Indian domestic steel prices have been on downward trend during 23 days of September. But flat products have been hit harder, specially plates.

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IFPPI – Indian Flat Product Price Index
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IANS cited Mr Raman Singh CM of Chhattisgarh as saying that Chhattisgarh is now on the fast track to industrial development with top companies rushing to the state with massive investment plans.

Dr Raman said that in an exclusive interview told IANS that “Chhattisgarh is now one of the top destinations for investors in the steel sector and companies like TATA, Essar and NMDC are setting up plants here. In the power sector, we have agreements with 51 firms totaling about INR 1,900 billion in investments.”

He said that “Major players in the steel, power and cement sectors are in a hurry to set up new units and those who already have units are filing proposals to expand production by at least 3 to 4 times. This shows the state is on the fast track to industrial development. TATA Steel is setting up a 5 million tonnes steel unit on a INR 100 billion investment while Essar is investing INR 70 billion for a 3.2 million tonnes plant.” Both deals were signed in June 2005.”

Mr Raman further added that “The state government has signed a deal with NMDC early this month for another 3 million tonnes steel unit in Bastar. My government’s thrust is to work for the poor, improve the quality of their life and protect farmers’ interests. Chhattisgarh provides farm loan at just three percent interest and we also provide rice to 3.4 million poor families at just INR 3 kilogram.”

Dr Raman said that “Chhattisgarh is the country’s only power cut free state and is set to become India’s power hub within 4 years when those companies now setting up coal fired plants will begin 42,297 MW power generation by 2012.”

Mr Raman Singh further added that 18,994 villages or 96.2% of the 19,744 villages in Chhattisgarh have electricity and that total power connection will be achieved by the end of 2009. He added that 3 major steel plants are coming up in the state’s impoverished tribal but Maoist insurgency hit southern Bastar region.

BL reported that the falling steel prices in the global market at a time when the rupee is depreciating may not spell good news for the domestic automobile companies and consumers.

Car makers who import 50% to 60% of their steel requirements from overseas markets such as Japan, Thailand and South Korea cite that the devaluation of the rupee would offset any gains that they may accrue due to the lower steel prices in the global market.

Auto companies said that while domestic steel can meet the requirements for inner parts, for body panels, the outer panel that constitutes the shape of the body is generally met from imported steel. In case of Maruti Suzuki, 50% of its steel is sourced from the domestic market and the demand for the remaining 50% is met through imports. Honda Siel Cars and Hyundai also source in similar proportion from overseas markets.

Mr Shekhar Viswanathan senior VP of Toyota Kirloskar Motors said that “Even though the prices have fallen in the global market, we don’t expect to get any advantage as our imports would become more expensive with the rupee devaluating.”

Japanese car maker Honda said that with contracts being long term, it does not see any immediate benefit that could be passed on to the consumer. A Honda Siel Cars spokesperson said that “With our imports coming from Japan and Thailand and the rupee depreciating since April, we continue to be affected. So when the steel prices had increased, we had absorbed the cost to an extent. Now we would not be able to bring the prices down.”

Shortage of domestic auto grade steel, combined with the need to make fuel efficient car has led more Indian and global auto makers import a majority of their steel requirements.

BL reported that Mir Projects and Consultants, the consultancy and project management wing of Mir Group has been awarded the consultancy for developing breakwater facilities, west of Mormugao port, in consortium with the Group’s US partner, TranSystems of Virginia.

The consultancy was awarded through a global bid. Mir Projects and Consultants will be responsible for preparing a detailed project report to develop the waterfront on the west of the existing breakwater, fully exploring the possibilities of creating port terminal facilities for berths, launch service, marina, cruise vessels, sailing, yachting, floating hotels, off shore base, rig repairs, RO RO service etc, at the Mormugao port.

Mir Projects and Consultants’ core areas of operations include a broad spectrum of expert consultancy and project management services in seaports and airports, heliports and vertiport, project management and consultancy, urban infrastructure, environment management, energy audit and carbon credit.

Recently, the company had conceived the feasibility study and business plan for India’s first international cruise terminal cum public plaza at Willingdon Island, Kochi. The company presented a successful public private partnership business model for the INR 390 crore cruise terminal projects.

ET reported that cement prices are likely to go up by INR 3 per bag to INR 5 per bag in Mumbai, Delhi NCR, Gujarat and the southern markets from October 1st.2008. Post this round of hike, prices will be hovering around INR 245 to INR 275 per 50 kilogram bag. Cement prices have gone up by 4% in the past 1 year.

As per report, cement makers attribute the hike to rising raw material prices and higher transportation costs. The companies which are expected to hike prices include ACC, Ambuja, JK Lakshmi and Binani.

Mr HM Bangur president of Cement Manufacturers’ Association & MD of Shree Cement said that “Price of any particular commodity is determined by the market forces. Cement prices are likely to go up in the end of monsoon.”

Mr Vinod Juneja MD of Binani Cement said that “Prices may go up in the next quarter by INR 3 per bag to INR 5 per bag due to rise in input and transportation costs. The spurt in the prices of raw materials has eroded margins.” He added that Binani Cement has presence in Rajasthan and western market. The prices of coal one of the main raw materials have gone up by 60% in 1 year.

Analysts said that the demand for cement has gone up in Delhi and NCR due to the construction works for the Commonwealth Games. They said that “This is one of the reasons for the imminent price hike.” However, cement prices in India are expected to fall in the longer term, when new production capacities will be added in the H2 of 2009.

The key drivers for cement demand are the real estate sector, infrastructure projects and industrial expansion projects. The real estate sector accounted for almost 55% of the demand in FY 2007. India has more than 70 cement companies and a total installed capacity of 170 million tonnes.

According to Cement Manufacture Association estimates, the country’s cement manufacturers would add 110 million tonnes to its current production capacities at an investment of about INR 50,000 crore over the next 5 years.

It is reported that Karnataka government is in negotiations with TATA Motors on relocating the Nano project to Dharwad.

TATA officials have visited 2 sites near Dharwad which is likely to be offered for the project. While one site is about 800 acre, the other is 1,000 acre and the state government has another 500 acre in its possession which can be made available for the Nano project immediately.

Meanwhile, the West Bengal government has extended the deadline for receiving applications from farmers in Singur who wish to accept their compensation cheques in lieu of land acquired from them for the TATA small car project. The earlier deadline expired on September 22nd 2008.

BL reported that Reliance Power also has plans of setting up a private coal jetty in the vicinity of Krishnapatnam Ultra Mega Power Project, but it is still in a nascent stage.

For shipping imported coal the company plans to invest over a USD 1 billion for acquiring 15 Capesize vessels. The company is in talks with Korean and Chinese ship builders for acquiring vessels.

Sources added that it has also mandated some international brokers for purchase of vessels and getting the quotes of shipping yards from across the world.

Capesize vessels are among the world’s biggest shipping vessels with capacity of up to 200,000 tonnes and these ships are mostly used in handling deepwater terminals for raw materials such as iron ore and coal.

Sources said that the process of awarding INR 7,000 crore contract for boiler turbine and generator for the plant is in a very advance stage.

BL reported that Ruias promoted Essar Ports Shipping & Logistics Limited is in talks with a few global container port operators for a tie up as part of its plans to foray into container berth operations in the Indian ports sector.

As per report, Essar Ports Shipping expects to complete the tie up within the next 2 months in time to bid for the Chennai container terminal project. The Essar group will be holding majority stake in the JV with the foreign partner expected to provide expertise in actual container operations.

As per report, the company is also looking to take part in the bidding process for other projects such as a coal berth at Marmagoa port, iron ore berth at Visakhapatnam, Kandla project and multi purpose berth at Paradip.

Mr V Ashok director of Essar Ports Shipping said that it will be involving its group companies, Vadinar Oil Terminal Limited which provides logistic support to Essar’s 10.5 million tonnes refinery and Essar Bulk Terminal Limited in its plans to sharpen focus on the port sector.

Mr KK Sinha CEO of Vadinar Oil Terminal Limited said that the company is simultaneously looking at buying out some minor ports, which were yet to start operations. He was not willing to name the ports on the company’s radar.

The report added that earlier, it was in talks with a Korean port operator for the Ennore project, but the plan did not materialize.

Ranchi Express reported that the Singur project still hanging in the balance Mr Sibu Soren CM of Jharkhand made a fresh plea to the TATA group. He requested the company to consider the setting up of the manufacturing unit for the much awaited Nano cars in Jharkhand. This is the second time that Mr Soren has come up with this plea, since the blockade began in Singur.

Mr Soren plea comes in the wake of reports suggesting that the project would be moved to Karnataka. Mr BS Yeddyurappa CM of Karnataka has already stepped forward with an offer of infrastructure and incentives for TATA Motors in the state.

Mr Yeddyurappa said that "whatever facilities they want if they decided to come to Karnataka." Though he was not categorical on the quantum of land to be given to TATA Motors, it is assumed that it would not be less than 1,000 acres.

Equity Bulls reported that Sical Logistics Limited has won the award for the Best Container Logistics Provider in the country at the Express, Logistics and Supply Chain Awards held in Mumbai on September 19th 2008.

The award was received by Mr Sudhir S Rangnekor MD and Group CEO of Sical Logistics. On behalf of Sical Distriporks Limited from Mr Nigel Goode CEO of Logistics Writer Corporation & chairman Express, Logistics and Supply Chain Conclave.

The winners of the Awards are selected by a panel of industry leaders, including past winners and the eminent members of the advisory council of ELSC.

Mr Ashwin C Muthich chairman of Sical Logistics said that "We are pleased to receive. The award for “The Best Container Logistics Provider” in the country the recognition underscores our ability to deliver the highest standards of service with a customer focused approach, through our wide network across the country."

He added that “Container logistics continues to be a key growth driver for the company and we have planned investments of INR 120 crore over the next 2 years, across key locations like JNPT, Tuticorin, Pipavav, NCR region and Bangalore amongst others. We expect our new CFSs and ICDs to be operational by FY 2012. Enabling us to consolidate our position as a leading con tamer logistics player in India.”

It is reported that India government has further liberalized the external commercial borrowings policy to allow infrastructure companies to avail themselves of borrowings of up by USD 500 million a year as against the existing limit of USD 100 million for rupee expenditure under the approval route.

As per report, the enhanced limit of up by USD 500 million comes with a condition that borrowings in excess of USD 100 million should have a minimum average maturity of seven years. The latest changes will particularly benefit telecom operators who will participate in the 3G auctions slated for October and November 2008. Also, the government has hiked the interest spread ceiling on ECBs with minimum average maturity of over 7 years, by 100 basis points to 450 basis points over 6 months London inter bank offered rate.
All other aspects of ECB policy such as USD 500 million limit for a company a year under the automatic route, eligible borrower, recognized lender, end use of foreign currency expenditure for import of capital goods and overseas investments, average maturity period, prepayment, refinancing of existing ECB and reporting arrangements also remain unchanged.

The Press Trust of India reported that Maharashtra State Electricity Distribution Company has threatened Jawaharlal Nehru Port, the country's busiest port with a one day a week power cut if it doesn't reduce electricity consumption by 10%.

Jawaharlal Nehru Port said that it would be difficult to reduce power consumption at terminals as it would hamper container handling which is of the order of 12,000 TEUs per day.

A circular from the distribution company said that the 10% reduction has been recommended as part of the company's load shedding program. The port has represented its case to the electricity company and requested an uninterrupted power supply.

To overcome the power problem in the long run, JNP plans to set up a captive power plant of 100 MW to serve its terminals.

ET reported that Nano is all set to roll out next month in 3 petrol variants, standard, deluxe and luxury. According to industry sources, the diesel Nano which will be launched next year will also have three variants.

The report cited some dealers as saying that the top end luxury variant will have a range of features like HVAC, power window, central locking, tinted glasses, extended reflector, front and rear fog lamps and instrument cluster with trip meter. It will also have body color bumper and door handles, door lock on the co driver side, slider with recliner, 3 spoke steering wheel and double stalk combiswitch. The deluxe version will have HVAC and tinted windows and the standard will have none of these.

When unveiling the car at the Delhi Auto Expo on January 10th, TATA Motors had said that the car will be available, when launched in standard and higher end versions. All versions will offer a wide range of body colors and other accessories.”

TATA Motors is yet to declare the exact launch date.

Project today reported that Hyderabad based Maytas Infra bagged two orders totaling to INR 480.67 crore from Maharashtra State Electricity Distribution Company for electrification of Beed and Nanded districts of Lathur Zones and Ahmednagar district of Nashik Zone under infrastructure development plan.

As per report, the first order for INR 214.77 crore is from MSEDCL from Mahavitran, Infra Plan in Beed and Nanded districts of Lathur Zones.

The second order worth INR 265.9 crore is from MSEDCL from Mahavitran, Infra Plan in Ahmednagar district of Nashik Zone.

It is reported that HPCL and Mittal Energy is likely to commission its INR 18,900 crore Guru Gobind Singh Refinery at Bhatinda in Punjab by March 2011.

As per report, HPCL and Mittal Energy each hold 49% in the Bhatinda project and the rest is owned by financial institutions. The project is being financed in a 1.5:1 debt equity ratio with an equity investment of INR 3,577.50 crore each by Mittal and HPCL.

After completion, the proposed refinery will give access to a huge market in the north. While it will be able to sell around 70% of the products in Punjab, the rest will be distributed in Delhi and nearby cities.

BL reported that Hyderabad based Titan Energy Systems has firmed up plans to target corporate sector and roof top installations in the domestic market. For corporate, it plans to offer solar power to supplement diesel to power systems and equipment in offices.

Mr Rao SYS Chodagam MD of Titan Energy said that Similarly, roof top installations with a wide range of applications from home lighting to taking care of the power needs of independent bungalows, villas, resorts and small offices are priority.

Mr Rao said that the company has created a separate division to pursue these two business opportunities in the business to business space and not the consumer end. He said that the company has emerged among the strong players in the solar energy sector with an installed capacity of 50 MW at present and an order book of over INR 1,500 crore from global manufacturers.

Mr Rao said by end of 2008 that the installed capacity would double to 100 MW and by the end of 2009 the target was to reach 250 MW. The major addition would come through the big project in the upcoming Fab City near the Hyderabad International Airport, on the outskirts of Hyderabad.

The company has been allocated 25 acres of land. It is raising the required USD 15 crore investments through term loans and internal accruals. He said that talks are also on with private equity players. The project, where ‘bhumi puja’ has been recently completed would provide employment to 400 to 450 people.

BL reported that land acquisition process for Krishnapatnam Ultra Mega Power Project of Reliance Power is partially complete. The company has acquired 1,800 acres which was earlier held by government and private owners. The land would be used for setting up main plant and other ancillary units.

Company sources said that additional 600 acres is also being acquired which would be used for creating ash pond and staff colony. The site office is functional and it is being led by a former executive director of NTPC.

In November 2007, the Krishnapatnam project was awarded to Reliance Power at a levelised tariff of INR 2.33 per unit. The coal requirement for the project is estimated to be 14 million tonnes per annum at 80% plant load factor.

It is reported the unidentified armed men assaulted 2 security guards in the paint shop of the TATA Motors small car plant at Singur.

The police said that 5 armed men sneaked into the project area at 9:45 PM last night and beat up security guards with iron rods.

Alarmed by screams of the injured other security men rushed to the site but could not nab the attackers. The injured were first taken to Singur Gramin Hospital and then shifted to Walsh Hospital at Srirampore.

They said that no FIR has been filed by the company officials yet. Senior police officials went to the spot.

BS cited a senior central government official as saying that the commerce ministry has recommended that the Maharashtra government take back the land acquisition notification that it had issued in Raigad for the Maha Mumbai SEZ.

A state government sponsored referendum on the project was held in Raigad. The Maharashtra government conducted a referendum, the country’s first on an industrial project on whether the land owners in Raigad and its adjoining areas wanted the proposed 5,000 hectare SEZ one of the largest in the country.

The official said that “SEZs for which the state government does compulsory acquisition will not be approved by the Board of Approval. The ministry last year had recommended to the Maharashtra government to take back the land acquisition notification. Because of this notice, land owners of the area cannot sell their land to any one, except the state government. This has led to resentment among farmers.”

Commerce ministry officials maintain that the issue has to be dealt with by the state government. The official said that “If the state government wants, it can acquire land for Maha Mumbai, but the BoA will not declare it as an SEZ. Other developers like Bharat Forge and JSW have brought land with the consent of farmers and were formally approved.”

Compulsory acquisition of land for SEZs was banned by an empowered group of ministers, headed by Mr Pranab Mukherjee external affairs minister in April 2007 in the backdrop of widespread protests against the tax free industrial enclaves.

The zone has been given in principle approval by the BoA, as its developer Gujarat Positra Port Infrastructure Limited is yet to acquire the requisite land. Mr Mukesh Ambani chairman of Reliance Industries and close associate Mr Anand Jain have a stake in the SEZ.

IANS reported that heartened by two Indian investors’ entry into Nepal’s once closely guarded hydropower sector, more and more Indian companies are now eyeing the Himalayan republic with over two to thirds of the latest applications for license coming from firms in New Delhi, Mumbai, Karnataka and Hyderabad.

As per report, out of the 72 recent applications made at Nepal’s Department of Electricity Development, over 60 are from Indian companies including the GMR group that broke the ice in a sector the Indian government itself could not penetrate in the past due to the prevailing political distrust and instability here.

GMR Energy which became the trendsetter by bagging the 300 MW Upper Karnali project despite opposition by local organizations and some sister concerns of the ruling Maoist party is now back to do more business, seeking licenses to develop the 500 MW Tila project and the more modest Karnali Gutu that can generate up to 144 MW.

Jindal Steel and Power that was worsted by GMR in the race for Upper Karnali is also back in the ring, setting its sights on eight new projects. JSPL is seeking to develop one of the biggest deals, the 10,800 MW Karnali Chisapani Storage as well as 7 smaller ones, Upper Arun, Lower Arun, Sapta Gandaki on the Narayani river and 4 projects on the Dudhkoshi that range from 108 MW to 213 MW.

Another bested bidder, Larsen and Toubro is also keen to enter Nepal’s hydropower sector and this time is eyeing 7 projects together with Larsen and Toubro Power Development Corporation. These are Upper Arun, Tila, Karnali, Ande Pipal Arun, Chokan Lingam and Lunsun Pepuwa. The other big bidder is Bhilwara Energy which wants to develop 6 power projects namely Upper Trishuli 2A, Karnali 7A, Seti River Jal Vidyut Yojana, Karnali 4, Humla Karnali 1 and Mugu Karnali 1. Others who could be first time entrants in Nepal are Mumbai’s Patel Engineering that is eyeing three projects including the ambitious 3,300 MW Saptakoshi Storage, Lanco Infratech, KSK Energy Venture, Athena Projects and Kasargod Power Corporation. Also in the fray are RVK Energy, Maytas Property, MMS Steel and Power and AES India that has teamed up with CG Energy Infrastructure.

Potential Indian investors got another shot in the arm from the new budget tabled by Maoist Finance Minister Baburam Bhattarai last week that pledges to generate 10,000 MW of power in the next decade, encourage Indian investors, dispense with red tape and discourage non serious bidders.

TOI reported that the beleaguered Gujarat Mineral Development Corporation which has seen its scrip fall sharply in September is facing the dark shadow of Lehman Brothers over its power project in Chhattisgarh.

GMDC has a JV with KSK Energy to set up 1800 MW coal based power project at Korba. Almost 30% of equity in the Hyderabad based KSK is held by the fallen US financial giant.

Two years ago, when GMDC signed the agreement for the INR 8,000 crore project, LB India Holdings Mauritius Limited held 90% equity in KSK which came down to 30% following an IPO. The Lehman Brothers’ firm cannot sell the shares in KSK as there is a lock in period till July 2009. As per the agreement, GMDC was to pick up by 26% equity stake in the proposed power plant which was to get coal from GMDC’s Mogra block. GMDC’s share in the power output was 1010 MW.

The GMDC is already in trouble with its scrip falling sharply in September following the announcement in its annual report that it was abiding by the Gujarat government’s request to public sector enterprises to set aside up by 30% of profit before tax for welfare.

When asked if the power project would get weighed down by Lehman’s misfortunes, Ms Gauri Kumar chairman GMDC said that she wasn’t aware of Lehman’s involvement with KSK. She said that “This is an input from you which we will look into.”

Project Today reported that Hyderabad based Nagarjuna Construction Co has secured four orders aggregating INR 413 crore.

The INR 229 crore is contract for commissioning of sub transmission lines, distribution lines, power transformers, new sub station and other allied works at Osmanabad and Latur for Maharashtra government owned power distribution company Mahavitaran.

The other orders include INR 73 crore water supply scheme at Eluru in Andhra Pradesh from Chief Engineer, Public Health of Andhra Pradesh Government, construction of 0.55 million square feet info park at Kochi is valued around INR 61 crore and INR 50 crore order of commissioning of water supply scheme at Cuddapah in Andhra Pradesh.

These ordered are to be executed over next 12 to 24 months.

It is reported that steel magnate Mr Lakshmi Mittal CEO of ArcelorMittal which produces around 10% of the world’s steel and has presence in over 60 countries is putting up a steel component manufacturing unit at an estimated cost of INR 100 crore in collaboration with Mumbai based Dhamm Steels at Ranipet in Vellore district.

Production is expected to begin at the unit in the next few months. Construction work has already begun in the 24 acre plot allotted to it by SIPCOT in Phase III in Ranganathapuram village adjacent to the proposed Leather Special Economic Zone.

Roads and other infrastructure are being developed in the area. Power lines are being erected.

Nearby villagers are hopeful that the industry would provide them job opportunities. Over 500 acres of land has been already acquired for setting up the SEZ and other non-SEZ industrial clusters in the locality.

As per report, the company plans to manufacture finished steel components for earth moving equipment manufacturers, construction and power industries. The entry of ArcelorMittal in SIPCOT has propelled industrial growth in the locality.

Project monitor reported that Mumbai based Pratibha Industries Limited has won INR 156 crore order from Delhi Jal Board. The contract involves design, construction, supplying, laying, testing and commissioning of 1.5 million dia 22 kilometer water pipeline. The order which also includes operations and maintenance for 5 years is to be completed within 21st months.

As per report, this is the second DJB order for Pratibha in recent times. In early September, Pratibha had won a similar INR 44.75 crore order from Delhi Jal Board for the Laxmi Nagar to Rajiv Gandhi Smriti Van water transmission system to be completed within 18th months.

Project monitor reported that Mumbai Metro One Private Limited has placed the order for the automatic fare collection system on Spanish firm Indra for the 11.7 kilometer Versova-Andheri-Ghatkopar elevated metro line in Mumbai. The contract for laying tracks has gone to VNC-Rail One, a consortium of VNC from Visakhapatnam and Rail One from Germany. The mandate for installing communication systems between operators and passengers has been awarded to Thales of France.

In June 2008, Chinese supplier CSR Nanjing Puzhen Rolling Stock Company had won INR 604 crore order to supply metro trains. The order involves 16 four coach trains to be supplied in the coming 2 years. The first 4 trains will roll out in the next 18th months.

Mumbai One Metro Private Limited is a 74:26 partnership with a private consortium Reliance Infrastructure Limited and Veolia Transportation of France holding majority stake. State nodal agency Mumbai Metropolitan Region Development Authority is a minority shareholder with 26% stake.

Construction on this line was flagged off on February 8th 2008 starting with digging work for pylons and pits at Dhaku Road off Andheri-Kurla Road in north Mumbai. Simplex Infrastructures Limited has been awarded INR 406 crore order for civil construction of a 10.7 kilometer viaduct on the Versova-Andheri-Ghatkopar elevated corridor. The order is executable over 22nd months.

Project monitor reported that Karnataka government has asked for the help of the Centre to hasten the setting up of the 4,000 MW ultra mega thermal plant in Bijapur. This comes in the wake of power shortages which the state has been putting up with for years.

As report, Karnataka has given highest priority for power generation and development. But now it is seeking help from New Delhi to start the Bijapur project. The state government had favored private sector investment in setting up two 2,500 MW thermal power plants in Jewargi and Ghataprabha. Karnataka has also sought mega power status for the 1,000 MW Bellary thermal plant which began commercial production in July.

It is reported that Mr Vinayak Deshpande has taken charge of Hindustan Construction Company's construction business as president & COO of EPC and Construction. He will be responsible for driving the EPC and Construction business of HCC which currently involves about 39 large construction projects all over India.

Mr Deshpande will be responsible for the operations of HCC Construction's verticals namely, Hydro, Water, Transport, Nuclear and Thermal Power, Integrated and Special Projects and Buildings and the EPC business.

As per report, the company has recently been restructured into 5 business sectors namely, HCC Infrastructure, HCC Construction, HCC Real Estate, Lavasa and HCC Capital. The restructuring process at HCC is a result of the strong growth the company has witnessed in all segments in which it operates and this reorganization will help focus on untapped segments.

United States Steel Corporation and Worthington Industries Inc announced that they have signed an agreement to expand and modify their current Worthington Specialty Processing joint venture located at Jackson in Michigan. Both companies anticipate closing the transaction in early October, subject to customary closing conditions.

Under the terms of the agreement, US Steel would contribute ProCoil Company LLC, its steel processing subsidiary in Canton, Mich., and Worthington Industries would contribute Worthington Steel Taylor, its steel processing subsidiary in Taylor to the expanded joint venture.

Worthington Specialty Processing is currently a 50-50 joint venture. Under the new agreement, Worthington Industries will own 51% and US Steel will own 49% of the joint venture. Worthington Industries will continue to be the managing partner.

The new expanded joint venture is expected to better serve the changing needs of automotive and flat-rolled customers by allowing each of the three entities to maximize their individual processing specialties.

Worthington Specialty Processing was established in 1986 to serve the automotive manufacturers' need for high quality, class one processing. The facility is capable of processing master steel coils into both slit coils and sheared first operation blanks including rectangles, trapezoids, parallelograms and chevrons. ProCoil slits, cuts to length and presses blanks from steel coils to desired specifications, provides laser welding services and warehouses material for automotive customers. Worthington Steel Taylor slits, cuts to length and tension levels steel coils.

Australian Bureau of Agricultural & Resource Economics cut its zinc and nickel production forecasts by 12% and 8% respectively for the year to June 30th 2009, after a fall in prices for both commodities and a recent power outage.

ABARE said, in its September report, that zinc output would total 1.49 million tonnes for 2008-09, down from a previous forecast of 1.69 million tonnes and its 2007-08 estimate of 1.57 million tonnes. Mined nickel output was forecast to total 236,000 tonnes in 2008-09, down from a previous forecast of 256,000 tonnes but still up sharply from 190,000 tonnes a year ago.

Australia accounts for nearly 13% of the world's annual zinc output and almost 17% of global nickel production.

China Steel Corporation expects third quarter earnings to be very good after raising product prices.

Mr Lin Chung assistant VP of CSC said that "Judging from July and August pre tax profits, the third quarter is a very good season. We will probably set a quarterly record."

Mr Lin said that CSC's August 2008 sales soared by 51% YoY, bringing eight month revenue to TWD 176.8 billion, a 31% YoY. Average production costs in 2008 will probably rise 42% from 2007 as compared with an estimated 34% gain in product prices.

CSC increased prices for domestic customers by 18% in the third quarter as costs soared. Asian mills are paying three times more for coking coal and almost two times more for iron ore this year.

CSC announced on August 28th 2008 a 3.9% increase in fourth quarter prices for domestic customers, the smallest gain this year as demand slows in the auto and construction industries.

World Bureau of Metal Statistics estimates that global refined tin consumption for the January to July 2008 period was 205,700 tonnes, which is fractionally lower than in the comparable period of 2007. The decline is mainly due to a slump in demand in the USA. Consumption in Asia and Europe is estimated to be up on year ago levels.

WBMS has revised down its demand figures for China, because of suspicions that the use of official export data gives an incorrect assessment of apparent consumption production plus net imports changes in any reported stocks.

In a statement WBMS noted that "Reported Chinese exports have fallen to zero in the last two months and this has resulted in a substantial rise in the apparent consumption. Imports reported by other consuming nations from China show a fall in the availability of Chinese tin but this does not appear to have been as dramatic as the Chinese reported exports indicate."

As a result, WBMS has revised its estimate of Chinese demand and the January to July total of 75,100 tonnes is 6.8 per cent above the comparable 2007 figure. In its previous monthly report WBMS had calculated that Chinese demand in January to June 2008 period was up by 13% YoY.

It also noted that "US consumption was exceptionally low in both June and July and the cumulative total is 36% lower than the first seven months of last year. Japanese consumption rose by 4.8% compared with the depressed 2007 total."

Economic Daily News reported that China Steel Corporation has received notice from the Vietnamese government to relocate a cold rolled JV planned for the south of the country to central Vietnam.

As per report, CSC is still making a last ditch effort to keep the USD 1.15 billion JV in the south but is also preparing for a move.

The report said that Vietnamese government is seeking relocation due to fears of oversupply in the area, which has attracted China Steel and its partners, including Japan's Sumitomo Metal Industries Limited.

Even if the project proceeds as planned, delays are expected while the company negotiates the relocation order with the government.

According to a survey by Japan Iron & Steel Federation, US domestic market prices of steel products went down from a month ago both for HR sheets and CR sheets in the Middle West at the end of August 2008, when they went up from a month ago for heavy plates.

Summing up the findings of its survey, the JISF gives the following report. "At the end of August 2008, Midwest market prices of flat products fell by USD 21 from a month ago to USD 1,047 per tonne for HR sheets and by USD 3 to USD 1,150 per tonne for CR sheets, while they rose by USD 57 from a month ago to USD 1,214 per tonne for heavy plates and moved sideways at USD 1,222 per tonne for hot dip galvanized sheets. As a result, the market prices of HR sheets and CR sheets declined from a month ago for the first time in a year since August 2007.

It added that "At the end of August 2008, Midwest market prices of long products advanced by USD 61 from a month ago to USD 1,116 per tonne for structural shapes and by USD 5 to USD 970 per tonne for rebars, while they receded by USD 14 from a month ago to USD 1,017 per tonne for wire rods. As a result, the market prices of wire rods lowered from a month ago for the first time in 11 months. Some steelmakers priced up long products by USD 30 per tonne in mid August amid a lulled surge in ferrous scrap prices."

It may be noted that, with domestic steel demand short on momentum, major integrated steelmakers such as ArcelorMittal USA and AK Steel Corporation retracted price increases of USD 40 to USD 60 per tonne in their steel shipments from September 1st 2008.

It is reported that Kahn Steel Company has bought a new facility on the Kansas City Southern Railway, which includes an overhead crane.

As per report, Kahn bought the 50,000square feet building and an additional 7.5 acres at 1710 Southern Road in Kansas City's Executive Park for an undisclosed amount.

The report added that "Jackson County tax records show a 2008 market value of nearly USD 1million for the property. However, the records also show that it was sold for USD 1.9 million in 2005, when the county listed its market value as USD 941,850."

Kahn Steel plans to start operations at the facility on October 1st 2008.

Mr Pedro Rondón board member of Venezuelan steelmaker Sidor and representative of employees who hold class B shares in the company said that Sidor cannot handle the addition of employees to its fixed payroll as the government has suggested.

Mr Rondón's comments come following an announcement from Mr Rodolfo Sanz minister of basic industries & mining that the hiring of new Sidor workers would be outlined in October.

Mr Rondón said that "The minister was offering regular jobs to subcontracted workers knowing that Sidor can't handle a single employee more on the payroll. He knows that."

Last week, employees from roughly 100 companies subcontracted by Sidor took over the company's administrative facilities, demanding higher salaries and asking to be added to the company's payroll.

In the hopes of keeping the company's cost structure stable, Mr Rondón and the employees he represents proposed the creation of business units, social production companies or cooperatives.

On September 19th 2008, Sidor's board agreed to set up such alternative solutions, such as the constitution of a social production company.

One can have an idea about the importance of the construction industry in India from the fact that it is the second largest contributor to the GDP after agriculture. The industry provides employment to more than 3% of the population. Its market size is around USD 55 billion and is growing at around 7% to 8% per annually, faster than the GDP growth. As the Construction sector is growing faster than the country’s project GDP growth, there exist a tremendous potential for development in the related area.

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ArcelorMittal operates some of the most modern and efficient steel plants in North America. Its Cleveland Ohio plant operates on nearly 1,000 acres with steel-making machinery located inside 7 million square feet of buildings. Such a large plant requires almost daily maintenance, resulting in scheduled shut downs to keep equipment up to date and working properly.

In the past, ArcelorMittal Cleveland used its own steelworkers to complete maintenance projects. When the steel industry nearly collapsed, it became a necessity for most companies, including ArcelorMittal, to supplement its labor needs with workers from the 14 building trades.

Mr Dan Hereda division manager of services, logistics and railroads for ArcelorMittal Cleveland said the plant needed the ability to hire workers for a short, definite length of time to supplement his crew size.

He found one of the best ways to manage labor surges was using an agreement called the National Maintenance Agreement from the National Maintenance Agreement Policy Committee. The NMA is a labor management system with more than 2,500 contractors and 14 different building trades that work under one set of rules.

Having this agreement streamlines operations and saves owners money, ensuring projects are completed on time, on budget, while preventing union disputes. ArcelorMittal is a yellow card site for the NMA, meaning the owner has designated work for the entire scope of the project under the terms of the NMA. Specifically, no maintenance project ArcelorMittal engages in is done without the NMA in place.

Worthington Industries Inc recorded strong gains in profit and sales in its fiscal first quarter.

The company said its earnings for the quarter ended August 31st 2008 totaled USD 68.6 million, more than triple earnings of USD 20.2 million in the same period last year. The company took on USD 8.8 million in restructuring charges during the quarter, nearly double similar charges last year, but earned USD 25 million on equity stakes in nine unconsolidated joint ventures. That’s up from about USD 15 million last year.

Fiscal first-quarter revenue grew 20% and hit a quarterly sales record at USD 913.2 million up from USD 759 million last year.

Mr John McConnell chairman & CEO said that he is pleased with the company’s ability to cut costs and make other improvements as commodity prices rose, but he kept a guarded outlook.

Mr McConnell said that “Unfortunately, the record quarterly sales and net earnings are not sustainable given current market conditions, particularly in the steel processing and metal framing business segments.”

ArcelorMittal South Africa said that a worker had been killed at one of its plants in South Africa, the first such fatality at the group in 2008.

ArcelorMittal SA said that the worker was killed after exposure to gas in an incident at the group's Saldanha plant in the country's Western Cape Province. A second worker is in a critical condition at a hospital, and a contractor was in a stable condition.

It added that four other employees were also affected and taken to hospital, and the incident is under investigation. The plant was declared safe to operate.

Brazilian long steelmaker Gerdau has announced plans for a BRR 90 million acquisition of KERSPE Empreendimentos and Participações via subsidiary Gerdau Aços Longos.

The steelmaker did not provide further details on the transaction.

Russel Metals Inc announced that it has entered into an automatic share purchase plan with a broker in order to facilitate repurchases of its common shares under its previously announced normal course issuer bid.

On February 20th 2008, Russel Metals announced that it had received approval from The Toronto Stock Exchange to make a normal course issuer bid, pursuant to which Russel Metals may purchase for cancellation up to 6,000,000 of its common shares, representing approximately 10% of its public float.

As at September 19th 2008, Russel Metals has purchased 767,500 common shares under the normal course issuer bid. The number of common shares currently outstanding is 62,502,890.

Under Russel Metals' automatic share purchase plan, Russel Metals' broker may repurchase shares under the normal course issuer bid at times when Russel Metals would ordinarily not be permitted to, due to self imposed blackout periods. Russel Metals anticipates renewing the plan from time to time during the course of its normal course issuer bid to enable purchases of its common shares to be made during internal blackout periods, however, such renewal or amendment may not be made by Russel Metals during a blackout period.

Russel Metals believes that the market price of its common shares at times may not fully reflect the underlying value of its business and its future business prospects. As a result, depending on future price movement and other factors, Russel Metals believes that its outstanding common shares may represent an attractive investment opportunity.

Sheffield Forgemasters has been officially presented with The Queen's Award for Enterprise International Trade 2008 by Mr David Moody Lord Lieutenant for South Yorkshire.

Forgemasters was awarded the prestigious honor for its impressive recent record for international exports earlier in 2008. Mr Moody, who is the Queen's representative in the area, read a citation signed by Her Majesty and Prime Minister Mr Gordon Brown at the company's Brightside Lane factory.

Mr Moody presented The Queen's Award and the citation to Dr Graham Honeyman CEO of Forgemasters and Mr Keith Bell, Forgemasters' longest serving employee of more than 48 years. He also met with a group of Forgemasters' employees including senior management at the event which was attended by 100 people from the company.

Mr Moody said that "The last few years have been a very interesting time for Sheffield Forgemasters. Just over a year ago this historic company was heavily flooded and fifteen months later it is performing outstandingly well and making a significant contribution to the region. It is with great pleasure that I present the award on behalf of Her Majesty Queen Elizabeth II to Sheffield Forgemasters."

This is the company's third Queen's award. It follows Export and Technology Awards in 1989 and 1997 respectively.

The Queen's Awards are the UK's most prestigious awards for business performance and are presented solely on merit. In order to win the award for International Trade, businesses must be able to demonstrate substantial growth in overseas earnings and commercial success, to levels that are outstanding for the goods or services concerned and for the size of their operations, as well as their contribution toward sustainability.

According to the International Copper Study Group, the global copper market recovered from 5 consecutive months of supply deficits to register a 14,000 tonnes surplus in June 2008. Seasonally adjusted the surplus for June 2008 comes to 43,000 tonnes.

ICSG said that the balance in January to June 2008 period amounted to a 130,000 tonnes deficit, though taking into account seasonal adjustments it registered an 89,000 tonnes surplus. For the year ago it noted a 264,000 tonnes deficit, or a 64,000 tonnes shortage with seasonal adjustments.

Mine output in the first half of 2008 totaled 7.50 million tonnes as compared to 7.67 million tonnes, while total refined output amounted to 9.11 million tonnes in first half of 2008 as against 8.91 million tonnes. Refined copper usage totaled 9.24 million tonnes in January to June 2008 period as compared to 9.17 million tonnes in January to June 2007 period.

ICSG said that China's usage rose by 3.8% in January to June 2008 period while the EU 15 countries declined 5% and US demand fell by 4%. In H1 mine output, Australia showed a 2% decline, Chile was down 1.8%, Indonesia fell 41% and Mexico was down by 39%.

However, China, Peru and the US all increased their mine output in the recent half by some 10% each, while output in Congo roughly doubled.

Antara News reported that Indonesian government expects to be able to privatize only 13 of the 34 state owned companies it originally planned to privatize in 2008.

Mr Mahmuddin Yasin state minister for state owned firms’ deputy for restructuring & privatization said that "This year the office of the state minister for state owned firms plans to privatize 34 companies but only 13 have been approved by the House of Representatives. Privatization of the rest of the companies will be carried over in 2009."

The state owned companies that had been approved for privatization include PT Adhi Karya Tbk, PT Waskita Karya, PT Pembangunan Perumahan, PT Bahtera Adi Guna, PT Garuda Indonesia, PT Krakatau Steel and PT Bank Tabungan Negara, while the other six are minority companies.

In line with Mr Yasin's statement, Mr Sofyan Djalil minister for state owned firms said that "It is not a problem because there is still an option for carrying the rest over."

He hoped state plantation companies PT Perkebunan Nusantara III, IV and VII could be privatized before the end of this year. He added that "Its implementation could be arranged later. The important thing is we already have the permission."

Allegheny Energy Inc has agreed not to push further its proposed USD 1.2 billion high voltage power line project through Washington and most of Greene counties. It agreed to a proposed settlement with the Greene County commissioners that would have it drop plans for about 36 miles of new power lines proposed for the two counties.

Two state Public Utility Commission administrative law judges last month recommended the entire 240mile project be scrapped.

Ms Pam Snyder chairwoman of Greene commissioners said that "When we started fighting this project two years ago, we had two objectives: eliminate the 37 mile portion of the project and protect property owners from the use of 30 year old rights of way deals. This agreement accomplishes both of those goals."

The project to be called Trans Allegheny Interstate Line or TrAILCo would have stretched from Southwest Pennsylvania through West Virginia before ending in Loudoun County outside Washington and linking in Virginia with Dominion Virginia Power. In Pennsylvania, Allegheny Energy would have built a 37 mile, 500,000 volt line from a new substation in Dunkard to a new substation in North Strabane. Three smaller, 138,000 volt lines totaling 15 miles in length would be constructed to connect with existing lines.

Under the proposed settlement, most of the above is out. Allegheny Energy now plans to build 1.2 miles in Pennsylvania of the 500,000-volt line from Dunkard, then the remainder through West Virginia and into Virginia. The project is designed to move low cost, coal fired power from this region to Washington DC and the East Coast, areas that need more power and are willing to pay for it.

Mr Doug Colafella spokesman of Allegheny Energy said that "We have been working collaboratively with officials in Greene and Washington counties. We still need to address some reliability issues in Washington County, concerns that could occur by 2009."

Mr Colafella said that it is open to ideas concerning how to address potential reliability issues in Washington County, including energy efficiency programs, transmission line enhancements and new transmission infrastructure, which some opponents see as a new transmission line in a different location.

Platts reported that attorneys for a second steel consumer in the US filed a lawsuit on September 19th 2008 in US District Court for the Northern District of Illinois. The action seeks treble damages under US antitrust laws against the defendants and also demands a trial by jury.

The filing, on behalf of plaintiff Wilmington Steel Processing of Philadelphia, came one week after Scranton filed virtually a verbatim class action suit against ArcelorMittal, ArcelorMittal USA, US Steel, Nucor, Gerdau Ameristeel, Steel Dynamics, AK Steel Holding, SSAB Swedish Steel and Commercial Metals.

Both complaints were filed by a prominent antitrust law firm Freed Kanner London & Millen of Bannockburn. The documents refer to the suits as class actions brought on behalf of a plaintiff class consisting of all persons and entities who purchased steel products directly from defendants between January 1st 2005 and the present.

Attempts to reach Wilmington Steel Processing directly were unsuccessful. A document dated May 7th 2008 from the Supreme Court of the State of Delaware notes that on September 19th 2006, Ohio based Concord Steel purchased certain assets of Wilmington Steel Processing for USD 4 million, but that WSP was to continue as a separate entity. On October 3rd 2006, Stamford Industrial Group acquired Concord Steel.

The lawsuits cover all products derived from raw steel and sold by the defendants, including steel sheet and coil products, galvanized sheet and other galvanized and or coated steel products, tin mill products, steel slab and plate, steel beam, blooms, rails, and other structural shapes, steel billet, bar, and rod, steel pipe and other tubular products and all other products derived from raw steel and sold by defendants.

The steel producers named responded almost immediately last week to Standard Iron Works' filing, maintaining that that their business activities are legally compliant. Most have vowed a vigorous defense, others have dismissed the allegations as baseless.

Usiminas, which bills itself as the largest flat steel producer in Latin America has announced a new partnership to supply capital goods. Specifically, Usiminas Mecanica and Nuclebras Equipamentos Pesados, which both manufacture engineered products, inked a supply deal for goods and services at the recent Rio Oil & Gas Fair. Projects covered by the new alliance are estimated to reach nearly BRR 300 million per year.

According to a Usiminas statement, the supply contract will focus mainly on the oil and gas, steel, and mining sectors, all of which present strengthening demand scenarios over the next several years. It said that "Scheduled to last at least five years, this partnership aims to take better advantage of business opportunities in these three markets."

Usiminas Mecanica offers solutions and services for the capital goods sector. It claims to be the leader in the supply of structures, equipment and services for heavy construction markets specializing in building steel, mining and offshore structures.

Tokyo Steel Mfg Co has announced upward revisions of its non consolidated earnings prospects for April to September 2008 period. Behind the revisions are improved earnings thanks to an upswing in sales, with a nosedive of ferrous scrap prices since the end of July 2008. The revisions in value are JPY 7,500 million as operating profit and pretax profit each and JPY 4,500 million as net profit.

As a result, the revised earnings prospects are JPY 168 billion in sales, up by 1.2% from what was projected earlier, JPY 16 billion in operating profit, up by 88.2% YoY, JPY 17.5 billion in pretax profit, up by 75% YoY and JPY 10 billion in net profit, up by 81.8% YoY.

For the latter half of fiscal 2008, Tokyo Steel keeps unchanged its non consolidated earnings prospects so far. Accordingly, it estimates its non consolidated earnings for the whole of fiscal 2008 at JPY 329 billion in sales, up by 0.6% from what was initially forecast, JPY 27.5 billion in operating profit, up by 37.5% YoY, JPY 29.5 billion in pretax profit, up by 34.1% YoY and JPY 17 billion in net profit, up by 36% YoY.

Bloomberg reported that Nigeria will sell stakes in pipeline and natural gas companies owned by state run Nigerian National Petroleum Corporation as part of a new national privatization plan.

Bureau of Public Enterprises said that Pipeline Products & Marketing Co will go through privatization from October 2008 to October 2009, while shares in Nigeria Gas Co will also be sold to the public from September 2008 to June 2009.

It may be noted that Nigeria is seeking greater private investment to expand oil, gas and other industries vital to the country of 140 million people. The privatization agency, also known as BPE, did not say what percentage of government ownership would be sold in the two companies, which are both wholly owned by NNPC.

The pipeline company owns pipelines linking fuel depots located around the country, connecting to four refineries and the main sea port in the economic capital, Lagos. The gas company operates eight pipeline systems supplying natural gas to power stations, steel plants and industries around Nigeria and neighboring West African countries.

BPE said that the government's overall privatization plan will amount to 105 transactions, and include the sale of the state's remaining 15% stake in Eleme Petrochemical Company Limited, based near the country's southern oil industry hub of Port Harcourt. Seven coal blocks in southeast and central Nigeria will also be sold to prospective investors.

Nigeria has Africa's biggest hydrocarbon reserves of more than 35 billion barrels of crude and 187 trillion cubic feet of gas. It also has coal reserves of over 2 billion tonnes.

Yonhap reported that Shipbuilding Co has won a KRW 121 billion deal to build two product tankers. The deal with a European shipping company calls on STX Shipbuilding to deliver the vessels by May 2011.

VNA reported that Vietnamese finance ministry has decided to reduce the export tax levied on non alloy iron and steel products to 10% from the current level of 20% in order to remove difficulties faced by local businesses. Earlier, the ministry of industry & trade proposed the finance ministry slash the export tariff on steel billets from 20% to 5%.

Vietnam Steel Association said that the move will help domestic firms to boost exports of these products, as they have experienced slow sales despite a decrease of VND 3 million per tonne compared with peak prices. According to the VSA, the amount of steel billets and products currently stocked by businesses is estimated at 500,000 tonnes.

In early August 2008, the finance ministry doubled the export tax on steel and steel billets to 20% to limit the re export of the materials due to weaker domestic demand.

Mr Surapong Phaisitpattanapong a spokesman for Federation of Thai Industries' Automobile Club said that the country's total automobile production excluding motorcycles dropped by 5.25% in August 2008 to 103,737 units due to a slump in the domestic market with only 34,110 units, down by 31.88% YoY.

Production of pickup trucks for the domestic market fell by 53.46% YoY August 2008 to 14,130 units because of a four month slide in sales blamed on rising diesel prices. Yet August sales still surpassed those in July.

Automobile production for export rose by 17.2% YoY in August to 69,627 units while actual vehicle exports rose by 5.74% YoY to 69,404 units. In January to August 2008 period, vehicle production totaled 944,893 units, up by 15.76% YoY, of which 529,530 units were produced for export, representing 56% of total production, up by 23.1% YoY. The remaining 415,363 units are for the domestic market, representing 44% of total production, up by 7.6% YoY.

Vehicle exports in the first eight months increased by 22.75% YoY to 526,518 units while the total value rose by 29.76% YoY to THB 382.84 billion.

Passenger car production in August rose by 12.36% YoY to 33,453 units and in eight months to August increased by 33.9% YoY to 272,756 units. Pickup truck production including passenger pickup vehicles fell by 10.93% YoY to 69,102 units but in the eight months to August it was up by 10.36% YoY to 659,073 units.

BNamericas reported that the sale of Brazilian steelmaker CSN's iron ore unit Namisa is likely to occur by the end of October 2008.

CSN said earlier this year that it planned to sell all or part of Namisa, and then confirmed in August 2008 that the idea is to sell 40% to 50%. The market is pricing Namisa at USD 5 billion to USD 10 billion.

Mr Galdi an analyst said that CSN could either sell Namisa in its entirety or partially and if CSN sells only a stake, its logistics system could be included in the transaction as well. Another possibility is for the steelmaker to negotiate part of Namisa and include an amount of iron ore from its Casa de Pedra mine that does not form part of Namisa.

He said that CSN purchased Namisa in July 2007 in an effort to create ties with the international market. He explained that for a number of years, CSN was not profiting from its Casa de Pedra mine because of a legal dispute with Brazilian miner Vale. At the time, Vale had exclusive rights on the sale of Casa de Pedra iron ore.

He added that "Namisa still is a valuable company and CSN wants to make some cash by selling the asset."

Jiji Press reported that Toyota Motor Corporation is set to cut its steel procurement costs by working closely with steelmakers.

As per repot, major steelmakers, including Nippon Steel Corp and Sumitomo Metal Industries Ltd have given Toyota a list some 300 proposals that they believe will help the automaker cut costs.

Based on the proposals, the top Japanese automaker will consider taking specific steps to reduce its production costs, thereby limiting the impact of higher materials prices and boosting its competitiveness. The proposals include the use of the same steel products in different auto models. The steelmakers also proposed that Toyota improve its production methods and reduce the use of steel products with low cost performance.

Toyota is now studying the proposals and intends to run trials for 6 to 12 months before full implementation. It accepted steel price hikes of some 30% in spring this year. This means that production costs will rise by roughly JPY 30,000 per vehicle.

With the prices of other materials, such as glass and resins, also rising, Toyota's fiscal 2008 material costs are expected to total about JPY 400 billion, far higher than the firm's estimate.

The preliminary data released show that overall steel imports in August 2008 decreased by 19.3% MoM from July 2008. The change in June’s total amount of steel imports was due to a decrease in imports for all product categories. The most significant decreases were in blooms, billets and slabs. Stainless imports also decreased by 14.89% overall due to a significant decrease in cold rolled sheet and blooms, billets and slabs. July 2008 imports of steel mill products were down 11.33% as compared to July 2007.

Preliminary census steel import statistic comparisons

In tonnes

In tonnes

It is reported that Indonesia steel mills including, Krakatau Steel Inc, Krakatau, Essar Indonesia Inc and others steelmakers are planning to increase their exports from August to October 2008 period.

As per report, Krakatau plans to increase export from 10,000 tonnes per month to 20,000 tonnes per month. Essar Steel said it plans to raise export from 5,000 tonnes to 9,000 tonnes per month. Gunung Garuda plans to export 40,000 tonnes from 35,000 tonnes previously.

Sims Group Limited announced that it has purchased another scrap metal recycling firm, Weinert Recycling, a ferrous and nonferrous metal recycling facility with locations in Middletown and Liberty.

Mr Kenny Weinert one of the former owners of Weinet Recycling, said that the deal has been in the works for around a year. Weinert has been in operations for around 50 years. Both facilities are roughly 10 acres, and are located in upstate New York, roughly 65 miles from New York City. Although the company doesn’t presently have any rail access at the yards, there is the possibility of laying track to shuttle the material in the future.

Other than changing the name, Weinert said that the management and employees, roughly 50 people, will remain with the company. The two yards will be used as feeder yards for Sims Metal Management facilities in the general area.

The deal for Weinert follows Sims’ acquisition of Silver Dollar Recycling in Las Vegas, and the completion of a deal to acquire C Herring and Son Limited.

Based on preliminary Census Bureau data, American Iron & Steel Institute reported today that US imported a total of 2.346 million tons of steel in August 2008, including 1.958 million tons of finished steel, down 19% MoM and 13% MoM respectively.

Total and finished steel imports through the first 8 months of 2008 are down by 11% YoY and 12% YoY. However, the monthly average for finished steel imports in the June to August 2008 period is up by 1% QoQ. Total and finished steel imports on an annualized basis this year are down by 4% YoY and 5% YoY, respectively. On an annualized basis, total imports of steel in 2008 would be 31.8 million tonnes.

Key product with a large increase in August 2008 compared to the month before include

1. Hot Rolled Bars, up by 17%
2. Oil Country Goods, up by 42%
3. Line Pipe, up by 10%

For August 2008, the largest volume of finished steel imports from offshore were

1. China 403,237, up by 69.7% MoM
2. South Korea 197,191, up by 3.1% MoM
3. Japan 149,144, up by 3.6% MoM
4. Germany 97,103, down by 5.2% MoM

Jiji Press reported that, facing higher raw materials prices, Japanese steelmakers are starting to utilize previously untapped low quality alternatives and waste matter left over from the iron production process. The use of such materials is now viable despite the additional processing costs, and Japanese steelmakers see the utilization of materials that would otherwise be discarded as contributing to environmental protection efforts.

Kobe Steel Limited has developed a technology to covert poor quality brown coal containing high levels of water into a fuel for thermal power generation by boiling it with oil to drain the water. It claims its new technology helps environment conservation because the low-quality coal contains relatively low levels of sulfur and cinder.

Nippon Steel Corporation and Sumitomo Metal Industries Limited have established a technology to extract iron and zinc from dust produced in the steelmaking process, by heating the dust in a furnace.

After a sixth furnace becomes operational this year, Nippon Steel will be able to recycle dust at all its steel mills. Through the recycling, the steelmaker expects to save up to 2.24 million tons of iron ore, around 5% of its annual consumption, and reduce its carbon dioxide emissions by 0.8 million tonnes per year thanks to lower fuel use.

Sumitomo Metal will have the capacity to recycle dust at its mainstay Kashima Works after a second furnace there starts operation in 2009.

It is reported that China Steel Corporation will spend TWD 2 billion to improve facilities at its four sintering plants to bring dioxin emission levels below a new limit to be enforced from 2010.

Mr Hsiao Yu Jeng director of the city government's Environmental Protection Bureau said that currently nearly 94% of the dioxins detected in the southern port city are emitted by China Steel's sintering plants. The integrated steel making plant is 23% owned by the government.

Mr Hsiao said that after holding a series of public hearings, the Kaohsiung City Council decided in June 2007 that effective from 2010, the ceiling on dioxin emissions will be lowered from the current one nanogram per cubic meter to 0.5 nanogram and that the cabinet level Environmental Protection Administration formally endorsed the decision last week.

According to Mr Hsiao, EPA head Mr Stephen Shen and several legislators paid a visit to CSC recently and met with the company's executives, who admitted that two of the sintering plants are too old and would never be able to meet the new emissions standard. He added that, after a round of negotiations, the EPA head agreed to consider as acceptable an average dioxin emission level of below 0.5 nanogram per cubic meter by the four sintering plants.

CSC's executives reciprocated by promising that the company will spend TWD 2 billion to improve facilities at its sintering plants in order to keep dioxin emission levels below the new ceiling from 2010. The function of a sintering plant is to process fine grain raw material into coarse grained iron ore sinter to supply the blast furnace. The plant's furnace is the main source of dioxin emissions.

Supermetal announced the signing of 2 major structural steel contracts in the Alberta Oilsands vicinity with Devon Energy for the Jackfish 2 SAGD project and EllisDon Construction for the Suncor Voyageur administration building.

The Jackfish 2 contract was signed with Devon Energy spawned from the success of the original Jackfish structural steel contract. The new contract is for the supply of 3600 tonnes of fabricated structural steel comprising of pipe racks, a process building and equipment modules. Jackfish 2 will be a stand alone SAGD plant adjacent to the original site 15 kilometers SE of the town of Conklin. The site is in the initial phases of construction with first oil anticipated in 2010 and a ramp-up capacity of 35,000 barrels per day.

The Suncor Voyageur administration building is a contract of firsts for Supermetal; the company will be working with EllisDon's Edmonton branch and indirectly for Suncor Energy for the first time. The 286,000 square foot administrative building is an eight story steel tower that will be comprised of 3,000 tonnes of steel structure.

Supermetal's construction subsidiary Supermetal Mojan based in Leduc will be performing the site erection. The total Suncor Voyageur village project is valued at USD 153 million and expected to be completed in 2011.

Mr Jean Francois Blouin GM of Supermetal said that "The Devon project represents the benefit of our previous performance from Jackfish 1 and our ability to meet a tight schedule. The Voyageur admin building will be a stepping stone in developing a strong working relationship with the parties involved. We look forward to excelling at both projects in the next 6 months and continue to broaden our experience in Alberta."

Supermetal Structures is a long established Canadian owned company with facilities in Quebec and Alberta and clients all across North America. It employs 400 people and specializes in the fabrication and erection of structural steel for industrial and commercial projects.

The national credit crunch was not in evidence as Magic Steel Corporation took a step toward securing Monday.

It is reported that Decatur Industrial Development Board has approved a resolution that gave Magic Steel Corporation, a customer of Nucor Corporation, tax exempt status on its USD 9.8 million loans bonds.

Magic Steel is the first tenant in Nucor's industrial park. By 2012, it predicts it will employ 30 people with an annual payroll of USD 1.3 million. More important, it is a buyer of products from Decatur's 700 employee Nucor plant.

While the industrial board is issuing the bonds for the Magic Steel plant, it has no liability on them. Magic Steel will make monthly payments to the purchaser of the private-placement bonds, GE Government Finance Inc.

The Industrial Development Board's role is to provide Magic Steel with tax exempt status on the bonds. It is the first bond the Industrial Development Board has issued since doing so on behalf of now defunct Trico Steel.

Magic Steel will invest about USD 15 million in the project on one of six tracts in the 171 acre Nucor industrial park. Nucor developed the park.

Reuters reported that Indonesia will scrap import duties for some raw materials, including steel and cocoa beans, to help local industries cope with increasing costs due to higher fuel and commodity prices.

Mr Fahmi Idris industry minister of Indonesia said that the government will pay the import duties for 10 industries, including iron and steel, cocoa processing, automotive, dairy products, power plant contractors, electronics and shipyards. He added that "Rising fuel prices have increased production costs, which in turn has greatly affected industry output. The fiscal incentive is intended to keep the industry running."

Mr Anggito Abimanyu head of fiscal policy analysis at the finance ministry said that Indonesian government will allocate IDR 2 trillion in 2008 and IDR 2.5 trillion in 2009 for the fiscal incentive program.

Japan's major electric steelmaker Kyoei Steel Limited has announced upward revisions of its consolidated earnings prospects except sales for April to September 2008 period. For main factors, it finds itself in improving sales prices of products, while domestic prices of locally available ferrous scrap as EAF feed are taking a nosedive.

With the sales forecast unchanged at JPY 115 billion, the revised earnings prospects are JPY 6,300 million in operating profit, up by 90.9% from what was projected earlier, JPY 7,000 million in pretax profit, up by 75% and JPY 4,100 million in profit, up by 78.3%.

For the latter half of fiscal 2008, it keeps unchanged its consolidated earnings prospects for fears about a rebound in ferrous scrap prices and a fall in demand for construction at home. Therefore, the company's consolidated earnings for the whole of fiscal 2008 are put at an unchanged JPY 235 billion in sales, JPY 17 billion in operating profit, up by 21.4% from what was initially forecast, JPY 18 billion in pretax profit, up by 20% and JPY 10.4 billion in net profit, up by 20.9%.

Khaleej Times report that the trial operation of Dubai Metro was launched by Shaikh Mohammed bin Rashid Al Maktoum VP & PM of the UAE and Ruler of Dubai.

The train ran for 11 kilometer between Jebel Ali Station and Ibn Battuta Mall Station. The train started its trial run with a 30 kilometer per hour speed and accelerated to 90 kilometer per hour.

The train on trial consists of 5 coaches and can accommodate up to 643 passengers. Once completed, the AED 15.5 billion Dubai Metro will be the world’s largest automated driverless Metro system with Green and Red Lines extending 75 kilometer and consisting of 47 stations including 10 underground stations.

Shaikh Maktoum congratulated the Dubai Metro teams and praised their efforts in rolling out one of the UAE and Dubai’s landmarks.

Shaikh Maktoum also commissioned the Metro' Internet Wireless Service which covers all Red Line and Green Line coaches. The service, allows passengers to use their laptops during the journey.

The Post reported that at least 270 steel industries in the city are illegally burning vehicle tyres in iron furnaces to save money on fuel and this poisonous smoke of steel industries is a potential threat to human health and clean environment.

A source told The Post that out of thousands of steel industries operating in various parts of the city, some 270 small sized steel plants are involved in illegal activity of using used tyres in running steel furnaces on regular basis in blatant violation of environment laws of the country. He said that no smoke contains more toxic contents than the smoke produced by tyre burning which is going on behind the closed gates of the steel industries busy in inhuman and illegal activity for petty business interests.

EPD also served notices on majority of 270 steel industries for using used tyres to run their furnaces. The officials of the environment department confided to The Post that the steel units in the residential areas of the city were creating air and noise pollution and about 270 steel units were violating environmental laws while the most dangerous violation was burning of tyres for cheap furnace material. Tyre burning in steel furnaces is also killing workers of these steel units as well, the officials said.

Reportedly, the Environment Protection Department is making efforts to stop use of illegal fuel of tyre in steel units but the steel industries use type fuel system in late night hours when the officials cannot catch them or at hidden furnaces inside the steel units where access of environment officials is not easy in normal circumstances in the absence of a tip off. The steel units are operating all over the city and the environment department lacks powers to take action against the industries violating environment laws.

Sources said the environment department of CDGL has served notices upon some of these steel units and action against violators is on the cards but procedure of action against violators under the environment laws is very lengthy and is making the department ineffective in the face of illegal activities going on in the city.

The localities of Kot Lakhpat, Town Ship, Multan Road, Walled City, Baghbanpura, Mughalpura, Chah Miran, Tajpura, Shadbagh, Misri Shah and Daroghewala are famous for light and heavy steel industry.

Khaleej Times reported that the prices of Portland cement up by AED 522 per metric tonnes in August from AED 500 in July as number of real estate projects went into construction phase.

As for the cement, a tonnes of Portland brand increase AED 522 in August from AED 500 in July. Belgian transparent glass decreased from AED 40 in July to AED 32 in August.

According to the building material index issued by the statistical unit of Abu Dhabi Department of Planning and Economy, current construction boom in the UAE in general and Abu Dhabi in particular has increased projects offered to contractors and at the same time given rise to prices of building materials and cost of construction.

The prices of building materials in Abu Dhabi saw a marked decline in August in comparison with prices in July, as prices of some types of steel went down by 10% to 15%.

DP World announced that it has further expanded capacity at its flagship Jebel Ali Port with the arrival of new giant tandem lift gantry cranes, the biggest of its kind in the world, and rail mounted gantry cranes for phase two of Container Terminal 2.

DP World said that 18 new tandem lift cranes and 20 RMGs have been delivered to the new terminal, doubling the number of tandem lift cranes and taking the number of RMGs at the terminal to 38. 6 of the tandem lifts and 18 of the RMGs have been commissioned and are now operational with the balance coming on line in the next seven to ten days. Further new equipment will be added to the terminal in coming months.

When fully operational which is expected to be in the Q1 of 2009, the second phase of Container Terminal 2 will deploy 29 tandem lift cranes and 60 RMGs. The tandem lift cranes are capable of lifting four 20 foot containers or two 40 foot containers simultaneously a total capacity of 80 tonnes which is twice that of traditional cranes.

Mr Mohammed Al Muallem senior VP & MD of DP World UAE Region said that “We have constantly invested in capacity at Jebel Ali to meet the rapidly expanding needs of our customers. This new equipment will contribute to alleviating the congestion that is impacting all ports in the regions as volumes have continued to grow.”

He said that “We remain committed to providing our customers quality services and have long term development plans for Jebel Ali Port. This includes building further state of the art container terminals in line with market demand.”

The first phase of Container Terminal 2 was launched in August 2007 which increased the capacity of Jebel Ali Port by 2 million TEUs. Once the second phase is launched in the Q1 of 2009, the total capacity of Container Terminal 2 will exceed 5 million TEUs, raising the overall capacity of Jebel Ali Port to 14 million to 15 million TEUs. This will further strengthen the DP World Jebel Ali’s position on the regional as well as global trade map as one of the most advanced centers for maritime freight and logistics services.

MEED reported that privately owned renewable energy plant of 2,500 MW capacity will be built in the Gulf of Suez.

According to Mr Hafez el Salmawy MD of the Egyptian Electric Utility & Consumer Protection Regulatory Agency, Egypt is to issue a tender for its first privately owned renewable energy project by 2011.

It will involve the construction of a 2,500 MW wind farm in the Gulf of Suez, south of Zaafarana on a build own operate basis. The New & Renewable Energy Authority is the client. Independent consultants from Canada are advising NREA on the technical, legal and planning aspects of the project and the consultancy work is being funded by the World Bank.

The bidding process for the power project will go ahead in two phases with an invitation for prequalification expected in early 2009.

It is reported that the construction of an Iraqi pipeline carrying crude from Iraq's southern fields to Iran's South Western Abadan refinery as well as of a pipeline carrying refined products from Abadan to southern Iraq has stalled, with the Iraqis blaming a lack of pipes as the main reason for the standstill.

The project which was initially signed last year would have entailed 100,000 bpd of Iraqi crude being exported to Iran from mid 2009, but with no construction having begun and the piping not even having been procured, exports before 2010 seem highly unlikely, according to Upstream.

Iranian officials late last year told the paper that Iraq seemed to have cooled on the project, blaming US opposition as the main cause, something that the Iraqis have continued to deny.

The Iranians have previously offered to finance most of the project, adding further questions to why the Iraqis have failed to procure materials and begin work. Ultimately the project was envisioned to transport up to 350,000 bpd to Iran.

Reuter reported that Iraq has signed a multi billion dollar natural gas deal with Royal Dutch Shell, the second major energy deal agreed with a foreign firm since the US led invasion in 2003.

Mr Hussain Al-Shahristani Oil Minister of Iraq described the deal as an initial agreement that he said that was worth some billions of dollars. It was unclear when a full deal would be signed. The agreement is between the energy giant and the state run Southern Gas Company for a JV in Basra province in Iraq's south. Under the terms of the deal, Iraq will hold 51% in the venture and Shell 49%.

Mr Al-Shahristani said that "We have signed an initial agreement for a joint venture between the Southern Gas Company and Shell."

An Oil Ministry official said that the deal is expected to include the capture of natural gas released as a by product of crude oil extraction. Shell is also expected to produce dry gas as well gas which is not a by product of oil.

Mr Shahristani said that "This company will stop the burning of gas as quickly as possible and will start to produce dry gas. Iraq will become one of the world's key LNG exporting countries."

He said that shell will also construct new gas facilities to process the by product gas, some 700 million cubic feet of which Iraq burns off or flares, each day. Shell will buy some of the gas itself. Shell's proposals include plans to supply the local market and export through Iraq's southern ports or through a pipeline.

Mr Gholam-Hossein Nozari Oil Minster Iranian in separate announcements appointed as new directors for the National Petrochemical Company, the National Iranian Gas Export Company and the National Iranian Gas Company.

MNA reported that National Iranian Oil Company’s director for contracts and legal affairs denied the rumors about Norwegian StatiolHydro Company’s withdrawal from developing Anaran block.

Mr Mostafa Zeinoddin director of National Iranian Oil Company’s said that “Not only hasn’t the Norwegian company informed us about its pull out from the block, but also has presented the block’s comprehensive development plan to the National Iranian Oil Company.”

He said that “NIOC and StatiolHydro will soon ink the Anaran Block development plan’s contract after finalizing the negotiations.”

While explaining that India’s ONGC Company has presented the Fazad B oilfield’s comprehensive development plan to the NlOC, Mr Zeinoddin added that “Beside the Indian company, a Chinese company has recently declared its willingness to develop Farsi Block, too.”

It is reported that European Commission has suggested a 90% antidumping duty on welded tubes and pipes of iron or non alloy steel from China. It also advised to levy duties ranging from 9% to 44% on the same product from Turkey, Russia, Thailand, Belarus and Ukraine.

EC initiated antidumping the investigation on September 26th 2007. The period of investigation is July 1st 2006 to June 30th 2007. It was envisaged to choose the United States of America as an appropriate market economy country for the purpose of establishing normal value in respect of China.

(Source: www.shihua.com.cn)

Jiangsu LongTeng Special Steel Co Limited has recently put its 850 continuous rolling production line into formal operation, which mainly focus on production of ship use sections like flat bulb steels and L bar, with annual capacity of 0.5 million tonnes.

Jiangsu LongTeng's steel branch factory professionally rolls flat bulb steels of various intensities and flat steel for ship use, and now in possession of one set of machine group production line of 580*4, 450*2, 300*5 respectively, with annual output capacity of 0.25 million tons. With the efforts in technical reform, the production lines of 580 and 850 were successfully put into operation, bringing annual output to 0.5 million tonnes.

It adopts the advanced equipment and processing technologies as well as other sophisticated detecting facilities, such as direct reading spectrograph, universal material testing machine, and impact machine to ensure the stable and reliable product quality. As a result, it has enjoyed products of complete specifications, steady product quality and reliable performance, with annual production capacity of over 1 million tonnes for various ship use sections.

Jiangsu LongTeng was accredited by the classification societies from CCS, ABS, GL, BV, RINA, NK, KR etc.

According to China Ministry of Commerce China will terminate antidumping duties on cold-rolled steel products originating in or imported from Russia, South Korea, Ukraine, Kazakstan and China's Taiwan.

MOC determined on September 23rd, 2003 that there was a reasonable indication that a home industry was materially injured by reason of imports of cold rolled steel products from the aforesaid countries and region and decided to impose antidumping duties for the following five years.

In accordance with relevant regulations of the regulation of the people republic of China on anti dumping the period for the levy of an anti-dumping duty and fulfillment of a price undertaking shall not exceed 5 years. However, the period for the levy of the anti-dumping duty may be extended as appropriate if, as a result of the review, it is determined that the termination of the duty would be likely to lead to continuation or recurrence of dumping and injury.

MOC reminded on January 15th 2008 that the duties would expire on September 23rd 2008 and domestic industry can apply for sunset review 90 days ahead of the deadline. MOC did not receive any application during the time limit and also decided not to launch initiative review of the case.

It is reported that in the earlier this month, Baosteel has respectively signed cooperative agreements with two domestic coal mines, Guizhou Shuicheng Mining Group and Jiaozuo Coal Industry Group, with a view to ensuring the coal supply.

Domestic leading steel makers have begun accelerating the progress towards working with coal mines after suffering the soaring materials prices in the first half of the year by means of equity participation or funding in a joint venture, apart from inking strategic agreement.

The source with Baosteel said coal supply and prices at home market seem softened right now, but major steel makers are unlikely to slow their step in materials preparation for future. Earlier this month, the steel giant came to terms with Jiaozuo Coal Industry Group, one of China's major anthracite bases, to jointly fund a venture in developing Zhaoguer mine, which has a workable reserve of 147 million tonnes and capacity of 1.8 million tonnes each year.

Central China Securities analyst Mr Huhao said that steel makers will focus their attention to the coal supply and its price behavior upon the expectation of oversupply of iron ore market the year ahead. On the other hand, major coal mines have wills to work with steel and power enterprises, for they have to introduce more advanced technologies and capital to guarantee their stable increase of sales. Cooperation with downstream enterprises is a good way for them.

(Source: China Securities Journal))

It is reported that WISCO and China Shipping Industry Corporation Wuchang Shipyard lately inked an agreement to build a supply and sell strategic alliance, which stipulated that by the end of 2009, Wuchang Shipyard required 100,000 tonnes of steel products will be provided by WISCO if it can make it.

Wuchang Shipyard is a huge consumer of steel product, as its Qindao Ocean Project and shipbuilding program for civilian use will ask for a large amount of materials. Wuchuan Heavy Engineering Corporation, one of its subsidiaries, majors in steel structure of bridges, with an annual production of 120,000 tonnes and total industrial output value of CNY 1.6 billion.

In the past, Wuchuan placed orders to WISCO, Shougang and Angang, while WISCO alone took up more than 70% of the country's total in bridge steel. The big maker has got the ability to produce most of varieties needed by Wuchuan after the establishment of its special steel base in Ercheng, Hubei province. Besides, the two sides have once worked together in Junshan Yangtze River Highway Bridge, Yangluo Yangtze River Bridge and Hangzhou Bay Bridge.

(Source: Changjiang Daily)

It is reported that by September 21st 2008, 590 listed companies in Shanghai and Shenzhen stock markets have reported their business performance, 317 of which have announced growth benefited from improved business. These companies take up 53.73% of all listed companies 4% lower YoY.

On the industry side, domestic coal market has remained robust this year, driven by international energy price rise and growing demand of domestic market. According to statistics, 14 domestic coal companies have reported fast business growth for the first three quarters. As many as ten companies, such as Panjiang Stock and Yanzhou Coal Mining have reported more than 100% growth from the year before.

Following the momentum of H1, the overall strong performance of the iron and steel industry has spread into the third quarter Xinjiang Bayi Iron and Steel and Fujian Sangangminguang both report business growth. Analysts say that the growth in the iron and steel industry will extend into H2 of 2008, albeit at lower rate.

(Sourced from MySteel.net)

It is reported that in the last two months, Steel mills in Hebei halt the purchase of steelmaking pig iron in succession. Following Xingtai Steel, Chengde Steel, Guofeng Iron and Steel and Tangshan Iron and Steel, Tianjin Steel Pipes also stopped its purchase recently. Tianjin Tiantie Steel withdraws from the market on September 20th.

Currently in Hebei, almost all the steel mills have stopped their purchase. As a result, most iron plants have to suspend production. Pig iron is offered at CNY 4100 per tonne to CNY 4200 per tonne now, but trade can rarely be seen.

(Sourced from MySteel.net)

XFN-Asia reported that the benchmark Shanghai Composite Index turned positive on gains in energy stocks led by PetroChina, although the rest of the market was pulled down after a significant rebound in crude oil prices. At 10:00 AM the Composite Index was up 6.17 points or 0.28% at 2,242.58.

PetroChina the biggest index component jumped 6.43% to CNY 12.92 after a buyback in its shares was announced.

Interfax China quoted a top NDRC official at a national PV industry conference on September 19th as saying that costs are still too high for China to build large-scale photovoltaic power generation plants nationwide, while new pilot projects will need to meet higher technology requirements to attain approval from the National Development and Reform Commission.

Mr Shi Lishan vice director of the renewable energy department of the NDRC's Energy Bureau said at the meeting in Changzhou City in eastern China's Jiangsu Province, the country's biggest PV product production region that "The costs of PV power generation, though half of what they were in 2000 are still about tenfold of those of conventional energy, such as coal."

He said that as the government is subsidizing the power, it is pushing to reduce costs. In recent years, the NDRC has rejected many applications to build PV power stations because the projects would require an on-grid power tariff of at least CNY 4 per kilowatt hour to be profitable, which is more expensive than the CNY 0.4 per KWh tariff for coal generated power.

Mr Shi said that "For new pilot programs, the NDRC needs to see technological advancements that could reduce PV power generation costs significantly, for instance, to a tariff of no more than CNY 2 per KWh."

He said that at present, China will focus on building large-scale grid-connected PV power stations in solar energy-rich deserts, small independent PV power stations in powerless regions and building integrated PV power generation facilities in some cities to meet its solar energy target.

According to Mr Huang Qili, member of the Chinese Academy of Engineering, China is focusing on the development of renewable energy such as wind, water, solar energy and biomass energy.

He said that the renewable energy will replace coal, oil and gas as the major energy in China by 2050, meeting 43% of the energy demands.

Mr Huang said that energy conservation and the development of clean and renewable energy would ensure the protection of environment as well as the sustainable growth of China's economy.

China was the biggest emitter of COD, industrial fume, dust, and sulfur dioxide, and its carbon dioxide emissions were the second largest in the world.

It is reported that currently, China's deficient railway transport capacity intensifies coal demand and supply imbalance, which is attributed to the huge price differences between railway freight and highway freight, and seasonal tight transportation.

Present coal freight by rail stays at CNY 0.0975 per tonne kilometer to CNY 0.12 per tonne kilometer and at CNY 1.2 per tonne kilometer by road. If one tonne coal is transported through 500 kilometers from Shanxi Province, it will only cost CNY 48.75 to CNY 60 by rail, but CNY 600 to CNY 800 by road. If one tonne coal is freighted through 300 kilometer by road, almost CNY 300 will be spent, but only CNY 30 to CNY 40 will be spent by rail through the same distance.

As a result, the huge gap between railway freight and highway freight makes trains the first choice to carry coal, and lower expense by rail made it the most cost-efficient way for coal transportation. Transportation capacity of North Channel fluctuates seasonally due to seasonal demand for thermal coal, causing a tight transport in summer and winter every year. Moreover, the middle channel and the south channel's capacity fall far short of actual demand. At the moment, tight line capacity seriously restricts coal hauling out of Shanxi, which is resulted in the coal shortage and rising coal prices in some areas.

China will accelerate line construction and rebuilding for Shanxi coal transportation during the "Eleventh Five-Year Plan", which is expected to ease the current situation in future.

(Sourced from MySteel.net)

It is reported that PetroChina and Russia's Rosneft is going to sign an agreement next month on building a 15 million tonnes per year refinery in Tianjin. The refinery, to cost CNY 60 billion is planned to be located in north China's port city Tianjin and feed on oil imported from Russia.

At the beginning of this year, a JV investment company named Sino-Russia Oriental Petrochemical was established by PetroChina and Rosneft deliberately for the building of the refinery. It is unknown when the refinery will come on line.

China and Russia is constructing crude pipeline running from Russian Thaishet to China's northeastern Daqing city. China hopes to extend the Sino-Russia crude pipeline from Daqing to Tianjin to ensure feedstock supply to the new refinery.

It is reported that CNPC, parent of PetroChina has seen its windfall tax for the first eight month triple YoY to CNY 68.69 billion. The surged windfall tax is expected to drag down CNPC's performance for financial 2008.

The company's pre tax profit hit CNY 56.4 billion in H1 of 2008 down by 39% YoY.

As per report, CNPC's profit growth has slowed down since the levying of windfall tax from 2006 that requires China's state-run oil companies to pay 20% to 40% of crude income if crude price exceeds USD 40 dollars per barrel.

Over the profit slide of Chinese oil refiners and the staying-high crude prices, market guesses that Chinese government may lift the threshold of windfall tax in the near future.

It is reported that Jiangsu Shagang took the lead recently to cut scrap purchase prices by CNY 50 per tonne, pushing latest price to CNY 3,480 per tonne for charging quality-scrap (1).

As followers, Wuxi Xuefeng, Jiangyin Xicheng Steel and Shandong Yantai Steel have lowered their prices by CNY 50 per tonne leaving their latest price to CNY 3,400 per tonne for charging quality scrap (1), quality scrap and heavy scrap respectively. Wuxi Huarun also cut price by CNY 40 per tonne with latest prices offered at CNY 3,420 per tonne for high quality scrap.

The price cut, supported by the favorable stocks and falling steel prices, has swayed the quiet scrap market in East China. Shagang has lowered steel products prices by CNY 800 per tonne for November supplies, giving a heavy blow to the already slack steel market. And some insiders even predict that price for rebar may break CNY 4,200 per tonne at the end of the year.

The panic mood has whipped steel mills facing profit loss to slash scrap purchase prices. In fact, cutting costs is the only way they can do besides output cutback at the moment. Therefore, scrap price is set to move down in future.

(Sourced from MySteel.net)

It is reported that the western part of Yantian port in Shenzhen will be the site of three new berths and the expansion of an existing fourth one to accommodate 50,000 tonne ships and the capacity to move 1.8 million TEUs a year.

As per report, the USD 561 million projects including imported equipment costing about USD 150 million will be built and operated by Shenzhen Yantian Port Holdings Co Ltd and Hutchison Whampoa Port Investment Ltd for 30 years.

According to the construction scheme, the four new berths will be operational in 2010.

China Mining reported that affected by sluggish market demand for iron ore and rapid increase in supply, China's iron ore marketh as plunged into a sluggish state of price drop and bleak transaction.

Experts hold that continual slipping of market price of iron ore may produce influence on price negotiation for iron ore for 2009. Theoretically, price drop of steel products will inevitably force steel plant reduce their demand for iron ore and press for lower prices. But talking of negotiation, as the three iron ore giants all have two systems: one for supply and one for spot price, there will be certain gap between the price and spot price. Therefore, though the price of domestic spot iron ore supply and the price of imported spot iron ore supply have dropped together with the slipping of steel prices, compared with the targets of the three iron ore giants, there is still a certain gap.

In view of the situation, Mr Zhou Xiaoming Langesteel Analyst said that affected by drop of steel prices, many enterprises have cut their purchase of iron ore raw materials, and the decrease in demand will influence the negotiation for iron ore prices. But the originaliron ore price negotiation mechanism exists some problem: still calculating on the basis of FOB. As the Australian side will go on demand compensation for sea transport fee, the growth of agreed price would inevitably be higher than the FOB of CVRD. CVRD may require increase of FOB, which may made the negotiation more complicated.

It is reported that the Municipal Government of Zhanjiang enhanced compensation standards for housing removal because of the construction of the Zhanjiang Steel Project.

According to the new plan, ordinary brick-structured houses will be paid 600 Yuan per square meter, compared to CNY 550 per square meter in an original plan and the compensation for frame structured and concrete buildings will be increased by about CNY 300 per square meter.

In order to avoid compensation fraud, compensation standard for newly built brick walls and sheds will be lowered to CNY 150 per square meter from the previous CNY 250 to CNY 300 that for makeshift sheds will be lowered to 70 Yuan per square meter from the previous CNY 200 to CNY 220. Fruit trees beyond a normal planting density will not be made up.

It is reported that Jiangsu Shagang Group Co, the country's largest privately owned steelmaker has proposed to Brazilian counterpart Cia Siderurgica Nacional to acquire a stake in the latter's iron ore unit Namisa.

Mr Jia Xinagrong vice chairman of Shagang said the Chinese steelmaker does not expect its talks on the possible stake purchase to close before the end of September. He said that the negotiations are very complicated and the value of its bid for Namisa remained unclear as the Brazilian company's proposal was vague.

Mr Jia said that last week Brazilian mining giant Vale has slowed iron ore loading, forcing Chinese ships to halt at their port. He said that Shagang will use existing inventories and consider importing more from Australian, India and South Africa to replace the delayed ore from Brazil.

It is reported that Hebei Iron & Steel Group Handan Steel lately ceased its last wire rod line running for 28 straight years, which is a significant move in improving products structure and shake off antiquated capacity. Until now, the steel maker's proportion of competitive steel products has risen up to 83%.

Handan Steel has been working to upgrade its existing equipments and wash out energy consuming and low value-added lines in recent years. In the 10th Five Year period, it eliminated three 150,000 tonnes steelmaking converters or 1 million tonnes of steel capacity, a Belgian rolling mill or 450,000 tonnes of sections and five sintering machines or 1.2 million tonnes of sintering ore.

At the same time, it is striving to build plate deep processed projects and has established world-class production lines including a world one up 1.3 million tonne CR sheet line, two color coated lines with a yearly 120,000 tonnes capacity. It has today boated an integrated steel plate mix now, ie HR and CR sheet, color coated sheet/plate and medium plate.

Plate products have become a highlight of benefit increase for the steel maker. During this January to August period, it developed a dozen of new plate varieties including high strength galvanized plate, many of which have gone to the high-end markets of America and European economies.

(Source: Hebei Daily)

It is reported that domestic market price for flat products still showed a declining trend in last week. Domestic steel market price dropped under the combined influence of falling raw material price, weak demand and economy. Recently, many large scale steel makers cut their prices. At present, many small-scale suspend production under such circumstances. And many large-scale steel makers also felt much pressure.

Steel consumption is forecasted to come back after the Olympic Games. But the problem is the released demand will not certainly give support to market prices as there is still room expected for further decline. In the end of September many steel makers published new price policy. A lot of first-class steel makers slashed EXW prices surprisingly. Baosteel pronounced to cut its flat product and shipbuilding plate prices by CNY 700 per tonne to CNY 800 per tonne and some CNY 500 per tonne. To a certain extent, the price cutting is favorable to downstream consumers. Besides, the move will help stabilize domestic market.

As the demand from downstream industries is released gradually and social stocks keep on a low level, it is possible for market prices to rebound temporarily. However, the temporal price bounce can not turn the scale. Besides, there is still room expected for further decline. So, the market price will not see a favorable turn at present.

(Sourced from MySteel.net)

It is reported that China Shipping Development was cleared by the NDRC to set up a shipping joint venture in Hong Kong with Baosteel Resources a subsidiary of Baosteel Group.

The new company, called the Hong Kong Haibao Shipping is 51% owned by China Shipping and 49% by Baosteel Resources with a total investment of USD 703.66 million. The company will mainly deal with ocean transportation for imported bulk cargoes including iron ore.

China Oilfield Service Ltd announced that it had completed acquisition of Norway’s Awilco Offshore ASA for CNY 17.1 billion aiming at sale amount in excess of CNY 100 billion in 2020.

COSL said after the acquisition, COSL will build the eighth largest drilling fleet in the world, which owned totally 34 operating rigs at present include the construction platform of the two companies. Now the COSL has sent a team to Norway for handing the merger, the AWO will be a wholly-owned subsidiary of COSL. The deal has won support from relevant government departments of Norway and Statoil, the state oil company of Norway.

COSL has received approvals from all relevant Chinese departments and has met all the requirements for completion of the offer.

This was a great move for COSL, China’s largest offshore oil services provider, to expand internationally.

It is reported that Yuguang Gold & Lead, China's top lead producer, will shut down more than a third of its 310,000 tonnes of lead production capacity for repairs from October 6th 2008 for 35 days to 45 days.

Mr Li Xiaodong trade manager of Yuguang's said that "We have to shut down the system as it has been overused. If we don't shut it down now we may have a big problem. We think the system may be able to restart on November 10th 2008"

He said that Yuguang operates 3 lead production systems in Henan province and normally produces 25,000 tonnes of refined lead a month. The shutdown would reduce the firm's output by more than 10,000 tonnes. He added that the firm had informed domestic clients that it would delay some term shipments to November.

China is the world's top lead producing country, but its production has fallen in the last two months because of a diminished supply of concentrate, which has helped stabilize slumping prices.

Mr Volodymyr Novytskyi Minister of Industrial Policy of Ukraine predicted that Ukraine growth of steel production by 3% to 4% in 2009.

Mr Novytskyi said that steelmaking indexes in 2008 will be a bit lower than expected, namely about 43.7 million tonnes against 46 million tonnes forecasted.

He said that “Such a situation occurred due to drastic price reduction for steel on the world markets, which lead to problems of the Ukrainian enterprises in sales of their products. The risks on the foreign markets that may be caused by expansion of the Chinese metal products were not taken in consideration. Thus, over the last months, China supplied metal to the same markets with Ukrainian enterprises.”

He added that there is a problem of supplying the mining complex with raw materials required for steelmaking in particular coke.

Kommersant reported that Severstal Overseas Limited bought 156,040 GDRs of Severstal at USD 13.65 per a GDR September 19th 2008. The deal budget reached USD 2,129,946.

Severstal announced September 16 the launch of the project for buying back the stocks for the total worth of up to USD 400 million, which corresponds to 2.8% of the stock capital. The stocks are acquired at USD 14.04 per a GDR, i.e at the price of the LSE close on September 15th.

The stocks and GDRs will be bought out by one of Severstal subsidiaries on behalf of Severstal. The operation will last from six to ten months depending on the market quotes of the stocks and GDRs and on the general market opportunities.

Steel blockbuster Severstal has assets in Russia, North America, Europe and Ukraine. Its key beneficiary is Mr Alexei Mordashov General Director, who owns more than 82% of the stocks. The free float accounts for roughly 18%.

Ukrainian Journal Staff reported that Ukraine’s GDP will grow 6% to 7% annually from 2010 to 2012.

The government expects the economy to grow by 6% in 2010, 7% in 2011, and 6.5% in 2012. Inflation will fall from 15.9% in 2008 to 9.5% in 2009, 9.2% in 2010, 8% in 2011, and 7% in 2012. The foreign trade deficit will continue to grow, from USD 17.7 billion in 2008 to USD 25.3 billion in 2009, USD 31 billion in 2010 and USD 34 billion in 2011.

Ukrinform reported that gas production in Ukraine grew by 0.9% YoY in January to August 2008 compared to the same period in 2007 to 13,953.5 billion cubic meter including natural gas by 1.4% to 13,265.2 billion cubic meters.

According to the Fuel and Energy Ministry, enterprises with NJSC Naftogaz of Ukraine reduced gas production over eight months by 0.5% to 12,780.7 billion cubic meter including natural gas by 0.2% to 12,205.6 billion cubic meters.

Other oil and gas production companies of Ukraine went up gas production by 19.1% to 1,172.8 billion cubic meters including natural gas by 23.4% to 1,59.6 billion cubic meters.

Gas production in Ukraine in 2007 dropped by 1.2% against 2006 to 20,604.3 million cubic meters including natural gas by 1.1% to 19,532.3 billion cubic meters.

Interfax cited Mr Karen Karapetian CEO of Armrosgazprom during a meeting with Mr Serzh Sargsian president of Armenia Russia will raise gas prices for Armenia 40% to USD 154 per 1,000 cubic meters on April 1st 2009 from the current USD 110.

He said that gas prices will then rise to USD 200 per 1,000 cubic meters on April 1st 2010. The growth in gas prices for Armenia is on par with the increase on the Russian energy market. Starting in 2011, Armenia is to start paying European prices for gas.

Mr Karapetian said the upcoming hike in gas prices would not lead to a reduction in gas consumption.

Mr Sargsian said the negotiations with Gazprom are based on a gradual increase in gas prices, which allows the population and business to plan in advance. The president said that the price hike will have a negligible impact on the population but create great opportunities for heightened competition among businesses."

He also called on Armrosgazprom to actively continue the process of bringing gas to the whole country.

In September 2008, Gazprom signed a contract on gas supplies to Armenia in 2009 to 2010. Gazprom delivered 2.05 billion cubic meters of natural gas to Armenia in 2007.

RIA Novosti reported that Eurocement Holding had bought 6.52% of voting shares of Switzerland's Holcim - the world's second largest cement producer on the open market.

Russia's largest cement producer said in a statement that "This investment is a friendly move and a long term strategic investment by Eurocement Holding."

Eurocement added that “It did not intend to make a public offer on acquiring the entire stock of Holcim and nominate its representatives to the Swiss company's board of directors.”

Eurocement said that "The decision on an investment in Holcim stock was made on the basis of knowledge of the sector and the results of work by the Holcim board of directors and management, adding that it was interested in the Swiss company's engineering, technical and technological potential to implement its previously announced investment program.”

Eurocement is among the world's top eight cement producers and unites 16 full cycle cement factories in Russia, Ukraine and the Central Asian republic of Uzbekistan with an annual capacity of 38 million tonnes of cement. Eurocement intends to boost cement production capacity to 50 million tonnes annually through the construction of new and the modernization of existing capacities by 2015. The company's investment in the cement business is estimated at USD 6 billion.

Ukrinform reported that the output of electricity in the United Energy Grid of Ukraine grew by 2.4% YoY or 3.082 billion KWH in January to August 2008 to 130.513 billion KWH.

According to the report, thermoelectric power stations increased electricity production by 7.4% over the period, to 56.22 billion KWH, nuclear power plants decreased electricity output by 3.4%, to 60.737 billion KWH and hydroelectric power stations increased electricity output by 15.1%, to 8.044 billion KWH. The production of electricity by municipal heat and power plants and block-stations grew by 3.5%, to 5.508 billion KWH.

The share of nuclear power plants in electricity production in January to August 2008 reached 46.5% thermoelectric power stations 43.1% hydroelectric power stations 6.2%, municipal heat and power plants and block-stations 4.2%.

RIA Novosti reported that the Russian government has approved cutting its crude oil export duty from USD 485.8 to USD 372.2 per tonne from October 1st. Export duty for light oil products has been fixed at USD 263.1 per tonne and at USD 141.7 for heavy petroleum products.

The government adjusts export duty on crude and petroleum products every two months, depending on the price for the Russian benchmark Urals blend on world markets.

Mr Alexander Sakovich deputy head of the ministry's customs payment department said the average crude price was USD 97.297 per barrel for September 1st to 17th and export duty would therefore be USD 372.2 per tonne.

Mr Alexei Kudrin Finance Minister of Russia estimated that the October 1st cut in the crude export duty would save Russian oil companies and refineries a total of USD 5.5 billion.

MMC Norilsk Nickel ha announced that Mr Vladimir Strzhalkovsky General Director of OJSC MMC Norilsk Nickel took part in the meeting of Mr Vladimir Putin PM of Russian and Mr Francois Fillon French Prime Ministers with Russian and French businessmen at the VII’th International Investment Forum Sochi-2008.

In his speech, Mr Strzhalkovksy emphasized significant contribution of MMC Norilsk Nickel to the development of economic co operation between Russia and France. For instance, in 2007 the Company’s exports to France reached USD 450 million.

In addition, Mr Strzhalkovsky outlined a number of issues that demand specific attention of the governments of the two nations. In particular, the General Director expounded in full details the intention of the European Commission to pursue with classification of a number of nickel-containing compounds as dangerous substances in total absence of any objective grounds substantiating such a decision. MMC Norilsk Nickel and all other global nickel producers concur with the opinion that such a decision of the European Commission lacks any sound evidence. In the modern world, nickel is renown as a reliable metal whose properties have been thoroughly studied and are well-known to the users. Over the last 100 years, the practice of appropriate use of nickel has never given any grounds to question its known characteristics. The Company is of the opinion that the said classification of a number of nickel-containing compounds is the result of a flawed methodology in practical application of the read-across principle to the EU Dangerous Substances Directive by the Commission.

According to Mr Strzhalkovsky, Mr Putin PM of Russia has pointed out that this decision would affect not only the interests of MMC Norilsk Nickel but those of other Russian industries, and hence would badly affect economic co-operation between the two countries as well as between Russia and the EU in general.

In this regard, Mr Putin and Mr Francois Fillon have agreed to relate this matter to Franco Russian Council for Economic Cooperation. Besides that, France as the current EU president will explain to the European Commission the necessity to bring forward a reasonable and scientifically sound solution to the issue. Russia, in its turn, will engage Russian experts in addressing the problem.

Interfax cited Mr Vladimir Putin PM of Russia as saying that Mr Igor Sechin deputy prime minister of Russia will head the governmental commission for the development of power generation.

He said that "It will be engaged in locating power generation facilities up to 2020. He added that the commission will also coordinate the investment plans of the government and market actors in the power generation industry.”

Mr Putin said that "Mr Igor Sechin will head this commission."

A decision to establish the commission was made in the Monday meeting of the presidium of the Russian government.

Mr Sergei Shmatko Russian Energy Minister said the commission has the status of a coordinating and consultative body, but its decisions "will be mandatory for all constituting agencies. The minister also said that Mr Anatoly Chubais the former CEO of Russian electricity holding RAO UES will not be a member of the power generation commission.

Mr Shmatko said that "Mr Chubais is not a member of the commission. We have a rather close relationship with him. Our further relationship with him will be specified after he is back after holidays. The minister added that the commission will also tackle the most crucial issues linked to the development of power generation. It will also look into the current issues of its functioning.”

Mr Shmatko said in particular, such topical issues as technological junction, fight against cross subsidizing and the formation of the wholesale and retail markets for electricity will be discussed. He said that the commission will convene no less than once per month, and the first meeting will take place in the next one or two weeks.

He added that the commission will consist not only of officials but also businessmen, representing both large electricity consumers and infrastructural power generation organizations.

Mr Shmatko added that the personal composition of the commission has already been approved.

RIA Novosti reported that the Irkutsk department of Russia's Federal Antimonopoly Service has fined state oil company Rosneft RUB 229 million for abusing its dominant position on the wholesale gasoline market.

According to the report "The violation was in the creation by Rosneft of favorable oil product purchase conditions for its subsidiaries and discriminatory conditions for buyers that are not part of the company group."

In July, the Irkutsk department found the company to be in breach of laws on domestic sales of oil products, and ordered it to rectify the situation. The body also ruled that Rosneft must sign contracts with all buyers except when this is economically or technologically impossible.

The probe was launched in May after experts established that Rosneft's subsidiary Irkutsknefteproduct was supplied gasoline under a long term contract while other wholesale clients had to bid in monthly tenders.

Interfax cited Mr Sergei Bagapsh president of Abkhaz as saying that Abkhazia's ownership of the Inguri hydropower plant cannot be disputed.

He said that "The Inguri hydropower plant has always been ours and will always be ours. We will dictate our terms and conditions at any negotiations on it."

Earlier agreements stipulated that 40% of electricity generated by this hydropower plant would be supplied to Abkhazia and 60% to Georgia.

The plant is located in the village of Saberio in the Gali district of Abkhazia, and the dam is on the Georgian bank of the Inguri river.

Interfax reported that Belarus expects to increase natural gas imports from Russia by 2.3% to 22.1 billion cubic meters in 2009 and leave oil imports unchanged at 21.5 million tonnes.

Belarus has asked Russia to increase oil supplies via pipelines to 20 million tonnes in 2009 from 18 million tonnes in 2008 if possible.

The country also plans to import 5 billion kilowatt hours of electricity next year.

Kommersant reported that Russian Railways will get RUB 45.5 billion from the RF Investment Fund to implement high-speed railway projects at St. Petersburg-Helsinki direction and for rebuilding Oune-Vysokogornaya section, including construction of a new tunnel.

As per report Russia government has appropriated RUB 27.9 billion to implement the first project and RUB 17.6 billion for the second one. The total cost of rebuilding Oune-Vysokogornaya section and constructing a single-track tunnel equals RUB 59.8 billion. The project will be implemented in 2008 through 2013.

Overall, arranging high-speed railway traffic between St. Petersburg and Helsinki will cost RUB 79.7 billion. The trains are expected to cover the distance of 450 kilometer in 3.5 hours.

It is reported that in Cast Rolling Complex which the United Metallurgical Company Vyksunskom built in the area of the Nizhny Novgorod region recently was released the first piece of rolled steel. Rolls made from the stamps were “20” weighs 20 tonnes and has the following dimensions 7 mm thick strips, Width 1300 mm.

Mr Konstantin Pityul executive director of forestry said that “The tests showed that the equipment complex is fully prepared to top the full production process.”

The production reel has been successfully tested all operating mechanisms chain of production: a fusion of metal in the steel arc furnaces treatment in an oven-Bucket digging and pouring machine continuous casting billets test all the equipment rolling mill.

Ukrainian News Agency reported that Ms Yulia Tymoshenko PM of Ukraine intends to carry on negotiations with the government of Russia on conclusion of a long-term contract on natural gas supplies to Ukraine in the nearest future.

She said that "In the nearest future, we will discuss the issue with our Russian counterparts. Ukraine ought to have a long-term gas supply contract. In her opinion, conclusion of a long-term contract will contribute to stability of natural gas provision to Ukraine.”

Ms Tymoshenko said that "Otherwise, each December will be a month of natural disaster caused by gas supply shortfall."

Itar-Tass cited Mr Alexander Artamonov press secretary of the Vladivostok branch of the Far Eastern Railway as saying that reconstruction of the railway section between North Korea’s port Rajin and Russia’s station Khasan in the Primorye territory will be launched on October 3rd.

The Russian and North Korean leadership in 2001 signed the Moscow declaration reflecting the sides’ agreement to create a railway transport corridor linking the North and South of the Korean Peninsula with Russia and Europe. In April 2008, Mr Vladimir Yakunin President of OAO RZD Company and Mr Kim Yong-sam North Korean Railways Minister signed in Moscow a cooperation agreement.

The sides agreed to jointly implement the Khasan-Rajin pilot project that includes reconstruction of the railway section Khasan Rajin, construction of a container terminal at Rajin port, as well as the following exploitation of this infrastructure. With this end in view the sides agreed to set up a joint venture.

Interfax reported that the Russian government has made amendments to the charter of Russian Railways to increase the company's charter capital to RUB 1.542 trillion.

Mr Vladimir Putin PM of Russia signed off on the amendments on September 12.

RZD previously had charter capital of RUB 1.536 trillion split into 1.536 billion common shares with par value of RUB 1,000.

RIA Novosti reported that Russia's state controlled VTB Group unaudited net profit calculated to International Financial Reporting Standards increased 34.7% YoY in January to June to USD 679 million.

The group's assets grew 17.4% in the reporting period to USD 108.8 billion.

TMK has announced that a 600,000 tonne capacity Premium Quality Finishing seamless rolling mill was brought on line as scheduled at its TAGMET plant in south-western Russia. The first batch of PQF seamless pipes was shipped to Surgutneftegas.

TMK is the first global pipe producer to operate a PQF mill, allowing it to produce pipes with geometry that twice surpasses API requirements. The PQF mill will produce high-performance 73 mm to 273 mm OD seamless tubes with up to 25 mm wall thickness. The mill was designed, manufactured and supplied by the German company SMS Meer, a leading supplier of pipe rolling equipment. In addition to expanding the share of premium-class products, the state-of-the-art three roller technology employed by the mill will improve production yields by 6 to17%.

The mill is scheduled to reach its projected production rate in the first quarter of 2009.

On top of the PQF mill, 200,000 tonnes of additional heat treatment capacity is also being brought on line, further enhancing the mechanical characteristics of pipes produced at TAGMET. Italian metallurgical equipment producer Olivotto Ferré supplied the heat treatment equipment. This new generation of oil and gas pipes is designed for aggressive and complex operating environments such as those found in Caspian Sea offshore operations and Arctic shelf projects in the Kola Peninsula and the Barents Sea. The production of PQF seamless tubes will also meet the needs and requirements of the machine building, energy, chemical and petrochemical industries and other demanding applications.

Production is intended for both Russian and international markets, primarily North America, the European Union, the Middle East and North Africa. Furthermore, shipments of PQF tubes to TMK IPSCO finishing facilities will provide the North American market with premium-class products.

Mr Konstantin Semerikov CEO of TMK said that “In 2008, TMK’s Strategic Investment Program focuses on the expansion of seamless OCTG production. The launch of the PQF mill was a key part of our strategy to bring TMK’s OCTG production to the next level. Although we expect a positive impact from this new mill already this year, the full effect of the PQF technology and high value-added production will be felt in 2009, when the mill is fully ramped up. The globally recognized high quality standards of the PQF rolling mill will allow TMK to successfully compete in all global oil and gas pipe markets.”

Interfax cited Mr Alexander Dyukov president of Gazprom Neft as saying that Gazprom Neft might still raise a loan for USD 1 billion before the end of the year.

He said that "Despite the financial crisis, we remain interested in raising a loan. Our profits and financial condition are sound. I think we will be able to reach agreement with the banks for a loan at advantageous terms for us."

It was reported earlier that Gazprom Neft completed syndication of a loan totaling USD 1 billion in July. The loan proceeds were used for general corporate needs and to refinance existing debt.

The loan was organized by Banco Bilbao Vizcaya Argentaria SA, The Bank of Tokyo-Mitsubishi UFJ, Ltd, Barclays Capital, Sumitomo Mitsui Banking Corporation and WestLB AG.

It is reported that the first stage construction of the 0.5 million tonnes per year alloy steel project for Anhui Jinzhai-based Jinan Stainless Steel Casting Co has recently completed after 10 months strenuous working.

With total investment of CNY 360 million, the technical-innovation project will be constructed in two phases. The first-stage of 0.3 million tonnes per year alloy steel billets project costs CNY 198 million and will realize annual production value of CNY 2 billion after completes.

A set of 850 HR/CR rolling mill will be added to the second-stage building to produce seamless stainless steel pipes for different market use. And annual production value would reach CNY 5 billion when the project launches full-scale operation.

(Sourced from MySteel.net)

Ferrochrome producer International Ferro Metals has completed its first full year of production at its Buffelsfontein ferrochrome facility in South Africa, with output expected to increase by over 10% from July 2009.

IFM produced about 205,607 tonnes of ferrochrome in the year ended June 30th 2008, representing about 77% of its 267,000 tonnes capacity. It announced a net profit of ZAR 578.1 million, from a ZAR 344.2 million loss a year earlier.

Mr Stephen Turner CEO of IFM said that its growth profile remained robust, despite the electricity constraints in South Africa, which had forced management to reassess its expansion plans. He added that "Production is expected to increase by over 10% to 267,000 tonnes of charge chrome a year from July 2009, following the commissioning of our off-gas power generation plant."

Mr Turner noted that IFM was well positioned to benefit from the strong ferrochrome demand if it continued with tight cost control, increased production and no debt.

IFM said that its expansion plans remained a focus, despite uncertainty over state owned Eskom's electricity supply. It seeks to increase its chromite production by 300% over the next 18 months, by expanding its current Lesedi mine, at Buffelsfontein, and the establishment of an open pit mine, decline and underground operation at the nearby SkyChrome.

Mr Turner noted that IFM had completed the SkyChrome underground feasibility study, which had resulted in a 72% increase in total resources to 126 million tonnes.

Mr Tony Grey chairperson of IFM stated that it still planned to expand its Buffelsfontein production facility to 665,000 tonnes per annum by constructing a further three furnaces and ancillary plants.

IFM noted that the off gas power generation plant, which would use electricity generators to capture waste gas from its furnaces, would start benefiting the company from July 2009, when it would generate about 12% of the producer's electricity requirements.

The first of the generating units would be delivered by December 2008. This plant was expected to cut IFM's carbon emissions by about 136 000 tonnes per annum, generating EUR 2.6 million worth of carbon credits.

Kazakhstan Today reported that prices in the world market for titanium have decreased. The experts forecast further falling of prices at the market of titanium production. One of the main factors are expectant tendencies prevailing now in behavior of the European and, first of all, British buyers.

According to the report, the increase of prices on ferrotitanium is limited by general uncertainty in the market of steel, mainly, due to decrease of prices for stainless steel and threat of decrease in manufacture that will affect prices for alloying ferroalloys.

Problems in stainless steel industry have also affected the market of titanium sponge of metallurgical quality. As a result, there is over supply of the Chinese material at rather low prices despite of high export duties in China.

As for future world market for titanium, the expected introduction of new capacities on manufacture of titanium in China can lead to increase of supply.

According to the latest statistics of China Nonferrous Metals Industry Association, China's molybdenum concentrate production reached 115,248 tonnes in the January to August 2008 period, with 51,862 tonnes of molybdenum content, up by 24.74% YoY.

The molybdenum content of Henan and Shanxi molybdenum concentrate production prevails at 25,100 tonnes and 10,808 tonnes, picking up 20.37% YoY and 9.95% YoY. Molybdenum content of the two areas accounts for 69.5% of national production.

(Sourced from www.MySteel.net)

Moly Mines Limited said that geological logging of 31 RC holes drilled to follow up previously reported significant iron intersections in two areas at its Spinifex Ridge moly copper project site in Western Australia has reported strong hematite iron mineralization in all but two of the holes.

Preliminary assaying has been completed on 23 of the holes using a portable hand held XRF instrument. Intersections included 55 meters of 60% iron, 69 meters of 57% iron, 20 meters of 60% iron and 54 meters of 57% iron, all extending from surface and 47 meters of 59% iron from 3 meters depth. The holes were drilled to an average depth of 72 meters.

Comprehensive laboratory assaying is now in progress as the hand held XRF instrument does not report SiO2 or Al2O3. Assays are also awaited from the diamond drilling program which is currently in progress to test the depth extension of the iron mineralization, and geological logging of the core has recorded massive hematite to a depth of 150 meters.

Furthermore, the iron potential of the area has been further enhanced by the discovery of a third area of outcropping hematite mineralization to the west of, and covering a similar area to Auton.

Moly Mines said that all but one of the 11 rock chip samples gathered from the prospect returned values of more than 60% iron, with four greater than 65% iron. In addition, there is a strong magnetic anomaly coincident with the three areas of hematite mineralization.

Dr Derek Fisher MD of Moly Mines said that "Spinifex Ridge is well positioned to capitalize on the current, sustained iron ore boom due to its proximity to key infrastructure required for such bulk tonnage commodities. It has access to the paved Marble Bar Port Hedland road and the world class shipping and loading facilities at Port Hedland which are only 160km away. The advantages in developing and mining an iron ore resource in parallel with the progression of the Spinifex Ridge moly copper operation represent an outstanding opportunity for Moly Mines to significantly enhance the value of the overall project while only incurring minor additional costs."

It is reported that Nickel futures tumbled sharply for its biggest weekly fall in almost 4 years in the trades on MCX and LME.

On MCX, the benchmark September expiry contract Nickel for delivery in 3 months plummeted by INR 73 kilogram to INR 742 kilogram as against INR 845 per kilogram on September 15th 2008 the start of the week.

As per report, the prices of nickel were declined sharply because the stockpiles rose to 9 year high that have brought down the demand. Stockpiles in warehouses monitored by the London Metal Exchange advanced 378 tonnes to 51864 tonnes, the highest since July 1999. The demand is slow on account of feeble picking by Stainless Steel sector.

Reuters reported that Indian iron ore industry has asked the government to remove a 15% duty on exports following a sharp drop in prices and falling demand from China.

The levy was imposed in June after the steel industry said iron ore exports should be discouraged to ensure enough raw material for the domestic firms.

Mr SBS Chauhan, an advisor to the Federation of Indian Mineral Industries, said that the duty had pushed prices down by about 40% over the past three months. He said medium grade iron ore prices had dropped to USD 75 per tonne to USD 85 per tonne FOB from USD 130 per tonne to USD 140 per tonne FOB in June, making the business unsustainable.

He said that "Unless demand from China increases, mines will have to curtail their production and price below USD 100 per tonne is unviable for the industry due to steep increases in transportation costs.

Mr Chauhan said there is no pick up in Chinese demand even after Brazilian miner Vale demanded an increase in term iron ore prices, effectively erasing an Asian discount that offset higher freight costs and bringing on level with European prices. He said "As of now there is no fresh demand from China despite Vale's demand for higher contracted prices.”

Mr Chauhan said that “Exports in the first half of September dropped to 1.99 million tonnes from 2.7 million tonnes in the same period last year and sales in August were also lower at 4.57 million tonnes against 5.39 million a year earlier.”

It is reported that China's imported coal slipped 18% YoY to 28.68 million tonnes and exported coal rose 0.3% YoY to 33.64 million tonnes in the first eight months. 9.68 million tonnes of coke and semi coke were shipped out in the same period down by 5.7%YoY.

Current stocks remain high in the north transshipment ports, south unloading ports, and power plants. Power plants see a further decrease of coal price, but traders hold out for price upturn, resulting in large piles of coal at ports.

Due to slow economic growth in the South, higher efficiency of West-East Power Transmission, and bad weather, southern demand for coal was lowered. Meanwhile, sufficient stock at both discharging ports and power plants also put adverse effects on the coal purchase at the north ports. Otherwise, rail-transported coal arrivals at ports are increasing, for example, coal arrivals at Qinghuangdao port went up 11.4% MoM in August with more discharging cargos than loadings.

China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters has released the average reference prices for import transactions of ferrous 63.5% Indian iron ore concluded last week on September 22nd 2008 as under

Price in USD per tonne

The change is with reference to that posted on September 16th 2008

The reference price practice is intended to regulate the domestic trading of Indian iron ore and avoid speculation on the raw material for China's booming steel industry. The China Chamber of Commerce of Metals, Minerals and Chemicals Importers & Exporters are the largest trading association in China.

It is reported that Hebei Iron and Steel Group has established a wholly owned subsidiary, Hebei Mining Corp Ltd. The new entity is the fruit of 10 coal mines of Tangshan Iron and Steel and Handan Iron and Steel. Thus the new company has CNY 3.48 billion of fixed assets and 1.03 billion tonnes of iron mine reserves. The total iron mine reserve is planed to reach 4.62 billion tonnes.

The establishment of the mining company marks a significant step of Hebei Iron and Steel towards strategic integration of resources. It will help promote the exploitation of Sijiaying iron mine of Tangshan. Heibei Iron and Steel intends to raise up its annual ore concentrate output to 30 million tonnes in coming years.

(Sourced from MySteel.net)

Indian express reported that Chiria iron ore mines for state run steel giant SAIL, steel minister Mr Ram Vilas Paswan will meet Mr Shibu Soren CM of Jharkhand soon to hammer out a solution to the vexed issue. Failing that, he is planning to write to the PM seeking nationalization of the mines through an ordinance.

A Steel Ministry official said that “Mr Paswan will soon meet Mr Soren on the issue and seek an early resolution of the issue as Steel Authority of India Limited needs raw material security for its expansion plans in Jharkhand. Initial talks have been positive and we are now hopeful of a solution. The issue has been pending for long.”

An enraged Mr Paswan said that “The delay on the Chiria mines is frustrating. Repeated requests by the Centre to the Jharkhand government have not produced any results. So, I am planning to write to the Prime Minister to nationalize Chiria through an ordinance.” He added that state run steel giant SAIL which is the key claimant to the said mines has tried vigorously to arrive at an out of court settlement with the state, but the latter has not reciprocated effectively so far.

Mr SK Roongta chairman of SAIL is understood to have already met the new chief minister and it is believed that talks have been positive and encouraging.

Talks with the previous Madhu Koda Government had not yielded much dividend.

Reuters reported that Russia's largest coking coal miner Raspadskaya net profit in H1 of 2008 up by 186% YoY to USD 262 million from the same period a year ago on high coal prices.

Raspadskaya said in a statement that revenues rose by 79% to USD 607 million, while earnings before interest, taxation, depreciation and amortization rose by 117% to USD 434 million.

It is reported that the market has been confused by the prices of coke in Shanxi as producers continued to significantly cut their ex-work prices on a quiet transaction.

The prices of the second-grade metallurgical coke were offered at CNY 2,400 per tonne to CNY 2,700 per tonne by most plants with CNY 2,200 per tonne to CNY 2,300 per tonne as the lowest. Major coking plants in Shanxi decreased the price of coke by CNY 100 per tonne in September, provoking dissatisfaction among steelmakers.

Coke producers are likely to further cut production on an obviously rising stock due to the absence of demand from the steel industry. The situation will be worse with 10 million tonnes of new capacity ready to be launched in the second of this year or the first half of next year in Hebei.

The export duty of coke has risen to 40% over the past two years, sending the price of coke to CNY 3,000 per tonne in the middle of the year from CNY 2,000 plus per tonne early this year. The price experienced a massive drop later due to foreign customers’ decreased buying on rising costs and the delayed recovery of normal operations among the domestic mills during the post Olympics economy.

Rio Tinto Limited Plc said that it would spend USD 131 million to improve housing and infrastructure in the town of Pannawonica in Western Australia to support a new mine.

Rio Tinto's investment is part of a total USD 247 million to be poured into Pannawonica to refurbish and build new homes, build a mining village, improve an air strip, and spruce up buildings for the Mesa A/Warramboo iron ore mine, due to be completed in 2010. It provides all infrastructure, housing and services in the town.

Mr Sam Walsh CEO of Rio Tinto iron ore said that it is difficult to say whether the government could make the same sort of investment in other Pilbara towns under the Nationals' Royalties for Regions program. He added that "That's one hell of a lot of money. Whether the state government could spend that sort of money refurbishing inland towns and what have you, I'm just not sure. It seems to me that the 25% of the royalties are not going to go a long way towards that."

Mesa A/Warramboo is one of several projects Rio Tinto is working on to boost Pilbara iron ore production capacity to 320 million tonnes a year by 2012, key to its defense against a hostile takeover offer worth USD 138 billion from BHP Billiton Limited Plc.

Australian Broadcasting Corporation reported that a train carrying ore from Portman Limited's iron ore mines has derailed in Western Australia.

As per report, the train derailed on the way to Esperance Port from Portman's Koolyanobbing mine. Several carriages had left the railroad and it wasn't known how much ore had been spilled.

Mr Ken Lewsey from the Australian Railroad Group, which operates the trains, said that up to 6 wagons and 3 locomotives were derailed in the incident.

Mr Lewsey said that a response team has been dispatched to the scene and the company is liaising closely with the Esperance Port Authority on the clean up. He added that "We've had a low speed derailment actually on the port of Esperance site, no one was injured. The locomotives are off the tracks and a handful of wagons are off the tracks, at this stage we're not actually sure of the cause of the incident until we can clear the site further."

BNamericas reported that Ecuador's ministry of mines & oil has withdrawn 1,664 mining concessions and returned them to state control due to noncompliance with rules established by the mining mandate issued in April 2008 by the constituent assembly.

With the decision, the government hopes to avoid protests by environmentalist association Condem during the vote on the country's new constitution on September 28th 2008. In June 2008, the ministry of mines & oil also withdrew 1,138 mining concessions for similar reasons.

The ministry said that further withdrawals could be announced after the deputy ministers of mines and environmental protection finish analyzing article 3 of the mandate that addresses water concessions.

Among the properties returned to state control 85 were held by past officials, or their relatives, who worked at the former ministries of natural resources and of energy and mines. The rest of the concessions were pulled when holders neglected to renew concessions by legal deadlines, which have required yearly payments since March 31st 2004.

It may be noted that Ecuador's constituent assembly passed a mandate in April 2008 suspending all mining activities for six months to allow time for preparation of the mining reform bill.

'Iron Ore in India: The Present and the Future of Hô', authored by prominent author Dr AS Firoz provides you the valuable information on Indian iron ore market and is scenario. The report covers the reviews of the developments in Indian iron ore industry.

This report critically looks at the current situation in the industry, potential of the iron ore market growth in the medium term, growth plans of the individual major companies, demand and supply issues related to raw materials like coal and iron ore, competitive positioning of steel production in the country, socio economic and political factors which may have direct and indirect impact on the growth dreams of the Indian steel makers, etc among a large number of other relevant issues of strategic importance.

This report is the product of extensive and in depth analysis with incredible amount of time spent to put the numbers in perspective. There are neutral and frank expert views on matters which have drawn attention of the industry in the recent period.

The phenomenal rise in iron ore prices and their continued shortages worldwide have raised many important questions on the future of the iron and steel industry globally especially in the context of the changing dynamics in the environment surrounding especially in respect of raw materials to this industry. The steel makers are undergoing a phase of uncertainty, volatility and speculation amidst a supply side crisis looming large over raw materials, importantly iron ore and coking coal.

The Indian story is no different. A country having over 25 billion tonnes of officially declared iron ore resources and producing over 210 million tonnes of them annually and exporting nearly 95 million tonnes of them is important from all angles to the world of iron ore business.

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Brazilian steelmaker CSN said that its Casa de Pedra mine will only reach its 21 million tonnes iron ore output in late September 2008, despite its previous target for June 2008.

Mr Galdi an analyst at SLW Corretora in Sao Paulo said that "That is a three month delivery delay. Falling behind in the company chronogram is worrisome for CSN. If they can't get their expansion online they'll wind up losing market share to competitors such as Usiminas."

Mr Galdi explained CSN's Casa de Pedra expansion fell behind schedule due to equipment delivery and permitting delays.

Meanwhile, Mr Andre Segadilha analyst at Banco Prosper believes the delay is not a cause for concern as such setbacks are quite normal in operations this size. He added that "Of course the market would rather see timelines on schedule, but this delay does not result in great changes. In this case, delays are under control and that's okay."

It may be noted that CSN had planned to start up the expansion to 21 million tonnes per annum from the current 16 million tonnes per annum in February 2008. Further expansion at Casa de Pedra in Minas Gerais state aims to take capacity to 40 million tonnes per annum, while a third phase is due to expand output at the mine to 50 million tonnes per annum and a fourth stage to 70 million tonnes per annum.

It is reported that Taiyuan Coal Trade Center recently stamps as the third party on an agreement between China's major power generation plants and major coal mines, marking that the newly founded trade center starts its operation materially.

Taiyuan Coal Trade Center witnesses the agreement between the major power generation plants represented by China Huaneng Group, China Guodian Corporation, China Huadian Corporation and the major coal mines delegated by Shanxi Coke Group and Jincheng Anthracite Mining Group.

This is the first time that coal trade center inks on a coal supply agreement to supervise the implementation as the third party.

(Source: Shanxi Daily)

It is reported that Macquarie conducted a field study of coking coal supply in Shanxi, China's main coal producing region. We believe that the contribution of small coal mines to China's total coal output will be constrained through to the end of 2010.

Thereafter, the production growth of the Chinese coal sector is dependent upon the success of its ongoing consolidation process is full of uncertainties.

Jakarta Post reported that five coal producers accused of withholding government royalties have provided an advance payment to the state as a show of goodwill in the dispute with authorities.

Mr Mulyani Indrawati finance minister of Indonesia said that the companies had paid the government a combined IDR 600 billion in royalty debts, which would be counted toward the total coal mining royalties owed to the state. He added that "They have all settled the IDR 600 billion payment recently."

In addition to being an act of goodwill, the payment was meant to begin resolving the dispute, which has gone on for more than 3 years.

PT Kideco Jaya Agung, PT Kaltim Prima Coal, PT Arutmin Indonesia, PT Berau Coal and PT Adaro are among the 6 companies allegedly withholding the royalties until they receive a tax refund from the government. Another company, PT Kendilo Coal Indonesia, currently in talks with the government over its obligation to pay the debt, has decided not to respect the goodwill commitment, as it may discontinue production.

On September 1st 2008, the state development finance controller announced the 5 companies had agreed to pay the IDR 600 billion in advance without providing a deadline. According to the deal, Kideco agreed to pay IDR 110 billion, with KPC agreeing to pay IDR 150 billion, Arutmin to pay IDR 100 billion, Berau Coal to pay IDR 90 billion and Adaro to pay IDR 150 billion.

The dispute between the coal producers and the government escalated in early August 2008 when the government banned 14 executives from traveling overseas over allegations the six companies failed to pay royalties amounting to IDR 7 trillion between 2001 and 2007.

BL reported that East Coast Railway is currently holding only one indent for loading iron ore for exports and no indent for loading for domestic movement from the Keonjhar-Nayagarh area in Orissa and worse, there is no material available at the loading points in the area.

The WIS customers, it is pointed out have all cancelled their indents. Sources said that “At the beginning of the fiscal, we had more than 3,000 indents for loading iron ore from the same area and 90% of them were for exports.”

Sources added that while the drop in demand for rakes for transportation of iron ore for exports has been caused mainly by the slump in international prices of the ore, the decline in demand for rakes for domestic transportation should be attributed to the non-availability of the ore in the mine areas.

Excessive rainfall in the mine area is believed to have thrown up myriad problems, such as disruption in production in the mines and virtual devastation of the roads causing suspension of road movement of ore from the mines to the nearest railheads.

While the demand for rakes for domestic movement, it is hoped, it will pick up from the middle of October, when the weather condition is expected to improve and the festival season will be over, the Railways is keeping its fingers crossed about the prospects of an early revival of export demand.

Analysts and industry observers said that the price of coal will rise sharply if a US appeals court upholds a ruling restricting surface mining in the Appalachian Mountains. The battle over surface, or mountaintop, mining resumes in a Virginia court and one expert said that there could even be power shortages and brownouts if the judge sides with environmentalists over the miners.

Mr Jeremy Sussman analyst of Natixis Bleichroeder said that at the least, several mining companies namely Massey Energy Co, International Coal Group, Alpha Natural Resources and Patriot Coal Corporation, will lose production. Those companies have a large number of surface mines in the central Appalachian coal fields. He added that "If the ruling is upheld, we believe that Appalachian prices could spike. Producers with a significant amount of surface exposure in Appalachia could get hurt."

Mr Jim Thompson editor of industry newsletter Coal & Energy Price Report said that a restrictive ruling would probably drive up costs for any miner with surface operations in Central Appalachia. He also warned that higher coal prices could lead to increased electricity prices and a potential for brownouts.

He added that "If you lose a big percentage of Central Appalachian production, it would be impossible not to have a severe impact on coal prices and the availability of coal. It does not change the fact that 50% of our electricity comes from coal."

It may be noted that on September 16th 2008, the US Court of Appeals in Richmond heard an appeal brought by Massey and the West Virginia Coal Association. Surface mines account for about one third of coal from West Virginia and half of that from Kentucky.

Antara News reported that PT Bakrie Power is planning to build 3 coal fired power plants with a total capacity of 2,710 MW.

Mr Ali Herman Ibrahim president director of PT Bakrie said that the three are PLTU Tanjung Jati A in Cirebon, with a capacity of 2x660 MW, PLTU Pendopo in South Sumatra with a capacity of 2x630 MW and PLTU Sangata in East Kalimantan with a capacity of 2x65 MW. He added that "Two of the projects, namely PLTU Pendopo and PLTU Sangata, will be mine mouth power plants."

Mr Pandam Pandyono director of Bakrie Power said that work on the construction of PLTU Tanjung Jati A would be started late in 2009 and scheduled for completion in 2014. He added that it is in the middle of holding a tender for the construction of the projects, with Chinese and Japanese investors participating.

He said that besides Bakrie, a British investor International Power and Toyota Tsosho of Japan also held stakes in PLTU Tanjung Jati A. He added that Bakrie Power would also take part in the construction of a geothermal power plant with a capacity of 30 MW in Ende.

Transnet Limited said that operations on one of its two coal railway lines to Richards Bay Coal Terminal will resume on September 24th 2008 after being closed by a partial derailment.

Mr Sandile Simelane a spokesman for Transnet's freight unit said that the other line remains closed for routine maintenance. He couldn't immediately say when the line will re open.

Mr Terry Howarth CEO of RBCT said that normally 25 to 30 trains loaded with coal arrive at the terminal per day, and he was unable to give an exact figure for the amount of coal that had failed to be railed for export so far. He added that "In the long term the closure of the export rail route would have little impact, but in the short term we expect deliveries to be interrupted."

BL reported that the export loading of iron ore cargo in South Western Railway zone has come down by nearly 50% in a span of nearly 4 months.

As per report the Hubli headquartered South Western Railway which loaded around 22 rakes of export iron ore cargo a day during April to May is now loading around 11 rakes a day.

Sources in the Railway said that the traffic has started declining from the middle of May. It said that from the peak of 22 rakes a day during April to May 2008 the export loading of iron ore reached 15 rakes a day in June, 12 rakes a day in July to August and 11 rakes a day in September.

It is to be noted that Karnataka contributes a major share to the total iron ore production in the country. Of the country’s annual production of around 145 million tonnes, the Bellary-Hospet and Chitradurga areas contribute around 45 million tonnes a year. Out of the 45 million tonnes, SWR zone loads around 32 million tonnes per annum.

Australian miner Oz Minerals Limited said in a letter to shareholders that the production levels were in line with its previously announced plans.

Oz Minerals, which was created by the merger of Oxiana Limited and Zinifex, also said that the demand for commodities remained strong.

It is reported that Mr Zeng Shaojin the Vice Standing President of China Mining Association met with Mr Marc Parisien, the mining official from Embassy of Canada and Mr Wendy Wang the Natural Resources Specialist from Embassy of Canada on September 22nd 2008.

As per report, at the meeting, the details on the China-Canada Mining Forum, which will be held on November 10, 2008, has been discussed. It is estimated that over 200 people from Canada and China will attend the forum.

Linde Group and Vattenfall Europe Technology Research GmbH a subsidiary of the Vattenfall energy group have entered into a wide ranging technology partnership for carbon dioxide separation in coal fired power stations.

The aim of the collaboration is to test the oxyfuel combustion process for lignite and anthracite and to develop the technology for subsequent use in large power stations.

The tests are being conducted at the research facility for a coal fired power station using carbon dioxide capture technology in Schwarze Pumpe in Brandenburg. Linde has built an air separation plant and a carbon dioxide liquefaction plant for this pilot power station. Linde is supporting Vattenfall via a technology partnership, providing extensive scientific and technical expertise during the first trial phase to the end of 2011.

Dr Aldo Belloni a member of executive board of Linde AG said that "This promising collaboration with Vattenfall can provide an important impulse to climate protection. Our professed aim is to use our technologies to contribute towards a reduction in emissions. Our activities therefore range from continually improving the efficiency of our plants through CO2 separation technologies and adopting sensible recycling concepts to producing environmentally friendly fuels."

He added that “Under the technology partnership, Linde will moreover take delivery from Vattenfall of around 4,000 tonnes of liquefied CO2 per annum from the research facility and market it. Both companies also intend to work together to develop further possible applications for the separated liquefied CO2 which is not required for the storage projects. Rather than being stored, the separated CO2 could be channeled into another constructive application, which would avoid expending large amounts of energy on manufacturing the product for that application.”

It is reported that a long running legal battle over Peabody Energy Corporation's proposed coal fired power plant in western Kentucky has taken a new twist after the state's Court of Appeals upheld an air permit originally issued in 2002.

The ruling, issued on September 19th 2008, overturns a circuit court decision in August 2007 that sent the permit back to state environmental regulators.

Peabody initially proposed the 1,600 MW Thoroughbred plant near Central City in early 2001. The state issued an air permit the following year, but the project has progressed little, and it's uncertain that it will get built.

The legal fight is emblematic of court battles going on nationwide over new coal-fired power plants. On one hand, electricity demand and power bills for consumers are rising. But there's also growing concern about global warming, and plants that burn coal are considered a significant source of greenhouse gas emissions.

The Thoroughbred plant is identical to the Prairie State Energy Campus under construction near Lively Grove. Peabody owns just 5% of the Prairie State project; it has sold the rest to rural electric cooperatives and municipal utilities.
Peabody said that it will continue to evaluate the scope of the project in light of the lengthy approval process.

BNamericas reported that Chile's state owned copper company Codelco aims to carry out a USD 19 million exploration program at its Radomiro Tomic mine in region II including 77,000 meters of drilling.

As per report, the exploration program is to last 1.5 years during which the company plans to drill roughly 160 holes in and outside of the 250,000 tonnes per annum mine's open pit.

Radomiro Tomic produces copper cathode and is part of the Codelco Norte division, Codelco's largest and home to the company's biggest mine, Chuquicamata.

Codelco Norte produced 381,000 tonnes of copper in first half of 2008, down from 417,000 tonnes YoY due to lower grades. It produced a total of 675,000 tonnes of red metal in H1.

It is reported that Chile's Minera Cerro Negro has presented an EIA for a USD 5.33 million expansion to the Medialuna pit in the Chiringo area of its open pit and underground copper mine in region V.

According to the EIA report, the Chiringo area of Cerro Negro was previously mined by underground methods, therefore the company must fill in cavities left from the previous operation below the Medialuna open pit area in order to expand it.

Cerro Negro has a copper cathode production capacity, including toll treatment, of 6,000 tonnes per annum, concentrator output capacity of 9,600 tonnes per annum of copper silver concentrates and copper sulfate production capacity of 4,200 tonnes per annum.

Coro is buying Cerro Negro from its Chilean owners under a USD 40 million option agreement. It said that it will first carry out due diligence on the property and then begin evaluating resources using Canada's NI 43-101 system.

Coro's interests also include the Barreal Seco property in Chile and San Jorge property in Argentina, as well as other exploration properties in Chile and Mexico.

According to local press reports citing the department's export chamber Cadexor, mining exports from Bolivia's Oruro department jumped 39.1% YoY to just under USD 64 million in the first half of 2008.

Tin, the department's main export during the period, generated USD 27.3 million, while zinc and zinc concentrates brought in USD 17.2 million. Lead and lead concentrate exports amounted to USD 10.9 million.

Oruro's total exports in H1 also included copper and antimony.

BNamericas reported that China's Minmetals has agreed to not exercise its right to acquire 25% of Chilean state owned copper company Codelco's Gaby mine.

Mr José Pablo Arellano executive president of Codelco said that "This is a long term relationship." He added that Minmetals' bond with Codelco.

Mr Arellano said that after decades of being a major buyer of Codelco's copper, Minmetals will continue to be an important strategic partner for the Chilean miner and the companies aim to embark on JVs in and outside of Chile.

With the agreement Codelco will remain with 100% of the Gaby mine's output. It also said that it is scrapping previous plans to auction off another 24% of the mine following the exercise of Minmetals' 25% stake that would have left the mine 49% privatized.

Commissioned in May 2008, Gaby is slated to produce 80,000 tonnes of copper cathode in 2008, 150,000 tonnes in 2009 and 165,000 tonnes per year after an expansion. The mine is located in region II near the company's largest division Codelco Norte.

ET reported that Haryana Power Generation Corporation and Indra Prastha Generation Corporation have jointly floated a company for development of a coal block in Madhya Pradesh.

A HPGCL spokesman said that Mara-II Mahan in Singrauli district was jointly allocated under the government company dispensation to HPGCL and the Government of NCT of Delhi in August 2006.

As per report, the block has estimated reserves of 950 million tonnes enough for generating 4,000 MW for the next 25 years. Total area is about 66 square kilometer. The spokesman added that HPGCL would also explore the possibility of establishing a pit head plant at the block site.

Coal Insights Bureau reported that Central Mine Planning & Design Institute may explore Coal India blocks against the scheme for detailed exploration of non CIL blocks.

According to Infraline, the ministry of coal has agreed to let CIL retain its requirement of blocks to meet demand and asked CIL to allot the remaining for captive mining. Blocks not used by CIL were classified as either coal to liquid or captive.

CMPDIL had submitted details in February 2007 for exploration in 46 blocks 13 captive and 33 non CIL at an estimated INR 893.89 crore. However, approval was granted for only INR 472.94 crore and advised to meet the shortfall through loans or a grant from CIL.

FE reported coal ministry has issued guidelines that mines cannot be closed without reasons in relation to exhaustion of mineral, lack of demand, uneconomic operations, natural calamity or directives from a statutory organization.

As per report, inflation and NPV rates will be taken into account for deriving the total abandonment cost and the amount to be deposited every month by the mine owner for the same.

Existing infrastructural facilities such as roads, aerial ropeways, conveyer belts, railways, power lines, buildings and structures, water treatment plants, transport and water supply sources in the area and their future utilization will be evaluated on a case to case basis.

If retained, the measures to be taken for their physical stability and maintenance should be described. If decommissioning is proposed, dismantling and disposal of building structures, support facilities and other infrastructure like electric transmission line, water line, gas pipeline, water works, sewer line, telephone cables, underground tanks transportation infrastructure like roads, rails, bridges, culverts, electrical equipments, electric cables and transformers must be described in connection with restoring land for further use.

According to sources, project developers will be entitled to financial assistance for closure of mines. However, the ministry has made it clear that mine owners for projects other than Coal India, Singareni Collieries Company, Neyveli Lignite Corporation and projects of other public sector undertakings will have to open a corpus account.

Coal Insights Bureau reported that Sanjay Gandhi Thermal Power Station in Birsinghpur has sought a 50:50 coal linkage from Korea Rewa and Korba fields. It is looking at receiving six to 7 rakes per day regularly.

According to Infraline, the standing linkage committee had approved coal linkage of 6.5 LMT per month for the July to September quarter. Linkage has been allocated on 23:77 basis from Korea Rewa and Korba areas, respectively.

However, the unit received some 4.15 LMT less than the approved linkage from July to September 7th. This resulted in a sharp depletion of its coal stock, leading to MP Power Generating Company running units on partial load.

Movement is limited between Bilaspur and Anuppur due to a 140 kilometer single track. According to the railway operation authority, only 4 rakes can be moved. Recently, super fast trains have also been traveling on this track, bringing movement of rakes to a standstill. The committee on economic affairs had proposed coal linkage of 7.25 LMT per month for the plant as of September 3rd 2008.

China Knowledge reported that CITIC Group, the largest state owned investment enterprise in China, shows interest in bidding for the iron ore and coal assets in Aquila Resources, the fourth largest Australian mining company by market capitalization.

CITIC is considering buying both the iron ore and coal assets that Aquila has put up for sale. Last month, the Australian company had assigned investment banks Citigroup and Macquarie to conduct a strategic review and had begun to approach several interested parties on the matter.

According to the report, CITIC Group may realize the acquisition directly or through subsidiary CITIC Resources Holdings.

It is reported that China Coal Energy Co Ltd, the country's second largest coal producer parent state-owned China National Coal Group bought back 4.05 million China Coal shares in Shanghai recently.

China Coal Energy said in a statement filed with the Shanghai Stock Exchange, the parent's stake will rise to 57.55% from 57.52%.

The parent company will further increase its stake in China Coal within the next 12 months by not more than 2%.

It is reported that at present, domestic FeMo market weakens continuously and rare deals are closed, which caused sliding FeMo quotations in the Northeast.

Mainstream price of Mo60 in Jinzhou stays at CNY 253,000 per tonne to CNY 255,000 per tonne at CNY 253,000 per tonne to CNY 254,000 per tonne in Henan and at around CNY 254,000 per tonne in Anhui area, the same as quotation in Beijing. Moreover, prices are even lowered to CNY 250,000 per tonne to CNY 252,000 per tonne in some other places.

Many molybdenum plants determine production tonnage in line with sales amid weak market, hit by poor downstream demand and lower bid price from mills, resulting in few spot goods available. As a result, FeMo is expected to weaken further in the future.

(Sourced fromMySteel.net)

It is reported that over this year, China coal export volume points to the downside. From January to August 2008 period, Shanxi Province exported 5.68 million tonnes of coke down by 1.6% YoY. However, owing to the jump in coking coal prices and demand from the international market, coal price has constantly set new records, pushing the overall export value up to CNY 2.6 billion up by 152.3%YoY.

Coke price rise widened the gap between domestic and overseas price. Under such a robust driving force, coal plants exerted their utmost to export coal, leading coal export volume to rebound and thereby reversing the negative growth. From January to August, coal export of Shanxi totaled 3.28 million tonnes increasing by 29.5% YoY. Its export value hit USD 480 million a sharp rise of 158.1% YoY.

(Sourced from MySteel.net)

Some steel makers are shooting up the building of their own coking capacities while some independent coking enterprises are seeking alliances with coke and steel companies, as coke prices are surging fueled by the substantial coking coal price hikes. Rearrangement in coking sector is bound to happen.

China's coking industry has made great progress especially in 2000 to 2007 when the coke production almost tripled. The figure accounted for 61% of the global total amount in 2007 and the exports of this resource, 45%.

The industry are getting increasingly concentrated in 2007 with 55% of production provided by provinces of Henan, Hebei, Shanxi and Shandong, and 8% by the top four coke firms. Back in 2000, steel enterprises almost contributed half of coke output, while today independent coke enterprises take about 70 %. However, the diving steel prices coke price hikes triggered by rising coking coal have urged many steel makers to set up their own ovens or amplify the existing capacity. Ma'anshan Steel, Taiyuan Steel, Wuhan Steel, Baotou Steel and so on have taken steps in doing so.

The current situation has also caused quite a number of independent coke enterprises to look for cooperation with coal and steel mills by building joint coke ventures. Taking Wuhan Steel an example, it has built up a 10 million tonne coking base jointly with Pingdingshan Coal Group. There is no doubt that the coke industry will be under rearrangement upon the government furthering macro control coupled with decreasing steel demand, partly influenced by the shrinking real estate market.

The coke future, if launched, will be favorable to the macro control of the industry by restricting small and backward capacity entering into the future market with strict quality standards.

(Source: China Securities Journal)

According to Mr Zhu Haiqi board chairman secretary of Nanjing Steel as uninterrupted growth of iron ore prices threatens smooth steel production, many large steelmakers in Jiangsu, like Shagang Group and Nanjing Iron and Steel Co are extending industry chain to the upstream to secure iron ore supply.

He said that Nanjing Steel has achieved fruits of investment on iron ore. Anhui Jinan Mining, a wholly-owned subsidiary and iron ore provider of Nanjing Steel, has brought the company lots of benefits. Currently, imported iron ore takes up 60% of the total demand of Nanjing Steel, and the rest 40% is met by domestic ore.

Mr Zhu said "We're still looking for the ore deposit, we have set up an office in Indonesia for more chances, however, trivial progress is made so far, due to mines private ownership there and uncertainties in the negotiation. He said that recent steel prices decrease have limited negative impact on Nanjing Steel. High value added HR steel plate mainly used on vessels will maintain sound profits even if the export tax rebate is canceled.”

On the other hand, Nanjing Steel will cut its steel prices following the price decrease announcement from 25 mills last week.

(Sourced from MySteel.net)

China Daily reported that the central government will increase its financial support for the Ningxia Hui autonomous region to help develop it as a resource base and a model for circular economies.

Mr He Guoqiang a member of the Standing Committee of the Political Bureau of the CPC Central Committee and head of the central government delegation to Ningxia, at the celebration of the region's 50th anniversary in regional capital of Yinchuan said that Ningxia should be developed as a base of coal resources and the coal-chemical industry. It should also be a base for the electrical power industry and a model for the development of circular economies.

He said that it is particularly important for the region to protect its environment and conserve energy in its development.

It is reported that currently, Shanxi Datong coal prices dip modestly due to high stock at Qinghuangdao port down around CNY 20 per tonne with little purchase. However, coal prices at the mine change a little with almost no stock left basically.

Datong's 5500 kilocalorie per kilogram premium blend coal is priced at CNY 780 per tonne to CNY 800 per tonne. Shipment from mine has slowed down, but coal inventory remains low in nearby power stations, because miners are holding for an inflection point in the coal market, but power stations are delaying purchase for a further coal price dip and electricity price rise.

As per report, September is traditional busy season for coal market, but moves weak this year. Coal price soars up in this March and April. It has hit a new record in August. The rapid price surge has led to downward corrections in later days.

Sources said as many mining accidents happened these days in China, Shanxi, Henan, Liaoning and the other places strengthen the mining security check. So, shrinking coal supply will probably lend a support to the price. As winter comes, coal demand for heating will increase from the Northeast, thus, a turning point of thermal coal in Datong Mine is expected to show up soon.

(Sourced from MySteel.net)