Strategic initiatives by SAIL during 2007-08

Indian steel major Steel Authority of India Limited undertook a number of strategic initiatives during 2007-08, primarily to ensure security of raw material supplies and expand business.

These included
1. The decision to install Steel Processing Units in states where SAIL has no plants

2. Equity participation in International Coal Ventures Ltd, a special purpose vehicle formed with four other PSUs for acquisition of coal assets in overseas territories

3. MoUs with MOIL and TATA Steel

4. Setting up of two joint venture companies for production of slag cement at Bhilai and Bokaro with Jaiprakash Associates

5. SEZ at Salem along with IL&FS

6. Decision to install a wind power plant of 50 MW capacity in Tamil Nadu

7. Expansion of JV captive power plants by 1250 MW at Bhilai and Bokaro

8. Alliance with POSCO for exchange of know how

9. Establishment of SAIL Growth Works at Kulti for production of non-ferrous and ferrous castings.

Permanent export duty may hurt Indian steel industry – Mr Roongta

Steel Authority of India Limited hopes that the export duty imposed upon the metal would not be a permanent measure or else it could upset resource generation of the steel utilities.

Mr Sushil Kumar Roongta chairman of SAIL said that "It is our hope and belief that it is not taken as a permanent measure as it has been taken only in extraordinary circumstances. And if it is taken as a permanent measure, it could affect the resources of steel industry."

He said domestic steel consumption has increased by 12% while production has failed to match the same resulting in India importing 6.6 million tonnes of steel. Arguing that input costs have shot through the roof, especially coking coal, scrap and ferroalloys, he pointed out that this has resulted in global steel prices shooting high by 50% to 70% during the past six months.

Mr Roongta said that "Obviously it hurts the consumers. In India prices too have gone high by 30% to 50% which has caused concern among government as well as the masses. SAIL is committed to make more steel available to meet the increased demand. So our effort is to use existing resources and make steel available."

He further added that in view of the growing demand supply mismatch, SAIL has decided to produce 2 million tonne more steel in 2008. Efforts are also on to resolve the impasse of Chiria and Rowghat mines.

Usha Martin to become largest wire rope maker in the world

Commodity Online reported that Indian specialty steel major and world’s second largest wire rope manufacturer Usha Martin Limited post its planned expansion of INR 21 billion, would become world’s largest wire rope manufacturer dislodging KISWIRE of Korea.

Usha Martin Limited is undertaking capacity expansion in a phased manner that is expected to drive volumes for the company.

Usha Martin Limited will be the only global producer to have a complete presence across the value chain starting from iron ore and coal to offshore utility ropes as most of the players in the industry process wire rods directly into wire ropes and do not have any captive mineral linkages.

UML has an integrated business model with captive iron ore for manufacturing sponge iron and pig iron, which is converted to steel, which then becomes a feedstock for its value added products like wire ropes.

SAIL spend INR 120 crores on CSR initiatives

Committed to bringing development and growth in every corner of the country, Steel Authority of India Limited spent around INR 120 crore on corporate social responsibility initiatives during 2007-08.

The company adopted 79 villages across eight states as Model Steel Villages for exclusive development of medical facilities, education, roads, sanitation, community centers etc.

As an initiative towards achieving 100% literacy in steel townships during 2007-08, five free schools were set up for the first time for underprivileged children to provide free midday meals, school uniforms, text books, etc.

Five free medical health centers were set up at Bhilai, Bokaro, Rourkela and Burnpur providing free medical consultation, medicines, etc., for needy persons. Besides, over 400 medical camps were held during the year by SAIL plants units in 11 states, providing free health check up and treatment to over 0.5 million persons.

TATA Steel to seek people mandate before construction

BS reported that TATA Steel, which is planning to start the construction work for its proposed INR 15,400 crore 6 million tonne per annum integrated Greenfield steel plant in Kalinga Nagar within a month, would go ahead only with mandate from the people.

Mr HM Nerurkar COO of TATA Steel said that "I think there have been some mistakes let us say from our side, in not understanding the people. We will go for construction after getting positive approval from the people, mandate from the people in a peaceful manner. We want the people to be with us before the company starts construction."

Stating that the company is ready to talk to anyone to solve the problem, Mr Nerurkar said that it is in continuous discussion with the local people and is also open to talks with the Visthapan Virodhi Manch.

It may be noted that TATA Steel could not start the construction work of the plant as it is faced with the resistance of the local tribals in taking the physical possession of land allotted to it. It has already placed orders worth INR 6,000 crore for the plant and has rehabilitated 650 families.

No increase in steel price for next 3 months – SAIL

Steel Authority of India Limited has ruled out any increase in the prices of its products in the next 3 months.

Mr SK Roongta chairman of SAIL said that "We will hold the price line of steel for at least 3 months despite the cost pressure which is steepest for the steel industry. This is our commitment to the government."

Mr Roongta said that "I feel that this is just a temporary measure by the government. If the government is not going to roll back the export duty and the inputs costs remain as high, we might consider revising our decision after 3 months."

KEC International order book crosses INR 4,000 crore

Projects Today reported that KEC International Limited has achieved a major milestone with its order book position crossing INR 4,000 crore. The order book of the RPG Group enterprise touched INR 4,200 crore, excluding L1 positions, as of March 31st 2008 as compared with INR 3,000 crore.

Mr Ramesh Chandak MD & CEO of KEC International Limited said that overseas orders played a dominant role accounting for INR 2,950 crore or 70% of the order book position.

He added that "Middle East, Central Asia and Africa will be our thrust areas in the international market. Rising crude oil prices had inspired a significant increase in capital expenditure in the Middle East region. In several African countries too, multilateral funding has prompted widespread infrastructure upgrade programs."

Mr Chandak said that KEC International is expecting a 20% to 25% increase in fresh order inflow during 2008-09. He added that "We also expect much better business from national utility Power Grid Corporation of India Limited during the current year as compared with 2006-07."

Optimistic of prospects in the power sector, he asserted that rural electrification and power distribution would form key areas for the company's diversification program. Commenting on India's plans to build large power transmission lines through private sector participation, he said "We would be very interested in bidding for these projects and shape up as an independent power transmission company."

KEC International began the current fiscal year on an encouraging note with a INR 482 crore order from Saudi Electric Company for a 380kV transmission line order to be executed with Saudi Arabia based Al Sharif Group, on turnkey basis.

BHEL to invest INR 236 crore in BHVP

BS reported that Bharat Heavy Electricals Limited, which formally took over Visakhapatnam based Bharat Heavy Plates & Vessels recently, plans to make major investments.

Mr K Ravi Kumar CMD of BHEL said that BHPV could be developed as a dedicated centre for industrial boilers, ensuring better delivery.

He said that “Though the current cost structure of BHPV is similar to BHEL, costs were expected to come down due to factors like increased volumes, better financial capability leading to lower working capital borrowing costs. Initially, BHEL will invest INR 236 crore over the next 3 years, in addition to induction of experienced manpower and required technology.”

He added that “Around 1,332 of the total 1,512 employees of BHPV would be continued in employment. It would create indirect employment to thousands of people and the existing ancillaries would be doubled to 34.”

ArcelorMittal to hold works shop before land acquisition

SNS reported that, ahead of Orissa government's plans to hold a gram sabha to seek people's views on ArcelorMittal's proposed Greenfield steel project in Keonjhar, ArcelorMittal has decided to organize a workshop on May 26th 2008 to garner support.

A senior official said that holding workshops and giving people a chance to express their opinion in favor or against any industrial project, was a new concept in the country's industrialization process.

Mr Sanak Mishra chief of ArcelorMittal India said that it would invite people to express their views on the proposed steel project, which he claimed would be the finest steel plant in the world. He added that "We will sit with people, listen to them and tell all concerned that ArcelorMittal builds a steel plant for the benefit of all. The works shop will be held before the company decides to go for land acquisition."

Mr Mishra said that ArcelorMittal had prepared one of the best rehabilitation and resettlement policies and the benefit of which would go to both the affected and local people.

It may be noted that Keonjhar district administration had decided to organize gram sabha meetings at the villages, where ArcelorMittal was planning to set up its 12 million tonnes per annum steel mill with an investment of INR 40,000 crore.

Steel prices in India to remain firm in 2008 - CMIE

PTI reported that steel prices in India are expected to remain firm in 2008 as supply side constraints continue to persist with major Greenfield projects hitting roadblocks due to delays in acquiring land.

The Centre for Monitoring Indian Economy in its monthly report said that "Notwithstanding government pressures to bring down prices, we believe that global price movements, strong demand and rising production costs would continue to dictate the trend in domestic prices.”

CMIE added that “In a buoyant demand scenario, supply side constraints continue to persist with major Greenfield projects hitting roadblocks due to land acquisition delays.”

Global Steel to invest USD 450 million in Delta Steel - Report

ET last week reported that Global Steel Holdings is firming up plans to invest USD 450 million to double its capacity at Delta Steel Company in Nigeria to 2.4 million tonnes per annum in a couple of years.

The report cited Mr Sunil Kumar Manwati of Global Steel Holdings as saying that "Delta Steel is in talks with leading European banks to raise debts of USD 350 million. While Delta Steel will organize USD 50 million from internal accruals, Global Steel will invest USD 50 million to finance the expansion plan. The debt portion of the financing program will be securitized against the sale of the company."

Mr Manwati said that Global Steel had filed a lawsuit at the International Court of Arbitration challenging the Nigerian government’s decision to confiscate the concessions Global had been awarded and pull out of the stake sale from Ajaokuta Steel Company and National Iron Ore Mining Company. He added that "However, we are open to any talks with the government to resolve the issue."

Mr Manwati pointed out they are not the only ones in Nigeria to face problems with the government. Ever since Mr Umaru Yar’Adua was elected as Nigeria’s President in 2007, the new dispensation has reversed the previous government's decision to sell several state assets, including Shell, ExxonMobil and Chevron.

He further added that the government's decision had jeopardized the process of putting Ajaokuta Steel back on the rails after it remained shut for two decades. He rubbished allegations of asset stripping and not being serious in running the company. He said "Had it been the case, we would not have invested our time, energy and money in Ajaokuta Steel."

ArcelorMittal and Deutsche Bank seek FIPB approval

It is reported that German banking giant Deutsche Bank has approached Indian government for approval for its investment in Delhi Stock Exchange. Earlier, media reports had said that Deutsche Bank was looking for a 5% stake in Delhi Stock Exchange.

The application was made to Foreign Investment Promotion Board last week. ArcelorMittal has also sought FIPB approval through its Indian arm ArcelorMittal India Limited.

Highway builders hit due to rising input costs

BL cited builders of National Highways claiming to have taken a hit of about INR 10,000 crore to INR 12,000 crore during the last two years on account of extraordinary escalation in input costs for which they are not adequately compensated. These 40 odd projects involve an investment of INR 42,000 crore.

Mr M Murali director general of National Highways Builders Federation said that "Cement, steel, bitumen and petrol lubricants account for about 35% of the cost of construction. Price of these commodities has seen an unprecedented hike in last 2 years."

The report gave price comparison between April 2006 and April 2008 are as follows

Cement: INR per bag
Bitumen: INR per tonne

The concession agreement for build, operate, transfer projects followed by National Highways does not provide for any escalation in input costs. And, for BOT annuity projects, where companies are paid for construction and toll revenues accrue to the Government, the cost escalation that developers are compensated for is drawn from the increase in wholesale priced index of the respective raw materials.

National Highways Builders Federation said that since the increase in wholesale priced index is well below the actual market price increases of these raw materials, road developers are incurring losses on actual funds incurred in the projects. It added that for BOT projects, they are demanding an extension in the time period for which they can collect toll. Otherwise, they indicate it would be difficult for them to access funds and continue work.

National Highways Builders Federation represents 52 companies, which includes Larsen & Toubro, Unitech, GMR, GVK and Nagarjuna Construction, with exposure in highway projects.

ArcelorMittal and Vedanta being targeted by campaigners

IANS reported that ArcelorMittal and Vedanta Resources are being accused of paying scant attention to the environment and the rights of tribals in their areas of operation.

As per report, Vedanta Resources is being targeted by Survival International, a global group fighting for the rights of tribals that claims the company’s activities are threatening the survival of a tribe in a remote corner of Orissa. Survival International has launched a global campaign saying plans by Vedanta subsidiary Sterlite to mine bauxite from the Niyamgiri mountains of Orissa would destroy the Dongria Kondh tribe if carried out. It is urging shareholders to sell their stakes in Vedanta unless it abandons its plans. Survival said that Sterlite plans include building a huge open cast mine which it says would destroy the local forests, part of the mountain and the Dongria Kondh tribals, whose 8,000 members live on the slopes of the Niyamgiri.

Campaigners from Bankwatch are gathering in Luxembourg saying ArcelorMittal has used money from publicly funded institutions such as the European Bank of Reconstruction & Development to boost its profits rather than address the environmental and social impact of its plants.

Both companies have vehemently denied the allegations.

A spokeswoman for ArcelorMittal said that it takes environmental issues very seriously. She added that "During 2007, we spent approximately USD 500 million on health and safety and environment-related projects and since 1990 we have successfully reduced the carbon footprint of our steelmaking by over 20%."

A spokesman for Vedanta said that "As one of the largest metals and mining groups in India and with mines in Australia and Zambia, Vedanta is committed to managing its business in a socially responsible manner. The management of environmental, employee, health and safety and community issues in respect of our operations is central to the success of our business. Therefore, we vigorously refute these allegations from Survival."

Cartelization in tyre industry

It is reported that India’s Monopolies & Restrictive Trade Practices Commission recently issued notices to major tyre makers accusing them of indulging in anti competitive behavior. The industry has also been warned that government agencies might resort to large scale imports of Chinese tyres to curb the increase in domestic prices.

As per report, with rubber prices continuing to rule at record highs, tyre makers are facing a major crisis and are being forced to raise the price of their products. Leading tyre makers including JK Tyres, CEAT and MRF have recently raised the price of their products by 2% to 5% and have also warned that more such hikes are inevitable.

According to tyre industry sources, overall raw material costs have jumped by nearly 15% in 2008. The tyre industry has justified the price hikes in view of the spurt in the price of rubber, which has jumped by nearly 25% during the January to April 2008 period, accounts for 40% of the raw materials for the tyre industry.

Rubber prices in India have been rising following a sharp decline in production. As against a projected output of 87,500 tonnes in fiscal 2007-08, actual production was down at 825,000 tonnes. Stiff import duties have also prevented large scale import of rubber from Thailand, Malaysia and Indonesia, the three top producers of rubber.

Chittagong port proposed as gateway to NE region again

Exim News Service quoted Mr Manik Sarkar chief minister of Tripura as saying that India has proposed the use of Chittagong port as a transit point for transporting goods to and from the North East region once again.

Bangladesh has been lukewarm in its reaction to this proposal so far.

Mr Sarkar said that the Tripura government has also taken up with the union government the issue of expediting the implementation of the 130 kilometer long rail link between Agartala and Sabrum in South Tripura, bordering Bangladesh. He added that Tripura is ready to bear 15% of the project cost.

The Agartala Sabrum rail project, which was announced in the Railway Budget, would take 3 to 4 years for completion.

Finance ministry rejects follow on proposal by NTPC

Mr Jairam Ramesh union minister of state for power last week said that union finance ministry has turned down power major National Thermal Power Corporation Limited’s proposal for a follow on public offer.

Mr Ramesh said that "There was a proposal, but the finance ministry rejected it last week. It was for selling 4.75% government’s stake."

He said union power ministry had approached department of disinvestment in the finance ministry in August 2007 for approval of NTPC’s FPO plans, which was estimated to raise up to INR 6,000 crore to part finance the company’s expansion program.

Following the issue, the government’s shareholding in NTPC was to come down to 84.75% from 89.5%. NTPC, in 2004, had raised INR 5,386 crore through an initial public offering by way of raising fresh capital and also a dilution of government’s stake in the company.

He added that the government currently holds 89.5% in the utility.

Indian government to appoint CCI chairperson and members

It is reported that, eight months after the amended Competition Act was passed, Indian government has finally begun the process of hiring a chairperson and 5 members for the Competition Commission of India. The ministry of corporate affairs issued advertisements in newspapers inviting applications for the posts by June 16th 2008.

The tenure of the chairman and other 5 members would be 5 years with a fixed pay scale of INR 26,000. However, the government has not made clear whether the pay scale of the members appointed will be increased according to the recommendation of the 6th Pay Commission, which has suggested a substantial hike in compensation for regulators in the country.

This is a crucial step towards making the commission functional as without at least 3 members, its powers cannot be notified. The commission had recently expressed its inability in taking action against the alleged cartelization in the steel industry.

Mr Vinod Dhall acting chairman of CCI said that pending the notification of the commission's powers, it was not in a position to take any action against the alleged cartelization.

India is perhaps the only major economy in the world without a fully functional competition regulator.

Mr Rawat appointed as new joint MD of Shah Alloys

Shah Alloys Limited has informed BSE that it has appointed Mr Bhagavatsingh Rawat as its new joint MD.

Mr Rameshchandra appointed as additional director of Man Industries

Man Industries India Limited has informed BSE that its board of directors at its meeting held on May 16th 2008 has appointed Mr Rameshchandra Jindal as its additional director with effect from May 16th 2008 to hold office till forthcoming Annual General Meeting.

Indian Railway announces INR 17.40 crore cash awards for railway men

In a special gesture aimed at motivating and inspiring railway men across the country, Mr Lalu Prasad Yadav union railway minister has announced cash awards amounting to INR 17.40 crore for railway officers and staff for their excellent contribution in achieving record revenue earning freight loading by Indian Railways.

The group cash awards include INR 1 crore to each of the zonal railways, INR 2 million to each of the 6 production units and INR 2 million to central organization for railway electrification.

It may be mentioned that the Indian Railways have carried highest ever loading of more than 794 million tonnes during the financial year 2007-08. This has exceeded the initial budgeted target of 785 million tonnes and the revised estimate target of 790 million tonnes loading. The highest ever incremental loading during a financial year of 65.59 million tonnes has also now been achieved. This has beaten the previous record of 64.61 million tonnes achieved in 2005-06.

Indian Railway have now set a target of loading 850 million tonnes in 2008-09 and an ambitious target of 1100 million tonnes of revenue earning freight traffic by the terminal year of the 11th Plan. The thrust henceforth will be to consolidate the position gained so far by equipping the system for higher growth.

With the above strategy, Indian Railways hopes to continue the momentum of spectacular freight loading performance in the coming years.

MIDC arm seeks tie ups for gas supply to industrial estates

It is reported that Maharashtra Industrial Gas Transmission Company is likely to tie up with major gas suppliers to facilitate its operations as a gas carrier in industrial estates of the state.

MIDC is now in the process of taking state cabinet approval for the step down company, which will procure gas from the upcoming pan India pipeline network of GAIL India and Reliance Industries. The companies on MIDC's list include GAIL, Reliance Industries and the Gujarat State Petronet Corporation.

As the transmission company necessarily requires a JV partner for sourcing natural gas, MIDC will be content with a small stake in the partnership.

Som Distilleries bags township project in MP

Projects Today reported that Som Distilleries & Breweries Limited, in collaboration with Patel Engineering has bagged a contract worth INR 2,500 crore from Madhya Pradesh Housing Board for a Thatipur township project in Gwalior. SDBL won the bid by quoting INR 266 crore for 50 acres of land in Gwalior City.

The township project will spread over an area of 74.25 acres of land and is covered under the re densification scheme of the government of Madhya Pradesh. Out of this, 23.88 acres will be used to create 1,000 residential units, a high school and government offices. The remaining 50.36 acres of land adjacent to Gandhi Road will be developed for residential and commercial purposes.

Cuttack Paradip railway electrification completed

SNS reported that electrification of the Cuttack Paradip railway section has completed and commissioned with the inauguration of a new traction sub station at Kendrapara Road rail station by Mr Ajay Kumar Goyal GM of East Coast Railway.

The new traction sub station will provide 25 KV power to over head electricity for smooth running of 2 to 6 trains on electric traction. At present this traction sub station will feed major part of the electrified route of East Coast Railway, the entire section of Cuttack Paradeep, Kapilas Road to Barang, Barang to Naraj Marthapur and Nergundi, Kapilas Road to Salegaon on the Cuttack Talcher branch line.

Another new traction sub station is coming up at Gorakhnath which is likely to be completed by end of July-2008. After its commissioning, as many as 10 electric trains will be fed with power for service.

NTPC Kaniha Plant workers go on strike

SNS reported that hard pressed by price rise and non revision of their daily wages since 2006, about 2500 contractual workers working in key places at NTPC Kaniha Plant resorted to cease work strike since May 14th 2008 for an indefinite period.

The contractual workers who outnumber the permanent workers in the plant are deployed in many key areas like at boilers, turbines, coal handling plant and in maintenance of works of the plant. Earlier these contractual workers went for three days strike before they called off when the management asked for some time to settle their demands.

Mr Dhurjati Das president of Talcher Super Thermal Power workers union, affiliated to All India United Trade Union centre, said that "We were forced to wage strike again amid price rise and long denial of wage hike unlike other sector in the state. The management asked for time till April 30th 2008 but failed to solve the issues within the deadline."

He announced to continue the strike till their main demand, to raise the daily wages of all categories of casual workers is not met by the management.

Meanwhile, the NTPC official sources deemed the strike as illegal and clarified that doors are open for talks. They added that the strike has no serious impact so far.

Indian cement makers under cost pressures

BS reported that Indian cement maker' latest quarterly performance shows that they have begun to feel the pinch of the government's anti inflationary measures. The latest price cut of 1.5% to 3% at the government's persuasion and a decision to hold prices for the next 3 months could impact earnings even more.

Compared to the steep rise in net profit in Q4 of 2006-07, the corresponding quarter of 2007-08 has seen either significantly slower growth or a fall for all the companies concerned.
Company net profit in the January to March 2008 quarter

In INR crore

The trend change is primarily due to the inability of cement companies to increase prices since April 2007 despite an increase in raw material and fuel costs. Over the last one and a half years, the government has taken several measures to check cement prices to control inflation, which has mostly stayed above the central bank's target level of 5 to 5.5%. The latest restrictions have been an export ban and a 12% ad valorem duty on cement selling above INR 250 per 50 kilogram bag.

In 2007, the government made cement import duty free. Cement has a weight of 1.73% in the wholesale price index.

Nalagarh Steel Mill bids for power project in HP

It is reported that Nalagarh Steel Rolling Mills Private Limited has bid for a hydro power plant in Himachal Pradesh as part of its attempt to diversify into the power sector.

Currently, it manufactures steel and structural products like angles, channels and patties.

Numaligarh Refinery Limited to hold prices for now

BS reported that, bowing to mounting pressure from various quarters, Numaligarh Refinery Limited has decided to put on hold the recent decision to hike retail oil prices.

NRL, which unlike other three public sector oil marketing companies, namely Indian Oil Company, Bharat Petroleum Company Limited and Hindustan Petroleum Company Limited, does not enjoy any compensation from the government to offset its losses, had last week taken a decision to revise its retail prices in wake of rising crude oil prices.

The decision has now been put on hold temporarily as it drew flak from various quarters. The dealers and owner of retail outlets feared that if retail prices were hiked then there would be no taker at NRL outlets.

RIL makes USD 1 billion realty foray with Vornado

ET reported that Reliance Industries has sealed a USD 1 billion JV with the New York Stock Exchange listed Vornado Realty Trust to set up a real estate fund that will develop a network of mega malls and highway shopping centers in India.

Reliance is also in talks with the Canada based Four Seasons Hotels and French group Accor to set up hotels at some of its properties in Mumbai and Ahmedabad.

The JV with Vornado is Reliance’s 5th global partnership in 3 months, the other 4 being with Marks & Spencer, Vision Express, Miss Sixty and Office Depot. However, the latest partnership is important as it would deal with real estate acquisition and management, which is crucial for the viability of any retail company.

Meanwhile, a source said the group’s big buck real estate foray may also see it tapping a synergistic foray into hospitality. It added that "RIL is looking at the possibility of setting up hotels to take advantage of the excess floor space index available at some of its existing properties."

At Mumbai’s Bandra Kurla Complex, Reliance is developing an integrated project, including corporate offices, shopping mall and five-star hotels, on a 25 acre plot. However, it is not clear whether the real estate joint venture with Vornado would extend to hotel projects, even though the US realty major has an asset like Hotel Pennsylvania in its portfolio.

Reliance, which was averse to global partnerships in the past, has now adopted a more pragmatic approach to form joint ventures with the world’s best to capitalize on their domain expertise and brand power. Since the group is a green horn in retail and has never dealt with a consumer business on such a large scale, it wants to learn the systems and processes from experienced global companies so that it can apply them on its own retail venture.

Newly constructed city liaison office of RINL inaugurated

Mr PK Bishnoi CMD of RINL Visakhapatnam Steel Plant has inaugurated the newly constructed city liaison office located at HB Colony. Earlier, VSP had its liaison office in leased building in Dwarakanagar.

The city liaison office caters to interaction of VSP’s officials with state government, district officials etc. A product gallery displaying products of VSP and CSR photo gallery depicting the ‘Corporate Social Responsibility’ activities under taken by VSP will be set up in the reception lounge of the office.

Jharkhand plan underway to exploit wind energy potential

Ranchi Express reported that Jharkhand Renewal Development Agency, in association with the center and other private firms, is now looking to exploit state’s potential in wind energy.

Moved by the initial finding of the JREDA, union ministry of new & renewable energy has sanctioned installation of two more masts that would come up at Simdega and Gumla in 2009.

The high mast equipment would access potential and feasibility of setting of wind energy capacity. The ministry has agreed to set up additional high mast equipment following encouraging data offered from the one installed at Neterhaat in Gumla a couple of years ago.

Another mast installed at Pithoria in Ranchi, however, did not yield promising result in course of its study in Center for Wind Assembling Technology.

REC financing NTPC TNEB mega project

Rural Electrification Corporation Limited, which has been supporting power sector through a range of measures and initiatives, achieved yet another milestone by sanctioning a term loan of INR 3796 cores to NTPC Tamil Nadu Power Company.

MoU to this effect confirming REC commitment to the project was signed recently by Mr A Veluchamy chief project manager at REC Project Office Chennai and Mr Radha Krishnan CEO of NTPC Tamil Nadu Thermal Power Company.

As against the normal practice of project financers, funding such mega project through consortium route, REC has decided to fund it single handedly. This is one of the highest sanctions made by REC for financing a power generation project, which makes a record.

The project is coming up at Kuruvimedu village in Ennore near Chennai. The first unit is expected to be commissioned in 2010-11. The entire work of the plant is awarded to BHEL and site leveling and piling work is in progress. When commissioned, this will be the first 500 MW thermal unit in Tamil Nadu. The project will be commissioned in the 11th plan and is likely to add 1000 MW thermal generation capacity to the state of Tamil Nadu and would contribute significantly to development of power infrastructure in the State.

It may be added that REC has entered into a MoU with TNEB to provide project finance support of the order of INR 16000 crore for the TNEB's for the proposed 3000 MW generation capacity addition and related transmission and distribution net work development schemes, proposed to be implemented during the 11th plan period.

India to develop hydro power plants in Bhutan

With India looking to significantly ramp up its role in developing Bhutan’s hydropower potential, both countries are eyeing complementary gains in the future.

Dr Manmohan Singh Prime Minister of India, who is on an official visit to Bhutan, said that India would develop 2 new mega hydropower projects namely Punatsangchhu II and Mangdechu. He added that India would also commence preparation of detailed project reports for 4 new projects to achieve the target of importing at least 5,000 MW of electricity from Bhutan by 2020.

India’s plans to scale up its involvement in harnessing Bhutan’s vast hydropower potential comes in the wake of the successful implementation of the jointly implemented 1,020 MW Tala hydroelectric power project. The move also envisages greater play for Indian firms there.

The coming on stream of Tala has already catapulted Bhutan into the double digit GDP growth league. Tala has effectively tripled Bhutan’s total power generation capacity to 1,480 MW, from the combined 460 MW of three older power stations, due to which total power exports shot up 77 per cent. Assuming that Tala’s full operation and the building of the new projects progresses on schedule, GDP growth should stay in double digits, at 14.4% in fiscal 2008.

Of the new projects on the anvil, Mangdechu with 670 MW and Punatsangchhu II with 990 MW projects are slated to be built in 2009-2016. India is already involved in the building of the 1,095 MW Punatsangchhu project stage I.

While for the Tala project, firms including Power Grid Corporation of India Limited, PTC India Limited and NHPC Limited were involved, private sector players including the GMR Group and IL&FS are expected to be in the running for contracts in the upcoming projects in Bhutan, according to industry players.

While for India, the prospect of increased hydropower imports to the tune of around 5,000 MW from Bhutan by 2020 offers a long term and viable solution to plug the widening peaking shortages back home, Bhutan could well be looking at double digit GDP growth through increased power exports to India in the foreseeable future.

Pig iron prices yet to come down – SIEMA

Southern India Engineering Manufacturers’ Association has lamented that the price of pig iron is yet to come down.

Mr CR Shanmughasundaram president of SIEMA said that an impression had gained ground among the consumers that the prices of all steel related products had come down.

He said that "Of course, the initiative of the Prime Minister and the union finance minister has resulted in the decline of price of certain steel products relating to building sector to a certain extent. However, the main raw material used in manufacturing of pump sets, pig iron had not come down due to increase in prices of iron ore and metallurgical coke imported from China. Besides, price of materials like CRNO sheets, En-8 shaft, fasteners, SS sheets, rods, etc, had also not come down. Rather, prices of all these items are still showing increasing tendency."

He appealed to the government to take suitable steps as in the case of building materials to prevail upon the manufacturers to reduce the price of steel items used in the manufacture of engineering goods.

CIL NECL to increase coal production by 2009

BL reported that CIL North Eastern Coalfields Limited will start two opencast mines in Assam to boost its production by over 27% to 1.4 million tonnes by the end of 2009, with a total investment of over INR 100 crore.

Currently NECL produces about 1.1 million tonne of coal a year and the two new mines are expected to generate 300,000 tonne of coal.

Sources said that officials from the Assam government have been apprised of the draft plan for the mines and the proposal now awaits environmental clearance. However, opposition to open cast mining is quite old in the area.

NECL took over the mines in 1973 from the UK based Assam Railways and Trading Company. In 1985, it switched from underground mining to open cast mining to offset the high cost of production involved in underground mining. A similar move by NECL to set up two opencast mines in 2005 had been caught up in litigation and opposition from the environmental groups. This time around both the state government and NECL are keen to see the plan to materialize without being caught in litigation.

NECL is keen to see early implementation of the project as it aims to minimize its operating losses. The operating cost for an underground mine is INR 3,000 per tonne while it receives only INR 1,800 per tonne from sales, thereby incurring a loss of INR 1,200 per tonne. NECL makes up for this loss by its production from the opencast mines, where the cost of production is significantly lower than its sales price.

For Assam government, the project is vital to meet its power generation needs. Assam continues to be one of the states with the lowest power generation and most of its coal fired power plants suffer from the lack of availability of coal.

Toyota Nippon 30% steel price hike deal to set grounds for others

Koyodo News reported that the recent decision by the Japan’s largest automaker Toyota with Japan’s largest steelmaker Nippon Steel will probably force the other automakers, including Honda Motor Co and Nissan Motor Co to accept similar price hikes as other steelmakers such as JFE Steel Corp are expected to follow suit and conclude similar agreements with automakers.

Major Japanese steelmakers had demanded that automakers to accept a steel sheet price hike of some JPY 30,000 per tonne for the year but negotiations with automakers have been rocky.

Toyota Motor Corp. and Nippon Steel Corp. have reached a final agreement to hike the price of steel sheets for vehicles by some 30% with retroactive effect for April shipments. The price hike, which exceeds JPY 25,000 per tonne will send the price for the steel product over the JPY 100,000 per tonne barrier for the first time, rewriting the record set 26 years ago.

ThyssenKrupp to raise steel prices in Q3 and Q4 – CFO

Thomson Financial quoted Mr Ulrich Middelmann CFO of ThyssenKrupp as saying that it expects to substantially raise steel prices during the third and fourth quarters of its business year that ends September 30th 2008 to offset spiraling raw material costs.


Mr Middelmann said that he expects the next round to exceed these increases by between EUR 20 and EUR 30.

Mr Middelmann said that ThyssenKrupp is unable to fully pass on the raw materials' cost hikes to customers due to its contract structure.

He said that spot prices make up only 10% of ThyssenKrupp's steel pricing contract mix, while some 60% consists of annual or multi annual contracts, a higher share than at some of ThyssenKrupp's peers.

Mr Middleman said that the contracts are legally binding, however, and that the company has to strike a balance between lower margins due to rising costs and the value of customers.

ThyssenKrupp's steel unit increased steel prices by up to EUR 100 per tonne effective April 1st 2008.

US DOC issues notice in AD case on HRC from Thailand

The US Department of Commerce on December 27th 2007 published a notice of initiation of an administrative review of the antidumping duty order on certain hot rolled carbon steel flat products from Thailand. The review covers two manufacturers and exporters G Steel Public Company Limited and Nakornthai Strip Mill Public Company Limited.

The period of review is November 1st 2006, through October 31, 2007. Based on requests from United States Steel Corporation and Nucor Corporation we are now rescinding this administrative review.

Highlight of the review are

1. On November 1st 2007, US DOC published a notice of opportunity to request an administrative review of the antidumping duty order on certain hot rolled carbon steel flat products from Thailand for the period November 1st 2006, through October 31st 2007.

2. On November 30th 2007, petitioner, a domestic producer of the subject merchandise, and Nucor made timely requests that the Department conduct an administrative review of G Steel and NSM.

3. On December 27th 2007, US DOC published in the Federal Register a notice of initiation of this antidumping duty administrative review

4. On January 2nd 2008, both G Steel and NSM submitted a letter to the Department certifying that the companies made no shipments or entries for consumption in the United States of the subject merchandise during the POR and requested that the Department rescind their respective administrative reviews.

5. On February 15th 2008, the Department issued a memorandum to the file detailing request to US Customs and Border Protection for import data for G Steel and NSM during the period of review.

The products covered by this antidumping duty review are certain hot rolled carbon steel flat products of a rectangular shape, of a width of 0.5 inch or greater, neither clad, plated, nor coated with metal and whether or not painted, varnished, or coated with plastics or other non metallic substances, in coils (whether or not in successively superimposed layers), regardless of thickness, and in straight lengths, of a thickness of less than 4.75 mm and of a width measuring at least 10 times the thickness. Universal mill plate ie flat rolled products rolled on four faces or in a closed box pass, of a width exceeding 150 mm, but not exceeding 1250 mm, and of a thickness of not less than 4.0 mm, not in coils and without patterns in relief of a thickness not less than 4.0 mm is not included within the scope of this review.

The Secretary will rescind an administrative review under this section, in whole or in part, if a party that requested a review withdraws the request within 90 days of the date of publication of notice of initiation of the requested review.

Because petitioner and Nucor submitted their requests to rescind the administrative review of G Steel and NSM within 90 days of the date of publication of the notice of initiation, the Department is rescinding this review. The Department intends to issue assessment instructions to CBP 15 days after the date of publication of this rescission of administrative review.

Malaysia to issue circular on steel price calculation

Bernama reported that the Malaysian finance ministry will be soon issuing a Circular on the price variation calculation for steel following the abolishment of the ceiling price for steel.

The finance ministry in a statement said that the contractors carrying out conventional government projects can apply for a price variation on their contract based on the current steel price. It said that "The application by contractors would have to be through the implementing agency as what is in practice now.”

It added that the new price calculation mechanism is also effective May 12th 2008.

The ministry said that the conventional contracts for civil and construction works have a clause on price variation. For civil works, the price variation calculation is based on the transaction price. This method of calculation will be continued.

It added that for construction projects, the calculation of price is based on the cost of 15 building materials including steel. This method of calculation will be revised where the suggested price variation calculation for steel will be based on the current market price and separately calculated from the indices of other building materials prices.

The ministry said that for government projects under the design and build category there is no clause on price variation currently and in order to reduce the risk in price variation that is absorbed by the contractor, this category of contracts will have a price variation clause specially for steel.

Congestion at Brazilian iron ore ports to push Capesize rates further

Bloomberg reported that the sizzling dry bulk market is poised to reach new records yet again as port congestion sees queues of Capesize vessels at Brazilian ports swell to almost 40. Rising congestion in key Brazilian iron ore ports of Tubarao and Ponta da Madeira as well as Australia and discharge ports in China has coincided with rocketing demand for export commodities.

It said that Chatterers were caught short last week as available bulk carriers failed to match the number of export cargoes of coal, iron ore and grain from South America, the US Gulf and Australia for the next month.

The Baltic Dry Index hit a record for the second consecutive day advancing 3.5% to 11,459 points. The record high voyage cost of USD 104 per tonne recorded today is more than double the cost three months ago.

Mr John Kemp analyst from Sempra Metals said that “Further delays in Brazil will possibly push rates higher. I do not see any reason why the market will back off, and in the next week expect it to rise quite strongly.”

Mr Kemp said that this would generate increased demand for coal fired plants, with most coal transported on the rapidly expanding cabotage trade. He said that the extraordinary advance in freight rates now means that the cost to transport iron ore from Brazil is only marginally less than the commodity.

China is also expected to soak up scarce tonnage within weeks to transport extra coal along its coast, after an earthquake damaged hydroelectricity systems.

Taiwanese steel prices to continue upward trend in 2009 - TIS

According to the analysis from the Taiwan Industry & Technology Intelligence Services, the capacity utilization of global steel making will reach to a record high in the next two years and tight supply for carbon steel will remain unchanged.

Taiwan Industry & Technology Intelligence Services estimated that steel price in 2009 will be much higher than now, because of raising raw material costs and strong demand from developing countries.

Besides, global steel prices will continue to soar as the cost of steelmaking raw materials including iron ore, coking coal and scrap have rocketed.

(Sourced from YEIH.com)

Vietnam licenses 3 new billet plants

It is reported that the Vietnamese government has licensed construction of three billet plants with a combined production capacity of 1.75 million tonne per year in response to strong domestic demand and limited imports.

Honda may boost car prices in US as steel costs rises

Bloomberg reported that Japan second largest automaker Honda Motor Co may increase prices for its vehicles in North America and other markets to offset higher steel and other raw materials costs.

Mr Yoichi Hojo COO of Honda's business management operations in an interview in Tokyo said that “We will definitely consider it. It may be difficult to raise prices right away in Japan and North America, as market conditions are tough.''

Honda, which gets about 70% of its operating profit from North America, may follow Toyota Motor Corp and Nissan Motor Co in boosting prices in the region. Honda expects a 32% drop in operating profit this fiscal year as raw materials prices and a stronger yen erode earnings.

Mr Hirofumi Yokoi an analyst at CSM Worldwide in an interview with Bloomberg Television said that “The global automakers have to tackle some negative situations. They have to consider all the things to achieve their goals.''

Steel, precious metals and other car making materials will erode Honda's operating profit by JPY 75 billion this fiscal year.

Double hull bunker tank legislation moving forward in US

It is reported that politicians in the United States are moving ahead with plans for legislation to require cargo ships to have their bunker tanks protected by double skins.

The US Senate Committee on Commerce, Science and Transportation approved two bills aimed at improving maritime safety and environmental protection.

Senator Frank Lautenberg, who proposed the bills said that "We cannot let our coastlines, our wildlife or our economy suffer the catastrophic effects of another oil spill. These bills bring us closer to modernizing ship designs and harbor operations, making us more confident in the safety of our ocean shipping system."

Senator Lautenberg introduced his legislation in March at a US Senate hearing on the Cosco Busan bunker spill in San Francisco Bay in November last year.

Among other things, his Oil Spill Prevention Act would require ships to have double skinned bunker tanks. It also calls for improvements to Coast Guard vessel tracking systems.

CSC eying purchase of Japanese scrap

It is reported that Taiwan's China Steel Corp has decided to enter into private negotiations for new purchases of scrap, instead of using open tender.

As international scrap prices have sharply increased along with the continual upward global trend, and with a very limited supply source, finding a scrap source has become a difficult task.

Recently CSC has focused its scrap purchasing on a Japanese source. It is based on 5,000 tonnes purchase each time and with a target price of about USD 770 per tonne CNF.

(Sourced from YEIH.com)

Mitsui Mining and Smelting raises zinc selling price

It is reported that one of the Japan's leading smelters of zinc, copper and other nonferrous metals Mitsui Mining & Smelting Co Ltd has raised its zinc selling price to JPY 280,000 per tonne an increase of JPY 15,000 per tonne.

Mitsui said that the move is bringing the average zinc selling price for May to JPY 276,700 per tonne.

Measurement of level of molten steel in mould

It is reported that AMS Instrumentation and Calibration has released a mould level system which samples the level of molten steel in the mould in high speed.

AMS Instrumentation said that the Ronan X96 ML system has an update time of ten minutes and fast cast start capability. The high speed sampling is said to give better control, enabling the user to increase throughput.

According to the company, the unit implements improvements in detector and microprocessor technology, lowering levels of activity to provide a safer working environment.

The company also offers a service whereby the it’s engineering team works with the end user or OEM Company from the design phase of a project through the commissioning phase to seamlessly integrate level measurement in mould design and control specifications.

AMS Instrumentation also offers various solutions to upgrade existing gamma technology or solutions which involve the use of previously acquired detectors to increase the cost-effectiveness of upgrading.

Major nonferrous smelters in Japan post lower profit

JMB reported that six Japanese nonferrous smelters out of major 8 firms posted lower profit for the year ending March 2008 from previous year due to higher ore and materials cost while Sumitomo Metal Mining and Mitsubishi Materials posted record profit.

The report said that the smelters expect lower recurring profit for the year ending March 2009 due to higher ore and materials cost and higher yen rate.

ThyssenKrupp technology unit may earn EUR 1 billion pretax profit

Thomson Financial reported that ThyssenKrupp AG's technologies division has the potential to reach a pretax profit of EUR 1 billion in the long run, on strong global demand for industrial plants.

Mr Olaf Berlien head of ThyssenKrupp AG's technologies division said that the unit posted pretax profit of EUR 544 million in ThyssenKrupp's business year 2006/07 and targets EUR 750 million in 2009/2010.

Mr Ulrich Middelmann CFO of ThyssenKrupp added that the profit in 2009/10 could easily reach EUR 800 million. Mr Berlien said that “If the economy is running as it is currently, it will be possible to reach 800 million very soon. The next level would be EUR 1 billion for which we need additional investments.

ThyssenKrupp AG's technologies division consists of industrial plant supply, such as for fertilizer and cement factories, civil and military shipyards, as well as mechanical and automotive component supplies.

Plymouth Tube appoints Mr Centa as VP

Plymouth Tube Company announced that Mr Tom Centa as the new vice president of the CAT Group upon Mr Dennis Lasker's retirement.

In his new role, Mr Tom will provide leadership and direction for the US manufacturing and international marketing of carbon and low alloy tubular products. Mr Tom will be responsible for the Carbon & Alloy Tube Group of mills, which includes the Winamac, Eupora and Streator operations.

Mr Tom began with Plymouth Tube in November 2004 as GM Hot Mill. Most recently he was the Winamac Site GM where he was responsible for both Winamac operations which act as separate business units.

Plymouth Tube Co is a global supplier of specialty carbon, alloy, nickel alloy and stainless steel tubing for mechanical, pressure, boiler, and hydraulic applications. Steel, nickel and titanium extruded and cold drawn shapes are produced by Plymouth Engineered Shapes.

Kinder Morgan announces USD 12.8 million expansion

The Monroe County Journal reported that an approximate USD 12.8 million expansion has been announced by Kinder Morgan Energy Partners, which leases the city’s port and handles material loading and unloading there. The expansion will allow the company to handle raw materials for SeverCorr the new steel mill in Columbus.

According to company officials, the expansion at the bulk terminal facility will provide additional infrastructure to help meet the growing need for carbon products in the Southeast due to increased steel making in the region. With the expansion, Kinder Morgan will receive carbon products by barge, rail and truck, for use in producing steel in the region.

The expansion is expected to create about four to six new jobs directly and more indirectly, such as in trucking. Because the city receives a tonnage fee for all materials that move across the city’s port on the Tenn-Tom Waterway, the expansion will increase tonnage fee revenue for the city.

New infrastructure that will be added to the terminal includes a 12,000 square foot building to house a dryer and screener, two 400 ton silos for storage of materials, 400 feet of train track and a 100,000 pound truck scale.

Mr Jeff Armstrong president of the Kinder Morgan Terminals business segment said that “This expansion project will enable Kinder Morgan Terminals to help meet the demand for carbon at the recently opened SeverCorr facility in Columbus as well as other steel mills in the Southeas. As the nation’s leading bulk terminal operator, we continuously look for opportunities to provide additional services to our customers, improve efficiencies and grow our business.”

He added that the construction on the expansion is scheduled to begin late in the second quarter of this year, with completion expected in the fall of 2008.

Nigerian government approves establishment of dry ports

It is reported that to ease the difficulties often experienced by importers and exporters based in the hinterland and arrest ugly trends at sea ports such as congestion, expensive and hazardous nature of the haulage of goods to hinterlands, the Federal Government has given a nod to the establishment of dry ports across six locations of Isiala Ngwa in Abia State, Erunmu inOyo State, Zawachiki in Kano State, Heipang in Plateau State, Funtua in Katsina State and Maiduguri with a view to allowing shippers to undertake consolidation and distribution activities as well as export and import procedures at these inland locations.

The revelation was made at the opening session of a two day stake holders forum with the theme: Dry Ports Project In Nigeria: The Challenges Of Trade Facilitation In The 21st Century, organized by the Nigeria Shippers Council at the Shehu Yar'Adua Centre in Abuja.

Flagging off the forum, the minister of state for water transportation, Prince John Okechukwu Emeka said that in view of the fact that dry ports in some organized economies are sometimes used as an instrument of economic stimulus and often primarily as a tool to relieve seaport congestion and serve as a catalyst for the establishment of cluster manufacturing and agro allied industries, the forum had become expedient to ensure that all key players consisting of the federal and state governments, concessionaires and service providers, fully appreciate and understand their roles in the successful implementation of the dry ports project.

He said that "We are gathered at this forum to assess the progress made so far in the implementation of the Dry Ports project and to highlight problems impinging the progress and to collectively proffer solutions that would ensure the actualization of the project.”

In his presentation, Chief Shonekan noted that the concept of dry ports was conceived as a response to the new trade order, and there is no limit to the sitting of ports as long as it provides important logistics services to both industry and trade.

Thailand to prevent steel hoarding as prices rise

The Nation reported that Thailand’s internal trade department will soon dispatch officials around the country to check steel inventories in a bid to discourage hoarding, which could aggravate the pain already felt by the construction industry.

The report cited an internal trade department source as saying that "Some suppliers have declined to sell to construction companies saying they are running out of quota. Some steel makers have been stocking up on speculation that the Commerce Ministry will soon approve a THB 7 per kilogram hike in the steel price.”

Thailand steel committee has proposed to raise the steel price by THB 3 early this month and by THB 4 in the middle of the month, but the move is still pending Mingkwan Sangsuwan commerce minister's approval.

An industry source said the steel price did not deserve to go up by as much as THB 7. He said that "What steel makers told the Internal Trade Department was not true. They claimed their production cost rose more than USD 1,000 per tonne in line with the increase in billet prices. In reality, they did not use 100% billets as raw material, but mixed it with scrap steel, which is much cheaper. Therefore, the current price of THB 36 a kilogram does not reflect the real production cost. Those steel makers can make a profit even though they quote a price of THB 30.”

As per report the price of construction steel has kept rising from THB 18,000 per tonne in August 2007 to THB 35,000 to THB 38,000 at present due mainly to speculation in the global market and high demand in China. Contractors have cried over the steep price increase, which is the major factor pushing up construction costs by 25% in 2008.

ArcelorMittal SA to increase wages by 12%

Mining weekly reported that steel giant ArcelorMittal South Africa has agreed to a 12% wage increase for its workers across the board. The increase will be effective from the end of June 2008.

The National Union of Metalworkers of SA said that Mittal Steel also agreed to link increases for next year to the consumer price index plus 1%.

Numsa said that "The negotiators agreed to consider the negative effects of the ever rising headline consumer price index, which shot up to 9.8% in February from 4.9% a year ago without resorting to strikes."

Numsa added that "It is a historic agreement for it has established provisions to address among others, the critical shortage of skilled artisans by ensuring additional improvements on benefits, development and keeping qualified artisans.”

Bechtel earns top US Contractor award

It is reported that Bechtel has been named the top US contractor for the tenth straight year by Engineering New Record a US trade publication for the construction industry.

Bechtel in a statement said that its North American operations accounted for 40% of its 2007 revenue and generated two thirds of new work. It added that business was also strong in Europe, the Middle East and Africa.

Bechtel's project highlights for 2007 included High Speed 1 in the UK, the first high speed rail project in the UK and Britain's first new railway in a century; the Tacoma Narrows Bridge in Washington, the longest new suspension span built in the US in 40 years; Equatorial Guinea LNG, a LNG processing facility that will supply at least 3.4 million tons of energy to the market annually; the Fjarðaál aluminum smelter, Bechtel's first project in Iceland and the largest private investment in Iceland's history and Brown's Ferry Unit 1 in Alabama, the first nuclear reactor to come into service in more than a decade.

The ENR Top 400 Contractors' list is based on construction revenue.

Vietnam exporting more steel billets

Xinhua reported that steel billet producers in Vietnam are making efforts to export more products due to a sharp drop in domestic demand. However, the Vietnam Steel Association has warned that such exports may soon result in a shortage of materials in the local market.

As per report Van Loi Steel and Cast Iron Company last week said that it has exported 10,000 tonnes of steel billets to the Philippines, while Dinh Vu Steel Company has recently signed contracts to export 30,000 tonnes of the product to some Southeast Asian countries.

The two export pioneers said that they are forced to export as they could not sell the product on the domestic market, noting that the government has lowered the targeted economic growth in an effort to curb inflation, resulting in delay for many construction projects.

Vietnam steel billet export price is lower than the average price in the region over USD 800 per tonne as compared to USD 900 to USD 970 per tonne.

The VSA warned that there could be a shortage of steel following the recent billet exports. According to the association, Vietnam would need 4 million tonnes of steel billets this year. Domestic producers are set to supply only half of the amount, with the remainder being imported.

Mr Nguyen Tien Nghi chairman of Vietnam Steel Association said that as the price of steel billets in regional countries has seen strong fluctuation and has already risen to USD 900 to USD 950 dollars, local steel producers would not import steel billets under such circumstances.

Argentinan steel output in April up by 6% YoY

According to the data issued by Argentina's steel industries association CIS, crude steel output in the country up by 6% YoY to 501,000 tonnes as compared to 472,800 tons in April 2007.

The association said that production of long steel increased from 204,200 tonnes to 250,600 tonnes, while hot rolled flats production up by 6% to 247,000 tonnes. Production of crude steel totaled 1.87 million tonnes in the January to April 2008 period up by 9.9% YoY.

Taiwanese imports of seamless tube in April up by 64%YoY

Taiwan imported 17,055 tonnes of seamless steel pipe in April 2008 up by 63.83% MoM as compared to March 2008

The import price from China was at TWD 26.6 per kilogram, which went down by 4.6% MoM as compared with March 2008.

Due to the increasing cost of billet and short supply on market resource, China has raised the pipe export price to Taiwan by USD 100 to USD 150 per tonne. It caused that Taiwan’s import of seamless pipe decreased in January and February.

According to the latest statistics, Taiwan’s import of seamless steel pipe from China in January was 4,085 tonnes down by 59%. Besides, the import in February was 3,275 tonnes which dropped by 20% MoM as compared with January again. However, the import of March soared by 83.42%MoM to 6,007 tonnes.

Goldman Sachs axed from Daewoo Shipbuilding sale

AFP reported that US investment bank Goldman Sachs has been axed as coordinator for the sale of South Korea's Daewoo Shipbuilding and Marine Engineering.

A creditor bank said that the state run Korea Development Bank gave no reason for the decision. But South Korea's Yonhap news agency earlier reported creditors were unhappy with Goldman Sachs' appointment as main coordinator of the sale because it has a stake in a Chinese shipyard.

Daewoo Shipbuilding went bankrupt in the aftermath of the 1997-98 Asian financial crisis and is now controlled by its creditors, who plan to select a preferred bidder as early as August for their combined 50.4% stake.

The shipyard produces submarines, destroyers and other military equipment and Yonhap said that military intelligence officials would monitor the sale to prevent leaks of the company's weapons related technology.

According to an unnamed official quoted by Yonhap that the government also plans to prevent foreigners from taking part in the due diligence.

Hyundai Heavy Industries and steel giant POSCO have shown interest in bidding.

Japanese H2 scrap prices rise again

During the second week of May 2008, Japanese H2 scrap average price was JPY 59,680 per tonne in the Kanto region, Kansai region and middle part the price increased by JPY 144 per tonne than last week.

Japan's H2 scrap price was JPY 61,500 per tonne in the Kanto region, up by JPY 330 per tonne than last week; H2 scrap price was JPY 58,740 per tonne in middle part an increase of JPY 100 per tonne; H2 scrap price was JPY 58,800 per tonne in Kansai region, which is the same as in the previous week.

At the same time, Japan's H2 scrap average price was JPY 59,713 per tonne showing an increase of JPY 62 per tonne from last week.

(Sourced from YEIH.com)

Hyundai Heavy rises most in 4 weeks as ship prices climb

Bloomberg reported that Hyundai Heavy Industries Co rose the most in four weeks after an index of vessels prices climbed, easing concerns that shipyards would be unable to pass on rising steel costs.

Hyundai Heavy climbed as much as 4% to KRW 381,500 and traded at KRW 379,000.

The weekly Clarkson Index, a measure of prices for all types of vessels, rose on May 16 for the first time in more than three months, as shipyards charged customers more. Shipbuilders are raising prices for oil tankers, container ships and other vessels amid increasing costs for steel.

Mr Lee Jae Kyu an analyst at Mirae Asset Management Co in Seoul said that “The increase in the index shows that despite some concerns in the market, shipbuilders are still able to pass on some of their costs. He rates the shipbuilding industry overweight.''

Construction cost in Egypt on a record high due to steel prices

According to a report issued by HC Securities, the cost of construction in Egypt dramatically increased by nearly 27% since January 2008, triggered by the increase in the cost of raw materials, specifically rebars and cement.

The cost of wholesale steel increased in April 2008 to EGP 5,210 per tonne while consumer prices closed at EGP 5,630 per tonne. This is the third increase in steel prices since the beginning of the year.

Steel price increases are currently under investigation by the Egyptian Competition Authority, but a decision has not been made yet. Steel companies have justified the price hikes in the sector, linking them to leaps in international markets and rises in prices of raw materials, which directly affect production costs.

Cement prices have also increased, resulting in 20 executives being charged with forming a cartel to increase prices and control production. Spurred by the steady ascent of cement prices, the Ministry of Trade and Industry announced it would ban cement exports, hoping to staunch further increases.

Ms Mona Yassin chairman of Egyptian Competition Authority said that while construction activities might not be affected by the increase in raw material prices now, the tables might turn soon. He added that "I am expecting a recession in the construction and real estate domains by 2010 if the prices continue to increase at this rate."

She said that the proportionate increase of construction raw material prices and the price of real estate units will eventually affect the consumer’s purchasing power, decreasing the demand for both commodities.

The construction sector is expected to face trouble amid expectations that sooner or later many people would not be able to afford the construction costs and real estate purchases if the prices continue to rise.

(Sourced from The Daily Star)

O&G Engineering wins contract to build oil pipeline in Kuwait

MEED recently reported that local O&G Engineering General Trading & Contracting is the low bidder at KWD 5.7 million for the contract to build an oil pipeline linking transit line 3 and the Doha water and power generating complex in the north of Kuwait.

O&G's bid is 28% lower than the next best price of KWD 7.3 million from the local KCC Engineering & Contracting Company. The local Alghanim International General Trading & Contracting Company came third on price at KWD 7.9 million. The client Kuwait Oil Company is expected to take about 3 months evaluating the bids before making an award.

The lump sum engineering, procurement and construction job involves the installation of a 20 inch diameter, 25 kilometers long crude pipeline running between the new main crude export pipeline and the oil-fired Doha East power and desalination plant. The pipeline is expected to be operational for 30 years.

Hafilat Industries bags major contract to supply buses to Australia

BI-ME reported that UAE based Hafilat Industries, a leading manufacturer of quality aluminum buses licensed by Australia's Volgren, has won an AED 30 million contract to produce and export buses to Australia.

The contract states that Hafilat will build Volgren’s New Generation City Bus’ on a Euro IV Mercedes Benz chassis originating from Spain, all of which will feature multiplexed electrics, sophisticated video surveillance, electronic signage and a full aluminum body.

As per report, the production of these buses would be commenced this month at Hafilat’s 10,000 square meter factory located in ICAD at Mussafah in Abu Dhabi and will take approximately four months.

Mr Obaid Sughair Qubaisi director of Hafilat said “This agreement is a major milestone in the bus manufacturing industry of the UAE. It will also benefit the UAE’s basic industries through the purchase of locally manufactured glass and aluminum and materials from small to medium businesses. We have won this contract because of our commitment to the highest standards of manufacturing, a commitment which will continue to benefit the country as the UAE develops its own intensive public bus network.”

Hafilat Industries is a joint venture between socialized Investment Group, Emirates Link Group and Volgren.

Oman signs deal with SKIL for SEZ at Sohar

Oman and Port of Rotterdam have signed a deal with Indian firm SKIL Infrastructure to develop a special economic zone connected to the Port of Sohar.

Mr Maqbool Bin Ali Bin Sultan Oman's minister of commerce & industry, Mr Hans Smits chief of Port of Rotterdam and Mr Bhavesh Gandhi VC of SKIL has signed the contract.

Oman views SEZs as a tool for economic growth that will create opportunities for attracting foreign investments. The Sohar SEZ is expected to be launched in fourth quarter of 2008.

The Sohar SEZ's proximity to the port gives it logistics advantage. It will create employment for the people living in Batinah region.

SKIL is internationally known for its skills in developing the SEZ concept and will be bringing its expertise to bear in helping to build Sohar's own SEZ, 4,300 hectares in size, which is expected to be launched at the end of this year.

Atkins to design P-17 super slim tower in Dubai

Arabian Business reported that UK based architecture and engineering firm Atkins is designing the P-17, a super slim tower, which will be located on Dubai arterial Sheikh Zayed Road. The client is Tasameem Group and construction on the project is expected to start in November with a completion date set for November 2011.

The 379 meter tower will be mixed use and will include 17 office floors, a five star hotel, 74 serviced apartments and 176 residential apartments. It will span an area of 165,327 meter square and will also include a 14 level car parking block.

The 81 storey tower will have an angled atrium that cuts straight through the tower, filling a void over several storeys. This atrium serves the five star business hotel above, and hosts a group of supporting amenities for the 18 floors of offices underneath. 75 serviced apartments will be operated by the hotel to cater for the varied clientele and the top 19 floors of the tower will be residential apartments.

Mr Joe Tabet, head of architecture for Atkins in Abu Dhabi said that the tower will have the illusion of constantly changing its appearance with the movement of people and the sun. He said that “This design intends to integrate contemporary architectural thought, with innovative engineering solutions.”

Height of Mile High tower may be reduced – Report

MEED reported that Saudi Arabian Kingdom Holding’s Mile High tower could be up to 500 meters shorter than originally planned, with contractors deciding it would be impractical to build a structure to such an extreme height. Building to such a height presents massive physical and practical challenges, from wind loading to the transporting of materials or elevator passengers.

The report cited a source as saying that "The Mile High tower is now more like 1,100 meters to 1,150 meters. They have found it too difficult. There is a problem with profitability and the transport of materials to such a height, so there are real technical issues. Of course, everything can be built, but maybe this is beyond the cost."

Saudi company Omrania, in collaboration with US group Pickard Chilton, worked on the design of the tower and the US' Bechtel is the construction manager. MEED understands that the UK's Hyder Consulting is working jointly with Arup of UK as engineers on the project.

The tower forms part of a wider real estate project planned by Kingdom Holding. The development covers 5.3 square kilometers and is located in the north of the city near the creek, and has an investment value of SAR 50 billion on completion.

(Sourced from Meed)

Top 10 Abu Dhabi projects are worth USD 190 billion

Trade Arabia News Service reported that the top 10 civil construction projects currently planned or under way in Abu Dhabi alone are worth more than USD 190 billion.

Mr Mark Goodchild project manager of Cityscape Abu Dhabi said that "It is only the projects that are officially planned or have broken ground, that have made it onto the list. After last year’s event we estimated that USD 327 billion worth of projects had been announced, this year’s total is sure to be significantly higher."

Mr Goodchild said that "The sheer scale of these combined projects is remarkable. Little wonder that investors have flocked to Cityscape Abu Dhabi, visitor attendance figures for the first two days of the show exceeded 20,000, which is double the number we recorded last year at the same stage."

Details of the top 10 projects were provided by research company Proleads and are listed below in order of budget value

1) The biggest single project is the new capital city for Abu Dhabi namely Khalifa City. Budgeted at USD 40 billion, the planned city is to comprise all federal ministries, local government offices and embassies. The development will cover 49 million square meters. The city is expected to be completed by 2030.

2) Work has started on the Yas Island Development, a massive $39 billion mixed use tourist development including residential, hotels, beaches, marinas, retail, golf and equestrian facilities as well as a Ferrari theme park. The island will have a total developed area about one-third the size of Abu Dhabi island.

3) Burooj Properties is behind a planned USD 24 billion mixed use real estate community project in Abu Dhabi to include 11 residential towers, offices, four hotels and a shopping mall.

4) Saadiyat Island is another massive offshore development underway with a budget of more than USD 22 billion. It includes 19 kilometers of beachfront, 29 hotels, three marinas, 8,000 residential villas and more than 38,000 apartments. The project also includes a museum, concert hall, maritime history centre, three harbors, a park, golf course and sailing club.

5) A USD 22 billion budget has been allocated for the ambitious Masdar City project, billed as the first zero carbon, zero waste city. The city will include a university, commercial, residential and eco-friendly industrial areas. It will depend on solar energy. Masdar City will also be car-free. Around the city will be wind and photovoltaic farms, as well plantations to supply crops for bio fuel factories.

6) The USD 13 billion Al Raha Beach Complex will include 50 high rise and a number of low rise buildings for approximately 120,000 people. Water taxis will provide access to Abu Dhabi city centre.

7) Abu Dhabi's International Capital Trading is planning a USD 10 billion mixed use city, tentatively called Ghantoot Green City. The project will comprise commercial centers, hotels, offices, residential areas, warehousing and light industrial areas.

8) Al Reem Island development is a USD 7.8 billion mixed use community next to the bridge connecting Al Reem Island to Abu Dhabi city. Several 40 and 50 storey towers will form the central business district. The development will include two 80 storey buildings and house approximately 80,000 people.

9) With a budget of USD 6.5 billion, Sheikh Mohammed Bin Zayed City is another new city comprising 374 residential and commercial buildings as well as the associated infrastructure and entertainment facilities. The development is on the Abu Dhabi Al Ain highway.

10) At joint number 10 with budgets of USD 3 billion each are the Abu Dhabi Light Rail project and the MGM Grand Hotel. The rail project is in the study phase and will involve some 350 km of rail. The MGM Grand project will have two further branded luxury hotels and more than 1,200 rooms. It will also feature a 12,000 seat arena, retail, restaurants, waterfront residences and private yacht berths.

Pakistan to resume IPI talks with Iran on May 26th 2008

Daily Times reported that Pakistan and Iran are going to hold another round of talks over USD 7 billion Iran Pakistan India gas pipeline deal in Tehran on May 26th 2008.

A senior official in petroleum ministry of Pakistan said that the two sides have proposed to hold talks on IPI so that the final arrangements could be made on signing of gas sales purchase agreement. He added that signing of GSPA on gas pipeline deal could be delayed due to political uncertainty followed by the resignation of petroleum minister Mr Khawaja Asif.

He that said the Pakistan and Iran were supposed to sign the GSAP on IPI without making any other round of talks and during the Iranian President visit to Pakistan on April 28th 2008, two sides also agreed to sign deal within 45 days. He said that these talks could be for making arrangements for signing the GSPA on IPI that would be signed by petroleum secretaries, ministers and heads of states of two countries.

He said that Pakistan and Iran have finalized the GSPA on IPI during the caretaker government’s tenure and Economic Coordination Committee of the cabinet approved the draft of the GSPA.

The official said that Asian Development Bank GAIL and Interstate Gas Company Limited could work in a JV to materialize the project. He said that Indian petroleum minister Mr Murli Deora during his talks on transit fee on IPI had conveyed that Indian company GAIL was interested in this project.

Official said that ECC has authorized IGCL to sign the agreement with Iran and Pakistani government and is going to convert IGCL into a corporation in this regard. He said that Asian Bank country director has also conveyed Pakistan that it is ready to finance the project.

Cement exports from Pakistan to grow further – Report

Cement exports from Pakistan are still lucrative due to the commodity’s high demand and shortage in the region, especially in India and the UAE, placing Pakistan in a favorable position to further increase its exports.

According to latest data, cement sales increased by 24% in July 2007 to April 2008 period. This growth has been primarily due to a 142% jump in exports during the period. At present, neighboring India and the United Arab Emirates are the key export markets for Pakistani cement because of an unprecedented increase in their construction activities.

In an effort to increase cement imports, the Indian government is working to remove infrastructural and procedural constraints. It is trying to increase railway rakes from Pakistan to four from the current one, which will help boost cement supply through railway by 3 fold. Moreover, officials are discussing to allow cement trucks to travel to Amritsar instead of unloading at the border to smoothen supplies. Furthermore, talks are also going on to install a conveyor belt at the border on which cement can be loaded from Pakistan’s side and reach India. These measures will bode well for Pakistan’s cement companies as freight charges through sea have jumped up from USD 3 per tonne to USD 9 per tonne.

Cement demand in the UAE is likely to stay higher with an expected 23.5% growth in construction activities this year. Moreover, with cement shortage of around 2.5 to 3.5 million tonnes in the UAE and export ban in major exporting countries like Egypt and India, Pakistan is poised to reap the benefits of regional shortages. Besides, the shortage of limestone in the Middle East is expected to keep cement production under pressure in the region. Along with cement, clinker demand is rising in the UAE. As clinker price free on board from Pakistan is low at USD 64 to USD 66 per tonne, it is quite cheap for the UAE importers.

Cement producers in the UAE have agreed to reduce the price cap from AED 17 per bag to AED 16 dirham per bag. However, the export of cement from Pakistan is still attractive at fob price of USD 70 per tonne. Adding average freight cost of USD 5 to USD 10 per tonne it will take landed price of Pakistani cement to around USD 75 to USD 77 per tonne. So, Pakistan’s cement is still competitive for exports to India and the UAE.

Saudi Arab to launch 3rd dry dock at Jeddah Port

ArabianBusiness.com reported that Saudi Arabia is launching an ambitious project to build its third major dockyard that can store 2 million containers at the Islamic Port in Jeddah.

The USD 426 million project was announced last week at the Euromoney Conference in Riyadh by Dr Jabara Al Seraisry minister of transport of Saudi Arabia. The dockyard will be constructed under a Saudi-Malaysian pact and will be on a build, operate and transfer basis.

The date to begin construction has not been announced, although work is expected to begin soon.

Dr Seraisry said that "This would be the third major dockyard to be constructed in the kingdom. It would be larger than the others and would have better loading and unloading facilities. A second container terminal will be built at the King Abdul Aziz Port in Dammam, he said. The project signals Saudi Arabia's willingness to attract foreign investors."

Dr Seraisry said the Saudi government has introduced regulations that allow Saudi investors to partner with foreign companies that have the experience and technology to tackle large projects. He added that "There will be plenty more opportunities for foreign companies that have the expertise in the relevant field."

Aramco to celebrate its 75th Anniversary this week

Saudi Aramco will be celebrating its 75th Anniversary Jubilee this week. While the theme of the celebrations will be under the slogan “Energy for Generations”, to highlight Saudi Aramco’s role in contributing to the future of the Kingdom and the world economy, the success of Aramco should not be measured in terms of the number of barrels of oil it produces.

Saudi Aramco has developed such best practices over its 75 years, learning to adapt and absorb from its foreign partners, and developing its own unique internal practices to take account of its evolving domestic and international role. Today, it has established presences in all the continents of the world and has also learned to manage a diverse labor force and operations base.

The Saudi Aramco jubilee celebrations are also focusing on the human side of the corporation, for in the end, this is what sets Saudi Aramco aside from others in the Kingdom and the world at large. If such best business practices as Saudi Aramco can be adopted as a matter of fact by many other companies, then the national economies of the Arab world can increase and ensure that one celebrates such jubilees rather than Nakbas, for in the final analysis economic strength leads to political strength to avoid future catastrophes.

UAE petrochemical capacity to treble – Report

Khaleej Times reported that, already a global force to be reckoned with, the Middle East’s chemical and petrochemical sector is on the brink of a new era of investment and expansion. The GCC already produces 30 of the most common intermediate petrochemical products, representing 7% of worldwide production. This is set to increase to 20% of global output by 2010, with Saudi Arabia accounting for almost half of that increase.

UAE is investing heavily in its petrochemical industry, and will see capacity increase threefold, opening up new opportunities in the downstream and end-use processing sector. An estimated USD 40 billion in new investments is expected in the GCC chemical and petrochemical sector, including non oil products such as polymer resins, polystyrene and liquid industrial chemicals by 2010.

According to Mr Abdul Rehman Falaknaz president of International Expo Consults, this is just the start of a period of rapid growth for the region’s chemicals sector. He said that "With petrochemical facilities in Europe and the US facing cutbacks due to increasingly high prices and shortage of feedstock, the Gulf countries have emerged as the world's first choice for new facilities and best choice for investment in this industry."

Mr Falaknaz explains that "The continuing expansion and growth in the Middle East has resulted in a need for more sophisticated logistics and supply chain processes to distribute more than 40 million tons of petrochemicals and plastics to over 70 countries on a plant to customer basis. For the next 10 years at least the Middle East will continue to have an edge over others. Beyond that, new technologies may change the way we produce polymers and petrochemicals. Economics will ultimately decide the future."

GAC rules out IPO to fund its expansion

Emirates Business reported that global shipping and logistics provider Gulf Agency Company Group has ruled out launching an initial public offering to fund expansion and acquisition programs. It intends to maintain its current funding model which involves significant levels of self financing complemented by loans from regional and international banks.

Mr Bengt Ekstrand group director of Gulf Agency Company said that "We are content with our financing model and see no reason at all to go to a capital market to rise money. For us launching an IPO is totally out of the question. The group's performance has been good and we will continue to fund our programs from our returns with additional financing from banks."

Mr Ekstrand said that GAC is not scouting for opportunities and any expansion or acquisitions would be customer driven. He added that "We do not go out looking for opportunities. Our customers who want to benefit from our services wherever they ship items are the ones who inform us about opportunities and encourage us to invest in certain areas. And we have partners in various locations who approach us and ask us to buy them."

Over the last 12 months GAC has invested Dh183 million in acquisitions and expansion programs in Algeria and Australia for shipping services and Kazakhstan for oil logistics services. Recently it acquired 100% of UK based shipping and logistics group OBC. The acquisition saw OBC re branded as GAC OBC and the company will continue to handle vessels in ports in the UK, the Netherlands and the US Gulf Coast.

Dubai based GAC is a world leader in shipping, logistics and marine services with clients across the globe, though the Middle East remains its core market. The group started as a shipping agency operating in the Middle East but later adopted a global approach and diversified. It has 8,500 employees and an annual turnover of AED 5.49 billion. It has achieved a 15% YoY revenue growth across the board over the past 3 years and expects the figure to rise this year.

Gulf steel projects to boost supply – GOIC Report

Doha based Gulf Organization for Industrial Consulting, in a study about Gulf steel projects, said that mega steel projects undertaken by Gulf oil producers in face of rapid growth in domestic consumption will boost their output of the metal by 10 million tonnes within 3years. But the massive increase will cover only part of the region's soaring steel imports due to an ongoing construction boom, which involves projects worth more than USD 1.2 trillion.

It said that while the production of steel in the six GCC countries surged by 21% between 2001 and 2005, their consumption increased by 64%. It added that "This has led to ever increasing imports of steel into this region. Imports of finished and semi finished steel into the GCC were more than 13 million tonnes in 2005. The steel industry has taken note of the continued growth in steel imports and a number of projects have been planned and are under implementation. It is estimated that in the next 2 to 3 years, about 10 million tonnes of new steel capacity will be created in the GCC region."

Citing figures by the International Iron & Steel Institute, GOIC said that global steel demand recorded a compound average growth rate of 8% between 2001 and 2005, while the rate was as high as 17% in the GCC, which controls nearly 45% of the world's proven oil wealth. Global demand is projected to grow by around 4.9% until 2010 before it slips to 4.2% between 2010 and 2015.

GOIC study said that "As for the GCC, the level of economic growth will continue to be robust based on sustained high surpluses generated by oil revenues. This economic growth will in turn continue to fuel the construction boom as money is pumped into real estate, infrastructure and tourism projects."

The report noted that steel and other metal projects, including aluminum in the GCC are the most feasible in the world as they involve heavy usage of energy, which is abundant and cheap in the region. As a result, GCC states have pumped billions of dollars into such projects as part of their long-term economic diversification programs. The projects are expected to gain momentum in the coming years because of the construction boom and expectations oil prices will remain high.

It noted that massive investments are also taking place in infrastructure projects such as airfields, ports, power plants and desalination plants. In addition to major real estate developments which are creating entirely new cities, several mega projects are under way to provide resorts and residential accommodation for international tourists and home owners.

No need for emergency OPEC meeting – Qatar

Mr Abdullah bin Hamad Al Attiyah Qatari deputy prime minister and minister of energy & industry of Qatar said that oil markets are balanced and there is no need for an emergency OPEC meeting before September 2008 despite record oil prices.

Asked if Qatar would raise its output or stick to OPEC’s existing quota, he said that "Of course, we are committed to the quota, to the OPEC agreement. Like other OPEC members, Qatar has blamed factors other than supply for oil’s rise and speculation on oil markets is now so strong that it was hard to make an impact.”

Mr Al Attiyah said that "True it is a record figure but the question is this because of a lack of supply? It is not now in our hands or that of any power to intervene in these markets. This market today is reacting to politics and speculation. The speculators have moved from the stock and bond markets to the commodities markets."

OPEC is next slated to meet in September 2008 to decide on output policy. Runaway gains that have lifted oil to records close to USD 128 a barrel had prompted talk this month that OPEC might consider raising its output before its September meeting if crude prices keep rising.

Under pressure from consumer nations hard hit by the rally, OPEC kingpin Saudi Arabia said that it had boosted output by 3.3%, or 300,000 barrels per day, to loosen up the market and make up for declines from other producers.

It may be noted that oil prices have risen by 6 fold since 2002 and doubled since 2007 as rising demand from China and other developing nations cinched spare production capacity, adding pressure on the US economy already hard hit by a housing slump.

Steel price hike affects Turkish steel based industries – Report

Turkish Daily reported that excessive price hikes in steel are leading many pioneering industrialists to abandon their projects worldwide. Affected by the hike, Turkey’s construction, automotive and white good sectors will either introduce price increases or be defeated by the crisis

The rising costs of investment in industrial commodities such as steel, copper and zinc have led pioneering industrialists to give up their projects worldwide, and are also about to affect several sectors in Turkey

Turkey's construction sector is preparing for a 15 day action in 8 cities in order to secure a reduction in prices by steel producers. Defining the situation as a disaster, Mr Bülent Gürsoy chairman of Turkish Engineers Union, called on construction, automotive and white goods sectors to take urgent measures. He said that "Per ton prices of some types of iron have risen by 110% since October 2008. Nobody is aware, but there will be disasters particularly in construction as well as automotive and white goods sectors within a month."

Mr Kasım Gündüz secretary general of Aegean Automotive Association said that the automotive sector, which operates mainly with stocks and will make its second largest purchase in June 2008, is expected to experience the hike related problems during summer months. He added that "The sector has not witnessed a decline in capacity at present however, the real problem will occur during June and July 2008. Supplier industry exports mainly to the European Union. Our rivals China, India and Egypt are making 10 year deals at fixed prices with iron producers."

Mr Gündüz said that some domestic companies that cannot purchase from enterprises such as Erdemir import raw material at lower prices from abroad, which hits domestic intermediate goods producers. He added that "Around 30,000 to 40,000 companies that produce moving parts and motor hoods will face great distress soon. The problem, in the long run, will also shape the employment structure of the sector, which currently employs 2 to 3 million people on average."

Baosteel joins CRGO club

It is reported that the first batch of cold rolled grain oriented silicon steel sheets and coil were produced at the new line in Baosteel recently, which symbolized that Baosteel had gained the independent innovation ability of producing oriented silicon after ten years of hard research.

As per report, the designed annual production capacity of Baosteel is 100,000 tonnes.

Producing CRGO is regarded as an art due to difficulties in production, which calls for top grade manufacturing competence and technology and there are only a handful of CRGO makers in the world.

Chinese HRC export prices continue increasing last week

It is reported that export offers for Chinese hot rolled steel coil are raised again by steel producers so as to reflect the rise in domestic market. At the same time, transaction price has also seen evident increase.

On Shanghai market the quoted rates are as under
1. Commercial 4.75mm to 11.5mm HRC in 1500mm - CNY 5680 per tonne
2. Commercial 4.75mm to 11.5mm HRC in 1800mm - CNY 6100 per tonne
3. Low alloyed 7.5mm HRC in 1500mm - CNY 5950 per tonne

Mysteel forecasts that taking Shanghai price for 4.75mm to 11.5mm HRC in 1500mm width as benchmark, it is going to approach CNY 6000 per tonne in the next two months if it keeps at CNY 5500 per tonne. Otherwise, it is likely to experience downward adjustment or even peak out.

(Sourced from MySteel.net)

Earthquake hits production at Pangang Group production

It is reported that a major quake measuring 7.8 on the Richter scale in Wenchuan County, Sichuan has completely suspended the operations in Pangang Group Chengdu Iron and Steel Company Limited and Pangang Group Sichuan Changcheng Special Company Limited with reports on staff casualty and property damage in these two companies.

As per report Pangang Group has called on various subsidiaries, branches and organs to immediately initiate the emergency-response system and join in disaster relief efforts.

Chinese steel export prices summary

It is reported that the export price for various products to different countries during last week was as under

Billet
20MnSi
S Korea - 1080
S.E Asia - 1080-1100
Price in USD per tonne FOB

Rebars
BS grade for EU and Middle East
HRB400 for South Korea and South East Asia
Europe - 960-970
S Korea - 950-960
S.E Asia - 960-970
Middle east - 970
Price in USD per tonne FOB

Wire Rod
SAE1008 for EU
Q195 for Asia
Europe - 980-1000
S Korea - 960-980
S.E Asia - 980
Price in USD per tonne FOB

HR plate
Q235/SS400 for Asia
S235JR for EU
Europe - 1200-1220
S Korea - 1070-1100
S.E Asia - 1080-1150

HR Coil
SS400 for Asia
S235JR for EU
Europe - 940-960
S Korea - 930-950
S.E Asia - 940-960
Middle east - 950-960
Price in USD per tonne FOB

CR Coil
SPCC
Europe - 1060-1080
S Korea - 1040-1060
S.E Asia - 1050-1080
Price in USD per tonne FOB

HDG
DX51D
Europe - 1090-1140
S.E Asia - 1080-1130
Price in USD per tonne FOB

(Sourced from MySteel.net)

Chinese HDG export prices see increase last week

It is reported that hot dipped galvanized coil price are still going up in China. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7050 per tonne, 0.5mm material by private steel mills at CNY 7300 per tonne up by CNY 400 per tonne to CNY 450 per tonne and CNY 300 per tonne respectively from end April.

Export offers are further raised to reflect the rise in domestic market. A Hebei based tier two steel maker tells Mysteel that it is quoting DX51D/SGCC 1.0mm HDG at about USD 1080 per tonne to USD 1090 per tonne June production and July shipment. There is an extra of USD 60 per tonne to USD 65 per tonne and USD 100 per tonne for 0.55mm to 0.59mm and 0.5mm to 0.54mm material respectively.

(Sourced from MySteel.net)

Hebei to hike electricity price to force obsolete capacity elimination

It is reported that Heibei would raise differential electricity price for steelmakers that are scheduled to be washed out in a bid to accelerate obsolete steel capacity elimination.

As per report, the province will pull up additional electricity price for would be eliminated equipments to CNY 0.3 per kilowatt hour from May 1st 2008 and CNY 0.4 per kilowatt hour from January 1st 2009, CNY 0.1 per kilowatt hour and CNY 0.2 per kilowatt hour higher respectively than national level.

The province also urged local governments to strictly implement the policy and banned non fulfillment or watered down execution.

(Sourced from Mysteel.net)

Baosteel supplying steel fabricated houses to earthquake hit areas

It is reported that Baosteel s working overtime in fabricating simple steel deck house urgently needed for the earthquake disaster areas.

A group of employees just returned from the South Pole building steel deck house volunteered to help the disaster area in rebuilding.

It is estimated that the first lot of simple steel sheet house will be sent to the disaster area in approximately 1 month.

Baosteel donates CNY 10 million to the quake disaster areas

It is reported that Baosteel Group decided to donate CNY 10 million to the quake disaster areas. Various subsidiaries and branches of Baosteel are organizing donations from individuals now.

Baosteel Group and Baosteel Ltd head office members donated CNY 228,000 to the disaster area on May 14th 2008.

Cracks found in Sichuan hydro project after earthquake

Interfax China reported that cracks were found in a dam operating as part of a major hydropower plant in Sichuan Province and buildings on the plant's site collapsed after a 7.8 magnitude earthquake struck the province on Monday.

Xinhua reported that a team from China's Ministry of Water Resources has been sent to repair the damaged dam which is part of the Zipingpu hydropower, irrigation and flood control project located between Wenchuan County and Dujiangyan City. It did not detail the extent of the cracks, nor any potential for dam failure.

Mr Fan Xiao a hydropower expert with the Sichuan Bureau of Geology told Interfax that the reservoir's water level rose quickly after the earthquake due to blockages. He said that reports about other dams located in the area have not yet come in because of communication disruptions and that if such dams collapse, it could mean more trouble for the Zipingpu project.

Mr Fan said if Zipingpu's dam was to give way, the entire downstream Chengdu Plain will be flooded.

Guangzhou Port container throughput in Q1 surges

Schednet reported that Guangzhou Port's first quarter container throughput surpasses Port of Kaohsiung, which is likely to fall out of the world's top 10 box port rank this year and also the world's seventh largest port of Rotterdam.

Guangzhou port, China's fifth and world's twelfth largest box port in 2007 handled 2.79 million TEU during the first quarter of this year, surpassing Rotterdam's 2.68 million TEU up by 35.4%YoY making it the third largest domestic port after Shanghai and Shenzhen. The growth of its box volume was the fastest among the top five ports in China.

The report added that the port lifted 974,000 TEU in March. Its annual container throughput is estimated to reach 10 million TEU by the end of this year.

Chinese pate export volumes dipping

According to market sources there have been less steel plate exports from China recently with the continuous increase of export prices. Despite the rise in offers, transactions are said to be on the decrease.

Quotations for 12mm to 40mm commercial HR plate by tier two steel makers are at about USD 1080 per tonne FOB to USD 1140 per tonne FOB which compares with USD 1160 per tonne FOB to USD 1180 per tonne FOB by tier one steel mill

Jiangsu based steel maker said "The price increase is quite slow and it is not easy for us to raise price by large range as before. Beside, current contract price for commodity grade plate is much lower than quotation."

A tier one producer tells Mysteel that it is quoting