SAIL RSP makes a one time saving of INR 9 crore

It is reported that simply hearing out employees on what they feel about the company has helped Steel Authority of India Limited’s Rourkela Steel Plant make a one time saving of INR 9 crore, besides recurring savings of another INR 9 crore in 2006-07 fiscal.

RSP encouraged employees to share their views through an innovative Srujani Creativity Scheme with a view to harnessing their ideas for improving the performance. Apart from the financial savings, the scheme has also brought about all round improvements in the process parameters, safety, quality, housekeeping and various other aspects.

A record number of 11,131 suggestions were generated through the year up by 9.74% YoY. Out of these, 6,485 suggestions were given awards in 68 functions and 20 melas and cash prize of over INR 700,000 were distributed among the employees for this.

Prizes are given for acceptable suggestions, while cash awards are presented for those implemented. The employees contributing most under this scheme were awarded with 'Best Suggester' and 'Second Best Suggester Awards', while departments excelling under the scheme were being awarded with the Srujani Rolling Trophy every year.

Indian galvanizers at cross roads

Mr P Chidambaram’s announcement of imposition of export tax on various steel products has drawn very critical reactions, especially from the Indian cold rollers and galvanizers, who are exporting major share of their production.

Mr RV Sridhar senior VP marketing of Shree Precoated Steel Limited has expressed serious concerns both in short and long terms. Mr Sridhar outlined the Indian coated product scenario by saying that “India has overcapacity in coated products as installed capacity is around 6 million tonnes to 7 million tonnes and is growing with further investments in new capacity whereas domestic consumption is close to 2 million tonnes.”

Mr Sridhar said “Where will this excess capacity go? As domestic market is not large enough to absorb this excess capacity, it has to be exported. If we do not export or we are not able to export because of loss of competitiveness due to export duty, we would perforce have to close some of our lines, which would result in employment loss. So, the point is that we have to export.”

He made a comparison with the actions of Chinese government by saying that “Indian exports of value added coated product is in fledgling state as compared to China, both in volumes and variety. By imposition of 5% duty on coated products an unlevel playing field has been created for Indian steel makers vis a vis Chinese exporters. In fact even China has not put any export tax on galvanized and pre painted to encourage export of value added products. Indian government should take a clue from Chinese government policies.”

He said that “We have built market share and reputation painstakingly over a period of time and are we going to loose this because of the action of government? If we are to loose this market share can we regain it back in this highly competitive environment? We are surprised that the government of India instead of encouraging value added steel exports is disincentivizing it. We are surprised that commodities like iron ore have been spared form export tax, where as value add products have been taxed. The Chinese have exempted export duty on coated products like galvanized whereas export duty has been put on semis etc. Our government is strangely acting contrary to this ”

Mr Sridhar also said that “If this step of putting tax on galvanized steel is carried through, than all the exporters would have to face legal hurdles for existing orders under various stages of implementation. We would loose USD 60 per tonne to USD 70 per tonne If we were to recover from the customer, there would be legal issues. If we are to bear our bottom line would be hit by INR 2500.”

Steel & cement cost hits Commonwealth Games projects

It is reported that, with less than 2 years to go before Delhi hosts 2010 Commonwealth Games, at least 4 infrastructure projects worth INR 300 crore have not found any contractors due to the steep rise in prices of steel, cement and other raw materials.

The projects include an INR 100 crore wrestling stadium, an INR 25 crore hostel, a media centre at Indira Gandhi Stadium, a space planning project costing INR 100 crore at Jawaharlal Nehru Stadium and a INR 70 crore project to refurbish Karni Singh Stadium in Tughlakabad.

The last day for submitting the tender for these projects was April 24th 2008, which has been postponed to May 6th 2008. This is the sixth postponement due to lack of bidders.

As per report, Central Public Works Department, responsible for awarding these projects, which include construction of stadiums, a media centre and a hostel, among others, has failed to get contractors for these projects due to the government's inability to address their concerns over the unprecedented rise in prices of key raw materials.

Besides, seven to eight projects being implemented at Indira Gandhi Stadium, Jawaharlal Nehru Stadium and Dr Shyam Prasad Mukherjee Stadium are progressing at a slow pace due to delay in the procurement of key raw materials.

Builders said that steel and cement, which together constitute around 60% of the total input cost of any stadium project, have become substantially more expensive. They added that it will be difficult to go ahead with these projects without a suitable compensation mechanism.

Mr Arun Sahay chairman of Builders Association of India, Delhi unit, which is constructing a swimming pool complex at the Talkatora stadium, said that "Builders have decided to boycott all future projects related to the Commonwealth Games on the ground that existing cost escalation norms, linked to the Wholesale Price Index, are not commensurate with the actual increase in prices of raw materials. So we have demanded that the CPWD and the ministry of urban development rework the cost escalation norms and link them to the base prices of commodities published every month by the CPWD, which we think are more realistic."

Indian CAPEX in Q4soars to USD 174 billion – ASSOCHAM

According to a ASSOCHAM Investment Meter study capital expenditure announcements by the India Inc has soared by 66% QoQ during January to March 2008 quarter to a whopping USD 174 billion from USD 105 billion lined up in October to December 2007 quarter. Mr Venugopal N Dhoot president of ASSOCHAM said that "The huge investments flowing into the infrastructure sector indicate that the economy is getting into the mode of absorbing even more investments in a far more efficient way."

As per the study, while steel has continued to lead the list of sectors attracting highest planned investment for the second quarter in a row following the third quarter, its magnitude has fallen by 28%. Steel with investment announcements worth USD 22.30 billion accounted for nearly 13% of the total CAPEX planned in Q4 of 2007-08 as against almost USD 31 billion in Q3 2007-08. The sector attracted almost a third of the investments proclaimed across the sectors in October to December 2007 quarter. However, few of the announcements made in Q4 could be an overlap of previous months. Fresh investments planned in the cement sector were only about USD 1.5 billion in Q4 of 2007-08 as against USD 4.8 billion in Q3 OF 2007-08.

The ASSOCHAM Investment Meter’s readings of other sectors indicated a planned investment of USD 6 billion in ports & shipping, USD 5 billion in metals, USD 4.5 billion in hospitality, USD 4.5 billion in auto and USD 3 billion in IT & ITES.

The study further revealed that with the investment climate for infrastructure industries improving, corporate India has continued to bet big on this sector. A capital outlay of more than USD 109 billion was announced during January to March 2008 quarter, on top of the USD 85 billion in October to December 2007 quarter.

Mr Dhoot concluded that "Though there seemed to be no sign of postponement or shelving of investment plans in the last quarter of the preceding financial year, high domestic interest rates coupled with drying up of global liquidity may dampen the investment outlook in months to come."

India to discuss ITI gas pipeline on April 29 – Dr Parikh

Dr Kirit S Parikh member of Planning Commission said that India would seriously be discussing about the possibility of an early execution of Iran Turkmenistan India gas pipeline project as it is falling short of all forms of energies to meet its future energy requirement with the visiting President of Iran who is arriving at New Delhi on April 29th 2008.

Inaugurating the ASSOCHAM organized '3rd South Asia Renewable Energy Conference', Dr Parikh also advocated the need for cooperative development with countries like Burma, Nepal and Bhutan to import hydel energy so that India meets its power requirements and get out of its power crisis. He said that "Benefits of cooperative development and its cost should be equitably shared by the countries concerned as this project is much more feasible and the Planning Commission would recommend it to the government."

Elaborating on Iran Turkmenistan India gas pipeline project, Dr Parikh emphasized that since India has fallen short of all power forms, the much talked about gas pipeline project would be discussed at the highest political level when the Iranian President arrives at New Delhi. He also emphasized the need for harnessing the solar power to generate electricity particularly to remove darkness in the rural India. He added that "Initially, their should be subsidies extension to promote such power projects and thereafter subsidy should be done away with as solar power is much more environmental friendly and can be harnessed with little more costs and that is why, the Planning Commission would lay its focus on power generation."

According to Dr Parikh, with harnessing of solar energy, India could generate nearly 50,000 MW of solar power by 2050, the capacity of which could be further enhanced to over 75,000 MW. According to him, bio fuels such as Jatropha are being also grown in nearly 55 million hectares of wasted land of India to generate 100 million tones of bio fuels. This would also help India to generate fuels that can be mixed with petrol and diesel to help its transport sector.

Welspun Gujarat Q4 2007-08 net profit up by 145% YoY

Welspun Gujarat Stahl Rohren Limited has announced the results for January to March 2008 quarter

The unaudited results for January to March 2008 quarter
Welspun Gujarat has posted a profit after tax of INR 1022 million for the January to March 2008 quarter up by 146.2% YoY as compared to INR 415 million for January to March 2007 quarter. Total income has increased from INR 7447 million for the January to March 2007 quarter to INR 12383 million for the January to March 2008 quarter.

The audited results for the year ended March 31st 2008
Welspun Gujarat has posted a profit after tax of INR 3514 million for the year ended March 31st 2008 up by 146.4% YoY as compared to INR 1426 million for the year ended March 31st 2007. Total income has increased from INR 26955 million for the year ended March 31st 2007 to INR 40290 million for the year ended March 31st 2008.

The consolidated results are as follows

Welspun Gujarat has posted a profit after tax & minority interest of INR 3407 million for the year ended March 31st 2008 up by 139% YoY as compared to INR 1425 million for the year ended March 31st 2007. Total income has increased from INR 26955 million for the year ended March 31st 2007 to INR 40130 million for the year ended March 31st 2008.

Welspun Gujarat has posted net sales of INR 1227 crore in January to March 2008 quarter up by 68.5% YoY as against INR 728.1 crore in January to March 2007 quarter. Its net profit stands at INR 102 crore in Q4 of 2008 up by 145.7% YoY as against INR 41.5 crore in Q4 of 2007.

Mr BK Goenka vice CMD of Welspun Gujarat said that it has over INR 5,000 crore order book position right now. He added that "We are expecting a growth of 20% to 30% in the first quarter of 2008-09 and with our commissioning of our backward integration plate cum coil mill, we are likely to achieve much better topline as well as bottom line.

Mr Goenka added that "We had revenue of more than INR 4,000 crore in 2007-08 fiscal and a growth of more than 50% and an EBITDA has grown by almost 100%. We have over INR 5,000 crore order book position right now. Basically we are expecting a growth of 20% to 30% in the first quarter of 2008-09 and with our commissioning of our backward integration plate cum coil mill, we are likely to achieve much better topline as well as bottom line."

Cement export ban will help stabilize prices – Centre

Indian government said that cement prices in India will stabilize on the back of export ban imposed on the building material to augment domestic supplies and asserted that suitable measures will be taken to check cartelization in the sector.

Mr Ashwani Kumar union minister of state for industry said that "Post ban on cement exports, prices are bound to stabilize because that much more cement will be available within the country and therefore the mismatch between demand and supply will be addressed to that extent."

Mr Kumar said that the government will continue to take measures to check cartelization in cement, steel and any other industry as controlling prices is the foremost priority of the government. He added that "We have already enabled the state governments to cap the amount of stocks any stockist can keep which will then release a lot more stocks in the market of primary commodities."

India to add 30,000 MW of wind energy by 2032

Mr Vilas Muttemwar union minister of state for new & renewable energy said that integrated energy policy has projected capacity addition of 30,000 MW from wind by the year 2032.

Mr Muttemwar said that this would be a major part of realizable potential and road map to achieve the wind power potential of the country.

He said that “The government put efforts to promote setting up of commercial wind power projects through private sector investments with number of incentives. Besides, wind power is being given preferential tariff in potential states. The Center for Wind Energy technology also identifies new wind power potential areas through wind resource assessment studies. Upward revision of the potential of wind energy would depend upon identification of new wind power potential areas.”

GAIL joins consortium to build TAPI gas pipeline project

It is reported that GAIL India Limited will be part of a consortium that will build the USD 7.6 billion Turkmenistan Afghanistan Pakistan India gas pipeline. The consortium comprising national oil companies of the four countries will build and operate the 1,680 kilometer long pipeline from Dauletabad gas field in Turkmenistan to India through Afghanistan and Pakistan.

The participating countries will together float a special purpose vehicle for the purpose. International companies are also likely to join in laying and operation of the pipeline.

Under a draft framework agreement signed by oil ministers from Turkmenistan, Afghanistan, Pakistan and India last week, the pipeline will transport 100 million standard cubic meters per day of gas from the Dauletabad gas field, of which India will get 60 million standard cubic meters.

Talks on the TAPI gas pipeline project have been underway since 2002. In 2006 India was invited as an observer. India last week formally joined the US backed project to meet its growing energy needs. Rival Iran Pakistan India gas pipeline is to be built by the three nations separately in their respective territories.

Chowgule Group to focus on shipping and mining business

After selling its 76% stake in Aurangabad Breweries Limited, Goa based shipping & mining organization Chowgule Group said that it is exiting completely from breweries to focus on shipping, shipbuilding and mining. It will also sell its remaining 24% stake to Singapore based brewer Asia Pacific Breweries Limited for an undisclosed sum.

A senior Chowgule Group executive said that the move came in the wake of a management decision to focus on the areas in which the group is strong.

Chowgule Group has businesses in iron ore mining, sea transportation, iron ore pelletization, shipbuilding, explosives, industrial salt, industrial gases and machine fabrication. It had another small brewery at Arlem in Goa.

REL becomes Reliance Infrastructure Ltd

Reliance Energy Ltd announced that its name has been changed from Reliance Energy Ltd to Reliance Infrastructure Ltd with effect from April 28, 2008.

The release said that the company has received the certificate from the Registrar of Companies of Maharashtra registering the aforesaid change in name.

The release added that “The new name appropriately reflects the current nature of businesses. The new identity redefines the Company's vision and focus to emerge as a premier infrastructure company. The new name reflects the branding philosophy followed by the Reliance Anil Dhirubhai Ambani Group, where the name signifies the space in which it operates and creates a sharper brand presence among the stakeholders.”

Reliance Infrastructure has either directly or through subsidiaries or through investee Companies and on its own or in consortium, been engaged in a number of projects under implementation or under consideration in the field of not only power generation, transmission and distribution businesses but also in several other infrastructural projects such as highways, roads, bridges, metro rail and other mass rapid transit systems, airports, special economic zones, real estate, etc.

Haryana to spend INR 239 crore for power reforms

It is reported that Haryana power utilities are planning to spend INR 239 crore in the power sector in Gurgaon by 2011. Under the proposed ambitious plan, new sub stations will be set up and the capacity of existing sub stations will be augmented and new transmission lines will also be laid in a phased manner.

As per report, seven new sub stations will be set up in Gurgaon during the current financial year at a cost of INR 164.40 crore, out of which work on 4 sub stations has already commenced. Apart from this, 3 sub stations of 66 kV capacity each, will also be set up by the private colonizers for which necessary approval has been granted to them by the power utilities.

A 220 kV sub station, set up at a cost of INR 19 crore at Daultabad, has commenced functioning and a 66 kV sub station has also become functional in sector 38, which was set up at a cost of INR 5 crore.

Hinduja OVL gets Indian approval for Iranian oilfields project

It is reported that Hinduja Group ONGC Videsh combine has received approval of Iranian authorities to conduct due diligence for taking stakes in the oil and gas fields in Iran.

The deal for the projects, signed by Hindujas with NICO in August 2007, was not taking off presumably due to a concerted attempt by China, with all its influence, to get the same.

As per the deal, the Hindujas group will take a 45% stake in Azadegan oilfield and 60% in the phase 12 of the giant South Pars gasfield. However, the NICO board has now formally approved of the proposed collaboration for development of the 2 fields.

BHEL wins orders worth USD 840 million in Chhattisgarh

Bharat Heavy Electricals Limited recently announced that it has got orders worth INR 33.68 billion from Chhattisgarh State Electricity Board for the supply and installation of the main plant package at two power projects in Chhattisgarh.

This includes
1) One unit of 500 MW at Korba West thermal power project
2) Two units of 500 MW each at the upcoming Marwa thermal power project.

BHEL's scope of work in the contract includes design, engineering, manufacture, supply, erection and commissioning of steam turbines, generators, boilers, associated auxiliaries, piping and electricals besides state of the art controls and instrumentation.

The order for Korba West has been placed on BHEL after the cancellation of an earlier contract for the project on a Chinese company.

Reliance Power posts net profit of INR 95 crore in 2007-08

Reliance Power Limited has posted a net profit of INR 94.66 crore for the year ended March 31st 2008 while, total income stood at INR 133 crore. Reliance Power listed on February 11th 2008 and therefore, the corresponding figures for the year ago period is not comparable.

Reliance Power is setting up 13 power projects with a combined installed capacity of 28,200 MW.

Brakel may be ousted from HP projects

It is reported that Brakel Corporation of Netherlands may be ousted from the twin power projects of Jangi Thopan and Thopan Powari in Himachal Pradesh. The state is considering action against Brakel for delay in implementation and a proposal to this effect has been submitted to chief minister Mr PK Dhumal.

Brakel has been charged with a 2 year delay in submitting deposit of INR 173 crore for the two projects and initiating work in the name of Brakel Kinnaur Power Limited, an entity whose details have not been disclosed to the Himachal government.

According to sources, a show cause notice was issued on Brakel in January 2008 and the state cabinet is likely to take a final view on the issue soon. Brakel is asked to deposit INR 173 crore with the state, being 50% of the upfront premium offered by Brakel. After blaming the government for the delays, Brakel finally paid the amount on January 29th 2008, but it was deposited in the government treasury only in the first week of April 2008. The state government is now demanding interest on the delayed payment, which the company has offered to pay. The deposit was calculated at the rate of INR 3.61 million per MW.

At one stage, Brakel even said that there were restrictions in bringing foreign funds into India. However, RBI told the state that no approvals were necessary as investment could be brought in through the automatic route The explanations given by Brakel Corporation for the delay in submitting the deposit were not satisfactory. The state is now considering whether or not to scrap the allotment to Brakel.

The government is also weighing if Brakel should be allowed to go ahead after paying the remaining INR 173 crore premium for the project. It would only then be invited to sign pre implementation agreement with the government. It replied to the show cause notice on January 20th 2008, but officials are not convinced of Brakel’s explanations.

Reliance Energy PAT in 2007-08 up by 35% YoY

Powered by a 36% increase in revenues from electricity sales, Reliance Energy Limited has posted a 35% YoY growth in profit after tax at INR 1,085 crore for the year ended March 31st 2008 as compared with INR 801.4 crore in the year ended March 31st 2007.

Its total income grew up by 14% YoY to INR 7,501 crore as against INR 6,575 crore in 2007. In the fourth quarter ended March 31st 2008, the net profit grew up by 31% YoY to INR 311 crore from INR 237 crore in the fourth quarter ended March 31st 2007. Aggregate sales of electricity stood at 9,292 million units in 2007-08 up by 6% YoY as compared with 8,766 million units in 2006-07. Revenues from energy sales during 2007-08 stood at INR 4,920 crore as against INR 3,611 crore in 2006-07.

Mr Lalit Jalan director of Reliance Energy said that "We expect Reliance Infrastructure to perform well in the years ahead since we are executing infrastructure projects worth about INR 16,000 crore in two years besides various Reliance Power projects. The new name reflects the current nature of our business and our vision and focus to emerge as a premier infrastructure company." He added that it is developing 2 metro rail projects in Mumbai and Delhi, 5 road projects in Tamil Nadu, 2 SEZs and a business district in Hyderabad.

Eicher Motors Q4 2008 net profit dips by 6.7% YoY

Reuters reported that Eicher Motors Limited's January to March 2008 quarter net profit fell by 6.7% YoY to INR 194.6 million from INR 208.7 million on high steel prices and could continue to impact margins in the coming quarters. While, its net sales rose by 5.5% YoY to INR 6.53 billion.

Eicher, which makes and sells trucks and Royal Enfield motorcycles, however said that it expects to grow faster in the year to March 2009, as it gains market share from expanding sales and a wider marketing network.

Mr Siddhartha Lal CEO of Eicher Motors said that "In the light and medium duty commercial vehicles, we have increased our market share by a percent. In the heavy duty we have been acquiring a lot of key customers and entering new segment. We expect the trend to continue. The slow down in the pace of growth of the Indian commercial vehicle industry was most evident in the fourth quarter."

Mr Lal said that "Our operating margin and EBITDA declined due to commodity price increases and a temporary industrial relations related setback at our components business. With interest rates hardening and prices going up further and with further issues in retail financing there is a possibility that there will be further slowdown. Right now we look at flat market in near future."

Salzgitter forms sales JV in India and opens office at Mumbai

Düsseldorf based Salzgitter Mannesmann International GmbH, eying the growing demand for steel products in the region, has strengthened their presence in India by opened their first office at Mumbai in the beginning of April 2008.

The opening ceremony was held in presence of Dr Leese CEO of Salzgitter AG, which is the parent company of Salzgitter Mannesmann International, accompanied by board members, representatives of SMID and of course by customers and suppliers of Salzgitter in India.

The new company Salzgitter Mannesmann Pentasteel International (India) Pvt Ltd is a 50:50 JV with Mumbai based Pentsteel their exclusive agent in India for a long time. Both the companies will be involved in running the operations.

The release said that in addition to their existing activity of exporting steel products from India, this JV will focus on sale of imported steel products, which are not sufficiently produced in India to end users directly. It said that “Focus would on all the industry sectors with special attention to shipbuilding, engineering, white good industry as well as the automotive sector.”

Measure by Indian government to cool down domestic prices

Indian government has taken following measures recently to improve availability of steel in domestic market to cool down the surge in domestic steel prices

1. In the Union Budget Proposal 2008-09, the import duty on melting scrap has been reduced from 5% to 0%

2. General rate of excise duty has also been reduced from 16% to 14% in the Union Budget Proposal 2008-09.

3. DEPB benefits on export of various categories of steel products have been withdrawn with effect March 27th 2008

4. Basic customs duty reduced to 0% from 5 % on imports of pig iron and mild steel products, including sponge iron, granules, powders, ingots, billets, semi-finished products, hot rolled coils, cold-rolled coils, coated coil sheets, bars, rods, angle shapes, sections and wires.

5. Countervailing duty scrapped from the current 14% on TMT bars and structurals

6. Basic customs duty scrapped from the current 5% on metallurgical coke, ferrous alloys and zinc, three inputs used for manufacturing steel.

7. New export duty levies of 15% on overseas sales of specified primary forms, semi-finished products, hot-rolled coils and sheets.

8. New export duty levies of 10% on specified roll products, including cold-rolled coils, pipes and tubes.

9. New export duty levies of 5% export tax on galvanized steel in coil and sheet form.

Indian Railways reduces freight charge for domestic iron ore

TNN reported that in a move to counter inflation Indian Railway has reduced freight charge on iron ore transportation by 6%. This will become effective from May 1st 2008.

The report cited an official as saying that "The reduction is only for iron ore meant for domestic use.”

Mr Lalu Prasad India’s railway minister had recently said that the government would do everything possible to control inflation.

While replying to a question whether railways had increased freight rate on iron ore transportation, Mr Prasad had said that "We have only reclassified it".

The surcharge on iron ore transported to ports for export has been increased to 100% from 60% while the surcharge on iron ore meant for domestic use has been reduced to 30% from 60%.

Indian Railways transported 53.59 million tonnes of iron ore for export in 2007-08.

Vedanta hires 7 banks to arrange USD 1 billion for Seas Goa

Bloomberg, citing 4 people involved in the deal, reported that Vedanta Resources Plc has hired seven banks to arrange a USD 1 billion loan to refinance debt taken to fund its purchase of Sesa Goa Ltd.

As per report, ABN Amro Holding NV, Barclays Capital, Bank of Tokyo- Mitsubishi UFJ Ltd., Calyon, Citigroup Inc., Standard Chartered Plc and Sumitomo Mitsui Financial Group Inc have been engaged.

As per report, Vedanta plans to pay interest at 2 percentage points above the LBOR in the first year of the loan, then 3 percentage points above LIBOR.

Vedanta bought a 71% stake in Sesa Goa for USD 1.37 billion last year and had borrowed USD 1.1 billion to fund the acquisition last year at between 50 basis points and 60 basis points above LIBOR. A basis point is 0.01 percentage point.

Riveting story of Titanic by 2 metallurgists

96 years ago, on April 14th 1912, the supposedly unsinkable Titanic hit an iceberg off the Grand Banks of Newfoundland in the Atlantic Ocean and went straight to the bottom of the sea.

A study of the disaster and a new book, “What Really Sank the Titanic” by Ms Jennifer Hooper McCarty who started researching the Titanic's rivets while working on her Ph.D. at Johns Hopkins University in 1999 and Mr Timothy Foecke form a metallurgist at the U.S. government's National Institute of Standards and Technology who has been studying the Titanic for a decade argue that substandard rivets used in the ship's construction was a main cause for its sinking.

Ms McCarty and Mr Foecke claim to have uncovered new evidence from archives in London, the shipyard and the wreck that Belfast’s Harland and Wolff shipyard overreached itself with three projects to build White Star Line ships The Titanic, The Olympic and The Britannic and resorted to buying batches of poor quality iron to save money.

As a result, the authors say, the 46,000 tonne ship was constructed using cheaper rivets which popped prematurely when it collided with an iceberg. While exploring the wreck, the expedition did not find a large gash, but rather narrow slits where the metal plates of the hull had split apart. This stood in contrast to what was previously suspected to be the cause of the wreck.

Examining the iron rivets from the wreck, Ms McCarty and Mr Foecke found high levels of slag which under pressure can make steel brittle and therefore weak. Approximately 3 million rivets were used in the Titanic, which measured 882 feet 9 inches long and displaced 52,310 tonnes.

Mr Foecke said that “Under the pressure to get these ships up, they ramped up the riveters, found materials from additional suppliers, and some was not of quality.”

Ms McCarty said "The company knowingly purchased weaker rivets, but I think they did it not knowing they would be purchasing something substandard enough that when they hit an iceberg their ship would sink.”

The authors noted that at the time the Titanic was built, there were not a whole lot of skilled riveters around so the work was substandard work. Riveters were making the transition to steel rivets, which are much stronger than iron, but they were used only in the central hull, where stress was expected to be the greatest. Of course, the Titanic took its blow to the front, where the rivets were the weakest.

Had the rivets been stronger, some have speculated, rescue boats could have arrived in time to rescue passengers. More than 1,500 people died in the shipwreck.

MEPS sees record hike steel prices in US

UK based MEPS said that “US transaction prices are going through the roof with gains over the last four weeks as high as USD 145 per tonne for some products and more substantial hikes planned by the mills for June deliveries.”

MEPS added that “Domestic values have now caught up with average world prices. Although real demand is no more than satisfactory as the economy weakens, supply is being allocated by the local mills. The availability of imports is virtually nil, due to the weak US dollar, high ocean freight rates and soaring prices in other regions. OEM's complain that expected delivery times are not being met. Inventories at the service centers are described as low to medium. They are unlikely to be rebuilt in the short term as buyers are unwilling to speculate when steel is so expensive.”

MEPS said that “In Canada, domestic order intake is strong. Producers need to offset the large increases in raw materials, such as iron ore and scrap. Consequently transaction values continue to advance, despite alarm amongst customers. Current imports and permits for the future remain low. Whilst local demand is reasonable but not overly strong, reduced foreign supply has helped keep the market in balance. Distributors' inventories dropped 10 percent in February to the lowest volume in more than a year. Stocks are depleted enough to require the service centers to keep purchasing, although they hesitate to do so with prices so high. The mills have tabled more increases for June.”

MEPS added that “International values are rising more swiftly than those in China at present, spurring on producers to look again at export opportunities. However, local demand remains solid. Output cuts at steel mills around Beijing, ahead of this Summer's Olympic Games, are expected to further strengthen values. In Japan, steelmakers have reduced shipments to the distribution sector in order to service the requirements of contract customers at home and abroad. Service centers are looking for alternative sources overseas. Further, upward price adjustments are expected in the third trimester. Inventories of strip mill products held by the mills and distributors went down by 2.3 percent in February compared to the previous month. Imports declined by 14.4% in the same time frame. Export business continues to expand. In South Korea, as expected, POSCO has compensated for huge raw material cost rises by ramping up steel prices by an average of over 20%. Taiwan's Chung Hung Steel announced sharp increases on all flat products for April business. CSC is already warning domestic customers of further price hikes to come in period three.”

MEPS further added that “The upward price trend continues in the three East European countries under review. Monthly pricing is now commonplace amongst domestic mills. There is concern that the strength of local currencies against the Euro will have a negative impact on exports of both steel and manufactured goods. In Western Europe, despite relatively muted consumption, steel prices continue to escalate, sustained by supply-side restrictions. There are virtually no workable offers from third country sources. Moreover, many market players believe that the EU mills are maintaining low output in order to drive values up using higher input costs as justification. The producers are talking of another round of price advances for period three.”

Mr Chavez sets next Tuesday as deadline for Sidor

It is reported that Mr Hugo Chavez ha set next Tuesday as a deadline for Ternium to accept the compensation offered for its stake in Sidor. Ternium SA demanded USD 4 billion in exchange for its 60% stake, which the government claims is only worth USD 800 million.

Venezuela's El Universal reported that Mr Chavez said that "If no fair settlement is reached regarding this issue by next Tuesday, I will sign a nationalization decree and order the company's takeover."

During his weekly radio and television program Aló Presidente, Mr Chavez declared that "I will not pay that amount because that company is not worth it. Sidor used to be larger before."

Mr Chavez instructed Venezuela's vice president Mr Ramon Carrizalez to meet with Mr Rodolfo Sanz minister of basic industries and mining and Sidor representatives to establish a fair price for the company.

Ternium currently owns 60% of Sidor, while the Venezuelan government holds 20% with the remaining 20% held by current and former employees. The government recently offered to buy a 40% share from Ternium, which would give Venezuela a majority stake, while allowing Ternium and Sidor's employees to each keep 20% of the venture.

US Steel Q1 profit falls by 14% YoY

US Steel Corp announced that its first quarter profit fell in its European and tubular businesses, leading to a 14% decline in total earnings despite higher shipments and prices for steel. It reported a net income of USD 235 million during the first quarter 2008 compared to first quarter 2007 net income of USD 273 million.

US Steel reported first quarter 2008 income from operations of USD 266 million, compared with income from operations of USD 116 million in the fourth quarter of 2007 and USD 346 million in the first quarter of 2007.

Other items not allocated to segments in the first quarter of 2008 consisted of a previously disclosed USD 45 million pre tax reserve established as a result of an adverse court ruling involving a power supply contract and a USD 17 million pre tax charge for inventory transition effects related to the acquisition of US Steel Canada (USSC). These items reduced net income by USD 45 million. Other items not allocated to segments in the fourth quarter of 2007 decreased net income by USD 117 million.

Mr John P. Surma chairman & CEO of US Steel said that "Net sales grew to a quarterly record of USD 5.2 billion and profitability increased substantially from the fourth quarter, reflecting sharp improvements in our Flat rolled and European segments on strong operating performances and higher shipments and prices. We've made excellent progress in integrating our Canadian facilities, which operated during the first quarter at the highest utilization rate in recent years."

Wheeling-Pitt plans to idle some lines

The State Journal reported that Wheeling Pittsburgh Steel Corp plans to idle its Allenport plant as well as two of three galvanizing lines at its Marlins Ferry mill.

The report cited Mr Jim Bouchard chairman Wheeling Pittsburgh Steel as saying that as many as 342 workers could be affected by the reductions but it is too soon to say how many jobs will be eliminated. He said that "Again, nobody has been laid off.”

Mr Bouchard added that the company complied with the federal Worker Adjustment and Retraining Notification that requires larger employers to give workers a 60-day notice of shutdowns and major layoffs. He said "We just issued the WARN notice and over the next 60 days we will bargain with the union on retirements, transfers, everything."

He said that closing the Allenport plant and eliminating the two galvanizing lines clearly is part of the right sizing. He said "It breaks my heart to have to do it. We are not here to shut down facilities, we a here to build. But this needs to be done so that the company can return to profitability and stay profitable."

The report added that Mr Bouchard has on several occasions spoken of the need to right size the company to bring costs in line and in October had confirmed that they were considering closing Allenport's cold mill and shifting its production to their Steubenville plant and in November, when Wheeling-Pitt's merged with Esmark, he promised a company wide restructuring.

LME steel billet futures crosses USD 1,000 mark on the first day

SBB reported that on the first day of trading of billets future contracts on the London Metal Exchange, steel billet contract on the LME ring ended with a total of 16 contracts traded, representing 1,040 tonnes of billet.

As per report, traded prices exceeded USD 1,000 per tonne for the first time since informal futures trading began in February. The Far East contract, which began the session at Friday’s closing price of USD 950 per tonne, traded up to USD 985 per tonne and the Mediterranean contract, starting at USD 975 per tonne broke through USD 1,000 per tonne with traded prices of USD 1,005 per tonne

TATA Steel Thailand furnace project facing construction delays

Reuters reported that Thai steel major TATA Steel (Thailand)’s mini blast furnace project would be delayed and cost slightly more than expected due to construction delays.

The furnace project, operated by its 99.66% owned subsidiary NTS Steel Group, is expected to be completed in second quarter of 2009 instead of the third quarter of 2008.

TATA Steel (Thailand) has also raised the project budget to THB 3.8 billion (USD 120 million) from an earlier THB 3.4 billion.

Brazilian steel sector riding on bullish domestic demand

The Brazilian Steel Institute announced that Brazilian steelmakers produced 2.960 million tonnes of crude steel in March 2008 up by 6.3% YoY as compared to 2.785 million tonnes in March 2007.

Brazilian production of rolled steel products also increased by 1.6% YoY to 2.213 million tonnes as compared with 2.178 million tonnes in March 2007 as output of long steel products continued to grow but flat steel production slipped slightly in March. In March, long steel output reached 896,300 tonnes up by 11% YoY whereas flat steel production tumbled to 1.316 million tonnes in March down by 3.8% YoY.

IBS said that strong demand from the civil construction industry and a surge in infrastructure projects has fueled demand for long steel products in Brazil but the flat production slumped despite strong demand from automobile and the oil, gas and naval sectors.

March domestic sales increased by 13% YoY to a record 1.922 million tonnes as compared to 1.697 million tonnes in March 2007. Domestic rolled steel sales jumped by 13% YoY to 1.858 million tonnes and sales of semis surged by 30% YoY to 63,900 tonnes.

March export sales continued a recent string of declines, which started last year as local steelmakers shifted production to meet local demand. Export sales dipped by 2.3% YoY to 867,900 tonnes in March 2007.

In 2007, Brazil produced a record 33.784 million tonnes of crude steel up by 9.3% YoY as compared to 30.901 million tonnes in 2006.

Grupo Simec Q1 net sale up by 17% YoY

Mexico based steel producer Grupo Simec SAB de CV announced its results of operations for the three month period ended March 31st 2008.

Net sales during the period increased by 17% YoY to MXN 7,288 million in the first quarter 2008 compared to MXN 6,237 million in the same period 2007. Shipments of finished steel products increased 6% YoY to 745,000 tonnes in the first quarter 2008 compared to 704,000 tonnes in the same period 2007.

Total sales outside of Mexico in the first quarter 2008 increased by 24% YoY to MXN 5,423 million compared with MXN 4,360 million in the same period 2007, while total Mexican sales decreased 1% from MXN 1,877 million in the first quarter 2007 to MXN 1,865 millions in the same period 2008. The increase in sales can be explained due to higher shipments during the first quarter 2008, comparing with the same period in 2007 and the 10% increase in the average price of steel products.

Gross profit in the first quarter 2008 was MXN 1,238 million compared to MXN 1,242 million in the same period 2007. Gross profit as a percentage of net sales in the first quarter 2008 was 17% YoY compared to 20% in the same period 2007. The decline in gross profit is due to the increase in cost of goods sold due to the reasons previously mentioned.

Operating profit was the same MXN 878 million for the first quarter 2008 and the first quarter 2007. Operating profit as a percentage of net sales was 12% YoY in the first quarter 2008 compared to 14% in the same period 2007. The decline in operating profit is due to the increase in cost of goods sold due to the reasons previously mentioned.

The company reached an agreement in February this year to acquire compatriot steel company Corporación Aceros DM and some of its affiliates, collectively known as Grupo San, for USD 850 million. Through the transaction Simec, owned by Mexico's Industrias CH will become the second largest producer of rebar and the largest steel producer in Mexico, with a production capacity of some 4.5 million tonne per year liquid steel and 3.8 million tonne per year finished products.

Recession reports - Japan inflation hits decade high levels

It is reported that Japanese annual inflation hit a decade high of 1.2% in March 2008, helping trigger one of the biggest ever sell offs in yen bonds as investors realized Japan has no immunity from price pressures facing the rest of the world and that could eventually lead to a rate increase despite a weak economy.

Like other central banks, the Bank of Japan faces rising fuel, raw materials and food prices as it ponders what to do with interest rates, already at a very low 0.5% in Japan. But because the increases in consumer prices in major economies are largely due to climbing costs, rather than strengthening demand, investors have until recently been eyeing more rate cuts, rather than increases.

The Japanese core inflation rate of 1.2% which was released on last week was just as economists had forecast, but it reinforced the pressure on the Bank of Japan to keep inflation under control, and shifted investors' focus toward an eventual rate increase.

The yield on two year Japanese government bonds, the most sensitive to interest rate expectations, jumped to a six month peak, with investors affected as much by rate expectations in the United States and other major economies as the outlook for Japan.

Mr Yasuhiro Onakado chief economist at Daiwa SB Investments said that "The market is now moving on the view that the worst is behind us in the subprime related woes, which is spurring a sharp reversal in positions that had bet on a bearish outlook on the economy and financial markets.”But he warned the market might go too far.

He added that "As the markets settle from the sharp unwinding of positions tilted excessively toward such a bearish view, players will come to realize that time is needed to resolve the credit market problems and see the US economy recover and see bonds as being oversold."

Mr Hiroko Ota economics minister told a news conference after a cabinet meeting that "The price rises are being led by upward pressure from higher raw material costs and not by strong demand, so it is not a good pattern.”

US weekly crude steel production up by 0.2 YoY

American Iron & Steel Industries reported that in the week ending April 26th 2008, US’s raw steel production was 2.118 million net tons while the capability utilization rate was 88.8%. Production was 2.113 million net tons in the week ending April 26th 2007, while the capability utilization then was 88.3%. The current week production represents 0.2 % increase from the same period in 2007.

Production for the week ending April 26th 2008 is down by 1.6% from the previous week ending April 19th 2008 when production was 2.154 million net tons and the rate of capability utilization was 90.3%.

Adjusted YTD production through April 26th 2008 was 35.356 million net tons, at a capability utilization rate of 88.7%. That is a 3.8% increase from the 34.040 million net tons during the same period last year, when the capability utilization rate was 84.3%.

District wise production for the week ending March 15th 2008
1. Northeast Coast: 176
2. Pittsburgh/Youngstown: 214
3. Lake Erie: 95
4. Detroit: 117
5. Indiana/Chicago: 523
6. Midwest: 252
7. Southern: 644
8. Western: 97
(In thousands of net tons)

AISI’s estimate is based on reports from companies representing about 75% of the US’s raw steel capability and includes revisions for previous months

Kobe outlook for 2008-09

Kobe steel looking at fiscal 2008 said that the world economy is anticipated to continue expanding, powered by growth in developing countries. However, attention must be paid on trends in the US economy and other factors and it is highly difficult to determine when the slowing domestic economy will improve.

Additional factors that will have a marked effect on Kobe Steel include the rapid rise in energy and raw material prices and the tight raw material situation. On this background, Kobe Steel's outlook for its steel business segments in fiscal 2008 is as follows

It said that “For steel products, demand is anticipated to continue being robust for high-grade steel used mainly in domestic manufacturing industries. Demand is expected to also be brisk for steel castings and forgings, titanium products and welding consumables. As a result, fiscal 2008 segment sales are forecast to be higher than in fiscal 2007.”

It added that “Due to the worldwide tight demand and supply situation for raw materials, Kobe Steel will strive to obtain the necessary quantity of raw materials to prevent interruptions in production and provide a stable supply of products. To cope with higher raw material costs, Kobe Steel intends to raise sales prices, as well as continue its efforts to maintain profitability and implement improvements by reducing costs and increasing production efficiency.”

EMF EUROFER statement on the EC proposal for revision of EU-ETS

The European Metalworkers’ Federation and the European Confederation of Iron and Steel Industries has released a joint statement on the European Commission proposal for the revision of the EU Emissions Trading System.

They said that the European steel industry is committed to contribute to the EU’s objective to reduce greenhouse gas emissions by 20 % in 2020 compared with 1990 and by 30 % provided that other countries commit to comparable efforts in the framework of a global agreement.

They have urged EC for adequate provisions in order to
1. Ensure a fair balance between climate change measures and the competitiveness of EU industry
2. Allow the steel sector to remain internationally competitive through the continued allocation of free allowances as long as no international or global sectoral agreement which provide for equal footing of industrial competitors are in place
3. Secure sustainable investment and high quality jobs in the European steel industry to maintain the European Union as a region with a strong industrial backbone in which the steel industry remains a driver of technological innovation.

The release added that “In this context, the EMF and EUROFER call on the decision makers in the European Parliament, the Council and the Commission to bear in mind that only a balanced recognition of social, economic and environmental aspects can secure a high level of employment, high social standards and the well-being of European citizens. Consequently decision makers should support the following proposals for strengthening of the EU Emissions Trading System”

1. Immediate identification of sectors at risk of carbon leakage plus listing in the text of the ETS Directive. Any prolonged uncertainty threatens investment
2. The sustainable use of unavoidable carbonaceous residues of production processes must be fostered and maintained. Especially the sustainable use of co-generation gases, which are an unavoidable product of primary steel making, must not be subjected to auctioning.
3. The determining allocation method shall be performance based benchmarking and take into account process-relates emissions.
4. 100 % free allowances as defined by the benchmarks for installations identified as being at risk of carbon leakage, as long as no international agreement that provides for a level playing field is in force.
5. Compensation for pass-through of CO2-costs in electricity for electricity intensive activities at risk of carbon leakage, without increasing the burden of other energy intensive industries. This is imperative, especially for the recycling of steel and high-tech special steel producers.
6. Readjusting the burden sharing between the ETS-sector and the non-ETS-sector, based on evaluation of economic, social and environmental impacts. This refers to the reductions assigned as well as redistribution of funds and access to project-credits. 7. Recognition of early action. The proposal’s reference to 2005 discounts early actions and punishes early movers.
8. Sustainable growth must be possible. The planned ban of industrial growth directly results in carbon leakage.

The European Confederation of Iron and Steel Industries – represents the European steel industry with a turnover of EUR 140 billion and direct employment of 370,000 people, producing 200 million tonnes of steel per year.

The European Metalworkers’ Federation is representing the interests of 5.5 million metalworkers in Europe and is a member of the ETUC.

ThyssenKrupp recognized by GM supplier of the year

ThyssenKrupp Steel announced that has received the General Motors 2007 Supplier of the Year award for its significant contributions to GM’s global product and performance achievements. The 16th annual award themed the “Best of the Best” was given during ceremonies on April 26th 2008 at the Sawgrass Marriott Hotel at Jacksonville in Florida US.

Mr Bo Andersson GM group vice president, Global Purchasing and Supply Chain said “GM is proud to honor ThyssenKrupp as a GM Supplier of the Year winner. This award is our way of telling the winners that we appreciate all of their efforts in working together with GM to manufacture world-class vehicles. ThyssenKrupp is among the best of the best. They understand that our mutual success can only be achieved by sharing common goals and priorities.”

Dr. Ulrich Jaroni, member of the Executive Board of ThyssenKrupp Steel AG responsible for the Auto business unit said “We are delighted to receive this recognition of our work and the quality of our products and services. At the same time this award is motivation to keep on improving our performance even further.”

The GM Supplier of the Year award began as a global program in 1992. Winners are selected by a global team of executives from purchasing, engineering, manufacturing and logistics who base their decisions on supplier performance in quality, service, technology and price. This year, General Motors honored 92 suppliers for their outstanding performance throughout 2007.

Within ThyssenKrupp Steel, the Auto business unit is responsible for business with global automotive customers. The company supplies General Motors with electro galvanized and hot dip coated sheet as well as cold-rolled coil. High strength and advanced high strength steels for automotive weight reduction are also an important part of the supplies. Tailored Blanks are supplied by ThyssenKrupp Steel’s affiliate ThyssenKrupp Tailored Blanks GmbH.

Living Steel announces jury members

Following the launch of the 3rd International Architecture Competition for Sustainable Housing, Living Steel has now announced the Jury members who will serve to judge the entrants and decide on the winner.

The Jury members represent some of the world's finest architects. They are all known for their passion for the environment and their application of sustainable practices in their designs.

1. Mr Glenn Murcutt
Mr Glenn Murcutt is returning to the 3rd International Architecture Competition after having served on the juries of both previous competitions' juries. Located at Sydney, Mr Murcutt was the first Australian recipient of the Pritzker Architecture Prize, awarded to him in 2002. Mr Murcutt's work has been lauded as architecture of place with designs that respond to the surrounding landscape and climate. He uses a variety of materials in his designs and only selects them after careful consideration of the amount of energy used to produce each material.

2. Mr Kimmo Lintula
Mr Kimmo Lintula hails from Finland and is the co-designer, with Hannu Tikka, of the now-famous Sibelius Hall, the striking congress and concert centre at Lahti in Finland.

3. Mr Mark Middleton
Mr Mark Middleton is a Partner at Grimshaw Architects and has worked on a variety of projects in the education, leisure and transport sectors during his 12 years at the practice. He has a specific interest in steel structures, developed through his work designing large span steel structures for airports and rail stations.

4. Ms Patricia Patkau
Ms Patricia Patkau principal of Patkau Architects an internationally recognized architectural design studio based in Vancouver, British Columbia, Canada. Since its founding, Patkau Architects has received numerous national and international design awards for a wide variety of building types, including ten Governor General's Medals, four Progressive Architecture Awards, thirteen Canadian Architect Awards of Excellence, and an RAIC Innovation in Architecture Award of Excellence.

5. Mr Alexei Venediktov
Since SeverStal is the developer of this housing construction project, Mr Alexei Venediktov GD of SeverStal Steel Solutions, also will serve as juror, providing vital input on the community and requirements of the steel demonstration building.

Linde to set up new ASU at ArcelorMittal Galati

The Linde Group announced that it has signed a long term supply contract for industrial gases with ArcelorMittal Galati.

The agreement involves the construction of a new air separation unit at ArcelorMittal's site at Galati in Romania and refurbishment of existing assets with a total investment exceeding EUR 100 million.

The Linde Group will start to implement improvement measures immediately after taking over operation of the existing industrial gas production in mid 2008 and will start construction of the new ASU. It will produce 2,000 tonnes per day oxygen as well as smaller quantities of nitrogen and argon for ArcelorMittal's local steel production.

Dr Aldo Belloni member of the executive board of Linde AG said that "This agreement seals the long term future of our partnership with one of our most important customers and confirms our market leadership in Eastern Europe.”

The Linde Group is a world leading gases and engineering company with more than 50,000 employees working in around 100 countries worldwide.

Construction starts on manganese unit in Vietnam

VNS reported that construction of the VND 200 billion (USD 12.5 million) electrolytic manganese dioxide factory in Trung Khanh District of Cao Bang Province of Vietnam began on Saturday. The factory is expected to be operational in the second quarter of 2009.

The factory, lauded the biggest mineral processing project in Cao Bang Province to date, will have annual production capacity of 10,000 tonnes. Most equipment and technology at the plant was transferred from Japan’s Tokyo Boeki Steel and Materials Company.

Once operational, 99.6% of the factory’s products will be exported to Japan and European markets, making it the first mineral processing factory in the province to focus production on exports.

Construction of the plant is expected to lay the foundations for a high tech metallurgy zone, which will help boost economic and social development in the border district of Trung Khanh as well as create jobs for hundreds of local laborers.

Summary of Japanese section exports in February

According to the related statistics, Japan exported 154,672 tonnes of section steel in February. The average export price was USD 727 per tonne. Japan section steel import to different countries in February 2008 were

(Price in USD per tonne)
(Volume in tonne)

(Sourced from YIEH.com)

South Korea to pay more for Chinese SBQ plates

After China’s import price of ship plate achieves USD 1,200 to USD 1,300 per tonne on June shipments, South Korea is going to increase the domestic price of ship plate.

The newest domestic price of ship plate is predicted to touch USD 1,018 per tonne. Besides, local market analysts forecasted that if global plate billet price still keeps on high level in near future, the price of ship steel plate will continue to increase.

(Sourced from YIEH.com)

Outotec to perform process tests for Zangezur in Finland

Outotec has agreed with Zangezur Copper Molybdenum Combine AG of Germany upon continuous test runs to be performed with Zangezur's concentrate at Outotec's HydroCopper® demonstration plant at Pori in Finland.

Zangezur is planning to build a HydroCopper® plant producing 27,000 tonnes of copper annually at Zangezur mine in Kajaran, Republic of Armenia. Outotec has made successful batch leaching tests with Zangezur copper concentrate. The following step, continuous test runs with Zangezur concentrate, will be performed in Outotec's HydroCopper® demonstration plant in Pori during the second half of 2008. The companies have also signed Heads of Agreement for the basic engineering and implementation of a HydroCopper® plant in Armenia.

Outotec's HydroCopper® technology is a result of extensive research and development work carried out at Outotec's research facilities in Finland. HydroCopper® is an advanced process, which produces copper semi products directly from copper concentrate at the mine site.

Mr Martti Nurmisalo of Outotec said that "This is an important step in the commercializing of our HydroCopper® process. We have concluded the pre-engineering phase of the first HydroCopper® plant for Mongolian Erdenet Mining Corporation and the negotiations for the plant implementation continue. This new Armenian project demonstrates the attractiveness of the technology for medium sized copper production plants.”

MindTree inks IT agreement with ArcelorMittal

India based MindTree Consulting Ltd announced that it has signed a multi year IT Offshoring agreement with ArcelorMittal.

Under this agreement, MindTree will deliver IT services to ArcelorMittal's Western European operations in partnership with Sopra Group who are an incumbent provider to ArcelorMittal.

In this program, MindTree will partner ArcelorMittal to consolidate current sub contractor activities with an objective to increase cost efficiencies, flexibility and service levels.

Mr Krishnakumar Natarajan CEO of MindTree said "The framework agreement with ArcelorMittal is strategic to MindTree and represents an important milestone in our journey towards MindTree 2.0. It reflects the confidence and trust which global corporations are placing on MindTree being a trusted partner for their Enterprise transformation efforts."

WCI Steel announces increase in credit facility

WCI Steel Inc announced that it has increased the size of its current credit facility by USD 25 million to a total of USD 175 million. The company currently has USD 127.5 million borrowed under the credit facility and over USD 20 million in cash.

Mr Leonard M Anthony president & CEO WCI Steel Inc said that “The additional borrowing capacity provides WCI Steel with increased financial flexibility and demonstrates the commitment of our lender-owner group. Our operations are now at full capacity allowing us to participate in today’s strong market for steel. The new walking beam furnace at the hot strip mill is helping WCI Steel improve product quality, lower its costs and reduce energy consumption.”

Mr Anthony concluded that “WCI Steel has overcome difficult operational challenges in the past year because of the support of our customers, employees and suppliers. We have invested over USD 100 million in our operations since May 1st 2006 to further improve quality, throughput and environmental compliance. We are all working to make WCI Steel successful for the long term as a niche producer in the competitive global steel marketplace.”

US Steel declares dividend

United States Steel Corporation announced that the Board of Directors declared a dividend of 25 cents per share on US Steel Common Stock.

The dividend is payable June 10th 2008, to stockholders of record at the close of business May 14th 2008.

EMF and EUROFER joint statement on ETS

The European steel industry’s employers and European Metalworkers’ Federation joined ranks to adopt a joint position on European legislation. The statement urges the European institutions to adjust the Commission proposal on the revision of the EU Emissions Trading System so as to safeguard the international competitiveness of European steel industry and thereby more than 370.000 jobs.

Mr Peter Scherrer general secretary of the EMF said that “The statement underlines the negative impact the proposal may have on the steel industry and its workforce if it is not adjusted towards technically feasible objectives, while ensuring the EU’s CO2 reduction commitments. Only a balanced recognition of social, economic and environmental aspects can ensure a high level of employment, high social standards and the well-being of European citizens.”

Mr Gordon Moffat director general of EUROFER said that “the European steel industry is committed to contribute to the EU’s objective to reduce CO2 emissions by 20 to 30 % in 2020 compared to 1990 levels. But the proposal as it stands now will inevitably stop growth and it could lead to a cost increase of 10 to 20 % per tonne of steel, a burden which competitors from countries outside the EU may not have to bear. We therefore urge the European Institutions not to put the renaissance of the European steel industry as a driving force of the European economy at risk.”

The Council, European Parliament and Commission are committed to reach an agreement on the new legislation before the end of the year under the French EU presidency. The Commission sees the legislation as one of the most important cornerstones for the UN Climate Change negotiations in Copenhagen in December 2009, showing the rest of the world the EU’s determination to combat climate change.

ICTSI takes charge at Mindanao container terminal

Philippines based container port operator, International Container Terminal Services Inc has signed a 25 year contract to operate the Mindanao Container Terminal in the southern Philippines.

International Container Terminal Services Inc signed the contract with the Phividec Industrial Authority which owns the industrial estate in Misamis Oriental where the port is located.

The Mindanao Container Terminal, 20 kilometres from the southern city of Cagayan de Oro was designed to handle 270,000 TEUs annually.

International Container Terminal Services Inc didn't provide financial details of the transaction.

Pakistani steel makers to use domestic iron ore

The News reported that Pakistan’s steel industry is chalking out plans to tap supply line of local iron ore and produce inexpensive steel as soaring international steel prices are eating up steel industry margins threatening its very survival. Soaring international steel prices are bringing changes in the steel industry that depends on imported raw materials and imported steel due to high demand and low production.

Mr Zaigham Adil Rizvi projects directory of Tuwairqi Steel Mills said that "We are seriously working to chalk out plan of using iron ore from Kalabagh and other reserves. Using local iron ore is an effort for the survival of steel industry of Pakistan."

Pakistan Steel Mill is using iron ore from Chaghi, Balochistan apart from this there are many other places where PSM is working to get raw material. It had conducted its own study to find out the total steel production of Pakistan that was estimated at around 5.5 million tonnes in which long products share around 4 million tonnes and flat products accounts from 1.2 to 1.5 million tonnes.

At present local steel mills are using scrap or imported raw material to make steel, unfortunately scrap and imported raw material both have seen rise in prices, the rising iron ore prices are making it unviable to produce cheap steel products in Pakistan.

Abu Dhabi to increase cap on cement prices - Report

According to a source at the ministry of economy in Abu Dhabi, the price cap on cement is expected to be officially raised this week to around AED 300 per tonne. The current cap, which stands at USD 80, has seen cement and ready mix suppliers pushing up their prices on a weekly basis over the past couple of months.

This follows recent reports in Construction Week, where contractors and material suppliers have voiced their concerns about the cap and the need for its removal in order to bring back a balance to the market.

Mr Chris Lobel GM of Conmix said that "At the moment, the cap is still in place but it will probably be raised this week to about USD 81.7. I am not sure if it will go higher at a later stage, but this is what we know so far. We are expecting the new capped price to be about USD 98. And I don't see why that shouldn't be the case as some of us are still buying cement for more than that amount."

Cement prices have escalated by more than 30% over the past few months with many of the biggest contracting names in the country alleging that cement prices are being manipulated by a cartel formed by the cement suppliers within the industry. However, cement companies have dismissed the allegation.

Builders in a fix to complete projects on committed terms

The Dawn reported that soaring steel and cement prices are making it difficult for local builders to complete their projects on committed terms. Cement companies maintain that the high cost of production is responsible for the price hike and believe that cement prices are still lower compared to global rates.

Mr Munir Sultan senior VC of FPCCI Standing Committee on Housing & Construction Industry said that "There has been a rise of 21.9% in cost of construction from July 2007 to April 2008. Though there is some reduction in mild bar prices and presently prices came to around PKR 70,000 per tonne from PKR 82,000 per tonne but much is needed to be done to ease the problems of construction sector."

He said that builders are blamed for using low grade steel in their projects instead of higher grade steel of British Standards Specification to successfully build projects. He said “Pakistan Steel Mill being a public sector giant should devise plans to regulate local steel prices and boost economy instead of making profits. He also urged the government to slash import duty and sales tax on steel products.”

Muhammad Ahmed VC of Karachi Iron & Steel Merchants Association said that people who have started the construction projects have few choices therefore they are taking their projects forward despite the soaring steel prices. In last few months steel sales declined but now they are back on track.

Turkmenistan re starts gas export to Iran

IRNA quoted Mr Mohammad Reza Forqani Iranian ambassador to Turkmenistan as saying that Turkmenistan restarted its natural gas exports to Iran as of April 25th 2008.

Mr Forqani said that "During a meeting between Mr Kurbanguly Berdymukhamedev MD of National Iranian Gas Company and Turkmen President, it was agreed that exports of Turkmen gas to Iran would restart."

Mr Forqani added that "The Turkmen president during the meeting welcomed broader cooperation between the two countries, it also go for greater cooperation between the two countries' gas experts."

It may be noted that Turkmenistan stopped its gas export to Iran on December 29th 2007, on excuse of technical difficulties. The Turkmen gas export to Iran is made possible through a 300 kilometer long gas pipeline, called the Korbach'che Kordcouy Line, which was put to use in 1987.

Turkmenistan's Korbach'che gas field with its over 100 gas and oil wells, is currently used to provide gas and oil supplies for that country and for exports to Iran, Russia and some other countries.

Arabtec won AED 10 billion construction contract in Russia

Arabtec Construction recently announced that it had won an AED 10 billion project to construct a 400 meter tower and 5 other buildings in St Petersburg in Russia. Work will begin soon, and is expected to be completed over 43 months.

Arabtec won over Russian and European bidders for the deal to build the mixed use Okhta Centre development, jointly owned by Gazprom Neft and the City of St Petersburg. The complex includes office space, along with leisure and entertainment facilities including a library and sports centre.

Mr Riad Kamal CEO of Arabtec said that "We are certain that this selection has been done on the basis of our extensive experience and successful record of implementation of similar projects."

Qatar Petroleum inks long term pact with Rotterdam Port

It is reported that Qatar Petroleum and port of Rotterdam have agreed to a long term cooperation on strategy and development with Port of Rotterdam. Under the agreement, Rotterdam will help Qatar Petroleum to develop its Ras Laffan port and in return the Dutch port hopes to gain closer links to the world's largest exporter of liquefied natural gas.

Mr Hans Smits CEO of Port of Rotterdam said that "With this cooperation Port of Rotterdam wants to strengthen its position as Europe's main energy port, especially in the supply chain for LNG and associated hydrocarbon products."

LNG production in Qatar is split between two companies, Qatargas and Rasgas, both majority owned by the state oil company Qatar Petroleum. LNG is gas chilled to its liquid form to make transportation easier.

Dutch oil storage company Vopak and state pipeline operator Gasunie have said they are planning to build an LNG terminal in Rotterdam, estimated to cost about EUR 800 million. They have said that the terminal should be fully operational in the second half of 2011 and will have an annual throughput capacity of 9 billion cubic meters, which can be increased to 16 billion cubic meters in the future.

GIC and Global to acquire 32.95% stake in Alumco

Khaleej Times reported that Gulf Investment Corporation and Global Investment House of Kuwait will acquire 24.46% and 8.49% equity stakes respectively in UAE's Alumco Llc.

Mr Samer Barakat MD of Alumco said that "This investment is a major shot in the arm as it will further enhance Alumco's growth and will give us massive expansion possibilities. Now with this investment and continued support from our strong financial partners Gulf Investment Corporation and Global Investment House, we aim to position ourselves to become the number 1 aluminum and glass facade manufacturing company in the Gulf."

Mr Hisham Al Razzuqi CEO of Gulf Investment Corporation said that "We see this investment as a launch pad for the company's further growth into the regional markets. The investment in Alumco's equity fits with our strategy of growing in the GCC region's manufacturing sector by partnering with the private sector."

Mr Shailesh Dash senior VP and head of Alternative Investments Group in Global said that "This investment only indicates our continued confidence in Alumco to become the leading regional supplier of aluminum facades and glass products to the booming Gulf construction markets. Upon the completion of the agreement, Global's managed private equity funds will now hold a total stake of 29.7% in Alumco as it already owns 21.21% of the company."

GIC is a leading investment firm with primary focus on the Gulf region and has assets under management of over USD 9 billion. It is equally owned by the 6 GCC governments and was established to promote development and enhancing the role of the private sector in the GCC countries. GIC has made several investments in the building materials and construction industry in the UAE and other GCC countries. GIC has made investment in Alumco through its 100% owned subsidiary Bitumat Company Limited based in Kingdom of Saudi Arabia. Bitumat is a holding company of several successful building material businesses across GCC.

Aramco to boost drilling investments by 40%

MEED reported that Saudi Aramco is preparing a plan to boost drilling activity by a third and increase investments by 40%. As per report, a final version of Aramco's plan, which runs from 2009 to 2013, is expected to be approved by the company's board and the Oil Ministry by mid May 2008.

Aramco will bolster the number of wells drilled around Saudi Arabia to 248 as compared with an initial target of 187 and investment on projects will be increased to USD 13.7 billion from USD 10.7 billion under the draft plan. The increase in drilling activity will be aimed at sustaining Saudi’s production target of 12.5 million barrels a day, which it expects to reach by the end of 2009.

Mr Ali Al Naimi Saudi oil minister said that the world's top oil exporter has no plans to embark on further capacity expansion as long term oil demand forecasts fall and alternative fuel supplies rise. He added that the world has enough oil to fuel future economic growth, but the energy industry is facing a big challenge to ensure investment is enough to meet future demand.

Iran agrees to raise Turkmen gas price

Mehr News Agency reported that Iran has accepted to raise the price of natural gas it imports from neighboring Turkmenistan.

Mr Reza Kasaizadeh deputy oil minister of Iran said that "Iran has accepted to increase the price of gas it imports from Turkmenistan."

Raysut Cement Q4 2008 net income up by 61.9% YoY

Oman based Raysut Cement has posted net income of OMR 11.855 million in January to March 2008 quarter up by 61.9% YoY as compared with OMR 7.322 million in January to March 2007 quarter. Sales revenue increased by 60.7% YoY to OMR 21.939 million.

Mr Mohammed bin Alawi Ali Muqaibal chairman of Raysut Cement said that "The strong growth in construction activity as seen last year is continuing during this year as witnessed from cement demand."

Cement production in the first quarter increased by 40.4% YoY to 712,518 tonnes. Analysts in a Reuters net profit survey in March 2008 said they expected Raysut's quarterly profit to range between OMR 8.5 million and OMR 9.79 million, for an average of OMR 9.23 million.

According to government data, Oman's USD 35.7 billion economy surged by 7.2% in 2006. The economy probably grew up by 7% to 8% in real terms last year.

Combined GDP of GCC, Egypt and Jordan to cross USD 1 trillion

According to an industry research, the combined GDP of the GCC economies, together with Egypt and Jordan, will cross USD 1,045 billion in 2008, thereby sustaining the region’s demand for white goods and consumer electronics. The strong growth of Middle East economies at a rate of 6.5% annually is fueled mainly by the continuing high oil prices.

Morgan Stanley estimates that GDP for the GCC plus Egypt and Jordan will reach USD 1,045 billion in 2008, more than twice the 2002 figure of USD 484 billion.

Mr Eckhard Pruy CEO of Epoc Messe Frankfurt said that "The strong economic growth is also intensified by the real estate boom across countries in the Middle East that continues unabated and translates into huge opportunity for appliance manufacturers. In the GCC countries, investment spending will expand to at least USD 800 billion over the next 5 years, with major projects in the oil and gas sectors, infrastructure and real estate. Given the urge to splurge in the region appliance manufacturers can expect to boost their sales volumes in 2008."

The UAE and Dubai in particular, is among the leading markets for consumer electronics products in the Middle East. Dubai also features as the prime distribution centre for regional electronics sales. Industry analysts believe the surge in sales of electronics products in and through Dubai is due to competitive prices. With diversification of import sources and introduction of new products, huge demand in the Middle East has arisen, giving a new dimension to the scale of supply required.

Syria likely to scrap subsidies on gas and oil

Reuters reported that Syria will begin lifting huge gas oil subsidies in less than a few months after the government takes steps to shield the poor from rising prices.

Facing US pressure to isolate Syria, as well as falling oil exports, the Baath party led government took limited steps to liberalize the economy in the last few years, while keeping a large public sector that employs over a million people. The budget deficit doubled to 10% of gross domestic product in 2007, although the government raised gasoline prices but dragged its feet on lifting more costly subsidies on gas oil, which is widely used in transport and heating.

Gas oil subsidies now cost the treasury more than USD 9 billion a year. A liter of gas oil is sold at 15 cents at the pump compared to the USD 1 it costs the state to import.

Mr Haitham Satayhe senior official of the ruling Baath Party said that "The state cannot keep supporting fuel prices to all people in the same way. Gas oil will go up in less than a few months but it will remain less than the international market. The reforms will ease the strain on the budget. Smuggling will also lessen because prices in Syria are far lower than our neighbors."

Mr Satayhe said that the government was not looking to make money by raising the price, but to recoup a proportion of its costs. He added that "We have a losing oil account while the well to do buy gas oil at hugely subsidized prices. This situation is unsustainable."

Syria exports 180,000 to 200,000 barrels per day of crude oil, sharply less than a few years ago, and imports large quantities of gas oil to counter shortages in domestic output. Crude oil exports are no longer enough to cover the cost of importing refined fuels. The balance went into a deficit for the first time in 2007.

Chinese rebar and wire rod export offer to reach USD 1000 FOB

It is reported that export offers for Chinese rebar and wire rod are expected to move up further in May and they are going to reach USD 1000 per tonne FOB soon. The steady rise in domestic market, robust overseas demand and rising production cost are believed to the major drivers.

Some steel producers have boosted export offer for rebar to USD 96 per tonne to USD 970 per tonne FOB June shipment. There is strong likelihood that quotation for July shipment would approach USD 1000 per tonne FOB or even higher. While wire rod is forecast to exceed USD 1000 per tonne FOB sooner or later.

Some steel mills have already shot up export offers last week citing higher cost and limited export allocation. Some traders indicate that current updated export quotations do not mean higher transaction prices. Actually, they lift prices on purpose so as to scare away some crazy buyers since there is almost no cargo for exports for the moment.

Most steel makers told Mysteel that the output is limited by expensive coke cost. They probably will be forced to cut production if there is not sufficient coke. The low production will lead to less exports and much higher export price.

New official export price would be announced following the 3 day long May Day Holiday. In addition, there will be more wire rod exports than rebar.

(Sourced from MySteel.net)

CISA predicts fall in steel prices in China in late 2008

According to China Iron and Steel Association steel prices in China, prices of steel may fall this year as government measures to rein in lending may slow domestic demand. CISA in a statement that steel prices which have risen 15% in 2008 would have limited room for future increases and may even fall by a small margin.

Mr Qi Xiangdong vice chairman of CISA said that “Steel companies may record roughly the same level of profit this year as last year or slightly higher. The uncertain factor is how the steel price will fluctuate.''

LME sees export tax on Chinese billets as temporary hurdle

Reuters reported that a tax on steel billet exports has driven Chinese producers away from the market and has so far discouraged them from signing up for London's steel futures.

Ms Liz Milan LME commercial director feels that Chinese interest will revive if the tax is reduced or abolished. She told Reuters in a recent interview that "We do not have any Chinese brands listed because there are no Chinese exports and the producers are not in the market effectively. China has a record of putting on taxes and taking them off. So there is likelihood that at some point in the future that tax is going to be removed. I am sure as the contract develops we will get more interest from the Chinese producers."

She said "Consumers looking for billet have had to go to further to try to source their requirements. The trade flows have somewhat shifted since we originally looked at the regions. But nevertheless they are still valid because the consumption is still in the areas that we have identified."

She said "Just because the Chinese have imposed a tax does not mean the trade in the Far East has stopped. Interest from the rest of Far East, including Taiwan, Malaysia and Korea has been strong and half a dozen producers have already registered as approved brands.”

She added that "The fact that Chinese are not exporting does not mean the consumption and the end use has gone away in the region. In fact it is still extremely strong. She also said "You are still getting a huge amount of construction in Thailand and Vietnam and Indonesia. That's why we chose that contract and that's still in place."

Ms Milan said "Export tax is something that the Chinese authorities put in place and it does not affect the LME contract in any way. We still have business and support in the South East Asia and Far East. She said I am sure China will come back in the market eventually."

Baosteel yet to firm up overseas listing plans

Interfax China reported that Chinese steel giant Baoshan Iron and Steel Group., which has plans to list on an overseas stock exchange, has not yet nailed down a detailed plan.

Mr Meng Haibiao a Baosteel Group press department official, in response to a recent media report, told Intefax that "An overseas IPO has always been on Baosteel Group's development agenda, but we have not yet decided on anything such as to where to list, how much to raise and which projects to fund.”

Mr Meng also denied that Baosteel Group has any plan to use funds generated through an overseas IPO to fund the 10 million tonne Zhanjiang steelworks project in southern China's Guangdong Province, saying that investment in the steelworks project will come from many different sources.

However the report added that at least six leading international investment banks, including Morgan Stanley, Goldman Sachs and Citibank, have held talks with Baosteel Group since June 2006, while other major banks such as HSBC, Credit Suisse and Merrill Lynch have expressed an interest in cooperating with Baosteel Group on an overseas listing plan.

Anshan Steel Bayuquan coke oven put into production

It is reported that the first domestic 7m type coke oven Anshan Steel Bayuquan 1 No coke oven was formally put into production.

Anshan Steel Bayuquan coke project is composed by four 1×52 hole JNX70 coke ovens and the supporting systems. JNX70 coke oven is designed on the basis of domestic JN series coke oven, 8 meter experiment furnace, Soviet Russia 41.6 M3 large capacity coke oven, Nippon Steel M type coke oven etc, inherited coke advantages at home and abroad.

It marks that China’s coke industry has turned to new technology, energy saving and environmental protection model from outdated technology, pollution model.

At present, the No 2 coke oven cold installation work is ready.

Xinxing Ductile and Huangshi Xinxing form pipe mill JV

It is reported that Xinxing Ductile Pipe inked M&A Operating Frame Contract with Hubei’s Xinyegang Co Ltd recently under which both companies will set up Huangshi Xinxing Pipe Co Ltd which is 60% owned by Xinxing Ductile Pipe and 40% owned by Xinyegang.

Minmetals to forge world class logistics unit

It is reported that China Minmetals Logistics Group Co Ltd’s Minmetals Shipping & Forwarding Co Ltd was officially set up in Beijing.

As reported, China Minmetals Logistics Group Co Ltd has a registered capital of CNY 100 million with Minmetals Development Co Ltd and China National Mineral Co Ltd taking 94.8% and 5.25 shares respectively. The logistics group will focus on metals & minerals industrial value chain provide storage, transportation of ferrous and non ferrous metals, non metal minerals and other bulk cargo as well as equipments.

Mr Zhou Zhongshu president of Minmetals said they aim to foster China's largest and world class metals & mineral logistics corp.

Mr Xu Qiangguo chairman of Minmetals said the company is learned to be open to introducing in more and diversified strategic investors in future.

29 listed steelmakers in China to produce 16% more steel in 2008

It is reported that 29 steelmakers released 2007 annual report and are counted to have a total production of 183.8519 million tonnes in 2007 and the listed companies are forecast to make 213.285 million tonnes in 2008 increasing 16% YoY.

As per report of the 29 steelmakers, 15 posted output growth of more than 10%; Shougang yet registered minus growth due to relocation project to serve the Olympic Games.

Baosteel, Wuhan Steel and Anshan Steel are predicted to generate 57.85 million tonnes in total up by 11.79% YoY than last year's 51.75 million tonnes. These three leading companies should take 27% of production of the 29 listed companies. In addition apart from Baosteel, Wuhan Steel Anshan Steel, Anyang Steel, Valin Pipe & Wire, Baosteel, Taigang and Tanggang are stepping into 10 million tonnes per year list.

Baogang rail exports to surpass 126,000 tonnes in 2008

It is reported that Baotou Iron & Steel Co Ltd has won steel rail export contracts to Brazil, South Korea, Argentina and Malaysia, covering total supply of over 98,300 tonnes. Malaysia has booked 83,000 tonnes. The steel maker's total rail export volume is expected to break 126,000 tonnes this year.

As one of China's three steel rail production bases, Baogang has built world advanced high speed steel rail production line in 2006.

Baotou Iron & Steel Co Ltd exported 73,000 tonnes of steel rail last year hitting the record.

Scrap price in Jiangsu in continuous upswings

It is reported that scrap market in Jiangsu Province has stepped into an upward stage. Steelmakers raise purchase prices in succession.

Xingcheng Special Steel pulled up price by CNY 80 per tonne with latest price standing at CNY 3850 per tonne for quality scrap and CNY 3660 per tonne for heavy scrap after a CNY 50 per tonne rise recently.

As per report some steelmakers follow suit. Xicheng Steel has hiked price by CNY 70 per tonne with quality scrap quoted at CNY 3750 per tonne. Changzhou Zhongtian has raised price by CNY 80 per tonne. Latest price is offered at CNY 3700 per tonne for first grade charging quality scrap and CNY 3680 per tonne for second grade charging quality scrap.

Other steelmakers now remain waiting and see. But continuous price advances have strengthened suppliers' confidence in future market. Steelmakers nearby are expected to adjust prices upward.

(Sourced from MySteel.net)

Daqin Railway 2007 net profit up by 38.37% YoY

It is reported that Daqin Railway Co Ltd, which accounts for 21.46% of China's total coal traffic, net profit in 2007 rose by 38.37% YoY to CNY 6.11 billion on increased rail cargo volumes for coal.

Daqin Railway said operating revenue also rose by 25.89% YoY to CNY 20.86 billion, out of which 97.02% was accounted by the coal transport business. Its operating costs totaled CNY 9.49 billion up by 19.14% and earnings per share stood at CNY 0.47 against CNY 0.39 in 2006.

In 2007 it reported coal traffic volume of 325 million tonnes as compared with 273 million tonnes in 2006.

Daqin Railway said it expects rising depreciation and financial expenses in 2008. It sees 2008 operating revenue of CNY 22.5 billion and a volume increase of 50 million tonnes.

Daqin Railway also plans to expand its fleet by about 360 electric locomotives and 3,000 cars in 2008.

Hunan Nonferrous raises CAPEX and eyes overseas projects

According to Mr Chen Zhixin finance controller of Hunan Nonferrous Metals Corp Ltd, Hunan Nonferrous Metals Corp Ltd China’s top zinc producer will raise its capital expenditure to at least CNY 2.5 billion to CNY 3.0 billion in 2008 from CNY 1.7 billion in 2007.

Hunan Nonferrous Metals Corp Ltd is also stepping up its moves into overseas projects, as it awaits Beijing’s approval to invest in Canada’s North American Tungsten Corporation Ltd.

Mr Liao Luhai executive director of Hunan Nonferrous’s said that his company is also in talks with two other mining firms in Canada on acquiring shares and is waiting for approval from Chinese regulators to invest in a tungsten product plant in Japan.
Hunan Nonferrous also holds an interest in Australia’s ABRA Mining Ltd which owns lead, zinc, gold and silver deposit in Western Australia.

Qinggang connects 3rd TRT for electricity generation

It is reported that on April 24th, 2008, the third set of share type TRT of Qinggang Iron & Steel successfully generated electricity.

So far, the six blast furnaces of Qinggang are connected to TRT device, which markes a new milestone on recycle using remaining energy.

At present, the two sets of TRT devices are running well and total generated power of 46108240 degrees of which the 5# and 6# share type TRT generated 39494640 degrees.

Through TRT, Qinggang Company saved electricity fee of CNY 25.8 million, greatly reduced the production cost, played a significant role in energy saving and environmental protection for Qinggang Company.

Shigang net profit in Q1 up by 100% YoY

It is reported that in Q1 Shijiazhuang Iron and Steel Company produced 484,000 tonnes of iron, 495,000 tonnes of steel and 480,500 tonnes of finished steel in the first quarter of 2008.

During the first quarter, it realized sale income CNY 2.27 billion up by 43.5% YoY, revenue of CNY 286 million up by 36.4% YoY and profit of CNY 182 million up by 99.2% YoY.

During the first quarter of 2008, it achieved a ratio of high grade and high quality steel up to 99.05% and a ratio of alloy steel to 57.42%. The newly developed No 45, 40Cr, 20CrMn, 20G, 20CrmMnTi steel by Shigang have won praise in the nation and entered the high end market like auto making and engineering machines manufacturing and so on. It has becomes a special steel company with the largest production of high grade and high quality steel rod.

Shigang also improved the product mix for export and adjusted the export policy in the first quarter of 2008 and as a result increased the export volume to 78,000 tonne of steel, making a foreign exchange of USD 57.48 million covering more than 20 countries and areas in Asia Europe and Americas.

Mr Guo Jirong appoint as new CFO of Gansu Jiu Steel Group

Gansu Jiu Steel Group Hongxing Iron & Steel Co Ltd announced that the Company has named Mr Guo Jirong as new CFO.

Mechel announces new appointments

Mechel has announced the appointments of Mr Alexander Starodubov as MD of Mecheltrans and Mr Victor Abarin as MD of Urals Stampings Plant OAO succeeding Mr Ramil Zakirov.

Mr Starodubov was the chairman of the board of directors of Mecheltrans since June 2007. He was GD of Uglemettrans OOO and after it changed its name to Mecheltrans from May 2002 to June 2007 and he was deputy GD of Uglemet-M OOO from October 1999 to May 2002. From June 1987 to October 1999, Mr Starodubov was deputy director for Business Affairs, Head of Mining Operations, Commercial Director of Dzerzhinsky Mine, and Director of the Mine’s Moscow Representation Office at Prokopyevskugol Coal Mining Production Association. Mr Starodubov graduated from the Siberian Metallurgical Institute with an Engineering degree in Technology and Complex Mechanization of Mineral Deposit Underground Mining.

Mr Victor Abarin, prior to his appointment as MD of Urals Stampings Plant OAO held various position at Chelyabinsk Metallurgical Plant OAO from June 1980 to October 2005 his last position there being Director for Production Head of Production Division. From November 2005 to April 2008, Mr. Abarin was General Director of Minplita Plant ZAO. He graduated from the Chelyabinsk State Technical University with an Engineering degree in Electric Power Supply of Industrial Enterprises, Towns and Agriculture. In 2005, Mr. Abarin won the All-Russian Contest "Engineer of the Year – 2005" in the nomination of “Ferrous Metallurgy,” and he holds the title of Professional Engineer of Russia. In 2004 he was awarded the title of Honorable Metallurgist.

Mr Vladimir Polin CEO of Mechel Management OOO said “Mr. Starodubov and Mr. Abarin are fully qualified and experienced specialists, terrific professionals in their jobs, and have been fully devoted to several years of work at Mechel’s subsidiaries.”

Mr Polin said that “Mr Alexander Starodubov has worked very hard to reach the position of managing director. Today, Mecheltrans is developing new logistic schemes that are being established while improving the existing ones, range of cargoes are being extended and their volumes are being built up. The geographical flow of the cargo also has been extended significantly lately. I am confident that, under Mr Starodubov’s operational management, Mecheltrans will continue its robust performance and strengthen its position in the market.”

Mr. Polin added that “Mr Victor Abarin has proved to be a competent executive and production specialist. He understands the specificities of steel production and has many achievements and awards in this area. Urals Stampings Plant is undoubtedly one of the more important metallurgical assets of Mechel OAO, and we expect Mr. Abarin to deliver impressive production and economic results.”

Ukraine marks 22nd anniversary of Chernobyl disaster

22 years after the Chernobyl nuclear disaster, work is under way on a colossal new shelter to cover the ruins and deadly radioactive contents of the exploded Soviet era power plant.

For years, the original iron and concrete shelter that was hastily constructed over the reactor, designed to seal off some 200 tonnes of radioactive magma made up of nuclear fuel, has been leaking radiation, cracking and threatening to collapse. A tornado or earthquake could bring down the shelter, releasing clouds of poisonous dust.

Work on a new sarcophagus, a steel shield 190 meter wide and 200 meter long, should start in October with a completion target of 2012. It is designed to last 100 years. It is designed and built by Novarka, a French led consortium. The new shield will weigh about 18,000 tonnes. It will be built next to the old shelter and slid over it on rail tracks. Its front side will be covered by metal, and the back will abut the wall of reactor No 3.

Moscow and Athens ink deal on Greek section of South Stream

RIA Novosti reported that Russia and Greece signed an intergovernmental agreement on cooperation in the construction and operation of the Greek section of the South Stream gas pipeline. The deal was signed by the Russian industry and energy minister and the Greek development minister after negotiations between Mr Vladimir Putin president of Russia and Mr Kostas Karamanlis PM of Greek.

Mr Putin said the South Stream project was by far the most viable, although its implementation does not mean that we are fighting against any alternative projects. He said "Our proposal is the most optimal and the most competitive of all. These projects will help considerably enhance the energy security not only of the Balkans but also of the entire European continent."

He added that during his negotiations with Karamanlis, the parties also coordinated further steps in implementing the Burgas-Alexandroupolis oil pipeline.

Mr Viktor Khristenko industry and energy minister of Russia said that the Greek section of South Stream will have an estimated capacity of 10 billion cubic meters of natural gas a year. He said "The agreement has set the volume of gas shipments via Greek soil at around 10 billion cubic meters of gas a year."

The South Stream pipeline is expected to pump 30 billion cubic meters of Central Asian gas to Europe per year. Serbia and Hungary joined the project, already involving Italy and Bulgaria earlier this year.

Gazprom and Italy discuss South Stream gas pipeline

It is reported that Mr Alexey Miller chairman of the Gazprom Management Committee lead a Gazprom delegation for a working visit to Italy. In the course of the visit Mr Alexey Miller met with Mr Romano Prodi Chairman of the Council of Ministers of the Republic of Italy and Mr Paolo Scaroni Chief Executive Officer of ENI.

At the meetings the parties addressed further prospects for the Russian Italian cooperation in the oil and gas sector. In particular special attention was paid to the South Stream gas pipeline construction and interaction between Gazprom and ENI within the joint hydrocarbon exploration and production projects in third countries including Libya.

The parties confirmed their interest in strengthening the mutually beneficial strategic partnership between Russia and Italy in the energy sector under the European gas market liberalization conditions.

Asia-Pacific to get 30% of Russian natural gas exports by 2020

RIA Novosti reported that Russia will increase natural gas exports to Pacific Rim countries from the current 3% to 30% of its total exports by 2020.

The Foreign Ministry quoted Mr Yevgeny Afanasyev envoy to the UN Economic and Social Commission for Asia and the Pacific as saying that "This will be an important Russian contribution to ensuring energy security in the Asia Pacific region. He said that the planned increase is due to the region's brisk economic growth against a backdrop of rising energy prices.”

The Russian envoy said the UN Economic and Social Commission for Asia and the Pacific could serve as a good platform for dialogue between energy producers and consumers in the Asia Pacific region to ensure energy security and search for the most effective methods of solving energy problems.

Mr Afanasyev said "Such cooperation could include information exchanges on energy polices, measures to determine areas for joint investment to develop energy infrastructure, analysis of regulatory and legal frameworks in the energy sphere, and efforts to harmonize standards and invest in energy and transit of energy products."

ESOP rerouted north of Khabarovsk

RIA Novosti reported that the second leg of an oil pipeline being built from East Siberia to the Pacific is to be rerouted north of Khabarovsk bypassing the city's water protection area. The project's second leg will be 120 kilometer longer and the whole project will cost an extra RUB 20 billion.

The route of the second section of the East Siberia Pacific Ocean pipeline was originally planned to run 15 kilometer to 20 kilometer south of Khabarovsk which would have affected the city's water supply system.

An official from the regional fuel and energy ministry said "Local authorities and environmentalists have repeatedly said the pipeline route needed to be rerouted north of Khabarovsk's water protection area, and Transneft, the oil pipeline operator, has met them halfway and agreed a new route with the local government."

Mr Sergei Sergeyev head of the ESPO-2 project management center, said last month the pipeline's second stage was estimated at RUB 320 to RUB 330 billion at 2006 prices and would take at least four years.

The second leg will stretch for 2,100 kilometers from Skovorodino to the Pacific. It will pump 367.5 million barrels of oil annually. The capacity of the Taishet-Skovorodino pipeline, being built as part of the project's first leg, is also expected to increase to 588 million barrels from the initial 220.5 million bbl.

The pipeline's first leg, estimated at USD 11 billion, was expected to be commissioned in December 2008. However, Transneft said on February 7th 2008 that the commissioning of the project would be delayed from late 2008 to late 2009.

LUKoil posts 73% net profit growth in Q1

RIA Novosti reported that Russia's largest independent oil producer LUKoil net profit calculated to Russian Accounting Standards climbed 73% YoY in the first quarter to RUB 13.231 billion.

LUKoil, which accounts for about 1.3% of global oil reserves and 2.1% of world crude output, said its first quarter net profit declined 14% on the fourth quarter of 2007 due to lower gross profit resulting from changes in sales structure, increased export duties, and negative revaluation of long-term financial investment in shares.

LUKoil earlier said its U.S. GAAP net consolidated income increased 27.1% YoY in 2007 to USD 9.51 billion.

Stroytransgaz eying oil & gas sector in Libya

It is reported that Mr Vladimir Putin President of Russia concluded a two day working visit to Libya. During the trip, he held discussions with Mr Muammar Al Gaddafi the leader of the Libyan revolution.

Mr Victor Lorents president of Stroytransgaz was part of the official delegation from Russia’s business community visiting Libya. In that capacity, Mr. Lorents participated in discussions with officials representing the Libyan business circle.

As per report the delegation discussed relations between the countries and coordination of the activities of Russian companies working in Libya, including work in the oil and gas construction sphere. Representatives were in accord in noting that the visit created very positive conditions for Russian companies to work successfully in Libya. The Libyans noted with considerable satisfaction that this was the first visit by a Russian head of state during the entire history of relations between the countries, including the Soviet period.

Stroytransgaz is one of the few Russian companies with broad and successful experience working in foreign countries, including countries of the Near East, North Africa, and the Persian Gulf. Stroytransgaz is working in Algeria, Saudi Arabia, Syria, and Jordan. The company opened a branch office in Libya in March 2006.

Indian SS makers to add huge capacity in 5 years

It is reported that India plans to add about 4.6 million tonnes per year of stainless steel capacity in 5 years, which could make it the world’s second largest stainless producer after China. India currently produces about 2 million tonnes per year of stainless steel, more than a third of which is exported as the domestic market is yet to be developed.

The expansion plans under way include following players

1. Jindal Stainless Limited
The largest expansion planned is JSL project to add 1.6 million tonnes per year to its near 800,000 tonnes per year capacity.

2. FACOR
FACOR has said that it will put up a 500,000 tonnes per year stainless plant beside its 65,000 tonnes per year charge chrome ferrochrome facility in Orissa state, and may add another 50,000 tonnes per year of stainless capacity next to its 50,000 tonnes per year alloy and special steels plant near Nagpur.

3. Rohit Ferro
Rohit Ferro Tech is planning a 200,000 tonnes per year stainless project

4. Steel Authority of India Limited
SAIL is adding 300,000 tonnes per year of capacity at its stainless plant in Salem.