Larsen & Toubro Limited announced that its Heavy Engineering Division has been awarded an order to manufacture and supply of 10 Hydrotreating Reactors and twelve Coke Drums for Petrobras’ prestigious 200,000 barrel per day North east Refinery Project in Brazil.

As per report, the total value of the order is approx USD 160 million. This is the largest order ever received by L&T from South America.

The reactors will be manufactured from advanced technology steels containing Chromium, Molybdenum and Vanadium, whilst the coke drums will be manufactured using Cr Mo Steel. These reactors and coke drums will be delivered to the refinery in Brazil in the financial year 2010-11.

ET reported that OP Jindal Group’s Jindal Saw Limited plans to set up a 3 million tonnes steel manufacturing plant along with a blast furnace and coke oven at Mundra in Gujarat with investments of close to INR 1,000 crore.

AS per report, the company would invest additional INR 500 crore in setting up a blast furnace with a capacity of 3 million tonnes of hot metal and a coke oven with 2 million tonnes capacity. JSL has placed orders for equipment and hopes to start construction work within the next 3 months. The proposed plant which is likely to get commissioned in the next 18th months would help the company fulfill its steel requirements.

As per report, the new plant would serve as a feed material source for the company’s seamless pipe making facility located in the same region. The report added that the project would be entirely funded through internal accruals.

RTT News cited Mr Pramod Kumar Gupta Railway Ministry Additional Member as saying that Indian Railways plans to invest INR 2, 000 crores annually to rise its consumption of stainless steel and get new coaches and wagons made up of alloy.

Mr Gupta said that negotiations are underway with transportation companies like Siemens and Bombardier to set up JV manufacturing unit in the county and make stainless steel coaches and wagons.

He said that the Government would hold 26% in the JV and the rest would be held by the private entity. He added that Railways is set for transformation due to advantages of alloy.

The report added that currently Indian Railways consumes around 5, 000 tonnes of stainless steel and carbon steel are widely used for which it spends INR 800 crores annually.

It is reported that to meet the ever increasing need of coated pipes for pipeline construction projects, the Sui Northern Gas Pipelines Limited has established its own pipe coating plant at Uch Sharif near Bahawalpur in 1996.

According to a press release, since then, the fully automatic and state of the art coating plant has produced 3 layer coating of more than 7.5 million square meters.

UKAS a renowned accredited certification body issued the certificate of Quality Management System ISO 9001:2000 to SNGPL coating plant in May 2008.

In order to save the steel gas pipelines against corrosion a protective 3 layer coating is the modern technique used internationally.
It has made a pipeline construction an economical and durable venture and help towards a continuous and uninterrupted supply of environment friendly fuel to the masses of the country.

The plant which remains in operation 24/7 round the year to fulfill the coating requirements is a milestone achievement for SNGPL comprising a system covering all key processes which can guarantee protection against corrosion of pipelines.

Exim News Service reported that India has slipped 2 notches to 122nd rank below even Nepal, Bangladesh and Pakistan in the Doing Business Report 2009 jointly prepared by the International Finance Corporation and the World Bank.

The report which ranks countries on the basis of ease of doing business has placed Nepal at 121st position Bangladesh at 110th place and Pakistan at 77th place in the overall ranking. The report had earlier ranked India at 120th position, while Pakistan was in 74th place.

Singapore retained the first place in the ranking which covered 181 countries on the parameters of quantitative measure of regulation for starting a business, getting credit, paying taxes, enforcing contracts and closing a business.

Prague Daily Monitor cited Mr R Seshasayee CEO of Ashok Leyland as saying that Ashok Leyland which bought the Czech car maker Avia in 2006 is considering further investments in the Czech Republic.

Mr Seshasayee said that Ashok Leyland is considering expansion in the automotive industry but also in the field of electrical engineering and in the defense industry. The investment in Avia is part of Ashok Leyland's intention to get to the Russian and Ukrainian market.

Indian investments in the Czech Republic are very rare at present. CzechInvest has so far mediated only four projects by Indian investors totaling CZK 1.35 billion. Mr Alexandra Rudysarova of CzechInvest said that "Indian investments are not very usual in this country at present, but their number and share is growing rapidly. CzechInvest has for example, mediated a software centre of the company Infosys which plans to employ around one thousand programmers in Brno."

As per report, companies of Indian origin active in the Czech Republic include Vectra, TATA Tea, Alok Industries, Glenmark Pharmaceuticals and Ashok Leyland.

IANS reported that Electrotherm Limited plans to produce motors for electric vehicles in China after dropping plans to make induction furnaces in that country.

Electrotherm Limited which manufactures induction furnaces and other steel and foundry industry equipment, steel products and electric vehicles told shareholders that it prefers to export furnaces to China from its Indian operations instead of producing them there.

For this reason, it has surrendered the business license it had secured to set up a factory in Bichen High Tech Industrial Park, Tianjin. For executing the project it had proposed to establish a subsidiary called Tianjin Electrotherm Induction Limited. Tianjin is a large city in the Chinese northern coast with a provincial level status. The city's urban area is the third largest in China after Shanghai and Beijing.

For implementing the motors project, Electrotherm has floated a subsidiary Jinhua Indus Enterprises Limited.

The company said that the company has also promoted another subsidiary under the name Jinhua Jahari Enterprises Limited which will be responsible for inspection and sourcing of components for electric vehicles for sale to Electrotherm electrical vehicles division. Both the subsidiaries have started operations.

According to the company, the decision to produce electric motors in China has been taken as its electric vehicles division has overcome problems that cropped up in Yo Smart a single seater electric bike.

India's second largest aluminum manufacturer National Aluminum Co Ltd has slashed its basic metal prices for the second time within a month to match international prices.

A senior company official said that “We have lowered the prices of standard aluminum products by INR 4,000 a tonne that includes INR 1,000 special discount.” He added that the discount will be withdrawn at the end of this month. The new rate is applicable to all products except roll products.

He said that the standard aluminum price per tonne would now be INR 132,000, he said.

Last month, NALCO had reduced aluminum prices by INR 4,000 a tonne to INR 136,000 a tonne. The official said the price of aluminum is governed by the international market. The rate has been revised as its price has fallen on the London Metal Exchange.

ET reported that country’s biggest engineering firm Larsen & Toubro has objected to its erstwhile technical partner, German plastic moulding major Ralf Schneider’s plans, to set up a wholly owned unit in India.

The press note was instituted to ensure Indian partners in technical alliances or JVs with foreign companies are not short changed by the latter through their own subsidiaries. This note allows the local JV or technology partner to block separate entry of the foreign partner in the same field.

In the latest case, L&T has stated that one of its business units manufactures the same equipment that Ralf Schneider intends to make. L&T has argued if the German firm is allowed to set up a manufacturing unit in India, it will create confusion in the market with 2 producers offering the same technology products.

It has also said that the move will hurt L&T and other local manufacturers and that it is not a necessity for the German firm to start operations in India.

L&T’s LTM unit has entered into a technical collaboration with Ralf Schneider in 1992 for producing equipment for plastic manufacturing and processing industries under the LTM Motan brand. This agreement was extended over the last decade and finally expired in December 2007.

The FIPB the nodal body for clearing foreign investment into India has also stated the proposal attracts the provisions of PN 1. It has set up a committee to discuss the issue with the 2 former partners and has deferred giving a green signal to the proposal.

BL reported that concession agreement for INR 12,000 crore Hyderabad Metro Rail Project between the government of Andhra Pradesh and Maytas Nava Bharat consortium, that won the mandate for constructing the project, would be signed in the next 2 weeks.

Simultaneously, they would also sign the shareholders’ agreement. The consortium has reportedly submitted relevant papers with the Registrar of Companies here for formally registering the company. The consortium is supposed to form the company to sign the agreement kicking off the project.

While the Government of Andhra Pradesh would have 11%in the company, the two major consortium partners would have 26% each. This primary arrangement could not be altered through the completion of the project and for 5 years thereafter.

Mr NVS Reddy MD of Hyderabad Metro said that they could dilute up to 26% after that 5 year period. He said that “The new company would have 2 directors from the Government.”

As per report, the Golden Share gives the Government the right to veto any resolution passed by the Board that might go against public interest.

Project Today reported that Maharashtra Maritime Board has cleared the proposal to develop a captive jetty at Achre in the Sindhudurg district in Maharashtra for the proposed UMPP likely to come up at Munge in Sindhudurg district. The project is estimated to cost INR 1,500 crore.

As per report, a decision to come out with the new port policy to encourage private investment in port development was also taken during the board meeting of the MMB.

Project monitor reported that work on the third tunnel of 951 meter long at Jor Bagh as part of the upcoming Central Secretariat Gurgaon route under phase-II developed by Delhi Metro Rail Corporation is complete.

It said that the down line tunnel passes beneath the railway track and flyover at Safdarjung. The tunneling was done 12 meters below the earth surface. DMRC has adopted German technology for tunnel boring machine which was brought from Germany and a German laser system was used to guide the TBM.

As per report, the corporation had to excavate about 38,000 cubic meters of earth for setting up the tunnel. It is currently setting up another parallel tunnel on the up line and expects to complete by September end.

Project Monitor reported that National Highways Authority of India is currently working on various national highways in Himachal Pradesh.

As per report, the Centre has given in principle proposal for 4 laning Pinjore Swarghat in the state to ensure smooth traffic on the congested Baddi-Barotiwala-Nalagarh Industrial areas. It said that the Centre has also approved widening of Kiratpur-Bilaspur section of NH-21 as 2 lane with paved shoulders under DBFoT basis. Work on 4 laning of Zirakpur-Parwanoo NH is underway, and the state is finalizing the land required for bypassing Pinjore, Kalka and Parwanoo sections for which the Forest Conservation Act has given approval.

Meanwhile, NHAI has invited proposals from consultants for preparing a fresh detailed project report for 4 laning of the Solan-Shimla section.

BL cited Mr L Madhusudhan Rao chairman of Lanco Group as saying that Lanco Infratech Limited is in talks with European and US based engineering procurement contractors for the group’s foray into nuclear power generation.

Mr Rao said that the company expects to finalize the nuclear energy generation plan within 6th to 8th months and also the quantum of investment required.

Mr Rao said that “As a group, we have stated our objective to be engaged with all forms of energy generation and this includes nuclear energy as and when we are allowed to enter. Now is the time to take up this new initiative.”

Mr Rao said that “It will take a few months to come out with a detailed plan based on the outcome of our discussions with EPCs and firms overseas.”

He further added that “The nuclear energy generation is capital intensive and we are looking at big plants in the range of 1,000 MW. Typically, it is estimated that for one MW of nuclear energy capacity the investments required are in the range of USD 1.5 million to USD 1.7 million.”

BL cited Dr AK Chanda chairman of KoPT as saying that Kolkata Port Trust handled record container traffic of 41,379 TEUs in August 2008, the highest monthly throughput achieved so far surpassing the previous best of 40,220 TEUs handled in February 2008.

Dr Chanda said that the growth in throughput in August this year was 13% over August last year when the port handled 36,634 TEUs.

As per report, the dock wise break ups show the Kolkata Dock System handled 28,128 TEUs in August this year compared to 25,813 TEUs in February this year and 27,562 TEUs in August last year. The corresponding figures for Haldia dock were 13,252 TEUs, 14,407 TEUs and 9,072 TEUs respectively.

In August this year, the coking coal throughput at Haldia at 771,695 tonnes too was the highest monthly throughput achieved so far as compared to August last year, when the dock handled 507,000 tonnes the growth was 52%.

The statement added that the previous best coking coal throughput of 646,146 tonnes was achieved by the dock in May 2005.

Thermax Limited has informed BSE that commercial production has begun at the manufacturing plant of Thermax Cooling and Heating Engineering Company Limited the Company's wholly owned subsidiary in China.

Projects today reported that Sona Power is expected to complete the land acquisition process for its proposed 600 MW coal based power project in Raigarh district of Chhattisgarh by October.

Sona Power said the power plant which will spread over 650 acres of land will entail an investment of INR 2,400 crore. Engineers & Consultant is the consultant and Hindustan Coal Linkage is the coal supplier for the project.

The DPR is ready and the company has received all the necessary clearances for the project. Financial closure is under way.

JMB reported that ferrous scrap market price rebounded by JPY 3,000 per tonne for H2 grade around Tokyo. The price is JPY 39,500 to JPY 41,500 and some price is as high as JPY 43,000.

The price is lifted by higher export price and higher consumption after local makers finished seasonal maintenance outage. The price increased for the first time in 2 and half months.

Reuters reported that European Union will not impose anti dumping duties for now in the first of three investigations into Chinese steel imports.

A European steel sector representative said that the need to impose duties on a provisional basis was less urgent, given a recent slowdown in Chinese steel exports to the EU. He added that "But at the same time, we would expect the investigation to be taken to its conclusion."

It may be noted that several European steel producers complained to the Commission in 2007 that their rivals in China were helped by unfair subsidies, allowing them to ramp up exports to the EU.

But some European engineering firms, big steel consumers, also oppose measures that would push up the price of imports.

Platts reported that in a market leading move, US mini mill steel producer Nucor has notified customers that it would decrease net transaction prices by USD 70 per short tonne for concrete reinforcing bars, and by USD 50 per short tonne for merchant bars and structural products effective with shipments from September 10th 2008. The new transaction pricing will remain in effect for shipments through October 31st 2008.

Nucor explained in a letter faxed to customers that the new transaction levels were determined in a two step calculation involving a raw material surcharge adjustment followed by a mill base price adjustment.

Nucor said it was lowering its raw material surcharge by USD 171 per short tonne to USD 213 per short tonne from the mid August level of USD 384 per short tonne. The scrap surcharge is calculated by subtracting the company's baseline scrap price of USD 162 per short tonne from the monthly published benchmark price for shredded auto scrap in the Chicago market, which is currently USD 375 per short tonne.

At the same time, Nucor said the mill base price of rebar would increase by USD 101 per short tonne. The base price for merchant bars and structural products would increase by USD 121 per short tonne.

Mr Ronnie L Johnson sales manager at Nucor Steel Birmingham said that "While we support the fact that globally the current bar market softness is due mostly to seasonal issues and that we will see a rebound in global demand in the fourth quarter, we believe a measured decrease in transaction prices is warranted at this time."

It is reported that Minnesota Steel’s mining to steelmaking project slated for Nashwauk moved closer to reality on September 9th 2008.

The Itasca County Board of Commissioners approved a business subsidy agreement that will provide USD 66 million in state bonding proceeds for project infrastructure, a master development agreement and land exchange.

Executives from Essar, the Indian parent firm of Minnesota Steel Industries, said these agreements are needed to proceed with a groundbreaking and construction.

Mr Madhu Vuppuluri president of Essar North America and also CEO of Minnesota Steel said that “We are very proud to be part of this history in the making taking place here in Minnesota.”

Although Mr Vuppuluri did not name a date, he said a groundbreaking will come by September 30th 2008. He added that “I assure you the groundbreaking will take place this month.”

US International Trade Commission has voted to institute an investigation of certain cast steel railway wheels, certain processes for manufacturing or relating to same and certain products containing same. The products at issue in this investigation are cast steel railway wheels that are used in railcars and locomotives, and their respective axles.

The investigation is based on a complaint filed by Amsted Industries Incorporated of Chicago on August 4th 2008. The complaint alleges violations of section 337 of the Tariff Act of 1930 in the importation into the United States of certain cast steel railway wheels and certain products containing same that misappropriate Amsted trade secrets. The complainant requests that the ITC issue an exclusion order and a cease and desist order.

The ITC has identified the following as respondents in this investigation
1. Tianrui Group Company Limited of China
2. Tianrui Group Foundry Company Limited of China
3. Standard Car Truck Company Inc of Park Ridge
4. Barber Tianrui Railway Supply LLC of Park Ridge

By instituting this investigation, the ITC has not yet made any decision on the merits of the case. The ITC's chief administrative law judge will assign the case to one of the ITC's five administrative law judges, who will schedule and hold an evidentiary hearing. The ALJ will make an initial determination as to whether there is a violation of section 337, that initial determination is subject to review by the commission.

The ITC will make a final determination in the investigation at the earliest practicable time. Within 45 days after institution of the investigation, the ITC will set a target date for completing the investigation. ITC remedial orders in section 337 cases are effective when issued and become final 60 days after issuance unless disapproved for policy reasons by the US Trade Representative within that 60 day period.

It is reported that POSCO Nippon Steel RHF JV Co Limited, jointly invested by POSCO and Nippon Steel Corporation, has commenced construction of the RHF factory at Pohang Steelworks on August 29th 2008.

Being conducted as part of the cooperation strengthening strategy of both companies, the RHF business has been invested by POSCO (70%) and Nippon Steel (30%), and construction completion for the Pohang factory to be established within the number 3 zone is expected in September 2009, while the Gwangyang factory to be established in the Donghoan reclaimed land is expected to be completed in December 2009.

Of the 140,000 tonnes of the HBI products to be produced annually in the Pohang factory, large quantities will be exported to Nippon Steel, and the 126,000 tonnes of the DRI products to be produced annually in the Gwangyang factory will be totally used by POSCO. When the RHF factory is completed, it is expected to contribute to resource recycling in this environment of rapidly rising steel material prices by recovering effective resources from steel by products disposed or used outside the company. Moreover, in preparation of the unstable demand for outside recycling of steel by products due to stagnation in the construction economy, internal recycling rates are expected to be stably raised.

By activating the jointly invested RHF facilities, POSCO and Nippon Steel expects to further develop the strategic cooperation between the 2 companies, and secure carbon credits through connections to the CDM business along with the resource creation from by products.

According to a study by PricewaterhouseCoopers, the number of metals industry mergers and acquisition remained steady in the first half of 2008, but overall value declined because attractive takeover targets have became scarcer due to consolidation.

In fact, the metals industry consolidation has triggered more attempts by companies, mostly steelmakers, to acquire and integrate suppliers of such key raw materials as iron ore.

According to PricewaterhouseCoppers, there have been 68 global deals with values of at least USD 50 million in the first half of 2008 as compared with USD 70 million in the first half of 2007. However, the total value of those deals dropped to USD 42.9 billion in the first six months, from USD 73.5 billion a year earlier. At the current rate, the 2008 total of merger deals would fall short of the USD 298.4 billion of 2007 and the USD 186.7 billion recorded in 2006.

Mr Douglas Dean, US metals leader at Pricewaterhouse, said that "While financial investors have diminished their role in this sector, strategic investors are taking full advantage of strong balance sheets and ample liquidity to vertically integrate or expand their geographic reach."

Romanian media cited a source close to the negotiations as saying that if Voestalpine chooses Romania for its EUR 5 billion investment it shall receive EUR 100 million state aids from Romania.

He added that ''The amount is very small compared to the investment’s value, but it is the maximum amount Romania can provide.''

Voestalpine, interested in investing over EUR 5 billion in a steel plant close to the Black Sea, will sign a MoU with Romania in the first half of October. It has also signed a MoU with Bulgaria in the first week of September.

Four countries are candidates for the Austrian group's steel plant namely Romania, Bulgaria, Turkey and Ukraine. Ukraine was the first country to sign the memorandum with Voestalpine.

Voestalpine has announced that it will name the location for its EUR 5 billion steel plant by the end of 2008.

Viet Duc Steel Pipe Joint Stock Co has made revenue of VND 750 billion during the January to August 2008 period, fulfilling 75% of the year's plan and VND 24 billion in profit, equaling to 101% of the year's target.

At present, Viet Duc Steel finished necessary proceedings to list shares on the Hanoi Securities Trading Centre in the fourth quarter of 2008. It would pay dividend and bonus shares at the ratio of 1:0.8 right after being listed on the northern bourse.

The Malaysian economy remained resilient with a satisfactory GDP growth rate of 6.3% in 2007 and 7.1% in the first quarter of 2008. The services sector, which accounted for more than 50% share of total GDP, continued to be the main catalyst to the growth expanding by 8.0% in the first quarter of 2008, followed by the manufacturing sector with 6.9%. The agriculture sector which is mainly driven by oil palm production, registered a 6.3% growth rate in the same period. The mining sector recorded a growth of 3.7%, supported by the higher production of crude oil.

The construction sector, which is the main driver for steel consumption in the country, has seen its share of contribution to total GDP shrunk from 3.9% in 2000 to 3% in 2007. However, after three consecutive years of decline, the sector turned around in 2007 to record a positive growth rate of 4.6%. The momentum was maintained in the first quarter of 2008, with a growth rate of 5.3% YoY. The increase in construction activity in Malaysia was contributed mainly by civil engineering projects such as the construction of expressway, development of airfields, construction of power plants and other infrastructure activity by both private and government sectors.

According to the department of statistics of Malaysia, iron and steel materials contributed up to 23% of total materials used in the construction sector while the share of cement and concrete material was also 23%. The current tight supply and rising steel and cement prices could lead to a slowdown in construction works in Malaysia. According to a developer in Malaysia, steel bars have gone up to MYR 4,100 per tonne in August 2008 as compared with MYR 3,500 per tonne in June 2008 while cement is sold at MYR 13.45 a bag as compared with MYR 10.95.

Mr Chow Chong Long president of Malaysian Iron & Steel Industry Federation said that there was no steel shortage in the country as steel millers had continuously increased their capacity over the past few years.

Civil engineering remained as the major contributor sector for construction industry in Malaysia with a share of nearly 40% of total output in the industry. Output from residential sector grew substantially from 16% in 1996 to reach 30% in recent years. More than 70% of the construction activities was carried out by the private sector. The majority of the construction works undertaken by the government was to build infrastructure including construction of roads, bridges, tunnels, highways, dams, drainage and sewage system and communication and power lines etc. Construction activities in Malaysia were concentrated in Selangor and Kuala Lumpur which together accounted for around 60% of the total gross construction output in the country.

(Sourced from SEAISI)

It is reported that Caterpillar Inc and Claycrete Limited have entered a marketing agreement to provide a roadway and pad construction solution to operators of mines and oil and gas sites as well as to owners and builders of unpaved roads and paved roads.

Caterpillar dealers will have exclusive rights to market Claycrete products worldwide, and Caterpillar Global Mining, a division of Caterpillar Inc, will support and oversee the business.

Claycrete Limited provides a unique process that combines project management and proprietary chemicals to transform native soils containing clay and limestone into pavement like roads, site pads or solid base for paved roads. The result is weather resistant, long lasting and environmentally friendly.

For more than 15 years Claycrete has been contracting with a variety of natural resource businesses and governmental organizations to manage and supervise construction using the Claycrete process. Clients include AngloGold, ArcelorMittal, BHP Billiton, BP, Freeport McMoran, Murchison Metals POSCO, Newmont Mining, Rio Tinto, Statoil and the governments of Western Australia, Algeria, Ivory Coast and Nigeria. Caterpillar and its dealers have long established relationships with many of these same clients.

Vietnam News Agency reported that Vietnam Seaports Association is focusing on 10 major measures to upgrade national seaports to the regional and international standards to turn the shipping industry into the key of the national marine economy after 2020.

The VPA said that it attached importance to international cooperation in consultancy, development assistance and trade promotion to bring the national seaport system on a par with other regional countries in all fields, ranging from development scales to management, potential tapping effectiveness and competitiveness.

It also unveiled a plan to upgrade the technological system to increase the cargo handling capacity and mitigate service costs, thus ensuring high competitiveness in deep water seaports in the global integration era.

Mr Hugo Chavez President of Venezuela announced that he will loan VEB 50 million to reactivate operations at state aluminum wheel company Rialca.

Mr Carlos Blanco union vigilance officer of Rialca said that "The plant is paralyzed but the machinery is in operating condition and now that the president has contributed the resources, we can launch the plant within 15 to 20 days. The idea is to start by transforming aluminum in the furnaces which will allow us to process 3,000 tonnes per month. But the plant has capacity to produce 30,000 wheels a week, which means 1.5 million each year."

In the meantime, Rialca's new board is expected to purchase input materials, contact providers and oversee all of the general logistics involved in normal operations.

Mr Chavez said that Rialca's production as a state company must supply the downstream needs of the government itself. He added that "These resources are a loan. It isn't a gift. This is a loan that the republic is going to give the company and you must be held responsible for every last cent."

The Rialca plant, with two 25 tonnes furnaces and aluminum processing capacity for 16,000 tonnes per year, is located in Carabobo state. Alcoa International controlled 41% of Rualca, while state heavy industry holding CVG had 23%, Grupo Rimcar owned 23% and General Motors 13%.

Vietnam National Shipping Lines has inked a JV agreement with China Merchants Group Limited to set up container port which will cover an area of 166 hectare in the southern province of Ba Ria Vung Tau at an estimated cost of USD 300 million.

They planned to start the construction work in 2009 and finish it in 2011. The port will be able to receive 80,000 DWT ships.

Earlier, Vinalines and CMG had reached an agreement with the China Development Bank on credit granting to carry out the project.

Business Recorder quoted a spokesman of Engineering Development Board as saying that work on steel policy is progressing well and the committees of stakeholders have completed the process of consultations and putting their recommendations in black and white.

The draft proposals will be circulated to members of the committees for their comments and after incorporating amendments, it will be placed before the full house of stakeholders. The spokesman expressed the hope that the whole process would be completed by the end of next month.

He was commenting on a news item published by a section of English press saying that Pakistan Standards and Quality Control Authority and EDB were developing steel policy. He clarified that EDB was not sharing this responsibility with any other organization. Only the concerned departments have been requested to give inputs on certain issues. Since standards fall under the purview of PSQCA, they are developing these for steel sector.

According to Mr Armen Movsisyan minister of Armenia's Energy & Natural Resources, Iran-Armenia gas pipeline's capacity will increase to 2.5 billion cubic meters a year as of November 2008.

Mr Movsisyan said that this was possible owing to an increase in the capacity at the Kadzharan-Yerevan section of the pipeline. Mr Movsisyan added that the main construction work on this section had already been completed and testing would soon commenced there.

He said that if necessary Armenia could use Iranian gas until the start of regular supplies. This would happen if Russian gas supply to Armenia is either limited or suspended for any reason.

He added that the Iran Armenia gas pipeline is an alternative route to the northern trunk pipeline, through which Armenia currently receives gas from Russia via Georgian territory.

In accordance with the agreement as of 2009, Iran will supply Armenia with 1.1 billion cubic meters of gas a year. This supply will increase to 2.3 billion cubic meters as of 2019. Armenia will pay for this gas with electricity at 3 KWH per cubic meter. Surplus gas could be used to meet Armenian needs. CJSC ArmRosgazprom is the general contractor for the construction of the Iran-Armenia gas pipeline.

Reuters reported that Abu Dhabi government owned Mubadala has agreed to build a multi billion dollar aluminum smelter complex in Kazakhstan.

Mr Askar Mussinov central Asian country's ambassador told Reuters that the total estimated United Arab Emirates governmental and private investment in Kazakhstan would reach about USD 35 billion over the next five years. But he did not give the exact value of the smelter.

Reuter reported that Oman and Iran plan to complete the development of the Kish gas field in the Gulf by 2012 with the sultanate footing the bill of up to USD 12 billion.

An oil and gas ministry project official said that "Oman is going to wholly fund the Kish gas field and we expect to sign an agreement at the end of 2008 so the plant can start producing gas for Oman by 2012."

He said that “The project will involve a 200 kilometer pipeline, mostly underwater, to Musandam and Sohar. Phase one of this project will transport gas to Oman at a rate of one billion cubic feet per day and then rising to 3 billion cubic feet.”

Iran and Oman signed a deal in April to jointly develop Iran's Kish gas field in the Gulf at an estimated cost of between USD 7 billion and USD 12 billion, but did not give a timeline for the project at the time.

DANA GROUP’S Dana Steel Processing Industries LLC has commissioned a new Cable tray and ladder management system in Al Quoz Industrial Area, Dubai. This is in addition to it’s fully automatic coil service center.

This new Cable management system with a total annual production capacity of 12000 tonnes will be able to produce customized Cable trays, ladders, trunkings, fittings and other accessories with most modern plant & infrastructure.

The project is to be commissioned in two phases, the first phase of the project has been intended to produce 12000 ton of output per annum while the capacity could be increased to 25000 tons.

Dana Group’s officials stated that trial production has been completed and the new cable manufacturing system is now operational and has recently bagged an order from Qatar, and one from UAE itself. Designed to provide support and protection to power and communication cables in both commercial and industrial buildings, the product range includes Cable Trays, Cable Ladders, Trunkings & accessories, which are supplied to various Power Plants, Electricity Boards, Engineering Organizations and many other ongoing Projects. It will also supply products for contractors working on oil and gas projects in the region.

Dr BS Dana chairman of Dana Group said that "We know that no two cable management projects are the same, often an installer's requirements can be much more complicated than first thought, which is why they need a supplier who is flexible enough to react quickly to any on site changes, with detailed expert advice and delivery times and dates to suit every project."

According to press reports, new US 350 million port in Bahrain in the Persian Gulf that could one day grow to rival the Middle East's largest transshipment hubs will begin operations at the end of the year.

After 2 years of construction, Khalifa Bin Salman Port will open at the end of 2008 and it is expected to be an alternative port in the Upper Gulf.

The Upper Gulf region consists of Kuwait and Iraq a country that industry observers believe could become an investment hotspot in the near future.

Iran Mania News reported that construction of several industrial units started last week in Qazvin province during an inauguration ceremony attended by government and provincial officials.

As per report, with an investment of IRR 1.6 billion the new industrial units will produce steel, iron, girder, polyester fabric and polyacrylic acid. They are expected to create around 1,000 new job opportunities in the cities of Qazvin and Takestan.

According to a fax sent to Iran daily, the participants of the inauguration ceremony were presidential economic advisor Morteza Tamaddon, Mr Ahmad Nasiri Governor General of Qazvin, Mr Mohammad Aqa Alikhani chairman of Qazvin Industries and Mines Organization and Boin Zahra MP Rouhollah Jani Abbaspour.

The report added that some 38 development projects will also be implemented in the near future in the province electricity, food, foundry, textile, chemicals, detergent and pharmaceutical sectors.

Meanwhile, the Parliaments Industry and Mine Commission has urged the government to provide finance to the manufacturing sector. Mr Hamidreza Fouladgari MP of Isfahan said that the commission has recently had a session with the Governor of the Central Bank of Iran Tahmasb Mazaheri and the officials of the Ministry of Mines and Industries to relieve the financial headaches of manufacturers.

It is reported that export price for Chinese CRC are still on the decrease and market remain sluggish. Weak domestic and overseas demand has forced producers to further lower prices.

Local cold rolled steel coil price continue to soften while that for cold rolled steel plate remain stable. On Shanghai market, 1.0mm CR sheet by Anshan steel goes at CNY 6400 per tonne, flat with last Friday. 1.2mm to 2.0mm material at CNY 6250 per tonne flat with last Friday. 1.0 CR coil by Maanshan steel drop by CNY 120 per tonne to CNY 6120/per tonne.

CRC price is believed to be following step of HRC, which start to fall again on weak demand. Taking Shanghai price for 1.0 sheet by Anshan steel as benchmark, there would be no more room for rebound if it remains below CNY 6600 per tonne. We do not exclude the possibility that it will slip to CNY 6100 per tonne to CNY 6200 per tonne in the near future.

Export price for DC01 1.0mm CRC are prevailing at USD 940 per tonne USD 950 per tonne FOB however there is not much transaction. At the same time, Wuhan steel set its new price for 1.0mm CRC at USD 980 per tonne FOB which is believed to be high and it is difficult to make deal.

(Sourced from MySteel.net)

According to Mr Wang Jianhua deputy director of Mysteel Research Center joint procurement is an inevitable choice for Chinese steel makers to cut raw material cost.

Mr Wang said that as China imports large quantities of iron ore, it's better for Chinese steel companies to join hands in exploring mines than to bargain for lower prices. He said that all the investors in such joint ventures should refrain from buying iron ore overseas on their own and leave it to the joint ventures so as to avoid overlapping.

Mr Wang said that right now four large procurement groups can be set up
1. A group joined by the four major states owned steel makers, initiated by WISC
2. A group composed of large and midsize private steel mills, which Jiangsu Shagang Group Co is working on
3. A group invested mainly by midsize and small state-owned steel companies, led by Sinosteel Corporation
4. A group participated by other steel producers, trader sand logistic service providers, led by China Minmetals Corporation.

(Sourced from MyStee.net)

It is reported that Chinese HRC export market remains quiet this week and there is few transaction despite great decrease in quotation.

Domestic prices keep in a dull period and there still seems to be pressure of downward correction. On Shanghai market, commercial 4.75mm to 12mm*1500mm HRC goes at CNY 5050 per tonne down CNY 50/per tonne from early this week. That for commodity grade 2.75mm HRC slip by CNY 250 per tonne to CNY 5500 per tonne.

As expected in last week, local HRC has seen rebound. Taking Shanghai price for commercial 4.75mm to 12mm*1500mm HRC as benchmark it is likely to resume decrease if it falls below CNY 5000 per tonne.

Export quotations for Q235 or SS400 HRC are prevailing at USD 830 per tonne USD 850 per tonne FOB and there is even lower level on the market. There is no report of evident increase in contracts since overseas buyers still employ a wait and see attitude wishing to get better prices.

(Sourced from MySteel.net)

21st Century Business Herald reported that China National Petroleum Corp, the country's largest oil and gas producer has begun a feasibility study on the third west east natural gas pipeline after work started on the second gas pipeline in February.

According to Mr Yang Jianhong deputy director of the oil and gas pipeline department at the China Petroleum Planning and Engineering Institute a preliminary plan should be produced next year. He said that the pipeline will start from the Xinjiang Uygur autonomous region and will end in Fujian province, supplying natural gas to the energy hungry Yangtze and Pearl River deltas. The two other pipelines do not cover Fujian.

Analysts said the project will be a similar length to the 9,102 kilometer second gas pipeline but it needs more investment due to higher raw material costs. The nation's second west east natural gas pipeline with total investment of CNY 142.2 billion comprises a main line and eight sub lines. With a gas transmission capacity of 30 billion cubic meters a year and it will cover 12 provinces and autonomous regions before reaching the eastern municipality of Shanghai and southern Guangdong province.

The company's first project to pipe natural gas from western to eastern China went into commercial operation at the end of 2004. It runs from Xinjiang's Tarim Basin to Shanghai. CNPC said that pipeline has already supplied 42 billion cubic meter of natural gas to the eastern region. That's a saving of 54 million tonnes of coal and 21 billion kWh of electricity. It has also changed the energy structure of Shanghai. In 2002, natural gas accounted for just 0.9 % of Shanghai's total energy consumption but in 2007 the figure was 4 %.

Xinhua quoted a researcher from the Chinese Academy of Sciences as saying that huge cost of damage to the environment has outweighed China's economic benefits in recent years.

China Daily reported that Mr Shi Mingjun a professor at the academy's Research Center on Economy & Data Science found the cost was CNY 2.75 trillion in 2005 while the growth in gross domestic product for the same year was CNY 2.24 trillion.

Mr Shi said the cost of damage to the environment, such as the exploitation of natural resources, ecological degradation and environmental pollution was 13.9% of the total output for the year. He said that "If we calculate the real cost to the environment and natural resources the losses are greater than the gains."

Mr Shi said that "And as the nation's growth pattern has changed little over the past two years, the conclusions are likely to be the same for 2006 and 2007. His team began researching the issue in early 2006. Over the following two years, they managed to calculate the monetary value of the natural resources consumed in 2005 as well as the cost of the pollution and ecological degradation over the year.”

Mr Shi said most of the calculations are based on official figures and the team tended to choose the most conservative ones, so as to not exaggerate the results. He said that the results validate the view that China's economic growth has relied mainly on the input of natural resources and is causing enormous environmental losses. He added that such a growth model is unsustainable.

The first figures were released in September 2006 and showed an economic loss in 2004 of CNY 511.8 billion or 3.05% of the nation's GDP for that year.

According to National Bureau of Statistics China's consumer price index a measure of inflation was up by 4.9% in August. The figure, compared with 6.3% in July, 7.1% in June and 7.7% in May was lower than most forecasts.

Mr Yao Jingyuan chief economist with the bureau, who attributed the decline to falling food prices said that "The continuous decline of the CPI is a positive sign as it shows that the government's measures to ease inflationary pressures were effective."

Food prices, which account for more than a third of the CPI calculation, rose 10.3% in August, 4.1 percentage points lower than July. The price of meat increased 8.0% down by 8 percentage points over July while that of pork rose 1.0%. Cooking oil went up 22.7% vegetables down 0.5% aquatic products up 16.4% and grains up 8.0%.

Economist Mr Wang Xiaoguang said the turning point for a wave of CPI rises had come, as the economic growth gradually slowed down and dampened demand. He said that "The overall slowdown of Chinese economy has become a trend, more than a sign."

He attributed the trend to the domestic tightening macroeconomic measures and the impact of global economic slowdown. He said that in response to the situation, China has relaxed its macroeconomic policies and would continue to do so as the inflation pressure reduced.

Talking about the impact of producer price index growth which remained above 10% for recent months, Mr Wang believed the CPI figure would be unaffected. The downturn trend of CPI has remained unchanged despite the high flying PPI for months which means the price was decided more by demand than cost. He said that "The CPI downturn might reverse in the future, but the possibility is slim."

According to National Bureau of Statistics China's urban fixed asset investment grew to CNY 8.49 trillion in January to August of 2008 up by 27.4% YoY.

The figure outpaced the growth rate for the first seven months of this year by 0.1 of a percentage point. This indicates a slight pick up in investment in August despite construction restrictions adopted for the Olympics in Beijing and areas surrounding the capital.

Mr Lian Ping chief economist of Bank of Communications said that "Fixed asset investment is likely to rebound further in the months ahead. He said that in the following months, reconstruction work will step up a gear. And local governments might also launch new projects to cushion the impact of the decline in exports."

The government already moved to relax loan restrictions for commercial banks in August an indication of policymakers' growing concern about a possible economic slowdown and their desire to encourage growth. The restrictions adopted last year, were seen as one of the government's most effective measures to calm the investment frenzy.

Investment growth in primary industries, including farming, fisheries and forestry, rose to 63.5%YoY in the first eight months. Meanwhile, investment grew 28.8% in secondary industries while tertiary industries witnessed a 25.5% rise. Investment in real estate declined to 29.1%YoY in the first eight months of the year down from 30.9% in the first seven months.

Mr Sun Mingchun an economist with Lehman Brothers said that this implies that its growth in August was only 18.9%YoY as compared to 37.5% in June. He said that "This is consistent with anecdotal evidence that the property sector is under severe pressure because of a gloomier economic outlook and the lack of funds."

Chinalco Northeast Light Alloy Co, which provides aluminum alloys to the aviation and defense industries, will spend more than CNY 5 billion to build a new plant as it tries to meet rising demand.

Beijing based Aluminum Corp of China in a statement said that construction of the 200,000 tonne a year alloy plant at Harbin n Heilongjiang province began on Tuesday and it is due for completion in 2011.

The plant will produce aluminum plates and strips widely used in the defense petrochemicals, transport and machinery industry. Chinalco Northeast expects annual profit of CNY 400 million and sales of CNY 7 billion once the plant is operational.

Mr Song Huaibin an analyst at Guoyuan Securities said the new plant is part of the nation's push to change its aluminum product structure and export more high value added aluminum products. He said that the nation's aluminum supply has exceeded demand this year.

Mr Song said however, the country currently imports some high end aluminum products and that might have been a key factor in the decision to build the new plant.

Mr Xiao Yaqing GM of Chinalco said the company supplies 80% of the aluminum alloys used in aircraft, atomic reactors, nuclear weapons, satellites and missiles for the defense industry. He said that the new plant is expected to boost production and create jobs in the region.

Shandong Haihua Co Ltd announced on September 8th that China National Offshore Oil Corp had become its actual controller. Both sides inked an agreement on mutual provision of products and services. They agreed to raise the supply price of electricity from CNY 0.479 to CNY 0.518 per kilowatt hour and that of steam from CNY 125 to CNY 166.37 per tonne.

Under the agreement, a refining company would obtain a 51% stake in Shandong Haihua's parent, Shandong Haihua Group Co Ltd for free from the commission. The refining company is wholly controlled by CNOOC parent of CNOOC Ltd. After the stake transaction, the commission would not quit entirely instead it would be the second biggest shareholder of Shandong Haihua Group, located in Weifang with a 29.3987% stake.

Shandong Haihua specializes in production of such chemicals as soda, ethyl acetate, methylene chloride and potassium sulfate depends on its parent for electricity and steam supply due to the separateness of locations. However, Shandong Haihua Group decided to sell electricity and steam to the listed arm at higher prices since July 1st. The average price at which the parent purchases coal had jumped more than 40% to the beginning of this year to the end of this June greatly driving up its costs in power generation and steam production.

The markup after being approved by the shareholder meeting, took effect from July 1st. It is expected to lift the production costs of the listed arm by about CNY 210 million in 2008.

According to Russian customs statistics, Russia's ferrous scrap exports totaled 3,982,000 tonnes in January to June 2008 down 201,000 tonnes or 4.8% from the same period of 2007 amounting to an annualized 7,964,000 tonnes.

In the breakdown by main destinations
1. Turkey accounted for the largest quantity of 1,738,000 tonnes or 43.7% of the total down 5.4% from the same period of 2007
2. Spain the second largest of 579,000 tonnes or 14.5% up by 2.9%
3. South Korea the third largest of 422,000 tons or 12.1% up by 42.2%.

As a result, the top three destinations together took 70.3% of the total.
Egypt ranked fourth at 132,000 tonnes or 3.3% down by 23.6%
Moldova fifth at 129,000 tonnes or 3.2% down by 21.3%
Greece sixth at 106,000 tonnes or 2.7% down by 40.4%

Interfax reported that the ChTPZ Group saw pipe shipments plummet 12.2%YoY in January to August to 1.147 million tonnes.

Chelyabinsk Pipe Rolling Plant reduced shipments 15% to 609,300 tonnes of pipes, including 287,300 tonnes of large diameter pipes, down 28%. August sales by the Chelyabinsk mill fell 14% YoY to 73,500 tonnes of pipes including 26,200 tonnes of large-diameter pipes down by 42%.

The ChTPZ Group's Pervouralsk Novotrubny Pipe Works from the Sverdlovsk region reduced pipe sales 8.7% YoY in January to August to 538,100 tonnes and August sales 19% to 69,200 tonnes.

The group is projecting a slight reduction in pipe sales this year due to delays with the construction of some major pipelines. However it expects to produce more in the way of other pipes, including oil well tubing and casing pipes.

RIA Novosti reported that Mr Dmitry Medvedev president of Russia dismissed speculation recently that his country would not have enough natural gas for European consumers and pledged to launch new fields if the market grows.

Mr Medvedev told a Valdai International Discussion Club meeting that “It is amusing to hear statements that Russia will not have enough gas for supplies to Europe. This is not so. He said that t the country's plans to develop energy cooperation with Asian states would not adversely affect energy supplies to Europe.”

Mr Medvedev said “We will do everything possible to solve a number of tasks on diversifying energy flows to Asia without detriment to Europe, adding that this concerned oil, gas and nuclear energy.”

Mr Medvedev said Asia as a 'promising market' for Russia, and pointed to the necessity of securing a balance between the country's energy relations with the West and Asia. He said that “This should reflect multipolarity. The world, the economy in particular, will be more stable if there are different economic zones.”

He also assured foreign consumers of Russian natural gas that “If we see that there is a large market, we will launch new fields.”

According to Standard & Poor's that its BBB+ sovereign credit rating would be put at risk if Moscow uses money from its national wealth and pension funds to support battered financial markets.

S&P's statement was made in response to Mr Alexei Kudrin's Finance Minister of Russia said recently that Russia was considering using the cash to buy securities in the domestic market which has suffered a significant drop in value this year.

S&P said in a statement that "Any use of public funds including the National Welfare Fund, which was originally established to shore up Russia's inadequately capitalized pension system to prop up asset values in financial markets would carry negative implications for Russia's sovereign rating."

The ratings agency said it suspected Kudrin's statements were an attempt at verbal intervention to stabilize the markets and therefore bore no implication for the investment grade rating.

S&P said "Russia's very substantial fiscal and monetary reserve buffers are a key ratings strength and are more important than ever given the potential need to recapitalize the weaker parts of the financial system."

S&P said the government's selective launch of investigations into private-sector corporations highlight the possibility that Russian enforcement of shareholder and property rights is becoming increasingly unpredictable, lowering Russia's attractiveness as a destination for direct investment.

Ukrainian Journal Staff reported that sales of new passenger cars in Ukraine in August grew only by 1.3% YoY and fell by 11.4% compared to June 2008, when around 60,000 cars were sold.

The group said that by the fall, the car market was in the state of stagnation, while in spring it saw a phenomenal pace of growth of around 80%.

Interfax cited Mr Vadim Geraskin deputy general director of RUSAL Oleg Deripaska's United Company RUSAL plans to boost smelting capacity in Siberia 83% to more than 4.5 million tonnes in 2013.

Mr Geraskin said the smelter that RUSAL was building in Taishet, Irkutsk region at a cost of RUB 3 billion would achieve full capacity of 750,000 tonnes per annum in 2013. The Boguchany smelter in the Krasnoyarsk territory will also hit full capacity of 600,000 tonnes per annum then.

Mr Geraskin also said a feasibility study for the second-stage modernization of the Irkutsk smelter would be ready within a year. He said that RUSAL expects to start building a smelter in the Far East in 2014. One of three sites will be selected in 2009.

Italy's news agency Apcom reported that Italian electricity company Enel is set to invest EUR 2.2 billion in various Russian energy projects by 2012.

The agency quoted Mr Fulvio Conti CEO pf Enel as saying "I am sure that the central government of Russia as well as local authorities will support us."

Enel, Europe's third largest listed utility by market capitalization has become the first foreign company to acquire generating assets in Russia in the recent process of power sector reform.

It is reported that a unit of billionaire Mr Oleg Deripaska's Basic Element is suing the government of Montenegro for up to EUR 300 million in damages over the 2005 sale of the country's largest aluminum producer.

Mr Branimir Gvozdenovic Economic Development Minister said central European Aluminum alleges in the lawsuit that the state inaccurately assessed the value of aluminum smelter and mine Kombinat Aluminijuma Podgorica.

Interfax reported that net profit at OGK-6 dropped to RUB 381.8 million in the first half of 2008 under International Financial Reporting Standards down from RUB 1.119 billion in the same period last year a decline of 66%.

OGK-6 posted a loss of RUB 288.6 million in the second quarter this year compared with a net profit of RUB 488.4 million in the same period of 2007.

OGK-6 said first half revenue increased 23.6% YoY to RUB 20.3 billion on higher electricity output. Revenue increased 29.9% in the first quarter to RUB 11.4 billion and 16.3% in the second quarter to RUB 8.9 billion. Profit on current operations declined 41.1% to RUB 704.1 million in the first quarter and the company posted a loss of RUB 946.4 million in the second quarter compared with RUB 1.012 billion a year earlier.

As a result, the company had an operating loss of 242.2 million rubles in the first half, mainly due to higher fuel prices that saw operating expenses rise 40.1% to 20.579 billion rubles.

Interfax reported that independent oilfield services provider Eurasia Drilling Company increased net profit 68.9% in the first half of 2008 to USD 132.671 million.

Revenue increased 53.8% to USD 1.016 billion. Pretax profit rose 62% to USD 175.437 million. EDC's controlling shareholder is CEO Mr Alexander Djaparidze. It had a consolidated net profit of USD 78.54 million in the first half of 2007 on revenue of USD 673.4 million.


EDC acquired its core asset, Drilling Company Eurasia LLC in November 2004 for USD 130 million.

EDC targets revenue of USD 1.9 billion in the 2008 fiscal year, based on projections for rising hydrocarbon demand and declining volumes of readily accessible reserves.

Specialty Steel Industry of North America has released the statistical data on imports, US consumption and import penetration for June 2008. The data represents US consumption, imports and import penetration for YTD June 2008 compared to the same 2007 six month period. The following data is presented by specialty steel product line, total stainless steel, and total specialty steel

Stainless steel
Imports of total stainless steel in YTD June 2008 were 258,016 tons, a 13.4% increase compared to YTD June 2007; US consumption was 750,925 tons, a 6.2% decrease; six month import penetration was 34.4%, a 6 percentage point increase from 2007.

In tons

Alloy tool steel
Imports in YTD June 2008 were 55,461 tons, a 6.1% increase as compared to YTD June 2007; US consumption and import penetration were not calculable.

Electrical steel
Imports in YTD June 2008 were 55,038 tons, an 8.3% decrease as compared to YTD June 2007; US consumption was 180,634 tons, a 20.8% decrease from June 2007; six month import penetration was 30.5%, a 4.2 percentage point increase from 2007.

SSINA is a Washington DC based trade association representing virtually all continental specialty metals producers. Specialty metals are high technology, high value stainless and other specialty alloy products. Its member companies are AK Steel Corporation, ATI Allegheny Ludlum Corporation, ATI Allvac, Carpenter Technology Corporation, Crucible Specialty Metals, Electralloy, Haynes International Inc, ThyssenKrupp Mexinox SA de CV, North American Stainless, Outokumpu Stainless Inc, Precision Rolled Products Inc, Latrobe Specialty Steel Company, Universal Stainless and Alloy Products and Valbruna Slater Stainless Inc.

It is reported that Shanxi Taigang Stainless Steel, the listed arm of TISCO, has increased its stainless steel production by just 2% in the first half of 2008 due to weak demand.

Taigang produced 977,500 tonnes of crude stainless steel and 928,400 tonnes of finished stainless steel in the January to June 2008 period.

Earlier, Taigang had said that it planned to raise crude stainless steel production by more than a quarter to 2.6 million tonnes in 2008. However, weak international market conditions and more domestic capacity coming on stream upset the original plan and also led to a decline in first half net profit.

Taigang Stainless has also announced that it will acquire a captive electricity generating plant from the parent company in order to ensure an uninterrupted power supply for its stainless steel production.

In China, the stainless steel industry remains largely quiet and purchasers of stainless steel scrap are reluctant to commit to large purchases of material from overseas.

Stainless steel mills said that the high prices demanded by US and European suppliers of scrap make such purchases unfeasible in present market conditions. They prefer to stay away from the volatile international market and buy from domestic sources.

Lloyds List reported that Vale has rejected brokers’ reports that it has cancelled or postponed shipments because of price negotiations with Chinese mills.

Vale said that as of now, 32 ships were waiting to load cargo at Vale’s four ports in Brazil, including 13 ready to load iron ore for Chinese customers. It added that "This number of ships is compatible with the current level of shipments, which continue normally without any anomalies."

The clarification came amid widespread reports that an unknown number of iron ore shipments to China had been affected, with one Chinese news agency earlier this week claiming nearly 100 ore carriers were sitting off the coast of Brazil’s loading ports.

Vale recently asked for a 11% to 11.5% increase on the annual contract price of iron ore, six months after it reac