It is reported that Steel Authority of India Limited’s Rourkela Steel Plant has continued its momentum in production during the current fiscal with an impressive performance during the month of August and all time best April to August since its inception.

During the month of August 2008, hot metal output stood at 190,122 tonnes, crude steel production touched 182,764 tonnes and saleable steel production reached 175,070 tonnes corresponding to remarkable capacity utilization of 112%, 113% and 123% respectively. It is worth mentioning that the production of hot metal and crude steel was highest in comparison to any month since the inception of the steel plant.

The first 5 months of this fiscal witnessed record performance in several production centers including hot metal production of 0.929 million tonnes, crude steel production of 0.876 million tonnes and total saleable steel production of 0.839 million tonnes. Besides being the best figure ever for April to August of any fiscal year since inception these figures indicate growth of 6.35%, 9% and 3.3% respectively over the levels achieved during the corresponding period of 2007-08.

During this period, impressive performance was also recorded in the finishing units of the steel plant. Finished products like plates from plate mill, hot rolled coils, hot rolled coils for sale, electric resistance weld pipes, spiral weld pipes, tin plates, galvanized sheets and CRNO steel from silicon steel mill also recorded performance levels that were higher compared to April to August of 2007-08.

The down slide in Indian domestic steel prices continued on September 3rd 2008.

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TOI reported that steel giant ArcelorMittal has offered help to the Mr Nitish Kumar CM of Bihar to tackle the devastation caused by the Kosi.

Officials of the company have decided to supply relief materials for flood victims through the department of disaster management in Bihar. They are of the view that experts in disaster management can best perform in a crisis situation.

After discussions with officials engaged in catastrophe management in Bihar, the company has procured certain necessary items like inflatable rafts from the US to give a fillip to rescue operations.

A communiqué from ArcelorMittal confirmed that necessary steps are being taken to ensure that the relief materials reach the flood hit areas in time. It also said that the company in partnership with several agencies will provide relief materials to the victims

BL reported that the Railway Ministry has stated that its rakes are lying idle in various zones due to inadequate loading by coal companies.

Railway in a release said that instead of loading 195 rakes per day in August, Coal India Limited and its subsidiaries could manage to load only about 142 rakes per day. Between April and July this year, CIL and its subsidiaries had also registered a shortfall of loading of 37 rakes per day.

Major shortfalls was also recorded at Central Coalfields Limited, South Eastern Coalfields Limited and Mahanadi Coalfields Limited where 12 rakes, 20 rakes and 10 rakes respectively could not be loaded a day.

As per report, the Ministry has blamed coal companies for their inability to transport coal from pitheads to railway sidings.

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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It is reported that Mr Sushilkumar Shinde union minister of power in the presence of Secretary and the CMDs of the Central Public Sector Undertakings, handed over a cheque of INR 33.5 crore to Dr Manmohan Singh for Prime Minister’s National Relief Fund for flood relief in Bihar.

The contributions made by the respective Central Public Sector Undertakings are as below:

1. National Thermal Power Corporation INR 10 crore

2. Power Grid Corporation INR 7 crore

3. Power Finance Corporation INR 5 crore

4. National Hydroelectric Power Corporation INR 2.5 crore

5. Rural Electrification Power Corporation INR 2.5 crore

6. Satluj Jal Vidyut Nigam INR 2.5 crore

7. Damodar Valley Corporation INR 2 crore

8. Tehri Hydro Development Corporation INR 1 crore

9. North Eastern Electric Power Corporation INR 1 crore

BL reported that Sical Logistics has identified several locations on east and west coasts for the port project it proposes to launch in partnership with Jurong Port Limited of Singapore.

Mr S Rangnekar MD & Group CEO of Sical Logistics told BL that “We will finalize the location within the next 4 months.”

He said that the cost of the project is estimated at INR 1,500 crore and Sical is to have 51% equity stake in it and Jurong, the balance on a debt equity ratio of 2:1.

Mr Rangnekar said that the proposed port, when ready for operation will handle bulk items, mainly iron ore exports and coal imports. He added that “To start with, it will have two berths at the most that drawing attention to the difficulties being experienced in selecting an appropriate site.”

BS reported that Pantnagar in Uttarakhand is leading the race to become the alternative site for TATA Motors' Nano plant. The company manufactures about 250,000 units of Ace and Magic vehicles over 1,000 acres in an industrial estate in the state. The state also houses its vendors' park spread across 300 acres.

Sources close to the development said that the TATAs earlier had an alternative plan to make the Nano frame in Pantnagar and send it to Singur, where it would be assembled if there was a delay in setting up its facilities in West Bengal.

Pantnagar was seen as one of the satellite locations in the company's overall plan to have smaller units across the country, where the car would be assembled, apart from having one mother plant in Singur. Pantnagar also houses one of Asia's largest paint shop facility which can be shared by the Nano too. Sources said that apart from the 2 vehicles, the TATAs have been looking at manufacturing 2 to 3 more vehicles at their sprawling plant which includes Indica and Indigo among others.

With nearly 75 ancillary units of TATA Motors setting shop already in the industrial estate, producing Nano from Pantnagar would not be a problem.

Uttarakhand offers some major tax benefits for industries. Vehicles manufactured in the state attract only 4% central sales tax. Besides, there is a 100% exemption from the excise duty, apart from 100% exemption from the income tax for the first 5 years of operation. All these benefits will go a long way in helping the company reduce the cost of production of the Nano.

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My Iris reported that Ashok Minda Group is planning to invest up by INR 9 billion over the next 2 to 3 years on expanding current business and acquisitions. The group aims to cross a turnover of INR 40 billion by 2011-12. It has acquired specialist interior component supplier Schenk Plastic Solutions in Germany for an undisclosed amount.

As per report, the group will focus on enhancing its position in four components, security systems, driver information, die casting and interior products.

Ashok Minda Group is currently carrying out a feasibility study to set up one manufacturing facility in either Uzbekistan or Russia. It is also studying the Brazilian market to set up an unit there.

The report added that the feasibility studies in Europe and Latin America are expected to complete within next 2 to 3 months after which it will proceed further.

BL reported that NTPC and BHEL Power Projects Private Limited a newly formed JV between state owned equipment maker Bharat Heavy Electricals Limited and power generation major NTPC Limited plans to sell up to a 50% stake to private companies.

BHEL and NTPC currently hold equal stakes in the JV that was formed in April this year to produce power equipment and build power stations in India and abroad.

A statement from BHEL said that “NTPC BHEL Power is planning to dilute its shares up to 50% with a view to inviting private partners to improve overall effectiveness and efficiency.” The statement did not provide any timeframe for the stake sale or the amount of money that will be raised through the transaction.

The release said that NBPPL will have a capacity of 5,000 MW a year by 2014-15 at an investment of INR 6,000 crore. It also said that Mr CP Singh director of BHEL’s has been appointed as the CMD of the JV Company.

BL reported that the fixed price coal linkage for cement companies has been declining constantly and has dipped 22% YoY to 0.97 million tonnes in July against 1.27 million tonnes in the same period in 2007. In June it was down 6% at 1.04 million tonnes and in May and April it slipped 4.8% each to 0.98 million tonne and 1.03 million tonnes.

The recent fall in freight cost due to the correction in crude oil prices has encouraged many cement companies to consider coal imports. Moreover, the international coal prices are down from its recent peaks. A cement company official said that given the shortage of electricity, coal supplies for thermal power projects are assigned priority status.

Mr Vinod Juneja MD of Binani Cement said that “We procure a small quantity of coal through electronic auction, but the quality is inferior. We prefer to import it from Indonesia. The ash content is about 60% in the domestic coal, while it is just 30% to 20% in the imported coal. Coal accounts for about 65% to 70% of the production cost of cement companies. Freight cost is down 5% to about USD 150 a tonne. It costs about INR 7,000 a tonne including transportation charges to our plants in Rajasthan.”

A coal mining company official said that apart from the production constrains in some of the mines, the soaring demand from the priority sectors such as power has lead lesser allotment for cement companies.

Heavy rains in August affected the mining operations at Singareni Collieries in Andhra Pradesh. The total coal production from 37 underground mines and 14 opencast mines was about 125,000 tonnes a day dropped to 78,738 tonnes. Similarly, un seasonal rain from mid July at Kalimantan in Indonesia, the main coal producing region has affected production. Key Indonesian producers such as PT Bumi Resources and PT Adaro reported to have delayed their shipments.

BL reported that Lanco’s Aban Power Company Limited has won the National Energy Efficient Unit award instituted by the Confederation of Indian Industry.

Shortlisted from 137 contestants, Lanco’s APCL emerged as a winner on account of its innovative and proactive measures implemented to conserve electrical and thermal energy in day to day operations.

Lanco’s Aban is a 119.8 MW gas based combined cycle power plant located at Karupur village in the Tanjore district of Tamil Nadu. Its operation and maintenance is carried out by Lanco’s own in house team.

The Aditya Birla Group announced the fall of 8.87% and 5.39% in cement production and dispatches for the month of August 2008 to 2,119,000 tonne and 2,188,000 tonne over August 2007 respectively.

However, the company posted a marginal growth of 1.11% in cement production for the period April to August 2008 to 12,616,000 tonne as against 12,477,000 tonnes during April to August 2007.

Dispatches moved up 1.51% at 12,593,000 tonne in April to August 2008 as against 12,407,000 tonne in the corresponding period last year.

In view of the concerns being expressed regarding the increase in prices of electricity being sold or traded in short term, the staff of the Commission has circulated a discussion paper titled “Measures for restraining the prices of electricity in short-term sale or trading.”

In addition to other required steps, the discussion paper proposes regulatory intervention under the provisions of the Electricity Act, in the form of price caps for inter state sale of electricity in short term by the distribution licensees, trading licensees and the power from hydro electricity/ domestic coal/imported coal based power stations. The proposed ceiling of tariff is 20% higher for the sale during peak hours as compared to that during off peak hours.

The Discussion paper analyses the prevailing scenario in short term trading, the cost of generation of power from typical power projects, the trend in prices of electricity being traded and the current power supply position in the country.

The staff paper proposes the following measures in order to cool down the price of electricity in short term sales:

1. Price cap of INR 5 per unit of electricity for inter state sale by distribution licensees, trading licensees and the power from hydro electricity/ domestic coal/imported coal based power stations.

2. Price cap of INR 6 for peak demand in the evening.

3. Ensuring impartial functioning of State Load Despatch Centres in order to increase power supply through “Open Access”.

4. Flexible scheduling framework so that bi lateral transactions can be modified at short notice keeping in view the demand pattern.

5. Strict monitoring of over drawal by the states during low frequency so as to induce grid indiscipline and planned purchases of electricity.

The discussion paper fully recognizes that there are no durable short cut solutions and the states have to accelerate addition of new generation capacity. It also brings out various implications of price caps on the electricity market.

The staff paper is available of the web site of the Commission and the stakeholders have been invited to send their views latest by September 22nd 2008.

BS reported that as many as 23 developers, including Reliance Power and JSW Energy, have submitted proposals for two power projects with a capacity of 3,300 MW at Allahabad in Uttar Pradesh.

Official sources said that on the last date for submission of request for qualification, 14 proposals were received for the 1,320 MW Karchhana project and nine for the 1,980 Mw Bara project. Developers who filed the RFQ for Karchhana included
1. Reliance Power
2. KSK Energy
3. Indiabulls
4. Jai Prakash
5. HDIL Energy
6. Bhushan Steel
7. Videocon Industries
8. Lanco
9. GVK
10. Adhunik Metallics
11. Adani Group
12. JSW Energy
13. L&T
14. Calcutta Energy supply company.

The official added that the RFQs received would be examined within a week's time. Later, request for Proposal would be issued to the qualifying developers.

Following state cabinet's decision, the Uttar Pradesh Power Corporation Ltd had invited fresh bids for the ambitious Bara and Karchhana thermal power projects. The UPPCL had issued a global invitation for RFQ from interested developers on August 21st 2008. While the bid for the Bara project was issued by Prayagraj Power Generation Company Ltd, the tender for the Karchhna project was floated by Sangam Power General Company Ltd the two entities launched by the UPPCL.

ET reported that Maharashtra’s second capital Nagpur will soon have a 10 MW solar thermal power plant. The proposed solar plant will be one of the country’s biggest in this category and is an initiative of Union minister for new and renewable energy Mr Vilas Muttemwar who is from Nagpur. Mr Muttemwar is the lone Congress MP from all of Vidarbha.

Mr Muttemwar said that “The thermal generation facility will also serve the purpose of demonstration for solar energy enthusiasts across the country, being the only plant coming up here.” He claimed that the city has been selected because of high solar radiation, besides its central geographical location and not because it happens to be the minister’s constituency.

The solar energy generated is environment friendly and pollution free. According to him, there would no transmission and distribution losses unlike the traditional methods of coal fired energy in most electricity generation units. The plant load factor which determines actual generation against its capacity is between 80% and 90% of the installed capacity.

He said that “The generated power will be put on the national grid. It’s a small step but a big leap in solar energy generation world.” His ministry has approached the state government for allotment of land anywhere including the area under Maharashtra Industrial Development Corporation. He added that “The process has begun and once the state government agrees, the Union ministry will commence its process of setting up the plant.”

BS reported that Mahindra & Mahindra cited it is looking for global alliances and acquisitions to enhance its 2 wheeler business.

Mr Pawan Goenka president of M&M said on the sidelines of ACMA annual convention "We are open to all possible alliances, which could be technological partnership or acquisition, to strengthen our 2 wheeler business."

He said that the company is looking in China and South East Asia for low end bikes, while in Europe for high end bikes. He added that the alliances and acquisition strategy was part of its plan to get a head start in the 2 wheeler business.

Mr Goenka said that "Kinetic gave us a good starting point and we are looking to enhance it further." He declined to comment asked what kind of budget has been earmarked for the acquisition activity.

He said that the company was in discussions with Taiwan based Sanyang Motors which is an investor in Kinetic Motors for technical collaboration. He added that the company's foray into the 2 wheeler segment was part of its strategy to expand its range in personal transportation. The company already has presence in utility vehicles, 3 wheeler, farm equipment and drugs segment.

He further added that on Mahindra Group's overall sales prospect for the rest of the year "We would try to get into the double digit growth."

TATA Motors announced details of its plan to increase INR 4,147 crore through 2 simultaneous and unlinked rights issues. The ordinary rights issue is priced at INR 340 a share while the issue offering shares with lower voting rights is pegged at INR 305 apiece. The shareholders will get one share of both the issues for every 6 they hold. The equity shares with lower voting rights, 1 to 10 of the ordinary shares will be entitled to get 5% extra dividend.

Mr NA Soonavala director of TATA Motors said that the shares with differential voting rights are in line with international practices and are being offered to increase liquidity in the company’s shares. Mr Soonavala said that “The TATA Group will subscribe to the rights issue to the extent of its holding in the company which is 33%. A shareholder can opt for either of the options or both.”

As per report, the issue would open by the end of this month and is being launched to re finance the USD 2.3 billion bridge loans taken by TATA Motors to fund its acquisition of Jaguar and Land Rover from Ford Motor Company this March. On Tuesday, TATA Motors’ shares closed at INR 429, down by 1.82% in an otherwise bullish BSE. The company’s shares have fallen 30% since the company announced its rights issue on May 28.

Mr Nimesh Kampani chairman of JM Financial and the lead manager to the issue said that this is for the first time in India differential voting rights are being offered to the shareholders. Post rights issue, the company’s equity will be diluted by 33%. Mr Kampani said that “This issue will raise equity capital by INR 130 crore and we are raising funds to invest in a company which is already earning good money for TATA Motors.” Apart from JM, I-Sec will also manage the issue.

Tenaris SA has announced it plans to increase its production capacity by installing a state of the art small diameter rolling mill up to 7 inches with an annual production capacity of 450,000 tonnes of seamless pipes at its industrial facilities located in Veracruz in Mexico.

The installation of the mill, together with associated iron and steel making and finishing facilities, will require an investment of approximately USD 1.6 billion and is expected to begin operations by 2011.

In addition to this investment in Mexico, Tenaris plans to continue to invest in its industrial facilities throughout the world and its capital investments, excluding the new mill in Mexico, are expected to amount to approximately USD 450 million per year over the next 3 years.

With these investments, Tenaris plans to increase its industrial capacity to meet the growing needs of its customers in Mexico and worldwide, as oil and gas drilling activity expands and becomes more complex.

Tenaris is a leading global supplier of steel tubes and related services for the world's energy industry and certain other industrial applications.

It is reported that ArcelorMittal believes that due to the cost increases in raw materials and steel equipment, steel pricing will continue to remain structurally strong.

ArcelorMittal will generally maintain its Q3 pricing levels into Q4. It is currently engaged in negotiating 2009 contracts for automotive, packaging and home appliance customers and is making good progress in agreeing substantial price increases.

In the case of seasonal market weakness, ArcelorMittal would adapt production to maintain stable pricing.

BNamericas reported that Venezuelan President Mr Hugo Chavez’s recently announced plan to take control over all of steelmaker Ternium's assets in the country will include companies Matesi and Tavsa.

The move would satisfy a petition to nationalize that Matesi employees have been making since June after the plant was not included when Mr Chávez called for state control over Sidor in April 2008.

Mr Pedro Rondón board member of Sidor said that "When the contract to purchase the company is drawn up, we want it to be crystal clear which rights the employees retain at the companies."

Ternium, which owns 59.7% of Sidor, asked Venezuelan authorities to resume negotiations for transferring the steelmaker to the Venezuelan state after Mr Chávez announced he had given up on negotiations and would proceed with expropriation.

The Matesi plant has production capacity of 1.5 million tonnes per annum. It is controlled by Venezuela's Materiales Siderúrgicos, a company held by Luxembourg based Tenaris and Sidor with stakes of 50.2% and 49.8%, respectively.

The Tavsa plant, also a subsidiary of Tenaris, is the only seamless steel tube producer in Venezuela and supplies state oil company PDVSA. It has production capacity of 80,000 tonnes per annum of seamless steel tubes and employs roughly 250 workers. State heavy industry holding company CVG has a minority stake in Tavsa.

Nippon Steel has concluded the price negotiation with Hyundai Heavy Industries and other South Korean shipbuilders for shipment in and after October 2008.

As per report, Nippon Steel got JPY 40,000 to JPY 50,000 per tonne hike and the price level is expected to increase to JPY 140,000 to JOY 150,000 per tonne FOB.

It is reported that Japanese carbon steel imports in July 2008 totaled 356,340 tonnes, up by 20% YoY for the third consecutive year, and 6% MoM up from June 2008.

The overall imports from China, including HRC, CRC, plate, wire rod and GI sheet, grew by 120% YoY, while imports from Korea and Taiwan also grew by 14% YoY and 10% YoY respectively.

Japanese steel association said that Chinese government will inhibit domestic price from growing, and therefore most mills need to acquire profit by importing steel overseas.

The new report on Indian steel from Steel and Natural Resources Research authored by Dr AS Firoz, Strategy Consultant, comes out with findings completely different from the popular growth stories told about the short and mid term potential of steel demand growth in the country. The report, yet to be officially released, blames much of it to the uncertainty in the policy regime and deep structural weakness in the economy.

The report says India may see a drop in steel demand in the coming two years. The annual growth rates in finished steel consumption are likely to be 5.5% in 2008-09 and about 4.5% in 2009-10. This is in sharp contrast to the forecasts made earlier when growth rates were expected in the range of 9% to 12% for these two years. Demand growth for stainless and alloy steel also will remain far below potential. The study has predicted significant change in the structure of the market in the next 10 years from the earlier forecast scenarios with changes in the growth trends for specific products.

The report further goes on to project a rather pessimistic scenario in respect of production growth as new projects start ups have been significantly delayed. While the Brownfield expansion projects of the private companies and RINL are on course, SAIL, the study finds, is way behind the schedule.

The new supply and demand conditions in the market will leave their expected impact on the external trade. Imports will remain far above exports this year, but, the situation will start changing from 2009-10. Exports of steel, especially flat products, will sharply rise to turn the country into a net exporter of steel once again.

The study forecasts prices of steel to come under pressure with weakening of demand and not so much due to government actions. With rising costs of coking coal, the integrated mills will see their margins eroding. Higher costs of other inputs such as iron ore, non-coking coal and ferroalloys will hit the secondary sector hard.

The steel companies will also find it hard to mobilize resources for their new projects, the report concludes.

To know more about it, please send a mail to reports@steelguru.com

Bloomberg reported that US steelmakers including Nucor Corporation fell in New York after ArcelorMittal said that it will cut South African steel prices, raising concern prices will drop in North America as well.

Nucor slid USD 3.43 or 6.5% to USD 49.07 in New York Stock Exchange composite trading. US Steel Corporation declined by USD 13.68 or 10% to USD 119.39. AK Steel Holding Corporation dropped by USD 4.69 or 8.9% to USD 47.92.

It may be noted that ArcelorMittal plans to cut prices for so called long steel products by an average of 5.6% in South Africa. Last month, US steel prices declined by 2%.

Hot rolled steel sheet, the benchmark product used in cars and appliances, fell to an average USD 1,047 a ton in August 2008, from USD 1,068 in July 2008. Most steel mills had expected prices of USD 1,080 for the month.

US relies on imported steel for about 25% of its needs and relatively lower prices in North America have made the US a less attractive destination for the imports it requires. That has allowed domestic producers to boost prices even amid lower demand.

The global scramble for raw materials is changing the shape of the world's steel industry, iron ore miners are becoming steelmakers and steelmakers are becoming ore miners.

In an effort to gain independence from the mining giants that control the world's iron ore and have raised prices more than 80% this year alone, a growing number of steelmakers are shopping for their own iron ore mines. Meanwhile, several ore miners are seeking to cash in more directly on the world's growing demand for steel.

The trend toward controlling production from the raw materials to finished product, known as vertical integration, harks back to the way the steel industry operated decades ago, when it was common for steelmakers to own their own mines.

In the US, the practice fell by the wayside in the face of competition from foreign steelmakers. The thinking was that the best way to fend off competition from abroad was to focus on steelmaking, which historically was more profitable than mining iron ore.

The swing back towards vertical integration is most evident in Brazil, which has vast reserves of iron ore that remain either untapped or up for grabs. In the past month, steelmakers and miners have announced major investments in Brazil's fast growing economy.

Steelmakers have focused on Brazil in part because Australia's iron ore reserves are controlled by BHP Billiton and Rio Tinto, meaning there are almost no opportunities for a newcomer to gain a foothold in the market.

Severfield Rowen plc, parent company of Watson Steel, has announced record half year results for 2008. Revenue is up by 26% YoY to GBP 173 million, underlying group operating profit is at GBP 26 million, up by 77% YoY and order book stands at GBP 431 million.

Watson Steel is a leader in specialist steelwork and complex engineering projects, such as stadiums and bridgework. It is involved in building the London’s Olympic stadium. Work will start on in October 2008 and other projects include Dublin Airport Terminal 2 and Cannon Place, an office development in London.

Severfield Rowen plc has 5 main operating companies namely Watson Steel Structures, Severfield-Reeve Structures, Atlas Ward Structures, Fisher Engineering and Rowen Structures.

The Carnegie Library of Pittsburgh, founded with money from the steel industry, has announced an ambitious project to preserve its archive of Pittsburgh's iron and steel business.

The impetus for the project is a USD 600,000 grant from the federal Institute of Museum & Library Services. The money will fund a 3 year program to digitalize the library's 400,000 pages documenting the area's historic role in the production of industrial metals.

Ms Barbara Mistick director of library said that "The state of our collection is not ideal. About 20% of it is too fragile to touch. This project will not only preserve it but make it available to everyone."

Ms Mistick said that at the instigation of its founder, steel magnate Mr Andrew Carnegie, the library became a repository for data and research from iron and steel firms dating to the early 19th century. She added that "As Pittsburgh celebrates its 250th birthday, it seemed to us that we could recognize the importance of Mr Andrew Carnegie and the steel industry by preserving our collection."

It is reported that Venezuela and South Africa have signed an agreement to strengthen cooperation between their oil and gas industries.

The deal likely included plans for oil rich Venezuela to supply crude to South African oil firm Petro SA at preferential rates. The deal is particularly important for South Africa, which has been plagued by energy shortages.

Mr Hugo Chavez President of Venezuela has signed the agreement while on a state visit to South Africa. He said that the deal was an example of southern nations cooperating in a new strategic alliance. He added that "It will be a wonderful day, the day when the first Venezuelan tanker will stop by to leave oil for South Africa."

Mr Thabo Mbeki President of South Africa said that the agreement would further empowerment of the countries of the south although he declined to say if South Africa would be getting preferential rates for oil from Venezuela. He added that "The object is to assist in reducing the costs of energy."

Bloomberg reported that Mitsubishi Heavy Industries Limited is in talks to upgrade Slovenian power plants in projects worth tens of millions of euros. The thermal plant, located in the central Slovenian city of Trbovlje, may generate energy from gasified coal and from synthetic gas.

Mitsubishi Heavy Industries is also building a 185 MW hydro power plant at Avce on the river Soca in the western part of the country. It may also cooperate with Litostroj Steel Limited, a Slovenian manufacture of hydro electric pumps.

Mr Andrej Vizjak economy minister of Slovenia said that "Japanese technology is very advanced and that's why we held talks with Mitsubishi heavy industries and they are ready to participate in the upgrade of our plants.''

It may be noted that Slovenia is seeking to boost its energy production as the economy expands and energy needs rise. It is also considering building a second unit at its Krsko nuclear plant as most EU nations try to diversify their energy resources.

Slovenia's USD 52 billion economy has expanded at the fastest pace in more than a decade last year when gross domestic product increased 6.1%. The economy is set to slow along with the rest of the 27 nation EU.

ArcelorMittal, under the new share buy back program as announced on December 12th and on December 18th 2007, hereby announces that it has repurchased 2,990,000 shares from August 25th until August 29th 2008.

The shares were repurchased at an average price of EUR 52.2523 and for a total amount of EUR 156,234326.

It is reported that BNSF Railway Company will replace almost 20 track miles of rail at several locations between Beaver Hill and North Dakota, beginning September 2nd 2008. The project is expected to cost an estimated USD 8 million and is scheduled to conclude October 16th 2008.

Two rail replacement production crews of 33 employees each will utilize equipment such as cranes, welders and ballast tampers to replace rail at an estimated combined rate of one mile a day for 34 days. To allow the two BNSF crews time to replace the rail, sections of track will be closed 6 hours a day during the week until completion. Materials replaced on the line will be reused or recycled in keeping with BNSF's environmental stewardship policies.

As part of a USD 2.85 billion capital commitment, BNSF currently expects to spend more than USD 1.8 billion to keep the railway's infrastructure strong by refreshing track, signal systems, structures, freight cars, and upgrading technologies. Unlike other modes of transportation, BNSF must build and maintain its own tracks, signals and other infrastructure.

Ruukki’s stand was ranked among the top 10 of 1190 stands in the ONS Best Stand Award competition. ONS 2008 Offshore Northern Seas in Stavanger, Norway exhibition and conference for the oil and gas industry is an international energy event and a forum for leading international oil companies, suppliers and the authorities. The main theme of this year’s event was 'Energy for one world'.

The ONS Best Stand Award goes to the stand judged to provide the best overall information to visitors, including design, theme, materials employed and stand staff. The reasons why Ruukki was voted among the 10 best stands were the elements, use of space and colors, pictures and a good overall impression.

Ruukki’s deliveries to the offshore industry include offshore steel plates, pipes for oil drilling platform construction, as well as components such as K-joints and transition pieces used to join round sections of a platform to flat and square steel sections. Ruukki delivers also suction and pile anchors.

The ONS exhibition, takes place every other year in Stavanger in Norway. The ONS 2008 exhibition area totaled 19,000 square meters and attracted 1,190 stands from 27 countries worldwide.

The cargo traffic at the northern Italian port of Trieste climbed by 4.5% YoY to 28.5 million tonnes in the January to July 2008 period.

Container traffic for July 2008 showed a rise of 8.7% YoY to 31,085 TEUs. Between January and July 2008, container traffic at the port surged by 33.7% YoY to 200,000 TEUs.

According to a report from EnergyQuest, Australian oil production dropped by 11.5% YoY with all but one of the major oil producing basins experiencing a decline.

As per report, oil production dropped by 2.4 million barrels in the Bonaparte Basin off the Northern Territory coast, 9.9 million in the Carnarvon Basin in offshore Western Australia and 2.5 million in the Gippsland Basin in offshore Victoria.

The Cooper Basin in South Australia and Queensland bucked the trend, with oil production increasing 14.2% YoY to 5.2 million barrels of oil over the past year, driven by Santos's Cooper Oil project and production from smaller players in the region.

Total Cooper Basin petroleum production dropped 5 million barrels of oil equivalent driven by lower gas and condensate production. Production in other parts of SA increased from 1.4 to 1.7 million barrels of oil.

Dr Graeme Bethune CEO of EnergyQuest said that oil production in the Cooper Basin had been falling for about the past 17 years, but efforts by the Cooper oil project joint venture, led by Santos, and other smaller companies had led to an increase over the past year. He added that "Record high oil prices and falling production meant that Australia recorded a record petroleum trade deficit of almost USD 30 million a day in 2007-08. Despite high fuel prices, petroleum imports leapt 11.3%. "Australia imported 39 billion liters of crude oil, petrol, diesel and jet fuel in 2007-08 - huge growth on the 35 billion liters imported in the previous year.''

He added that "Total CSG reserves and resources on the east coast are now nearly 60,000 petajoules. In less than 5 years the east coast has gone from facing a looming gas shortage to having more than enough gas to meet local demand and export overseas. Queensland looks set to join Western Australia and the Northern Territory as an important liquefied natural gas exporter.''

LNG production for export fell by 2.5%to 14.5 million tonnes for the year. New production of LNG from the North West Shelf fifth train, which has just started, will boost Australian LNG production by about 30% or 4.3 million tonnes in 2008-09.

ArcelorMittal SA said that it is not planning to reduce steel prices across the board despite a move to cut prices in South Africa.

It has raised prices this year on soaring costs for energy and iron ore, as it also faced less competition from lower priced Asian rivals.

ArcelorMittal SA said that prices in South Africa reflected 'specific currency developments and price mechanisms. It added that ''Globally ArcelorMittal will generally maintain its third-quarter pricing levels into the fourth quarter.''

It insisted that it was 'making good progress toward getting substantial price increases for 2009 supply contracts with car makers, packaging and home appliance customers.

Demand for the steel that is used to construct buildings, cars and appliances continued to surge in Asia, Russia and the Middle East, and to grow strongly in Europe, more than compensating for lower sales but higher prices in the United States.

A slowdown in cheaper Chinese steel exports also has helped as energy costs rise and the government curbs overcapacity, cutting the competition for ArcelorMittal and others in key markets such as Europe.

This has allowed the company to charge European customers a fifth more for steel than during the first quarter. Europe is ArcelorMittal's largest market and pays the world's highest steel prices.

Emirates Business reported that a sustained economic and construction boom triggered by soaring oil prices has given a strong push to the steel industry in Saudi Arabia and strong demand has boosted prices to one of their highest levels.

The National Commercial Bank in a study on Saudi Arabia's steel industry which was sent to Emirates Business said that despite hectic competition from imported steel, the local industry is projected to continue flourishing because of surging demand as the kingdom is pushing ahead with projects worth more than USD 460 billion including a major steel railway linking its east and west.

Its forecasts showed total supply of iron and steel products will grow by 13.8% to 15.57 million tonnes in 2008 with domestic demand set to absorb 89.4% and exports 10.6 %. Supply from domestic production meets nearly 55% of the total market demand while imports account for the remaining 45%.

As per report, Saudi crude steel output up by 21.9% to 1.3 million metric tonnes in the Q1 of 2008 from the Q1 of 2007. The report showed the kingdom's exports of iron and steel products will up by about 6.5% to 1.65 million metric tonnes in 2008.

Domestic demand for steel products is projected to expand by nearly 14.7% to 13.92 million metric tonnes in 2008. Total market value of iron and steel products is expected to rise 18.7% to SAR 43 billion in 2008.

It said that "The Saudi economy doubled since 2002 with GDP rising from SAR 707 billion to SAR 1.41 trillion in 2007 and the medium term outlook through 2010 is very favorable. The current boom is accompanied by an acceleration of economic reforms and sharply growing inflows of foreign investment, adding to the sustainability of the boom, but with inflationary pressure."

It added that "In the next 5 years, a growing number of mega projects with estimated investment of SAR 1.73 trillion are entering implementation stages while some of them have already started civil works that we expect to continue in the next 15 to 20 years. All of these projects contain a large construction component which would induce aggregate demand for steel and cement. We expect growth in steel demand to remain strong in the coming years."

According to NCB, Saudi Arabia's largest commercial bank, the kingdom's steel industry has been successful in achieving import substitution of numerous products, particularly those subjected to 20% protective custom duty. The figures showed Saudi steel imports jumped by nearly 40.1% to 6.4 million metric tonnes in 2006 and are estimated to have edged up further by 5% to about 6.7 million metric tonnes in 2007.

The study said that "One of the significant achievements of the Saudi iron and steel industry has been its clear ability to expand exports while enhancing the value added factor in the domestic economy. The Study added that in general, the overall iron and steel industry has reached a development stage whereby it is not only competing with foreign products in the domestic market but also has captured a notable share in the neighboring foreign markets."

According to the study, at an overall average price of SAR 2,620 per tonne, the aggregate market value of iron and steel products sold by the Saudi Arabian companies is estimated to have swelled by 24% to SAR 36.2 billion in 2007. It said that "The sharp rise in steel prices and volume of consumption in the kingdom were the major factors behind rising market size last year."

The report said that "Thus, in the domestic market perspective, the likely future of capacity overhang situation would tend to intensify competition among local steel producers and foreign exporters. This, however, is likely to affect domestic steel producers' long term profitability notwithstanding, the kingdom's supportive regulatory regime along with cheap energy cost and the protective tariffs, local industry will continue to maintain a competitive edge over foreign producers."

The study noted that the massive wave of ongoing construction activities in Saudi Arabia has created what it described as a "sizeable transient demand" for building materials including numerous steel products and reinforcing bars.

The study further added that "In addition, the establishment of 7 new economic cities and the approval of the much awaited steel intensive railway project linking east and west of Saudi Arabia are set to create huge amount of demand for steel in the next 5 to 10 years. In response to emerging huge transient demand, major players in the steel industry have drawn plans to expand industrial capacity."

The report added that "Upon completion of planned capacity and enhancement program, excess capacity above sustainable capacity demand is widely feared amongst industry analysts. Thus, in the domestic market perspective, the likely future of capacity overhang situation could tend to intensify competition."

According to the guidance price bulletin issued by the Chamber of Industry of Jordan and the Jordanian iron and steel manufacturing companies, rebar prices in Jordan dropped by JOD 20 to JOD 21.

Application of these prices will start during the next week from September 1st 2008.

Thus, the rebar prices, as per the tensile strength will vary between JOD 886 to JOD 995 per tonne FOT ex works and between JOD 880 and JOD 985 per tonne.

These prices include the sales tax amounting to 8%. This variation in prices is caused by the variation of the production costs between the rebar manufacturing companies in Jordan. Thus, the rebar prices have dropped by JOD 135 during 45 days since the first issue of the guidance price bulletin.

TradeArabia News Service reported that there is a significant imbalance between supply and demand in the region's steel sector due to the extraordinary number of major construction projects.

As per report, consumption of steel in the Middle East is growing at a phenomenal rate. By 2010 the region is expected to consume 60 million tonnes a year while it is expected to produce only 35 million tonnes per year.

Meed reported that this massive imbalance between supply and demand therefore means that the business opportunities for those involved in the region's steel sector is immense.

The report said that the cost of steel has almost doubled in the last 6 months.

It is reported that Iran has begun construction of its largest steel mill with an annual capacity of 1 million tonnes in the southwestern province of Khuzestan.

Mr Nourallah Hassanzadeh head of Khuzestan's Industries and Mines Department said that this is an industrial project which was initiated with an USD 808 million private investment and will be built in the city of Khorramshahr.

He added that “The plant will be built in two phases. The first allows for 1 million tonnes of steel production per year, which can be increased to 5 million tonnes during the second phase.”

Mr Hassanzadeh said that when the steel mill becomes operational, it will employ 5,000 of the local population. He said that the event additional financing would be available for the project, construction could be completed in less than 30 months.

It is reported that the 554 kilometer twin track line between Sirt and Benghazi uses a gauge of 1435 mm and will run along Libya's Mediterranean coast to connect the country's major cities and in the future will form part of the international transport corridor in northern Africa.

As per report, the 554 kilometer twin track line between Sirt and Benghazi construction, which is expected to last 4 years and cost EUR 2.2 billion will be carried out by Russian specialists working with Libyan companies. The project will require 30 rail and 23 road overpasses, as well as 4 major railway stations and 24 stations, of which 14 will be for passengers, 2 for passengers and goods and 4 for goods, with 4 operating stations.

It is estimated that construction will require more than 203,000 cubic meters of concrete and 40,000 tonnes of metal and employ 3,400 construction workers, including 289 engineers, as well as more than 200 pieces of equipment.

Reuter reported that inflation in Saudi Arabia and the UAE emirate of Abu Dhabi surged on relentless rises in food and rental costs new data has showed.

According to the latest data, inflation in Saudi Arabia in July accelerated to 11.1%, its highest level in at least 30 years, while in Abu