Bloomberg reported that Steel Authority of India Limited may lower output as the global financial crisis cuts car and construction demand and commodity prices tumble.

Mr PK Rastogi secretary steel while attending a conference in the southern city of Hyderabad said that production of some of the products by Steel Authority may be cut temporarily as demand for long products and hot rolled coils in India has fallen.

He did not give details about the size or timing of cuts.

SAIL produced a record 3.5 million metric tons of crude steel in the three months ended September 30th 2008.

The prices remain stable. Indian Long Product Price Index (ILPPI) increased by 68 points and Indian Flat Product Price Index (IFPPI) fell by 81 points . The overall Price Index INDSPI remained unchanged.

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

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

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PTI reported that JSW Steel has denied plans to retrench its workforce even as it has deferred the commissioning of its expansion project at Vijaynagar plant in Karnataka.

The report however cited a senior company official as saying that "Some contractual workers, who had been employed for the expansion project have been asked to be on hold till the project revives again.”

He added that “Neither has JSW Steel any plans to send workers, including management trainees, junior managers and contract workers on leave without pay, nor has it asked the lower rung employees in smaller groups to do the same till the financial situation improves.”

A recent media report said that JSW Steel has asked 1,600 of its employees to take unpaid leave.

Kolkata

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Delhi

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Chennai

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Mumbai

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Ahmedabad

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Kanpur

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Indore

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Raipur

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Mandi

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Bangalore

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Ranchi express reported that TATA Motors, which had closed its plant for the last five days following a drop in demand, reopened.

The report added that the workers looked relieved and the nearby petty shops also showed some activities.

It is reported that at the moment some 130-140 vehicles will be manufactured every day. Earlier when there was good demand some 500 vehicles were manufactured every day.

Mumbai:

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Kolkata

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Chennai

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Ludhiana:

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Delhi

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Indore

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Bangalore

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Ahmedabad

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Kanpur

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BS reported that Steel Authority of India Limited’s Rourkela Steel Plant is all set to go for massive expansion to raise production capacity from 2 million tonnes to 4.5 million tonnes of hot metal in an eco-friendly manner by adopting state of the art technologies and environmental protection measures.

Plant sources said that the Union Ministry of Environment and Forest has already issued environment clearance to RSP for its expansion. A technical committee of the State Pollution Control Board visited the plant on November 7th 2008 and examined the environmental management plans proposed by RSP for the expansion project. SPCB will issue clearance based on the recommendations of the technical committee.

As per report, RSP is the first integrated steel plant in the country which has installed two automatic ambient air quality monitoring stations, one inside the plant and another at the steel township. These stations continuously monitor the concentration of pollutants like dust, sulphur dioxide, oxides of nitrogen and carbon monoxide present in ambient air.

The enhancement of solid waste utilization to 73% and use in place of basic raw materials reduced consumption of natural resources like coal, lime stone and iron ore.

The plant as per its major achievements has taken various steps in maximizing the recovery of waste gases and their use as fuels in steel plant operations. RSP has complied to most of the commitments given under corporate responsibility for environment protection a charter voluntarily committed by various industries to Centre.

The price of iron ore declines in Bellary, whereas ingot shows improvement as result of firming of scrap prices in the international market.

Melting scrap
80:20
HMS

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Sponge iron

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Burwil

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Bellary

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Pencil ingot

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According to the an analysis of ASSOCHAM, Indian exports are likely to witness a shortfall of about 20% against their target of USD 200 billion for 2008-09 as prevailing domestic economic conditions have caused a severe dampening effects on potential exports segments of Indian economy.

The latest analysis of the ASSOCHAM on Realistic Exports Vs the targeted one of USD 200 billion for 2008-09 said that 7 key export segments such as textiles, apparels, gems & jewellery, diamonds, brassware, handicrafts and leather are already reeling under recessionary trends to sustain their past export buoyancy. These put together constitute the highest export volumes in India’s total exports from economies of scale such as America, EU and ASEAN. As a result of global slowdown especially in these economies, India’s export market got reduced substantially and on the other hand, domestic pressures of prevailing economic conditions on textiles, diamonds, brassware, handicrafts, carpets etc is too heavy.

Naturally, these sectors will not be able to generate their previous export momentum as a result of which the ASSOCHAM anticipates a minimum of USD 40 billion exports shortfall for current fiscal.

ASSOCHAM spokesman said in statement that its true that in the first couple of months of current fiscal, performance of merchandise exports which include grains, raw jute, petrochemicals has not been that bad but the fact is that the merchandise exports do not bring as much foreign exchange as are brought in by high value added products such as readymade garments, diamonds, jewellery, gems, carpets, handicrafts and brassware etc.

As per release, these exports are effected in markets of extremely higher value where other domestic exports are hardly penetrated and that is why, the ASSOCHAM is in general pessimistic on exports scenario especially towards markets of economies of scale. Besides, slowdown syndrome the other reason as to why Indian exports would receive a drubbing in 2008-09 as ocean freight rates are also rising rupee dollar exchange rate is weakening, recession not only in US and European markets is deepening and as a result, exports are subjected to certain restrictions.

The ASSOCHAM analysis however added that exports that would have reasonably good prospects would improve pharma and chemicals, heavy engineering, metal and marine products, besides FMCG, as these sectors continue to command demand not only in domestic market but on export fronts too in economies of Middle East, Far East and African continent including SAARC region.

According to latest estimates, the other factors that have eroded costs and competitiveness of Indian exports including rising input costs which is not falling and secondly, power and infrastructure remain a problem for Indian manufacturing. India is still far behind on logistics as a result, the transaction cost of exports are rising and even reached around 20%.

ASSOCHAM analysis concludes that all these factors have also rendered Indian exports non competitive as India is facing stiff competition on export fronts not only from China but also countries like Bangladesh, Sri Lanka, Pakistan and even Bhutan. As a result of tough competitions posed by these countries towards India, its traditional exports have suffered in the past which will continue to suffer even in future until exporters make amends to their products by technology infusion.

BS reported that putting pressure on the Orissa government for mines, ArcelorMittal will submit the detailed project report for its 12 million tonnes, INR 40, 000 crore Greenfield steel project in Keonjhar of Orissa after its name is recommended for prospecting license for mines.

Mr Sanak Mishra CEO of India Greenfield projects of ArcelorMittal said that “We will submit the DPR for Keonjhar project after our name is recommended for mines.” He said that we have already commissioned the detailed project report.

Mr Vijay Bhatnagar CEO India ArcelorMittal said that despite the global financial meltdown, its long term India strategy remains intact. There will however be adjustment in the short term strategy without scaling down the investment in the Greenfield projects in the country.

Mr Bhatnagar said that “As far as the long term strategy in India is concerned, it is intact but in the short run we have to adjust. The investment will be phased instead of being scaled down.” He said that there are about 1400 acres of forest land within the site for which permission for diversion is required.

He said that it has submitted papers with the Orissa government and expect the state government to initiate action on this proposal. He added that the land acquisition depends upon the cooperation of the villagers. Out of the 15 villages, the Gram Sabha has been held in 3 villages. It will have to be completed in the remaining villages.

The construction work can only start after a substantial portion of the land is acquired. Further, Rehabilitation and Peripheral Development Advisory Committee meeting will have to be convened for expediting the rehabilitation and resettlement issues.

Siemens announced that it has bagged an order worth INR 175.6 crore from Steel Authority of India Ltd for power plant related works.

Siemens Ltd said its industrial solutions division has secured the order, which is the part of expansion and modernization plan of SAIL's Bokaro Steel Plant.

The scope of work includes design, supply, civil work, erection, testing and commissioning of 220 KV and 132 KV switchyards for the captive power plant at the Bokaro steel plant, the company said.

Mr Armin Bruck MD of Siemens said that "We are happy to partner with SAIL in their expansion and modernization project at the Bokaro Steel Plant.”

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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The Hindu reported that ArcelorMittal would proceed in a phased manner to implement the projects.

Mr Vijay Bhatnagar CEO of ArcelorMittal’s India said that “The international meltdown will have no impact on the long term plans of the company. However in order to adjust in terms of economic situation, the projects in India have to be phased.”

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

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

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

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

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

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

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

JBM Auto Ltd has announced that it has entered into a JV Agreement with Ogihara Company Ltd on November 10th 2008 primarily for the manufacture of stamping or sub assembly parts for Toyota Kirloskar Motor Pvt Ltd.

The JV will set up state of art facilities at Bangalore. It will hold 51% while Ogihara Company Ltd will hold 49% in the JV. The commercial operations is expected to start from 2010.

Coal Insights reported that Kolkata Dock System and Haldia Dock Complex missed their April to September 2008 targets by over 20%. The current river draft problem is likely to increase the gap further.

According to data released by the Indian Ports Association, Kolkata port comprising KDS and HDC targeted to handle 33.72 million tonnes of commodities during April to September 2008 but finally managed to handle only 26.88 million tonnes during the above period. This was 20.29% less than the targeted traffic. To meet the current shortfall, port authorities need to take suitable actions to boost user's confidence.

Increased container movement and coking coal movement helped Kolkata port to make up a part of the shortfall. However, all other commodities trade performance belied expectations.

Traffic of coking coal at Paradip port also jumped appreciably in H1 by 57% to 3,254,000 tonnes compared to 2,073,000 tonnes in the same period last year.

Experts felt there might have been some diversion of traffic from the Kolkata port to the Paradip port which lead to the circumstances.

Reuters cited Fitch Ratings said that India's large foreign exchange reserves are helping keep its ratings outlook from being downgraded, but a widening fiscal deficit and outflows from its stock market are warning signs.

Mr James McCormack MD of Asia Pacific sovereign ratings at Fitch said that India's low level of exposure to global capital flows compared to other regional economies was also shielding Asia's third biggest economy from the worst effects of the global financial crisis.

Mr McCormack said in a telephone interview that "Capital outflows from the stock market is making the economy vulnerable, but its high level of foreign exchange reserves has meant that its economy is in a better shape than some of its Asian peers."

Currently, Fitch affirmed the country's "BBB minus" rating for both local and foreign currency debt and kept the outlook on its local currency rating outlook at negative and foreign currency outlook at stable. Fitch downgraded ratings for four Eastern European countries to below investment grade and revised its outlook on a handful of emerging markets due to the adverse impact of a looming global recession.

Express India reported that a senior Commerce Ministry official quoted country exports declined in October this fiscal for the first time in 5 years due to the global slowdown.

Mr RS Gujral director general of Foreign Trade said at a function organized by CAPEXIL in New Delhi that "For the first time in the last five years, in October, there has been a decline of over 15% in dollar terms. He said that barring the export of the petroleum products, there has been a decline of over 20%."

Growth in April to October has been 21.5% down from 30.9% for the April to September period. Trade data for October will officially be released on December 1st 2008.

According to release, the total approximate earnings of Indian Railways on originating basis during April 1st to October 31st 2008 were INR 44547.52 crore compared to INR 38481.83 crore during the same period last year, registering an increase of 15.76%.

The release added that the total goods earnings have gone up from INR 25688.18 crore during April 1st to October 31st 2007 to INR 30151.97 crore during April 1st to October 31st 2008 registering an increase of 17.38%. The total passenger revenue earnings during first seven months of the financial year 2008-09 were INR 12575.05 crore compared to INR 11160.90 crore during the same period last year, registering an increase of 12.67%.

The revenue earnings from other coaching amounted to INR 1127.55 crore during April to October 2008 compared to INR 1059.87 crore during the same period last year an increase of 6.39%. The total sundry earnings have gone up from INR 572.88 crore during April to October 2007 to INR 692.95 crore during April to October 2008 showing an increase of 20.96%.

Bloomberg reported that Dr Manmohan Singh MP of India assured company chiefs the government's support to help tide over the effects of the global financial crisis, which is worse than expected and is hurting growth.

Mr Singh told CEO in New Delhi that “The financial crisis has exacerbated a global downturn that was expected earlier but is now likely to be more severe and prolonged. A crisis of this magnitude was bound to affect our economy and it has.”

Mr Singh said that the central bank on November 1st for the first time since 1997 deployed all 3 of its main tools to shore up growth after inter bank lending rates up by 21%. India will speed implementation of projects such as construction of roads and utilities and ensure they have sufficient money. This coupled with spending on health and education, and faster farm growth will help maintain stability in the economy.

1. Pace of Growth
Mr GK Pillai Commerce Secretary said that Dr Singh expects growth at 8% this year. That compares with the Reserve Bank of India's forecast for 7.5% to 8% growth in the year to March 31st.

Dr Singh said that “The government will take all necessary monetary and fiscal policy measures on the domestic front to protect our growth rates.”

The central bank lowered its repurchase rate to 7.5% from 8% reduced the amount of deposits that lenders need to set aside as reserves to 5.5% from 6.5% and cut the amount of money lenders are required to keep in government bonds to 24% from 25%.

Companies sought deeper cuts in interest rates and the amount of bank reserves to improve the availability of cash.

The Federation of Indian Chambers of Commerce & Industry, a lobby group sought a reduction in the cash reserve ratio to 4.5% from 5.5% and a cut in the key interest rate to 5%.

Mr Rajeev Chandrasekhar president of the federation said that “Insolvency shouldn't be visiting all businesses and industry as a whole and hence the issue of general risk aversion in our banks has to be solved.”

2. Reasonable Rates

Dr Singh said that the infusion of cash from measures taken will help to provide credit at reasonable rates. He said that The public sector banks have been instructed to ensure that they act counter cyclically in this situation to counter the general erosion of confidence.”

He said that the success of the measures taken to contain inflation helped the Reserve Bank and the government to take steps to combat the financial crisis.

Dr Singh said that “We are able to act more boldly because our efforts to contain inflation have begun to be effective.” Movements in the Wholesale Price Index over the past 6 weeks suggest a definite abatement of inflationary process.

The commerce ministry said on October 30th that India's inflation rate fell below 11% for the first time since May to 10.68% in the week to October 18th from a year earlier.

3. Strong Banks

Dr Singh reiterated that India's banks are well capitalized and that there should be no concern over the safety of deposits, while pledging the government's support for the industry.

Increased spending on infrastructure such as ports, utilities and irrigation networks will help boost growth.

Dr Singh said that “We will review projects and programs in the area of infrastructure development including both pure public sector projects and public-private partnership projects, to ensure that their implementation is expedited and they do not suffer from constraints of funds.” He said that this spending along with increased outlays on health, education, rural areas and farm development will help maintain growth and economic stability.

He said that “While every effort needs to be made to cut costs and raise productivity, I hope there will be no knee jerk reaction such as large scale lay offs which may lead to a negative spiral.”

The India government has sought to allay concerns that a slowing economy may prompt companies to cut jobs. Mr Palaniappan Chidambaram minister of Finance on October 31st said that creation of new jobs may slow, but there won't be a loss of jobs.

Mr Sajjan Kumar Jindal MD of JSW Steel Limited said that “There is no such fear that the industry has shared with him of likelihood of jobs cuts. He said that the only point that has been shared is that there could be some reduction in new job creation.”

Dr Singh who will attend a meeting of the so called Group of 20 industrialized and developing nations in New York next week being organized by Mr George W. Bush President of USA said that India will work to contain the financial crisis.

Dr Singh said that “We are working closely with other countries to ensure coordinated policy action and increased development cooperation for the containment of this crisis. He said that we will seek reform of the international financial institutions.”

Project today reported that NTPC, NHPC and Power Grid Corporation of India are likely to form a JV for setting up testing facilities for equipment used in transmission and distribution of electricity.

Currently, Central Power Research Institute is the only autonomous body to carry out innovations in the power engineering sector, perform quality checks at its facilities in Bangalore, Bhopal and Muradnagar. However, due to capacity limitations a lot of testing work is outsourced to developed countries like Germany.

As per report, NTPC, NHPC and PGCIL are also in talks with SBI Caps and Power Finance Corporation for tying up debt for the proposal as the companies are yet to decide over fund requirement. The proposal has been put up for approval from the Union government. The proposal is being taken up at board levels of the public sector companies. Once cleared, an MoU will be signed and a detailed plan for implementation of the proposal will be worked out.

Reuters reported that Goldman Sachs recently cut its India growth estimate to 6.7% from 9% in the year ending March 2009 due to the knock on effects of the global financial crisis.

The investment bank said that "The larger-than-expected shock to the financial sector over the past couple of months, and its knock-on effects on both domestic and external demand, are responsible for our lower growth projections." It also cut its growth projection for the 2009-10 to 5.8% from 7.0% on concerns negative global financial stocks will continue to slow activities across the board.

Goldman said that "We now see further risks to the downside as problems in the financial sector feed through to the real sector."

Analysts at the bank pointed out that the government will not be able to counter a worsening financial scenario with more measures, as its balances are already stretched.

But growth rates are expected to bottom out at a quarterly pace of 5.0% in the April to June quarter of the next fiscal year starting April, supported by the monetary policy stimuli, prospects of a good agricultural crop, lower commodity prices, and infrastructure spending.

BL reported that the Power Finance Corporation will increase up to INR 400 crore through issue of bonds this week.

Mr Satnam Singh CMD of Power Finance Corporation said on the sidelines of the launch of Power Exchange India Ltd that “We are planning to raise around INR 300 crore to INR 400 crore through bonds in the next 7 days. He said that against the target of INR 19,300 crore for financing several power projects this fiscal, we have already disbursed INR 9,800 crore.”

ET reported that Indian corporate have raised less money from the overseas markets with total foreign loans falling by 5% to USD 30 billion till October end in 2008.

Indian companies had raised USD 32 billion in the first 10 months of 2007, data compiled by Dealogic research provider.

According to Dealogic, syndicated lending transaction was down from 105 deals last year to just 80 transactions this year. In fact, a majority of the overseas debt was raised before the financial meltdown hit the global financial markets in early September.

But compared to the global demand, Indian corporate have done well. The global loan volume is down by 43% to USD 2.4 trillion from USD 4.3 trillion raised in the first 10 months of 2007.

BS reported that hit by falling demand from the commercial vehicles, automotive and construction machinery sectors, Timken, the world's biggest ball bearings maker with revenues of close to USD 6 billion is redoing its growth strategy in India and has identified wind energy sector as its thrust area.

As per report, it is investing in research and development at its Bangalore centre, which has over 400 employees for manufacturing 3 meter bearings for clients who are into wind energy industry.

Speaking at the global mining summit organized by the Confederation of Indian Industry, Mr Pierre Kocher market manager of Timken said that “We are going on focus on wind energy sector as this industry growth is projected at 10% to 15% annually. The sectors that primarily used to drive our revenues like construction machinery and automotive industry are stagnant, which automatically slows our revenues down. We automatically had to look at alternate sectors for growth.” Each 3 meter ball bearing will cost upwards of USD 100,000. Each windmill needs at least three ball bearings.

Mr Kocher said that “Ball bearings are needed in high volumes in wind mills and each should last for 10 to 15 years, so quality assurance is very stringent. We have about a dozen clients in wind energy. This sector has already generated revenues of close to USD 40 million this year globally.”

He said that “Engineering clients are demanding more energy efficient products. So we will invest into making light weight products, special design to address friction so that the machinery consumes less energy, among other product development plans.”

The report added that it expects to close this calendar year at USD 108 million up from USD 89 million last year. It has invested close to USD 52 million into research and development in its centre in Bangalore.

Project today reported that CESC plans to invest INR 2,000 crore over the next 5 years for reviving its power distribution infrastructure.

As per report, it has tied up with SP Global Solutions, a subsidiary of Singapore Power, for consultancy support in the proposed project. SP Global Solutions will help the utility in strategic planning, technology application and process standardization for upgrading the distribution network within the 567 kilometer licensed area.

Project today reported that Murugappa Group is planning to enter the infrastructure sector for which it has recently incorporated a company Parry Infrastructure Ltd.

As per report, the group is likely to focus on roads, ports, power and real estate, including the revival of Coromandel Engineering, a group company that has constructed several buildings in Chennai.

BS reported that the 2X600 MW Bara thermal power projects and 3X660 MW Karchana thermal projects with a total installed capacity of 3,120 MW are struck as the Uttar Pradesh government is unable to find a suitable investor.

As per report, both the Bara and Karchana projects are to be awarded on tariff based bidding. The International Competitive Bids earlier floated twice for both the projects have been cancelled by the government without assigning any technical or financial reason. The earlier two bids for both the projects were invited together but in the third time bidding, the bids for both the projects have been separated.

On November 6th 2008, the bids for the Bara project were opened, while the last date for filing the request for proposal document for the Karchana project is November 20th 2008. The state government’s bid to award Bara power projects to the private sector on the basis of tariff based bidding received a setback after the lowest price quoted in the third time bidding for the 1,200 MW Karchana thermal power project in Allahabad was found to be far higher then what was quoted in the first time bidding.

The first global tender for the Karchana project was floated in December 2007. Five bids were received for the project and Lanco emerged as the successful bidder with the lowest tariff of INR 2.83 per unit. This round of the bidding was cancelled by the state government as the price was found to be too high by the state government.

The bids were floated for the second time in June 2008, where Reliance Power emerged as the successful, bidder with tariff of INR 2.60 per unit. The state government again scrapped the bidding process without assigning any reason.

The report added that the bids were floated for the third time in September. The financial bids of the Karchana project were opened on November 6th 2008. The Jai Prakash Associates emerged as the front runner to grab the 600 MW Kanchana thermal power project in Allahabad. The levelized tariff of JP for 25 years was found to be the lowest by the consultant Feedback ventures Pvt Ltd at INR 2.970 per unit followed by the Adani enterprise at INR 2.981, Lanco Infratech Ltd INR 3.188 per unit and Reliance power Ltd price was found to be the highest at INR 3.984 per unit.

Mr Avneesh Awasthi MD of UP Power Corporation Ltd said that the consultant would soon submit its report to the bid evaluation commit. Later, the committee would submit its report to the state government for further action. In the ICB floated for the first time and opened on April 11th last, Lanco had won both coal based thermal power INR 9,000 crore Bara thermal power project of 1980 MW and INR 6,500 crore, Karchana thermal power projects on levelised tariff based International Competitive Bidding.

BS reported that Bharat Forge has deferred its proposed rights issue to promoters in the background of volatility in financial markets. Instead, the flagship company of the Kalyani Group plans to issue non convertible debentures worth INR 400 crore.

However, the debentures will have a detachable warrant that can be converted into equity shares. The auto component-maker had initially planned to increase INR 300 crore through a rights issue to the promoters.

Mr Baba Kalyani CMD of Bharat Forge said that “The market conditions have made us take this decision.” The company did not specify how this delay in raising funds will affect their expansion plans, or a timeline when the debenture issue will be completed.

Meanwhile, the company recently announced a JV with Alstom Power Systems, a unit of French power and transport equipment maker, to manufacture supercritical power equipment in India. As per the agreement, two separate companies will be formed. The first firm will deal with manufacturing of core turbine and generators and the second will make all the auxiliary equipment. While Alstom will hold majority stake in the first JV, Bharat Forge will have 51% stake in the second company. However, company officials did not divulge investment required for the project and also how Bharat Forge will raise the funds.

Mr Kalyani however said that the JV will have a capacity to make 5,000 MW of power equipment, adding the plant will deliver its first equipment by 2012. He said that the proposed capacity, which represents around 20% of India’s average capacity addition will add EUR 1 billion in today’s value the company’s top line.

BS reported that McNally Bharat Engineering Company has approved a scheme of arrangement whereby its products division will be transferred to its subsidiary, McNally Sayaji Engineering.

According to the arrangement, the units of the product division Kumardhubi in Jharkhand, Asansol in West Bengal and Bangalore in Karnataka would be transferred to the parent company with effect from April 1st 2008.

The rest of the business of McNally Bharat Engineering would continue in the parent company. As a consequence, McNally Sayaji would issue and allot to McNally Bharat Engineering, 34.55 million equity shares of INR 10 each.

Mr Deepak Khaitan chairman of McNally Bharat Engineering said that the shareholding of the parent company in the merged entity would be 92%, which would give an opportunity to raise capital.

Mr Khaitan said that in the next 6 to 12 months McNally Sayaji would look at raising capital but the instrument was yet to be decided. McNally Bharat Engineering was eyeing a turnover of INR 1,000 crore by March 2009.

He added last March that it recorded a turnover of INR 550 crore. He said that McNally Sayaji would make a significant contribution to McNally Bharat’s turnover. The combined turnover of McNally Bharat Engineering and McNally Sayaji was likely to be around 1,250 crore by the end of the year.

Currently, McNally Bharat Engineering has an order book position of INR 2,400 crore and another INR 1,000 crore were in the pipeline.

BS reported that Karnataka will have a right over usage of 1,000 MW of power from the 2,000 MW thermal power project it is setting up as a JV with National Thermal Power Corporation. The state government is still scouting a location for the project.

Mr Jairam Ramesh Union Minister of State for Power said that “The project will be set up with an estimated investment of INR 10,000 crore. He said that Karnataka will have a right over 1,000 MW of power. The remaining 1,000 MW can be sold, where the first right of refusal will lie with Karnataka.”

On the 4000 MW thermal power project at Kudagi in Bijapur district, Mr Ramesh said that he has written to the union ministry to give it an Ultra Mega Power Project status. Karnataka has been allocated 1,558 MW but has been supplied with only 1,000 MW of power due to power shortage.

Mr Ramesh said that “Nuclear power stations are functioning at 45% of their capacity and gas based power stations are functioning at 50% their capacity due to shortage of Uranium. This is expected to improve post April 2009 due to availability of Uranium through the nuclear deal.” He said that NHPC which was planning to come out with an initial public offer has decided to defer its issue due to market conditions.

BS reported that Andhra Pradesh government has decided to restructure the equity pattern of the Krishna-Godavari Gas Network to include Reliance Gas Corporation, a subsidiary of Reliance Industries as a majority partner of the consortium.

KGGNL, a special purpose vehicle set up for the development of the natural gas network in the state is a JV of Infrastructure Corporation of AP, Gujarat State Petroleum Corporation and Infrastructure Development Finance Corporation. It was constituted in September 2006 to develop a network of pipelines to distribute natural gas from the Krishna-Godavari basin to all the districts in the state.

According to the restructured equity pattern, RGC will hold 67% while the state government, GSPC and IDFC will have 11% stake each. Currently, IDFC has 48% stake, AP and GSPC have 26% holding each. The state Cabinet, which met here on Monday approved the proposal to restructure the equity pattern.

As per report, the original equity base of KGGNL stood at INR 100 crore. However, an Incap top executive told Business Standard that there would be a substantial increase in equity following the induction of RGC, the details of which were now being worked out.

According to Mr A Ramnarayana Reddy Union Information Minister, the state government has decided to make RGC a consortium partner as it is the only company which can start supplying gas immediately. RGC has struck huge gas reserves in the K-G basin.

Mr Reddy said that “Due to certain developments regarding the availability of natural gas in the K-G basin, it is observed that GSPC may not be able to supply gas until at least 2011-12, which means that KGGNL has to wait for three more years if it has to develop the gas network.”

He said that keeping this in view and to expedite city gas distribution in the state, the state government has decided to rope in RGC. Briefing newspersons following the Cabinet meeting, he added that the restructured KGGNL would soon submit bids to the Petroleum and Natural Gas Regulatory Board, constituted by the central government, for laying the gas distribution network. The board has already received bids from RGC to lay the gas pipeline network in Hyderabad, Kakinada, Tirupati, Vijayawada, Visakhapatnam and Rajahmundry.

BS reported that Andhra Pradesh government has accorded permission to East Coast Energy Private Limited for construction of a dedicated captive jetty at Meghavaram 10 kilometer south of Bhavanapadu port for import of coal.

As per report, ECEPL is setting up a 2,640 MW coal fired thermal plant in an extent of 2,450 acres at Kakaraplli village in Srikakulam district at an estimated cost of INR 10,000 crore. The coal requirement for the plant would be 10 million tonnes per annum.

The environmental impact assessment studies for the project were stated to have been completed and the final clearance was expected shortly. The AP Industrial Infrastructure Corporation has also allotted the land provisionally. The project is expected to achieve financial closure by March 2009.

According to Mr A Ramnarayana Reddy information minister, basing on the report of L&T Ramboll Consultants and the recommendations of the director of ports, Meghavaram has been notified as a minor port.

BL reported that Kerala State Electricity Board has signed an agreement with Neyveli Lignite Corporation for purchase of power from the latter’s TPS II Expansion Project. The power from the project is slated to be made available in 2009 with an expected cost of INR 3 per unit.

The agreement was signed by Mr JN Prasanna Kumar CMD of Neyveli Lignite Corporation and Mr Rajiv Sadanandan chairman of Kerala State Electricity Board here on Monday in the presence of Mr AK Balan minister for Electricity.

As per report, the project has an installed capacity of 500 MW and the agreement was signed for Kerala’s share of 14%, which works out to 70 MW. The others entitled to a share from the project are Andhra Pradesh, Karnataka, Tamil Nadu and Pondicherry.

Mr Prasanna Kumar said that some problems relating to mining land and heavy rains had resulted in shortage in the availability of lignite. The situation was expected to improve shortly and Kerala would start getting its full share of power.

KSEB had earlier signed an agreement for purchase of power from the Simhadri project of National Thermal Power Corporation. The board has sought 200 MW from the project. It has signed another agreement for purchase of 122 MW from the project being jointly implemented by the Tamil Nadu Government and NLC at Tuticorin.

Indian steel projects are at a critical juncture. The road from now is uncertain and will certainly be turbulent.

Indian SNRSR report on Indian steel projects is a product of high quality research by an internationally renowned expert. The report is more than information it is analysis of the projects, their merits and demerits, examination of the ground reality and prospects and assessment of the macro environment in which these projects stand. It is an attempt to guide the user to understand the present and work for the future. It is an independent study and the views are totally neutral.

“Indian steel projects were based on the assumption that external commercial credit will be available cheap and endlessly. The global financial crisis has literally closed this avenue. This will take its toll on the Indian steel projects. Delays and even abandonment are expected in many cases.”

“The domestic banks and the financial institutions will be the first ones to take fresh looks at funding the ambitions of the steel companies.”

“India’s steel dream looks to be fading away.’ This is how we started our last year’s steel report. With the added uncertainty, the industry’s plans are in total disarray. There are no questions on the opportunities this country has offered in steel. From all points of view, these have been strong and credible ones. There are mineral resources, manpower, technical skill and most of what we require to make steel, except high quality coking coal or sufficient energy. There could be many shortcomings assessed and evaluated by all those who have ventured into this industry. Yet, such shortcomings disappeared into the thin air as one measured them against the huge growth potential of the domestic market, the enormous resources of high quality iron ore the country has etc.”

Assessment of Other Important Brownfield and Greenfield Projects

Company/Plant Intent Finance Viability Overall
SAIL Brownfield Projects Strong
TATA (Jamshedpur) Strong
RINL(Visakhapatnam)Andhra Pradesh Strong
Essar (Hajira)Gujarat Positive
Ispat ( Dolvi)Maharashtra Weak
JSW(Torangulu)Karnataka+SISCOL Strong
JSPL(Chattisgharh) Positive
Bhushan Steel and Power (Orissa) Positive
Mesco Steel Acceptable
JSPL ( Jharkhand ) Two Projects Strong
Monnet Ispat : Raigarh ( Chattisgharh) Positive
Monnet Ispat-Angul ( Orissa) Acceptable
MSPL ( Karnataka ) Acceptable
Electrosteel Casting Positive
Welspun ( Maharashtra) Uncertain

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

Report Summary:
1. Published: Sep 2008
2. Format PDF File (Delivery by Email on receipt of payment)
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Kyodo News reported that Japanese Fair Trade Commission has filed a criminal complaint with Tokyo prosecutors against Nisshin Steel Co and two other makers of galvanized steel for conspiring to fix the prices of their products.

The two others are Nippon Steel & Sumikin Coated Sheet Corp, a Nippon Steel Corp subsidiary based in Tokyo, and Yodogawa Steel Works Ltd, known as Yodoko and based in Osaka.

Acting on the complaint, investigators from the Tokyo District Public Prosecutor's Office started criminal proceedings against the three companies, the officials said, adding that their head offices and other locations will be searched soon.

The antimonopoly watchdog raided the three firms' head offices as well as JFE Galvanizing & Coating Co. in January on suspicion that they conspired to fix prices of steel sheets used in building materials.

The prosecutors will build a criminal case against the three makers and some of their officials on suspicion of forming an illicit cartel to fix prices of zinc-coated steel sheets in breach of the Antimonopoly Law, the officials said.

Reuters reported that Swedish specialty steel maker SSAB has cut output at a top strip product site in Sweden and is considering other cuts as it grapples with a downturn in demand.

Ms Helena Stalnert information director of SSAB said that it had cut production at its Borlange plant as customers appeared to be running down inventories before making new orders. She declined to specify the size of the cut.

The statement came as markets speculated that a drop in output was likely and it confirmed comments from a union official, who told Reuters that SSAB had told the union it was reducing production at Borlange.

Asked if demand in the fourth quarter was weaker than previously expected, Ms Stalnert said that "Yes, you could say that. It's clear you can see that from others, not only from SSAB. It's a strong downturn. We see a clear downturn in demand and we're adjusting production at Borlange to a lower level for the time being. How long that will be, we cannot say. We are considering doing the same at other locations."

Reuters reported that JFE Steel Corporation may cancel or suspend projects to build integrated steel mill plants in Brazil and Vietnam if demand remains weak.

Mr Hajime Bada president & CEO of JFE Steel said that it is cautiously assessing the feasibility of the projects now that steady demand growth in the global steel market is unlikely amid recession fears. He added that "If demand is shrinking and we find the projects are not feasible, we could cancel or suspend the plans. We need to be prudent in investments if a slump in demand looks likely to continue."

It may be noted that JFE, Vale and Dongkuk are jointly conducting a feasibility study on constructing blast furnaces and a plant capable of producing 5 to 6 million tonnes a year of steel slab in Brazil's northeastern Ceara state. JFE is also studying a plan to build an integrated mill with an annual capacity of 5 million tonnes in Vietnam.

'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.

Report Summary:
1. Published: Jul 2008
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3. Total no of pages – 178 (103 analytical perspective + 25 Tables + 50 Charts)

Price: USD 1500 or equivalent in INR
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Romanian media reported that French Romanian carmaker Dacia and steelmaker ArcelorMittal Hunedoara said that they will temporarily halt production due to a sharp drop in sales as the world's economic turmoil hits Romania's industrial sector.

ArcelorMittal said that its factory in Hunedoara will close in November and December 2008 due to the drop in demands for steel on the international market, but the company said it would not cut jobs.

ArcelorMittal Hunedoara employs about 1,200 people. The workers will get 75% of their salaries during the shut down.

Dacia said that it will halt production from November 20th 2008 to December 7th 2008 because of the financial crisis which led to a 30% drop in cars sales in October 2008 as compared to a year ago. It said its export center will remain open.

Dacia said that its market shrank also because of the invasion of imported secondhand cars and warned that jobs in the car industry are in danger. Dacia's 14,400 workers will get 85% of their salaries during the production halt.

Forging is one of the oldest known metalworking processes. It is manufacturing process where metal is pressed, pounded or squeezed under great pressure into high strength parts known as forgings.

Some of the largest customer markets include: Automotive & Tool Industry. But, application is not limited to automotive sector alone and there is ample scope for expanding the market of forgings to various sectors like Steel, Coal, Metals & Metal Working Industry; Material Handling & Off Highway Equipment Industry; Cement, Chemical Processing & Oil Exploration Industry; Mechanical Power Transmission Equipment Industry; Sugar & Ship Building Industry; Power Sector; Electric Equipment Industry; Defense Sector; Farm Machinery Industry & Railway Sector.

The domestic automotive sector and outsourcing have been the key drivers of growth for the forging industry in India with consistent increase in production, capacity utilization and exports. The fortunes of the forging industry is on a rise due to the booming auto component industry with forging exports projected to touch the magic figure of US $5 billion (which is about 15% of the auto component exports) by 2015. Along with this, there exists ample scope for forgings consumption in many other sectors that would open up big business opportunities for the forging industry.

Considering the above, the demand for forgings is expected to be at least 16% per annum. Hence, the future looks rosy for the forging industry in terms of the expected surge in both global and domestic demand.

Published in October 2008, 'Directory of Forging Industry in India' has been comprehensively researched and prepared, to bring you a fully up to date guide to Indian forging industry.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

Content:
This report covers name and product details of 121 forgers of India in alphabetical as well as location wise order. Look at the information you'll get in the 'Directory of Forging Industry in India'
• Company name -121 entries
• Address-121 entries
• Email-82 entries
• Phone number-118 entries
• Fax number -113 entries
• Mobile -72 entries

Format: PDF File
Total no of pages – 73
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Price:
USD 350 or equivalent in INR
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The Bureau of International Recycling has sent an official letter to EU Commissioners Mr Günter Verheugen and Ms Catherine Ashton to express serious concern regarding the commercial behavior of many buyers of secondary raw materials in the EU and in other countries worldwide.

As a result of the current financial and economic turmoil that is affecting all sectors including the production and manufacturing industries, many buyers of secondary raw materials are failing to pay for shipments, renege on open contracts or seek extraordinary discounts from the contracted price for materials even after the goods have reached the ports in the country of destination.

Although BIR members understand that the current market situation can lead to a reduction of demand for steel, paper, metals etc, they want to vigorously denounce the current practices of some buyers, which are unfair and unethical and which endanger the functioning of the whole European recycling industry.

BIR has asked for an official response of the competent directorates within the EU Commission and intends to discuss the matter at world level within the World Trade Organization.

Institute of Scrap Recycling Industries Inc also is working with inside and outside sources to provide assistance to its members, who are seeing sizable order cancellations. In a letter sent to its members, Mr Robin Wiener executive director for ISRI, writes that the association is looking at some options for addressing the problems from cancelled orders, defaults and efforts by buyers to obtain discounts from the contracted prices for shipments of scrap.

While Mr Robert Garino director of commodities at ISRI is in China having meetings with the US Commercial Service at the US Embassy in Beijing, as well as the US Consulate’s Office in Shanghai to discuss the matter, in the United States, Mr Wiener, along with Mr Scott Horne, have been in discussions with the US Department of Commerce and the US Trade Representative's Office.

Mr Wiener said that "We have also contacted AQSIQ on the question of the effect of what is occurring on the issuance of import licenses. However, the prospect of governmental intervention is remote unless the information we receive indicates there may be a violation of international laws or treaties, such as the WTO, or there has been a potential violation of criminal laws or licensing requirements."

SABC News reported that ArcelorMittal South Africa has been forced to put major investment projects in Mozambique on hold due to the current global economic crisis and a decline in demand.

ArcelorMittal said that the Maputo mill has been closed temporarily while the construction of a second mill near Matola has been postponed.

Mr Fernando Guebuza President of Mozambique said that he hopes to see more investments once the company resumes its operations.

Meanwhile, Mr Luc Bonte president of ArcelorMittal SA said that they are confident that the market will normalize in the second quarter of 2009.

It is reported that Kremikovtzi steel mil workers will continue to protest in front of Alexander Nevski temple and will continue if front of Council of Ministers’ building.

Workers expected in front of the Council of Ministers the decision from the meeting of Confederation of Labor Podkrepa and Confederation of the Independent Trade Unions in Bulgaria. Decision for strike hadn’t been taken until the end of the day.

The workers said that they worry about the raw materials due to the fact that the management workers sit in their offices, don’t protest with the workers and the steel mill is not working. Metallurgists asked them to leave their offices.

Workers had asked State Agency for National Security and Prosecutor’s Office to investigate the plunder of the steel mill. Leader of the Confederation of Labor Mr Podkrepa Konstantin Trenchev said that they had presented to the chief prosecutor Mr Boris Velchev documents for frauds at the amount of BGL 90,000.

The fast developing Indian steel industries are continuing beyond what most believed was possible. As one of the world's fastest growing economies, India has become the most happening place among world steel market over last few years and thus is in the radar of not only Indian but most of global players associated with steel industry. But due to fragmented nature of industry, a comprehensive list of smaller steel makers is not readily available.

"Indian Steelmakers Directory 2008' is one the top sources of information available on steel making companies in India! 'Indian Steelmakers Directory' is one of the most comprehensive and accurate directory of Indian steel companies that have ever been published. This powerful directory is your connection to the entire Indian steel industries sector.

Published in February 2008, “Indian Steelmakers Directory 2008” has been comprehensively researched and prepared, to bring you a fully up to date guide to India's rapidly growing steel makers. This Directory will be extremely useful to businesses that deal specifically with companies in the iron and steel industry, ferroalloys, consumable suppliers, raw material sellers, equipment makers and others.

Whether you are a product manager, in charge of marketing, raw material seller, in equipment business or simply interested to remain in touch with the latest developments in the Indian steel industries, this directory will save you time and effort in finding the information you need.

Why spend hundreds of hours searching for new contacts? Invest in a copy TODAY!

This directory covers name and details of 720 of Indian steelmakers in Alphabetical as well as location wise order.

Look at the information you'll get in the 'Indian Steelmakers Directory'

• Company name -723 entries
• Address-723 entries
• Phone number-723 entries
• Fax number -590 entries
• Email -446 entries

Report Summary:
1. Published: Feb 2008
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3. Total no of pages – 396

Price: USD 1250 or equivalent in INR
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General Motors has warned that it would run out of cash in the first half of 2009 and appealed to the US government for help to save it from collapse.

GM’s estimated liquidity during the remainder of 2008 will approach the minimum amount necessary to operate its business. Looking into the first two quarters of 2009, even with its planned actions, its estimated liquidity will fall significantly short of that amount.

GM has taken a host of aggressive self help actions to improve its business, but additional support from the US government to aid the auto industry during this industry downturn is essential.

GM also said that it had suspended takeover talks with struggling peer Chrysler and reported a deepening of its cost cutting plan in the wake of steep financial losses.

It may be noted that US Congress recently authorized USD 25 billion in loan guarantees to help US automakers develop more fuel efficient vehicles in order to meet upcoming regulations.

In its weekly freight market round up the Baltic Exchange reported that all dry bulk sectors remained severely depressed with little sign of upward movement.

Baltic Exchange said that "A paralyzed market as ships sit idle with the list growing ever longer. For some owners the choice is clear not to fix at current loss making levels. For the sake of repetition the same problems beset the market China slowdown, credit squeeze, congestion almost negligible. Vale's decision not to ask for a price rise from the Chinese failed to result in any new cargoes coming into the market."

For Panamaxes, it said that "The east saw a brief rally, well at least for those ships with either head owners or in a very short blue chip chain. LMEs were fixing around USD 6,000 to USD 7,000 daily, but as the week drew to a close this rally appeared short lived with talk that business has been done at USD 5,000 daily and a Kamsarmax coming open in Japan at under USD 6,000 daily. Today trading was negligible with minds now focused on paper settlements rather than physical trading."

In the Handy Supramax sectors the Baltic reports more period enquiry as some charterers felt that with hopefully little further downside left, now was the right time to venture back in to the market. But compared to recent fixtures, rates agreed tended towards bargain basement levels. On the spot market, more iron ore enquiry was registered from the Indian Ocean area and it was not quite the graveyard that it has been recently.

One report suggested that a 2007 built 53,600 DWT vessel had been fixed with mid November West Coat India delivery for a trip to China at a better USD 5,000 daily.

It is reported that Stelco Inc is charged with releasing illegally high levels of toxic dioxins and furans into the air over Hamilton in 2007. It's also charged with discharging water toxic enough to kill fish into the harbor at about the same time.

It faces one count of air pollution and two of water pollution laid by the Ontario Ministry of the Environment for Environmental Protection Act violations at the Hamilton Works. One count alleges the sinter plant stack emitted illegal levels of dioxins and furans for about 10 days in late February and early March of 2007.

The other two allege cooling water discharged into Hamilton Harbor in February 2008 killed more fish than allowed in a standard test and the company failed to report the violation as soon as reasonably possible. The water charges fall under Municipal Industrial Strategy for Abatement regulations that require industries discharging persistent toxic substances into Ontario waterways to monitor themselves.

The ministry no longer issues news releases when it lays charges, but revealed its actions against the former Stelco plant in response to a Spectator request for information about heavy emissions from the coke oven battery on September 3rd 2008. It said the water charges were laid July 18th 2008 and the air charge on August 28th 2008. The next court appearance on the air charge is November 24th 2008. A pre trial hearing on the water charges is scheduled for January 28th 2009.

Hamilton Works has the only iron sintering furnace in Canada. In 2006, Stelco said that it was used to fuse 600,000 tonnes a year of fine, iron rich, dust into fist sized chunks that could be fed into the blast furnace, which produces molten iron used to make steel.

It is reported that SMBC joins Inter American Development Bank to support an A/B yen loan for Usiminas' power generation plans.

The Inter American Development Bank is to provide a loan in Japanese yen for the first time ever. The funds under an A/B structure loan will go to the Brazilian steel manufacturer Usiminas to finance investments in power generation.

The IADB will provide the A loan equivalent to USD 50 million. The B loan portion, as yet of an unspecified amount, will be arranged by mandated lead arranger Sumitomo Mitsui Banking Corporation.

Scrap steel buyers in Asia are canceling purchases after prices tumbled more than 80 percent in the past four months as demand slumps.

Mr Bob Garino director of commodities at the Institute of Scrap Recycling Industries Inc said that "There are buyers in China, India and Europe that are literally fighting for their survival. Steel prices have fallen off a cliff and they just don't have the money to honor their contracts.''

Sims Group Limited said in October 2008 that sales may fall and force an inventory write down. Mills in China, Japan, India and Korea, which account for more than 50 percent of global output, are slashing production as the economic slowdown curbs demand from builders and carmakers.

Mr Jeff Allman MD of ferrous trading at Kataman Metals Inc said that prices fell to USD 120 a tonne from USD 730 a tonne in July. He added that there may be a global ferrous, or steel rich, scrap oversupply of more than 5 million tonnes.

Japan Ferrous Raw Materials Association said that scrap iron and steel prices in Japan slumped 25% to JPY 10,518 a tonne from a week earlier. The price has fallen 77% since the start of October. Prices in Korea dropped 27% in August from July.

Mr Suppakit Varnapurna steel scrap manager at SCT said that, in Thailand, 600,000 tonnes of the material are idled in yards because steelmakers have cut production and aren't using the raw material.

Mr Jim Lennon head of global commodities at Macquarie Bank feels that one may see further production cuts if steel prices continue to slide.

He said that "We have had a catastrophic fall in demand for steel and metals over the last two months. So it production cut is very much due to the credit crunch but also we have seen a major fall even in demand for cars and also construction activities. The move by the steelmakers to cut production has been necessary to halt to the price slide. We still do not know whether they have done enough but we will find out between now and the end of the year. If the prices continue to slide, you will see further cuts in Q1."

He said that "We have had a catastrophic fall in demand for steel and metals over the last two months. So it production cut is very much due to the credit crunch but also we have seen a major fall even in demand for cars and also construction activities. So we have seen, roughly speaking, around 10% to 15% cuts in global steel production in Q4 of this year."

He added that "Steel prices globally, on a spot basis, have more than halved since they peaked in late June early July 2008. Hot rolled coil, for example, was trading up at USD 1,200 per tonne on a spot basis, today it is trading down at USD 650 per tonne. The move by the steelmakers to cut production has been necessary to halt to the price slide. We still do not know whether they have done enough but we will find out between now and the end of the year."

Nearly 1.2 million jobs have been lost in 2008. The unemployment rate is at its highest level since 1994. Retail sales were dismal last month and for automakers, October was the worst month in more than a quarter century. But United States is still not officially in a recession. That’s because a recession is only defined by a group of academics called the National Bureau of Economic Research.

Mr Dennis Lockhart president of Federal Reserve Bank of Atlanta said that "The data indicate we are in recession, but heck, even Fed chair Mr Ben Bernanke does not get to make the call. According to the NBER’s website, a recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale retail sales."

Mr Sean Snaith director of Institute for Economic Competitiveness at the University of Central Florida in Orlando said that "It is academic at this point. It might just settle a few bets in the faculty lunch room. The credit freeze was the death blow that pushed an economy that was teetering on the edge of recession into one."

He said that now to be fair, the NBER has to be responsible. It would have been unwise for these economists to rush to declare a recession as soon as it started to see signs of weakness that alone could get consumers and businesses scared, creating a self fulfilling prophecy.

In addition, even though the NBER describes itself as nonpartisan and unbiased, it surely did not want to drop the R-bomb in the middle of a presidential campaign.

The NBER came very late to the recession party in the early 1990s as well. It announced the start of the 1990 recession in April 1991 and later decreed that this recession actually ended in March 1991.

The Linde Group achieved an 11% YoY increase in sales in the nine months to September 30th 2008, after adjusting for exchange rate effects, to EUR 9.392 billion and a 12.9% YoY increase in operating profit, after adjusting for exchange rate effects, to EUR 1.910 billion. Compared with the prior year period, the operating margin at group level improved by 50 basis points to 20.3%.

Dr Wolfgang Reitzle CEO of Linde AG said that "Our steady business performance is the result of the successful restructuring of our Group. The economic crisis has not yet had an impact on us. We are still on track. To meet our medium-term targets despite the expected economic downturn, we have already launched a new program for sustainable process optimization and productivity improvement. In the next four years, starting in 2009, this integrated program will result in a reduction in gross cost of between EUR 650 million and EUR 800 million."

If exchange rate effects are not taken into account, the increase in Group sales in the first 9 months of the year was 4.8%, given sales in the first 9 months of 2007 of EUR 8.958 billion. On the basis of reported figures, group operating profit increased by 7.9%, given sales in the first 9 months of 2007 of EUR 1.770 billion. Earnings before taxes on income at September 30th 2008 were EUR 796 million, which was lower than the figure for the prior year period of EUR 1.109 billion.

Earnings after tax in the first 9 months of the year were EUR 593 million. Earnings attributable to Linde AG shareholders were EUR 552 million, giving earnings per share of EUR 3.29.

As a result of the group's good business performance in the first 9 months of 2008, cash flow from operating activities also improved significantly when compared with the prior year period, by 11.2% to EUR 1.301 billion.

It is reported that global flat rolled price keeps on dropping but recently it has been falling at a slower rate.

China’s secondary steel mills are offering USD 450 per tonne while primary steel mills are offering USD 500 per tonne at present. It’s said that Ukrainian steel mills are even offering under USD 400 per tonne CNF but this has not yet been confirmed.

However, the highest price of HRC was USD 1,200 per tonne CNF but it plunged quickly during the past 4 months because buyers adopted a wait-and-see attitude, coupled with weak demand. Moreover, with the price of PRQ level HR being higher, buyers are not interested.

Russia and Ukraine would like to divest its stocks but Taiwan is reluctant to buy even with the HR price down to USD 400 per tonne CNF.

(Sourced from YIEH.corp)

Noble Group has announced record group revenues of USD 29.3 billion and USD 9.4 billion for the 9 months and third quarter ended September 30th 2008. Revenue growth continues to be well diversified with each of the 4 business segments reporting revenue increases of between 65% YoY and 110% YoY as compared to the corresponding 9 months levels for 2007.

Group tonnage volume rose to a record 108.2 million tonnes, a 20% YoY increase for the 9 months ended September 30th 2008, led by double digit increases in the Group's bulk commodity divisions namely iron ore, coal and coke, and grain as well as from its clean fuels and carbon credits divisions.

Group gross profits rose to a record USD 1.15 billion for the first 9 months 2008 as compared to USD 531 million for the corresponding period in 2007 with key core business segments each reporting significantly improved results. Profit diversification continues with three of our business segments roughly accounting for 25% to 35% of group gross profits followed by our MMO segment accounting for 13% of the aggregate Group gross profits.

Gross profits for the third quarter 2008 were USD 375 million as compared to USD 203 million for the third quarter 2007. Gross profits for the 9 months ended September 30th 2008 reflected the highest nine months total in the group history while the third quarter 2008’s gross profit level represented the second highest quarterly ever.

Noble’s net income for the first 9 months 2008 was USD 438 million as compared to USD 160 million for the corresponding period in 2007. Net income for the first 9 months 2008 included two one off gains on disposal of shares in the amount of USD 66 million, but even excluding that effect, the first nine months net profit was more than double the level for 2007.

Mr David Eldon chairman of Noble Group said that "Our third quarter and year to date results continue the remarkable performance the company has reported over the past several years. Noble's strategy has not only positioned the Company to pursue a strategy focused on building a long term sustainable business, but to do so while maintaining strong liquidity, a very conservative and prudent capital structure, and access to funding and trade lines to pursue future growth."

Mr Eldon added that "We have long considered Noble's diversified operations as a key strategic and operating strength. Now with certain markets demonstrating reduced economic activity, and with a heightened risk environment, Noble’s diversified operations by revenue and profit mix, by origination and destination markets and by the breadth of our global customer base create a competitive advantage to narrower business models. Despite the market pessimism, and lower commodity price levels, Noble continues to be well positioned to capture market share and grow its business."

The return on average shareholders’ equity was 33.9% for the 9 months ended September 30th 2008 as compared to an 18% return on equity for the corresponding period in 2007.

Hyundai Engineering Co Limited said that its consortium had won a USD 400 million oil refinery project in Algeria.

Hyundai said in a statement that it had partnered with Hanwha Engineering and Daewoo International Corporation on the project to expand an existing oil facility at Arzew in Algeria.

Mr Luis Alberto Echazu mine minister of Bolivia said that it is bracing for what it expects will be an extended slump in prices for zinc.

Bolivia announced last month that it would buy zinc from tens of thousands of independent miners at a rate above plunging international prices in a bid to keep them at work as the global financial crisis slows demand for industrial metals.

Mr Echazu said that "I think the zinc crisis is going to last it could probably affect other minerals, but we are not facing a dramatic crisis because of mineral prices yet. Tin and zinc production employ between 80% and 90% of the mining work force." He added that the government is also keeping a close eye on the tin industry and it could step in to stabilize prices if they fell substantially from current levels.

Mr Echazu said that roughly 60,000 miners work independently in the industry, including some 35,000 in zinc mines and about 15,000 extracting tin. He added that "At least two groups of independent miners have stopped operations in Oruro, and five smelters in Potosi would close down this month."

Mining is a pillar of the Bolivian economy. It exported nearly USD 1.4 billion worth of minerals in 2007. Bolivia exported USD 606 million worth of the metal in the first 9 months of 2008.

BHP Billiton said that the USD US2.2 billion expansion of the Worsley alumina refinery in Western Australia is on track despite financial and commodity market turmoil.

Mr Peter Ogden spokesman of BHP Billiton said that "We are on budget and on schedule with the Worsley efficiency and growth expansion project.''

The expansion is expected to lift the capacity of the refinery from 3.5 million tonnes per annum to 4.6 million tonnes per annum from the first half of calendar 2011.

Mr Ogden said that it continued to target production at 100% capacity' from Worsley.

Japan's electric steelmakers Kyoei Steel Limited and Chubu Steel Plate Co reported their consolidated earnings results for April to September 2008 period, in which the two companies won an increase in income but suffered a decrease in profits, affected by increased costs of raw materials.

But both companies have made upward revisions of their consolidated earnings prospects for the whole of fiscal 2008 in the wake of a plunging ferrous scrap market since August 2008, which will bring each company an increased net profit.

Kyoei Steel Limited announced its consolidated results of JPY 115,655 million in sales for April to September 2008 period, by up 31.5% YoY, operating profit hits JPY 7,119 million, down by 20.5% YoY, pretax profit of JPY 7,774 million, down by 15.4% YoY and net profit of JPY 3,875 million, down by 36.8% YoY. Its shipments of steel products decreased by nearly 60,000 tonnes or 5.9% YoY, but their average price increased by JPY 25,000 per tonne as compared with the same period of 2007. The average cost of ferrous scrap rose by nearly JPY 23,000 per tonne.

For fiscal 2008, Kyoei Steel describes its consolidated earnings prospects as JPY 195 billion in sales, up by 7.4% YoY, operating profit hits JPY 23 billion, up by 33.8% YoY, pretax profit of JPY 24 billion, up by 36% YoY and net profit of JPY 13.5 billion, up by 22% YoY. The prospects represent revisions of the earlier ones to meet an enlarged spread between what the company charges for steel products and what the company pays for ferrous scrap in falling prices of ferrous scrap. A downward revision by JPY 40 billion applies to sales, but there are upward revisions by JPY 6,000 million in operating profit, by JPY 6,000 million in pretax profit and by JPY 3,100 million in net profit. As a result, the group net profit is projected to increase by 22% YoY in contrast with the initially forecast decrease by 6.1%.

Chubu Steel Plate Co announced its consolidated results of JPY 40,729 million in sales for April to September 2008, up by 35% YoY, operating profit hits JPY 3,038 million, down by 3.3% YoY, pretax profit of JPY 3,037 million, down by 2.2% YoY and net profit of JPY 1,052 million, down by 35% YoY.

For fiscal 2008, Chubu Steel estimates its consolidated results at JPY 84.9 billion in sales, up by 31.5% YoY, JPY 14 billion in operating profit, up by 122.2% YoY, JPY 13.9 billion in pretax profit, up by 121.5% YoY and JPY 7,000 million in net profit, up by 100.3% YoY. The estimated figures are upward revisions of the earlier forecasts by JPY 7,500 million in operating profit, by JPY 7,500 million in pretax profit and by JPY 4,000 million in net profit.

(Sourced from Tex Reports)

Focus News Agency reported that General Labor Inspectorate State Agency had consulted both with Kremikovtzi steel mill management and syndics about the dates and stages to stop production in Kremikovtzi.

Mr Galab Donev executive director of GLI said that "Kremikovtzi management has not asked for larges scale retirement as it is written in Labor Code. General Labor Inspectorate State Agency has made a periodic control of all steel mill's manufactures and different measures were imposed during the years. Special regime was introduced in some of the manufactures in the recent months."

Bloomberg reported that Rio Tinto Group is reviewing plans to build a USD 10.6 billion aluminum smelter in JV with Saudi firm Maaden in Saudi Arabia and may delay the project by as much as a year.

Mr Dick Evans CEO of Rio Alcan unit said that “We are taking a step back to see how to optimize the project. Rio and its partner Ma'aden, may find significant savings in the USD 11 billion budget.”

However a source working on the 740,000 tonne per year smelter project said before Mr Evans made his remarks that Maaden would still push it through with or without its partner should Rio decide to drop it. A Maaden executive could not confirm if Rio Tinto is considering abandoning the plan.

It may be noted that the world largest producers of aluminum, iron ore and steel are cutting output and reviewing investment plans as the global economy slows and commodity prices decline. United Co. Rusal earlier said that 75% of companies making the metal in China, Europe and the US were unprofitable after the price plunged.

It also added that the costs for the Saudi project climbed from an initial estimate of USD 7 billion as raw material and energy prices increased. Rio sees an opportunity to cut building expenses now that commodity prices have dropped.

Arabian Business reported that Rio Tinto’s Alcan USD 2.3 billion aluminum project in Oman which will hold a production capacity of 365,000 tonnes per annum is set to be completed in the first quarter of 2009.

Mr Richard Evans CEO of Alcan said that the plant in Sohar which is already 50% complete would not be stalled by the dip in aluminum demand resulting from the global economic turmoil.

Speaking on the sidelines of the Arab Aluminum conference and exhibition held in Dubai, Mr Evans said that the plant would have the potential to double its capacity within two years once sufficient supplies of gas were in place to power the plant. But he added that Rio Tinto was taking a bit of a pause for a few months to review the capital costs of a USD 10.6 billion aluminum JV in Saudi Arabia with Saudi firm Maaden.

He further said that Rio Tinto was assessing the correction in steel prices for the project which would have a capacity of 700,000 to 720,000 tonnes per annum with the potential to double that in the longer term.

Pakistani media reported that the Pakistan Steel Re Rolling Mills Association has urged the government to ensure availability of quality raw material at affordable prices and exempt the steel industry from 35% letter of credit margin on import of raw material.

The demands were voiced at the annual general meeting of the PSRMA at the Lahore Chamber of Commerce and Industry on November 9th 2008.

The association members said continuous supply of power and gas to the steel industry could help put economy back on the track. They urged the government to reduce power tariff and eliminate sales tax on gas. They added that withholding tax at the rate of 3.5% on sale and supplies and 10% advance tax should be withdrawn. They said inconsistent, unjustified and drastic changes in the pricing and distribution policy with respect to billets by the Pakistan Steel Mills were causing shockwaves and distortions in the market. They sought a special procedure for collection of income tax.

Reuters reported that Saudi Basic Industries Corporation expects its fourth quarter earnings to be hit by a rapid slide in prices and a slowdown in demand due to the global financial crisis. Saudi Basic Industries Corporation had posted its first quarterly decline in profits in more than two years in the third quarter.

Mr Al Mady CEO of SABIC said that "The prices curve nosedived from September 1st 20008 to today. Prices of polypropylene and polyethylene for instance were above USD 2,000 now they are below USD 1,000." He added that SABIC was expecting a global slowdown in both demand and prices to start affecting the market in 2009.

Mr Mady also noted that the decline in demand will bring costs down but the decline in costs will not be enough to compensate a drop in revenues resulting from lower prices.

Bloomberg reported that Saudi Aramco will cut crude supplies to Asia in December 2008 for the first time in at least a year as demand slumps for naphtha and diesel fuel.

The report citing refinery official said that Saudi Aramco will reduce shipments to Japan, South Korea and Taiwan by 5% to 6% below levels agreed under annual contracts.

Saudi Arabia, the biggest producer in the Organization of Petroleum Exporting Countries, and other members agreed on October 24th 2008 to lower output quotas by 1.5 million barrels a day, the first cut in two years after global demand fell. OPEC is attempting to bolster crude oil prices that have plummeted 56% since reaching a record USD 147.27 a barrel on July 11th 2008.

Tehran Times quoted Mr Parviz Fattah energy minister of Iran saying that Iran is not only self sufficient in designing, building and operating dams and power plants but also the country has won some international bids in competition with foreign firms.

Mr Fattah said that “Constructing wind power plants and repairing some refineries in Armenia and Syria, implementing Halab 6 kilometer long tunnel, constructing dams in Tajikistan, inking contracts for building dams and power plants in Iraq, Bangladesh and Mali are some examples of Iran technical and engineering services exports.”

He further said that “An Iranian Company won an international bid to construct two 40 MW units in Muscat refinery at the cost of USD 90 million in 2006. The units are 68% complete now which shows a suitable trend of progress.”

Arabian business reported that Dubai Aluminium Company, Dubal has a production target of 1 million tonnes for 2009 up 4% from 2008 but may review it due to the global financial crisis.

Mr Abdulla Kalban CEO of Dubal said that a slowdown in the global economy would push demand down significantly lower but Dubal was committed to pushing forward its projects.

He said that "It's 1 million tonnes in my mind and we haven't changed that target yet. With this financial crisis we will have to see how it goes. we have a board meeting in December 2008. We will know by then."

Mr Abdulla Kalban CEO of Dubai Aluminum said that “With these market conditions I think we have to revise it.''

Mr Kalban further said that Dubal smelter is producing about 20% less than full capacity after a power outage on November 2nd 2008, it will take about six to eight weeks to restore full output of 960,000 tonnes, no units were damaged and no one was injured.

Dubal and its partners in the Emirates Aluminum project in Abu Dhabi are sticking with a plan to build a plant that will produce 700,000 tonnes of aluminum a year from 2010. A planned second phase to double output is being studied.

Reuters reported that Libya will begin building in January 2009 a USD 5 billion economic zone for energy firms operating in the country. It added that the planned Smart Energy City is joint project between Libya's state Fund for Economic and Social Development and Bahraini Islamic investment bank Gulf Finance House.

Gulf Finance, which invests according to Islamic principles envisages a USD 3.8 billion investment in the zone to be built 70 kilometer west of the Libyan capital Tripoli on the Mediterranean Sea. The energy city would provide business infrastructure for oil and gas producers, refiners, and companies involved in shipping, energy trading and support services.

Mr Hamed al Houtheiri CEO of Fund for Economic and Social Development said that "The preparatory works for the project are completed and the project will be launched in earnest in January 2009 and the total costs of the project are USD 5 billion."

Mr Esam Janahi chairman of Gulf Finance said that "Between three and five years are needed to complete the whole project and the first stage to build the basic infrastructure would take 18 months. Our project meets the needs of most oil and gas companies. Our study showed they were interested in doing more business in Libya and wants to expand their operations."

Libya plans to nearly double crude oil production by 2012 with an investment of USD 30 to USD 40 billion. It also wants to become a major gas producer and aims to increase production to 3 billion cubic feet per day by 2010, with a potential for 3.8 billion cubic feet per day by 2015 as compared with 2.7 billion cubic feet per day now.

Arabian business reported that Dubai Aluminum is looking to buy stakes in mines in Cameroon and the Democratic Republic of Congo as it seeks to secure raw materials needed for aluminum production.

The report quoting Mr Abdulla Kalban president & CEO of Dubal state that it was considering the move as the Gulf region held insufficient reserves of raw material bauxite.

Dubal already holds a 25% stake in refinery projects in Guinea with its partners Global Alumina and BHB Billiton and is carrying out a feasibility study into the possibility of further projects.

MEED reported that Dubai's Roads & Transport Authority has received bids for an integrated rail transit study as the emirate considers building more rail routes to serve developments in the emirate and incorporating them into the proposed inter emirates rail link.

The bidders include Arup, Halcrow, Hyder Consulting, all UK based, and US based Parsons Brinckerhoff. Four metro lines are either planned or under way in the emirate. The first of these, the Red line, is under construction and is scheduled for completion in September 2009. The Green line is expected to open in October 2010. A JV of Parsons International and Systra is the consultant for both lines.

A high speed link, the Purple line, which could connect Dubai International Airport and the new Al Maktoum Airport at Dubai World Central in the Jebel Ali area, is also planned pending the resolution of funding issues between the RTA and the Civil Aviation Department. Parsons Brinckerhoff was appointed as the consultant for this scheme in 2007.

A fourth line, the Blue line will also link the two airports but will not be a high speed connection. It will run in parallel to Emirates road and serve the Dubai land area. The tender for the consultancy role has yet to be tendered.

MEED reported that official documents has reveal plans to open first phase of rail link in 2011 and the entire network by 2015.

The report said that UAE plans to complete the first stage of the long awaited inter emirates rail network by mid 2011 with the entire network complete by late 2015. The project will be managed by a new agency known as Union Railway. The first phase will be 573.5 kilometers in length and will serve Abu Dhabi and parts of Dubai. The second phase will be 246 kilometer and will serve other parts of Dubai, the northern emirates and the east coast.

The backbone of the network will be an inland line that will run from Ghuweifat on the Saudi Arabian border, past Ruwais and through the desert to Ras al Khaimah. Spur lines will serve Mussafah, Abu Dhabi airport, Khalifa Port and Taweelah, Jebel Ali, Dubai and Sharjah, Al Ain in Abu Dhabi's eastern region and Fujairah and Khor Fakkan on the east coast.

According to the plans, construction will be broken down into six stages that will be carried out in two phases.

Stage one covers the line connecting Mussafah and Taweelah. Tenders for this section are expected soon as an award is scheduled for mid 2009 with actual construction due to start in early 2010. Completion is set for mid 2011. An award for stage two, from Taweelah to Jebel Ali, will be made at the same time but construction will not start until the final quarter of 2010. Completion of this section is also scheduled for mid 2011. Stage three, from Mussafah to Ruwais, and stage four, from Ruwais to Ghuweifat, will be awarded in early 2010. Construction of stage three will start in early 2011 and completion is set for mid 2012. Work on stage four will start in late 2011 and finish in late 2013.

Stage five, which will be part of a second phase of work will run from Jebel Ali to Port Saqr in Ras al Khaimah. An award is expected in mid 2010 with construction starting in late 2011 and ending in early 2014. The final sixth stage, which is also part of phase two will run from the Ghayl junction through Fujairah to Khor Fakkan on the east coast. It will be awarded in early 2010 with construction starting in early 2011 and completion set for early 2015.

A German consortium of Dornier Consulting, Deutsche Gesellschaft fur Technische Zusammenarbeit and De Consult has prepared a feasibility study for the project on behalf of the Planning & Economy Department.

MEED reported that the Mecca light rail project is likely to be re tendered following concerns that the timeframe for the project is unrealistic. Only two of the four invited local firms submitted bids for the estimated SAR 6 billion 14 month engineering, procurement and construction contract. It also added that sources close to the project said that both Saudi Binladin Group and Al Harbi Trading & Contracting submitted bids above budget, at more than SAR 10 billion.

The client, the Municipalities & Rural Affairs Ministry had also invited Saudi Oger and Al Mabani General Contractors to bid for the work, but neither firm submitted an offer by the deadline of the end of October 2008. According to one of the contractors, they decided not to bid due to concerns over the timetable of the project saying that the execution period of the project was simply too tight and thus made a decision at the last minute not to submit. It is understood that Municipalities & Rural Affairs Ministry is now considering extending the project duration by a further 10 months to 24 months.

The light rail system will be 19 kilometers in length and will link the holy sites at Mecca, Mina, Muzdalifah and Arafat. It will have capacity for up to 90,000 passengers an hour. The design for the light rail system was carried out by the French firms Systra and Egis Rail.

MEED reported that Iran is seeking to raise up to USD 4 billion in private sector investment to assist with the construction of the Tehran Metro, after deciding to expand a pilot scheme launched earlier this year to fill a funding shortfall on the project.

Under the pilot scheme, local firms are offered development land around the site of a proposed station in exchange for building the station itself. This is now being expanded to potentially cover all 350 inner city and suburban stations planned for the 370 kilometers of new lines. At an average cost of USD 11 million for each station, the total bill for the stations is almost USD 4 billion. At present, the cost of the metro is due to be split evenly between national and local governments.

An official at the Tehran Urban & Suburban Railway Company said that "I do not think we will get developers for every station, but the stations are one quarter of the total cost of USD 16.7 billion, so we want to cut the government's share of the cost."

Tehran Urban & Suburban Railway Company struck a USD 300 million deal with local finance group Fina in October 2008 which will see Fina build three stations over three years in central Tehran, the fourth such deal this year. Iran is struggling to attract foreign capital due to international sanctions and progress on the metro has been extremely slow.

It is reported that Bahrain's public and private sector institutions have won praise from Kobe Steel for safe and timely delivery of heavy lifts machinery to its palletizing plant expansion project site in Hidd.

Abnormal Load Engineering Bahrain, a heavy lifts specialist company had transported the oversized machinery and Alsharif International Freight Services organized all forwarding and other related work. The equipment weighing up to 186 tonnes was moved across the Shaikh Khalifa bin Salman causeway from Mina Salman to Hidd over several days by special hydraulic low bed trailers.

Officials said the operations were carried out in close co operation between Customs and Ports authorities, Roads Directorate, Bridge and Maintenance department, the ministries of Works, Interior and the Traffic Directorate.

Kobe Steel, the main contractor for the construction project is awaiting more such equipment. A 167 tonne shell kiln was successfully moved to the Gulf Industrial Investment Company project site as part of the operations.

Mr Andris Piebalgs energy commissioner of Europe has expressed hope that Europe and Turkey would reach a deal in January 2009 on transit terms to make the planned Nabucco gas pipeline a reality.

Mr Piebalgs, who held talks in Ankara with Mr Tayyip Erdogan Prime Minister of Turkey, Mr Abdullah Gul President of Turkey and Mr Hilmi Guler, the energy minister said that there was no disagreement over transit fees but that Turkey was concerned about its own energy supplies.

Turkey wants to divert 15% of Nabucco gas for cheap domestic use. As Azerbaijan is insisting on selling its gas at European market rates minus transit costs, the Nabucco consortium and its subsidiaries in Turkey, Bulgaria, Romania, Hungary, and Austria would be left to pick up the tab. The Nabucco pipeline, which will be one third financed by the owners and two thirds by banks is meant to diversify and lessen Europe dependence on Russian gas from 2013.

The project requires two million tonnes of steel, 200,000 pipes and more than 30 compressor units. The pipeline consortium Nabucco Gas Pipeline International Limited is equally owned 16.67% each by Austria’s OMV, Hungary’s MOL, Turkey’s Botas, Bulgaria’s Bulgargaz and Romania’s Transgaz and Germany’s RWE.

It is reported that India has sought an additional 5 million tonnes of liquefied natural gas from Qatar to meet its growing energy needs and has proposed to set up a gas fired fertilizer plant in the Gulf nation to meets its urea needs.

Mr Murli Deora petroleum minister of India said that a high delegation led by Mr Manmohan Singh Prime Minister of India was having talks with Qatari leadership for enhancing bilateral cooperation and met Mr Abdullah bin Hamad al Attiyah deputy Prime Minister and minister of Energy and Industry of Qatar.

Mr Deora said that "We had an excellent one hour meeting. Mr Attiyah is a great friend of India and promised to look into our LNG needs."

India currently buys 5 million tonnes a year of LNG from RasGas of Qatar under a 25 year contract. The ex ship price of USD 2.53 per million British thermal unit is considered a steal in current times of LNG prices breaching USD 20 per million British thermal unit.

It may be noted that when other nations has sought review of gas price when crude oil prices spiked, Qatar stood ground and also came to New Delhi rescue when it agreed to supply 1.5 million tonnes of more LNG on a short term contract to restart the beleaguered Dabhol power plant in Maharasthra.

Arabian Business reported that the GCC aluminum industry is set to produce 20% of global aluminum production by 2020.

The report quoted Mr Sheikh Hamdan bin Rashid al Maktoum deputy Ruler of Dubai & minister of Finance of UAE also chairman of Dubai Aluminum as saying that "A number of GCC countries are chalking out plans and feasibility studies to further develop the industry to play a pivotal role in their national industries towards this end, they are also pumping huge investment in the industry to boost their output capacity and sharpen its competitive edge at global markets."

He added that huge investment in the industry will sharpen the competitive edge of the region in global markets and present major opportunities for the future.

Bloomberg reported that Chinese steelmakers, the largest producers in the world, may cut output by 20% next year even with China's CNY 4 trillion stimulus plan.

Mr Zhu Jimin Chairman of Shougang's at a conference said “The steel market needs time to recover even with the stimulus plan. No one can tell how long it will take at the current stage.''

The China Iron & Steel Association said the Chinese government announced the stimulus plan on November 9th to revive growth in the world's fourth largest economy, and will invest in housing, railways, roads and airports. All Chinese steelmakers were unprofitable in October.

Mr Helen Wang a Shanghai-based analyst at DBS Vickers said “Demand is slowing and inventories are piling up. Steel producers cutting output reflects expectations of lower demand from end users. He said that of a 20% decline in output next year may be exaggerated.''

Mr Feng Zhang JPMorgan Chase & Co analyst said the stimulus plan may revive demand in 2009. He said that “We are in a demand-driven down cycle, with steel prices falling despite negative steel production growth. With a $586 billion stimulus package on its way, we believe steel demand is more likely to recover than contract.''

It is reported that China exported steel products of 4.62 million tonnes in October down by 2.05 million tonnes from a month before or up 380,000 tonnes or 8.98% YoY.

Through October, the cumulative export of steel products totaled 53.12 million tonnes down by 1.2% YoY valued at USD 55.6 billion up 49.8%.

Steel product import was 1.15 million tonnes down 9.45% from September or down 4.96% from the same period last year; cumulative import through Oct was 13.47 million tonnes down by 5% YoY. Net export of the steel product thus went to 3.47 million tonnes for October down by 35.74% from September or up 440,700 tonnes or 14.55% YoY.

In October alone, export of steel billet/slab was 110,000 tonnes, taking the total export through October to 1.24 million tonnes down by 79.8% YoY; import of steel billet/slab was 20,000 tonnes or 150,000 tonnes for January to October down by 24% YoY.

It is reported that the HRC market continues to appear slack in Nov with further price slips.

According to Mr Wu Haiyun GM of Shanghai Baoqiao Metal & Material Co Ltd, three disadvantages would trap the HRC market in continued fluctuations, and it's possible that the spot market price may fall to CNY 2500 per tonne.

1. Slowing economic growth resulted from the global financial crisis. Export-oriented enterprises are said to face tough trial, citing poor sales and output cuts at the home appliance and automobile companies. This is definitely reducing demand for HRC.

2. Financial strains facing the steelmakers, who are forced to abate the price further. It's common to see steelmakers in low water in November to December and this year in particular has witnessed an increased loss-making scope among the industry. Coupled with stagnant sales, piled up resources, the steelmakers have to offer lower price to draw attention from the downstream users, while this has dragged down the spot price further.

3. Next year's benchmark iron ore price is likely to drop, which is to pull down the HRC prices. It's predicted China's crude steel output would reach 500 million tonnes this year and 475 million tonnes for pig iron up by 2.2% and 1.2% respectively only, the lowest growths since 2000. Forecast says growth of steel output in 2009 would remain low, around 5%, posing new iron ore demand of about 36mt, which would almost be satisfied by homemade resources. In such case, the iron ore price for 2009 to 2010 will definitely drop.

Mr Wu considered above three reasons would contribute to lower HRC prices, and predicted the price in Shanghai market to head lower to CNY 2800 per tonne in November and CNY 2500 per tonne in December.

(Sourced from MySteel.net)

It is reported that despite recent production cuts, steel mill inventories remain under pressure as end user demand has collapsed.

While the mills are lowering prices to clear inventories, the buyers' strike continues as traders wait further price falls.

Even more severe production cuts may be expected in the short term as mills struggle to clear inventories. This de stocking is particularly severe as mills will try to work down stocks, not just to previous levels but to even lower levels in the face of uncertain demand.

Over the past week, the hot rolled coil price dipped to USD 419 per tonne ex-vat down by 1.5% from last week and cold rolled coil reported at USD 535 per tonne ex-vat, down by 2.3% from last week.

Index iron ore spot prices rallied last week for the first time in many months. The two main index providers, Platts and Metal Bulletin, both reported a small recovery. Platts' 62% Fe price rose to USD 60.00 per tonne CFR to USD 60.50 per tonne CFR while the Metal Bulletin quote hit USD 61.55 per tonne both up 5% on the week. There appears to have been a rise in the volume of orders for the first time in a while, perhaps signaling an easing of the credit squeeze, which has hit demand in China.

Reported stocks of iron ore remain high, but current shipping schedules suggest a major collapse in Chinese iron ore imports in November and December; Vessel line-ups suggest a 20% to 25% reduction in Australian and Brazilian iron ore exports in November and December from levels of a few months ago; and Indian exports are down by 80% YoY.

Along with the major fall in global and Chinese aluminum prices, we hear of a steep decline in aluminum raw material input cost including price drops in alumina, carbon anodes and thermal coal. As a result, we note some temporary relief on smelters' cost margins.

(Source: Mineweb)

It is reported that Chinese local CRC price is still slipping down and the downward trend is to spread into early next year. There are still few activities on export market and there is no expected to any improvement in November.

On Shanghai market, 1.0mm CR sheet by Anshan steel goes at CNY 4100 per tonne down by CNY 50 per tonne from last Friday; 1.2mm to 2.0mm material at CNY 3950 per tonne a decrease of CNY 70 per tonne. While that for 1.0 CR coil by Maanshan steel remain flat at CNY 3750 per tonne.

Export offer for DC01 1.0mm CRC goes at about USD 600 per tonne FOB which compares with USD 620 per tonne to USD 650 per tonne FOB early this month. Steel makers probably would lower quotation again taking into account further substantial drop in domestic market price and sluggish demand.

(Sourced from MySteel.net)

According to Mr Luo Bingsheng vice chairman of CISA, China Iron and Steel Association submitted a written statement to the government and suggested that China shall adjust the current steel export policy to encourage the exports of more high value added products.

Gloom market worldwide also hits China's steel exports. Domestic steel enterprises are reducing productions generally, some even halt. Beijing is investigating the industrial crisis and loss that spreads in different areas including Shandong province.

CISA suggests controlling the total gross of steel exports and increasing the export rebates to encourage the exports of high value added products whereas to limit the exports of low value-added products.

China exports 10% of the total steel output annually. But currently, the export orders for steel products in Q4 this year and Q1 next year is reported reduced a lot.

(Sourced from MySteel.net)

The General Administration of Customs said that China recorded a trade surplus of USD 35.24 billion in October 2008 as against USD 27.05billiob a year earlier,

Exports in October rose by 19.2% YoY to USD 128.33 billion while imports were up by 15.6% YoY to USD 93.09 billion.

In the 10 months to October, the trade surplus stood at USD 215.99 billion. Exports rose by 21.9% YoY in the first 10 months to USD 1.2023 trillion while imports were up by 27.6% to USD 986.34 billion.

It is reported that falling iron ore market has not cooled off Chinese leading steel mills' enthusiasm to develop ore mines overseas. And China Business News learned from Wuhan Steel Group recently that the steelmaker has inked an agreement with Madagascar to develop local mineral resources with another company in Hong Kong.

Madagascar is the world's fourth largest island with rich mineral resources. To develop & construct overseas strategic resources base, Wuhan Steel has set up a JV with HK listed Kam Hing International Holdings Limited in Hong Kong under the name of Wugang Kam Hing Co Ltd and conducted a feasibility study about the mines development in the island country.

Kam Hing International has acquired the prospecting and mining rights in Bekisopa regions in Madagascar with total area of 287 square kilometer at the end of last year. And the JV is to develop the mines there.

Xinjiang Daily reported that Shougang Group and its subsidiary Shougang Co Ltd have signed a cooperation framework agreement with Xinjiang government Sun to carry out broad cooperation in railway, coal and steel sectors etc.

As per the agreement, the two steelmakers will pour nearly CNY 100 million in Xinjiang Uygur Autonomous Region to build Linhe-Hami railway, consolidating steel sector in Yili, developing and constructing coal base in Hami and joining in urban construction and real estate development in Urumchi etc.

Securities Journal cited Mr Qi Xiangdong deputy GM of CISA as saying that steel stocks have surged limit recently stimulated by the State Council's CNY 4 trillion bailout plan. The huge investment will help ease market panic and resume confidence. The move is slated to bring 100 million tonnes of steel demand, and the effect might be felt in the first quarter of next year given policy's hysteretic nature.

Mr Qi thinks the more important role for the bailout plan is to help boost up market confidence however it takes time to take effect. He said that the investment will bring large demand for construction steel, while high-end products will feel little of the effect.

Steel stocks have led increase in stock market for two straight days, and surged 8.73% on average recently of which 25 among the total 32 have surged limit. Wind Information shows there are 5 steel stocks that soared over 20% within 5 trading days. Wuhan Steel surged 19.03%; Angang soared 13.93% and Baosteel roared up 12.97%.

Mr Liu Yanqi analyst from Haitong Securities said the sharp steel stocks rally is stemming from panic slide in earlier days. And the upward room is determined by steel mills' profitability. Although it's almost certain that huge steel demand will come bolstered by the investment, spot steel market has witnessed wide-spread falls yesterday. And price for HRC has fallen to the level of that posted at the end of 2005. Therefore, it remains a difficulty to stabilize steel market.

Mr Xu Xiangchun Mysteel senior analyst said "The investment, covering policy related houses, rural infrastructure and highway, railway and airport etc, will bring at least 100 million tonnes of steel demand. However, this does not mean steel demand will see sharp rise next year, on the contrary, it may witness a moderate growth taking the negative effects brought by the contracting down stream housing, automobile and machinery sectors into consideration.”

Analysts said the new generated projects are slated to break ground in the first trimester of next year given winter weather, therefore, steel price is expected to experience a rebound following the Spring Festival next year.

(Sourced from MySteel.net)

China Knowledge reported that the Chinese government will further invest CNY 50 billion in railway construction before the end of this year.

According to Mr Yang Zhongmin director general of the planning department of the Railway Ministry, the Chinese government will invest CNY 50 billion more in railway construction from the original budget of CNY 300 billion in a bid to boost the domestic demand.

According to the ministry with the launch of a series of railway construction projects, the Chinese government will invest CNY 600 billion in railway construction projects neat year. 65 projects that are currently under review are expected to start construction in 2010 and the total investment is about CNY 1 trillion.

Mr Yang also noted that CNY 500 billion will be used to purchase locomotive and rail cars in the next four years. He said that the CNY 600 billion investment plan next year is expected to create 6 million jobs and contribute 1.5 percentage points to the GDP growth in China with huge demand for steel, cement, optical cable and communication equipments, etc.

It is reported that China's shipbuilding industry has been facing tough market conditions in the second half of this year and, to handle the problem, the Ministry of Industry and Information Technology has declared it will no longer approve new shipbuilding projects in principle in the near future.

As per report, by the end of September, domestic shipyards' new ship orders have topped 200 million DWT taking up some 35% of the world's total. To counter the risks of excess capacity, the ministry urged shipping industry to speed up the scrapping of old ships, optimizing industrial structure and promoting structural readjustment.

The ministry has released the recommendations for shipbuilders to keep stable and healthy development in current market conditions, urging domestic shipping sector to keep a close eye on the market condition and take effective precautions, speeding up the development of new designs, improving ability for independent innovation, strengthening monitoring and analysis of economic operating conditions and having a better understanding of the country's shipping trends.

(Source: Motor Ship)

It is reported that Jiangsu Yonggang Group Co Ltd has realized about CNY 31.08 billion of sales revenue in this first ten months up by 60.56% YoY from the CNY 19.35 billion of the same period last year.

As per report, market price for quality wire rods has plunged to CNY 3500 per tonne from the peak CNY 7000 per tonne against the backdrop of global economical recession and fluctuating home steel market.

To survive the market downturn, Yonggang has cut the purchase tonnages of high priced raw materials and halt scrap buying since August.

(Source: Yonggang Group)

It is reported that shipbuilding in Huzhou, a small town of Zhejiang Province near Taihu Lake is seeing a revival in recent days under the falling steel price.

In Huzhou Huaxi Shipbuilding Co, three ships have just been framed after being idled for nearly one year, during which most of the workers stayed in long vacation. Rising steel and oil prices had forced the river shipbuilding industry on a downward course since second half of last year. Yet, the shipbuilding steel prices started to fall from this May; ever since October, the drops have appeared frantic, till reach a five-year low. The highest level was over CNY 7000 per tonne but now it's CNY 3800 per tonne.

This drives the ship owners to return to the market and place orders. As reported, there are five to six ship owners each day calling to ask for price and book a seat. The recent one month is said to have seen some 60 ship orders in Huzhou, compared with 18 in January to September.

Considering a big cost difference, a ship owner meant to sell the current 300 tonnes carrier and build another of 600 tonnes.

(Source: Qianjiang Evening News)

It is reported that Benxi Steel officially put its newly built NO.8 coke oven into production recently indicating a breakthrough in its pre-steel-making facilities.

This No 8 oven is designed and built independently at home with annual capacity of 0.75 million tonnes of coke. As a supporting facility for the steel maker’s new No 1 furnace project, the oven boasts perfect performances in terms of automation, reliability and energy-saving & emission reduction, reaching world advanced level.

With construction started on September 28th 2006, Benxi Steel’s new NO.1 furnace project was completed on this October 9th with an annual designed pig iron output of 3.5 million tonnes. It is reported as one of the most advanced big furnace in China with a 4350 cubic meter of cubage.

(Source: Benxi Steel)

It is reported that Shahe City, Hebei province has stepped up efforts in obsolete capacity elimination in a bid to realize the annual energy-saving and emission reduction targets.

So far this year, the city has closed 9 outdated cement and steel equipments, including 7 cement kilns and 2 irons-melting BFs with combined obsolete capacity of 0.4 million tonnes and reduced sulfur dioxide emission by 400 tonnes.

As per the responsibility agreements signed with local government, 5 enterprises have finished the backout work for their cement kilns, while 2 iron smelting BFs from local Jinfeng Steel Group and Tenyue Steel are requested by the local authorities to shut down.

(Source: Hebei Daily)

China's government announced that it would extend its value added tax reform to all industries nationwide from January 1st 2009 to reduce the tax burden on companies by more than CNY 120 billion next year.

According to the state council, the VAT rate on mineral product will return to 17%. Mr Shi Weiping analyst of a security company said "Obviously, the country is hoping to protect its mineral resources with tax, and prevent the sector from expanding excessively. He added that this was beyond his expectation.”

Mr Shi said as this tax reform is to be carried out in 2009 it still has some influence to listed companies. He said that "But it exerts different influence on different enterprises. Those that posses mineral resources will be affected most, and those without mineral resources will remain immune."

The increase in VAT rate on mineral product represents the overall trend of the industry.

(Sourced from MySteel.net)

The board of directors of Huandian Power International announced, it had signed the frame agreement with Huainan Mining Industry on November 10th 2008 to purchase coal for its Anhui based power plant.

According to the frame agreement the board of directors estimated that from the valid date to December 31st and in the two fiscal years between December 31st 2008 and December 31st 2010, its total purchase value from Huainan Mining Industry would stay less than CNY 670 million, CNY 4 billion and CNY 4 billion respectively.

It is reported that Lingsteel’s HR rebar has been successfully used in the high-speed Beijing-Shanghai railway project and has become the high-qualified product without any problem in number and quality.

As per report up till the end of September, Lingsteel has provided 17 million tonnes HR rebars for Harbin-Dalian railway project, 2.9 million tonnes for the Beijing-Shanghai railway project. And Lingsteel has got good reputation for their qualified products.

TMK, one of the world’s largest oil and gas pipe producers and the market leader of the Russian pipe industry, announced that it concluded a strategic partnership agreement with Novatek covering the production and supply of premium threaded pipes.

Under the terms of the agreement, TMK-Premium Service is recognised as preferred supplier of tubular goods to Novatek.

Earlier this year, in September, TMK-Premium Service concluded a premium threaded tubular supply contract with Novatek. Between October and November, TMK will ship over 740 tonnes of 127mm OD TMK CS casing with 7.52mm wall thickness and 168.28mm OD TMK FMC casing with wall thickness of 8.94mm. These premium class tubulars will be used at Novatek’s Yurkharovskoye gas condensate field, located within the Arctic Circle in the Yamal-Nenets Autonomous District.

Mr Sergey Chetverikov director of TMK-Premium Service said that “We are pleased that TMK is the only Russian producer of premium threaded tubulars to be chosen over international pipe producers as preferred supplier. TMK provides a range of tubulars and services that are comparable to what other major producers can offer”.

Novolipetsk Steel, the LSE listed leading Russian steel producer announces Q3 2008 Russian Accounting Standards financial results for its major companies.

NLMK Q3 2008 revenue grew QoQ due primarily to an increase in steel product prices and a larger share of high value added products in the Company’s sales structure.

The decrease in Q3 net profit quarter on quarter is attributable to a high level of Q2 proceeds accrued from dividends received from subsidiaries. If we ignore these gains from subsidiaries, Q3 net profit would increase by 47% on QoQ basis.

(In thousand RUB)

VIZ Stal
VIZ Stal Q3 2008 higher sales revenue on both a quarter on quarter and year on year basis is attributable to an increase in finished product prices as well as larger sales volumes of semi finished products for transformer steel production (full hard hot rolled steel) to NLMK.

Supplies of semi finished products from VIZ Stal to NLMK are carried out to enhance transformer steel production at both the Group’s sites and improve consolidated financial results.

Q3 2008 net profit grew quarter on quarter due to increased profits from operating activity and a positive foreign exchange effect. Net profit increase YoY was also driven by higher yields from forward contracts.

(In thousand RUB)

Stoilensky GOK
The growth of Stoilensky GOK’s Q3 2008 financial results on a YoY basis is due to an increase in iron ore concentrate and sinter ore prices.

A slight QoQ decrease in Q3 2008 net profit is caused by lower interests’ receivable due to dividend payments to NLMK.

%
(In thousand RUB)

Altai koks
The significant growth in Altai koks’ Q3 2008 sales revenue compared to the results in analysed periods is attributable to an increase in key product prices.

Q3 2008 higher gross profit on a QoQ basis is attributable to dynamic growth rates for coke chemical product prices against lower growth rates of raw material purchasing prices.

(In thousand RUB)

TMTP
Growth in Q3 2008 revenue and operating profit on a QoQ basis is mainly attributable to increased oil cargo volumes and a better mix of dry cargo as the company started to benefit from handling corn cargo.

A decrease in TMTP’s Q3 2008 financial results on a YoY basis was mainly due to a reduction in sales revenue caused by a change in transshipment structure and a decrease in dry cargo, metals and corn volumes.

(In thousand RUB)

NTK’s
The increase in NTK’s financial results in Q3 2008 compared to the periods under analysis is attributable to a growth in transportation by owned and leased railway cars. This enabled NTK to reduce railcar usage fees paid to Russian Railways, thus cutting transportation costs

(In thousand RUB)

Ukrainian Journal Staff Reported that Deteriorating exports, limited external financing and a credit crunch will lead to a 3% decline in Ukraine's economy next year compared to this year's 6% GDP growth, the International Monetary Fund forecasts.

The IMF said that about the approval of a USD 16.4 billion stand by loan to support of Ukraine's two year anti crisis program. Under the program, inflation is expected to decrease to 17% by end 2009 from the projected 25.5% this year.

Interfax China reported that Russia's oil exports have again become unprofitable in current conditions due to falling oil prices, December WTI futures cost USD 61.55 on November 7th 2008, and the export duty calculated given the oil price of USD 79.4, which suggests that Russian oil companies could again cut oil exports.

It is said that the number of formalized orders to export oil to the West in December is much lower than the contracted volumes in November. Usually orders to pump oil are made a month before. And now the volumes formalized fro December are very small."

Another source confirmed that contract prices were revised because of the export duty, which was set on November 1st 2008 at a higher level than oil companies expected. Companies are making no contracts for December so far.

The press service of Transneft and other oil companies made no comments on this information.

RIA Novosti cited the country's oil and mineral resource minister as saying that the Kazakhstan government plans to slash export duty on crude oil by 45% to USD 139 a tonnes.

According to the report, the move comes on the back of plunging oil prices amid the global financial crisis, and just one month since the government raised oil duty by 85% to USD 203.8 per tonnes.

Mr Mynbayev Minister of Energy and Mineral of Kazakhstan said that "the Ministry of Industry and Trade has already drawn up draft regulations, which propose cutting export duty on crude oil to USD 139 a tonnes and export duty on fuel oil from USD 130 to USD 95 per tonnes."

The minister did not give any details on when the new duties would come into effect.

Business daily Vedomosti reported that oil production in Russia will grow by 8% to 20% and natural gas by 42% by 2030 in line with Russia's draft energy strategy.

The draft, prepared by several research institutes and the Energy Ministry, will be submitted to the government in January after discussions and approvals.

In August the Economics Ministry set a task of ending the economy's dependence on raw material exports by 2020.

The paper said currently fuel and energy accounts for about 30% of Russia's GDP, 50% of budget revenue, and 64% of foreign currency receipts. Under the draft strategy, the sector's current share of GDP will remain unchanged until 2012. This will be a period of the quantitative build up of investment and resources to create potential for the economy's transformation.

The paper said for 2013 to 2020, the government plans a period of intense investment and innovation. During this period, the share of the fuel and energy complex in national GDP will drop to 25%. The period from 2020 to 2030 will see the economy's transition to innovation and environmentally friendly and efficient power engineering; the share of the fuel and energy complex is expected to contract to 18% of GDP.

The paper said the draft strategy pledges incentives to boost growth in private investment, as well as foreign capital and technology, which are expected to grow at least 5% in 2008 to 2012 and 12% to 15% by 2030.

It is reported that Sumy NPO ‘Frunze' SMASH UZ NR signed a USD 65 million contract to supply compressor equipment to Gazprom with delivery by July 2009. The equipment is for the Gryazovetskaya station which is the part of the Russian North European gas pipeline.

SMASH is one of the companies which successfully fills its order book despite the current difficulties indeed, SMASH’s ability to increase its production and sales volumes defines not only market demand for their products but also the company’s maintenance of a high degree of competitiveness in price quality ratio. We frequently hear that Gazprom intend to favor domestic Russian suppliers but SMASH consistently win competitive tenders. We see this news as POSITIVE.\

(Sourced from Millennium capital)

It is reported that the OAO Gazprom Board of Directors recently decided to elect Mr Oleg Aksyutin to the Management Committee of OAO Gazprom for a five year term.

Mr Aksyutin replaces Mr Bogdan Budzulyak in the position.

According to Gazprom order, Mr Bogdan Budzulyak was relieved of his post as Head of Gas Transportation, Underground Storage and Utilization Department in October 2008 due to his retirement.

Korean Yonhap cited South Korea's state run oil company as saying that it signed an exploration and drilling pact with its Uzbekistan counterpart that could help expand future resource development in the Central Asian country.

The Korea National Oil Corporation said that the deal with Uzbekneftegaz is a follow up on the broad understanding reached in May during Mr Han Seung soo PM of South Korean visit to Tashkent, and permits two dimensional seismic readings and drilling to take place.

It is reported that in January to October 2008 car production grew by 82% YoY to 77,720 cars. Despite increasing CKD production by 15.4% to 1,359 cars at its new Cherkassy plant the total car production of the Company dropped by 18.8% compared to September 2008 to 7,269 cars because of low market demand.

A significant increase of the enterprises account receivables in January to September 2008 financial results shows a decrease in cash flow from dealers that forced the Company to cut production in October. We keep our recommendation to buy the stock but the target price is reduced. A detailed report will be published soon.

Ukrainian Journal Staff Reported that Ukraine plans to move at least 120 billion cubic meters of Russian natural gas to markets in the European Union in 2009, on par with the record amount that is expected to be shipped in 2008.

Mr Oleh Dubyna, the head of the company said that “We pledged to move at least 120 billion cubic meter of gas in 2009. We will implement this.”

It is reported that Ms Yulia Tymoshenko PM of Ukraine said that her government is working on a gas supply agreement with Russia that would keep the price at the current level.

Ms Tymoshenko said that "we are at the moment working to retain the 2009 gas price as it is today. We are working on this, but an agreement has not yet been signed."

She said that last month the two countries had agreed Ukraine would pay a market price within three years. Gazprom said that last month the European price had reached an all time high above USD 500.

Russia has raised gas prices steeply since 2005, although at USD 179.50 per 1,000 cubic meters, Ukraine still pays less than the European market price. Russia’s gas export monopoly Gazprom had suggested it could double that price to around USD 400.


Disputes between Kiev and Moscow over prices and debts have led to gas supply cuts. One such cut in January 2006 briefly affected European countries, which receive just under a quarter of their gas needs from Russia via Ukraine.

MMC Norilsk Nickel has announced that it signed MoU with Cubaniquel. From the part of Norilsk Nickel the international document was signed by Mr Vladimir Strzhalkovsky GD and from the part of Cubaniquel by Mr Ricardo Gonzalez Sanchez, Vice Minister of MINBAS.

The signing ceremony took place during the working visit of Mr Igor Sechin, Vice PM of the Russian Federation, to a number of Latin America countries. Mr V Strzhalkovsky was a member of a group of Russian businessmen who accompanied Igor Sechin Vice Premier of Russian.

MoU confirms the Parties' decision to organize, in particular, exchanges of specialists in mining, marketing and environmental issues, exchanges of experiences in commercialization of Nickel products, as well as of information and consultations on prospective types of nickel products, on a regular basis, to meet the needs of basic consumers. MMC Norilsk Nickel and Cubaniquel agreed also on cooperation in the fields of geological prospecting of Nicaro Mines, in particular, to examine the stocks of solid serpentinites.

In order to stretch cooperation, Mr V. Strzhalkovsky MMC Norilsk Nickel GD Chairman of the Management Board and Mr Ricardo Gonzalez Sanchez Vice Minister of MINBAS agreed in the Memorandum to analyze this program of joint research at a meeting of Russian Cuban Intergovernmental Commission in January 2009.

As per report Mr Yuriy Boiko Former fuel and energy minister believed that the price of gas supplied from Russia to Ukraine may remain in 2009 at the current level of USD 179.5 per 1,000 cubic meters due to a drop in crude oil prices. He said that "the price of gas is really pegged to that of oil. Gas price depends on those of fuel oil and gasoline, which in their turn depend on the price of crude."

Interfax China reported that Cuba invites Russian companies to explore and develop Cuban oil fields.

Mr Felipe Perez Roque Cuban Foreign Minister said that "we want Russian enterprises to explore and develop Cuban oil fields both on the land and on the sea bed.”

He said that. "We want to stimulate Russian companies to operate in Cuba. Cuba produces about a half of the fuel it consumes. One of our priorities is to achieve energy self sufficiency. We should not import energy." He added that Military cooperation with Russia has a long history.

Mr Felipe said that "every Cuban effort seeks to defend its sovereignty. This activity threatens nobody."

He said that the current Cuban leadership wants to "inspect relations with Russia, to make then stronger. These relations are profitable for Cuba. Our relations do not depend on expediency and should not depend on either US Russian or US Cuban relations. Russian Cuban relations should get stronger.”

Russian RIA Novosti Novatek net profit calculated to International Financial Reporting Standards grew 47.9% YoY in January to September to RUB 20.23 billion.

Russia's largest independent natural gas producer said that its revenues in the reporting period grew 37.8% to RUB 62.7 billion. It said that its profit from oil and natural gas sales in the reporting period grew 36% YoY, reaching RUB 60 billion.

In January to September, Novatek increased natural gas output YoY by 9.2% to RUB 22.83 billion cubic meters.

Moscow Time reported that energy firm Sintez Group was suing German utility RWE for USD 1.41 billion for breaking its agreement to jointly buy electricity generator TGK 2.

According to the report, "Sintez Group has filed a claim against RWE in the London Court of International Arbitration in relation to RWE's breach of its obligations in relation to the joint acquisition of TGK 2 shares."

RWE said that it would not go forward with an earlier agreement to acquire TGK 2 jointly with Sintez, citing uncertain market conditions. Under the agreement, reached in March, the German energy major and Sintez were to pay 2.5 kopeks per TGK 2 share.

The March agreement would have seen the German energy major and Sintez pay RUB 9.3 billion for the state's 33.5% stake in TGK 2. They also agreed to pay more than RUB 9 billion for the purchase of TGK 2's new share issue, giving them effective control of the company for about RUB 19 billion, which is USD 704 million.

Sintez said that RWE never transferred the money for its share in the acquisition.

AK Steel announced that it is temporarily idling at Mansfield in Ohio operations and most of its at Ashland in Kentucky operations, due to the recent unanticipated and major downturn in the economy, which has resulted in sharply lower demand for some of the company's products.

The company said that, based upon currently foreseeable market conditions, both facilities will remain idled until early to mid January.

AK Steel's Mansfield Works currently employs 365 hourly and salaried men and women. The plant produces stainless flat rolled steel which is used primarily to manufacture automotive exhaust systems. Steel production and shipping temporarily ceased at the Mansfield Works earlier this week. A small number of hourly and salaried employees will continue to maintain the operations in anticipation of a resumption of production when warranted by business conditions.

The Ashland Works produces carbon flat rolled steel for automotive, appliance and other markets, and the plant currently employs 1,100 hourly and salaried men and women. However, about 275 of the Ashland Works employees work at the company's coke plant, which will continue to operate, but at a reduced level. Ashland's blast furnace, steelmaking, casting and coating operations will be idled later this month.

As in Mansfield, a small number of hourly and salaried employees will continue to work maintaining the idled operations in preparation for a re-start. The company said Ashland's blast furnace would be maintained in "hot-idle" status.

The company said it continues to evaluate all of its operations and administrative functions in light of the economic downturn, and will be prepared to adjust to continued rapidly changing conditions. That would include restarting the idled operations sooner if warranted by significantly improved business conditions.

Mr James L Wainscott chairman, president & CEO o KA Steel said that "We remain hopeful that we will be able to return our dedicated and hard working employees to their jobs as swiftly as possible. Of course, that depends entirely on credit availability and consumer confidence, which are at the heart of this serious economic downturn."

POSCO has said that it is not in talks to buy controlling stake in the Thainox Stainless PCL.

Korean media quoting an anonymous source earlier reported that POSCO is in talks with Thailand's largest stainless steel producer Thainox to take over a controlling stake as part of efforts to beef up its global business.

Universal Stainless & Alloy Products Inc has updated its business outlook for the fourth quarter of 2008 previously reported in its earnings release and 8 K filing of September 23rd 2008.

In updating its outlook, Universal confirmed its forecast of consolidated sales in the range of USD 45 to USD 55 million including sales of USD 10 to USD 12 million from its Dunkirk Special Steel segment. However, it now expects that diluted EPS will range from breakeven to USD 0.15 due to lower raw material prices.

Universal total backlog at September 30th 2008 approximated USD 101 million compared to USD 97 million at June 30th 2008. The increased backlog is primarily attributable to tool steel plate and electro slag re melted products.

In the month of October 2008, the average market prices for nickel, chrome and carbon scrap decreased by 32%, 13% and 52%, respectively from the September 2008 average prices due to reduced global demand for stainless steel products. The revised EPS estimate is based on October raw material costs and may be further impacted if raw material costs continue to decline.

Sales from the Dunkirk Specialty Steel segment are expected to approximate USD 10 to USD 12 million on lower shipments compared to the fourth quarter of 2007. The anticipated reduction in shipments is a result of lower demand from the effect of the Boeing labor situation on demand for aerospace products and very conservative buying patterns of service centers. Based on current raw material costs, Dunkirk is now expected to generate an operating loss between USD 1 to USD 2 million for the quarter.

PTI reported that India's stainless steel importers including utensil manufacturers have urged Mr P Chidambaram finance minister of India not to impose import duty on the alloy saying it would lead to a monopoly of low quality domestic products in the market.

The importers demand comes within days of Mr Ram Vilas Paswan minister of steel of India seeking urgent consideration of the finance ministry on levying 10% import duty on all categories of steel products to ward off the threat of cheaper imports.

Mr VP Ramachandran secretary of India Association of Process Plant & Machinery said that "Import duty on stainless steel which had remained untouched till date will benefit a single monopoly industry."

The association, which is an umbrella organization of stainless steel importers and utensil producers, has shot off a letter to Mr Chidambaram requesting him not to heed the Steel Ministry proposal for imposing import tariff on all categories of steel.

Mr Ramachandran said that the domestic stainless steel industry has a poor range of products with a monopoly of one producer and so the small scale firms need to import value added alloy to compete globally. He added that "The domestic producers are catering to low end needs whereas our members cater to high end products which are essentially imported. Moreover, the import of stainless steel flat products takes place in those grades and sizes, which the domestic industry does not manufacture."

To further expand market share and strengthen presences, Taishan Steel Group has stepped up efforts in new products development and its stainless steel plant has successfully developed 420 stainless steel on October 31st 2008, becoming one of the few domestic steel mills mastering the technology.

Taishan Steel has developed 430 stainless steel in earlier days.

(Sourced from MySteel.net)

It is reported that owing to suspension of molybdenum purchases for long period and financial situation at consumers, molybdenum prices have fallen suddenly to a large extent on the end of last week.

Namely, the market price of molybdenum oxide has fallen by 30% compared with that in the week before last. An anticipation of the steep fall for molybdenum prices is already whirling in the market from the middle of last week. The prices as of the end of last week were in the range of USD 18 per pound of Mo as a higher side and USD 16 as lower side for molybdenum oxide having fallen to a lower level than USD 20 per pound of Mo and USD 40 per kilogram of Mo for ferromolybdenum.

A basic tone to move price of molybdenum oxide in 2008 has been continued on a high level. Accordingly, a steep fall of molybdenum prices arisen on the end of October 2008 has put a considerable shock on the molybdenum industry of the world. This sharp fall of molybdenum prices is thought to accelerate the mind at consumers, which holds back their new purchases of molybdenum products with an aim to lower its book values as the countermeasures for settlement of accounts to be closed on the end of December 2008 or on the end of March 2003.

The prices of USD16 to USD 18 per pound of Mo for molybdenum oxide were the lowest ones since April to June quarter of 2004. The market price of molybdenum oxide was maintained on a comparatively high level at USD 32 to USD 33 per pound of Mo but has suddenly fallen to a large extent in the last one week and this steep fall of price for molybdenum oxide is due to the offensive taken for disposals of molybdenum stocks at discounted prices. Many of major molybdenum producers said that they have rather planned to decrease their molybdenum production than to increase it and the fundamentals on supply and demand of molybdenum have been viewed to be on a firm tone.

However, molybdenum prices have suddenly fallen to a considerable extent at present and this aspect is due to the actions taken by steel mills, which have decided to reduce their steel production and extremely held back to purchase molybdenum. Consequently, new purchases of molybdenum products have been suspended and stockiest were in a hurry to dispose of their molybdenum cargoes even at discounted prices. The stockiest concerned are converters and traders.

(Sourced from Tex Reports)

It is reported that Chinese customs have lowered check prices for SiMn exports. The price has been cut to USD 2100 per tonne for SiMn 6517 and USD 1800 per tonne for SiMn 6014, from USD 2300 per tonne and USD 2000 per tonne respectively in October 2008.

However, traders complain that this is not enough to boost transactions and can hardly relieve heavy burdens on exporters.

Export price is quoted at USD 1700 to USD 1750 per tonne for SiMn 6517 and USUSD 1300 per tonne for SiMn 6014 at the moment. Due to output cutbacks by overseas steelmakers, SiMn export market remains dull.

Electrolytic manganese market eyes similar operation. Export price has declined to USD 2100 to USD 2150 per tonne on account of falling domestic price.

China's domestic ferrosilicon market remains quiet from last weekend to November 11th 2008.

Current ex factory price of 75A ferrosilicon stands at CNY 5700 to CNY 5800 per tonne and 75C at CNY 5500 to CNY 5600 per tonne in the northwest, and FOB export price for 75A gathered at USD 1200 to USD 1250 per tonne, but thin deals were done amid stagnant market.

Conditioned by electricity charge, domestic ferrosilicon industry dipped slight by contrast with the other ferro metals. Meanwhile, rising closure drives plants with spot goods to sustain current price level and producers out of stock to hold out for a clear future. There are also some small sized makers pricing much lower to recover investment cost.

In a long run, ferrosilicon market at home is expected to run quiet, but would remain steady with a little dip in this week.

(Sourced from MySteel.net)\

Alcoa said that NASA has certified its Davenport facility as the only supplier in the US to produce aluminum lithium alloy 2195 thin plate for the Ares 1 crew launch vehicle.

Alcoa added that the Davenport plant will produce around 1 million pounds of the thin aluminum lithium material for this program. The Alcoa Technical Center near Pittsburgh is casting the aluminum lithium ingot and shipping it to Davenport where it is rolled into thin plate for additional fabrication.

Earlier in 2007, NASA awarded Alcoa a USD 18.5 million contract to develop the manufacturing capability and to supply the initial requirements of high performance aluminum lithium plate and ingot.

It is reported that recent prices of coking coal and PCI coal, inputs of steel making, falls sharper than high grade thermal coal price amid diverse market.

On October 20, ex mine price of main coking coal dived almost 40% from the peak of this year. Liulin coking coal price slumped by 42.3% to CNY 820 per tonnes from the highest of CNY 1420 per tonnes in this August.

Price of PCI coal, major substitute of coking coal was lowered accordingly. On October 10th 2008, Yangquan PCI coal premium price slid to CNY 1380 per tonnes, falling 18% from this year's peak high CNY 1680 per tonnes.

Coking coal price would run dim in the short term along with downward steel market

According to the statistics the total reserve of coking coal hits 64.8 billion t in China, with basic reserve of 124.4 billion tonnes and resource stock of 147.7 billion tonnes, taking up only 27.65% of the total coal reserves. China mainly churns out gas coal and 1/3 coking coal, accounting for 25.86% and 21.28% of the total coking coal output respectively and the production of prime coking coal and fat coal only share the rest of 28%.

In short term, local small sized mines are the main force to make coking coal. In 2007, domestic output of coking coal from key mines took up 31.66% of the total with the rest of 68.34% shared by that from small sized mines, which revealed significantly in Shanxi Province.

Incomplete statistics indicate that in 2006, annual production of coking coal in Shanxi was 164 million tonnes and only 18.9% of the total was produced by key miners. Following the declining market, the integration progress of small sized miners will exert a significantly influence on the supply and demand and even price of coking coal.

China’s General Administration of Customs announced that China imported 30.62 million tonnes of iron ore in October 2008 down from 39.2 million tonnes in September.

Total imports for the January to October period rose by 20% YoY to 376.69 million tonnes.

BHP Billiton shipped the lowest amount of the steelmaking material last month since February 2008. Port Hedland Port Authority statistics show that BHP shipped 10.2 million tonnes of iron ore in October 2008 as compared with 11 million tonnes in September 2008.

Shipments to China also fell significantly. BHP sent 4.8 million tonnes of ore to China in October 2008 as compared with 5.4 million tonnes in September 2008 and 5.7 million tonnes in August 2008. Shipments to Japan and BlueScope Steel rose to partially compensate for the decrease in sales to China.

The lower shipments could be partially explained by the shutdown of one of BHP's four car dumpers after an accident on October 24th 2008, which meant it was able to unload fewer ore cars during the last week of the month. The car dumper did not re enter service until last week.

Rio Tinto experienced a similar problem with one of its car dumpers in September, which cost it 400,000 tonnes of production during the two week shutdown.

Mr Peter Ogden BHP spokesman would not say how much production his firm had lost while one of its car dumpers was inactive. But even accounting for the car dumper outage, BHP's shipment figures last month appear noticeably soft, particularly since it expects to increase production from 122 million tonnes last year to about 140 million tonnes this year.

Bloomberg reported that coal exports from Australia's Newcastle port fell 8.7% last week and the number of ships waiting outside the port dropped.

Newcastle Port Corporation said that the volume shipped in the week fell to 1.97 million tonnes from 2.16 million tonnes a week earlier. A total of 24 ships waiting to load 1.92 million tonnes of coal were lined up outside the port, down from 26 last week.

Coal ships waited 7.8 days to load the fuel in the week, down from 8.7 days a week earlier. The waiting time compared with 1.1 days for general cargo vessels last week. A total of 24 vessels carrying coal left Newcastle in the week ended November 8th 2008. Sixteen ships were bound for Japan, five for Taiwan, two for South Korea and one for the Netherlands.

According to the globalCOAL NEWC Index, the weekly index for power station coal prices at the New South Wales state port increased USD 3.19 to USD 104.02 per tonne in the week ended November 7th 2008.

Bloomberg reported that Noble Group Limited forecast a rebound in demand for metals and grains over the next 12 to 18 months as government investment programs boost economic growth.

Mr Richard Elman CEO of Noble Group said that “I am seeing the bottom. I would not be surprised to see in a year to 18 months time we take off again. There will be renewed vigor for most countries to revitalize their economies. The Chinese are putting a lot of money into infrastructure.''

Noble forecast for a recovery tallies with that from Rio Tinto Group, which said on November 10th 2008 that the slowdown will be short and China will be rebound next year.

SABC News reported that the economy of the Northern Cape stands to benefit from the Kumba Iron Ore expansion program with an investment of about ZAR 8.5 billion.

The Sishen Expansion Project includes upgrading the electricity infrastructure with Eskom and the construction of a ZAR 4 billion railway line in partnership with Transnet.

Mr Chris Griffith CEO of Kumba said that the project is expected to translate into about R2.1 billion in foreign exchange. He added that ''When the SEP project is up and running at full production we expect the contribution to the foreign exchange earnings to South Africa to be in the region of about USD 200 million.''

The project, situated outside the Postmasburg Sishen mine, is in the vicinity of major mining operations by Assmang and BHP Billiton. Thousands of employment opportunities are expected to be created.

China’s General Administration of Customs announced that China exported 2.56 million tonnes of coal in October 2008 down by 51% YoY.

Coal exports in the first 10 months fell by 11.5% YoY to 38.28 million tonnes.

The drop is due to tighter coal export quotas as well as weaker international coal prices. Coal miners have nearly used up the first series of export quota totaling 31.8 million tonnes but the second quota series is only for 15.9 million tonnes.

South Africa's Solidarity trade union said on Monday two workers died of carbon dioxide poisoning in a gas accident at Xstrata's coal mine outside Witbank in South Africa.

Xstrata spokesperson said that they died after drilling into a pocket of noxious gas. The mine was evacuated and the two men taken above ground but could not be resuscitated.

A third miner was hospitalized and was reportedly out of danger.

Xstrata stopped all underground operations at the mine.

It is reported that Coal of Africa has appointed Mr Pierre Leonard as ArcelorMittal’s nominee as non executive director on its board.

Mr Leonard has a PhD in Industrial engineering and is currently based in London as ArcelorMittal’s GM for mergers and acquisitions.

The appointment follows ArcelorMittal’s acquisition of a 16% stake in CoAL last April and agreed to buy coking coal from the company’s projects in South Africa.


CoAL is primarily focused on the acquisition, exploration and development of thermal and metallurgical coal projects in South Africa. The company recently said that it would be spending about AUD 40 million to bring the Mooiplaats project, situated in the Ermelo coalfield, into production. Production at the project, which had a coal resource of 113 million tonnes, of which 88.2 million tonnes were measured, would consist mainly of bituminous or thermal coal, as well as lean coal.

Coal Insights reported that production of coking coal between April and September 2008 went up by 2.11% YoY.

As per report, coking coal production during the H1 stood at 13.40 million tonnes which was nearly 2% higher than corresponding period of the previous year but over 14% lower than the target set by the government.

Its production by CIL subsidiaries stood at 9.38 million tonnes up by 2.46% compared to 9.15 million tonnes produced in the corresponding period of 2007-08.

Production of coking coal at captive mining companies like TATA Steel increased only 0.85% to 4.02 million tonnes from 3.98 million tonnes produced in the same period of 2007-08.

BS reported that CIL, DVC and BEML will be investing around INR 1000 crore in phases to revive the West Bengal based Mining and Allied Machineries Corporation, a BIFR company since 2003.

While BEML will be the major share holder with 48%, CIL and DVC will be picking up by 26% stake each in the company. A revived MAMC is expected to commence operation from the middle of 2010.

Mr PS Bhattacharya chairman of CIL said that "I have approached the Mr HC Gupta coal secretary to take up the matter with the ministry for a cabinet clearance on the takeover. Prior to that the clearance for the joint take over will have to come from the Calcutta High Court as it is a BIFR company and the court is sole custodian to determine the company’s future."

Mr Bhattacharya said that MAMC has dues of INR 1200 crore with the Centre and about INR 100 crore with the West Bengal government. He said that “I approached the West Bengal government for a waiver and they have readily agreed. The green signal for the central waiver is still awaited and for this cabinet clearance is mandatory."

He said that a silver lining recently emerged on the future revival of the company with the State Bank of India deciding to prune the debt component of the company from INR 430 crore to INR 120 crore. He added that SBI ends have been tied up and things are moving in the right direction.

Revival of MAMC is essential for CIL as it is moving ahead in augmenting underground mining production in the next couple of years. The coal giant is also seeking overseas tie ups in Australia, China, Indonesia and USA for developing UG mining in the country.

The Australian reported that the credit crisis and falling Chinese demand for commodities continues to bite the resources sector, with two more major project expansions in Western Australia put on hold.

Following a slew of recent cutbacks and delays, aluminum giant Alcoa revealed it had shelved its Wagerup alumina refinery expansion south of Perth, while Fortescue Metals Group said it was reviewing a USD 2 billion Pilbara iron ore growth plan.

Alcoa's plans to shelve the multi billion dollar Wagerup expansion could cost 1500 construction jobs and 250 permanent jobs. Alcoa gave no indication of how long it expected the project, which had been due to start in 2010, would be delayed, saying only that it would look at it again when conditions improved.

China’s General Administration of Customs announced that Chinese coke exports in October stood at 530,000 tonnes down from 1.42 million tonne a year earlier.

During the 10 months, coke exports reduced by 12% YoY to 11.58 million tonnes. Coke export value totaled USD 5.53 billion up by 123.4%.

According to Mr Zou Jian, chairman of Metallurgical Mines' Association of China, there are 17 iron ore projects under construction in China at present, and the capacity totals 120 million tonnes. These projects are to launch operation in next 2 to 3 years.

Among these, several projects have a capacity of 10 million tonnes or more, including Taigang’s Yuanjiacun Iron Mine Project, Phase two of Tanggang’s Sijiaying Iron Mine Project, Anhui Huoqiu Iron Mine Project and Baogang’s Baiyun West Mine. Besides, Magang’s Luohe Iron Mine Project has a capacity of 5.0 million tonnes, and Shougang’s Xingshan Iron Mine Project has a capacity of 4.0 million tonnes.

According to Mr Zou Jian, the global finance crisis hit the iron and steel industry in China, and slowed the growth in production; therefore the increase in iron ore production in China could meet the growth of iron and steel capacity. The oversea iron ore and ocean freight market will see an end to the period of incredible high profitability but maintain a considerable profit due to the monopoly in supply. From the end of 2008, the iron ore price will gradually become stable.

Mr Rafael Correa President of Ecuador said that he will propose this week a bill to overhaul the nascent sector and warned his allies in the legislature not to make deep changes to the legislation.

Mr Correa said that he wants to jump start mining of precious metals from large deposits to diversify the oil dependent economy and share its revenues with the poor. He added that "If there are deep changes to the law I will veto it and put it up for a popular referendum. The government's political decision is to develop the mining sector."

Mr Correa has clashed with more radical factions inside his party that say large scale mining will hurt the country's pristine environment and indigenous communities in the jungle. The new mining law is key for foreign miners who have found massive gold and copper deposits in southern Ecuador.

If approved, the law will lift a government ban on mining activity approved in April that hurt the stock price of Canadian miners such as Corriente Resources and Iamgold.

Mining development in Ecuador should raise revenue for the government at a time when its income from oil sales is likely to be lower than in previous years. Foreign companies have waited months for details of the government's legislation to see whether doing business in Ecuador will be viable.

The new bill, expected to be approved by early 2009, will set royalties and tougher environmental controls over miners.

Mitsui & Company has revised investment for metal and energy resources under financial squeeze and slower economy.

Mitsui selects new investment plans and would postpones some plans in the area with revision for demand and price condition and investment cost while it keeps existing plans including iron ore and coal output expansion and nickel projects in Philippines and New Caledonia.

Mr Masami Iijima senior executive managing officer of Mitsui said that he expects competitive resources would be short in long term due to growing demand for steel and other industries. The firm tries to keep develop longer term resource portfolio when the firm targets 1.5 times of iron ore interests by 2015.

Platts reported that Venezuela overall mining productivity is estimated to decrease 7% in 2008 in relation to 2007 figures.

It quoted Mr Gilberto president of Venezuelan Mining Chamber as saying that "The drop is the result of widespread labor unrest, the nationalization of certain companies like Sidor steel, the stalling of several major projects and heavier than usual rainfall."

Adversely affected are the country major iron, steel, gold, nickel and coal companies. Mr Sanchez noted that Sidor steel is a good example, with its productivity at only 60% right now. Before nationalization in 2002, it produced 5 million tonne of liquid steel and this year its output will be only 2.5 million tonne.

Mr Sanchez further said that that “There was less foreign investment in 2008 in large part due to the country currently downgraded risk rating. However, once the labor situation calms down, the mining sector should enter a more balanced period in 2009 adding that it was still early to gauge the effect on Venezuela of the global economic recession.

The North West Iron Ore Alliance has announced the appointment of Dr Justin Walawski as its new deputy chairman & CEO.

Dr Walawski will be responsible for overseeing the operations of the North West Iron Ore Alliance as it continues to focus on negotiating key rail and port access arrangements and completing a scoping study for infrastructure development at Port Hedland.

Ms Megan Anwyl independent chair of the North West Iron Ore Alliance said that Dr Walawski appointment reflected the Alliance commitment to proceed rapidly towards achieving economic and social infrastructure solutions for junior iron ore companies in the Pilbara, and that she looked forward to working with him to deliver a diversified iron ore sector to the Pilbara.

She said that "We are delighted to have attracted such a high caliber executive to the Alliance, which I believe reflects the very significant achievements we have made over the past year and the new workload that exists as we increase our financial commitments towards the development of inner harbor berths and other infrastructure."

The North West Iron Ore Alliance was formed in 2007 to support the development of a junior iron ore sector in the Pilbara. The member companies Atlas Iron, BC Iron, Brockman Resources and FerrAus have agreed to cooperate on issues such as infrastructure development and access, statutory approvals and community development.

Collectively the members of the North West Iron Ore Alliance have the potential to deliver over 52 million tonnes of iron ore per annum by 2013, generating approximately USD 200 million in state royalties per annum.

Coal Insights reported that coal production during the first 6 months of the current financial year increased 7.89% to 205.97 million tonnes compared to 190.91 million tonnes produced in the corresponding period of the previous financial year. However, production was below the target of 221.10 million tonnes set by the India government for the period.

Domestic coal production was below the target mainly because some Coal India subsidiaries Central Coalfields and Eastern Coalfields missed their production target by huge margins. Despite missing the target of 179.17 million tonnes it can be appreciated that all CIL subsidiaries, except North East Coalfields, produced more than what they had produced in the first half of 2007-08, despite law and order related issues in the production areas of CCL and some projects having witnessed a delayed start under ECL. Increased production by all subsidiaries meant that CIL ended with 167.80 million tonnes during the H1 which was 6.29% more than 157.88 million tonnes produced in the H1 of 2007-08 but down by 6.34% from the target of 179.17 million tonnes.

The Singareni Collieries Company continued with a better performance to come out with a production of 20.77 million tonnes during the first 6 months of the fiscal up by 8.62% from the corresponding period in the previous year and as compared to government target of 19.33 million tonnes.

Captive coal mining companies produced 17.39 million tonnes of coal during the H1 which was 25.05% higher compared to 13.90 million tonnes produced in the corresponding period of previous year and as compared to government target of 19.33 million tonne.

It is reported that coal mining has taken its toll on paddy cultivation in Meghalaya the state that is still known as agricultural state.

The toll taken by the surge in unscientific coal mining is apparent from the statistics provided by the Meghalaya Minister of Agriculture on the floor of the assembly recently. Overall, cultivation of the staple food of the people showed a serious decline in the past few years, but it is in Jaintia Hills that the huge fall is evident.

Mr ECB Bamon agriculture Minister Meghalaya said that the total decline of areas under paddy cultivation stands at 5479 hectares in 2004-05 to 2005-07 and another 1746 hectares in 2006-07.

As per the statistics provided by the minister, the total area under paddy cultivation in the state stands at 111550 hectares in 2004-05, it came down to 106071 hectares in 2005-06 and 1104325 hectares in 2006-07. However, it is Jaintia Hills district which has faced the worst brunt and all attributes goes to coal mining and the ongoing power projects.

In between 2004 and 2006, the slum of areas under paddy cultivation is 4633 hectares. As per statistics the area under paddy cultivation in jaintia hills was 16926 hectares in 2004-05 and it dips to 12293 hectares in 2005-06.

Mr Bamon however said that “The extensive reduction in respect of paddy cultivation of paddy cultivation in Jaintia Hills is due the shift of economic pursuits of the rural people from cultivation to coal mining which renders quick buck as against the traditional culture of paddy cultivation whose economic benefit is relatively insignificant.”

While expressing the government helplessness to the people shift from cultivation to coal mining, the Agriculture minister however said that steps are being taken by the government to maintain paddy cultivation in the entire state.

It is reported that bombed out Red Rock Resources has managed to raise GBP 580,000 to join a bid to control Australian iron ore play Jupiter Mines.

Chaired by Mr Andrew Bell, who holds a key shareholding through another AIM loser Regency Mines, Red Rock has succeeded in raising the money at GBP 0.5, with support from directors and serial investor Mr Bruce Rowan and his company Starvest.

The placing will leave Equity Resources, Starvest and Regency with a combined 46% of Red Rock plus warrants in some cases. Together with Pallinghurst, Red Rock wants to inject other iron ore and manganese assets and GBP 440,000 cash for the 55% of Jupiter the two groups seek.

Red Rock is joining forces with Pallinghurst to seek 55% of Aussie listed Jupiter, which has potentially significant iron ore interests in Western Australia’s Yalgarn region and the placing proceeds will support that.

Presumably, Pallinghurst, which recently failed to gain control of manganese play Consolidated Minerals and backed a thwarted partial bid by Gemfields Resources for Tanzanite One, is confident of a better outcome this time.

Reuters reported that South Africa hopes to phase in measures to convince miners to process more of their output locally to encourage growth of industry and skills in South Africa. South Africa's beneficiation policy already requires that 10% of diamonds be processed in country, helping develop a downstream cutting and polishing industry employing more people.

Officials have said in the past that diamonds were a test case for other minerals such as steelmaking raw materials, including iron ore and chrome, as well as platinum group metals, base metals and uranium.

Ms Buyelwa Sonjica mine and mineral minister of South Africa said that "The effort is two pronged. We will continue to supply raw materials. But we also encourage companies to beneficiate in South Africa, through incentives. It will be phased in we will do it by phases."

The effort to develop a downstream diamond industry and counteract the economic distortions left by apartheid has been hampered by South Africa's relatively high wages and low skills, compared to longer-established centers like India and China.

Ms Sonjica said that at the moment, the policy to encourage local processing of other minerals does not have a firm quota and could be offset by other factors, for instance increased black ownership in the firm.

Investors in processing capacity could, in the short term, face difficulties in financing projects, given a sharp decrease in loans due to the global economic crisis although Ms Sonjica said South Africa's banking sector has coped relatively well.

South Africa would also have to address worries about power supply. Supply to mines is already restricted, after shortages caused by faster than expected industrial growth and an expansion of the grid to poorer communities.

Reuters cited a vice minister in charge of mining as saying that China will extend a period of consolidation in the mining sector well into 2009, after high profits enabled miners to avoid merging for longer than expected.

A nearly two year effort to resolve overlapping claims and consolidate deposits being mined by several firms was to end by 2008, but Beijing had not counted on strong prices, particularly for coal, which made miners unwilling to relinquish their stakes.

Mr Wang Min vice minister of land and resources said that "The main mines have complied but we still have certain challenges with the small ones. The main difficulty is the competing interests of the players, when we wish to use economic means to persuade them to merge. We will have to continue to push and with greater force."

The ministry had envisaged creating a handful of large mining firms that could exploit domestic deposits efficiently be more responsive to environmental and safety standards, and ultimately compete internationally.

That process has partially worked, with mining in some provinces increasingly concentrated under local champions such as Western Mining in Qinghai province in the west, Hunan Nonferrous Metals Corporation Limited in the south or Jiangxi Copper in the east.

During the reorganization, some foreign mining investors reported greater difficulty in some provinces in obtaining licenses. That partly reflected Chinese planners' frustration with junior miners buying and selling stakes without fulfilling exploration commitments.

It is reported that Nippon Yusen Kabushiki Kaisha has launched a new 230,000 DWT dry bulk carrier to bring iron ore from Australia to Baosteel. The carrier, named Bao an, was built by Namura Shipbuilding Company at Imari in Saga in southern Japan.

NYK said that the carrier left for Western Australia from Imari on 31st October. It will carry about 2 million tonnes per year for ten years.

Last November NYK launched another bulker for Baosteel, a 200,000 DWT vessel named Bao Guo, to ship some 600,000 tonnes per year of Brazilian iron ore to the Chinese mill for ten years.

NYK operates 70 bulk carriers in the 100,000 DWT to 200,000 DWT but the Bao An at 230,000 DWT is so far the largest.

Puda Coal, Inclusive has announced that strong financial results in the Q3 this year, owing to the strong demand for high grade coking coal and a substantial increase in selling prices.

The company’s Q3 net income was USD 6.5 million or USD 0.06 per fully diluted share, up 94.3% from USD 3.4 million, or USD 0.03 per fully diluted share, comparing to the same period of last year. In addition, operating income totaled USD 9.0 million, up 63.1% from the Q3 last year.

At the same time, Q3 revenue reached a record USD 74.1 million, up 82.7% from the Q3 last year. Net revenue was USD 177.8 million for the nine months ended September 30th 2008, up 53.2% from USD 116.0 million in the same period of 2007.

Puda Coal sold 603,000 metric tonnes of clean coal, up 22.6% from 492,000 metric tonnes in the same period last year. The average selling price was approximately USD 123, up 35.2% from USD 91 for the same quarter of 2007. The increases in tonnage sales and selling price of cleaned coal were the primary reasons for the increase in the net revenue.

Puda Coal said that it plans to maintain a strong level of cash flow and liquidity to fuel its operations in the Q4 of 2008 and in 2009.

According to the construction program, Shanxi Coke Group will serve as chairman of the unit, Shanxi Coking, TaiYuan, coal gasification and so on a number of large enterprises as the main sponsor, joining companies to join the voluntary participation of the establishment of the Shanxi Coke Trading Center Company Limited, in charge of trading operations center.

It is reported that Guangzhou South China Coal Trade Center shows coal overstock at ports is worsening due to increasing coal stock and constant railway transport to ports. With coal stock increasing, coal price inevitably goes down. Therefore railway transportation should be adjusted before coal overstock can be alleviated.

Mr Li Chaolin the expert of coal industry points out that in booming periods, deficient transport capacity was a limit to Shanxi's coal ex province sales. For this reason coal enterprises have to plan in advance for next year's railway transport, Thus when demand weakens, such transport plan is not able to be reversed in time, thereby aggravating coal overstock at ports.

Some stuff in coal enterprises reveal that when coking coal arrives at ports, traders will have a tough time in selling. Besides, they will have to pay high site cost. All these call for an adjustment in railway transport. And in respond to the situation, Shanxi is to adjust its railway transport volume of some of its coking coal and coke, in an effort to reduce coal stock at ports.

(Source from MySteel.net)

It is reported that as a big coal producing city, Jining had always seen short supply due to strong demand. However, this year a large amount of coal has been piled up. 19 coal enterprises have stocked 800,000 tonnes of coal, and its' estimated that 2 million tonnes has been stocked in the whole area.

According to the analysis, this is caused by shrinking demand of downstream enterprises in south China.

Recently a worker at Jining port said that, trade at port is supposed to be booming in November, but now there are hardly any deals. In this August, second grade coke price rose to CNY 3,080 per tonnes, while it stands at a meager CNY 1,200 per tonnes now. In the past, the port could deliver more than 40,000 tonnes of coal, but in this October only 7,000 tonnes was delivered.

Other work zones show the same picture. At present 5,500 calorie coal prevailed at CNY 1,100 per tonnes, while it stayed at CNY 600 per tonnes now. Coal mine bosses are now seeking earnestly for buyers.

In late September, Jining's coal stock remained at 856,000 tonnes, and it increased to 2 million tonnes in late October. The sales volume of steel making coke stayed at 287,000 tonnes, and it went down to 200,000 tonnes in late October.

Jining's coal is mainly sold to south China, and power coal takes up 60% of all. Affected by global financial crisis, some enterprises in the south have started to go bust, thus cutting coal demand sharply this is the major reason why Jining's coal has been stocked unduly high. On the other side, traders have long been used to purchase when the price is rising, so on the opposite, they are not likely to purchase amid the downtrend.

Currently, the local government has been focusing its attention on the dispatch of the stock. It has also started to contact large coal consumers. In the meantime, some enterprises have cut production and started to produce according to its actual sales volume, in the hope of reducing loss.

(Source from mysteel.net)

It is reported that Shanxi Province has started control on coal supply in a bid to stabilize coal market and ward off large scale industry declines.

The province announced its M&As target in coal industry in this September 2008. It aims to halve current 2822 legal mines to some 1500.

Mr Hou Wenjin, Vice Inspector of Shanxi Coal Industry Bureau said that by the end of this year, more than 800 unqualified small coal mines will be closed, decreasing total capacity by 80 million tonnes to 90 million tonnes.

Total coal output in the province broke 800 million tonnes last year, with key mines and local mines contributing equally. The province has been ambitious to build super large size coal groups by M&As since this year beginning to raise industry concentration and resist market fluctuations.

Market analysts comment that both supply and demand sides are cutting outputs. All the production, transportation and distribution are shrinking at the same time. However, large coal groups can hardly control the market until they grasp an output share of 60% to 70%. The groups now only hold approximately half of the outputs hence future market is still up in the air.

Against such a backdrop Shanxi Coal Industry Bureau has urged coal enterprise to remain cautious towards coal sales, manage production and supply according to market demand and maintain balanced supply and demand relation consciously.