in 2007.

Steel Exchange’s net sales for the quarter increased 30.54% to INR 1,568.92 million, while total income for the quarter increased 29.06% to INR 1,572.67 million when compared with the prior year period.

(In INR million)

Steel Exchange said that during the quarter, the operating margin of the company increased to 7.09% compared with 3.99% in the previous year period.

A steel user, however big or small, is always concerned about steel buying as it is normally a big ticket item, but there is no bench mark available to steel buyers to compare their transaction prices, which in a big way decided their bottom line. Lastly, steel has been very volatile in last 6 months and has effected many users in a very severe way making it all the more important to track the prices and trends.

www.steelprices-india.com is a new portal that provides domestic pricing information for benchmark steel products in each category at select location in China on a regular basis 5 days a week. In addition, FOB levels for commonly exported steel products from two of the major exporting nation Ukraine & Russia and China are also available on daily basis to give a sense of alternates.

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TATA Steel announced that it has no plans to suspend construction work on the Dhamra port project in Orissa.

A Tata Steel press release said that the clarification was being issued following a forged statement sent to the media stating that the company was planning to halt work on the Dhamra port project.

The release said that “The company would like to clarify that the statement is false and has been done with the deliberate intention to malign the company’s reputation and hinder the project.”

It said that “TATA Steel strongly condemns this malicious attempt to stall the development initiative in Orissa, reiterating that the company was committed to the socio economic prosperity and sustainable development of the State.”

The release added that it would continue to work with civil society and the government towards the same.

BL reported that there will be a fresh bidding process for the INR 3,100 crore mega container terminals at the Chennai with the Chennai Port Trust deciding to review and modify the modality structure of the project. The project has just completed the RFQ stage.

Mr K Suresh chairman of Chennai Port Trust said that that a new tender will be issued on August 15th with necessary amendments in the new bidding process. He said “In a way, it is going to be a re tender.”

Mr Suresh said that the project cost has also increased by 16% to around INR 3,600 crore with the share of the port trust to triple to around INR 1,600 crore. The balance INR 2,000 crore will be brought in by the private operator.

Mr Suresh said that in the new project structure, the Chennai Port Trust will construct the breakwater costing around INR 1,000 crore. This is in addition to the INR 600 crore to be spent by the port trust on dredging, reclaiming of land and providing tugs.

He said that the private operator will take care of landside investment on the berth like equipment. He added that in pre bid meetings the bidders felt that it would be easy for the port trust to construct the breakwater and deal with issues such as quarry license and transportation of stones.

Gail India Ltd reported that Mr HR Hingnikar director HR has ceased to be a director of the company wef July 27th 2008.

Further, the Ministry of Petroleum & Natural Gas of the government of India, vide letter dated August 4th 2008 has appointed Mr Aliasgar Qutub Contractor as non official part time independent director of the company wef August 4th 2008.

Project Today reported that Shiv Vani Oil & Gas Exploration Services has secured a contract worth 1,611 crore from Oil & Natural Gas Corporation to deploy eight onshore deep drilling rigs on an integrated well completion basis for its Tripura, Sivasagar and Rajahmundry assets for a period of three years.

The rigs have been chartered for three years, with a mobilization period of seven months for deployment.

BL reported that land acquisition for creating basic infrastructure for the proposed international container transshipment terminal at Vizhinjam will begin soon although the proposal is now awaiting the clearance of the union home ministry.

Mr VS Achuthanandan said that it is reckoned that 1,088 hectares would be required to establish rail and road connectivity, warehousing, parking and other facilities as part of the project. He said that development of the Vizhinjam terminal would accelerate the growth of not only the state’s economy but of the whole nation.

As per report, the project estimated to cost around INR 5,400 crore and being implemented on a build operate transfer basis. The first phase of the project in which the state government will have 24% share holding is envisaged to be completed within 3 years.

The government has selected a consortium led by Hyderabad based Lanco Kondappally Power Limited to implement the project after floating a global tender. The other partners of the consortium are Lanco Infratech Limited and Pembinan Redzai of Malaysia.

The government had identified a consortium led by Mumbai based Zoom Developers with two Chinese companies as the private investor for the project following a global tender floated in 2006. The proposal, however, failed to get the security clearance from the centre and consequently, the government floated a fresh global tender which was bagged by Lanco Kondappally consortium.

Mr Jairam Ramesh union minister of state for power while reviewing the progress of work at Damodar Valley Corporation's 2x250 MW Chandrapura thermal power station project in Jharkhand has directed Bharat Heavy Electricals Limited to immediately carry out technical studies to restart the 3x120 MW units supplied by it in the late 1970.

These units have never worked properly and have been shut down since 2002.

The Chandrapura TPS in Bokaro district of Jharkhand has 6 units to 3 each of 130 MW and 120 mw. DVC is setting up 2 more units of 250 MW each for which BHEL will be the main plant supplier. This project was originally scheduled for completion in the 10th Plan period ending March 2007, but is still under construction. By revised timelines, 1 unit is planned for commissioning this month followed by the second in February next year.

While pulling up BHEL for the colossal waste of national resources, the minister noted that the 3x130 MW units supplied by GE in the late 1960 were still working well at Chandrapura while the Bhel supplied units failed.

It is reported that Power Grid Corporation of India has formed a JV company Teestavalley Power Transmission Limited with Teesta Urja Limited for developing transmission system to evacuate power from the upcoming 1,200 MW Teesta-III Hydro Electric Project in Sikkim.

The agreement was signed by Mr VM Kaul ED of Private Investment of PGCIL and Mr YN Apparao MD of Teesta Urja Limited in the presence of Mr SK Chaturvedi CMD of PGCIL. The JV board will be chaired by CMD of PGCIL.

Power Grid’s stake in the INR 708 crore project would be 26% while Teesta Urja would have a 74% stake. The project, which would work on a Build, Own and Operate basis is scheduled to be completed by September 2011 and it will provide transmission capacity to private hydel projects being developed in North Sikkim. The project would be built on 70:30 debt equity ratio.

Project monitor reported that in a 2 day investors' meet that concluded on July 30th 2008 the Madhya Pradesh government signed 62 MoU envisaging new investment worth INR 88,000 crore.

The industrial sector saw 29 agreements worth INR 42,465 crore being reached, while 6 agreements were signed in the energy sector for a total investment of INR 40,340 crore. The remaining investment was spread over areas like food processing, IT and higher education.

A senior MP government official said that Indiabulls Power Services Limited’s agreement for a 2,640 MW power plant was amongst the prominent ones. Regency Agrotech has also proposed to set up a bio diesel plant costing INR 110 crore. He said that KSR Steel will be putting up by INR 70 crore steel rolling mill.

As per report, the state government has proposed to monitor these MoUs on a 3 monthly basis to ensure that these intentions transmute into actual investment.

Project monitor reported that Jaisu Shipping Company Private Limited of Kandla in Gujarat has bagged a 3 month contract worth INR 19 crore from Kochi Port Trust for maintenance of dredging in the channel.

As per report, Jaisu Shipping will carry out the work on quantity basis. The report added that this is only an interim arrangement for smooth port operations during the monsoon.

Bhaba Atomic Research Centre has conducted a tracer study using radio active isotopes on the dredged materials and it was found that there was least possibility of dredged material coming back to the channel. Based on the recommendations made by BARC, the port had also extended the dumping ground to the North and South in the outer channel.

Emerson Process Management announced that it has been selected by NTPC Limited to modernize obsolete controls at the Tanda thermal power station a 4x110 MW plant located in Ambedkar Nagar in Uttar Pradesh.

Emerson is installing its Ovation expert control system at all four units of the coal fired power plant as part of a comprehensive renovation and maintenance project. Emerson's local India Engineering Centre is designing, engineering and supervising the project.

At all 4 Tanda units, the Ovation system will monitor and control the burner management system and furnace safeguard supervisory system. The Ovation system designed to meet the specific challenges of the power generation industry will also interface to the existing BHEL boiler and turbine controls. In all, the Ovation system will manage 10,000 I/O points. The contract also calls for Emerson to supply a total of 40 Ovation redundant controllers and 36 workstations.

Emerson received the contract for Unit 3 after the previous vendor was unable to meet the original schedule. The control system installation and unit commissioning needed to take place during a 90 day scheduled outage which began in the last week of March 2008. A mere 3 months after contract award, Emerson was able to complete the project during a specified 70 day window within the outage.

As per the report, Emerson Process Management, an Emerson business helps businesses automate their production, processing and distribution in the power, water and wastewater treatment, metals and mining, chemical, oil and gas, refining, pulp and paper, food and beverage, pharmaceutical and other industries. The Pittsburgh based company develops plant wide process control solutions for the power generation, water treatment and wastewater industries.

Project today reported that Subhash Projects bagged an order worth INR 318 crore from Public Health Engineering Department, Basni, Rajasthan for Pokaran-Falsoond-Balotra-Siwana lift project.

As per report, the scope of work includes supply of water from canal outlet near RD 1,253.5 of IGN through P, L&J of MS & DI Pipeline & RWRa, water treatment plants, CWRs, raw water pump houses, GSS with allied works and civil, mechanical, electrical and instrumentation work at all the 3 head works at near canal outlet, village Agasar and Biliya complete on single responsibility basis turnkey job contract including necessary design, operation and maintenance.

BL reported that Alcock Ashdown Limited, which turned around last year and gave up its proposed divestment plans, is now exploring the possibility of entering into a JV on profit sharing basis to raise funds to complete its projects on hand with an order book worth over INR 1,500 crore.

The report said that Alcock Ashdown Limited is in talks with some shipbuilders including Dolphin and Modest and a decision is likely to be taken in the next few weeks.

The report added that a meeting in this regard may take place next week in Bhavnagar. Once the company zeroes in on its JV suitor it would send the proposal to the board for final approval. Alcock Ashdown intends to increase an initial capital of around INR 100 crore for their tanker projects for 4 ships under construction at its Chanch shipbuilding yard in Amreli district.

Although funds were available from other sources, it chose to have a JV with companies already engaged in the same business so that a seamless and ready technical collaboration became available.

BS reported that India's largest material handling equipment, industrial gears and transmission products manufacturer Elecon Engineering Company Limited expects to bag orders worth INR 1,100 crore in the next quarter of the current fiscal.

Presently the company has outstanding orders to the tune of INR 1,800 crore. Apart from this, orders worth INR 5, 000 crore related to material handling are likely to be finalized this year.

Mr Prayasvin B Patel chairman & MD of Elecon Engineering said that "We expect to bag new orders to the worth INR 1,100 crore within next 4 months."

Mr Patel said that material handling equipments segment has a huge growth potential. Estimates suggest, power, steel, coal and port sectors are likely to witness investment inflow of nearly INR 5,69,500 crore by 2020 of which around INR 46,500 crore investment would be related to MHE segment with annual average of INR 4,300 crore.

He said that "Of the estimated annual investment in MHE category, Elecon hopes to garner a share of INR 450 crore to INR 670 crore annually. He added that the company plans to move from 600 KV to 1.5/2 MW windmills in a phased manner and we aim to be major player in 1.5 MW to 2 MW windmill segment."

FE reported that infrastructure firm Hindustan Construction Company led consortium has bagged a contract worth INR 1,398.50 crore from Andhra Pradesh Government for irrigation project.

Hindustan Construction Company in a filing to the Bombay Stock Exchange said that it has been awarded the contract along with two other companies Megha Engineering & Infrastructure and Czech Republic based CKD Blansko Engineering for J Chokka Rao Devadula Lift Irrigation Scheme. It said that Hindustan Construction Company has a share of 45% or INR 629.33 crore in the total value of the contract.

Under the project, given by the Irrigation and Command Area Development Department, about 3.43 acres of land would be irrigated in Warangal District of Telengana region and is expected to be completed in 36 months.

BL reported that freight loading in East Coast Railway has been on a low key for some time. During the first four months of the current fiscal, the total originating freight loading was 23.15 million tonnes which, though higher than the volume of 21.83 million tonnes handled in the same period of the previous year, falls short of the target of 24.6 million tonnes set for the period.

As per report “Coal is the major item of freight and Talcher, under Mahanadi Coalfields Ltd is the major coal loading point. However for the past several days, the average daily loading at Talcher has been around 19 rakes as compared to the normal 27/28. Between July 18 and 28, the loading was allowed only for power houses. As a result, National Aluminum Company was badly hit by coal shortage.”

East Coast Railway sources would attribute it to the drop in road movement of coal from the mines to the nearest railheads. The number of trucks deployed by MCL for road bridging, it appears, has come down.

The sources said that another area of concern has been the unsatisfactory iron ore movement on the 450 kilometer long Kirandul to Kottavalasa line. For the past several days, night movement of iron ore rakes on the route has not been possible due to threat by Maoists. Also, the Bacheli iron ore plant of National Mineral Development Corporation, it is reported, has not been functioning to its capacity.

BS reported that JSW Energy will soon foray into the power distribution business as a part of its plan to become an integrated power company and would start entry by bidding for power distribution in Maharashtra.

Mr Sajjan Jindal chairman of JSW Energy told Business Standard that "We will enter power distribution and its details are being worked out. It is too early to talk about the plans.” The report added that the further details on investments and fund raising plan are not known yet.

As per report, JSW Energy has formed a JV with the Maharashtra State Electricity Transmission Company to set up a 400 KV transmission system to evacuate power from JSW's 1,200 MW power plant coming up at Jaigad in Maharashtra.

The state run power distributor Maharashtra State Distribution Company is planning to rope in private sector players in select regions, including Aurangabad, Ahmednagar, Ulhasnagar and Jalgaon, said state government sources.

The report added that JSW Energy plans to bid for the likely privatization of power distribution in the four regions of the state under the franchise model, under which the successful bidders would not buy existing assets of the state owned distribution entity but would have the management rights to run their operations and make additional investments to improve performance.

It is reported that Bharat Heavy Electricals Limited has won first ever contract worth INR 2,500 crore for supplying 800 MW supercritical boilers.

BHEL in a statement said that the company has received the INR 2,500 crore contract from Andhra Pradesh Power Development Company for supply of 800 MW supercritical boilers. It would set up 1,600 MW steam generator at Krishnapatnam Power Project of Andhra Pradesh Power Development Company Limited.

As per report, the contract includes manufacture, supply, erection, testing and commissioning of the steam generators and other auxiliaries like Electrostatic Precipitators.

The supercritical boilers would be manufactured by BHEL at its Tiruchirapalli unit, coal mills and ESPs would be supplied by the company's Hyderabad and Ranipet plants respectively.

The report added that major equipment to be supplied for the project comprises hydro turbines, generators, transformers, controls, monitoring and protection system and switchgear. As per the contract, the company would design, engineer, manufacture, supply and supervise installation as well as commissioning of electro mechanical equipment.

It is reported that Mr VS Achuthanandan CM of Kerala will officially announce the completion of acquisition and handling over of land required for the rail and road connectivity for the International Container Transhipment Terminal at Vallarpadam at a function to be held here on August 10th.

As per report, the district administration had acquired 108 acres of land from Kalammassery to Vallarpadam for setting the up the NH connectivity and around 10.82 acres of land from Edappally to Vallarpadam for setting up the rail line. The state government also awarded adequate compensation packages for 327 families who were displaced from their land.

As per the report, with the completion of all acquisition formalities, it is expected that the connectivity projects will be ready prior to the commissioning of the Vallarpadam Terminal by November 2009.

Platts reported that the price assessment for shredded ferrous scrap delivered to Midwest mills fell USD 35 to a midpoint of USD 565 per light ton as more scrap processors sold into a market flush with supply and short on demand.

One large processor in the eastern US said that he sold shredded at USD 525 per light ton FOB yard and estimated freight at USD 30 per light ton for a mill delivered price of USD 555 per light ton.

Another East Coast processor confirmed that two eastern US mills had bought limited tonnages of shredded scrap at USD 560 per light ton and USD 565 per light ton, respectively. Another large Eastern processor put the shredded market between USD 555 per light ton and USD 575 per light ton for August 2008.

One senior industry executive agreed the shredded market was likely between USD 555 per light ton and USD 575 per light ton and said he had heard that Turkish mill buyers were ready to return to purchasing, which could provide upward pricing momentum. Turkey's absence from the US market has been credited with causing pricing weakness.

One Eastern scrap processor, however, said he sold a lot of approximately 2,000 light ton of heavy melting scrap for USD 385 per light ton to one of his mill customers. He added that other scrap processors like himself were selling only what was necessary to generate cash, preferring to hold most stocks until prices recovered.

If there is renewed export buying by Turkish mills, spot prices could recover more quickly than many expected. Most sources said they believed ferrous scrap pricing softness could stretch into mid September 2008, absent any uplift from export sales.

It is reported that Nippon Steel Corporation will offer quarterly supply contracts to replace the existing half year ones in the ship plate exports the company negotiates anew with South Korea's major shipbuilding companies such as Hyundai Heavy Industries Co.

Nippon Steel is expected to start its ship plate export negotiations with the Korean shipbuilding companies on this weekend at the earliest. If it concludes quarterly contracts in the negotiations for October to December 2008 period shipments, it will mark the first of its kind in Japanese ship plate exports to South Korea.

NSC is considering negotiating for quarterly ship plate contracts with the Korean shipbuilding companies this time. It believes that it is uncertain whether the company can execute stable ship plate supplies for the Korean customers due to repairs of the number 1 blast furnace and the heavy plate mill at its Oita works.

Until now, NSC has spearheaded Japanese integrated steelmakers in contract renewal negotiations on their ship plate exports to South Korea. As NSC sees it, a wide spread between the company's and Chinese ship plate prices for South Korea stems from the present Japanese contract period of a half year, a condition that makes it difficult to respond in a changing supply demand environment for ship plates. As a result, it is likely that NSC will take a position to meet market fluctuations for heavy plates by shifting to quarterly contracts in its ship plate exports to South Korea.

NSC is expected to offer yen denominated price terms as well in the ship plate exports the company negotiates anew with the Korean customers. Besides, it is certain that the company will seek a price increase of JPY 30,000 to a level of JPY 130,000 per tonne FOB in the negotiations.

It is reported that Ternium SA has agreed to retain a stake in the Venezuelan plant seized by the government this year.

Mr Hugo Chavez President of Venezuela said that government and company officials reached an agreement on the price Venezuela will pay for nationalizing the Siderurgica del Orinoco steel mill.

He added that "There should be a final agreement soon and friendly. They will keep a percentage. They do not want to leave the country. They like Venezuela a lot. And we do not want them to leave.''

Vallourec SA said that it is leading the race to supply equipment for a field off the Brazilian coast that may hold USD 6 trillion of petroleum. Petroleo Brasileiro SA, which estimates its Tupi oil field has as much as 8 billion barrels that may make Brazil one of the 10 largest oil producers.

Mr Pierre Verluca chairman of Vallourec said that Vallourec, competing against Argentina's Tenaris SA, will gain from its proximity to Petrobras as it develops a factory in Brazil.

He added that "We are the only ones who have a close relationship with Petrobras. We are already working with them on defining the products they need.''

Mr Verluca said that the Brazilian plant being built by Vallourec will be ready in 2010 and will increase the company's production capacity by 10%. He added that "Vallourec moved very, very fast to invest in Brazil. Vallourec's strategy was to impede Tenaris's entry.''

According to estimates from UK research firm Neftex Petroleum Consultants Limited, Petrobras may spend USD 240 billion to unlock offshore reservoirs holding as many as 50 billion barrels of oil.

Manila Bulletin reported that Global Steel Philippines is eyeing substantial coal and iron reserves as it positions for a USD 1.6 billion expansion that will triple its plant capacity from 1.2 million tonnes to 3.6 million tonnes. It is in talks with various groups for an integration of raw material supply sourcing from its present steel making business.

Mr Sangram Mohanty VP for corporate communications at GSP said that "We will have 3.6 million tonnes once we are able to put up an integrated steel operation. But we are still planning it. We are looking for all opportunities."

GSP is hoping to displace huge importation of raw materials for the steel plant in order to save on cost and enable the Philippines to become more globally competitive. Philippines imports all of its 70,000 tonnes raw material steel plate for manufacturing a steel product meant to be used for making cranes and other industrial equipment. It is expanding in order to meet growing markets.

Despite planned expansion, GSP is concerned that the Philippines has not yet comprehensively mapped its iron and coal resources which are essential to a steel industry which in turn is critical to a country’s economic development.

Economic Daily News reported that Taiwanese government is expected to lift a ban on steel bar exports to permit shipments beginning September 5th 2008.

An official from Industrial Development Bureau said in the report that the IDB has proposed the measure to the Bureau of Foreign Trade. He added that the sluggish domestic real estate market and slow progress in some infrastructure projects have cut demand and reduced prices for steel bars recently.

The suspension took effect in March 2008.

According to Japan Iron & Steel Federation, Japan's iron and steel exports totaled 3,230,000 tonnes in June 2008 up by 4.7% YoY and the values of the exports totaled USD 3,858.68 million, up by 25% YoY.

Of the total exports, ordinary steel products accounted for 2,216,000 tonnes, up by 6% YoY. Details of ordinary steel products exported are
1. HR coils – 606,000 tonnes, up by 10% YoY
2. Galvanized sheets – 444,000 tonnes, up by 7.6% YoY
3. Heavy plates – 283,000 tonnes, up by 9.3% YoY
4. CR coils – 264,000 tonnes, up by 4.5% YoY
5. Welded & butt welded pipes – 165,000 tonnes, up by 39.2% YoY
6. Bars – 57,000 tonnes, up by 35.9% YoY
7. Shapes – 85,000 tonnes, down by 18.8% YoY
8. Electrical sheets – 68,000 tonnes, down by 0.4% YoY

Breakdown of the total exports by main destinations are
1. South Korea – 754,000 tonnes, down by 0.7% YoY
2. China – 539,000 tonnes, down by 2.3% YoY
3. Thailand – 381,000 tonnes, up by 14.5% YoY
4. Taiwan – 395,000 tonnes, up by 12.7% YoY
5. USA – 167,000 tonnes, up by 3% YoY

Reuters reported that world's No 4 steelmaker POSCO was selling JPY 52.795 billion (USD 482.2 million) worth of bonds exchangeable for US listed shares in SK Telecom.

The 5 year, zero coupon bonds are guaranteed by POSCO and exchangeable for shares in South Korea's SK Telecom at a 23% premium to the American Depositary Receipt's Wednesday closing price of USD 22.29. The bonds, which have a put option after three years, have a yield to maturity of 0.3%.

Last month, POSCO said it planned to issue 49.3 billion in overseas debt to refinance maturing exchangeable bonds.

In 2003, POSCO sold JPY 51.6 billion of bonds exchangeable into 1.7 million shares of SK Telecom owned by POSCO.

Analysts expect POSCO to sell more bonds later this year, as the steelmaker has said it is interested in bidding for Daewoo Shipbuilding and Marine Engineering, which will be put up for sale by its top sharehold