Bharat Refractory merger with SAIL approved

India’s union cabinet has approved the merger of Bharat Refectories Limited in Jharkhand with Steel Authority of India Limited, under Section 396 of the Companies Act, 1956, deemed effective from April 1st 2007.

Mr Priyaranjan Dasmunsi information & broadcasting minister told reporters that 'Every whole-time officer, including the whole time director, or other employees of the BRL will become an officer or employee, as the case may be, of SAIL.”

He added that “The merger will set off the additional loss of INR 30 crore on restructuring of current assets based on assessment by the SAIL, also against the paid up equity share capital of INR 227.19 crore.”

The government would allow the BRL to 'redeem 7% non cumulative preference shares worth INR 12.05 crore due for redemption on April 1, 2005 by fresh issue of fully paid up shares of equivalent amount as per provisions of Section 80 of the Companies Act, 1956.'

Update on TATA Steel 3 Greenfield steel plants

Giving a status report on the Greenfield projects, Mr B Muthuraman MD of TATA Steel said that it will spend INR 80,000 crore on 3 of its Greenfield projects which will take its total capacity in India to 35 million tonnes.

Jharkhand
He said that "By mid 2010, we will be 10 million tonnes in Jamshedpur, making it the largest capacity in a single location in India."

Orissa
Mr Muthuraman said that “In Orissa after 3 years of struggle to acquire land and after a satisfactory rehabilitation & resettlement policy, TATA Steel is about to start construction of the 6 million tonnes plant as soon as the required iron ore was allotted. R&R policy is awaited and iron ore lease is also being awaited.”

Chattisgarh
He said that “In Chhattisgarh, capacity similar to Orissa is proposed, land acquisition is about to begin.”

Mr Muthuraman said that "Our Greenfield projects can be considerably speeded up if we are able to acquire land quickly and given captive leases of iron ore and coal."

TATA Power achieves financial closure of Mundra UMPP

TATA Power has announced the financial closure of its 4,000 MW ultra mega power project at Mundra in Gujarat. The financial agreements have been signed under the company’s special purpose vehicle Coastal Gujarat Power. The project cost is estimated at INR 17,000 crore.

Mr Prasad R Menon MD of TATA Power said “The signing of the financing agreements for Mundra UMPP is an important milestone. The terms of debt financing provides us long tenure of loans, supporting our competitive bid price assumptions.”

The project is financed through equity of INR 4,250 crore, external commercial borrowings of around USD 1.8 billion (INR 7,200 crore) and rupee loans of up to INR 5,550 crore. SBI Caps are the financial advisors and mandated lead arranger for rupee loans.

The first of the five units is expected to be commissioned by September 2011 and the entire plant is expected to be commissioned by end of 2012.

ArcelorMittal appoints 3 member CR team for India

ArcelorMittal has announced the appointment of three members to its India Corporate Responsibility team to lead the company's initiatives at its two projects in Jharkhand and Orissa.

The three team members include
1. Mr Sudhir K Sinha Country Head CR, Resettlement and Rehabilitation
2. Mr Sumana Datta CR Head Jharkhand
3. Mr Bibhudendu Panda CR Head Orissa

Mr Sanak Mishra CEO of ArcelorMittal India said "The appointments strengthen the company's resolve to achieve an appropriate balance between CR and growth in business operations.’

Mr Remi Boyer VP CR said "The India CR team will identify and prioritize the development needs of the project areas that will sustain growth of society and economy." We will continue to engage all relevant parties to build an R &R plan on a convergent model that benefits all stakeholders.”

POSCO plan to compensate displaced farmers driven by returns

It was recently reported that POSCO has agreed to pay higher levels of compensation to farmers who will be displaced from non forest land but this decision of POSCO is not driven by kind heartedness, but from shrewd planning and analysis of what they can get away with.

The report said that “As part of the initial deal, POSCO has promised a flat rate of royalty at USD 0.5 per tonne of iron ore to the government of Orissa. This results in less than INR 1620 crore to government of Orissa over time of the contract of 600 million tonnes. The current global market rate of iron ore is over USD100 per tonne. By this rate, 600 million tonnes of iron ore at greater than 62% iron content would result in INR 288,000 crore.”

The report added that “The indirect costs of this effort to the people of Orissa add up even further. Thousands of acres of land and millions of gallons of water given almost free to the company, coal at give away prices and the economic venture framed within a special economic zone providing tax benefits to the company.”

It concluded that “And yet, the government of Orissa has continued to argue that this project is for the good of the state.”

People who will be affected by the project, however, have realized the harm they come to and have continued to oppose this effort in spite of extreme intimidation, threats, offer of jobs or money.

Trinidad PM supporting Essar Steel plant

IANS quoted Mr Patrick Manning Prime Minister of Trinidad & Tobago as saying that the USD 1.2 billion steel unit proposed by the Mumbai based Essar group will proceed on schedule despite emotional protests. He added that the construction of the steel plant will begin shortly.

Mr Manning said that "This is an emotional issue for many. But when you examine the facts of the case they are not borne out by the emotion you are seeing. In fact people are shedding heat on it, not light."

The prime minister’s response followed several protests since the announcement that the plant would be constructed in the Pranz Gardens in Claxton Bay.

Prominent attorney at law Mr Prakash Ramadhar had joined the fray in condemning the government for its decision to allow the plant despite protests by some of the 1,500 residents, all of who have been living there for over a generation. They view the project as a distasteful, inhumane and dangerous proposition, with Mr Ramadhar describing the unit and its potential effect on the community and the environment as the nature of mother nature.

Mr Ramadhar asked the residents to defend themselves not by violence but by networking with one another and taking lawful methods of action. He added that "Use this issue to show the government that the residents will not sit by and let their lives be destroyed."

Mr Prem Singh administrative manager of Essar Steel said that the proposed plant would be one of the most modern in the world and would not have a destructive effect on the environment. He added that the plant would provide hundreds of jobs during construction and in smaller number upon completion.

S&P downgrades TATA Steel credit rating to 'BB'

Rating agency Standard & Poor's has downgraded TATA Steel's corporate credit rating to stable 'BB' from positive, while assigning the same rating to the company's unsecured bank loans totaling USD 1.25 billion.

The downward revision was prompted by the uncertainty over infusion of additional equity as per the initial plans for the acquisition of Corus and some increase in capital commitments, specifically for its expansion projects in India.

Mr Anshukant Taneja analyst at S&P said that "TATA Steel's initially proposed plan of issuing hybrid securities of USD 2.56 billion and equity of USD 500 million to partially fund the USD 14 billion acquisition of Corus has been deferred due to prevailing credit market conditions."

Standard & Poor's observed that concurrently, TATA Steel has accelerated the execution of some of the expansion projects in India, especially that for adding 2.9 million tonnes per annum capacity at an outlay of USD 2.3 billion and another 3.9 million tonne Greenfield project in Orissa worth USD 3.9 billion. The total cost of these projects have also risen about 20% from the initial estimates given by the company due to widening of scope and inclusion of mining related investments in the project costs.

Mr Taneja said that "These events, along with potential investments in upstream coal and limestone resources, limit the upside potential of the current ratings."

S&P added that volume growth and synergy gains, which have been in line with expectations, also add to the stability of current ratings. Geographical and product diversity have also increased, a positive development for the overall risk profile of the company.

Panel to examine feasible o coal transportation via waterways

FE reported that the Indian government, in view of bottlenecks in the existing transportation network of the railways, has proposed coal transportation through waterways.

It has formed a committee chaired by Planning Commission member Mr Kirit Parikh to make slew of suggestions. Centre’s initiative is crucial as 20 million tonnes of domestic and 10 million tonnes of imported thermal coal is currently being transported through coastal shipment and these are projected to grow to 30 million tonnes of domestic and 20 million tonnes of imported thermal coal by the end of the eleventh plan.

The report cited an official source as saying that “The committee will assess the feasibility of coal transportation through waterways based on economic considerations. It will take into account the bottlenecks of the existing transportation network of Railways while exploring alternative modes of transportation. There is a consensus that an alternative mode like waterways, inland as well as coastal, should complement the railways."

CEA has called for a need for exploring alternative modes of coal transportation as the existing railway network is unable to take additional load. Coastal shipping and use of inland waterways could become a viable alternative for new plants. Central Electricity Authority has already received applications from prospective developers for setting up nearly 250 MW generating capacity at coastal locations in Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu.

According to the Inland waterways Authority of India, in addition to 3 existing National Waterways, 2 new waterways are planned in the 11th Plan. One of the proposed waterways comprising inland and coastal route would be most appropriate for moving coal out of IB valley and Talcher coalfields.

Indian Railways hopes for bigger pie of goods traffic with DFC

BL reported that Indian Railways hopes to grab larger share of goods once the dedicated freight corridor becomes operational.

Mr Lalu Prasad Yadav union railway minister said that "Work on the Delhi Mumbai and Ludhiana Howrah section of the DFC will begin soon as the project is important for us. This will help railways in carrying 60% of goods that are currently transported by roads."

Mr Yadav said that various leading financial institutions such as World Bank and ADB have been coming forward to financially support it. He added that "We are also planning to extend the DFC from Mumbai to Kolkata via Chennai in the second phase. We will never allow PPP in our core functioning. But there are many other areas where we are allowing PPP model."

SKIL investing INR 1,200 crore to set up a port at Positra

BL reported that Mumbai based SKIL Infrastructure Limited would be investing around INR 1,200 crore in setting up a port at Positra in Gujarat.

With a draught of 16 meters and a shore area of 4,000 acres, the port will be able to handle ships of 8,000 to 10,000 TEUs. Mr Rajesh Samson associate director of Ernst & Young said that "According to SKIL, the port will initially have one terminal with a capacity to handle 1.5 million TEUs which will come up by financial year 2011. They plan to scale up to eight terminals of 1.5 million TEU capacity each by 2018."

Mr Samson said that SKIL Infrastructure is already in talks for tying up with strategic partners for the project. It is also understood to be negotiating with the state government for concession agreement and expects to get necessary clearances shortly.

He said that the proposed Positra port is a part of SKIL Infrastructure’s plan to have a shipyard along with other related facilities with an estimated cost of INR 6,000 crore. He added that "This green field project with deep water location would be important in terms of capacity and linkage creation."

Ernst & Young has been signed to assist SKIL in the fund raising for the project.

NLC Tuticorin power plant approved

India’s Union Cabinet has given its approval for Neyveli Lignite Corporation’s 2X500 MW coal based thermal power project at Tuticorin in Joint Venture with Tamil Nadu Electricity Board, at an estimated cost of INR 4909.54 crore on April, 2007 Price Leves.

The Cabinet also approved the formation of the Joint Venture Company of NLC with TNEB by the name of NLC-Tamil Nadu Power Limited as per the Memorandum of Articles and Articles of Association for setting up of a 1000 MW coal based Thermal Power Project named Tuticorin Thermal Power Project at Tuticorin, Tamil Nadu with share holding of 89% of the equity capital by LNC and 11% by TNEB.

The power generated from TUTICORIN Power Project (2x500 MW) units would cater to the demand of the States in the Southern Region.

East Coast Railway uncertain of 2008-09 targets

BL reported that East Coast Railway is in a dilemma as railway board would like it to handle more than 100 million tonnes of originating freight traffic in 2008-09 as compared to 93.19 million tonnes in 2007-08.

As per report, East Coast Railway is not sure if such a big jump in throughput is achievable at all. The throughput in the current fiscal could be up at the best by an additional 5 million tonnes to reach 98 million tonnes or so.

East Coast Railway is reported to be concerned about the volume of traffic on following major grounds

1. The commissioning of Gangavaram port will take away coal and limestone traffic currently imported by Rashtriya Ispat Nigam Limited through Visakhapatnam port and transported by the division. From Gangavaram, the import of these items will be transported by the conveyor system to RINL’s plant.

2. The critical law and order situation along the 450 kilometer long Kottavalasa Kirandul line. The transportation of iron ore on the route remained totally suspended several times last year, largely due to the Maoist problem. Right now, about 11 to 12 rakes are being moved a day against the normal 16 to 17 rakes.

3. In 2007-08, East Coast Railway suffered setbacks on several other fronts also. For example, the Maharashtra State Electricity Board has stopped importing power grade coal through the Visakhapatnam port for its Khaparkheda unit. It used to load about 20 rakes a month on an average for that unit. It is has now come to a halt.

4. Also in March 2008, there was virtually no loading of fertilizer, either imported or domestic, against the normal 8 to 9 rakes a day. There was hardly any import and the domestic loading was affected because the production at two major Paradip based fertilizer plants was hit by the skyrocketing of rock phosphate prices in the world market.

Fortunately for East Cost Railway, last year the loading of coal, the single largest item of traffic, particularly at Talcher mines, was satisfactory despite a couple of hold ups, the daily loading at one point going up to 28.5 rakes.

TATA Group may set up R&D hub in UK - Report

AS per a report in ET, TATA group is likely to finalize plans for a world class global research & development centre in the UK shortly. The global R&D hub will encompass R&D activities of TATA Motors, TCS, INCAT, Corus, and TATA Chemicals and now Jaguar Land Rover among others.

The report said that “At present, TATA Motors European Technical Centre, which was involved in designing the Nano, is based in Warwick University, but the plan is to move the operation to a base that can accommodate all group companies, with world class facilities to service various sectors. The European Technical Centre is focused on automotive design and research, but it is expected that group companies like Corus, TCS and others will bring their own R&D divisions together under one roof. Details of the total investment and exact location are expected to be finalized in a few months.”

It added that “The idea is that the global R&D centre will leverage synergies across group companies, and emerge as a major global research powerhouse. The TATA had zeroed in on Anstey in West Midlands as a likely location, but are rethinking the location after its recent acquisition of Jaguar Land Rover, which is also located in the area. JLR also has its own automotive design and engineering research centre in UK, which is credited with doing much of the work on the recently launched Jaguar XF.”

Hydro power key to success of power reforms in Orissa

Mr Suresh Mohapatra energy secretary of Orissa, while addressing the Foundation Day celebrations of Orissa Hydro Power Corporation, said that "Orissa is the only state which has substantially implemented power sector reforms and excelled without any subsidy from the government over the last decade."

Mr Mohapatra said that the mid term appraisal and study reports on power sector reforms in the state had categorically stated that unless an investment of over INR 3500 crore is made the reforms will collapse. He added that "We have bridged this gap by successfully remaining power surplus and also earning INR 4000 crore by sale of power to other states."

He said that elsewhere in the country, the state governments continue to provide subsidy. All liabilities were wiped out by the state government and reforms undertaken with the new entities beginning with a clean slate. In Orissa the liabilities were given to the corporations and the government neither took it nor provided subsidy, yet Gridco which had a 1700 crore accumulated loss and was facing regulation for non payment of NTPC bills five years ago has today wiped out all its losses.

Mr Mohapatra said that "Similarly the OHPC today has revenue of INR 390 crore and a fixed deposit of INR 500 crore. Hydro power is both clean and cheap power and we have been able to weather the initial storm by optimum utilization of this power. We managed to generate up to maximum levels and sell power to neighboring states."

OHPC is on expansion mode with at least nine more hydro power units being planned. It is also looking at JVs and is tying up with Orissa Mining Corporation to set up a 2000 MW thermal power station.

Mundra to become largest power hub in India

It is reported that Mundra is all set to be India's next big power hub and in a decade, Mundra may boast of having India's largest power capacity ever.

Mundra’s barren land will soon be the home to Adani Power Plant and TATA Power too is setting up an ultra mega power project of 4,000 MW. It is the first time ever that two mega power projects are being set up in a single location. But it's may not be just two projects that Mundra is seeking to house, another 10 could well be on their way.

Mr Gautam Adani chairman of Adani Group said that "Mundra as a site in 5 to 10 years will be a power hub. We envisage that basically 12,000 MW to 14000 MW capacity will be established there."

The reason behind Mundra selected for the purpose is for its port connectivity which makes importing coal economical. It also has a huge barren land bank that can be easily accessed. And last but not the least its proximity to the sea which gives power plants sufficient water resources. All this is only once the Planning Commission gives these projects its nod of approval.

Orissa delaying water linkage to NTPC Talaipalli

Orissa government has delayed water linkage to National Thermal Power Corporation Limited’s captive coal mining project at Talaipalli fearing protests from farmers in another demonstration of growing conflicts between companies, governments and farmers over scarce resources.

Mr Suresh Mahapatra energy secretary of Orissa said that “There was a law and order problem in the Hirakund dam area last year on the water issue. We are trying to resolve the issue at the earliest."

The delay comes even as NTPC struggles to start production at the first captive coal blocks allotted to it at Pakhri Barwadih in Jharkhand because of procedural issues. Production at this block was expected to have begun in December 2007. A senior NTPC executive said that "With the water clearance pending, we can not go ahead. We are pursuing the matter with the state government, but there has been a delay due to pressure from the farmers."

NTPC’s effort to mine for coal from captive blocks was part of its effort to ensure a stable fuel source for its power plants. Coal is critical for NTPC as more than 80% of its installed capacity of 29,144 MW is coal based. NTPC currently requires 122.94 million tonnes per annum of coal and it expects this to grow further as a substantial portion of the capacity it is adding will be based on coal. NTPC has been allocated 8 captive coal blocks by the government. The problems it has faced at 2 blocks had led power sector analysts to fear changes in the company’s plans to achieve fuel security and reduce dependence on Coal India Limited.

In order to meet this requirement, NTPC plans to double its imports of coal to 5 million tonnes per annum in the current year and will soon float a global tender for the same. The rest of its coal requirements are met through supplies by CIL. It plans to invest about INR 10,000 crore to produce 50 million tonnes of coal annually from its captive blocks by 2013. The company expects coal from these captive blocks to be 20% cheaper than what it pays CIL.

Sasol TATA CTL plans hit roadblock

ET reported that Sasol and TATA Group's plans to establish India's first coal to liquid plant has hit a snag after last week's news that the Indian government is examining the possibility of allocating coal blocks to the Sasol TATA project.

The differences have arisen among the inter ministerial group set up to develop the roadmap that would allow the country to commercialize the CTL process.

According to the report, the main argument raised by those opposing the liquefaction projects, particularly TATA's collaboration with Sasol, is that India's coal resources should be reserved for use by the power sector rather than being offered for projects that put it to unproductive usage without aiding Indian's energy security.

The report said that "With India's 80% to 90% of future power projects coming up on coal, the fuel could hardly be spared for liquefaction projects that have yet to become popular even globally."

A CTL plant typically consumes up to 30 million tonnes a year of extractable coal reserves, half of which could support a coal based power project generating about 4000 MW.

The proposed Sasol TATA project aims to establish CTL facility with a production capacity of 3.6 million tonnes of oil and oil products a year. It has been suggested that Sasol believes the project would only be feasible if it can secure the up to 1.5 billion tonnes of coal required to feed the plant over its 25 year life.

TATA Steel embarks on combating malaria

SNS reported that, in an attempt to combat Malaria as part of its corporate social responsibility in Orissa, TATA Steel has announced to embark on an initiative christened malaria prevention cum eradication program with am approximate budget of INR 1 crore.

Under the program, medicated mosquito nets and medicines would be distributed to about 50,000 families of the state. In the first leg of the two phase program, 6 blocks of Jajpur and Keonjhar districts will be covered and later, other parts would be covered.

In association of TATA Steel Rural Development Society, the TATA Steel has been undertaking regular initiatives to create awareness, detect and treat malaria in the past.

To create awareness, it organizes Malaria awareness camps, Nukkad Natak, health talks, wall painting in different villages. Further to avoid infection it regularly does fogging and spray of DDT, distributes mosquito nets, slide testing and also distributes medicines to the affected. At many villages it has dug soak pits near tube well sites and also filled the pit hole with Moorum soil.

As per government reports, as many as 365,592 numbers of people were found affected from malaria out of which about 86.60% were found Plasmodium

Binani Cement to invest INR 2,000 crore to double output

Binani Cement has announced that it would invest INR 2,000 crore to double its capacity to 12 million tonnes per year by 2012.

Mr Vinod Juneja deputy MD of Binani Cement said that "We are looking at both organic and inorganic routes to double our capacity to 12 million tonnes per annum by 2012. This will require investment to the tune of INR 2,000 crore."

Mr Juneja said that Binani Cement would put up a 2 million tonnes per annum Greenfield plant near the coastal Gujarat with an investment of INR 800 crore. He added that "We will invest around INR 350 crore from our own resources in the proposed plant. We have already acquired 100 acres of land and work on the grinding unit will start within this fiscal itself."

WB attracts INR 63,961 crore investment proposals in 2007

PTI reported that West Bengal government had succeeded in attracting 7.7% of the total investment proposals in 2007 through industrial entrepreneurs memorandum among the leading industrial states of India.

Mr TK Dasgupta deputy director of industries said that West Bengal received 226 industrial entrepreneurs memorandums involving INR 63,961 crore in 2007, which translate into 7.7% of the aggregate investment attracted by Gujarat, Maharashtra, Orissa, Chhattisgarh and Jharkhand beside Bengal. He added that "Total additional employment generation from the investment was expected 117,000.''

Analysis of various industrial entrepreneurs memorandum issued during the year reveals that maximum investment proposals came from iron & steel sector contributing 46.64% or INR 29,834 crore followed by power sector that attracted 27.7% or INR 17,714 crore of the total pro posed investment.

In 2007, West Bengal received 15 proposals involving INR 2,190 crore and employment of 6,512 people in the emerging industry of the state, automobile and auto ancillary. Most of these were from component makers for TATA Motor's small car project at Singur.
Among notable investment proposals from iron and steel sector were Jai Balaji Industries that announced investment of INR 7,737 crore while Adhunik Corporation said that it will pump INR 1850 crore in Purulia district.

Kakinada Old Port braces for a difficult year

A difficult year is ahead for the old port of Kakinada as union government has imposed a ban on export of non basmati rice. It has been doing exceedingly well for the past 3 years or so, mainly due to rice exports to Africa and other countries. In fact, more than half of the cargo handled by the old port is rice. The ban on rice exports is a big blow to the old port and, if the ban continues, 2008-09 may be a difficult year. The cargo throughput may not cross the usual 2 million tonnes or 2.5 million tonnes.

Kakinada port handled 4.19 million tonnes of cargo during 2007-08, with rice accounting for 2.25 million tonnes, fertilizers 1 million tonnes and the rest being other cargoes such as maize. Kakinada port earned INR 20 crore of revenue during 2007-08 up by 42.85% YoY as against INR 14 crore during 2006-07.

The new port at Kakinada handled 12.6 million tonnes of cargo during 2007-08, of which transhipment cargo accounted for more than 6 million tonnes and the rest was general cargo. The fourth berth at the deep water port has been commissioned recently and, therefore, the port is set to handle more cargo during the current financial year.

At the deep water port facilities have been created for export of alumina powder brought in from Orissa by Vedanta Alumina. Export has started on a small scale.

L&T may form JV with NHPC

Larsen & Toubro along with NHPC is likely to form a JV to develop hydel projects that NHPC is planning to construct in India and is further likely to expand to overseas projects and consultancy assignments.

In the proposed deal NHPC will retain 51% equity in the JV and L&T will own 41%. The JV will treat each of the projects as special purpose vehicles.

Though details of the proposed JV were yet to be finalized, its first assignment is likely to be 3 projects in Jammu & Kashmir that NHPC is planning. These are the 1,000 MW Pakaldurg, 600 MW Kiru and 520 MW Kawar. All of these projects are planned to be built on the Chenab in the Kishtwar region of Doda district in Jammu & Kashmir.

Bids invited for consultants for high speed corridor in Chennai

It is reported that Tamil Nadu Urban Infrastructure Financial Services has invited proposals from international consultants to study, plan and design a high speed transportation corridor in Chennai.

The Tamil Nadu government will construct a 120 kilometer circular high speed transportation corridor over the banks of major water courses in the city at a cost of INR 2,300 crore. The four lane and six lane roads, which will constitute the corridor expressway, will be linked to the Chennai bypass road and constructed over the banks of Adyar river, Buckingham Canal, the Cooum and Mambalam canal.

The National Highways Authority of India will construct 60 kilometer of the expressway and the remaining will be constructed by the state government.

Last date of submission of bids is May 28th 2008.

JFE profit drops 13% as costs outpace price increases

JFE Holdings Inc, the world's third largest steelmaker, posted a 13% drop in full year profit as raw material costs rose faster than it increased product prices.

JFE in a statement said that its net income sank to JPY 261.8 billion (USD 2.5 billion) in the year ended March 31st 2008 as compared with JPY 299.7 billion a year earlier. JFE Holding wouldn't forecast profit for this year until price talks with customers were finished.

JFE, along with bigger rival Nippon Steel Corp is paying at least 65% more for iron ore this year, while prices for coking coal have tripled to record highs. The increases, driven by rising demand in China and limited mining capacity, come as slower US economic growth may prevent carmakers and other steel buyers from passing on costs.

Mr Toshiyuki Johno an analyst at Nikko Citigroup Ltd in Tokyo said that “They can't be too confident about the outcome of price negotiations with carmakers and other companies. Profit will probably be flat this year once the price increases come through in the second half.''

Salzgitter Flachstahl commissions new hot strip CTL

Salzgitter Flachstahl GmbH has presented its new hot strip cut to length line to its customers and partners on April 21st 2008. After the welcoming words by Mr Ulrich Grethe Technical Director, the new facilities were officially commissioned.

The new line will be able to cut sheets from 2mm to 9 mm thick, up to an elastic limit of 1,100 MPa, as well as sheets of 2mm to a maximum of 16 mm thickness, with an elastic limit of 850 MPa. The line configuration allows a maximum width of 2,000 mm and a manufacturing length between 1,000 mm and 16,000 mm.

On the new line Salzgitter Flachstahl GmbH is producing metal sheets in high and ultra high strength qualities with excellent flatness and dimensional tolerances. One particular feature of the new hot strip cut to length line in Salzgitter is the high driving power of the straightening element, which is executed in a grid design. It is also possible to increase the stiffness of the straightening aggregate by pre-tensing the framework, consequently compensating for the back spring of the straightening roller sets.

The release said that “The all new line, representing total investments of some EUR 20 million is a further key component in the Salzgitter Stahl 2012 growth strategy, which continues the offensive in high quality steel products. The Salzgitter Group is positioning itself as a successful niche player with competitive advantages resulting from close customer relationships, product quality, flexibility and productivity. One of the fundamental goals of this strategy is a focus on high strength and ultra high strength hot rolled strip. In addition to this product portfolio expansion, the company is also striving to shift quantities to these higher grade product market segments.”

It added that “This will accommodate the market's growing requirements and increasing demands. Detailed market analyses have shown a demand for more than 1.2 million tons of the highest quality laser sheets for the European wide strip market.”

ArcelorMittal eying mega investments in Indonesia - Report

As per a report in the Investor Daily, ArcelorMittal has recently told the Indonesian government that it is interested in investing between USD 5 billion and USD 10 billion in steel and mining projects in Indonesia.

The newspaper quoted Mr Fahmi Idris Industry Ministry of Indonesia as saying that Mr LN Mittal president & CEO of ArcelorMittal, after his recent visist, wrote to the government and proposed three options
1. ArcelorMittal to buy a stake in state owned steel company PT Krakatau Steel
2. ArcelorMittal to tie up with KS to build a steel plant on a Greenfield site
3. ArcelorMittal to tie up with PT Aneka Tambang Tbk to develop coal, iron ore, nickel and manganese mining projects.

The newspaper quoted Mr Idris as saying that Mr Mittal is expecting the government to respond to his offer within two to three weeks.

JFE to boost capital spending by 36% in bid to meet demand

JFE Steel Corp announced plans to increase its capital spending by 36% this fiscal year, in a bid to quench strong demand for high end steel in the auto and shipbuilding industries.

Japan's No. 2 steelmaker and a core unit of JFE Holdings Inc in a statement said that it will spend JPY 265 billion in the year to March 2009 for the output hike, to repair existing works and to build new facilities.

The plan reflects the stronger than expected global demand for high grade sheet and plate steel used in cars and ships. It also represents the growing pressuring on Japan's major steelmakers to cash in the fact that only a few steelmakers have the technology to produce high grade steel without compromising their growth.

JFE said that the main project to increase its high end product output will be finished by April 2010. The investment includes JPY 85 billion for boosting its crude steel output, a plan which JFE was originally considering putting in its medium term strategy scheduled for release next year.

A JFE spokesman said the company decided to bring forward this plan to raise crude steel production in the wake of growing demand.

Court says Salzgitter may have to pay back German state aid

Thomson Financial reported that European Union's highest court ruled that German steelmaker Salzgitter AG may have to repay state aid which the European Commission deemed illegal.

As per report the European Court of Justice sent the case back to the second highest court, the Court of First Instance for scrutiny.

A spokesman for competition commissioner Mr Neelie Kroes welcomed the ruling, but said that the EU executive will have to wait for the CFI's decision on the case before commenting further.

In 2000, the commission said that tax aid granted by the German government to Salzgitter, Preussag Stahl AG and units of the group from the 1980s to 1995 were incompatible with EU rules. It ordered the repayment of the aid. In 2004, the CFI overturned part of the commission's ruling.

Zinc global demand and output in 2008 to be up by 5.8%

The International Lead and Zinc Study Group said that global zinc demand is set to increase by 5.2% to 11.85 million tonnes in 2008 as global zinc mine production ramps up by 10.4% to 12.08 million tonnes.

The report said that the rising levels of demand will be mainly due to growth in Asia, with usage in China forecast to rise by a further 10.4% primarily as a consequence of further investment in domestic infrastructure projects. Demand is also expected to increase in India, Japan, the Republic of Korea and Thailand.

ILZSG said that in Europe, predicted rises in demand in Belgium, France, Poland, the Russian Federation and Spain will be partially offset by falls in Germany and Italy, resulting in an overall increase of 0.9%. After falling by a significant 11.8% in 2007 to its lowest level since 1991, demand in the US is forecast to rise by 4.8% in 2008.

The ILZSG indicated the increased capacities at established mines and the opening of new sites as major factors influencing the metals global mine production increase in 2008. It said that 2007's opening of Apex Silver's San Cristobal mine would result in a significant increase in Bolivian output alongside the commissioning of new capacity in a number of other countries including Australia, Canada, China, India, Peru, Portugal and the US.

World output of refined zinc metal is forecast to rise by 6.4% to 12.06 million tonnes in 2008. Further significant increases are expected in China and India, where Hindustan Zinc's second 170,000 tonne per year capacity refinery at Chanderiya was commissioned in December 2007. Rises are also forecast in a number of other countries including Canada, Iran, Japan, the Republic of Korea, Mexico, Peru and the US.

The report said that Chinese net exports of refined zinc metal this year were expected to be significantly lower than in 2007, mainly as a result of rising domestic demand. However, net imports of zinc contained in zinc concentrates in 2008 are forecast to remain close to the record levels achieved in 2007.

The latest forecasts supplied by the Group's member countries indicate that global supply of refined zinc metal will exceed demand by 215,000 tonnes in 2008.

Nucor loses appeal in libel suit

It is reported that Charlotte based Nucor Corp has lost an unusual NC Court of Appeals case in which the steelmaking giant sued an analyst for libel after he issued a critical report about the company.

A superior court judge dismissed Nucor's lawsuit in April 2007, and last week, the N.C. Court of Appeals upheld the trial court's decision. Nucor can appeal to the N C Supreme Court.

Mr Tumazos who worked for Prudential Equity Group, issued a sell rating on Nucor stock along with the report in December 2006. According to court documents Nucor objected to metals market analyst Mr John C Tumazos' report that said that “Alienated customers may file antitrust lawsuits and Nucor needs to wake up from its monopoly dreams."

Analysts and advocates said that it's rare for companies to sue analysts for libel but such cases can be dangerous for both parties, making companies look bad or keeping analysts from issuing honest opinions.

Mr Jon Stokes of the CFA Institute, an industry group that sets standards for financial analysts said that "It is something we hear about, unfortunately. It has the potential to put a chilling effect on analysts."

Japanese steel demand to drops in April to June period

JMB reported that Nippon Steel expects Japanese steel demand decreases by 560,000 tonnes to around 19.08 million tonnes in April to June 2008 from same period of 2007.

The firm sees the demand increases by around 250,000 tonnes for manufacturers while the construction demand decreases by 810,000 tonnes compared with temporally boom in April to June 2007 before new building standard law. The firm estimates the demand could increase by 1.55 million tonnes to 79.54 million tonnes for fiscal 2008 started April from fiscal 2007.

Private projects keep steel demand steady in Thailand

According to Mr Wikrom Vajragupta MD of the South East Asia Iron and Steel Institute, Thailand's demand for steel is expected to rise by 4% to 5% in 2008 from 12.14 million tonnes in 2007 due to private construction projects.

However, Mr Wikrom predicted that a decline in global and domestic steel prices in the second half due to falling demand caused by a slowing US economy. He said that ''Steel prices should not rise beyond the current level.”

Hot rolled steel coil and steel bar prices have risen above USD 900 a tonne from an average of USD 500 last year on soaring cost of coal and strong demand from India, China and the Mideast. Mr Wikrom said that ''Steel consumption should slow in the second half of this year which may affect prices for the period.”

Taiwanese H beam price to move up in May

It is reported that Taiwanese Tung Ho Steel and Dragon Steel are considereding hiking their H beam price about USD 49.67 per tonne based on their April shipments.

Basically, due to the market situation, the H beam price for May will be for sure increasing, but both of mills have no confirmed with the actual price raising level so far.

Market sources believe that the price will be released this week.

(Sourced from YIEH.com)

ArcelorMittal Shelby hikes tube prices for June

US ArcelorMittal Shelby announced to increase it’s drawn over mandrel tube price by 8.6% for all new orders shipped from June 1st 2008.

The company had increased the price by 8% for orders shipped from May 19th 2008. The continued rising cost of raw materials is the main reason caused this increase.

(Sourced from YIEH.com)

Metso announces Q1 results

Finnish engineering company Metso Oyj has reported first quarter sales and profits. Highlights of the first quarter

1. New orders worth EUR 1,509 million were received in January to March.
2. At the end of March, the order backlog was EUR 4,340 million.
3. Net sales totaled EUR 1,400 million as compared to EUR 1,366 million in Q1 of 2007
4. Earnings before interest, tax and amortization were EUR 133.7 million as compared to EUR 121.9 million in Q1 of 2007
5. Operating profit was EUR 119.6 million as compared to EUR 108.4 million.

Mr Jorma Eloranta president & CEO of Metso Corporation said that "Our first quarter profitability improved across Metso despite currency headwinds and cost increases. Capacity constraints are still a fact in some of our units, and we have focused on projects and products with higher margins. We have also initiated several projects to meet the growing demand, especially in the emerging markets."

He added that "Overall our markets continue to be active. Delays in the decision-making in some larger pulp and paper projects and timing issues in some new mining projects under negotiations led to a relative weak order intake in the first quarter. We expect a recovery in the coming quarters based on our strong prospects list and letters of intent. He continues that he is not pleased with the cash flow development during the past couple of quarters but he is confident that the actions taken will turn the trend.

Mr Eloranta also points out that at comparable exchange rates Metso’s order backlog was 14% stronger than a year before, providing a solid basis for continued net sales growth. The financial development in January to March supports our guidance for the full year 2008. Our target is to achieve, at comparable exchange rates, net sales growth of about 10% on the previous year and to improve our operating profit margin level to about 10 percent.

Vinashin revenue in Q1 up by 108% YoY

The Viet Nam Shipbuilding Industry Group has announced it earned a revenue of VND 5.1 trillion (USD 318.7 million) in the Q1 of 2008 an increase of 108% YoY. Vinashin attributed the business bonanza to its strategy of progressive re investment, which helped to enhance its production capacity.

In the first three months of 2008, Vinashin built as many as 50 large vessels ranging from 4,000 DWT to 105,000 DWT as well as dozens of smaller vessels for either private use or maritime transport.

Mr Pham Thanh Binh CEO of Vinashin said that "This quarter we recorded our highest ever growth rate with gains in both production capacity and productivity.”

Vinashin which has 40 subsidiaries recruited an additional 7,000 laborers in the first quarter. It is now one of Viet Nam's biggest employers with a total workforce of 78,500. So far Vinashin which targets revenue of over VND 40 trillion for the entire year has secured contracts with both domestic and foreign clients worth USD 12 billion.

Gallatin Steel announces promotion of GM

Gallatin Steel has announced that Mr John Volmer has been promoted to general manager of hot rolling, replacing Mr Denis Desjardin who resigned in 2007.

Mr Volmer will have responsibility for all day to day operations in the company's rolling mill department and will be reporting directly to Gallatin Steel's president, Don Daily.

Volmer holds a degree in computer integrated manufacturing engineering technology. Prior to joining Gallatin Steel in 1994, He worked for General Electric Aircraft Engines

Mr daily said that "Mr John brings a wealth of experience and knowledge and is a valued addition to Gallatin Steel's senior management team.”

Gallatin Steel is located in Ghent and is a flat-rolled carbon steel producer and employs 450 associates.

Carpenter Technology increases cash dividend by 20%

The Board of Directors of Carpenter Technology Corporation on April 22nd 2008 declared an increase in the quarterly dividend on its common shares to USD 0.18 per share from USD 0.15 per share or an increase of 20%.

Ms Anne Stevens chairman, president & CEO of Carpenter Technology said that "The dividend increase reflects our Board's confidence in the long term strength of Carpenter's business and financial position. The dividend is a key component of our cash deployment strategy to provide a consistent, competitive return that rewards long term investment oriented shareholders. The dividend increase, our share repurchase program and our recent capital investments are all intended to create long-term value for shareholders."

Carpenter last increased its quarterly dividend from USD 0.1125 to USD 0.15 on April 26th 2007. The Company has paid a dividend every year since 1906.

Carpenter Technology produces and distributes specialty alloys, including stainless steels, titanium alloys and superalloys, and various engineered products.

Hyundai Heavy wins USD 2.49 billion orders in March

Hyundai Heavy Industries Co., the world's largest shipyard said that it clinched deals worth USD 2.49 billion to build ships, offshore platforms and plants in March.

Hyundai Heavy in a regulatory filing said that the March figure is up 41.5% YoY helped by increased orders for vessels. But the orders won in March were down 61.6 percent from the previous month.

Shipyards in South Korea, the world's largest shipbuilding nation, have received record orders in recent years as demand has surged for vessels to transport raw materials to China and goods to the rest of the world.

US Steel appoints Mr Beltz as GM for flat rolled marketing in NA

United States Steel Corporation announced that Mr Robert J Beltz has been named GM North American flat rolled marketing. He will report to Mr Richard M Efkeman vice president worldwide marketing.

Mr Beltz will oversee industry market strategies, product mix distribution and pricing for U.S Steel's flat rolled operations in the United States and Canada.

He joined the company in 1990 as a management associate in accounting and finance.

Air Liquide Q1 sales up 10.8% YoY

French industrial gases group Air Liquide announced a 10.8% rise in Q1 sales driven by strong demand from clients in the steel, chemicals and energy sectors and maintained its 2008 outlook.

Air Liquide said that its group revenue in the first quarter of 2008 amounted to EUR 3,091 million, up by 10.8%. On a comparable basis revenue increased by 8.5%

Gas & Services revenue in the first quarter, up by 9.1% on a comparable basis, reached EUR 2,649 million. This growth is in line with that of the fourth quarter 2007. It results from sustained demand in all industrial sectors and geographic zones demonstrated by the good performance of Industrial Merchant. In Large Industries, new unit start ups and ramp ups are contributing to this growth. After several exceptional growth quarters, the Electronics business remained healthy. Finally, Healthcare has benefited from strong growth in homecare.

In Engineering & Construction, sales more than doubled due to the acquisition of Lurgi, reaching EUR 189 million. Capacities are fully utilized.

Mr Benoît Potier chairman & CEO of Air Liquide group said that "The dynamic growth noted in 2007, continued in the first quarter, in a welloriented market environment. This performance again demonstrates Air Liquide's ability to generate strong sustainable growth. The integrated ALMA program, launched at the start of 2008, is proceeding according to plan and should enable us to strengthen our geographic positions and open up new markets, thanks to sustained strategic investments, continuing innovation and constant improvement in our competitiveness. For 2008, we maintain our guidance of double digit growth in net profit at constant exchange rates."

Zamil Steel boosts capacity in Vietnam with new plant

VNS reported that Pre Engineered Building producer Zamil Steel Viet Nam has opened its second factory in Viet Nam, in the Amata Industrial Park in the southern province of Dong Nai.

The facility, covering more than 24,000 square meters, would produce 4,500 tonnes of steel buildings per month. It will help bring the company’s total annual production to 100,000 tonnes or a total annual production of 50,000 tonne to 100,000 tonnes, once it reaches full operating capacity, according to the company.

Mr George Kobrossy GD of Zamil Steel Viet Nam said that "While demand for steel buildings is still increasing strongly, our plant in Ha Noi has been at full capacity for the last few years, after two expansions in 2002 and 2004. We think that the time now is right for us to operate the new factory to meet the demand and better serve our customers in Viet Nam as well as in the region.”

Mr Kobrossy added that the "The opening of the factory is also proof of our long term commitment to the Vietnamese economy."

Zamil Steel Viet Nam was established in 1997 as a joint venture between Saudi Arabia’s Zamil Steel Industries and Japan’s Mitsui & Co Ltd. The first factory, located in Ha Noi’s Noi Bai Industrial Zone, produced 5,000 tonnes of steel buildings per month in 2007. Construction of the USD 14 million plant would increase the total investment of Zamil Steel in Viet Nam to over USD 35 million.

Iranian steel output to exceed 32 million tonnes in 2011

Fars news agency quoted Mr Ali Palizdar deputy director of Iranian Mining Industries Development & Renovation Organization as saying that annual steel production will exceed 32 million tonnes in 2011.

He said that steel production increased from 9.28 million tonnes in the year to March 2007 to 10.19 million tonnes in the year to March 2008, up by 3% YoY. He added that the output of steel products also rose from 9.71 million tonnes to 10.22 million tonnes during the period.

Mr Palizdar stated that copper cathode production went up from 201,000 tonnes in the year to March 2007 to 202,000 tonnes in the year to March 2008. He added that "Aluminum production decreased from 205,000 tons during March 2007 to 204,000 tons in the year to March 2008."

Arab Iron and Steel Union elects Mr Ezz as chairman

Arab Steel reported that the Arab Iron and Steel Union has elected Mr Ahmad Ezz as chairman of its board of directors during its meetings held at Sharm El-Sheikh on April 22nd and April 23rd 2008.

Ezz Steel has occupied the first rank among the top Arab companies producing the finished products in 2007 with a production figure amounting to 4.853 million tonnes and the 65th rank at the world level in producing crude steel, as its production exceeded 4 million tonnes in 2007 of the total Egyptian production amounting to 6.2 million tonnes.

The Arab Iron and Steel Union comprises of 84 Arab companies. Its member companies produce 92% of the total Arab production which amounted to more than 24.8 million tonnes of finished products and 17 million tonnes of crude steel in 2007.

Dubailand to deploy tram and monorails

Gulf News reported that Dubailand will have 50 kilometers to 60 kilometers of combined tram and monorail lines to enable easy movement of people within the emirate's most ambitious leisure and entertainment zone.

Mr Mohammad Al Habbai CEO of Dubailand said that the specific details of the internal transport system that connects Dubailand's various attractions are still being worked out. He added that "The plan is in the concept and design stage."

Mr Al Habbai said that the local transport systems will drastically cut the travel time within the zone, part of Dubai's plans to attract 15 million visitors each year by 2015. He added that "Today average time spent by a person on Dubai's roads is 3 hours daily but we want to reduce it to 25 minutes for Dubailand."

Being developed on 3 billion square feet of land, Dubailand will have more people living in it than Dubai's current population of more than 1.5 million. In other infrastructure projects, AED 1.5 billion is being spent on 11 electricity sub stations within the zone. One sub station is ready and the rest are under construction.

Turkey to shift export focus to India and Brazil

Today's Zaman reported that, with the hope of increasing exports, Turkey is seeking to strengthen its trade relations with Brazil and India, and a new expansion plan tailored for India is on the way.

Mr Tuncer Kayalar Turkey’s foreign trade undersecretary said that the foreign trade secretariat is closely watching the needs of exports and global developments. He added that Turkey will particularly focus on countries such as Brazil and India, which stand out as significant economies.

Mr Kayalar emphasized that although there has not been a joint economic commission meeting between Turkey and Brazil for a long time, one will take place in May 2008. He added that the secretariat is continuing with efforts to arrange a trade committee in Brazil.

He said that Turkey would also establish close ties with neighboring countries such as Iran, Syria, Georgia, Ukraine and Russia.

Iranian gas exports likely to increase substantially

Fars news agency reported that a number of countries, including Switzerland, Germany, littoral states of the Persian Gulf, Syria, Turkey, Azerbaijan and Armenia have either inked agreements or expressed an interest in importing gas from Iran.

Iran’s gas exports are projected to reach 96 billion cubic meters by 2020.

Dubai to build LNG re gasification terminal

Dubai Supply Authority has announced that it will develop a floating liquefied natural gas re gasification facility at the DP World Jebel Ali Terminal in Dubai. The new facility will supplement the Emirate’s existing supplies of natural gas during summer peak demand, delivering environmental and security of energy supply benefits.

Dubai Supply Authority has selected Shell as adviser and project manager for the development phase. Shell will also be the main LNG supplier and will continue to provide advice to DUSUP once the facility is completed.

Golar Freeze, an existing LNG ship, will be chartered by Dubai Supply Authority from Golar LNG Company and converted into a floating Storage and Re gasification Unit to be moored offshore within DP World Jebel Ali Terminal. LNG ships will moor alongside the Golar Freeze to offload their cargoes. Gas will be piped through a sub-sea pipeline from the Golar Freeze into the Dubai natural gas pipeline network to industrial customers.

Imam Khomeini Port sees 24% YoY increase in export

IRNA reported that Imam Khomeini Port has witnessed a 24% YoY increase in exports during the Iranian year ended March 19th 2008. The rise was recorded in the export of chemicals, iron and wheat.

Imam Khomeini port exported 6.3 million tonnes of commodities in 2007, loading and offloading 21.8 million tonnes of goods showing an increase of 6% YoY as compared to the figure for the previous year.

The port is now a major hub for the export of wheat. Some 40% of Iran’s exports are shipped from this port. Meanwhile, Golestan province exported 151,000 tonnes of goods valued at USD 79.3 million during 2007-08 fiscal.

Oman selects GE compressors to revive depleted gas wells

For more efficient extraction of gas from depleted wells in 4 of its gas fields, Petroleum Development Oman has turned to advanced, high pressure compression technology from GE Oil & Gas.

GE announced that it will supply 16 electric motor driven centrifugal compressors under a multi year, multi project contract valued at more than USD 250 million worth of contract. The technology will be used for high pressure injection applications in the Kauther, Saih Nihayda and Yibal gas fields of Oman.

The compressors will be manufactured at GE Oil & Gas facilities in Florence in Italy and will be shipped to Oman over the period of 2009-2015, for a total of 14 projects that will come on line between 2010 and 2016.

Mr Claudi Santiago president & CEO of GE Oil & Gas said that “For more than 3 decades, GE Oil & Gas has been dedicated to the development of state of the art technology for challenging gas injection applications, such as sustaining and improving production from depleted wells. Our experience with these types of projects worldwide was a key factor in our selection by PDO to provide compressors for upcoming projects that will help maintain the levels of gas production throughout the region."

In 2007, GE received 2 contracts from PDO to supply centrifugal compressors for projects in the Saih Rawl gas field of central Oman and the Harweel oil field of south Oman.

PDO accounts for more than 80% of Oman’s crude oil production and nearly all of its natural gas supply. It is 60% owned by the government of Oman, 34% by Shell Group, 4% by Total and 2% by Partex. Gas fields, however, are operated by PDO exclusively on behalf of the Omani government.

Pakistan FDI in 9 months dips by 46% YoY

The News reported that Pakistan’s foreign investment recorded a significant drop of 46% YoY during July 2007 to March 2008 period as compared to July 2006 to March 2007 period. The foreign investment remained in a narrow band, even after democracy was restored in Pakistan through general elections on February 18th 2008.

The current statistics of State Bank of Pakistan showed that in March 2008, Pakistan attracted only USD 300 million foreign investments. This is less than the expectations of economic experts, who were predicting much more investment under a democratic government. However, economists are confident that in the remaining three months of the current fiscal year, overall investment would grow robustly due to the issuance of global depository receipts of National Bank of Pakistan and some other companies.

As per official statistics of State Bank of Pakistan, during July 2007 to March 2008 period, net foreign investment stood at USD 2.98 billion as compared to USD 5.55 billion in July 2006 to March 2007 period.

It seems that foreign investors are still reluctant to invest in Pakistan, despite the fact the election process has been smoothly completed without any problems. The new government has taken charge and the law and order situation is improving gradually. Major decline was recorded in portfolio investment, which fell by 103%, with a decrease of USD 53 million as compared to an investment of USD 1.69 billion.

Analysts were of the view that the current growth in foreign investment was not sufficient to meet the expanding current account deficit of USD 11 billion and the government would be compelled to rely on international debt.

Lucky Cement net profit in 9 months by 50% YoY

Pakistan’s Lucky Cement has posted a net profits of PKR 2,014 billion in July 2007 to March 2008 period up by 50% YoY as compared to PKR 1,345 million recorded in July 2006 to March 2007 period. The gross profit increased by a considerable 24% YoY to PKR 3.1 billion as against PKR 2.5 billion.

Lucky Cement’s distribution and administrative expenses took a significant jump to PKR 821 million up by 125% YoY from PKR 365 million.

In July 2007 to March 2008 period, the local cement dispatches of the company declined by 11% YoY to 2.18 million tonnes as compared to 2.45 million tonnes. Conversely, exports rose by a substantial 113% YoY to 1.95 million tonnes.

Iranian update on IPI

National Iranian Gas Export Company said that Tehran has every right to revise the price of gas supplied from the proposed Iran Pakistan India pipeline in view of the increase in energy prices and demand, coupled with the fact that Pakistan and India have not inked any deal yet.

Interestingly, India still seems apprehensive about the successful implementation of the USD 7 billion project, as it is opposed to the draft agreement Tehran has submitted seeking revision of prices at any time during the contract period.

In the past, India’s petroleum & natural gas ministry showed enthusiasm when the first breakthrough on the 2,600 kilometer natural gas pipeline draft deal occurred. But later the ministry described the Iranian proposal as partisan, undermining the interests of two major partners, India and Pakistan.

Meanwhile, Mr Murli Deora India’s petroleum & natural gas minister said that "The Iranian draft agreement has been formulated in a way to allow Tehran to revise the price of gas whenever it likes during the entire contract period in line with volatile global gas prices."

India had also earlier accused Tehran of attempting to betray the commitment it made during several rounds of talks. New Delhi claimed it was concerned that if the condition mentioned in the draft was agreed to, Tehran could walk out of the pipeline project any time.
But Tehran never did walk out of the project.

India Oman trade jumps by 66% YoY to USD 1.5 billion

Trade between India and Oman has registered the highest growth rate of 66% YoY and amounted to USD 1.5 billion in 2007 from USD 900 million in 2006.

Mr Anil Wadhwa Indian Ambassador to Oman said that India Oman economic and commercial relations have gained sufficient momentum in recent years to lend a strategic nature to the bilateral engagement. He added that "The political relations between India and Oman are guided by mutual respect and commonality of views on major regional and international issues."

Recent years have witnessed a two way flow of significant investments in various fields, including oil and gas, heavy engineering, chemicals and pharmaceuticals, IT and infrastructure.

Mr Wadhwa mentioned that the steady growth of tourists traffic between the 2 countries was a result of increase in air connectivity between the two countries.

Emarat Maritime eyes more success beyond GCC

Emirates Business 24-7 reported that many players in the global shipping industry are seeking to benefit from the Middle East’s growing shipping market but UAE registered Emarat Maritime continues to set its sights elsewhere.

As per report, Emarat Maritime is determined to maintain its international business model despite the regional successes of the shipping industry resulting from increasing global demand for oil. It is one of the few UAE shipping companies that operates in the tramp trade and concentrates on international waters.

Mr Sharafudin Sharaf chairman of Emarat Maritime and also VP of Sharaf Group said that "Our business model has proved successful over the years and we are not about to abandon it to concentrate on regional shipping. We want to concentrate on the market that we understand better. We have experienced steady growth in our core market since we started our operations and have managed to diversify into several shipping sectors."

Mr Sharaf said that "Building materials such as steel and aggregates are in very heavy demand globally these days. With regard to our ships the surge in export goods from China and other parts of Asia means these routes continue to be lucrative."

Dubai based Emarat Maritime commenced operations in 1990, focusing primarily on the agriculture products trade from the Indian subcontinent. Its core markets remains India, China, Indonesia and Australia but its ships go as far as the United States, South America and West Africa. Emarat Maritime has a fleet of 10 bulk carriers with 5 more under construction and due to be delivered by January 2013. It also has 4 liners.

NDRC backups steel mills combination in Shandong province

It is reported that delegate of Development and Reform Commission of Shandong province lately gave a report to the National Development and Reform Commission about the successful establishment of Shandong Steel Group and opinions about later restructuring work. After that, NDRC noted that the coastal foundation building program in Shandong province should be scheduled on the basis of the provincial overall conditions especially the next combination of Qidao Steel and Rizhao Steel.

On March 26th 2008, Shandong Steel Group was set up by combining subsidiaries such as Jinan Steel, Laiwu Steel, Zhangdian Steel and steelmakers affiliated to the former Shandong Metallurgical Company. Steel mills mentioned above combined to give birth to 23.31 million tonnes of pig iron, 23.82 million tonnes of crude steel and 22.71 million tonnes of steel products in 2007. Based on last year's output level, the nowadays Shandong Steel Group has ranked the second largest steelmaker in China, only after Baosteel. The newly built steel group aims to improve its general competitiveness of the provincial steel production through eliminating the backward capacity and making adjustment to the remaining steel capacity and layout.

Mr Xiong Biling vice department chief of industrial sector of NDRC said the establishment of Shandong Steel Group is a paragon of significant merger of domestic steel mills and steel industry consolidation has jumped into full swing.

EU to initiate AD probe for Chinese wire rods

It is reported that on April 18th 2008 EU said in a note that it has received a complaint lodged by steel industry in EU and would initiate an anti-dumping investigation into wire rod from China.

As per report conventionally EU will officially announce to file the case due on or about ten days after the note.

EU rejects Chinese market economy treatment application

It is reported that EU has disclosed that it has rejected the application for market economy treatment waged by six Chinese enterprises that respond to anti-dumping case into certain welded tubes and pipes of iron or non-alloy steel from China.

EU said that the investigation indicated the six Chinese enterprises failed to provide credible evidences to prove their commercial decisions and costs were market oriented and the accounting books were unqualified. Besides, EU believed the enterprises were affected by non-market economy system in aspects such as use of land and transfer of shares.

EU launched anti dumping investigation into the welded tubes and pipes from China on September 26th 2007.

(Sourced from MySteel.net)

BHPB sets up new Chinese headquarter in Shanghai

It is reported that the mining giant BHP Billiton's representative in China lately noted that the corporation has set up a new headquarter in Shanghai in order to strengthen cooperation with Chinese business partners, would like to take part in community activities and as a sponsor to Beijing Olympics and the Paralympic Movements.

The representative said comparing with traditional resource companies BHP Billiton focuses more on quality and diversified portfolio and can provide steadier cash flow and strong production capability for growth.

In 2007 the Australian corporation's operating revenue reached USD 47.5 billion in 2005 and became a sponsor of China's Beijing Olympics and the Paralympic Movements 2008 by agreeing to provide medal making materials.

China unlikely to shut largest steel plants for Olympics

It is reported that China is unlikely to shut its largest steel plants in the regions around Beijing during the Olympic Games but could close more private mills that do not meet emission standards.

Mr Qi Xiangdong vice secretary General of the China Iron and Steel Association said although officials have said anti pollution measures will be taken in the five surrounding provinces of Hebei, Tianjin, Shandong, Inner Mongolia and Shanxi, no details have been released. He said "We have not seen any documentation for steel mills other than Shougang, but we do not expect surrounding big steel companies like Tanggang or Hangang to close."

He added that "If private companies have pollution or emissions issues, they may have to take measures, further he was unable to provide an estimate of what proportion of steel mills might have to close in Hebei, the province that neighbors Beijing and accounts for 10% of China's steel output.”

China has already announced a two month shutdown of some plants belonging to No 7 steel producer Shougang to help reduce pollution in month of August 8 to 24 Games and the following Paralympics.

Some economists believe that regions surrounding Beijing are still negotiating with the central government for adequate incentives to close industrial plants and ensure blue skies for china's showpiece. Tanggang was China's third biggest producer of steel last year with Hangang ranked 14th in the country. Beijing is one of the most polluted cities in the world and International Olympic Committee research indicates there is a slight risk to the health of athletes in endurance events when the air quality is lowest.

Baosteel now capable of making entire range of Al Zn coated steels

It is reported that Baosteel made by one of its branches, low alloy high strength hot dipped Al-Zn steel was authorized by Danmark largest Industrial Corporation also a leading temperature controller of the world Danfoss.

Baosteel's first batch of products will be adopted by Danfoss in making the shell of temperature controller.

Before Baosteel's development, low alloy high strength steel could be made by one European steel mill only. This ends the incapability of China's making this steel and makes Baosteel one that can produce whole set of six hot dipped Al Zn steel varieties.

As per report hot dipped Al Zn coated steels for common steel drawing steel, deep blanking steel, structural steel, full hard steel and low alloy high strength steel are widely used in construction and automobile industries.

Broner to supply PPC solution to Tiantie Steel

Broner Metals Solutions, the world’s leading provider of supply chain planning, scheduling and manufacturing execution systems, specifically for the Metals Industry, has announced that it is to supply its Production Planning and Scheduling solution to Tianjin Tiantie Metallurgical Group for their major project in China’s Hebei province.

The Broner solution will be used to manage and control the planning and scheduling of the production for the new flat products facilities, and will be implemented by CISDI, Broner’s partner in China, and includes Broner Material Planner, Production Planner, Caster Scheduler, Hot Mill Scheduler, Schedule Editor and Melt Shop Control Centre modules.

Mr David Mushin CEO of Broner Metals Solutions said “The Tiantie project highlights our growing business in China and is a result of superior solutions for metals manufacturing together with strong local partnerships.”

Tianjin Tiantie Metallurgical Group Ltd is one of the top 500 state owned companies in China producing over 4.3 million tons of raw steel annually. It is headquartered in Tianjin city, while most of its facilities are located in She city in Hebei province. Tiantie currently produces pig iron and some long products, like merchant bar and narrow strip, but is changing its market focus, and is building a new flat products plant that will eventually replace the existing long products facilities. The first phase of this project will include a new steelmaking and hot rolling plant in She city, Hebei province, and this will be followed by a cold rolling plant at Tianjin, closer to port facilities. The new facility in She is a hot-rolling facility with annual production of over 3.8 million tons of steel coils.

Hyundai Motor may use Chinese steel in South Korea

Reuters reported that Hyundai Motor Co South Korea's top auto maker may consider using steel from Chinese producers for auto production at home to lower costs as raw material prices rise.

Mr Park Dong-wook director at Hyundai's treasury division told reporters and analysts when the company announced its first quarter earnings that "If Chinese steel is cheap and of good quality, we may consider buying steel from China."

He added that Hyundai does not yet use steel from China.

On April 18th 2008 its Chinese unit said it planned to increase the use of Chinese steel in its auto production to cut costs amid rising raw material prices.

Import price of Mn ore at Chinese ports

It is reported that the import price of Mn ore at Chinese ports is under

Price in CNY per MTU

(Sourced from MySteel.net)

Ansteel improves SPHC yield strength

It is reported that recently, Ansteel has successfully lowered SPHC steel’s yield strength from the current 250 MPa to 270MPa more than 300 MPa, the average down by more than 50 MPa reaching the domestic advanced level.

SPHC is the first efficient variety steel developed by 1700mm production line and it is widely used in various industries. In the early days of the production, because of the high yield strength of this product, it had greatly impact the CR production. Against this question,

Ansteel established professional group to lower SPHC steel’s yield strength.

Bricmont to supply 6 furnaces to Nanshan Aluminum

It is reported that Bricmont Inc of Canonsburg, an Inductotherm Group Company, has been awarded a contract to supply six high production capacity round top charge aluminum melting furnaces and six rectangular tilting holding furnaces for Nanshan Aluminum’s expanded production facility in Shandong Province of China.

The installation will incorporate several state of the art design features, including regenerative burners with advanced controls and electromagnetic stirring. When commissioned in late 2009, this new facility will form part of one of the largest capacity aluminum casting centers in China.

UC RUSAL acquires 25% stake in Norilsk Nickel

UC RUSAL announced the completion of a transaction today whereby it acquired a 25% +1 share stake in OJSC MMC Norilsk Nickel.

Mr Denis Morozov general director of Norilsk Nickel commenting on this transaction said “On behalf of Norilsk Nickel’s management I would like to welcome UC RUSAL as a large shareholder in our Company. The acquisition of such a significant stake demonstrates once again the investment appeal and strong prospects for the further growth of Norilsk Nickel.”

Mr Denis Morozov said “The management of Norilsk Nickel continues its efforts to strengthen the Company’s leadership in the world mining and metals industry and ensure stability of its activities in the interests of our shareholders, employees and the regions where our operations are located.”

Norilsk Nickel’s development opportunities expanded considerably last year as a result of major overseas acquisitions and effective implementation of Brownfield and Greenfield projects in Russia. The market value of the Company, the largest public company in the Russian mining and metals industry, nearly doubled over the last year.

NLMK announces 3rd phase CAPEX plans

NLMK announced that its Strategic Planning Committee has approved the key parameters of Phase 3 of the Group’s Technical Upgrading Program covering the period until 2015. It includes investment projects for the period 2009 to 2011 and outlines NLMK’s production strategy until 2015.

This new phase of the Program envisages crude steel production in Russia growing to 22 million tonnes, flat steel products to 6.9 million tonnes, and long steel products and pipes to 5.9 million tonnes. Total investment CAPEX in the 3rd Phase of the Program will be USD 4.1 billion for the Lipetsk production site and USD 2.0 billion for Maxi-Group facilities. In addition the Program envisages production of 3.1 million tonnes of crude steel and 6.4 million tonnes of rolled steel products at NLMK’s overseas production sites.

The 3rd Phase of the Technical Upgrading Program aims to achieve the following objectives:

1. Increase crude steel production volumes at NLMK’s Russian sites to 22 million tonnes by 2015
(a) BOF steel production at Lipetsk site will reach 14.5 million tonnes
(b) EAF steel production at Lipetsk site will reach 1.5 million tonnes. NLMK plans to construct casting and rolling mill on Lipetsk production site which comprises electric arc furnace, thin slab caster and hot-rolling mill
(c) Maxi-Group’s EAF steel production will reach 6.0 million tonnes

2. Increase flat steel production at NLMK’s Russian sites up to 6.9 million tonnes
(a) Lipetsk site will produce 6.9 million tonnes of hot-rolled steel by 2012 including 1.3 million tonnes on casting and rolling mill
(b) Cold rolled and pre painted steel production volumes will amount to 4.9 million tonnes by commissioning cold-rolling mills, galvanizing lines and new pre-painting line

By the end of 2008, NLMK will reach a final decision on whether to order a Togliatti EAF steelmaking plant with 2 million tonnes hot rolled flat steel capacity

3. Increase long steel product and pipe production on Maxi-Group sites up to 5.9 million tonnes
(a) Nizhnie Sergi site will produce 1.4 million tonnes of wire rod and high-strength rebar in 2008
(b) Commissioning a new long product mill of 1.0 million tonne wire rod capacity at Berezovsky production site in mid 2008
(c) Starting construction of the first stage of Kaluga EAF steelmaking plant in 2008 with 1.0 million tonne rebar and shaped profile capacity by 2011 and 3 million tonne capacity by 2015

By the end of 2008, NLMK will reach a final decision on whether to construct a Voronezh EAF steelmaking facility with 2 million tonnes long product capacity,

4. Electrical steel production development program
By 2015, NLMK plans to produce at least 400,000 tonnes of transformer steel. The share of Hi-B grades in total transformer steel production volume will exceed 70%

5. Basic raw materials self-sufficiency program
Today, NLMK covers 90% of its requirements in iron ore and 100% in coke. Taking into consideration the significant planned increase in production volumes, NLMK intends to implement a number of projects to enhance its iron ore and coking coal base, as well as to maintain 100% self-sufficiency in coke and scrap by 2015.

To secure the supply of basic raw materials to NLMK, the following projects will be implemented:

(a) Commissioning the first stage of palletizing factory with the capacity of 3 million tonnes in 2011 with a further increase to 6 million tonnes in 2014
(b) Development of the Zhernovskoe-1coking coal deposit with 3 million tonnes capacity in 2011
(c) Increase coke production to 6.5 million tonnes by constructing coke battery #6 on the Altai-Koks site and simultaneously closing 4 coke batteries on the Lipetsk production site
(d) Increase scrap collection on NLMK and Maxi-Group sites from 2.1 million tonnes in 2007 up to 7 million tonnes in 2015.

6. Overseas production site development
The key objective for the development of NLMK’s overseas production sites is an increase in finished steel production and share of high value added products.

The development plans for the DanSteel production site include:
(a) Increase in total rolled steel production to 600,000 tonnes together with increasing production volumes of special grade hot-rolled thick plates

The NLMK Duferco Group Joint Venture plans to increase long and flat steel production to 6.3 million tonnes. The share of high value-added products will amount to 57%. The following projects will be implemented:

(b) Increase in hot-rolled thick plate production to 0.9 million tonnes at the Clabecq site by 2010 together with the introduction of plate quenching & tempering technology
(c) Increase in crude steel production at Carsid site to 2.1 million tonnes, vacuum degasser commissioning and revamp slab continuous caster
(d) Increase flat steel production to 3.0 million tonnes at La Louviere production site by commissioning new reheating furnace
(e) Modernization of Verona Steel site (Italy), together with the increase of plate and forging ingots capacity to 0.6 million tonnes.

Mr Vladimir Lisin Chairman of NLMK’s Board of Directors commented on the Company’s plans that “The rapid development of the Russian economy is a powerful driver for demand in the domestic steel market. By 2015, we expect steel consumption to soar by 60% to 65%. We anticipate that demand for our steel products to go up in construction, mechanical engineering, automotive, infrastructure and other metal-intensive industries. NLMK’s development plans seek to meet the growing demand in the domestic market. We intend to expand steel production and output of high quality finished products at all of our sites. In pursuit of this goal, we have decided to significantly increase investment in the development of NLMK’s facilities and have approved the major steps of the 3rd Phase of our Technical Upgrading Program until 2015.Our aim is to strengthen the company’s position in production efficiency and leadership among the steel producers in the Russian market and deliver significant value to all our shareholders.”

He said “The Company plans to develop its finished product capacity on the largest foreign markets. The implementation of this strategy results in strengthening NLMK’s leadership in the global steel market and growth in high value added product volumes. It is a primary goal of the development program of our foreign assets.”

NLMK is currently implementing the 2nd Phase of its Technical Upgrading Program which is expected to be completed by 2011. The NLMK Group will increase production at its Russian sites to 16.3 million tonnes of crude steel including 12.4 million tonnes at the main production site in Lipetsk and 3.9 million tonnes at Maxi-Group facilities by 2011. The production volumes of rolled products at the Lipetsk site and long products at Maxi-Group facilities will amount to 5.5 million tonnes and 4.0 million tonnes respectively. Total investment CAPES covered by the 2nd Phase of the Program is more than USD 4.4 billion for Novolipetsk Steel and its subsidiaries and c. USD 1.8 billion for Maxi-Group.

Azovstal net sales in 2007 up by 30.8% YoY

According to the officially published financials of Azovstal, its net sales in 2007 grew to USD 3.243 billion up by 30.8% YoY while net income almost doubled to USD 420.3 million up by 92.4% YoY and the the net margin grew to 13%.

Mr Yuriy Ryzhkov analyst with Millennium Capital said that “The improved financials stem from increased prices for steel products, which compensated for raw materials prices growth on top of AZST's crude steel output, which grew to 6.3 million tonnes up by 5.4% YoY in 2007. The reported net sales are only 0.6% above and net income 10.6% below our estimates.”

(Sourced from Millennium Capital)

Severstal' to acquire balance shares in mining subsidiaries

Interfax reported that Severstal' OAO's LLC Holding Mining Company has offered minority shareholders in coal producer OJSC Vorkutaugol RUB 4,455 per share. The voluntary offer applies to ordinary shares and Type A preferred shares. Holding Mining Company currently owns 98.33% of ordinary shares and 76.20% of preferred shares in Vorkutaugol. The offer is effective for 70 days from the date of receipt.

UniCredit Bank is the guarantor for the offer. In addition, LLC Holding Mining Company sent an offer to minority shareholders in Karelsky Okatysh and Olenegorsky GOK on the buyout of their stock at a price of RUB 26,965 and RUB 18,290 per share, respectively. At present, LLC Holding Mining Company owns 94.78% and 92.7% of these companies, respectively. Based on this price and the number of shares to be bought out, the company could spend a total of USD 1.36 million on these offers.

MMK update on 1 year of mega IPO

MMK has announced that it has managed to raise USD 1 billion through IPO to realize its investment projects and that the offering allowed to obtain market valuation of MMK as well as to establish the company as a public company in the international market.

The released added that “The year after IPO became a year of quality growth for MMK. The company saw record production level for its 75 years history. It undertook large scale projects to modernize and build new production facilities, both at MMK and outside the site. MMK made serious moves to secure raw material sufficiency. Corporate governance also underwent serious changes, including increased presence of independent directors at MMK Board. MMK shares were included into calculation base for MICEX and MSCI Russia indices.”

Mr Victor Rashnikov Chairman of MMK commenting on the results of the IPO one year ago said that "MMK IPO is a landmark of a new chapter in the company’s history. MMK holds a strong position in the Russian and international markets, and we intend to further develop our company."

Mechel inks agreement with VTB Bank

Mechel announced signing of a Collaboration Agreement with VTB Bank. The Agreement was signed for VTB Bank by Mr Andrey Kostin chairman and CEO and Mr Igor Zyuzin CEO of Mechel OAO.

The released said that “The agreement represents a long term, mutually beneficial collaboration between the Company and VTB Bank for the purpose of implementing Mechel’s long term projects and development programs. The basis for this Agreement was established by a long, positive collaboration history between VTB Bank and Mechel OAO and the parties’ mutual interest in the further development of their relationship.”

As part of the work under the agreement, VTB Bank will be engaged as one of the lending institutions in financing Mechel’s current and investment activities and in servicing the Company’s other financial operations. It is expected that VTB Bank will act as a consultant to the Company on projects related to the improvement and development of an international and domestic settlement system and the implementation of modern financial resource management technologies to enhance Mechel’s performance.

Mr Igor Zyuzin CEO of Mechel’s commented that “Signing the Agreement with VTB Bank is a positive step for Mechel that continues a relationship that has existed for a long time. VTB Bank is one of the leaders in its market in Russia, and our collaboration opens new opportunities in financing and crediting to help further the growth of our business. In 2007, VTB Bank gave us invaluable and timely support in our successful efforts to purchase coal assets in Yakutia. Going forward, we are confident that we can continue to count on VTB Bank to add value to our business as we continue to execute our operating strategy. We are pleased that our partners are major financial institutions, such as VTB Bank, as we believe this is evidence of Mechel’s effective financial policy and reputation in the marketplace.”

Gazprom set to buy TNK-BP by year end - Report

Business daily Vedomosti said that Gazprom is willing to buy a controlling stake in the Russian-British joint oil venture TNK-BP by the end of the year for USD 20 billion.

A source close to the management of the Russian energy giant told Vedomosti that "The issue of TNK-BP's sale to Gazprom for USD 20 billion is a decided matter. The deal will be closed by the end of the year."

The paper said a source close to one of the co owners of TNK-BP a joint venture established on a parity basis in August 2003 between Britain's BP and Russia's AAR consortium of Alfa-Group, Access Industries and Renova, confirmed Gazprom's willingness to acquire a controlling stake by the end of the year.

According to the source, the energy giant approached Russian shareholders at TNK-BP, Russia's third largest company in terms of crude oil output, early in 2008 with a proposal to buy out their entire stake in the joint venture and told them that it had agreed on purchasing another 1% from BP.

Vedomosti said however under the existing TNK-BP shareholder agreement each party has a priority right to buy out the stock of its partners.

Gazprom manager told Vedomosti that Gazprom has long been seeking to buy a controlling stake in TNK-BP. However until late last year a moratorium on the sale of stock by the Russian-British joint venture was in effect.

Rail container transportation increase by 11% YoY

It is reported that Mr Vadim Morosov first VP of JSC Russian Railways at the 13th International Exhibition and Conference TransRussia 2008 estimated that during the last 4 years annually the rate of increase of the international rail container transportation volume totaled about 11%.

According to Mr V.Morozov in 2007.the international rail container transportation volume increased by 1.3 times and totaled more than 822,000 TEU. Import grew by 1.5 times up to 351,000 TEU transit by 1.3 times up to 125,000 TEU.

China may become net stainless steel exporter in 2008

Reuters, citing an official of world’s largest stainless steel maker Taiyuan Iron & Steel Group, reported that China's stainless steel capacity has reached a conservative 12 million tonnes and that growing production could turn China into a net exporter.

Mr Hao Peigang director of the policy research department at Taiyuan Iron & Steel Group said that "It is likely that China will become a net exporter of stainless steel in 2008. China has the best manufacturing equipment, but the cost of pretty much everything is low.”

Mr hao said that Chinese capacity may be as high as 20 million tonnes. He estimated that currently, major stainless steel producers are operating at 10% to 20% less than expected.

According to Beijing metals consultancy Antaike, stainless steel capacity and output has soared in China, with production seen rising by 42% YoY to 7.6 million tonnes.

EU buyers eying Asian mills on rising 304 price pressure

ICD reported that, if European mills continue trying to push 304 grade cold rolled coil base prices up by EUR 100 per month, European stainless processors and distributors will again look at buying material from Asia.

The risks concerning anti dumping duties would not be an issue for buyers looking to source from Asia before the end of the third quarter, and there is still time to order material for arrival before the third quarter. Base prices have remained within the EUR 1250 to EUR 1300 range this week.

Russia considers lifting 5% tin import tariff

Reuters quoted the Economic Development and Trade Ministry of Russia as saying that Russia may lift a 5% import tariff on tin in order to increase output of tinplate, steel sheet coated with tin and used mainly in tin cans.

Economic Development and Trade Ministry said in a statement that the government Commission for Protective Measures in Foreign Trade, the body responsible for drafting government orders on customs tariffs, was examining the issue at the request of steel major Magnitogorsk Iron and Steel Works.

The statement did not say when a decision on lifting the tariff was expected.

Japanese stainless steel output in February dips by 3% MoM

Japanese stainless steel production has totaled 272,117 tonnes in February 2008. Among them, production of chrome based stainless steel was 115,499 tonnes and nickel based stainless steel was 123,023 tonnes.

Up to February 29th 2008, the stocks of stainless steel in mills were 168,881 tonnes down by 3% MoM as against 174,171 tonnes in January 2008. The stocks of special stainless steel were 3,363 tonnes by the end of February 2008 down by 7.4% MoM as against 3,635 tonnes in January 2008.

Indian ferroalloy makers urge for control on raw material prices

It is reported that Indian ferroalloy makers are accusing state run mineral giants Manganese Ore India Limited and Orissa Mining Corporation of profiteering by unilaterally hiking prices of critical steelmaking inputs and demanded action against them.

Indian Ferro Alloy Producers' Association, in a letter to Mr Ram Vilas Paswan union steel minister, said that "When the government is making efforts to bring down the prices of commodities, at the same time, Manganese Ore India have again increased prices by 50% for the quarter ending June 2008 in majority of grades as compared to last quarter prices. Similarly Orissa Mining Corporation too has raised chrome prices by 198% YoY during April to June 2008 quarter to INR 18,250 per million tonne as compared to INR 6,131 per million tonne during April to June 2007 quarter."

Accusing MOIL and OMC of increasing prices of ores without any relevance to the cost of production, IFAPA said that private mine owners are increasing the prices of ores as and when the PSUs raise their prices.

Asking the centre and the Orissa government to take immediate action against MOIL and OMC for hiking prices, IFAPA said that it is imperative that such high costs of basic steel making inputs like manganese ore and chrome ore would have cascading effects and push up prices of finished goods.

The IFAPA pointed out that these minerals were finite resources and their conservation was indispensable in view of the capacity expansion plans by major steel companies. It demanded a ban on the exports of these ores which would also ensure price stability in production of ferroalloys and steel as well.

US ferrochrome prices keep on flying

As demand for material from stainless steel producers increases and supply decreases the ferrochrome prices in the USA continue to rise.

As the dollar weakens customers in the USA are cutting back on stainless steel and nickel alloy imports, but are booking more domestic product. The weakening of the dollar is also creating more overseas business for the domestic stainless producers. Free market high carbon ferrochrome has also moved up to a range of USD 2.46 to USD 2.50 per pound from USD 2.36 to USD 2.42 per pound at the start of April 2008.

Low carbon 0.05% ferrochrome is now priced at between USD 4.90 and USD 5.00 per pound. The South African power crisis has also contributed to the higher ferrochrome prices. Eskom has requested the ferroalloy and other metal producers to use 90% of their normal electricity consumption. The power crisis is expected to continue for the next 5 years.

Chinese nickel output in March 2008 up by 21.4% YoY

According to statistics showed by National Bureau of Statistic of China on April 16th 2008, Chinese nickel output in March 2008 was 11,957 tonnes up by 21.4% YoY.

The total output in Q1 increased by 15% YoY to 837,000 tonnes.

Chinese tin exports in 2008 likely to fall

Platts quoted Beijing Antaike said during a presentation at ITRI's event in Hong Kong from April 14th 2008 to April 17th 2008 that China's net tin exports are forecast to fall to 6,000 tonnes in 2008 down by 43% from 10,588 tonnes in 2007.

Antaike analysts Mr Cui Lin and Mr Zhang Changhai attributed the expected lower net exports to higher anticipated refined tin usage in the country at 146,000 tonnes in 2008 up by 10.45% from 132,200 tonnes in 2007. The growth in refined tin usage is expected to continue at a rate of 10% per year in the next few years on the back of strong growth in the electronics sector and a major increase in tinplate capacity in 2008-2009.

Tin usage in solders, which is estimated to have accounted for 72% of total consumption in China in 2007 is expected to continue to expand at some 13%/year, although growth in the lead-free share of the market is expected to slow. Meanwhile, an Antaike survey of steel companies identifies planned increases in tinplate capacity of some 1.2 million tonnes per year in the next two years. Partly offsetting these gains tin usage in chemicals is forecast to fall partly in reaction to higher prices.

The statement said tin smelting and refining capacity is also being expanded, but a lack of major new mining projects and increased competition for scrap means that raw materials constraints will limit growth in tin production.

(Sourced from MySteel.net)

CR silicon steel favored on narrowing price difference with HR

It is reported that CR silicon steel and HR silicon steel prices usually present a CNY 500 per tonne around discrepancy, citing "DR-510"0.5*1000*2000mm and "50WW800"0.5*1200mm*C. Once the price discrepancy expands to CNY 800 per tonne or above, the sales would tip in favor of HR silicon steel, otherwise, when it narrows to CNY 200 per tonne or below, the buyers tend to prefer CR silicon steel.

As per report April 2008 narrowing of price discrepancy is remarkable in Shanghai, and 800 low grade CR silicon steel price posted no more than CNY 200 per tonne higher than the HR silicon steel. This makes merits of CR silicon steel more obvious as it has a coat that helps improve insulating capability while used in electric motor and home appliance, while HR silicon steel hasn't and needs to spend some CNY 400 per tonne to make it up; secondly, utilization rate of CR silicon steel is 5% to 10% higher than HR silicon steel.

Consequently, the CR silicon steel is advantageous in sales in the market now and HR silicon steel may move downward amid stability and is advised to enlarge the price difference for better marketing.

(Sourced from MySteel.net)

Vale announces results for Q1 of 2008

Companhia Vale do Rio Doce has posted a solid performance in the first quarter of 2008 in spite of the negative effects of currency volatility and the pressures on costs generated by the price increases for inputs. In this context, expansion of production and the effort to contain costs were fundamental to achieving strong results.

The main highlights of our performance in Q1 of 2008 are

1. Record shipments of iron ore and pellets in a first quarter of 76.572 million tonnes up by 15% YoY

2. Records for a first quarter in shipments of aluminum at 136,000 tonnes, alumina at 833,000 tonnes, cobalt at 740 tonnes and platinum group metals at 86,000 troy ounces

3. Gross revenue of USD 8.048 billion up by 4.8% YoY

4. Operational profit or EBIT of USD 2.915 billion up by 7.9% YoY

5. Adjusted EBIT margin of 37.2% as against 36.1% in 1Q07.

6. Adjusted EBITDA of USD 3.729 billion up by 17.1% YoY

7. Net earnings of USD 2.021 billion as compared to USD 2.217 billion in Q1 of 2007

8. Investments totaled USD 1.695 billion

Qatar Steel may seek USD 1.75 billion fund for SNIM project

Gulf Times reported, citing Mr Sheikh Nasser bin Hamad al-Thani GM of Qatar Steel as saying that Qatar Steel a unit of Industries Qatar may borrow USD1.75 billion to fund an iron ore project in Mauritania.

The Doha based newspaper cited Mr al Thani as saying the remainder of the USD 2.5 billion projects will be funded by shareholders, including Societe Nationale Industrielle et Miniere and Australia's Sphere Investments.

Coking coal price rises further in Shanxi on output decline

It is reported that leading coke producers in Shanxi are considering coke price hike in response to the CNY 30 per tonne increase on coking coal price in Linfen as of May 1ST 2008.

Market analyst forecasts that coking coal price rally is set to spread into near future, therefore, steel mills, the major buyer of coke would suffer continuous profit squeeze and the government might release further coal power price linking policy in days to come. Exhausted inventory is the main driving force behind coking coal price rise in Shanxi as a number of small coal miners have been shut down.

Coking coal analyst Wangling noted that the government has stepped up efforts in rectifying small coal mines especially in Shanxi. As a result, the production at many small mines has been affected and some of them can only produce at normal rate for two or three months.

Mr Lu Pin coal analyst with Merchants Securities said small and medium coal mines have contributed 72% of China's total coking coal output. However, the tightening security check has had a huge impact on the capacity utilization at these mines. Moreover, the global coking coal price has almost reached USD 300 per tone around CNY 1000 per tonne than domestic price.

Mr Lu said higher coking coal price has a direct impact on steel sector. Coke accounts for 15% to 20% of the steelmaking cost. Therefore, the crude steel production cost would rise 4% to 5% if the coking coal price gains CNY 150 per tonne to CNY 200 per tonne.

Power plants have also suffered great loss from spiking coal price in particular thermal coal. And the industrial official warns that over 70% state owned power plants would lose money if they are not allowed to raise up the electricity price to recoup higher cost.

(Sourced from MySteel.net)

ArcelorMittal to spend USD 263 million on Kazakh mines

Reuters reported that ArcelorMittal's Kazakhstan subsidiary, criticized by the Kazakh government over safety standards, will spend USD 263 million this year to modernize its mines.

Mr Satish Taparia CEO of ArcelroMittal Temirtau, after a meeting between Arcelor and Kazakh officials, told Reuters that the company has started implementing a long term program to upgrade working conditions and equipments at its mines and USD 63 million has already been invested as part of a five year plan.

He said that "The general prosecutor's office ordered a probe after the January explosion. It was mainly to do with upgrading equipment because our equipment is quite outdated. So we said that this year we will spend a total of USD 262.8 million to modernize equipment."

Mr Taparia said that under the investment plan, better ventilation systems and methane gas detectors are the priorities.

Kazakhstan has piled pressure on the company since an explosion at one of its Kazakh mines killed 30 miners in January. A blast at another mine killed 43 workers in 2006. Two earlier blasts in 2002 and 2004 left more than 30 people dead.

Guinea to negotiate bauxite mining contracts

Bloomberg reported that Guinea, holder of the world's largest bauxite reserves, may seek a bigger share of profits from foreign mining companies including Russia's United Co Rusal after commodity prices jumped.

Mr Yamoussa Bangoura president of Circam and the government committee responsible for altering the accords said the West African nation will review mining agreements. Strikes and protests over foreign ownership of the mining industry led to the deaths of 113 people last year.

Mr Bangoura said in an April 16th interview in Conakry, Guinea's capital that “It is not our goal to cancel the agreement with any company. He said there is no resistance to come back to the table. We think there are no big difficulties to come to solutions.''

According to US Geological Survey figures show it has 7.4 billion tonnes of bauxite reserves or 30% of the global total.

Jharkhand asked to end row over Chiria iron ore mines

It is reported that a dispute over the Chiria iron ore mines in mineral rich Jharkhand has left hanging several major steel projects among amid state run Steel Authority of India Ltd promise to produce an estimated 24 million tonnes of the commodity annually.

The central government wants the state government to end the dispute and sanction some iron ore for the projects, since the Chiria mines have proven reserves of over 2.4 million tonnes, but the state government says it has other commitments.

Mr Ram Vilas Paswan steel minister said in Bokaro recently that "I request Mr Madhu Koda CM of Jharkhand with folded hands to share the iron ore from Chiria mines so that SAIL can set up its 12 million tonne steel plant. He said for the last two years my ministry has been trying to clear the legal dispute, referring to an agreement last year where the Jharkhand government had had agreed to share one billion tonnes of ore with the union steel ministry.”

The dispute is pending with the Jharkhand High Court. The state government wants the mines back after one of the center’s steel companies which were given access to the iron ore from there was merged with SAIL a few years ago.

Ningbo Shunxin to tap Thai iron ore mine

Interfax China reported that Ningbo Shunxin Creative Group a privately run Chinese trading company, plans to commission an iron ore mine in Thailand by the end of the year through a recently established joint venture.

The iron ore mine located in northern Thailand's Udon Thani Province is a joint venture between Shunxin Creative Co Ltd the group's Thailand based subsidiary and a Thai individual investor. Shunxin Creative holds a 49% stake in the joint venture while the Thai investor holds the remaining 51% stake.

Mr Ge Liang general manager of Shunxin Creative Import and Export, a Ningbo Shunxin Creative Group subsidiary said "The iron ore mine, located in northern Thailand is scheduled to commence first stage production by the end of the year and is designed to produce about 1 million tons of iron ore per annum over a 10 year lifespan. All offtake from the mine will be transported to China."

Mr Ge declined reveals the name of the Thai investor. He said "It is no easy business doing mining in Thailand, as the Thai government doesn't allow foreign companies to hold controlling stakes in projects. Shunxin Creative has approached dozens of iron ore mines throughout the country, but the one in northern Thailand stood out from the crowd a