Esmark to merge with Essar

US based Esmark Incorporated announced that it has agreed to the material terms of a proposed tender offer and merger with Essar Steel Holdings Limited for a cash purchase price of USD 17 per share. Essar Steel Holdings, a part of Essar Global, is paying a 13% premium over the prevailing price of Esmark to acquire all the outstanding share of the company.

Esmark is a steel production and distribution company. It also has distribution centers across the US. Esmark last year acquired Wheeling Pittsburgh and its steelmaking operations in three states. Esmark, including Wheeling Pittsburgh, has an annual production capacity of 2.4 million tonnes.

The Company plans to enter into definitive documentation upon expiration or waiver of the approximate 52 day right to bid period set forth in the collective bargaining agreement with the United Steelworkers.

Esmark has also entered into a binding commitment letter with Essar for a USD 110 million term loan which is anticipated to be funded by the middle of May. Proceeds of the loan will be used to refinance the existing term loan and provide additional liquidity.

Within ten days of entering into definitive documentation, a wholly owned subsidiary of Essar will effectuate the two step acquisition by means of a front end, cash tender offer for all of the outstanding shares of Esmark's common stock, at USD 17.00 per share in cash. If greater than 50% of the outstanding shares are tendered, then a second-step, cash out merger would follow in which all remaining shares of Esmark common stock will be converted into the right to receive USD 17.00.

The tender offer, which was unanimously accepted by Esmark's Board of Directors, is subject to certain conditions, including the valid tender in the offer of a majority of the fully diluted Esmark common stock, and other customary conditions as well as the approval by the Department of Justice and Committee on Foreign Investment in the United States.

With this proposed acquisition, Essar will have nearly 7 million tonne capacity in the US and Canada, making it a significant player in those two markets. In June 2007, Essar acquired Algoma Steel Inc. Later it added Minnesota Steel to its holdings and is building a new plant on that property to further increase North American capacity.

Mr Shashi Ruia chairman of Essar Global, said that "This is one more step in realizing our global steel vision on having world class low cost assets, with a global footprint. Having acquired Algoma and Minnesota Steel last year, this acquisition provides us with an excellent platform for the Canadian and North American markets.”

Mr James P Bouchard chairman & CEO of Esmark Incorporated said that "The proposed merger with Essar is the culmination of an extensive review of the strategic options available to the company that included exploratory discussions with a number of potential partners. With spiraling raw material and transportation costs, difficulty securing long term financing commitments and the investment challenges associated with maximizing steel production capacity, we were convinced that a strategic partner like Essar was the best possible solution for the long-term prospects of the company moving forward. I am grateful to the employees of Esmark and Wheeling-Pittsburgh, our shareholders as well as the United Steelworkers for their continued belief in our company and I am proud that the Esmark family will be joining a great company like Essar."

Mr Madhu S Vuppuluri president of Essar Americas said that "Essar is very excited about the potential merger with a great company located in the steel capital of the United States. We plan to make significant investments into Wheeling Pittsburgh Steel to make it a low cost, technologically advanced steel producer. We look forward to a strong relationship with the United Steelworkers, our employees as well as the local communities."

Mr Roongta favors amicable settlement of Chiria issue

It is reported that Steel Authority of India Limited, which is locked in a legal battle with the Jharkhand government over the issue of mining rights of Chiria deposits, would prefer an out of the court settlement.

Mr SK Roongta chairman of SAIL, during his visit to the Chiria mines, told “We are having dialogue with the Jharkhand state government. The union steel minister has also made a strong appeal to the state government to resolve the issue. Even the Prime Minister’s Office has intervened.”

He said that “After the Prime Minister’s visit to the state on April 22nd 2008, we have again urged the Jharkhand chief minister for a fresh round of dialogues on the issue. I will try to personally speak to the chief minister and I hope that the issue will be resolved.”

SAIL has 6 mining leases in Chiria and 4 in Gua in Jharkhand, with an estimated iron ore reserve of around 2 billion tonnes. Out of the 10 leases, the renewal of two in Ajitaburu and Sukri, which are spread over a combined leasehold area of 933 hectares, are under dispute with the Jharkhand state government and the matter is pending before the court.

UGSL net sales in 2007-08 up by 23% YoY

Uttam Galva Steels Ltd has reported a net profit after tax of INR 124 crores for the financial year ended March 31st 2008.

Uttam Galva’s posted an increase of 23% YoY in its net sales at INR 3156 crores for the year ended March 31st 2008 as compared to INR 2575 crores of the previous year ended March 31st 2007.

Mr Ankit Miglani director, commercial of Uttam Galva said that "Our expansion plans of increasing our capacities of cold rolled and galvanized steel are now complete. We are now exporting to more than 135 countries globally. Our facilities are geared to satisfy the most exacting client requirements in both domestic and global markets.”

Uttam Galva Steels Limited is a one of the largest manufacturer exporter of cold rolled steel and galvanized steel in India. In the domestic market, the company is a major supplier to the automobile, white goods, general engineering and construction industries. Some of its major end users include Bajaj Auto, Bajaj Tempo, M&M, Kirloskar, L&T and Crompton. It currently exports its products to more than 135 countries including Australia, France, Germany, Greece, UK and USA.

SAIL may take 50% stake in Kerala based SCL

It is reported that Kerala government owned Steel Complex Limited will be now managed by public sector Steel Authority of India Limited as a JV project.

Mr Elamaram Kareem industries minister of Kerala said that "The agreement to this effect would be inked on May 3rd 2008 at Kozhikode." The MoU for the JV will be signed in the presence of Union minister for steel Mr Ram Vilas Paswan.

According to the agreement, SCL would become a 50:50 JV with SAIL pumping in funds for its modernization and tackling management control. Currently, the state government holds 93.2% stake in SCL while the rest is with private individuals. SCL has liabilities in excess of INR 1 billion.

SAIL also plans a new rolling mill with 60,000 tonne annual capacity at Kozhikode. It is poised to invest 50% in Steel Industries Limited Kerala for manufacturing high quality steel with minimal carbon contamination. Mr Paswan will lay the foundation stone for a rolling mill for thermo mechanically treated steel this week, after the pact for SAIL’s Kerala unit is signed.

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.

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.

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.”

Two steel plants to come up in Madhya Pradesh

Mr Ram Vilas Paswan union minister for steel & chemicals said that two new steel plants will be set up at Ujjain and Hoshangabad in Madhya Pradesh.

Mr Paswan added that "Two new steel plants will be established at Ujjain and Hoshangabad. Besides, another steel plant would be set up in Gwalior if the state government made available land."

Jindal Saw net in Q4 of 2007-08 up by 21.6% YoY

Indian pipe major Jindal Saw Ltd has posted net profit of INR 854.0 million for January to March 2008 quarter up by 21.6% YoY as compared to INR 702.5 million in January to March 2007 quarter.

Its total Income has decreased from INR 12722.7 million for January to March 2007 quarter to INR 9550.6 million in January to March 2008 quarter.

MECON signs MoU with GOIC

India’s state owned consulting firm Metallurgical & Engineering Consultants Limited and Gulf Organization for Industrial consulting have signed MoU to work together for providing continuing collaboration opportunities in the Gulf region.

The MoU was signed recently in Mumbai by Dr. Ahmed Khalil Al Mutawa the secretary general of GOIC and Mr Drona Rath CMD of MECON.

The field of collaboration include iron & steel, non ferrous metallurgical plants, coal & chemical plants, refractory plants, power plants, general engineering industries, oil, gas & Petroleum industries, environmental engineering, mining and mineral etc.

The MoU provides broad framework for cooperation between the two organizations that will be mutually beneficial.

GOIC is an organization founded in the year 1976 by the Arab Gulf States with their mandate to foster Industrial Development across the GCC region.

India's new export duties on steel products

Further to the Breaking News dated April 29th 2008 on this matter, given below are the rates of export tax proposed by Mr P Chidambaram Indian finance minister

Readers may kindly note that this is compiled based on the information available from various sources and is not based on detailed announcement from the government.

Talks for TATA investment in Bangladesh to resume next month

It is reported that Bangladesh government and TATA Group are going to resume talks on a TATA investment proposal sometime in the first week of May 2008.

As per report, Mr S Manzer Hossain project director of TATA in Bangladesh recently met Mr Hossain Zillur Rahman commerce adviser of Bangladesh to discuss issues pertinent to the talks. He also met Mr Kamal Uddin Ahmed executive chairman of Board of Investment to set the schedule and agenda of the negotiations.

Mr Rahman, following his meeting with the TATA representative, said that "We will definitely make sure that Bangladesh’s interests are protected while we welcome foreign investments."

BSL announces 2007-08 results

Bhushan Steel Limited has announced the following results for the quarter & year ended March 31st 2008

The unaudited results for the January to March 2008 quarter

Bhushan Steel has posted a net profit of INR 1350 million for the January to March 2008 quarter up by 23% YoY as compared to INR 1097 million for the January to March 2007 quarter. Total income has increased from INR 10696.90 million for the quarter ended March 31st 2007 to INR 12179.60 million for the quarter ended March 31st 2008.

The unaudited results for the Year ended March 31st 2008

Bhushan Steel has posted a net profit of INR 4111.20 million for the year ended March 31st 2008 up by 31.2% YoY as compared to INR 3132.60 million for the year ended March 31st 2007. Total income has increased from INR 38681.60 million for the year ended March 31st 2007 to INR 42574 million for the year ended March 31st 2008.

The figures for the year ended March 31st 2007 are audited.

Mr Agarwal appointed as CFO of Algoma Steel

Algoma Steel Inc announced that Mr Dan Ardila VP finance and CFO has conveyed his intention to resign effective April 30th 2008 in the pursuit of other career interests and Mr Amit Agarwal has been appointed CFO.

Mr Agarwal will be accountable for all financial, logistics and supply chain functions effective May 1st 2008.

Mr Agarwal has been with Essar Steel since November 2007 and has over eighteen years' experience in the steel industry. Mr. Agarwal came to Essar from ArcelorMittal where he served most recently as CFO of the European Long Business Segment and prior to the merger, he was the CFO for Mittal Steel Germany.

A member of the Essar Group, Algoma Steel Inc is based in Sault Ste Marie in Ontario. As a fully integrated steel producer, Algoma's revenues are derived primarily from the manufacture and sale of rolled steel products including hot and cold rolled sheet and plate.

Notification on change in custom duty by Indian government

Department of revenue of government of India’s finance ministry has announced the amendments in the notification of the government of India in the ministry of finance, No 21/2002 Customs dated the March 1st 2002 vide notification no 56/2008 - Customs, dated 29-04-2008
To see the notification, please visit
http://www.cbec.gov.in/customs/cs-act/notifications/notfns-2k8/cs56-2k8.htm

The principal notification No.21/2002-Customs dated the 1st March 1st 2002 was last amended vide notification No.42/2008-Customs dated the April 1st 2008.

Change of guard at ISMT

ISMT Ltd announced that Mr V Balasubramanian joint MD of ISMT has resigned from the board with effect from the closing hours of business on April 30th 2008.

The release added that Mr Salil Taneja president Corporate Strategy & Development has been re designated as joint MD with effect from April 30th 2008.

Environmental angle for iron ore mining permits in Goa

Goa has been well known since the time of the Portuguese for its iron ore deposits, the spurt in global demand, especially fed by the Chinese consumption levels, has begun to turn the state red with iron ore mines.

It is reported that more than 70 mining leases have been given environmental clearances in less than 2 years to mines covering 66.9 square kilometer of the state's forested areas in the hills have been leading to a crisis in the state. The clearances to the leases have now become subject to the decision of the Supreme Court in an ongoing case.

In addition, different local groups and villages have gone to the Bombay High Court against the problems caused by unregulated mining.

A mapping exercise carried out by NGO Goa Foundation found that several of these mines are operating within 1 kilometer of wildlife sanctuaries in the state in contravention of the Supreme Court orders. One mine was found to be operating in the heart of a wildlife sanctuary and work has been stayed on the orders of an apex court committee.

Mr Claude Alvares director of Goa Foundation and also member of Supreme Court Monitoring Committee on hazardous waste said that "Under SC orders, the state was forced to assess these mines for their environmental clearances. It ended up clearing all of them. The shipping costs are lower and the low grade ore is allowed to be exported, so Goa has become a favored export hub of iron ore."

Monnet Ispat net profit for Q4 of 2007-8 up by 34% YoY

Monnet Ispat & Energy Limited has reported a 104% YoY increase in net sales to INR 380.64 crore for the January to March 2008 quarter as against INR 186.45 crore in January to March 2007 quarter. The net profit after deferred taxation stood at INR 57.20 crore as against INR 42.79 crore, marking an increase of 34% YoY.

Mr Sandeep Jajodia v CMD of Monnet Ispat said that "In the coming years, it will be focused more on the energy business rather than steel. In the future, 55% of the revenues will come from the energy business and the rest from steel."

Monnet Ispat has completed the commissioning of 0.50 million tonnes of sponge iron plant during the year and installed 90 MW new power generating capacity in Raigarh during the year taking the total power generation capacity to 150 MW.

Indian GDP expected at 7.8% in 2008 – Moody's

Global credit rating agency Moody's in its latest report said that, on the back of strong government spending and investment activity, the global slowdown would only have a modest effect on Indian economy whereas its GDP is expected to ease to 7.8% in 2008.

The report by Moody's Economy.com noted that slowing exports and tight monetary policy are the key downside risks to expansion this year. Further, government's current priority to improve infrastructure and reduce poverty would witness strong demand for workers and household income grow at a stunning pace in 2008.

The report said that public expenditure would receive a major boost in anticipation of the general election to be held in May 2009. It added that "However, thanks to strong government spending and investment activity, the global slowdown will have only modest effect. India's GDP growth is expected to slow to around 7.8% in 2008 and rebound to 8% the following year as the global economy rebuilds momentum."

Meanwhile, the Reserve Bank of India raised the cash reserve ratio by 0.25% to 8.25% in its Annual Monetary Policy. The new CRR would be effective from May 24th 2008. Pointing out that domestic demand is a key driver of expansion in India, the report said that amid rapid wage growth, household demand would be solid. However, strong inflation coupled with high borrowing costs would weigh on household budgets and dampen consumer spending.

NTPC and BHEL for power equipment JV

With reference to the earlier announcement dated September 10th 2007 and January 11th 2008, National Thermal Power Corporation Limited announced that it has formed a 50:50 JV company with Bharat Heavy Electrical Limited under the name of NTPC BHEL Power Projects Private Limited on April 28th 2008.

Kolkata Port to lease 2 berths

FE quoted Mr Rajeev Dube deputy chairman of Kolkata Port Trust Kolkata as saying that Haldia Dock Complex's berths 2 and 8 will be reserved for one contractor.

He said that “The contractor will have to assure a cargo capacity of 1.5 million tonne per berth a year. If the contractor achieves this, he will get an incentive that will allow only his ships to operate in any one berth. TATA Steel and SAIL are strong contenders.”

Mr Dube said that "We have decided to give the operations to someone who can handle them."

He added that the contractor would have to provide a bank guarantee of INR 34 per tonne against failure to deliver the assured 1.5 million tonne cargo. The move has been operational from March 15th 2008.

NALCO Q1 2008 net profit dips by 30.8% YoY

National Aluminum Company Limited has announced the following results for the quarter & year ended March 31st 2008

The unaudited results for the January to March 2008 quarter

NALCO has posted a net profit of INR 4090.60 million for January to March 2008 quarter down by 30.8% YoY as compared to INR 5914.80 million for January to March 2007 quarter. Total income has decreased from INR 16957.20 million for the year ended March 31st 2007 to INR 15407.00 million for the year ended March 31st 2008.

The unaudited results for the year ended March 31st 2008

NALCO has posted a net profit of INR 16248.90 million for the year ended March 31st 2008 down by 31.7% YoY as compared to INR 23813.80 million for the year ended March 31st 2007. Total income has decreased from INR 63540.80 million for the year ended March 31st 2007 to INR 55567.30 million for the year ended March 31st 2008.

The figures for the year ended March 31 2007 are audited.

NTPC may enter cement sector in JV with private firms

It is reported that National Thermal Power Corporation Limited will manufacture cement near 6 of its power plants through ventures with private firms.

NTPC will set up the units near its power plants at Badarpur in New Delhi, Sipat in Chhattisgarh, Ramagundam in Andhra Pradesh, Barh and Kahalgaon in Bihar and Rihand in Uttar Pradesh. While Sipat and Barh are yet to be commissioned, the other plants generate around 8 million tonnes per annum of fly ash.

Mr T Sankaralingam CMD of NTPC said that "We are looking at equity participation from private sector companies, the percentage for which will be decided later. We have already issued expressions of interest for JVs and received responses from 11 firms. We plan to sign MOUs by September 2008. All leading private sector cement manufacturers have shown interest. Depending upon the logistics and the discussions, the investment details will be firmed up."

NTPC is India’s largest fly ash producer because more than 80% of its installed capacity of 29,144 MW is coal fired. It burns 122.94 million tonnes per annum of coal and expects fly ash production to grow further as a substantial portion of the capacity it is adding will be based on coal. It plans to add 22,430 MW of capacity by 2012.

Power sector analysts see this as an attempt by NTPC to better utilize the 43 million tonnes per annum of fly ash its coal fired plants produce, only half of which the company is able to dispose of safely. Indian coal contains high levels of ash that harms the environment. NTPC can utilize the fly ash better by making cement, to make a tonne of which requires about 150 kilogram of ash.

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.

Punj Lloyd subsidiaries bag power plant contract in Indonesia

Punj Lloyd Ltd announced that its wholly owned subsidiaries PT Punj Lloyd Indonesia and Punj Lloyd Pte Ltd Singapore have been awarded an EPC project for 2x30 MW Coal Power Plant at Kalimantan Island in Indonesia for a consolidated value of EUR 52 million by PT Makmur Sejahtera Wisesa of Indonesia.

Pt Punj Lloyd Indonesia has been awarded the Construction Services Contract and Punj Lloyd Pte Ltd has been awarded the Equipment Supplies Contract.

Power ministry identifies three sites for UMPPs in Orissa

Union ministry of power said that 3 sites have been identified in Orissa to develop ultra mega power projects of 4,000 MW each.

Mr Anil Razdan union power secretary said that "We have identified three sites for UMPPs in Orissa and Tamil Nadu government has also proposed Cheyyur as a site for UMPP."

Kolkata Port to upgrade Haldia Dock roads

FE quoted Mr Rajeev Dube deputy chairman of Haldia Dock Complex of Kolkata Port Trust Kolkata as saying that around INR 20 crore will be spent over the next 2 to 3 years to upgrade roads within the Haldia Dock Complex.

He added that "We will spend INR 106 crore on deployment and procurement of shore handling equipment and INR 30 crore on expansion of the railway yard and ancillary facilities within the dock in the coming years. A berth will be constructed in another 6 months outside the port lock gate with an investment of INR 100 crore. In 2007-08, we handled 43 million tonne of cargo and 2332 vessels."

Satyam inks framework agreement with ArcelorMittal

Indian IT major Satyam Computer Services announced that it has signed a framework agreement with steel major ArcelorMittal as one of the only 2 global IT services providers to consolidate sub contractors' activities.

Satyam, in a press release said that the agreement would focus on enhanced application support, cost advantages, reduced vendor management overhead, dependable partnership for future enhancements and IT Convergence initiatives for ArcelorMittal. Satyam would share approximately 70% of the currently subs contracted activities in the scope for this initiative.

Industry may join government fight against inflation

It is reported that the prime minister’s appeal to industry to assist the government in moderating inflationary expectations as its societal obligation at the CII AGM has struck a cord with the captains of Indian industry and many CEOs have reacted positively to the PM’s speech and said he had the right to expect industry to assist him.

Mr KV Kamath MD & CEO of ICICI Bank said that "The industry needs to look at inflation in a responsible manner and should be prepared to do whatever it can. The PM and the FM made clear that the government is against cartelization, and so is CII. It’s time we start behaving responsibly or be ready to face the consequences."

Mr Sunil Mittal chairman of Bharti Enterprises and also outgoing CII president said that the government move to reduce duties on several items should have a positive impact on inflation. He added that "The industry can help by being more efficient and by absorbing the extra burden. As a statesman, the PM should expect the industry to assist. And if the government is willing to show the way, I think the industry will respond well and participate in bringing price stability. Reducing demand would not be the answer. Rather, we should rather celebrate demand and ensure an equal flow of supply."

Mr Pawan Munjal CEO of Hero Honda Motors said that "The automobile industry has been tremendously hit by the rise in input costs. We have passed on as little burden as we can to the consumers. Every duty cut that was provided to the industry has benefited the consumers too." He added that the inflation rate would have been much higher if industry had not successfully absorbed rising costs.

NTPC to set up 8MW hydel plant at Singrauli

As a step towards capacity addition from renewable energy sources, the sub committee of board of directors of NTPC at a meeting held on April 29th 2008 has approved a detailed project report for setting up 8 MW Singrauli Small Hydel Project located in the state of Uttar Pradesh at a current estimated cost of INR 628.77 million.

This project will utilize hydro potential in condenser cooling water discharge channel at the existing Singrauli thermal power station.

Indian government reviews coal position

It is reported that ministries of power, coal, shipping, railway board and Planning Commission recently met to review the coal position in India.

The total coal requirement by the end of 11th Plan has been pegged at 550 to 600 million tonnes for power utilities, besides captive coal requirement. He added that another pre requisite of the government is to put the regulatory commission in place.

NTPC board approves modernization of Auraiya power plant

Board of directors of NTPC at its meeting held on April 29th 2008 has accorded investment approval for undertaking renovation and modernization work at 652 MW Auraiya Gas Power Station in the state of Uttar Pradesh at an estimated cost of INR 4868.3 million.

HRB spot prices maintain upward trends

SteelBenchmarker reported that the US hot rolled band spot price for April 28th 2008 surged by 9.4% to USD 1,097 per ton, FOB the mill for the twelfth consecutive rise totaling USD 520, world export HRB price rise by 5.2% to USD 995 per tonne FOB the port of export, for the tenth consecutive rise totaling USD 414, Chinese HRB ex works price surged by 2.1% to USD 67q per tonne for the second consecutive rise and the Western European HRB surged by 5.9% to USD 1.066 per tonne ex works for the sixth consecutive time totaling USD 353.

USA
USD 1,097 per metric tonne FOB the mill
Up by USD 94 per tonne from USD 1003 two weeks ago
Up by USD 537 per tonne from the recent low of USD 1,003 on August 13th 2007
Up by USD 467 per tonne from the recent high of USD 630 on April 9th 2007

China
USD 671 per metric tonne, ex works
Up by USD 14 per tonne from USD 657 two weeks ago
Up by USD 201 per tonne from the recent low of USD 470 on October 22nd 2007
Up by USD 184 per tonne from the previous high of USD 487 on September 10th 2007

Western Europe
USD 1,066 per metric tonne, ex works
Up by USD 59 per tonne from USD 1.007 two weeks ago
Up by USD 403 per tonne from the recent low of USD 663 on July 23rd 2007
Up by USD 370 per tonne from the recent high of USD 696 on June 11th 2007

World Export Price
USD 995 per metric tonne, FOB the port of export
Up by USD 49 per tonne versus USD 946 two weeks ago
Up by USD 445 per tonne from the recent low of USD 550 on July 23rd 2007
Up by USD 399 per tonne from the recent high of USD 596 on March 26th 2007

SteelBenchmarker publishes steel benchmark prices for HRB, CR coil, rebar and standard plate in the US, Western Europe, mainland China, and the world export market every fortnight.

Venezuela declares Sidor of public and social interest

Ternium SA has announced that the National Assembly of the Republic of Venezuela passed a resolution declaring that the shares of Ternium's majority owned subsidiary Sidor, CA together with all of its assets are of public and social interest.

The release said that “This resolution authorizes the Venezuelan government to take any action it may deem appropriate in connection with any such assets which may include expropriation.”

The release added that while continuing to preserve all of its rights under contracts, investment treaties and Venezuelan and international law, Ternium is prepared to continue discussions with the Venezuelan government regarding the adequate and fair terms and conditions upon which all or a significant part of Ternium's interest in Sidor would be transferred to the government.

CMC acquires assets of Rebar Services and Supply Company

Commercial Metals Company announced that it has completed the acquisition of substantially all the operating assets of Rebar Services and Supply Company of Fort Worth.

Mr Russ Rinn executive VP of Commercial Metals Company & president of Commercial Metals Company Americas said that "The addition of Rebar Services and Supply Company to the Commercial Metals Company Rebar group will allow us to expand our presence in the growing North Texas market. The company has an outstanding team in place and a strong reputation in the marketplace which we have witnessed through our business relationship of over 20 years. We are excited to have the Rebar Services and Supply Company team joins Commercial Metals Company."

Commercial Metals Company and subsidiaries manufacture, recycle and market steel and metal products, related materials and services through a network including steel minimills, steel fabrication and processing plants, construction-related product warehouses, a copper tube mill, metal recycling facilities and marketing and distribution offices in the United States and in strategic international markets.

Hyundai Steel inks PCI deal with Macarthur

AP reported that Macarthur Coal Ltd has signed a long term contract Hyundai Steel Company Ltd of Korea to supply coal from its Coppabella coal mine operations.

Under the deal, Macarthur will supply low volatile pulverized coal injection material from 2009 to Hyundai to use in its new blast furnace.

Ms Nicole Hollows CEO of Macarthur Coal said that "This agreement with Hyundai Steel is a strengthening of the relationship and extends future cooperation between the companies.”

PCI coal is crushed into a fine powder and injected into blast furnaces as a replacement for coke in the production of pig iron. It is one of the fastest growing segments of the coal market.

CSC to raise all product prices by 20% in Q3

CENS reported that forced by price hikes in raw materials as coal internationally, Taiwan’s China Steel Corporation is considering raising product prices by 20% on products to be delivered in the Q3 of 2008 to offset the increase in production costs.

Based on the projected consumption of 0.7 metric tonnes of coal to produce a metric ton of steel products, CSC is expected to experience an increase of USD 140 in cost to roll out per tonne of steel and to offset such increase, CSC will raise domestic sale price of its products by 20%, to be discussed at a production sales meeting slated for the end of May.

Mr LM Chung executive vice president of CSC said that his company has to purchase 8.5 million tonnes of coking coal from Australia and Canada yearly, leading to an increase of TWD 20 billion in the procurement cost of coal this year.

Metal Resources acquires Kataman Metals

LockeBridge Investment Banking, Lexington, Mass has announced that it has acted as exclusive financial advisor to Kataman Metals Inc a leading merchant broker of nonferrous metals in its sale to Metal Resources Inc Chicago. The terms of the transaction were not disclosed.

Kataman which is based in St Louis was founded in 1993 and established itself as a leading international supplier of copper, aluminum, zinc, lead and nickel. Kataman is an integrated merchant that deals in primary and secondary copper on a large quantity basis. The company has established strategic partnerships with most of the Fortune 500 corporations that require metal resources.

Mr Ben Fixman CEO of Kataman said that "Our sale to Metal Resources Inc. has resulted in substantial additional capitalization which will enable the company to grow much faster.”

Mr William Garnett MD at LockeBridge said that "The combination of Metal Resources’ aluminum experience combined with Kataman’s expertise in nonferrous metals, specifically copper, represents substantial growth opportunities for both firms.”

Mr Rick Beldner general counsel for Kataman said that “Fortunately, the thorough analysis which LockeBridge performed found value other bankers had overlooked. Their ability to search out the right potential buyers resulted in securing multiple offers from around that world that were each substantially higher than the valuation suggested by the other firms.”

LockeBridge is an investment banking firm focused on middle market transactions, assisting clients with mergers, acquisitions, divestitures, recapitalizations, consulting services and capital access on a global basis.

Rautaruukki sells its German precision tube unit

It is reported that Rautaruukki is selling its German precision tube and automotive component processing unit Carl Froh GmbH to the German company Arques Industries AG. Completion of the transaction requires final regulatory clearance from the German authorities. The transaction is expected to be closed in May June 2008.

Carl Froh GmbH is based at Sundern in Germany and had net sales of EUR 58 million in 2007. The company employed around 200 people at year end 2007.

This transaction is part of Ruukki's strategy, whereby Ruukki Metals focuses on special products in the Central and Southern European markets. Carl Froh is not part of Ruukki's core business and acquires almost all of its raw material from outside suppliers.

Rautaruukki will recognize a loss during the second quarter of around EUR 6 million on the transaction. The transaction will have a positive impact of about EUR 16 million on Rautaruukki's cash flow.

Arques Industries AG is an investment company and listed on the Frankfurt Stock Exchange.

Pacific Steel Group to raise prices by 25%

Pacific Steel Group has advised customers that it will be increasing the price of its reinforcing steel and wire rod product ranges by 25% with effect from June 1st 2008.

Mr John Beveridge GM of Pacific Steel Group said that it has been forced to increase its prices due to the cost of the raw materials continuing to rise at an unprecedented pace. The latest price hike follows on from a 12% increase announced in March 2008. With a 100% surge in the price of scrap, increasing freight rates due to the rising cost of oil, and iron ore at record price levels, all steel products, not just reinforcing steel, are being exposed to this type of increase.

Mr Beveridge said that "Our outlook for the coming month is that prices will remain high, if not increase further, particularly if we see any weakening in the New Zealand dollar. Our prices are still very competitive relative to importing steel into New Zealand. The ongoing volatility in the global steel commodities market necessitates regular reviews of our pricing and we are continuing to monitor this situation closely."

All Pacific Steel Group products are made entirely from New Zealand sourced recycled scrap metal, but the price is set by the international market. A global shortage in scrap metal, and strong demand for steel in Asia, is behind a significant rise in the cost of scrap.

Pacific Steel Group in Auckland is New Zealand’s only manufacturer of reinforcing steel and wire, under the Seismic and Wiremark brands respectively.

Sutiss may stop work as Venezuela fails to sign Sidor contract

BNamericas reported that Venezuela's steelworkers union Sutiss has threatened to halt works at steelmaker Sidor since Mr Rodolfo Sanz minister of Venezuela's ministry of basic industries and mining has not signed the collective contract with employees.

Mr Pedro Rondón board member of Sidor said that "We expected the minister to sign the contract but he called and said there are still some final details and finishing touches missing on the contract and that it has not been possible to sign."

Mr Rondón said that the union has given the government until April 29th 2008. He added that "After the deadline, stoppages will begin because we don't make concessions for anyone here. If we did it with the Argentines, we will not hesitate to do it with the government."

It may be noted that the Venezuelan government is expected to sign a collective contract agreement with employees that includes a daily pay raise of VEB 53 and other benefits such as vacation pay and a 10% salary bonus based on merit.

Unsuccessful collective contract negotiations between Ternium and Sidor workers led to a series of strikes in the first few months of 2008 and were a factor in President Mr Hugo Chávez's April 9th 2008 announcement that Sidor would be nationalized. Ternium is now in talks with the Venezuelan government concerning nationalization.

The Venezuelan state already holds 20.4% of Sidor through state heavy industry holding company CVG and employees own the remaining 19.9%.

ArcelorMittal SA to increase flat product prices by 5% in June

South Africa's largest steel producer ArcelorMittal South Africa announced the fifth consecutive price hike for 2008, as international prices continued an upward movement.

Mr Tami Didiza a spokesperon of ArcelorMittal South Africa said that the company would increase its flat steel prices by 5% in June. He added that the latest price hike would not affect the price of long steel products.

In May, steel prices increased prices by an average of 18%, which followed on a price hike of between 15% and 25% for both long and flat products in April, and an increase of between 10% and 12% in March.

ArcelorMittal South Africa said that steel prices were rising as a result of higher input costs, particularly iron ore and coking coal.

TATA Corus opens a metal centre in Telford

Steel maker giant TATA Corus has opened a unique dedicated metal centre in Telford, creating 7 new jobs.

Mr Lee Winsper business manager of Corus said that "A wide range of products are held in stock including an extensive variety of structural steels weld mesh, open steel flooring and hollow sections. The new metal centre will meet customer’s requirements, in both range of products and ability. Because we have access to the extensive stocks held by Corus nationwide we can cater for orders of any size, from a single bar of steel up to a full load, and source a wide variety of material at very short notice."

Mr Winsper added that "Designed to meet the requirements of both small and large customers, the new centre will give organizations everything they expect from a local supplier with all the benefits of dealing with a major multi national company with a comprehensive product range, stock availability and competitive prices."

Shapeline and Mesacon tie up for measurement systems for the steel industry.

The Russian Steel operator Metchel is the first customer to order the new Integrated Multi Measurement system that has been jointly developed by Shapeline AB and Mesacon Messelektronik GmbH.

The system, specially designed for hot rolling mills, offers position and flatness compensated thickness profiles. In addition, it offers flatness, width, speed, length, and temperature profiles from one single system. Several other customers are expressing keen interest in the product and more deliveries are expected during the year.

The environment in a hot rolling mill is very demanding. Smoke, vapor, water and heat provide challenges for both correct measurements and for the long-time survival of the sensors. The sensors of the new instrument are all integrated in the well-proven mechanics of the Mesacon C Frames. Air purges, heat shields and both active and passive cooling is used to ensure low maintenance, long life and trustworthy data.

Mr Pär Kierkegaard CEO of Shapeline said that “This is the first time we at Shapeline integrate our system into a system provided by a partner company, but it is not the last. The competence and experience of Mesacon in this line of business is helping us to enter this new area, for us, in an efficient way.”

Mr Detlef Jährling vice president of Mesacon said that “For a long time, we have worked together with Shapeline in the marketing area. I am happy that we now also have taken this further to the product development stage. The combined benefits of our respective competence areas are providing our customers the best solution available.”

Shapeline AB is a privately owned company based in the city of Linköping in Sweden. The Shapeline solution for measuring the flatness of metallic products (plates and strip) is technically frontline. Not only will the metal producers that use the Shapeline system be able to verify and document the flatness of the products delivered by measuring flatness in different phases of the production costs are saved too.

Tenaris to display high technology products at the OTC

It is reported that Tenaris will once again participate in the Offshore Technology Conference which will be held from May 5th to 8th 2008, at the Reliant Center in Houston of Texas. Tenaris will exhibit its full range of solutions for the oil and gas industry.

Located in the main exhibit hall at booth #2951, Tenaris will offer information about new and existing products, such as:

1. TenarisHydril pr emium connections - A comprehensive range of high performance products that are setting new standards in operational performance and environmental compliance worldwide.

2. Deepwater risers and flowlines - Products and complementary services to meet the needs of the world's most challenging projects.

3. Coiled tubes - For both subsea and downhole applications, Tenaris coiled tubing products are appropriate for even the most complex drilling environments.

4. Sucker rods - Tenaris has created the first premium sucker rod, improving the lifespan under fatigue of the API designed rods.

Offshore Technology Conference 2008's theme, Waves of Change, reflects the oil and gas industry's transition as it works to satisfy increasing demand. More than 70,000 offshore E&P specialists are expected to participate. This is Tenaris's 22nd consecutive year participating in the Conference.

SSI announces Q1 result

Thailand's largest hot rolled steel coil maker Sahaviriya Steel Industries announced its first quarter result ended March 31st 2008

Highlights for Q1 result


1. The company realized THB 8,922.6 million revenue from sale of hot rolled coils higher than THB 7,507.3 million during the same quarter in 2007. It also recorded THB 155.6 million sales of steel scrap compared with THB 136.3 million during the same quarter of last year. The company and subsidiaries registered a gross profit from sales and service of THB 1,014.5 million compared with THB 452 million gross profits from sales and service during the same quarter in 2007.

2. Selling and administrative expenses of the company and subsidiaries amounted to THB 193.8 million compared with THB 252.9 million Baht during the same quarter of last year.

3. A subsidiary recorded a recovery of provision for doubtful accounts in the amount of THB 8.6 million during the first quarter in 2007.

4. The company recorded a reversal of loss on diminution in value of inventories in the amount of THB 43.5 million compared with THB 146.5 million.

5. The company and subsidiaries registered THB 1,028.0 million Baht profit before interest expenses and corporate income tax, compared with profit before interest expenses and corporate income tax of THB 497.0 million during the same quarter in 2007.

6. Interest expenses on short term and long term loan totaled THB 140.6 million compared with THB 366.3 million interest expenses during the same quarter in 2007

7. Subsidiaries recorded accrued corporate income tax in the amount of THB 3.9 million compared with THB 4.4 million Baht during the same quarter in 2007.

8 The company and subsidiaries realized a net profit of THB 883.5 million Baht compared with a net profit of THB 126.3 million during the same quarter in 2007.

Sahaviriya Steel principal activities are the manufacture and sale of hot rolled steel coils, provision of maintenance services and deep sea port services.

Toyota Motor acquires 2% stake in Daido Steel - Report

Japanese business daily Nikkei, without citing sources, reported that Japan's biggest automaker Toyota Motor Corp has acquired nearly 2% of Daido Steel Co in order to widen its network of suppliers of specialty steel.

The business daily said the automaker has apparently been buying shares in the leading specialty steel producer since last fall with a total investment estimated at around JPY 7 billion (USD 67.3 million).

Toyota began procuring specialty steel used to make transmission components and other auto parts from Daido Steel in 2006.

Bodycote to sell testing business unit

It is reported that British engineer Bodycote International Plc plans to sell its materials testing businesses and focus on its heat treatment operations.

Bodycote said that it had concluded after a strategic review that substantial shareholder value should be unlocked both through a successful sale of the entire Testing SBU and that it has appointed advisers.

Bodycote whose heat treating technology is used to strengthen parts in a variety of industries, said that "Demand in the group's key aerospace, power generation and oil and gas sectors continues to be buoyant.” It said that "All of the group's major markets remain firm with the exception of the anticipated softness in North American automotive. Operating margins and cash flow are in line with the board's expectations.”

Bodycote said sales in its first four months were up by 18% with approximately 6% from organic improvement, 5% from acquisitions and 7% as a result of currency translation".

SMS reports record business year on global steel boom

The SMS group comprising of leading companies in metallurgical plant and rolling mill technology as well as tube, long product and forging technology has increased its order intake by some 60% YoY to EUR 5,142 million in 2007 as compared to EUR 3,235 million in 2006.

Its sales reached around EUR 2,937 million as compared to EUR 2,826 million and at EUR 176 million, the group’s pre tax result was double the previous year’s figure of EUR 85 million.

Dr Heinrich Weiss chairman of the SMS group said that “It is already clear that the exceptional boom in metallurgical plant construction will continue into its fourth year in 2008. Global steel production is expected to increase to 1.4 billion tonne over the year. We are especially pleased to see that this growth not only comes from the threshold countries alone in other words China, India, Brazil and Russia but also from our customers in other regions of the world that are increasingly placing orders with us.”

He added that “The current boom has broken through the normal peak and trough pattern in the steel industry. The reason is that the threshold countries require large quantities of steel to build up their economic infrastructure. This trend has been a major factor for years.
Meanwhile, more and more of these emerging economies are equipped with state of the art production plants. To stay internationally competitive, North American, Japanese and European steel producers must catch up. That explains why the SMS group expects increased demand for revamps and expansions in these regions.”

European rebar price to smash through USD 1,000 per tonne

It is reported that Italian domestic rebar base price was at USD 704 per tonne and medium rebar's price was traded at USD 1,041 per tonne.

Current demand is still weak, but due to scrap cost up constantly and strong international price, it is estimated that price will keep at a high level in May.

Besides, Germany rebar prices have smashed through record USD 1,095 per tonne supported by strong demands. Rebar base in Spain is quoted at USD 704 per tonne.

(Sourced from YIEH.com)

Tenaris may report weak Q1 results on costs – Citigroup

Citigroup Inc said that Tenaris SA, the world's biggest maker of seamless steel tubes for pipelines, may report weak first quarter results because of higher costs.

Mr Tereza Mello analyst in a note to clients said that earnings per share probably fell to 75 cents from 81 cents a year earlier as seamless tube sales volume declined and cost pressures increased.

Olympic Steel Q1 sales up by 6% YoY

Olympic Steel Inc announced its financial results for the first quarter of 2008. Its net sales for the first quarter of 2008 totaled USD 274.9 million up by 6% YoY from the USD 259.4 million for the first quarter a year ago.

Olympic Steel’s first quarter 2008 net income totaled USD 13.2 million, compared to net income of USD 5.3 million. Tons sold increased by 1.2% to 315,000 from 312,000 in the first quarter of 2007, better than the Metals Service Center Institute statistics of a 4.8% decline in year over year steel shipments for the first quarter of 2008.

Mr Michael D Siegal chairman & CEO of Olympic Steel said that “We are pleased to report record first quarter earnings results, while maintaining a strong balance sheet and capital structure, positioning us well for the current market. As carbon steel prices and working capital needs are rising to unprecedented levels, we actually reduced outstanding debt by maintaining our strict disciplines over working capital and credit risk management. We enter the second quarter with significant borrowing capacity available under our credit facility, allowing us to fully participate in the high stakes steel market as liquidity requirements increase dramatically in the second quarter.”

He added that “We are simultaneously investing in near term elevated working capital needs and future growth initiatives for Olympic Steel. This year, we have capital investment plans of approximately USD 40 million, which include new satellite processing facilities, like the recently announced expansion in South Carolina, and a new Red Bud stretcher leveler cut to length line, expected to become operational in Minneapolis during the second quarter.”

Olympic Steel is a leading US steel service center focused on the direct sale and distribution of large volumes of processed carbon, coated and stainless flat rolled sheet, coil and plate steel products.

Construction starts on heavy industry factory in Vietnam

VNA reported that construction of a heavy industry factory at a cost of VND 450 billion (USD 27.9 million) started in the Vietnamese oil field province of Ba Ria Vung Tau on April 29 with full investment from the Vina Halla Company Ltd of the Republic of Korea.

Mr Shon Ho Yong CEO of Vina Halla said that the factory has a design annual capacity of producing 85,000 tonnes of industrial fans, 5,000 tonnes of pressure bottles and 10 units of heavy cranes all made of steel.

The project will also manufacture incinerators to deal with steel waste, steel facilities for environmental protection and liquid waste treatment and other machines and steel equipment for cement, energy and steel rolling factories.

The factory is scheduled to become operational in the next four months with a licensed operation term of 40 years and provide jobs for 500 workers. Its products will be largely exported to Asian countries.

Vinashin hands over MV Sophia to Graig Group UK

VNA reported that the Nam Trieu Shipbuilding Industry Corporation, an affiliate of Vinashin group, handed over a 53,000 tonne cargo ship to Britain’s Graig Group in northern coastal Quang Ninh province, on April 29.

The ship, named Sophia, was the second among 15 vessels that the Vietnam Shipbuilding Industry Group has signed to build for GRAIG Group. The ship will start its work by carrying GRAIG’s cargos from Vietnam to Thailand.

As a new generation cargo vessel, Sophia includes five well equipped cellars with a combined capacity of 65,700 cubic meters.

The ship will start its work by carrying GRAIG’s cargos from Vietnam to Thailand.

KEPCO Q1 profit falls 61% on high fuel costs

Reuters reported that state run utility Korea Electric Power Corp posted a bigger than expected 61% fall in quarterly net profit hit by higher fuel costs and a weaker won currency.

KEPCO, which supplies more than 96% of South Korea's electricity, reported KRW 299.7 billion (USD 299.1 million) net profit for three months to end March as compared to KRW 775.3 billion profit in the year earlier period. Its sales rose 12% to KRW 8.02 trillion from a year ago.

Architectural competition to promote the new face of Dubai

The Municipality of Dubai and ThyssenKrupp Elevator have announced the launch of an international design competition for the conception of a tall emblem structure to promote the new face of Dubai. The competition is open to architects and teams of architects worldwide who are licensed to practice in their own countries and there is no registration fee.

Located within the Za'abeel Park the structure should promote tourism, have a unique state of the art design, include cultural and leisure activities, conference and theatre facilities. Local climatic conditions should be taken into account, as well as urban and landscape aspects. Passive construction principles should be applied and the structure should respond to the seismic constraints of the region.

The registration deadline is August 31st 2008. The deadline for dispatch of entries is January 31st 2009 and the deadline for the receipt of entries is February 28th 2009. Announcement of the results and official awards ceremony will take place in Dubai in May 2009.

The following prizes will be awarded
1) A first prize of USD 100,000
2) A second prize of USD 50,000
3) Three prizes of USD 20,000 each

The international jury is composed of Mr Sheikh Hamdan Bin Rashid Al Maktoum chairman of Dubai Municipality, Mr Hussein Nasser Lootah director general of Dubai Municipality, Mr Javier del Pozo Portillo chairman of ThyssenKrupp Elevator Business, Southern Europe, Africa & Middle East and Mr Jaime Duróy Pifarre former president of International Union of architects.

In conformity with the UIA-UNESCO regulations for international competitions, the competition has been approved by the Union Internationale des Architectes.

Demand for steel to soar by 31% in Middle East

According to the Gulf Organization for Industrial Consulting, demand for steel products in the world should continue strong, especially for long products.

Besides, the price of crude oil staying at a high level has resulted in a huge spurt in construction activities in the region. GOIC estimated that the demand for iron and steel products in the Middle East region will soar by 31% to 19.7 million tonnes by 2008.

GOIC predicted that local steel producers have been increasing their production to meet the growing demand, but domestic consumption has been far beyond their capacity.

UAE to unveil major sour gas deal soon

Reuters reported that UAE will sign a contract to develop its sour gas reserves within a week.

An official at state oil company Adnoc said that that US oil giant ConocoPhillips had won the project to develop sour gas at the Shah field, which has a price tag of over USD 10 billion. He added that Conoco and Adnoc have yet to make an official announcement on the contract.

Mr Omair Suwaina manager of the onshore division of Adnoc's exploration and production directorate said that "We expect to sign within a week. The project is going as planned and there are no delays or issues."
Rising costs worldwide in the energy industry had pushed up the investment needed in sour gas development, he said in a presentation to the conference. He added that UAE, short of gas to fuel rapid economic development, would go ahead with plans to develop other sour gas fields.

Mr Suwaina said that "There will be more developments. It is necessary and we have to do it." He added that still, the rising price of sulphur would help make the projects profitable. Sulphur prices stood at around USD 700 to USD 800 a tonne.

Pakistan reconstitutes board of Privatization Commission

The News reported that Pakistani Prime Minister Mr Syed Yousuf Raza Gilani has reconstituted the board of Privatization Commission.

Mr Syed Naveed Qamar federal minister for privatization, investment, ports, shipping, industries & production will head the PC board as its chairman. The eight members PC board includes Mr Naveed Qamar, Mr Laeeq Ahmed, Mr Abdul Latif Yousafzai, Mr Pervaiz A Khan, Mr Mahmood Nawaz Shah, Mr Hameedullah Khan Paracha and Mr Ahmed Jawad.

RTA launches first tram system in Dubai

Dubai based Road & Transport Authority has launched Dubai's first tram system, a 14 kilometer network connecting several key locations within the city. The AED 4 billion tram project will span 19 stations along Al Safooh Road, linking the Madinat Jumeirah and Mall of the Emirates with Dubai Marina and the Jumeirah Beach Residence.

The Al Safooh tram will interconnect with the Red Line of the Dubai Metro at 3 stations along Sheikh Zayed Road. The tram will also interlink with the monorail of the Palm Jumeirah at the entry point of the Palm on Al Safooh Road. The system also covers areas including Knowledge Village, Dubai Media City and Dubai Internet City as well as other projects under construction.

Mr Mattar Al Tayer executive director at RTA said that the Al Safooh tram project is part of the authority's intention to provide mass transit systems including metro, tram, bus, and marine transport by 2020.

Mr Al Tayer said that demographic surveys, population density estimates and manpower distribution along the tram path revealed that these locations are inhabited by 180,000 residents, 210,000 workers, and 20,000 visitors. He added that "Population density coupled with the nature of activities in the area highlight the importance of having a tram network in place. This step will be followed with a series of similar transit modes spanning across densely populated areas of the emirate in the future."

He further added that the tram will not require overhead electrical cables since it will be supplied with electricity through a ground cable system. Each tram car can accommodate 300 passengers and will feature a first class coach and an area only for women and children.

NPC and Ssangyong Engineering ink strategic pact

In a significant initiative that would facilitate future growth and expansion, Abu Dhabi based construction company National Projects & Construction LLC has entered into a strategic agreement with South Korea based Ssangyong Engineering & Construction Company.

The agreement, which was signed at Abu Dhabi, in the presence of Mr Salem Al Neyadi chairman of NPC and Mr Kim Seung Joon executive VP & head of international business division at Ssangyong, will soon be working on large scale projects, which have been the forte of Ssangyong.

The agreement enables NPC to share Ssangyong Engineering's expertise in handling mega projects and according to the agreement NPC will handle projects worth Dhs1bn and above.

Ssangyong specializes in building and infrastructure construction and has been involved in prestigious projects like the Grand Hyatt and the Emirates Towers Hotel in Dubai and major international projects such as the Raffles City Complex and Raffles Hotel in Singapore.

Mr Paul Majoor GM of NPC said that "We are pleased to have signed this agreement with Sssangyong, which will positively influence our growth and enable us to gain from their vast experience in mega projects. We are confident that both NPC and our clients will benefit from this partnership."

Mr Lee Jae Kung GM of Ssangyong said that "This partnership will help us to expand our position in the region due to NPC's extensive local experience which will add significant value to the projects jointly handled by us in the region."

Leighton wins USD 435 million contracts from TDIC

Leighton has been awarded a series of new projects worth a total of USD 435 million for the Tourism Development & Investment Company, the tourism asset development arm of the Abu Dhabi Tourism Authority.

The new contracts are the first of a series of major projects that TDIC is developing as part of its aim to turn Abu Dhabi into a world class tourism destination. Details of the new projects are as follows

1) Saadiyat Construction Village
TDIC Leighton is responsible for engineering, procurement and construction of a 20,000 man labor village on Saadiyat Island, complete with accommodation, kitchen, dining, recreation, mosque, shops, etc. The village will be produced in four clusters and there will be room for further expansion.

2) Abu Dhabi Golf Course Hotel
TDIC Leighton is responsible for the construction of a 5 star 35,500 square meter hotel, including leisure facilities comprising, spa, pool, gymnasium and tennis academy. The site is located adjacent to the existing golf course facility at Abu Dhabi National Golf Course. In addition there will be residential accommodation provided around the existing golf course containing 66 villas, 32 townhouses and 144 apartments.

3) Eastern Mangroves Hotel and Resort
TDIC Leighton is constructing the Eastern Mangrove Angsana Hotel and Resort, consisting of 223 bedrooms, 79 chandlery apartments, 91 marina apartments, and 51 luxury apartments.

4) Gary Player Golf Course
TDIC Leighton will construct an eighteen hole championship golf course and nursery, including shaping, grassing, cart paths, irrigation, landscaping, toilets, refreshment kiosks, etc. An academy and maintenance building will be built in the next phase and a golf clubhouse in the phase thereafter.

5) ADTA & TDIC Headquarters
TDIC Leighton is responsible for the construction of a 122,000m2 eight-storey office block. Piling and basement excavation works, including dewatering. The main building works are to be LEED Gold Award certified.

6) Desert Islands Resort and Spa
TDIC Leighton is refurbishing the Desert Islands Resort and Spa, an existing 64 room hotel located on the northern part of Sir Baniyas Island. It is acting as project manager for the hotel works and main contractor for the chalets and ancillary buildings. The company is also main contractor for the construction of three staff accommodation buildings and temporary accommodation including all necessary infrastructure works.

TDIC and Leighton entered into a JV agreement in December 2007, creating a major new force on the UAE capital's construction scene. The 51:49 JV, TDIC Leighton Contracting LLC, was formed to undertake contracting for civil engineering and infrastructure, building, and mechanical and electrical projects, project and construction management and facilities management services for TDIC.

In 2007, TDIC awarded TDIC Leighton the USD 550 million 6.5 kilometer long Saadiyat Link, which will connect Abu Dhabi's Shahama district to Saadiyat Island, the 27 square kilometer island lying offshore Abu Dhabi city and which is being transformed into a signature leisure, cultural and residential destination. The Saadiyat Link roads will transverse the island and connect to the 10-lane Saadiyat Bridge, which is already under construction from Abu Dhabi's Mina Zayed area. The Saadiyat Link, which includes 5 lanes in each direction, is due for completion in 2009.

Iran rejects objections to gas OPEC

Iran dismissed objections from big western consumer nations to setting up an OPEC style gas body when officials from producer countries met in Tehran to discuss cooperation.

The two day meeting of deputy ministers and senior experts of the Gas Exporting Countries Forum was expected to debate a Russian proposal for a charter for the grouping. Major gas exporters have met informally for several years within the informal club, widely seen as a talking shop.

Iran has been pushing for turning it into a more formal body for natural gas producers akin to the 13 member OPEC.

Oil price may hit USD 200 a barrel on dollar slide – OPEC

Algerian government newspaper El Moudjahid reported that OPEC president Mr Chakib Khelil does not rule out oil prices reaching USD 200 a barrel, even though supply is adequate, because the market is driven by the dollar's slide.

Mr Khelil said that "In terms of fundamentals, stocks are high, demand is easing and supply is satisfactory. Therefore normally, without geo political problems and the fall of the dollar, the prices of oil would not be at this level. The prices are high due to the fact of the recession in the United States and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by USD 4 and of course vice versa."

He added that "If the dollar strengthens by 10%, it is probable that oil prices will fall by 40%. If the US economic situation improved from now to the end of the year that would help the market to stabilize. But I do not think that an increase in production would help lower prices, because there is a balance between supply and demand and the stocks of gasoline in the United States have recorded a surplus and are at their highest level for 5 years."

Mr Khelil further added that if the dollar's value on currency markets stayed as it was at present, then oil prices would be expected to remain at between USD 80 and USD 110 a barrel.

Prolyte opens office in Dubai

It is reported that Prolyte Products Group has launched its Middle East sales office at the PALME exhibition in Dubai. In response to growing market opportunities, Prolyte decided last year to open a sales office which could accommodate this market from within.

Mr Fokko Smeding CEO of Prolyte Products said that "The Gulf region and Dubai in particular is developing at a massively fast pace. There is a strong need for our products in permanent installations as well as for a range of local events. Both the event market and the entertainment market are expanding fast. Behind the scenes we worked hard to get the PME office up and running and I'm very proud of this accomplishment."

The Prolyte Middle East sales team consists of Mr Riham Abuelem GM and Mr Roni Bader sales director. Mr Roelof Bouman, technical support manager will offer his expertise whenever technical support is required.

CISA criticizes blind iron ore imports

China Iron and Steel Association criticized the blind iron ore imports and called on related departments to stop the iron ore speculation.

Mr Luo Binsheng vice executive president of CISA said that the total iron ore stock sitting on 18 ports have reached 61.91 million tonnes hitting the new record high. He pointed out the home iron ore output could meet the entire added demand for iron making which is the newly added 10.45 million tonne iron ore in Q1 is totally redundant.

Mr Luo added that "Currently iron ore importers are actually blind and it has resulted in the increase in iron ore inventory on ports. Such crazy import is not in the interests of domestic steel development and related departments have to make measures to restrain such behaviors.

He also informed that Baosteel is still in negotiation with Rio Tinto and they wish to come to terms before the deadline of June 30th 2008. While the two base lines of China are:
1. Respecting the international iron ore pricing mechanism.
2. Against any unfair price which is aiming at China.

Baosteel targeting 50 million tonnes annual capacity by 2012

It is reported that China's largest steelmaker Baoshan Iron & Steel Co Ltd is targeting an annual capacity of 50 million tonnes by 2012.

Mr Fu Zhongzhe GM of Baoshan Iron & Steel Co Ltd during an online briefing on the company's first quarter results said that one silicon steel production line is due to come online in the fourth quarter and the company will add 1 million tonnes of capacity per year.

He said that Baosteel completed the acquisition of the Luojing steel production project from its parent company's Shanghai Pudong Iron and Steel Co unit on April 1st 2008 and earnings from the project will come on stream in 2009.

Chinese steel mills seeking subsidies for Olympic closure

Reuters cited the head of the China Iron and Steel Association as saying that Chinese steel mills around Beijing are holding out for subsidies in return for agreeing to shut down or reduce operations during the Olympic Games in August 2008.

Mr Luo Bingsheng general secretary of China Iron and Steel Association said although authorities have said emissions restrictions would apply to six surrounding regions with further measures to come if smog fails to clear, they have yet to release any detailed shutdown orders. He said "The mills are doing this as part of their responsibility to serve the national need, so it's natural they should get something as compensation."

He said mills were seeking direct subsidies, adding that he could not yet estimate how much production capacity would be shut during those two months.

The report added that to determined to crown the Games with blue skies, Beijing has already ordered its top polluter, Shougang Steel as well as other factories and power units to shut for two months from late July to late September.

Widespread closures of steel mills and other heavy polluters could reduce electricity demand in the north and cause prices for iron ore and other raw materials to dip.

Angang and GREE to build white goods steel service center

It is reported that Liaoning based Angang Steel and Zhuhai based GREE Group's joint venture project a home appliance steel sheet service center has been passed a feasibility study and is treading a steady course as scheduled.

The joint venture will be located in Lingang industrial zone of Nanshui town, Zhuhai city and will be constructed in two phrases. Its annual processing capacity would reach 430,000 tonnes after completion.

Planning guidelines have been finished for the JV. After completion, the project would cut the transport and re processing costs for GREE Group.

As per report it's the first time for Anshan Steel to cooperate with a domestic household appliance producer in building a steel processing line after its ties with ship builders and automobile manufacturers. The JV would expand the steel maker's distribution network to deep Pearl River Delta region.

Maanshan Steel Q1 profit surges by 40% YoY

It is reported that China's second biggest Hong Kong listed steelmaker Maanshan Iron & Steel Co Q1 profit surged by 40% YoY after it raised prices and shifted its product mix to cover higher costs.

Maanshan, Anhui province based company in a Hong Kong stock exchange in a statement citing domestic accounting standards, said that net income rose to CNY 766.9 million in the three months ended March 31st 2008 from CNY 548.8 million or CNY 0.0781 a year earlier. Sales rose to CNY 17.6 billion from CNY 9.94 billion.

Mr Su Jiangang GM of Maanshan said the company, which sells more than two thirds of the steel used in train and car wheels in China, will raise prices by 2% in May.

Rising Chinese demand from builders and carmakers enabled Maanshan Steel to raise prices by as much as 25% in the first quarter from the previous three months, covering higher costs. The company also started selling more profitable products such as plates.

Baotou Steel rolls 250×250 H Beam

It is reported that on Aril 24th 2008, Baotou Iron and Steel successfully rolled HW 250×250 section, after the successful development of HN 350×175 section on March 2nd 2008, laying foundation for Baotou Steel to enter the H beam market.

Most of domestic H-beam manufacturers adopt beam blank rolling whereas Baotou Steel uses the existing continuous casting rectangular blank rolling thus increases the difficulty. The plant technical staff overcame difficulties and vigorously carried out technological research, timely improvement measures, and successfully developed HW 250×250 beam.

TISCO and Shanghai Sensong ink strategic agreement

It is reported that on April 26th 2008, the general manager of Shanghai Sensong Group visited TISCO and signed a strategic cooperation agreement with TISCO.

With the development of domestic pressure vessel industry, China’s equipment manufacturing industry has entered into a fast growing period and also brings new development opportunities for steel industry.

In order to seize the opportunities, fully exert the two sides’ resources, TISCO and Shanghai Sensong Group follow the long term cooperation, mutual benefit and win to win principle.

Shanghai Sensong is a group company in China invested by Japan Sensong, including the pressure vessel company, pharmaceutical equipment company, environmental technology company, fine chemical whole set equipment company and chemical whole set equipment company five wholly owned subsidiaries.

Guanggang net profit in Q1 up by 49% YoY

It is reported that Guanggang realized business income of CNY 1.888 billion in the first quarter this year up by 46.73% YoY than the same period of last year. The total business cost was CNY 1.868 billion up by 46.33% YoY than the same period of last year due to products sale price and cost rose 41.18% and 39.34% respectively. Guanggang net profit in the first quarter was CNY 22.02 million up by 49.13%.

The main reasons for this performance are
1. It realized the full production during the snow disaster in most areas of China and brings profit for the company.
2. It intensified inner management cost and reduced the manufacturing costs.
3. Construction steel sales were good in the first quarter.
4. It expanded raw material reserves in the fourth quarter in 2007, this made raw material price was much lower than the market price in the same period of last year.

3 Chinese steelmakers announce Q1 results

It is reported that on April 29th 2008 Baotou Iron and Steel Co, Panzhihua New Steel & Vanadium Co and Tangshan Iron and Steel Co issued the seasonal reports of 2008.

1. Baotou Iron and Steel Co net profit in Q1 amounted to CNY 514,609,538.9 up by 159.89% YoY.

2. Tangshan Iron and Steel Co net profit in Q1 amounted to CNY 729,827,579.37 up by 57.05% YoY.

3. Panzhihua New Steel & Vanadium Co net profit amounted to CNY 171,057,461.86 down by 11.69% YoY.

China Railway Q1 net profits reach CNY 524.84 million

Reuters reported that China Railway Group the country's leading railway and highways builder profit attributable to shareholders amounted to CNY 524.84 million for the first quarter of 2008.

China Railway, which is also involved in consulting services, engineering equipment and property developments said the results were prepared in accordance to Chinese accounting standards but it gave no comparison figures.

Analysts said China's massive infrastructure investments laid out in its five year economic plan ending 2010 should provide China Railway with growth opportunities.

China will invest CNY 1.25 trillion in railway construction and CNY 3.8 trillion in waterways construction as part of the plan. Shares in the company fell nearly 30% in the first quarter, underperforming a 25% drop in the index for Chinese companies listed in Hong Kong.

Cosco posts USD 873 million Q1 profit on dry bulk surge

Bloomberg reported that China Cosco Holdings Co posted Q1 profit of CNY 6.13 billion after buying the world's largest fleet of dry bulk ships last year to take advantage of rising imports of iron ore, coal and grain.

The Tianjin based company in a Hong Kong stock exchange statement citing domestic accounting standards said that net income per share was CNY 0.6. It didn't provide year earlier figures as it listed shares in Shanghai in June.

China Cosco, Asia's largest shipping company by market value agreed to buy the dry bulk fleet from its parent last year as China's commodities imports were pushing up shipping rates. The Baltic Dry Index a measure of rates surged about 50% in the year ended March 31st 2008.

Mr Ric Leung an analyst at Everbright Securities Co in Hong Kong said before the announcement that “The first quarter profit is quite strong. The company secured contracts last year when the Baltic Index was very high.''

China Cosco, already the country's largest container line, agreed to buy 412 dry bulk ships from China Ocean Shipping Company for CNY 34.6 billion in September. The move helped the company to more than double net income last year to CNY 19.5 billion.

Severstal releases operational results for Q1 of 2008

Severstal released its Q1 2008 operational results as follows

Production of crude steel in Q1 2008 amounted to 4.8 million tonnes that is 7% YoY higher than it was in Q1 2007. Beginning Q1 2008 Severstal has consolidated SeveCorr production volumes that resulted in growth of crude steel production by 8% on consolidated basis and 41% YoY for Severstal North America in Q1 2008 over Q4 2007.

Production of rolled products in Q1 2008 was 5% higher than in Q1 2007 and 8% higher than in Q4 2007. Production of iron pellets in Q1 2008 reached 1.3 million tonnes, or 49% YoY higher compared with Q1 2007. Total production of iron ore pellets was 14% higher than in Q1 2007. In Q1 2008 Mining segment sold 223,000 tonnes of iron ore concentrate to customers, non related with Severstal.

Total production of coal concentrate was down 22% in Q1 2008 compared with the same period of 2007, while production of this material net of inter company sales was down by 58%.

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Norilsk Nickel announces production results for Q1 2008

MMC “Norilsk Nickel”, the world’s largest nickel and palladium producer announces preliminary consolidated production results for the first quarter of 2008 at its Polar and Kola Divisions in Russia and international operations in Finland, Australia, Botswana and South Africa.

Highlights of the production are

1. Overall saleable nickel production in the first quarter of 2008 increased to 74 572 tonnes from 60 913 tonnes in the first quarter of 2007.

2. Overall saleable copper production in the first quarter of 2008 increased to 103 990 tonnes from 101 049 tonnes in the first quarter of 2007.

3. Overall saleable precious metals production in the first quarter of 2008 amounted to 597,000 ounces of palladium and 138,000 ounces of platinum.

4. Previous 2008 full-year production guidance for saleable nickel, copper, palladium platinum remains unchanged.

Ukrainian steel mills calls for investigation in to iron ore pricing

Ukrainian Journal reported that Ilyich Steel & Iron Works, Alchevsk Steel and Zaporizhstal Steel have requested the Antimonopoly Committee to investigate the increase in the price of iron ore by Metinvest claiming that iron ore prices are unreasonable high.

TMK to supply 15,000 tonne pipes to Kenkiyak to Kumkol pipeline

Russian pipe major TMK announced that it has begun shipments of 813mm diameter pipes in 9.5 mm wall thickness according to API 5L X60 for use in the construction of the Kenkiyak to Kumkol pipeline in Kazakhstan.

TMK will supply 15,000 tonnes of large diameter pipes to Kazakhstan China Pipeline LLC during April to June 2008.

The Kenkiyak to Kumkol pipeline is the third section of the 761 kilometer long Kazakhstan to China Pipeline. This project will merge Kazakhstan’s main pipelines into a unified system that will be connected to Russian and Chinese pipeline networks.

Zlatoust posts record performance for March

In March 2008, Estar Group’s Zlatoust metallurgical plant cast 52,533 tonnes of steel up by 100.3% YoY, 38,499 tonnes of rolled products up by 101% YoY.

It dispatched 38,438 tonnes of products up by 108.8% YoY to consumers, out of which 5,375 tonnes were exported.

The plant is making a shift towards rapid and high alloy steel grades in its product line and it increased its calibrated steel output, with shipments reaching 1,606 tonnes in March 2008.

Gazprom and VNG to build gas storage facility in Germany

RIA Novosti reported that Russian energy giant Gazprom and Germany's Verbundnetz Gas are to build a EUR 350 million gas storage facility in the east of Germany. A cooperation deal was signed in Moscow by Mr Alexander Medvedev a deputy head of Gazprom's management committee and Mr Klaus-Ewald Holst the chairman of the executive board of the German company a natural gas importer and supplier in the east of Germany.

Mr Alexander Medvedev said "Gazprom's participation in underground gas storage projects in Germany is an example of how the company's strategy to ensure energy stability in Europe is being implemented."

Mr Holst said "Over the next 14 years, Gazprom and VNG intend to jointly invest around EUR 350 million in the construction of the underground gas storage facility and build a total of ten additional subsurface storage spaces in Saxony-Anhalt."

Gazprom is already involved in the operation of the biggest gas storage facility in Western Europe, located in the German town of Reden, with a capacity of over 4 billion cubic meters. Another facility is currently being built in Heidach, Austria, and may become the second largest in Europe, with 2.4 billion cubic meters.

BP to produc