Orissa CM asserts that POSCO plant will not relocate

It is reported that Mr Navin Patnaik CM of Orissa asserted that the proposed steel plant by POSCO will certainly come up near Paradip and his government has not received any proposal from the company for its relocation.

Mr Patnaik told reporters that "No such plan for relocation has been given to the state government. There is no possibility of shifting.”

Mr Patnaik informed that “He had met board of directors of POSCO in New Delhi on October 19th 2007 and it had sounded very positive about the project. The government would give all support to POSCO for setting up its proposed steel plant near Paradip.”

A senior official of POSCO had hinted that it would prefer to relocate its proposed plant than invite a bloodbath as witnessed at Kalinga Nagar, Singur and Nandigram. However, later POSCO officials in Seoul said that the company remains committed to its investment plan despite protests by local residents and politicians.

HZL Q2 net profit dips by 11.6% YoY

Hindustan Zinc Limited has announced the following Audited results for April to September 2007 quarter.

HZL has posted a net profit of INR 11480 million for the July to September 2007 quarter down by 11.6% YoY as compared to INR 12980 million during July to September 2006 quarter. Its total Income has also decreased from INR 24920 million during July to September 2006 to INR 21280 million for the July to September 2007 quarter down by 14.6% YoY

JSW Steel board to consider SISCOL scheme

JSW Steel Limited announced that the meeting of its board of directors convened to be held on October 25th 2007 for considering the un audited financial results for the quarter & half year ended September 30th 2007, would also be considering the following

1. Draft Scheme of Amalgamation of Southern Iron & Steel Company Ltd with the Company.
2. Valuation Report and the recommendations made by Price WaterHouse Coopers, valuers appointed to value the business of the two Companies.
3. Share exchange ratio based on the Valuation Report

Mr Bishnoi awarded best CEO gold award

Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limited has been awarded the Best Chief Executive Gold award of “Indira Gandhi Memorial National Awards-2007 for Excellence in Indian Industries”.

The award was presented at Institution of Engineers (India) at Hyderabad

Ennore Foundries announces INR 350 crore CAPEX

It is reported that Hinduja Group’s Ennore Foundries will be investing INR 350 crore over the next 3 years for expansion, which includes setting up of an auto core making machine at INR 25 to INR 35 crore, INR 140 crore for a new facility for ductile iron and grey castings, including blocks and heads at Hyderabad and INR 120 crore for a low pressure die casting line for aluminum.

Mr Dheeraj Hinduja president of Hinduja Group told media persons that trial production at its Greenfield foundry at Sriperumbudur near Chennai had commenced last month. The new facility would be enhancing production capacity of cylinder blocks and heads from 50,000 tonnes to 72,000 tonnes next year. Around 40% of the capacity would be exported once production is in full swing.

Mr V Mahadevan MD of Ennore Foundries said that “In the next 3 years, total exports from all the foundries in the country will constitute 25 percent of the total production, from the present 2%. The pattern and tool shop and the design centre at Sriperumbudur, equipped with the latest CAD & CAM machines and related software, had become operational. These facilities will enable the company to shorten the lead time for new product development considerably.”

Ennore Foundries has also completed installation of the new moulding line at Ennore for producing bigger castings weighing up to 500 kilograms.

Japanese agency submits report on dedicated freight corridor

It is reported that Mr T Fujii resident representative of Japan International Cooperation Agency has presented the final study report on dedicated freight corridor to Mr KC Jena chairman of railway board.

Mr Jena said that the completion of JICA study is the culmination of an initiative which originated in April 2005 in the joint declaration by the prime ministers of India and Japan.

Mr Jena said that the dedicated freight corridor projects are the flagship projects of Indian Railways and are certainly one of the most ambitious infrastructure projects in the country. He added that “The project is a very vital for the Indian Railways for capacity creation to meet the ever growing traffic requirements. The implementation of this project requires massive resources and is also a challenge for our engineers in more ways than one.”

The study was agreed upon by the governments of the 2 countries and is a good example of Indo Japanese cooperation. He expressed his confidence that this study is only the beginning of the cooperation between India and Japan on the dedicated freight corridor project.

Development of dedicated freight corridor for carrying additional traffic is essential in view of high growth in demand. Indian Railways have proposed a 2700 kilometer long railway line projects including eastern corridor of 1279 kilometers and western corridor of 1483 kilometers as an augmentation of capacity of Indian Railways network to handle the large increase in volume of traffic over the coming years.

New coal distribution policy reduces linkages for cement and steel sector

It is reported that the new coal distribution policy announced by union government has spells bad news for cement and steel sectors as it reduces assured coal supply to the 2 key sectors to only 75% of their requirements. The governments move is likely to hit cement companies more as they meet a substantial part of their demand for coal from the domestic market, while steel companies depend on overseas cooking coal for consumption.

Under the new coal distribution policy, Indian government has decided to do away with the current classification of coal consuming companies into core and non core sectors and has decided to replace it with regulated and non regulated sector, entailing power, fertilizer and defense sectors to get assured supply of their entire coal requirement.

Jai Balaji to sign deal with WBMDCL for 2 coal blocks

It is reported that, Jai Balaji Industries, which is investing INR 16,000 crore to set up a 5 million tonnes steel project at Ragunathpur in West Bengal’s Purulia district, is set to sign an agreement with the West Bengal Mineral Development Corporation Limited for 2 coal blocks in WB.

As per report, West Bengal Mineral Development Corporation Ltd is likely to allot coal blocks at Jagnathpur A and B to Jai Balaji Industries. Another coking coal block located at Siuli is also slated to be allotted to the company.

The report cited a Jai Balaji source as saying that “The mines are within 50 kilometers to 70 kilometers radius of our project site and have reserves of 30 years.” The source added that additionally, it would also have to import coking coal from Australia, China and South Africa.

L&T may choose Tamil Nadu for port cum shipyard project

BL reported that Larsen and Toubro has planned to invest INR 3,000 crore on its proposed port cum shipbuilding project and Tamil Nadu is its preferred investment destination for the project.

Mr AM Naik CMD of L&T recently said that “L&T has short listed both Tamil Nadu and Gujarat as project locations but we are very serious that south is our priority.”

He added that though the Gujarat government was willing to give any amount of land or any location his organization was keen to set up the project in the south due to its skilled workforce.

But in the event of any further delay in getting the project put on keel in Tamil Nadu, L&T would be left with no choice but to turn to Gujarat. Mr Naik said that “I hope by the first week of November 2007 we will know whether we will go forward here or not.”

L&T officials said that “We hope the Tamil Nadu and Gujarat government’s decision on land allocation would be known in the next 2 weeks’ time.”

At present, L&T has a small shipbuilding facility at Hazira in Gujarat where it is building ships on the orders received from Dutch and Russian shipping companies. It has chosen Hazira for these 2 projects, subject to land allocation from the state government.

L&T has set its energy on promoting the port cum shipyard project as a separate subsidiary that will be run outside its flagship, considering the global demand for shipbuilding capacity, especially in the sophisticated ocean going vessel manufacturing.

Hydel projects may get to sell 40% power at spot price

ET reported that union government, in a major policy reform aimed at promoting private investment in the hydel sector, is planning to allow hydro electric projects to undertake merchant sales of up to 40% of the saleable energy. As per report, these changes have been incorporated in the new hydro policy that has been finalized by the power ministry.

The move is aimed at granting incentives for operations of hydel projects where cost of power in initial years of operations is very high. In the present system, entire saleable power from a project is locked under long term power purchase agreements and tariff approved by the regulator on a cost plus basis. This would enable hydel projects to earn huge premium on sale of power in the spot market that at times is more than twice the tariff under the long term power purchase agreement route.

The report cited a power ministry official as saying that “The hydel sector has potential to generate over 150,000 MW of power. However, large projects are not coming up due to investment requirements and other rehabilitation and resettlement related issues. We plan to open a window where developers of hydro-electric projects could also function as merchant power projects and thereby could increase their earnings.”

As per the cabinet note, under the new policy developers would have to follow specific milestone, concurrence by CEA or states and all clearances within three years, financial closure and award of work within 3 ½ years of notification the hydro policy and competition of projects within four years thereafter.

Under the new policy, project developers would have to give specific time lines for completing a project and adherence to the milestone would enable them utilize full quota of 40% energy for merchant sales. Projects that do not conform to the prescribed time lines would, however, lose the incentive of merchant sales in a graded manner. Delay of every 6 months in the commissioning date would result in reduction of merchant sales by 5%.

Garware Offshore to foray into shipbuilding business

Exim News Service reported that Garware Offshore Services Limited is all set to enter the shipbuilding business and may set up a facility to build offshore support vessels initially.

Garware is understood to be holding talks with Havyard Leirvik AS of Norway in this connection and is keen to form a 50:50 JV. It is also considering various sites in Gujarat for this purpose.

SEZ rehabilitation policy to be cleared soon

It is reported that the rehabilitation & resettlement policy for farmers affected by large industrial projects including SEZs is likely to be cleared by the cabinet during October 2007.

The report added that a group of ministers on the policy headed by Mr Sharad Pawar union agriculture minister is believed to have recommended that states be allowed to acquire 30% of land required for special economic zones.

It is in contrast to a decision made by a different panel in April 2007 imposing a total ban on compulsory land acquisition by government agencies.

The rehabilitation policy may facilitate contiguity of land by developers, who will be required to directly buy 70% of it from the farmers. However, the policy is understood to have many provisions for protecting the interests of farmers, whose land have been acquired for big industrial projects, including special economic zones.

NTPC begins studies on Trincomalee coal power project

It is reported that National Thermal Power Corporation is now jointly conducting pre feasibility studies with the Ceylon Electricity Board to set up a 500 MW coal based thermal power plant near China Bay in Trincomalee in Sri Lanka.

The report cited a senior NTPC official as saying that “The new site is north of Trincomalee, while the earlier site was south of it. We have selected the site and prima facie it is okay. We now have to sign the power purchase agreement.”

NTPC’s Sri Lankan project involves an investment of USD 500 million and is to be set up in a JV with the Ceylon Electricity Board. It is expected to be commissioned by 2011. The project will be set up on a build, operate, own and transfer basis and will have a debt to equity ratio of 70:30. It will use around 2.5 million tonnes per annum of imported coal, which may be sourced from Australia and Indonesia.

Sri Lanka has a total power generation capacity of only 2,500 MW as against India’s capacity of 130,000 MW. The project in Sri Lanka is important for NTPC to globally demonstrate its ability to set up power projects in other countries. It also plans to set up power plants in Nigeria, which is allocating long term supplies of liquefied natural gas to fuel NTPC’s plants in India.

Thermax inks license agreement with Balcke Durr

It is reported that Thermax Limited has signed a license agreement and technical know how transfer with Germany based Balcke Durr GmbH. The license would include manufacture of electrostatic precipitators’ air pollution control equipment for steel, cement, material handling and power sectors.

Thermax Limited said that, pursuant to the deal, the 2 companies would work together on a selective basis for utility power projects above 300 MW. It would also be able to access diverse applications of the ESP technology in power generation, ferrous & non ferrous metals, paper & pulp, cement & rock products, refinery & petrochemicals, incineration and glass etc.

Mr MS Unnikrishnan MD of Thermax Limited said that "This partnership will give Thermax a technological edge in the domestic power, steel, cement and utility sectors. We also gain access to overseas markets where we do have a presence and plan to grow.''

The agreement would help Thermax to gain a good share of the air pollution control business emerging from this sector. Thermax Limited said that has a network of offices, service centers and franchisees across South East Asia, Middle East and Africa for marketing and support of current business in these markets, it plans to utilize this infrastructure to expand its air pollution control business.

GAIL to invest INR 18,000 crore for gas infrastructure

It is reported that GAIL India Limited is planning to invest INR 18,000 crore on augmentation and creation of new infrastructure in the gas availability and distribution network in India.

Mr S Venkatraman executive director of GAIL, while announcing the gas utility's future plans, said that there is an urgent need for infrastructure development to fuel the fast growing energy market. He said that "New finds of gas sources across the country in the recent past and future would trigger the need for further development."

At present, GAIL has the capacity to handle 115 metric million standard cubic meters per day of gas everyday through its network of pipelines across the country. Its plans to invest in the creation of new infrastructure are also led by the projected figures of the energy sector till 2010-2011.

According to statistics, the demand for oil and natural gas would increase to 279.43 metric million standard cubic meters per day in 2011-12 from 179.17 metric million standard cubic meters per day in 2007-08. The projected supply of gas from various sources in India has been pegged at 202.3 metric million standard cubic meters per day in 2011-12 from 80.54 metric million standard cubic meters per day in 2007-08. The increase is also to be seen in the total LNG supply in the country which has been pegged to rise to 83.33 metric million standard cubic meters per day in 2011-12 from 30.45 metric million standard cubic meters per day in 2007-08.

ArcelorMittal and Borusan JV to set up HSM at Gemlik in Turkey

ArcelorMittal and Turkish steelmaker Borusan announced a 50:50 JV for USD 500 million investments in the construction of a new hot strip mill at Gemlik in Turkey. A MoU was signed by both parties and implementation of the proposed joint venture is subject to customary regulatory clearances.

The mill, which will be located in Turkey next to ArcelorMittal and Borusan's jointly operated Borçelik plant in Gemlik, on the Marmara sea coast, is planned to come online in first half 2010 with a capacity of 4.8 million tonnes. Slabs for this hot strip mill will mainly be sourced from ArcelorMittal, which will ensure a regular supply of high quality products to better serve the booming Turkish steel market.

Mr Michel Wurth member of ArcelorMittal's group management board in charge of Flat Carbon Europe said that "The Turkish steel market is strong and expected to grow at a yearly rate of at least 6% over the next ten years. We at ArcelorMittal are very excited at the prospect of expanding our cooperation with our partner Borusan into the hot rolled coil business. This hot strip mill will offer high grade products, which we believe can be very successful on the Turkish market."

Mr Agah Ugur CEO of Borusan Holding said that "Borusan is an experienced and leading steelmaker on the Turkish market. Our cooperation with ArcelorMittal over the past years has much helped to develop the Turkish steel industry and economy. Only in August last year did ArcelorMittal and Borusan decide to jointly build a galvanizing line, the third at our common Borçelik plant. Thanks to this cooperation, Borçelik is today the most modern galvanizing facility in Turkey and the leading supplier to the automotive industry. Currently, Turkey imports large volumes of hot rolled coil, and it makes perfect sense to locate such a facility at Gemlik, which has its own port and an ideal industrial layout for such a purpose".

Nippon and POSCO to form recycling JV

It is reported that POSCO and Nippon Steel Corp will form a 70:30 JV to build facilities for recycling of dry dust generated at POSCO’s steel plants and converting them to DRI

Outline of collaboration on DRI supply and Dry Dust Recycling
1) POSCO and NSC will establish a JV in South Korea for the supply of DRI and the recycling of dry dust with the main objective of effectively utilizing dry dust generated in the steelworks of POSCO.
2) The JV will construct and operate 2 units of Nippon Steel type DRI making and dry dust recycling equipment rotary hearth furnace, each having a processing capacity of 200,000 tonnes of dry dust per year, one at Pohang Works and the other at Gwangyang Works of POSCO, which will produce DRI supplied to both companies.
3) This project constitutes a business model for creating a new source of steel making raw material through collaboration of the companies, utilizing the technology established at NSC.
4) POSCO and NSC will seek registration of this project with the CDM Executive Board of the United Nations Framework Convention on Climate Change as a CDM project.

Outline of the JV
Name: POSCO Nippon Steel RHF JV Co Ltd (PNR)
Capital: approximately JPY 5 billion
Shareholding: POSCO 70% and NSC 30%
Total Investment: approx. JPY 16 billion
Establishment: January 2008
Scheduled Commissioning of RHF: September 2009 at Pohang and December 2009 at Gwangyang

Mr Mimura Akio president of Nippon Steel and Mr Lee Ku-Taek chairman of POSCO, since the signing of the agreement on strategic alliance and mutual shareholding in August 2000, have pressed ahead various cooperative measures under the agreement, setting up the steering committee co chaired by executive vice presidents, along with various subcommittees and working groups. In October 2006, the companies agreed to enhance the strategic alliance, including the additional share purchase mutually in the value of JPY 55 billion for each, and have since studied specific additional measures.

BHPB release production update for July to September quarter

BHP Billiton has released its production report for the quarter ended on September 30th 2007. The highlights are as under
1. Quarterly production record achieved for iron ore, underpinned by strong demand. Western Australia Iron Ore’s Rapid Growth Project 2 achieved nameplate capacity in the current quarter.
2. Quarterly production records achieved at the Worsley, Western Australia Iron Ore, Illawarra Coal, Hunter Valley Coal in Australia, Hillside in South Africa, Samarco in Brazil and Cerrejon Coal in Colombian operations.
3. Quarterly production record achieved for natural gas and natural gas liquids at Bass Strait in Australia and silver at Escondida in Chile & Antamina in Peru.
4. Petroleum production was in line with prior periods reflecting strong facility and reservoir performance offsetting natural field decline.
5. Major operations were impacted by scheduled maintenance and tie in activity associated with expansion projects.

The segment wise update is as under

Iron Ore
Record production was achieved reflecting the full ramp up of Western Australia Iron Ore’s Rapid Growth Project 2 and record performance from Samarco. Tie in activity for Western Australia Iron Ore’s Rapid Growth Project 3 impacted production in the current quarter and is expected to continue during the next two quarters.

In ‘000 tonnes
Change is YoY

Metallurgical Coal
Production was lower than the record June 2007 quarter due to planned maintenance and the impact of un seasonal wet weather experienced at Queensland Coal in Australia. Illawarra Coal achieved record quarterly production due to reduced impact from longwall change outs during the period. Third party rail and port constraints continue to impact Queensland Coal’s sales. These constraints at third party facilities are expected to continue in the near term.

In ‘000 tonnes
Change is YoY

Energy Coal
Scheduled maintenance at Navajo in US and poor geological conditions at the longwall operation at San Juan in US impacted production. This was offset by record quarterly production at Hunter Valley Coal and Cerrejon Coal. Third party infrastructure constraints on the east coast of Australia will continue to impact Hunter Valley Coal's export sales.

In ‘000 tonnes
Change is YoY

Nickel
The September 2007 quarter’s production was impacted by a scheduled statutory maintenance outage at the Kalgoorlie Nickel Smelter in Australia, the duration of which was 15 days. Planned maintenance activities at Yabulu in Australia also impacted production, with 14 days production outage in July being the most notable.

In ‘000 tonnes
Change is YoY

Manganese Ore
Production for the quarter was impacted by maintenance activities at Samancor in South Africa.

In ‘000 tonnes
Change is YoY

Manganese Alloy
Production was higher than the quarter ended September 2006 due to optimization of product mix and improved facility availability and utilization at Samancor.

In ‘000 tonnes
Change is YoY

Zinc
Production was higher than the September 2006 quarter due to higher grade and an increased proportion of zinc containing ore being processed at Antamina. The completion of the Cannington rehabilitation project also had a positive impact.

In tonnes
Change is YoY

Samancor forecasts 50% increase in contract prices of ferrochrome

South African manganese miner Samancor Chrome said that ferrochrome prices might rise as much as 50% next year from a current record level. Samancor Chrome in a statement said that low stocks, the absence of new production capacity, rising demand from China and surging costs in top producer South Africa would push prices higher.

According to Metal Bulletin the price of the same metal for immediate delivery has doubled to USD 1.45 a pound. Samancor said that “The gap between spot and contract prices is widening and is unreasonably high." It added that prices for quarterly contracts might climb as high as USD 1.5 a pound from USD 1 per pound.

Demand for ferrochrome climbed this year as stainless steel makers substituted the metal for nickel, which doubled to a record USD 51,800 a ton in the 12 months to May 2007. Producers' stocks of chrome, especially in South Africa, are critically low; conditions will tighten further and accelerate. Ferrochrome prices will continue to rise as consumption in China is expanding at a fast rate.

Ferrochrome contract prices are being negotiated between producers of the metal and steel makers. The contract price of so called charge chrome has risen by 22% this year.

MEPS sees steel prices decline as oversupply builds up

MEPS said that end user demand for strip mill products remains relatively good but distributors, who continue to have surplus inventories, are buying very little. MEPS added that this lack of activity, together with what appears to be a determination on the part of European producers to drive out imports at all costs, has created negative price pressure. However, the mills are intimating that they will seek advances at the start of 2008, to cover escalating raw material, energy and freight expenditure.

MEPS said that “Although underlying consumption is satisfactory in Germany, we have identified a temporary pause in demand. Inventory levels are high in general. The West European mills have very little business for standard grades / sizes and are carrying huge stocks of so called 'second choice' material, which they are selling very cheaply. Third country suppliers are still offering but they are no longer influencing the market to any great extent. Buyers are discouraged from ordering by the four to five month delivery lead times and the fact that domestic producers are quoting very competitive prices for fourth quarter business. Resale values have plummeted.”

MEPS added that “In France, strip product producers have been unable to implement any period four basis rises and have even had to offer decreases. The most significant falls are for coated material. Stocks remain high and demand is weakening, except from the car industry. Moreover, there are quite a lot of imports in the system. Mills are hoping to at least stabilize values in January.”

MEPS further added that “The Italian scene is quiet with weak consumption. Service centers have plenty of stock because they are selling less than expected. Despite large quantities of third country offers, customers are not booking - just waiting to see how the market progresses. Import quotations are similar to local ones and, for the moment, domestic producers are not chasing business by offering further discounts. Prices have been held at the September level.”

MEPS also added that “The UK market is described as "thoroughly unexciting" with very little improvement in business activity since the end of the holidays as customers only purchase for their immediate needs. Distributors' inventories are overabundant due to a lack of demand. Consequently, resale values are down as service centers fight for orders. There are not many new third country offers, so import pressure is no longer depressing prices. Nevertheless, EU suppliers have reduced basis values for the fourth trimester.”

MEPS said that “Market sentiment is poor in Belgium. Both buyers and sellers are nervous. The large distributors are de stocking because they are required to have lower inventories by the end of the year. Consequently, purchasing activity is slow and delivery lead times are shrinking, causing the mills to drop prices. Further corrections cannot be ruled out. In Spain, third country suppliers are now selling less tonnage because European producers are offering more attractive prices with much shorter lead times. Although underlying demand is strong, resale margins have fallen significantly. In general, stocks are healthy.”

Japanese steel makers costing hit by materials and freight price hikes

According to Japan Iron & Steel Federation, Japanese steel maker cost increases might exceed an earlier forecast because of surging shipping expenses and raw material price gains.

Mr Hajime Bada chairman of Japan Iron & Steel Federation recently said that the costs may increase as much as JPY 900 billion or USD 7.8 billion, in the fiscal year ending March 31st 2008. The gain is 29% more than his estimate of JPY 700 billion on April 22nd 2007. Incidentally, Mr Shoji Muneoka executive VP of Nippon Steel had estimated in June 2007 that costs may rise as much as JPY 1 trillion

Mr Bada said that "Raw material costs for the steel sector may rise between JPY 800 billion and JPY 900 billion from last year because of surging freight costs and higher prices of steel scrap and other metals including nickel, ferrosilicon and ferromanganese.”

Steel makers are scheduled to begin annual price negotiations this month for iron ore and coal with suppliers like BHP Billiton and Vale do Rio Doce. The talks will cover shipments from April. Mr Bada said that "The negotiations will last longer this time."

China's iron ore fines imports in 8 months up by 14.5% YoY

According to the latest statistics from the China’s General Administration of Customs, China's imports of iron ore fines went up by 14.5% YoY to reach 250 million tonnes in January to August 2007 period.

The import of 250 million tonnes iron ore fines was worth USD 19.61 billion up by 43.8% YoY as compared with January to August 2006.

During the period, the average import price of iron ore fines grew by 25.5% YoY to USD 78.2 per ton. Meanwhile, price of iron ore fines rose by 36.9% YoY to USD 89.8 per tonnes in August.

Growing price of iron ore fines is attributed to the increasing transportation cost, which had more than doubled year on year by the first half of the year. In addition, the lack of international shipping capabilities resulted in the mounting cost.

An update on steel futures worldwide

Steel futures are a highly debatable subject in the global steel industry with most of the steel makers opposing it but commodity exchanges putting their best feet forward. Following exchanges are trying to put it together
1. London Metal Exchange
2. New York Mercantile Exchange
3. Shanghai Futures Exchange
4. Dubai Gold and Commodities Exchange

An update of their plans, announcements and status is as under

1. London Metal Exchange
The London Metal Exchange, through which most of the world’s industrial metals are traded, will officially launch its two steel futures contracts in the open outcry trade on April 28th 2008.

But the contracts, which cover steel billet for delivery in the Mediterranean and Far East, will be tradable on electronic platform Select and by telephone from February 25th 2008. The first cash date remains July 28th 2008.

Contracts out to 15 months will be available and the lot size will be 80 tonnes, loose or in bundles of seven to nine tonnes in billets, which are semi-finished products. The initial delivery location for the Mediterranean contract will be Istanbul, and for the Far East contract South Korea. Lot sizes for both contracts will be 65 tonnes.

2. New York Mercantile Exchange
New York Mercantile Exchange the world’s largest physical commodity exchange will launch a steel futures contract later this year based on the steel benchmarker index of World Steel Dynamics Inc.

The expected contract will be USA hot rolled band steel futures and will be cleared on the NYMEX ClearPort system. The contract will be 20 short tonnes with a minimum price fluctuation of 50 cents per short ton and will be listed for 18 consecutive months.

SteelBenchmarker is an index developed by World Steel Dynamics. Final settlement day will be the fourth Wednesday of the current contract month.

3. Shanghai Futures Exchange
The Shanghai Futures Exchange has been trying to launch rebar and steel wire futures for well over a year, but the exchange still lacks support from China’s steel industry.

Mr Yang Maijun MD of the Shanghai Futures Exchange said in April the exchange hoped to launch steel futures some time in the next two years. He said “We’re still convincing them (the Chinese steel industry) that it is in the industry’s best interest.”

4. Dubai Gold and Commodities Exchange

The Dubai Gold and Commodities Exchange plans to launch its steel futures contracts on October 29th 2007 after repeatedly postponing the kick off date since last year.

The Dubai steel contract will be reinforcing, used in construction and will be priced in dollars per tonne and will be accessible to international investors. Each contract will be for 10 tonnes of grade W460 rebar of 12 meters and will allow for physical delivery at DGCX-approved delivery points in Dubai, which can be used as optional warehouses.

At the launch, the DGCX will list three delivery months initially December 2007, January 2008 and February 2008. Additional delivery months and a weekly delivery cycle will be added as market liquidity grows.

TU members begin strike at Rautarukki Raahe units

It is reported that around 450 members of the Union of Salaried Employees began a strike following the breakdown of Sunday's negotiations between the employer association Finnish Technology Industries and TU to reach a settlement. The strike affects those functions of Ruukki Production, Ruukki Engineering, Ruukki Metals, corporate administration and transport services located in Raahe.

As per report, the strike will stop hot rolling production and the cutting lines at the Raahe Works resulting in the stoppage of product manufacture at the works as well as deliveries to customers and products for further processing. Raahe supplies around 7,000 tonnes of rolled and partly processed steel products a day. Around a third of these are direct customer deliveries and the rest is sent to the Hämeenlinna Works, tube works and Rautaruukki's own service centers for further processing. Steel production, as well as critical personnel, process and environmental safety functions will be maintained despite the strike.

The release said that “Should it continue, the strike will mostly affect Ruukki Metals division, which will make every effort to utilize the resources of its extensive service centre network in the Nordic countries to safeguard customer deliveries during the dispute. Ruukki Engineering division will be able to mainly take care of customer deliveries during the early stages of the strike, except for direct deliveries from the works. The strike will not significantly affect the operations of Ruukki Construction division during early stages.”

The release added that “The company will do everything it can - for example, by using stocks and transferring deliveries so that they can be managed from service centres, to ensure the continuity of customer deliveries. Additionally, the company will increase steel sourcing from outside Finland. The effects of the strike in the company's international units will initially mostly be experienced in Ruukki Metals division's sales units in Western Europe. Other units outside Finland mainly use steel sourced from outside the company. Around 70% of Rautaruukki's net sales are currently generated outside Finland.”

AK Steel to expand electrical steel capacity at Butler and Zanesville

AK Steel announced that its board of directors had approved capital investments to lower production costs and increase electrical steel capacity at its specialty steel operations at Butler in Pennsylvania and Zanesville in Ohio.

The capital investments will include a new electric arc furnace and ladle metallurgy furnace as well as additional electrical steel finishing equipment. The projects, totaling USD 180 million, will provide flexibility in helping AK Steel serve growing electrical steel demand, as well as the opportunity to increase carbon steel production at its Butler Works. The projects are expected to be completed by the end of 2009.

When the electrical steel projects have been completed, AK Steel’s grain oriented electrical steel capacity will increase to approximately 344,000 tons annually. The new capital equipment will allow AK Steel to increase production of its highest efficiency product, as well as increase its coating capacity for all grades of grain oriented electrical steels.

Mr James L Wainscott chairman, president & CEO of AK Steel said that “Our grain oriented electrical steels continue to be in high demand and short supply. The capital investments announced today will help serve the robust markets for new, highly efficient electrical transformers in the United States and elsewhere around the world.”

New electrical efficiency standards recently promulgated in the United States, as well as aging electrical generation and transmission infrastructures in some regions of the world, are driving the increased demand for grain oriented electrical steels.

Outokumpu to change surcharge calculation method for SS

Outokumpu has decided to change the calculation method for the alloy surcharge in its stainless steel pricing to bring more stability in the stainless steel market and to reduce the effects of the raw material price volatility.

The alloy surcharge reflects the changes in the prices of raw materials for stainless steel and is added on top of the so called base price resulting in transaction price, which is payable by the customer.

Currently, the alloy surcharge is based on the average raw material prices two and three months prior to delivery. Starting with stainless steel deliveries for January 2008, Outokumpu's alloy surcharge will be based on the 30 day average price of raw materials calculated back from the previous month's 20th day. In the new method, only the reference period will change and all other parameters will remain as before.

Outokumpu will apply the new alloy surcharge calculation method in its home markets in the Nordic countries and the UK, as well as in markets where there are no local producers. In markets, which have a local producer, Outokumpu already follows the method used by that producer.

Kagara quarterly zinc production rises to record

Bloomberg reported that Kagara Zinc Ltd, the Australian mining company that sells its output to Korea Zinc Co produced a record amount of the metal in the first quarter after it mined higher grade ore. The quarter saw a continuing improvement in performance across all sites.

Perth based Kagara Zinc said that its Zinc production for the three months ended September 30th 2007 rose by 34% YoY to 13,549 tonnes from the corresponding period a year earlier. Its lead output also rose by 30% YoY to 3,977 tonnes, the highest in two years and copper production was 4,453 tonnes.

Kagara said that it is seeking to boost output of both copper and zinc by developing its Mungana mine in Queensland.

Kagara's full year profit for the year ended June 30th 2007 doubled to a record as output rose and metal prices gained.

Shougang ties up with China Shipbuilding for boosting cooperation

It is reported that Shougang has recently signed a strategic cooperation agreement with China Shipbuilding Industry Corp for supplying ship building quality plates for the latter's shipbuilding bases around Bohai sea. Shougang's move is to strengthen its presence in the buoyant shipbuilding market.

In fact, both sides have already inked deals for ship plate R&D and supply as early as 1990's. Shougang is moving its production bases to Caofei, Qinghuangdao adjacent to the shipbuilder's Bohai Sea, which would help boost their cooperation in the future, according to Wang Qinghai, general manager of Shougang.

China Shipbuilding Industry Corp has new shipbuilding orders of 25 million dead weight tonnes so far, with its main shipbuilding works having full order book till 2010 or even 2012. The shipbuilder intends to raise up its capacity to over 10 million DWT by 2012.

Mr Dongqiang vice GM of China Shipbuilding Industry Corp noted that the shipbuilder would require over 1 million tonnes of steel products annually in the near future when its shipbuilding bases in Qingdao, Shanhaiguan and Tianjin all come on stream. It aims to set up a shipbuilding base around Bohai Sea in next couple of years. Mr Dong anticipants that their requirement for SBQ plates would remain at a high level for long time.

Currently, all of China's major plates mills are seeking to invest in the shipbuilding industry to help guarantee a bigger and more stable domestic plate market. Anshan Iron & Steel is planning to invest RMB 200m to construct a shipbuilding base with Qingdao Beihai Shipbuilding Heavy Industry in Qingdao Development Zone. Baosteel is moving to enter its second shipbuilding venture with China State Shipbuilding Corporation.

(Sourced from MySteel.net)

German Theis eying Serbian market

It is reported that German cold steel rolling company Theis plans to enter Serbian market. Mr Axel Rubeck manager of Theis said that it aims to enter Serbia, as the company has no operations in the Balkans neither a company nor a service.

He told a presentation in Belgrade, organized by Serbian German Chamber of Commerce, that the company's factories are very specific in their cold steel rolling production, being capable of delivering necessary precious steel within two weeks, even in such small quantities as 10 kilograms.

Theis is one of three steel companies in Europe which produces steel strips and is also supplying the auto industry with spare parts.

SinoSteel gets NDRC nod to buy 73% stake in Zimasco

Bloomberg reported that SinoSteel Corp, China’s second biggest iron ore trading company, recently won government approval to buy a majority stake in Zimasco Ltd, Zimbabwe’s largest ferrochrome producer, as it tries to secure raw material supplies.

SinoSteel will buy 73% of Zimasco Ltd as the purchase has been approved by the National Development and Reform Commission.

Zimbabwe has the world’s largest reserves of chrome after South Africa. Zimasco produces about 180,000 tonnes a year of the commodity, according to the company. It was once the world’s fifth largest maker of ferrochrome.

SinoSteel is expanding into producing raw materials such as ferroalloys used in steelmaking, to meet demand in the world’s biggest producer and consumer of steel.

China to drive rise in global nickel consumption in 2008 - INSG

According to a recent International Nickel Study Group, China's demand for nickel and nickel containing products is set to boost global primary nickel consumption by 8.9% to 1.47 million tonnes in 2008 from 1.35 million tonnes in 2007. However, estimates for global refined nickel production in 2007 and 2008 surpass predicted global consumption.


According to the INSG, global refined nickel consumption will fall to 1.35 million tonne in 2007 from 1.4 million tonnes in 2006 following a slump in high nickel content stainless steel production in most parts of the world, and reduced demand for refined nickel and nickel containing scrap in the second half of 2007. European countries contributed significantly to falling global nickel consumption this year, despite growing consumption from China. However, the recovery of stainless steel production around the world particularly in China will cause refined nickel consumption to rise in 2008.

INSG also predicted that global refined nickel production has risen sharply from 1.36 million tons in 2006, to an estimated 1.47 million tons in 2007 and 1.57 million tonnes in 2008.

According to China's National Bureau of Statistics China produced 81,176 tons of refined nickel in the first eight months of this year, up 27.3% from the same period last year. China Nonferrous Metals Industry Association previously told Interfax that China produced 107,700 tons of nickel last year up 13.05%YoY with production set to reach 210,000 tonnes by the end of this year, including 90,000 tons of nickel metal from nickel pig iron production.

Xinjiang to contribute 20% of China's total coal production

Xinhua reported that Northwestern China's Xinjiang Uygur Autonomous Region will produce one billion tonne of coal annually by 2020, accounting for at least 20% of China's total. The plan is based on Xinjiang's prospective coal resources of 2.19 trillion tonnes or 40% of China's total.

Currently, Xinjiang turned out 50 million tons of coal a year. To achieve the 2020 goal, it needs to increase coal output by 80 million tonnes in each of the coming 13 years or so.

According to local government sources, the region will turn its coal production into chemicals and electricity and transport them to interior areas through transmission lines and pipelines, as freight cost is high for coal in the region.

More than 80 coal producers from Shanxi Province, a traditional coal production base in northern China, have flocked into Xinjiang for investment opportunities in coal resources development. Lu'an Mining from Shanxi has signed a framework agreement with Xinjiang's regional government in comprehensive development of coal resources.
The sources said China planned to have a total installed capacity of 1.6 billion KW by 2020, much more than the current 600 million KW. Around 600 million KW out of the one billion KW increment will come from thermal power facilities, which will help increase China's total annual coal demand to five billion tonnes. Areas outside Xinjiang will produce 3 billion tonnes to 3.5 billion tonnes of coal a year, while the remaining 1.5 billion tonnes will be provided by the remote autonomous region and filled up with imports.

Xstrata Coal announces completion of Anvil Hill acquisition

Xstrata Coal recently announced that it has completed the acquisition of the Anvil Hill asset from Centennial Coal Company, following receipt of ministerial approval and the resolution of conditions precedent.

The acquisition of the Anvil Hill Project will add to Xstrata's NSW thermal coal portfolio, with the mine plan envisaging production of up to 10.5 million tonnes of both domestic and export grade thermal coal annually over a 20 year period.

Xstrata release added that it will consult with landowners and other affected stakeholders in the coming weeks.

Pakistan Steel increases prices of steel products

Business Recorder reported that Pakistan Steel has raised prices of its eight steel products by PKR 500 to PKR 3,000 per tonne last week to match with the International market.

As per report, Pakistan Steel raised the prices of pig iron, billets, plates, slab, scrap, hot rolled and cold rolled coils in the wake of raw material price hike in the international market. According to Pakistan Steel management the price of all grade and quality of billets had been raised by PKR 1,000 per tonne, while the extra charges for special grade was increased by PKR 250 per tonnes.

The report citing a Pakistan’s steel dealer outlined the following changes

In PKR per tonne
Exclusive of sales tax

NDRC publishes closure list of obsolete capacity in coke, ferroalloy and carbide segment

China's top planning body National Development & Reform Commission has published the first closure list of outdated capacities in calcium carbide, ferroalloy and coking industry.

In coking industry, for coke from machinery oven, the list totally includes 69 companies, 14 in Hebei, 27 in Shanxi, 1 in Liaoning, 2 in Shandong, 2 in Henan, 1 in Guangdong, 5 in Guizhou, 6 in Sichuan and 11 in Sha'anxi

For semi coke, coke from beehive oven and coke from primitive oven, 228 enterprises are in the blacklist, including 115 in Guizhou and 113 in Sha'anxi.

In ferroalloy industry, 204 companies are involved, among which 11 companies are in Hunan, 49 in Guangxi, 18 in Gansu, 22 in Guizhou, 15 in Sichuan, 34 in Shanxi, 47 in Yunnan, 4 in Sha'anxi, 2 in Henan, 1 in Fujian and 1 in Qinghai.

In calcium carbide industry, the list covers 83 enterprises, including 35 in Shanxi, 1 in Liaoning, 5 in Guangxi, 3 in Sichuan, 3 in Guizhou, 25 in Yunnan, 4 in Sha'anxi and 7 in Yunnan.

(Sourced from MySteel.net)

Shapeline 500 to further improves flatness for Hugo Vogelsang

Shapeline announced that it has supplied fourth Shapeline 500 system to its long term customer Hugo Vogelsang in Germany. The new system will, through precision crossbow measurements, enable Hugo Vogelsang to adjust hardening parameters and assure quality of delivered products.

Mr Pär Kierkegaard CEO of Shapeline said that “Our seven year history of delivering flatness measurement systems to Hugo Vogelsang proves that a company determined to keep their quality advantage find our equipment the best tool for flatness control. We are proud of being an important factor why Hugo Vogelsang, and other European makers of quality steel products, continue their world leadership.”

Mr Hartmut Heckermann MD of Hugo Vogelsang said that “Shapeline has shown that with their systems we can hold on to our leading-quality approach.” He continues: “Our current first three systems have proven that not only is the information they provide correct and useful, but also that they and Shapeline are reliable components in our highly efficient production process. We are together with Shapeline looking at possibilities to use the systems also for other purposes than we currently use and expect our relation to continue for many years to come.”

Shapeline AB is a privately owned company based in the city of Linköping in Sweden and provides advanced solutions for measuring the flatness of metallic products plates or strip.

ArcelorMittal extends lease for Aviles coke plant until 2020

Platts reported that ArcelorMittal has renewed its lease on its Aviles coke plant in northern Spain until 2020.

A spokesman of ArcelorMittal told Platts that its EUR 70,000 per year leasing contract with plant owner Infoinvest was originally due to expire in December of this year. Though a price was not mentioned, the spokesman confirmed that the lease price had increased.

The spokesman said that Aviles' production is necessary to maintain steel production levels at its nearby Gijon steel plant. He told Platts that "It is quite simple really, we need to produce coke from Aviles to continue to feed the blast furnaces at Gijon.” According to the spokesman, part of the production from the Aviles plant is also sent to ArcelorMittal’s other steel operations in Europe but the main reason is Gijon.

Gijon plant has its own on site coke battery which produces about 1 million tonnes per year, while the Aviles battery produces 1.4 million tonnes per year.

Salzgitter Flachstahl to modernize finishing line drives in HSM

It is reported that Salzgitter Flachstahl GmbH has ordered Siemens Industrial Solutions and Services Group to supply new main drives and the associated automatic control technology for its hot strip mill. The order value amounts to approximately EUR 29 million. The drive systems will be supplied, installed and commissioned in several stages beginning in spring 2009.

Siemens will replace the main drives of the seven stand finishing line; at present they are DC drives, but these will be replaced by AC drives stage by stage. The new cylindrical rotor synchronous motors will be fed via Sinamics 150 DC link converters with a total output of about 100MW. The motors will be manufactured at Siemens AG’s Dynamowerk Berlin.

The conversion will be carried out in a total of five stages so as to keep disruptions to ongoing production to a minimum. The layout of the motors was chosen so that the existing foundations could continue to be used, thus avoiding costly construction work. Installation will be taken care of by the Siemens Regional Company in Germany, in Hannover.

Salzgitter Flachstahl is the largest steel subsidiary in the Salzgitter Group. In 2006, it produced about 4.6 million tonnes of steel. Its hot strip mill produces from standard low carbon to high strength grades, carbon steels up to C75 and pipe steels up to API 5L X75. The thickness of the hot strip ranges from 1.23mm to 25mm in widths of 900mm to 1,880mm.

Iron ore agreements signed by Chinese steelmakers in Q3

It is reported that the Chinese Steelmaker has signed the following agreement in the Q3 of 007

I Supply
A) Laiwu Steel entered into a long-term iron ore supply agreement with African Societe Nationale Industrielle et Miniere and US Cargill. The agreement will secure long term and stable iron ore supply from SNIM for the steelmaker.
B) Rizhao Steel inked contract with Australia's Mount Gibson Iron and would buy 1.5 million iron ore every year from Koolan Island. The contract would be valid within 15 years or until the exhaustion of the iron ore mine.

II Transport
A) Laiwu Steel, Handan Steel and Wuhan Steel in succession signed iron ore COA with British ship owner, Zodiac Maritime Agencies Ltd.
B) Tangshan Steel entered long-term iron ore transport contract, the fourth contract of this kind, with South Korea's Sinokor Merchant Marine Co Ltd.
C) Wuhan Steel inked a 15 year contract of affreightment with China's largest shipping company China Changjiang National Shipping Corp. CSC would forge four 92,500 tonnes seagoing vessels to ensure the steel maker’s iron ore transport.
D) Baosteel Group signed three long term shipping contracts with China Ocean Shipping Company. The deals include carriage of imports of coal for three consecutive years, nine years coastal service under a three year COA, with tailor made 300,000 DWT Brazil to China iron ore service for 20 years.

III Investment
A) Baosteel finalized a JV agreement with Fortescue Metals Group Ltd to explore and potentially develop a targeted 1 billion tonne prospective magnetite deposit within Fortescue's tenement areas in the Pilbara region of Western Australia. The agreement describes the development phase in three sequential parts: exploration and resource definition; feasibility studies; agreement to proceed to mine. After the JV successfully completes stages 1 and 2, as funded by Baosteel and reaches agreement to proceed to stage 3, the equity share will be 50:50.
B) Baotou Steel signed an agreement with Australia's Centrex Metals Ltd to provide up to AUD 40 million to help fund pre development studies on Centrex's Bungalow magnetite concentrate. In return for its investment, Baotou will earn half of Bungalow's expected total annual production of 3 million tons of magnetite concentrate.

C) Jiangsu Shagang Group inked an agreement with UK based trading the company Stemcor Holdings to acquire a 90% stake in the Savage River iron ore project in Australia. The group will increase both production and the project finance for the iron ore and the related steel ore factory, in order to try to prolong its exploitation term from 2009 to 2023.

(Sourced from MySteel.net)

MMK eying options in US - Report

The Ironton Tribune reported that Russian steel company Magnitogorsk Iron & Steel Works, which is considering building more than a USD 1 billion project in Scioto County, may instead opt to purchase Ohio based AK Steel Corp.

AK Steel, which operates steel plants at Ashland and Middletown, among other operations, has often been the target of takeover efforts from various companies, including most recently US Steel Corp. AK Steel recently reached an agreement to fund a USD 663 million voluntary employee beneficiary association trust to cover the health care benefits of retired workers from its Middletown plant. It has also made early contributions to its pension funds in order to settle labor contracts and satisfy longstanding cost issues.

Analysts see those efforts as indications AK Steel is putting itself in position to be a more attractive takeover target. Analysts have also questioned why MMK would build a new plant in AK Steel’s backyard. Am analysts said “I have been wondering for some time that with AK already in southern Ohio and importing slab, why would you build a mill in that area.”

FLSmidth to supply mining equipment to FMG

It is reported that FLSmidth Minerals has been awarded a contract to provide two mobile overburden handling systems to Fortescue Metals Group for their iron ore mine in the Pilbara region in the north of Western Australia. The parties have agreed not to disclose the value of the contract.

The two mobile overburden handling systems are automated materials handling systems for the removal of overburden in the mining operation up to 16,000 tonnes per hour. The equipment will be supplied by FLSmidth Minerals' subsidiary FLSmidth RAHCO Inc. Installation of the first system will begin in July 2008 with start p by the end of 2008. The second system will follow four months later.

Mr Jørgen Huno CEO of Rasmussen Group comments that "FLSmidth Minerals recently has the ability to reduce the operating costs of the mining companies through the combination of our long history of engineering expertise in minerals crushing technology and the acquired leading materials handling technologies in MVT, Koch and RAHCO."

The orders result from synergies between the recently acquired materials handling companies within the FLSmidth Group combined with the Group's position as one of the global leaders in large capacity material handling systems for the mining industry. Ater RAHCO's acquisition by FLSmidth Minerals in the beginning of 2007 the company is now capable of handling much larger projects than before.

Qatar Steel makes first DRI export shipment to Egypt

The Peninsula reported that Qatar Steel successfully made its first DRI shipment of 20,000 tonnes from its jetty at Mesaieed in Qatar to Al Ezz Flat Steel at Ain Sukhna in Egypt in September October 2007.

Qatar Steel has recently successfully commissioned its 2nd DRI plant which will increase its total DRI production from 800,000 tonnes to 2.3 million tonnes per annum. The new DR plant which uses the Midrex technology is equipped to annually produce 1.5 million tonnes of both CDRI and HBI simultaneously.

The new DRI plant is one of three expansion projects that have started production in 2007 and expected to be in full operation in 2008, the other two project are a new Electric Arc France with capacity of 600,000 tonnes per annum and a new deformed bar rolling mill with capacity of 700,000 tonnes per annum.

SNR to mine coal for Eastern Cape power supply

It is reported that coal deposits first mined in South Africa's Eastern Cape province in 1864 will soon be exploited again by Strategic Natural Resources, which plans to use new technology to mine narrow seam coal.

The property is located about 400 kilometers north of Port Elizabeth a major metropolis in the Eastern Cape Province. Strategic Natural Resources has completed a mining plan for the proven resource and will now submit a mining permit application to the local department of minerals and energy. The 5.5 million tonnes of proven resource will supply the company's first five years of production, while Strategic Natural Resources continues to upgrade the balance of its current 40 million tonnes of resources on the concession.

Mr Jeremy Metcalfe CEO of by Strategic Natural Resources said that the company planned to start production from 5.5 million tonnes of proven resource on its Elitheni concession within a year. He said that “The Elitheni concession is a large area of 26,000 hectares that is very prospective according to early drilling and a geological survey. The company is confident that it would continue to expand its resource over time.”

Mr Metcalfe said the intention was to supply 2 million tons of coal per year to Independent Power South Africa's planned Indwe power station adjacent to its mine. IPSA would go ahead with its construction of the 500 MW station once SNR had proven it could supply sufficient coal. Mr Metcalfe confirmed that SNR would not produce thermal export coal.

Mr Metcalfe said previous mining of the Eastern Cape deposits reached a peak of 176,000 tons per year around 1900, but production started to decline in 1917 when large deposits of wide seam coal was found in Witbank, east of Johannesburg. He added that mining in the Elitheni area is once again economically viable with new technology and higher electricity prices.

Price wars break out in Chinese domestic car market

It is reported that a new bout of price battles in China's car market, the second biggest in the world, has broken out following South Korean carmaker Hyundai Motor Co's aggressive price cuts on its locally made models last month.

Hyundai's JV with Beijing Automotive Industry Corp slashed prices of the subcompact Accent, the compact Elantra and mid sized Sonata by CNY 5,000 to CNY 16,000 to buck a downward trend in its sales this year.

Under attack from competition, January to August sales at the venture which also makes the Tucson sports utility vehicle plunged 20% from a year ago to 146,001 units, ranking eighth in the passenger car sector in China, according to industry data

Mr Hua Xue CEO of cheshi.com.cn a Beijing-based portal tracking nationwide car prices said "Other carmakers will have to follow suit to lure increasingly sophisticated Chinese buyers. He said as a result, domestic car prices will tumble by as much as 6.5% in December from January, a quicker pace than 5.6% last year. He added that prices in August dropped by 3.6% from January due to earlier price contests.

According to market intelligence, Shanghai GM, a tie up between General Motors Corp and SAIC Motor Co, will possibly launch a major price cut for the compact Buick Excelle its best seller to fight against the Hyundai venture.

Analysts said Shanghai GM, the third-biggest passenger car producer in China, will have to cut prices to achieve its lofty 2007 sales target as its growth this year has slowed sharply.

ArcelorMittal may expand presence in Mauritania

Local media has reported that Mr LN Mittal CEO of ArcelorMittal is planning a visit to Mauritania amid speculations of buying shares in the Mauritanian steel company.

Mr Mittal is visiting Mauritania for the second time after the one he did on mid October 2007, during which he met some government officials. The two parties discussed cooperation opportunities for setting exploration and exploitation projects in Mauritania.