Kalinga Times last week reported that ArcelorMittal is in talks with bankers to evolve a mechanism to provide appropriate investment advice to the farmers and local people whose lands would be acquired for its 2 Greenfield integrated steel plants in Orissa and Jharkhand.

ArcelorMittal is in talks with the bankers to evolve a mechanism an appropriate model on how to go about it so that some sort of a regular periodical income is assured.

Mr Vijay Bhatnagar CEO of ArcelorMittal India said that “The move is aimed to ensure that these people, who have never handled large sums of money, do not get misguided by unscrupulous elements and end up losing their money. The objective is to figure out ways for these people having very little or no education and financial knowledge get the highest possible return through safest possible investments.”

Mr Bhatnagar added that ArcelorMittal is also of the view that 50% of the compensation money should desirably be put in the name of the wife as it is she who actually runs the family and brings up the children. He said that “This would function as a sort of back up for the lady to run the family and bring up the children.”

Since legally the money has to be given in the name of the titleholder of the land, the company plans to involve the local village panchayats and NGOs to create a conducive atmosphere for putting 50% of the money in the wife's name.

Mr Bhatnagar said that “We are very clear that these investments would not be made in our company as that could again end up sending out wrong signals.”

The fall in prices was reactivated in last week. The overall steel index fell by 43 points:

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

The lowest values, after a continuous slide from August 5th 2008, are as under

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

Long products

Flat products

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

Input materials

Domestic prices for iron ore remained largely unchanged at Burwil, but sponge iron prices went down at Kolkata due to lack of demand. Scrap, Pencil Ingot and pig iron prices remained stable with negligible minor decline at some of the centers.

Melting scrap
80:20
HMS

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

Alang

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

Pencil ingot

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

Pig Iron

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

Sponge iron

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

Long products
TMT
Fe 415
12mm

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

WRC
SWR14
5.5/6

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

ANGL
GR A
65x6

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

CHNL
GR A
75/100

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

JSTI
GR A
250x125

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

However, prices are expected remain stable to low in the coming week due lack of buying and international downtrend in prices.
Flat products

HRC
Tube
2.5x1250

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

Patra

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

PLTS
GRA
8x1.5

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

PLTS
GRB
12-20x2.5

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

CR
DSK
0.63x1000

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

GC
100Gms
0.4

Change on September 19th is with respect to prices on 12th September
Change is in INR per tonne

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

What is important to take note of now, however, is that the Indian steel industry suddenly finds itself in a completely different context. In the world of steel, every player remains familiar with the cyclical nature of the growth. Therefore, the slowdown should not have surprised any in the industry. But, none really expected this to have happened so fast. The steel super cycle seems to have been ended abruptly or really?”

“India’s steel dream looks to be fading away” This is how we started our last year’s steel report. With the added uncertainty, the industry’s plans are in total disarray. There are no questions on the opportunities this country has offered in steel. From all points of view, these have been strong and credible ones.”

But the recent great years in steel have supported strong capacity growth in the steel industry in India. The more competitive brownfield expansion projects have started delivering results and more are expected to come. What has been extraordinarily interesting to note in the past few years is the growth of very small to mid size capacities.

The Indian steel industry is in a peculiar fix. The capacity could not be raised immediately because of their own strategic problems. The limited capacity in the country and higher global prices provided to them all the opportunities to make sufficient money themselves and raise their credibility in the global capital market. However, an impulsive government, given the high political value attached to inflation in India, intervened in the steel business more than it needed to do.

Despite the fact that the capacity expansions in India have been of recent origin, a huge chunk of the existing capacity is technologically outdated or is uniquely backward.

It will be premature to write India’s steel ambition off despite all the bad news surrounding it currently.”

“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

Chances of a solution to Singur impasse on Sunday appeared to have receded further with West Bengal government warning for the first time that the TATAats would leave the state if there was further delay in accepting its rehabilitation package for farmers and Trinamool Congress threatening fresh agitation of its demand was not accepted.

Mr Buddhadeb Bhattacharjee CM of West Bengal who a day earlier met the Governor to convey to him that he was open for talks with Trinamool Congress on the package that provides for 70 acres of land from within the TATA Motors car project area and compensation, appealed to the opposition parties to withdraw their agitation and accept it.

He said that "I appeal to opposition parties to accept the government's package on the land acquisition at Singur for the TATA Motors factory and withdraw the agitation. If there is any further delay, this project will leave West Bengal.”

Ms Mamata Banerjeer Trinamool chief, however gave the government a seven day deadline to operationally the September 7 agreement reached between her and Mr Bhattacharjee in the presence of Governor Mr Gopalkrishna Gandhi or she would resume her suspended dharna outside the TATA Motors plant at Singur.

BS reported that TATA Motors, which suspended work at the Nano plant in West Bengal's Singur in view of continued confrontation at the site early this month, has held talks with Gujarat Chief Minister Narendra Modi over relocating the facility to the state.

In a closed door meeting held at Modi's official residence on Saturday afternoon a team of TATA Motors officials led by Mr Ravi Kant MD discussed setting up the project in Gujarat.

Top Gujarat government officials as well as the chief minister’s office ensured that the Saturday's meeting remained a closely guarded affair.

However, sources close to the development told Business Standard that the meeting lasted for over 30 minutes, where TATA Motors officials evinced interest in Mundra as one of the probable locations for relocating the plant.

A source said that "TATA Motors is exploring various locations, one of them is Gujarat. The group is looking at Mundra in the Kutch region as one of the locations.”

BL quoted Mr S Hajara CMD of SCI as saying that Shipping Corporation of India expects to firm up its plans for setting up JV for ship building by this year end.

Mr Hajara said that “We expect to firm up our plans for setting up 1 to 2 shipyards by December this year. The partner could be Indian or foreign.”

SCI is in talks with various companies for setting up the shipyards in India. He declined to share any further details on the JV. The Shipping Ministry has been working on a proposal to set up a shipyard each in the east and west coast of the country in which SCI has evinced interest. The shipbuilding plans that SCI hopes to firm up by December are however, independent of the Shipping Ministry’s proposed shipyards.

According to ASSOCHAM, white goods segment is estimated to achieve production levels of INR 27,000 crore by end of 2008-09 as against INR 23,500 crore in previous year and show a growth of 15% in view of wide spread demand due to emerging competition among their manufacturers which would results into massive price relaxation.

An analysis on “White Goods, Emerging trends” done by ASSOCHAM also revealed that in white goods segment, products whose demand will multiply include home theatre systems, color TV, DVD players, Microwave oven etc. The color TV production as per estimates by ASSOCHAM was around 15.10 million units in 2006-07 which went up by 25% in 2007-08 and touched around 18 million units.

ASSOCHAM has projected that growth of white goods product in case of Refrigerator will take place between 18% to 22% and those of Air conditioners in the range of 32% to 35%. Washing machines segment is likely to grow by 15% to 20%, microwave ovens by 35%, color televisions in the range of 25% to 30%.

Mr Sajjan Jindal President of ASSOCHAM said that demand for consumer durables has increased with rising income levels, double income families, changing lifestyles, availability of credit, increasing consumer awareness and introduction of new models. Products like air conditioners, microwave are no longer perceived as luxury products.

Increasing consumer awareness and preference for new models have added to the demand. Products like air conditioners, microwave ovens are no longer perceived as luxury products but are treated as necessities in the changed socio economic environment with changed life styles.

The increasing popularity of easily available consumer loans and the expansion of hire purchase schemes will give a moral boost to the price sensitive consumers. The attractive schemes of financial institutions and commercial banks are increasingly becoming suitable for the consumer. Companies itself providing the different schemes like exchanging schemes, easy installment etc to the end users.

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

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

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

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

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

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

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

Press Trust of India reported that National Aluminum Company Limited has drawn ambitious growth plans worth INR 40,000 crore involving projects abroad and within the country in a bid to emerge as a global giant.

Mr RC Pradhan chairman of NALCO said that "In order to emerge as a company of global repute, we have drawn ambitious growth plans worth INR 40,000 crore for the next 5 years. These include smelter and power projects in Indonesia and Iran."

He said that the company is planning both Brownfield and Greenfield projects within the country.

It is reported that the 2x660 MW second stage of NTPC mega power project at Barh near Patna in Bihar was launched by Mr Jairam Ramesh minister of State of Commerce and Power.

Both the supercritical 660 MW units are being supplied by BHEL and these will be the first such units for the PSU. The total investment is pegged at INR 7340 crore. The first 660 MW units will be commissioned in March 2012 and the second 660 MW units will be commissioned in January 2013. The Minister inaugurated the site office of BHEL as well.

Barh Stage-I begun in February 2005 as 3x660 MW but it is considerably behind schedule mainly because of long standing contractual disputes between NTPC and the Russian company Technopromexport which is the turnkey contractor for the project. TPE is supplying the boilers and another Russian company Power Machines is supplying the turbine generators. Unit 1 was supposed to have been commissioned by March 2009 but the current anticipated date is January 2011. The other two units are also delayed by over 2 years.

The total cost of Stage-I is INR 8700 crore of which roughly INR 3000 crore has already been spent. Material supply for the first unit is almost complete but erection work has yet to begin.

For the past few months, NTPC has been in dialogue with TPE to sort out the disputes over price and time escalations and get work resumed at the site. But there has been no breakthrough.

When all 5x660 MW units are fully functional, the Barh project spread over around 3200 acres will be the single largest power generating complex of NTPC. Over 98% of the land has already been acquired. The associated transmission system is being implemented by PGCIL.

BL reported that supply of goods from domestic tariff area to special economic zone developers against payments made in rupees will now be entitled for duty neutralization benefits, enabling the SEZ developers to procure goods from domestic manufacturers at international prices.

The Directorate General of Foreign Trade has given effect to the empowered Group of Ministers decision to allow duty entitlement passbook benefit to an exporter from DTA supplying to a SEZ developer or co developer and receiving payments in rupees from that developer or co developer.

This DEPB facility will be available for supplies received with effect from February 10th 2006 the date SEZ Act came into effect.

Mr LB Singhal DG of Export Promotion Council for EOUs and SEZs said that “The DGFT move would encourage SEZ developers to procure goods from domestic manufacturers rather than importing and this would in turn encourage domestic manufacturing and backward integration of SEZs.”

He said that the DGFT had now made operational a facility that was envisaged in the SEZ Act and rules itself, but was not implemented so far because of stipulation that SEZ developer should make payment for supplies received from DTA in foreign currency.

Mr Singhal said that the department of commerce would soon issue guidelines for allowing drawback facility in respect of supply of inputs from DTA to SEZ developers against rupee payments. He said that “In such a situation, domestic manufacturers would have an option of either taking DEPB or drawback.”

SEZ developers could not make payments in foreign currency as they were not exporters nor were their earnings in foreign currency.

BL reported that a weakening rupee has set Indian automobile companies revising their export targets, reviewing future outlooks and exploring new markets to push overseas sales. The rupee depreciated against the dollar from INR 40 in the beginning of the fiscal to INR 46 currently.

As per report, Hyundai Motors India is planning to revise its export target in view of the favorable currency rate and also look at new, smaller markets.

Mr Arvind Saxena senior VP of Hyundai Motor India said that “Earlier we set an export target of 2.12 million tonnes units for the current fiscal. We have revised it to 2.6 million tonnes units.”

Mr Saxena said that the rupee depreciation happened very recently and the company is still working out its impact. It will help better export revenues.

Mr Anand Mahindra vice CMD of Mahindra & Mahindra said that “The present situation is good for exports. We will explore new regions with our tractors and utility vehicles. He said that we will increase our tractor sales in Africa and utility vehicle sales in Latin America. We have set up assembly plants in these regions”.

According to the latest report from Society of Indian Automobile Manufacturers, total vehicle exports from India till August, across all segments is up by 24% YoY at 140,728 units.

Indian automobile manufacturers have been struggling under adversities in the domestic market, ranging from escalating input costs to high interest rates. Automobile exports which have been on the upswing for sometime now, are likely to get a further push due to the depreciation of the rupee.

It is reported that Videocon Industries in consortium with Bharat Petroleum Corporation Limited has acquired a Brazilian oil exploration firm for USD 283 million.

Videocon in a filing to the Bombay Stock Exchange said that a 50:50 JV of Bharat PetroResources Limited and Videocon Industries has completed the acquisition of the entire stake of EnCana Brasil Petroleo Limitada from Canadian gas producers EnCana Corporation and Alberta Limited.

As per report, the acquisition has been made for a consideration of USD 165 million while the consortium would also pay USD 118 million as reimbursement the Canadian firms’ expenses.

Last year, the domestic entities had entered into an agreement with the companies to acquire their exploration arm saying that the deal was for interests in 10 deep water offshore exploration blocks in 4 concessions in Brazil.

The filling said that while Brazil’s national oil company Petrobras operates in three concessions, US based Anadarko Corporation’s Brazilian subsidiary operates in one concession.

Project Today reported that Rashtriya Chemicals & Fertilizers has kicked off its plan to invest over INR.6,000 crore in Mozambique. RCF will explore its opportunities to set up phosphoric acid and granulation unit, in collaboration with Industrial Development Corporation of South Africa and Foskor.

As per report, the proposed JV is for the supply of 6.50 million tonnes per annum rock which will then be railed to Mozambique where phosphoric acid production and granulation will take place.

Gujarat Narmada Valley Fertilizers Company and National Fertilizers and NMDC is also likely to join in the implementation of the upcoming project. Besides, phosphoric acid and granulation unit, the Mozambique authorities have indicated that RCF can also be involved in the development of its mining and infrastructure capacities.

BL cited Mr Pranab Mukherjee external Affairs Minister as saying that India is hopeful to start cross-border trade with Pakistan.

Mr Mukherjee on the sidelines of the annual general meeting of Bengal National Chamber of Commerce and Industry told newspersons that “Discussions are still on with Pakistan on cross LoC trade and we are hopeful in this regard.”

Earlier, India had planned to start the cross border trade soon after ‘Ramzan’ month this year.

In 2005, India had suggested trade across the LoC on Srinagar-Muzaffarabad, Poonch-Rawalkote and Kargil-Skardu routes. A list of items, too, was handed over to Pakistan in this regard.

Kalinga Times reported that NALCO in the 27th Annual General Meeting held here on Saturday, the shareholders of National Aluminum Company Ltd approved the annual accounts for 2007-08 with a sales turnover of INR 5576 crore, net profit of INR 1632 crore and an export earning of INR 2135 crore.

They also approved a dividend payout of 60% amounting to INR 386.59 crore (including 45 percent interim dividend paid in February 2008) on the paid-up equity share capital of INR 644.31 crore.

During the year, NALCO has achieved 104.48% capacity utilization of its smelter at Angul with a production of 360,457 tonnes of aluminum cast metal against 358,734 tonnes in the previous year.

Similarly, the alumina refinery at Damanjodi has reported 100.04% capacity utilization with a production of 1,575,500 tonnes of alumina hydrate against 1,475,200 tonnes in the previous year. Production of Bauxite increased to 4,684,684 tonnes from 4,623,278 tonnes in the previous year.

It is reported that state owned PSU Oil India Limited would soon launch an IPO to raise debts. It said in a statement that the company would generate funds from the market if the IPO fails to generate required debts.

Mr MS Pasrija CMD of OIL said that the company is preparing for IPO and it would float the offer within a period of 90 days. The company would issue the shares of worth 2.64 crore making a pre IPO sale of 10%. The pre sale would go to Hindustan Petroleum Corporation, Bharat Petroleum Corporation and Indian Oil Corporation.

As per report, the company spent INR 4,575 crore in for exploration and production. It has completed various projects in the India and overseas in the current fiscal.

The company recently got the approval of Security and Exchange Board of India in this regard.

Project monitor reported that PSU refiner Chennai Petroleum Corporation Limited has proposed to invest INR 7,800 crore over the next 4 years in its Manali refinery complex in Tamil Nadu.

Now part of the Indian Oil Corporation group, CPCL would be expanding its 3 million tonnes per annum refinery to 4 million tonnes per annum, besides undertaking residue up gradation project and auto fuel quality up gradation projects to meet Euro IV standards, revamp of naphtha hydro treating and catalytic reforming unit at Manali and to produce high quality motor spirit.

The report said that Chennai Petroleum Corporation has also planned a single buoy mooring facility to handle crude imports. This facility, costing around INR 700 crore will come up between Ennore and Chennai ports. The detailed feasibility report is expected by this year end. The proposed SBM would enable Chennai Petroleum Corporation to bring very large crude carriers of up by 270,000 deadweight tonnes. Currently, only 60,000 deadweight tonnes vessels can call at the Chennai Port. The SBM will result in a substantial saving in transportation costs.

It is learnt that Chennai Petroleum also has long term plans of setting up by 15 million refinery and petrochemical complex in Tamil Nadu with an estimated investment of USD 10 billion. Nodal agency Tamil Nadu Industrial Development Corporation has offered three locations.

It is reported that TATA Bluescope Steel will set up its fourth manufacturing unit at Jamshedpur at an investment of INR 900 crore.

As per report, the other manufacturing units are located at Pune, Rewa and Chennai. The Jamshedpur unit would be operational by the last quarter of 2009. The company also announced its entry in the retail segment with 'Durashine' range of colour coated steel building products in the eastern region.

Sources said that "This is in addition to the existing range of building products and solutions that the company offers in the SAARC region."

BS reported that the Chhattisgarh government is planning to put on hold allotment of Kawardha iron ore mines till the Assembly elections which are slated for November 2008.

Besides, ArcelorMittal, TATA Steel and 3 other companies are in the race to get control over the iron ore mines in Kawardha about 120 kilometer from the state capital of Raipur. The company winning the bid to mine 100 million tonnes of iron ore in Kawardha will have to set up a steel plant.

Mr Gourishankar Agrawal chairman of Mineral Development Corporation of Chhattisgarh said that “As of now, we have kept the matter pending and any decision on the allotment of iron ore mines in Kawardha is likely to be taken after the state Assembly elections.”

The mines had been allotted to CMDC which invited proposals from private companies to form a JV for mining and value addition to the mineral within the state.

Initially, about 30 companies had showed interest for the iron ore assets in Kawardha. But later only eight companies submitted their proposals. Ispat Industries and Bhusan Steel were disqualified after the bids were opened in early August. Besides ArcelorMittal, TATA Steel, Sarda Energy and Minerals, Adhunik Steel and Jai Shree Balaji Steel are left in the race.

A senior executive of a company in the race said that “Since the marking process was completed, CMDC should have issued the letter immediately and allotted the mine as it was not possible that none had qualified.”

ET reported that Mr Naveen Jindal led Jindal Steel and Power plans to float a wholly owned subsidiary, Jindal Petroleum which would look after the domestic and overseas oil and natural gas operations of the company. It is learnt that the firm has acquired exploration rights to one oil block in Rajasthan, 4 blocks in Georgia and 3 blocks in Peru.

Recently, the company along with Namibia based Enigma Oil and Gas Exploration received exploration rights to three onshore oil blocks in the Maranon and Huallaga basins in northern Peru.

EOGE is a wholly owned subsidiary of Chariot Oil & Gas an independent oil and gas exploration group. JSPL owns 50% in Block 159 in the Maranon basin and 80% interest in each of the other two, Block 147 in Maranon and Block 153 in the Huallaga basin. The remaining stake in the blocks is held by EOGE.

Mr Sushil Maroo director of JSPL’s said that “To attain energy security, the government has started New Exploration Licensing Policy to attract private sector companies to invest in oil and gas exploration. We are using this opportunity and intend to form a separate arm that would control all oil and gas operations of the parent company.”

Mr Maroo refused to divulge any detail. But he said that “We now have access to oil blocks in Peru, the exploration work on which is expected to commence in the next months. Following exploration, a detailed study will be conducted on the region and after a year drilling work will begin.”

According to sources, the company has also been allotted exploration rights to an oil block near Jaisalmer, Rajasthan. The block is spread across an area of 1,400 square kilometer.

The Hindu reported that the ban on movement of lorries transporting iron ore in Bellary city limits has now been extended to other heavy commercial vehicles.

Mr B Shivappa deputy commissioner of Bellary city said that the district administration had decided to ban the movement of all heavy commercial vehicles including those transporting sand in Bellary city between 6 AM to 9 PM. However, those transporting essential commodities such as medicines, medical equipment, petrol, diesel, vegetables and the like would be exempt from the ban.

A decision to this effect was taken following a proposal made by the Superintendent of Police who had said that there had been an increase in movement of lorries transporting sand as well as other heavy commercial vehicles in the city, causing traffic congestion.

UK based MEPS said that "There has been very little movement in strip mill product prices since July 2008. However, demand over the holiday period has been slower than normal for the time of year because of the current poor economic climate. This has caused growing concern over the trend for the final quarter. Most companies have sufficient inventories for the near term and are in no rush to conclude new business. The mills are likely to reduce capacity rather than chase orders by lowering prices, particularly before the annual auto contracts are settled. So far, there is no evidence of severe downward pressure from third country imports. Despite price reductions by Chinese exporters, many European buyers have not been tempted to place business because they suspect further discounts will be offered."

It added that "In Germany, the higher values that producers tried to enforce for September deliveries of some strip mill products were only accepted by a limited number of customers. Service centers have enough steel to cover current demand, which has weakened in several market sectors. There is now more ex stock material available from the EU mills. Some quantities of Indian and Chinese imports have been ordered and should arrive in time for the final trimester. Negotiations with local suppliers for period four shipments are due to start later this month. We do not believe that any increases will be possible, despite such proposals by the steelmakers."

According to MEPS, "Prices have stabilized in France, following the third quarter rises. Sales of coils at the beginning of September are described as not very good. Moreover, demand from the auto industry is expected to fall as French car makers have announced some temporary shutdowns. Steel producers are said to be looking for further price advances in the final trimester. However, the general feeling is that values are likely to remain steady. Meanwhile, negotiations for annual contracts are taking place with end users aiming to implement a rise of at least EUR 250 per tonne for 2009."

It said that "Subdued Italian sales over the summer have led to some discounting by the local producers. Buyers are limiting purchases because they expect prices to drop further. The quantities of third country material at the ports are rising. Distributors' inventories are too high for present demand, which is poor. They can live off their stocks for a while. The auto sector is under performing and construction is sluggish."

MEPS also said that "UK companies are holding off purchasing as manufacturing and building activity continues to contract. Sales at the service centers have been disappointing over the summer so inventories are slightly higher than planned. Consequently, resale values have come under negative pressure. Fourth quarter mill negotiations will get underway towards the end of the month. Market players are not anticipating any price falls but neither do they believe increases will be viable. The weakness of Sterling should help to keep imports at bay. Third country offers do exist but are not particularly competitive, especially when the long delivery lead times are taken into consideration."

It further added that "The Spanish building industry is in deep recession. Additionally, steel suppliers cannot obtain credit for any construction related companies. Customers are covered for their requirements in October and November and may be back in the market by December. Inventories are quite low because both end users and service centers are buying only the minimum possible quantities."

It is reported that USA's domestic ferrous scrap market is on track to rebound as evidenced by moves this week for an increase of around USD 50 per long tonne in ex yard prices.

There are strong expectations among local metal merchants for new purchases of US ferrous scrap by Turkey's electric steelmakers after Ramadan. Ramadan is the month of daytime religious fasting in the Islamic calendar. In the first week of September, Turkish electric steelmakers bought ferrous scrap cargoes from the US East Coast.

Negotiated prices are said to have stood at levels of USD 420 per tonne C&F for a mix of 80% No1 HMS/20% No2 HMS and USD 425 per tonne C&F for the shredded grade.

In the USA, local transaction prices of ferrous scrap already hit bottom on the West Coast last week. Ex yard prices there have recovered to a level of USD 300 per long tonne for No1 HMS this week, up from the earlier level of USD 270 to USD 280 per long tonne. It is understood that ex yard arrivals of material