The domestic steel prices in India remained stable with mild uptrend leading to a increase in Steel Price Index of 27 points. However the firming was more prominent in Long products

ILPPI – Indian Long Product Price Index
IFPPI – Indian Flat Product Price Index
INDSPI – Indian Steel Price Index

Long products

Flat products

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Scrap
With the crash of global scarp levels, offers are coming at lower levels and are reported in a wide range of USD 420 to USD 425 per tonne form different sources for various origins.

However some of the market sources have informed of offers at USD 375 CNF India for bulk supplies

Scrap
Various
USD 420- USD 440
CNF Mumbai

HRC – Structural grade
Import market has been quiet during last week although the reported offers have been reduced

China
USD 820-USD 840
CNF Mumbai

HRC for cold rolling
It is reported that a major Russian supplier of HRC for cold rolling grade is offering at USD 840 per tonne levels. Further details of transactions are not available as yet

Russian
USD 840 per tonne
CNF India

SteelPrices-India has started this update on import levels recently on request from many its subscribers. We shall be adding more products in coming week. To get such updates from next week, please subscribe to www.steelprices-india.com.

India with vast resources of iron ore, abundantly available low cost skilled manpower and the prospects of a strongly growing steel market provided huge opportunities to invest in the steel industry for new capacity. With a strong technical manpower, a history of steel making and a supportive government, there was no doubt that despite a few well known constraints, India had the chance to outperform her peers in attracting investments into the steel sector from all over the world.

Dreams were large, from a small company producing steel only in thousands of tonnes to global behemoths such as Arcelor Mittal Steel, POSCO, SAIL, TATA Steel, Essar Steel, Ispat Industries and JSW Steel doing so in millions of tonnes, all came out strongly to become part of this Indian steel dream. All of them had large Greenfield and Brownfield steel projects to add capacity. If one has to go by their ideas, the Indian steel capacity should touch 400 million tonnes by 2021.

But, the reality has been different. All of them have faced some common hurdles which are well known. Concurrently, each one of them has been hit by specific problems. The current status of the projects is not as encouraging as the dreams have been.

Where do the steel projects stand today?

“Indian Steel Projects: Ground Reality, Strategic Issues and Opportunities” from Steel and Natural Resources Strategy Research analyses the context each significant producer is placed in and identifies their core problems. It makes an objective assessment of the strength and weakness of each of the major projects, when they are expected to be completed and at what cost.

It takes a macro view of the emerging steel supply scenario till 2021.

This 115 page report with 35 tables, 12 charts, a number of annexure, three maps and an appendix looks at the steel industry’s future in India from a strategic point of view to guide the investors in the industry, capital goods industry, steel traders, raw materials suppliers and the policy makers in the government in their own individual planning for the future.

Report Summary:
1. Published: Sep 2008
2. Format PDF File (Delivery by Email on receipt of payment)
3. Total no of pages – 115

Price: USD 1100 or INR 50,000
(Note: You can Save USD 100 if you order before October 15th 2008)
(Additional Charges would be levied for delivery of file on a CD or in printed form)
You can order your copy to reports@steelguru.com

Kolkata

Change is on Sept 15th as compared to Sept 12th
Change is in INR per tonne

Mandi

Change is on Sept 15th as compared to Sept 12th
Change is in INR per tonne

Kanpur

Change is on Sept 15th as compared to Sept 12th
Change is in INR per tonne

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According to Mr PK Rastogi secretary to the ministry of steel free pricing for the steel pipe and tubes manufacturing sector required the major players to adopt a competitive stance and responsible business outlook.

Mr Rastogi at the Steel Tube Summit 2008 organized by Confederation of Indian Industry reiterated the government’s commitment to providing an enabling environment for growth of the sector and assisting in sorting out inter sectoral issues.

He said that “The sector had benefited greatly from demand both in the oil ands gas sector and from replacement demand in developed economies. Rising global demand for infrastructure and pipelines both in Asia and the Middle East would create opportunities for the Indian manufacturers. Government intervention in the rural and agricultural sector and in ensuring supply of safe drinking water would create an additional demand of INR 200,000 crore over the next few years which would benefit them greatly.”

Mr Mukesh Rohatgi CMD of Engineers India Limited said that “Though the country manufactures more than 90% of its requirement of steel pipes and tubes, there was an urgent need for investments in technology up gradation like pipeline linking that would provide more areas for the manufacturing sector to meet and increase their demand. There was a huge need for increasing both capacities and testing facilities to cater to the rising demand of infrastructure projects. He advised the Indian manufacturers to counter competition from abroad, especially China by offering both quality and reliability.”

Mr Vivek Kamra chairman of CII Precision Tube Division & Executive In charge of TATA Steel said that “In the last 3 decades, the production of steel tubes and pipes in the country had risen from 0.5 million tonnes to 5 million tonnes. The sector had seen tremendous growth in the production of large diameter steel tubes and in the manufacture of seamless tubes and a significant amount of investment has been made in their production.”

IANS reported that tension has gripped Kalinga Nagar industrial complex in Orissa’s Jajpur district after about a dozen people, including four officials of Jindal Stainless Limited were injured in a scuffle between the plant security personnel and local villagers.

Mr Bidyadhar Mohanty Contract Laborers Union president told IANS that the trouble started when some contractual workers, belonging to a minority community, wanted to come outside the plant Sunday evening for the Ramadan prayer and when the security guards stopped them, there was a scuffle between the workers and the guards.

As the news spread, hundreds of local villagers Monday locked the plant and ransacked electronic display boards, lights and staff quarters of the JSL unit at Manpur village near the industrial complex area.

Mr Rajdeep Mohanty chief resident manager of the plant told IANS that “The agitators have damaged properties worth around INR 1 crore. Production at the plant has been stopped as the agitators have locked both entrance and exit gates of the plant. They even prevented men and material from entering the plant premises. As a result, more than 1,000 workers and officers have been locked inside.”

He said that the company was forced to shut down operation of all its four furnaces since Monday morning however, the power plant has remained operational.

The prices for input material remained more or less stable with minor aberrations owing to local factors. However the price of sponge iron took a dip in Kolkata owing to lack of buying activity leading to stockpile exerting downward pressure on the prices.

Melting scrap
80:20
HMS

Change is on Sept 15th as compared to Sept 12th
Change is in INR per tonne

Sponge iron

Change is on Sept 15th as compared to Sept 12th
Change is in INR per tonne

Pencil ingot

Change is on Sept 15th as compared to Sept 12th
Change is in INR per tonne

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It is reported that Reliance Infrastructure has entered into an EPC business for steel makers. The company in August 2008 signed an agreement with China Metallurgical Group Corporation to execute steel projects in India.

The agreement between Reliance Infrastructure and MCC covers construction of integrated steel plant for public sector undertakings which can be extended to the private sector later.

The broad scope covers mine development, blast furnace, coke plant, sinter plant, by product plant, casting, finished product lines, power plant complex and civil and architectural works.

Reliance Infrastructure will execute the EPC business on its own and may also organize the activity under a special purpose vehicle.

BS reported that Tuticorin Port has crossed 10 million tonnes during fiscal April 1st to September 13th 2008 by surpassing the corresponding previous year handling of 89.59 million tonnes registering a growth of 12.08%.

Tuticorin Port in a release said that the port is confident of crossing the target of 240.60 million tonnes set by the Ministry for Tuticorin Port for the year 2008-09.

The release added that this performance was possible due to increase in anchorage operation for handling industrial coal and increased traffic due to cargoes like Copper concentrate, fertilizer and fertilizer raw material, containerized cargo and other commodities.

Express India cited Mr C Rangarajan Rajya Sabha member and former chairman of PM economic panel as saying that he expects inflation to ease to 10% by December.

Mr Rangarajan on the sidelines of a FICCI seminar on financial inclusion in New Delhi said that "My own estimate is that probably by December 2008 inflation rate may go down to 10%." He said that inflation last year was moderate almost at the end of December, so base effect will be to heighten inflation in the current year. The base effect relates to the affect on inflation because of its level in a year ago period.

He added that if inflation is low in a year ago period, the comparative inflation in the current year will look higher.

Ms Naina Lal Kidwai Head of HSBC India Country said that even though international crude oil prices are low and food prices are cooling off yet it is to be watched out how does inflation behave between now and March which is a very critical year.

Inflation stood at 12.10% for the week ended on August 30th 2008 despite moderation for three weeks in a row.

BL reported that New Mangalore Port Trust is on course to create more facilities. In this regard, the port has planned construction of more berths including two berths for captive users.

The Indian Port Association’s ‘Coordination of business plans for major ports in India, prepared by Port of Rotterdam Authority, forecasts that New Mangalore Port is likely to handle 52.17 million tonnes of cargo by 2011-12 and 84.14 million tonnes by 2025-26.

At present, the port has 14th berths. The four berths proposed for development are planned in the western dock of the port. While 3 are in various stages of planning, one is in construction stage.

Of the four berths planned, work has begun for a captive berth for Udupi Power Corporation Limited and is likely to be over by December 2009. The company will handle a dedicated cargo of 3 million tonnes per annum through a mechanized system. The promoter of the project is constructing the berth.

In this regard, NMPT recently invited an expression of interest to develop a container terminal in the western dock arm. The proposed berth will have a depth of 15.1 meters and the length will be in the range of around 300 meters. The area for storage yard will be in the 80,000 square meters to 1.2 million tonnes square meter range.

Traditionally New Mangalore is a bulk handling port with liquid bulk constituting a major share of the cargo. In the recent past, iron ore cargo has been adding significantly to the port’s traffic. Container cargo is on the rise nowadays.

It is reported that Bharat Heavy Electrical has started work on NTPC thermal power project phase II at Barh in Bihar.

NTPC has gone ahead with the work despite incomplete phase I which ran into trouble due to commercial disputes with Russian equipment suppliers.

The order for supply of equipment for phase II was placed with BHEL which has already started work under the phase I, NTPC placed the order for equipment with Technoprom Exports and Power Machine of Russia. These companies were to commission a capacity of 1,980 MW by mid 2006. But the project could not take off for nine years after the foundation stone was laid. The dispute with foreign companies was over cost escalations. The Russian suppliers demanded additional INR 600 crore citing high steel prices.

It is reported that Mr Anil Razdan secretary power has issued an advisory to States overdrawing power asking them to discipline themselves and not jeopardize the grid failing which they would face severe action.

As per report states Utilities have been warned that over drawls of power beyond its availability may have extremely serious ramifications for the country as a whole.

In a meeting recently convened by Secretary, Ministry of Power to discuss the critical condition of the integrated Northern, Eastern, Western and North Eastern grid and the Southern Region Grid in the recent past, Mr Anil Razdan said that whenever necessary, the states must resort to suitable and prompt regulation. He said that priority must be given to public utility services and essential services if the supply is less than demand.

The States overdrawing power from the grid on a regular basis include Tamil Nadu, Delhi, Kerala, Maharashtra Rajasthan and Uttar Pradesh when the frequency was low, below 49.0 Hertz. The main reasons for persistent over drawal of power were noted to be higher consumption, lower generation due insufficient rainfall, low water reservoir levels, outages, fuel shortage and delay in commissioning of units.

It is reported that Pravara Power is likely to achieve financial closure for its 30 MW bagasse based power plant at Pravanagar in Ahmednagar in a span of two months.

As per report the project will entail an investment of INR 150 crore and the plant will be spread over 21 hectare. The company has signed an MoU with MSEB in May 2008 and has received all necessary clearances.

Gammon Infrastructure has been appointed as the consultant & contractor for the project. Work on the plant will commence by October with completion scheduled for March 2009.

West Bengal government issuing newspaper advertisements announcing a rehabilitation package for Singur land losers, TATA Motors Limited expressed hope that the government's initiative would evoke a positive response.

TATA Motors in a statement said that “TATA Motors appreciates and supports the recent initiatives of the West Bengal government for Singur residents where it has acquired land for the small car project.”

The statement said that "TATA Motors hopes these initiatives will evoke a positive response from the residents of Singur and that all stakeholders will contribute to creating a congenial environment for the long term sustained operations of an industrial enterprise."

The West Bengal government placed display advertisements in newspapers announcing a rehabilitation package for those persons whose land had been acquired for setting up the small car plant at Singur. The company had earlier suspended work at the project on grounds that the atmosphere has not been congenial for carrying out operations there.

It is reported that US based International Automotive Components Group is planning to set up its new manufacturing and engineering plant at Chakan in Pune.

The project to be spread across 12.5 acre will manufacture vehicle interior components and systems including instrument panels, cockpits and door assemblies, entailing an investment of USD 25 million. The project is scheduled to be completed by the Q3 of 2009.

It is reported that Ministry of Micro, Small and Medium Enterprises has embarked a INR 1,000 crore National Manufacturing Competitiveness Program.

The program will be implemented in phases during the 11th and 12th Plan Five year period and over 10 segments will be targeted on PPP basis. For the implementation of each segment, 80% of the cost will be borne by the government and the remaining will come from private parties. The program is expected to boost the MSMEs across the country in primary manufacturing, retail and the service sector.

The 10 segments identified by the MSME ministry are market support for Bar Code mechanism, support for entrepreneurial and managerial incubators, manufacturing quality tools, campaign for investment of intellectual property rights, lean manufacturing program under cluster development initiative, mini tool room program, promotion of ICT, energy efficiency and quality certification, design clinic scheme and marketing assistance to small units with technology enhancement plans.

For the Bar Code segment INR 1.5 crore will be invested, incubators will see an investment of INR 80 crore, QMS/QTT INR 50 crore, IPR INR 5 crore and the LEAN program INR 230 crore.

It is reported that Power Grid Corporation of India is planning to pick up to 26% stake in Cross Border Power Transmission Company, a SPV of IL&FS Infrastructure Development Corporation that will operationalise the first Indo-Nepal transmission link.

The project involves setting up a transmission corridor involving construction of 400 kV D/C Muzaffarpur-Dhalkhebar link and PGCIL's role in the project is limited to the Indian portion of the transmission link.

The SPV has already got approval from Nepal Electricity Authority and PTC Financial Services to pick up equity in the transmission link. The project will commence officially once PGCIL joins in as a JV partner.

BL reported that Former executives of Nuclear Power Corporation of India Limited are in keen demand. With a bevy of private sector firms eyeing the opening up of the nuclear power business, there is a mad scramble among the prospective players to rope in retired NPCIL personnel to spearhead their nuke forays.

An official with a private firm eyeing the sector said that “NPCIL executives are the only ones who have any experience in the nuclear power generation space, especially in setting up and operating nuclear projects. So they are the most sought after talent pool right now.”

Reliance Infrastructure has already constituted a nuke power initiative group and hired Mr VK Chaturvedi former chairman of NPCIL to head the venture.

GMR Energy a unit of GMR Infrastructure Limited has roped in a posse of ex NPCIL executives including a former top level official of the State owned nuclear monopoly.

TATA Power, another contender in the fray has roped in Mr Sharaf Ali Bohra former NPCIL Director in an advisory role.

Suzlon Energy Limited has informed BSE that the Company received updated certifications for the V3 and V2 versions of the S88-2.1 MW turbine.

The certification comes from Germanischer Lloyd Wind a leading agency in the field of appraisals, certifications and expertise in wind energy and actively involved in the development of national and international standards.

These certifications are extensions of existing certifications on the S88 V3 as well as V2 turbines and are updated with inclusion of alternate makes and variant designs of some components.

The Minister of Railways Mr Lalu Prasad said that Indian Railways will extend all necessary assistance in the operation and management of Railways in Tanzania. This assurance came when the visiting Tanzanian delegation led by its Minister of Infrastructure development Dr Shukuru J Kawambwa met Mr Lalu Prasad.

Mr Lalu Prasad said that the request of the Government of Tanzania for providing the Indian line of credit on soft terms amounting to USD 83 million will be considered positively to make Tanzanian Railways a viable entity in long term.

The Minister said that RITES, a Public Sector Undertaking of Indian Railways, will continue to extend professional expertise and provide requisite resources to Railways in Tanzania. Both the Ministers have agreed that the management of Railways in Tanzania is part of the Government to Government cooperation and would further strengthen the bilateral relations between the two countries in the field of rail transportation.

RITES and Government of Tanzania have set up a Joint Venture, namely ‘Tanzania Railways Ltd to operate and manage Tanzanian Railways with RITES holding 51 per cent equity and the balance equity being held by the Government of Tanzania. Under this project, the TRL will operate and manage Railways on concession terms for the period 25 years.

It would be worthwhile mentioning that TRL, after taking over the Railways in Tanzania, have restored passenger and freight operations from Tanzanian capital Dar es Salam, introduced time-table trains, enhanced traffic movement, and commenced track renewal works. Recently, Indian Railways through RITES has supplied 23 passenger coaches to Tanzania. The Tanzanian Minister appreciated the progress made by TRL so far.

BL reported that engineering and construction mammoth McDermott International Inc’s group company Babcock & Wilcox Company is keeping an eye on the progress of the civil nuclear deal in India.

Mr Craig Hansen vice president (Washington Operations) of B&W in an email interaction with Business Line shared his views on the emerging opportunities for his company.

Mr Hansen said the US India Civil Nuclear Agreement is the first step toward US companies’ participation in India’s nuclear renaissance. US participation in this growing nuclear industry ensures India will have access to nuclear safeguards, technology, and operational culture, which would be complementary to the existing industry.

Mr Hansen said that the nuclear renaissance may result in the construction of dozens of power reactors over the next few decades. The approval of the agreement will create opportunities for B&W to work with Indian companies and power generation organizations to provide components, as well as technical and operational services, for a wide range of power reactors and related facilities.

Mr Hansen said India may be ideally suited for B&W’s modularly constructed small reactors. Modular small reactors do not require the same level of construction and operational infrastructure as large, 1000 MW reactors.

B&W has major interests in nuclear operations for US Government applications. The company’s links with Indian nuclear industry dates back to the 1950s. B&W is a group company of engineering and construction major McDermott International Inc.

ET reported that supplies of steel and steel products to special economic zones will continue to attract export duty at least for some more time. While the Andhra Pradesh and Madras High Courts have granted stay to petitioners who had complained against the export duty imposed on supplies to SEZs.

The commerce department has now referred the issue to the empowered group of ministers on SEZs which will take a call when it meets next month.

The Central Board of Excise and Customs levied export duty of 5% to 15% on various iron and steel products. The duty which is also applicable to supplies to SEZs has hit units in the zones especially those into manufacturing of engineering goods and automobile components.

Commerce department officials said that since SEZs were set up sale of goods from the domestic tariff area to the SEZs does not result in goods moving out of the country. Export duty on steel was imposed to check movement of steel outside the country.

An official said that “In case of sale of to SEZs, steel remains within the country, so there is no question of imposition of an export duty.”

The finance ministry, however, does not agree with this view. According to ministry sources, all supplies of goods and services to SEZs are treated as exports for all other purposes like calculation of incentives and so it cannot be interpreted differently to be exempted from export duty.

Moreover, they pointed out it was a deemed foreign territory outside customs as per the SEZ Act itself. The duty is to be collected by SEZ officials and then passed to the revenue department. Some developers and units in SEZs have filed cases against the imposition of export duty.

It is reported that Corus Process Engineering has been awarded a contract worth in the region of GBP 1 million to provide a complete design for a single strand continuous slab caster for Monnet Ispat & Energy of India.

The contract involves converting the existing 254 millimeter thick slab caster to a machine that is capable of producing three different thicknesses of high carbon steel slab. The overall contract between CPE and MIEL includes two other aspects, engineering services including refurbishment of the turret arms and the hardware sales and uplift from site.

Mr Willie Cowan project manager at CPE said that “CPE will also provide mechanical and electrical design services in converting the turret arms and Tundish Cars to fit the new Concast plant configuration which requires considerable design effort and know how. Much of the overall design effort will be spent converting the existing Concast plant equipment which previously cast 254 millimeter thick slabs, to plant that is capable of producing three different slab thicknesses: 200 millimeter, 254 millimeter and 300 millimeter. This involves modifying the moulds, Top Zones and segments.”

Monnet Ispat & Energy Limited is a company based in India that has diverse interests including sponge, steel, ferrous alloys, power, infrastructure and mining, both in India and overseas. MIEL will use the refurbished Concast plant to cast 200 millimeter, 254 millimeter and 300 millimeter thick high carbon steel slabs which will be used for rolling mild steel plate of various grades.

In 2001, the two Concast plants at Corus’ Llanwern site ceased operations, leaving just the rolling mill which still produces around 1 million tonnes of steel per year. In 2004-05, these two Concast plants were removed from site and temporarily stored at Corus’ Workington, Teesside and Llanwern sites. Some major items of the CC2 Concast plant were then supplied to Corus’ Port Talbot site for a new machine. The remaining parts from both machines will be supplied to MIEL.

Uplifting the various parts of the Concast plant ex Llanwern will be a major logistical exercise. The base of the turret has a diameter of 5.5 meters and weighs around 40 tonnes. The body measures 9.5 meter x 6.5 meter x 5 meter and weighs around 125 tonnes. Cranes and four 62 tonnes, 28 meter long booms will be required to lift the plant at Teesside.

It is reported that Reliance Anil Dhirubhai Ambani Group has proposed to invest INR 400 billion in Jharkhand to set up a 12 million tonne per annum greenfield steel plant.

Mr KK Khandelwal secretary of Jharkhand industrial said that “R-ADAG has moved a proposal to set up 12-million tonne steel plant in the state with an investment of INR 400 billion.” He added that the proposal has been sent to Mecon Ltd for further study.

Mr Khandelwal said that Jharkhand government and Reliance Infrastructure, part of R-ADAG will sign a memorandum of understanding once the proposal is cleared.

World's top producer of seamless steel pipes for the energy industry Tenaris warned of a downturn in its results for the third quarter but said the medium term outlook is favorable.

Mr Paolo Rocca CEO of Tenaris said that "The quarter will be weaker because of the summer closure of European plants. The situation was aggravated by hurricanes in America."

He added that "But if we look at the medium term, the situation is favorable for Tenaris.”

Mr Rocca said production of highly specialized pipes, for example for the harsh Arctic climate, was Tenaris's trump card as energy companies worldwide were expanding exploration in difficult conditions spurred by high oil prices and gradual depletion of mature fields.

He added that another boost is likely to come from national oil companies in resource rich developing countries, which need sophisticated equipment and services as they build up exploration expertise to become independent from international oil majors.

Bloomberg reported that a direct buyer claimed in an antitrust lawsuit that ArcelorMittal, United States Steel Corp and six other producers of the steel for the US market have for three years plotted to fix prices by limiting production.

Steel fabricator Standard Iron Works claimed in its complaint filed on September 12th 2008 alleged that the companies conspired to restrict output and to fix, raise, stabilize and maintain at artificially high levels the prices they charged for steel products in the US.

The lawsuit, filed by the Scranton, Pennsylvania-based company in Chicago federal court, seeks class action or group status for anybody who has bought steel from the firms since January 2005, together with unspecified money damages.

It is reported that oil tumbled below USD 100 a barrel to a 6 month low on early signs that Hurricane Ike may have spared key Gulf Coast infrastructure, although traders were cautious on Monday as they awaited status reports on more Texas refineries.

The upside for oil which has lost about 32% since its peak of over USD 147 in mid July was also limited as financial woes mounted after talks to rescue Lehman Brothers faltered and Bank of America Corporation agreed to buy Merrill Lynch & Company Inc which has also been struggling with mortgage related debt.

As per report, US light crude for October delivery fell USD 1.52 or 1.5% to USD 99.66 a barrel by 0223 GMT. London Brent crude fell USD 1.23 to USD 96.35. US prices dived as low as USD 98.46 the lowest since February 26th on Sunday, when the New York Mercantile Exchange held a special trading session due to Hurricane Ike.

Oil has fallen steadily since mid July's peak of over USD 147 a barrel amid mounting evidence that high energy costs and a weakening economy are cutting deeply into fuel consumption. Oil firms rushed to their offshore facilities and coastal refineries to check for damage on Sunday after Hurricane Ike's direct hit on the Houston energy hub left a quarter of US oil and refined fuel production idled and millions without power.

Vietnam News Agency reported that the steel price has decreased to VND 16.5 million to VND 17 million per tonne as the purchasing power has dropped by 50%, while the ingot steel price has fallen by USD 200 per tonne to USD 750 per tonne.

In previous months, the steel prices in HCM City were always VND 1.5 million to VND 2 million per tonne higher than the prices quoted by manufacturers. Now the gap is VND 500,000 per tonne only. F6 steel is now trading at VND 17,500 per kilogram, down by VND 1,300 per kilogram over the beginning of the month.

Mr Pham Chi Cuong chairman of the Vietnam Steel Association said that consumption has decreased sharply in comparison with previous months. The enterprises now have 30,000 tonnes in stock. In August 2008, they sold 120 to 130,000 tonnes, just a half of that in July 2008. In previous years, they could sell some 300,000 tonnes in July and August.

He added that "With the current ingot steel prices, enterprises will incur losses if they sell at VND 16 million per tonne and make steel with expensive high ingot steel."

Meanwhile, the ministry of industry & trade has asked the industry & trade information centre to analyze and give timely forecasts in order to help management agencies to have suitable measures to stabilize the market and help enterprises control their production plans.

The Baltic Exchange's BDI for global raw materials trade sank to an 18 month low on Monday, knocked by stormy financial markets, falling commodity prices and worries over world economic growth.

It extended losses by falling 53 points or 1.1% to 4,747 after losing close to 1,000 points last week.

The index has lost 56% since striking a record in June on booming demand for natural resources in China and India and mounting congestion at key export terminals in Brazil and Australia.

Sims Group Limited announced today that SA Recycling, a JV between Sims and Adams Steel operating in Southern California in Arizona and Nevada has acquired a 70% interest in Silver Dollar Recycling at Las Vegas in Nevada.

The financial terms of the deal, including price, were not disclosed.

Silver Dollar Recycling operates a shredder and has a leading position in Las Vegas.

Sims is the world’s largest listed metal recycler with over 230 operations globally. Sims’ core businesses are metal recycling and recycling solutions. Sims earns around 80% of its revenue from international operations in the United Kingdom, Continental Europe, North America, New Zealand and Asia. Sims has over 6,000 employees, pro-forma turnover in fiscal 2008 of over AUD 10 billion.

Nucor Corp has increased its third-quarter earnings guidance to between USD 2.15 and USD 2.20 per diluted share, up from previous estimates of USD 1.80 to USD 1.85 per diluted share.

The Charlotte based steel manufacturer earned USD 1.29 per diluted share in the third quarter of last year.

Nucor said that it has boosted its outlook because of the company’s improved overall performance, a lower than expected last in, first out accounting charge and strong contributions from recent acquisitions. Nucor bought Harris Steel Group Inc.

It is reported that, ever since a decision was made by government in 2006 to abolish import duties on wire, South African Wire Association has been working harder to encourage more local production and exportation of wire products and discourage the importation of such products.

Mr Bushy Botha chairperson of SAWA said that South Africa one of only a few countries to have duty free imports on wire, and that imports have risen noticeably since the abolishment. He added that "Although the reason for the abolishment was to lower costs for South African consumers, there could have been more local production if there was more protection."

He said that the abolishment of import duties has resulted in local wire users being able to import duty free wire from low price vendors such as the Chinese. He added that "While the recent earthquake catastrophe and the Olympic Games in Beijing have hindered China's exporting capabilities to a degree, this will pass."

He cites the relatively low cost of labor in China as being the main reason for China's low cost production capabilities. This is reflected by the fact that the more labor intensive products are more competitively priced than the rest.

Mr Botha said that SAWA has been trying to reduce the amount of imports of higher technical products. The association has been attempting to align with a strategic partner that will invest in a factory in South Africa.

Mr Dries Olivier executive director of SAWA said that, while China and India may have a price advantage, South Africa competes on the world market with a quality advantage. He added that "The quality of the steel produced in South Africa is world renowned, and that is our input product. We have a wide range of wire and much cleaner steels."

Mr Olivier said that although the South African wire industry is valued at around ZAR 2 billion, its contribution to satisfying the global demand is less than 1%. The largest importers of South African wire are Europe and Australia, and large quantities are supplied to the African market.

With a price increase of USD 100 per tonne on offer, Japanese integrated steelmakers have begun negotiations on their tinplate exports to Asian destinations for shipments in the October to December 2008 quarter.

According to market sources, local customers are reacting with no surprise to the price increase on offer unlike what they have done in the past. The sources cited the identical price increase on offer in the Japanese steelmakers' TMBP exports under negotiation for October to December quarter shipments to Asian destinations. The Japanese steelmakers have already agreed with Thailand's tinplate manufacturers on the TMBP price increase this time.

By comparison, South Korea's steel re rollers are said to have started their tinplate export negotiations on Q4 shipments to Southeast Asia. On offer in the negotiations is a price increase of USD 100 per tonne. The Korean steel re rollers are believed to have offered the price increase to forestall the prospects of increased HR coil costs.

There is a favorable environment in Asia for tinplate deals. With tight supply demand conditions for tinplate, the Japanese steelmakers are promoting their tinplate export deals on Q4 shipments to Asian destinations, assuming that price and quantity terms are settled for a package. As a result, in prospect are cases of a price settlement to meet an assured supply volume.

Meanwhile, the Japanese steelmakers are on a roll in the tinplate exports they negotiate to the Middle East. Until now, they have firmed up deals at high prices of USD 1,800 to USD 1,900 per tonne FOB one after another.

From Tex Reports

Bloomberg reported that Lehman Brothers Holdings Inc was suspended from energy and metals trading in London after London Metal Exchange declared the company a defaulter.

Mr Robin Bhar a strategist at Calyon in London said that "Lehman is an important counterparty in the commodity markets. Still, the bank's positions on the LME are unlikely to be huge.''

Lehman was forced to file for bankruptcy after two suitors, Barclays Plc and Bank of America Corporation, abandoned takeover talks. It joins Bear Stearns Co, Merrill Lynch & Co and more than 10 banks that couldn't survive the credit crunch.

Lehman's value at risk to commodities, a measure of how much the bank estimates it could lose, averaged USD 15 million a day in the quarter ended August 31st 2008 as compared with USD 12 million in the previous quarter.

Lehman is a so called category 2 member of the LME and eligible to issue and clear metals and plastics contracts. It can not trade on the floor of the exchange. It was suspended from trading on the bourse's Select electronic platform.

Taiwan’s Feng Hsin Iron and Steel has announced to hold domestic rebar, section and scrap prices unchanged this week.

This move is bringing its prices stable after the nosedive in the past weeks. The company’s rebar price is now about TWD 25,500 per tonne. And the new offer price of section steel remained at the same level in a range of TWD 25,000 per tonne to TWD 25,200 per tonne

The company’s scrap purchasing price is now between TWD 10,900 per tonne to TWD 11,600 per tonne

(Sourced from Yieh.com)

It is reported that, as global steel scrap price rebounded last week, Taiwanese domestic prices of rebar and billet are expected to rise in the future.

Furthermore, due to restriction on rebar and billet exports, local rebar price has hit the bottom and the price is very likely to rebound thereby.

Specifically, local rebar price is anticipated to hit the bottom in late September 2008 and rebound in early October 2008. Thus, currently mills and stockiest are not willing to undersell their rebar stocks.

(Sourced from YIEH.com)

Japan's Kanto Tetsugen cooperative association of ferrous scrap dealers is contemplating holding its sales tender on September 10th 2008 to export locally available number 2 HMS from the Kanto area for October 2008 shipment. Scheduled for sale is a total quantity of 5,000 to 20,000 tonnes.

Kanto Tetsugen sold a total of 20,000 tonnes of number 2 HMS at an average JPY 50,650 per tonne FAS in its previous export tender held August 12th 2008. As a result, the average sales price fell considerably by JPY 17,100 from the corresponding one in the earlier tender.

Japan's number 2 HMS export market has continued to decline since Kanto Tetsugen's previous export tender took place. At present, the going FAS prices of number 2 HMS are lower than JPY 40,000 per tonne in the Tokyo Bay area. As a result, there is a strong possibility that Kanto Tetsugen will see the average sales price to recede further in its September 10th 2008 export tender.

It is reported that as demands from Southeast Asia dropped sharply recently, prices of steel semi finished product and long product in Korean market declined significantly.

It is said that the offer of Russian square billet has decreased to USD 750 per tonne from USD 1,170 per tonne previously. However, the prices are expected to rebound as demands from South East Asia and Middle East are coming back in the next few months.

(Sourced from YIEH.com)

According to a new report by European bank HypoVereinsbank, ship owners are turning to green technologies in an effort to save on bunker costs. The international survey questioned both German and international ship owners. It showed that two thirds had already introduced environmental management procedures into their companies. Of those questioned, 94% considered hull design improvements and better engine efficiency as a way of helping them increase their mileage.

About 86% said that they would consider using new coatings and enhanced propeller designs to help cut back on fuel consumption. Many ship owners also said they are trying to upgrade their fleets ahead of International Maritime Organization regulations.

Many of those questioned confirmed they were turning to greener shipping technology as a way of not only reducing emissions but also to cut their fuel costs. About 23% believe that the SkySails GmbH & Company KG towing kite system will play a bigger role in the future of shipping and 65% believe that a CO2 index for vessels would help form the basis to include shipping into emissions trading.

Meanwhile, a new technology to clean hulls without the use of abrasives that can damage or remove anti fouling paint is said to be attracting world wide interest. Commercial Diving Services' Hull Service Treatment said that its process is cost effective, environmental friendly and will help vessels reduce fuel consumption. The company's hull cleaning service uses heat via thermal shock to kill marine algae and weed growth without its immediate removal. The material is later washed from the ship's hull by the natural pounding forces of open sea conditions after the vessel has left the servicing port or harbor.

A Commercial Diving Services spokesman said that some recent surveys suggested that the average fouling resistance for a commercial ship is 30% if the condition is not corrected. He added that "It appears that at least 10% may be saved in average fuel costs if regular anti fouling procedures are undertaken and for an average ship that burns 100 tonnes of fuel per day, that represents a saving of about USD 5,800 a day."

Reuters reported that Singapore's Neptune Orient Lines has carried 10% YoY more containers in the four weeks to August 22nd 2008 as compared with the same period a year ago.

Neptune Orient said in a statement that its shipping arm APL carried the equivalent of 208,200 40 foot containers in that period. The average revenue on each container carried by Neptune Orient rose by 7% YoY to USD 3,116, from US