BEML inks MoU with SAIL for supply of heavy earth moving equipment

Bharat Earth Movers Ltd a Public Sector Undertaking under the Ministry of Defence and a leading player in Earth Moving & Mining Equipment has announced that it entered into a MoU with Steel Authority of India Limited India’s Largest Steel Producer for supply of Earth Moving Equipment and Spares.

The released added that the MoU was signed by Mr VK Gulhati Director (Technical) SAIL and Mr M Poongavanam Director (Mining & Construction) in presence of Mr VRS Natarajan CMD of BEML.

As per the terms and scope of MoU SAIL shall purchase a total no of 261 Mining Equipment over a period of next Three years The various equipments envisaged under the agreement are Dumpers, Dozers, Motor Graders, High End Hydraulic Excavators and Tyre Handlers. The estimated value of these equipments to be ordered in 3 years will be 477 crores. In addition, the agreement also provides for the maintenance Contract of the fleet of equipments to be supplied valuing to approximately 300 crores.

Both the PSUs have mutually agreed to work on 11 years term during which, BEML shall supply Equipments upto 2011 to SAIL As well as undertaking Maintenance and Repair Contract for the next 8 years

SMS MEER launches Indian subsidiary

IANS reported that German company SMS MEER, manufacturer and supplier of long product rolling mill equipments launched their wholly owned Indian subsidiary here. Mr Joachim Schonbeck president of SMS MEER said “SMS MEER plans India as its most important business destination, looking forward to the ongoing boom in the Indian metal industries.”

Mr Bimal Kumar Sarkar MD of SMS MEER-India said “This German Company has chosen Kolkata as its destination to remain close to the customers.”

The report added that Indian companies like Jindal Saw Ltd, ISMT Ltd, IISCO and Jindal Steel and Power Ltd are some of the company’s top customers.

SAIL charts big plans for mining

The Indian leading news agency NDTV reported that rising input costs has been the biggest bugbear for corporate across sectors and it has been the same for the Steel Authority of India but the steel giant plans a steely strategy to counter just that.

As per the company plans, the Raoghat iron ore mines in Chhattisgarh would cover the raw material requirements at SAIL's Bhilai steel plant for the next 15 years where capacity will soon hit 10 million tonnes. The Thakurani mines in Orissa on the other hand would help support production at the Bokaro and Rourkela plants and SAIL is still on the lookout for mines in Jharkhand.

SAIL will work with NMDC to develop the Arki limestone mines in Himachal Pradesh which will address SAIL's requirement of limestone even post expansion. SAIL is currently getting its limestone from Rajasthan.

SAIL's raw material costs have escalated 8% in the last quarter of the previous fiscal. It has had had captive iron mines even in the past but is now very seriously considering ways to also bring other input requirements under its own umbrella. So, besides limestone mines SAIL is also keenly seeking opportunities for coking coal in Australia through a JV of 5 PSUs called International Coal Ventures Ltd to ensure that it is less dependent on others and in turn less vulnerable to sky-rocketing costs of input materials.

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.

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.

Ramsarup sees huge savings post merger

BL reported that Ramsarup Industries Limited is looking at saving an estimated INR 275 crore a year in raw material costs after merging its group company Lohh Udyog with itself.

Mr Naveen Gupta CFO of Ramsarup Industries said that Lohh Udyog, which is slated to start producing 691,000 tonnes of steel billets annually at its Kharagpur plant from April 2009, will fully meet Ramsarup Industries’ steel wire requirement at its Durgapur and Kalyani steel wire manufacturing units.

Mr Gupta added that "After the merger, we expect to save INR 4,000 a tonne as far as steel billets are concerned, which we now source from the open market. This will add to our profit margins. After the merger, we will be the first in India to produce steel wires right from the process of mining raw iron ore."

Ramsarup Industries is also expecting to save an additional INR 200 crore by sourcing power from its new captive power plant at the Kharagpur unit. The steel plant requires 60 MW an hour, of which 20 MW will be obtained from the captive plant. The unit will generate power from gas emitted from blast furnaces and waste heat from the sponge iron unit.

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.

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.

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.

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.

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.

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.

Export duty on steel hits supplies to SEZs – Report

FE reported that the government's move to impose export duty on certain steel products to rein in inflation has put itself in a fix as the decision is now affecting supplies of steel to special economic zones, where there is a huge demand for it.

Sales from domestic tariff area to SEZs are treated as deemed exports. Domestic tariff area is the area within the country where normal tariffs apply. This does not include SEZs, which is deemed as foreign territory for tax purposes and are therefore tax free enclaves. Imposition of export duty on such steel products has made these items costlier in SEZs.

On May 10th 2008, the finance ministry had issued a notification regarding the imposition of 5% to 15% export duty on semi finished and finished steel products.

A senior commerce ministry official said that "We have sought a clarification from the law ministry in the matter. Also, a reference has been made to the finance ministry. The commerce ministry has demanded that the export duty be exempted for sale of steel products for 'consumption within the SEZs."

In a similar instance, Mr Kamal Nath union commerce & industry minister had given some relief to the cement sector saying that export ban on cement will not apply to sale of cement from DTA to SEZs. These tax free zones, under various stages of becoming operational, are witnessing massive construction activity that needs huge quantity of cement and steel. Besides, SEZ units manufacturing items including auto-components and engineering products also use steel products.

The commerce ministry and Export Promotion Council have received several queries from SEZ units and developers on the issue of export duty on steel products for export oriented units and SEZs.

Mr LB Singhal director general of Export Promotion Council said that the SEZ rules define export as goods exported out of the country, supply of goods from DTA to SEZ and supply of goods from one SEZ to another. He added that since the finance ministry's notification is applicable only to goods exported out of the country, it should issue a clarification or carry out an amendment to that extent.

In the case of cement exports, the directorate general of foreign trade had subsequently carried out an amendment saying the prohibition of cement export is not applicable to supply of cement to SEZs for consumption within SEZs.

Meanwhile, the steel industry is lobbying the government hard to withdraw the export duty, arguing that they have already helped calm inflationary impact of rising steel prices by cutting their prices by INR 2,000 to INR 4,000 per tonne.

Maruti hikes prices up to INR 15,000 on rising input costs

BS reported that Maruti Udyog Limited has raised the prices of its vehicles by as much as INR 15,000 to offset the rising input costs. It raised the prices between INR 1,000 on the Zen Estilo and Wagon R hatchbacks to INR 15,000 on the diesel variant of its Swift model.

It may be noted that prices of steel have risen both globally and locally, forcing automobile makers such as Maruti and Honda Siel Cars to raise prices. Maruti's price increase comes amid prospects of a slow down in sales because of rising interest rates. Maruti also withdrew the special introductory price on the newly launched Swift DZire model.

Mr Shinzo Nakanishi MD of Maruti said in April 2008 that it was negotiating with steel companies on new contracts and faced a price increase up to 40%. Maruti had cut the prices of some models in February end 2008 after the government reduced the excise duty on small cars to 12% from 16%.

Meanwhile, Mahindra & Mahindra raised the prices of its vehicles by up to 2.5% last week.

Centre lines up INR 5,000 crore port expansion projects

BL reported that union ministry of shipping is launching 10 major expansion projects in 2008-09 at an estimated investment of INR 5,000 crore. About 60% of this investment will be for the Chennai mega container terminal, expected to cost around INR 3,100 crore.

Expansion projects are being taken up at 8 major ports namely Paradip, Vizag, Chennai, Tuticorin, Cochin, New Mangalore, Goa and Kandla in 2008-09. The sudden deluge of projects is on account of the government’s plan to enhance port capacities significantly by 2011-12. As per the National Maritime Development Program, the objective is to raise capacity from 383.7 million tonnes to 615.7 million tonnes.

As Paradip is located close to India’s major iron ore and coal mining belt, the plan is to add 2 new deep draft berths. Separate berths are planned for both iron ore and coal shipments.

The government plans to set up a mechanized iron ore handling facility at the New Mangalore port. Shipments of iron ore and coal are expected to see a 70% rise at Indian ports between 2005 and 2012.

Two separate cargo terminals are to be developed at Vizag for liquid and bulk cargo. An international cruise terminal at Kochi, a multi purpose cargo berth at Kandla and a bulk cargo berth at Goa are also on the cards. At Tuticorin, berth number 8 will be converted into a container terminal.

The slew of projects planned for the current fiscal is in contrast with the previous years. Earlier, only 1 or 2 projects were commissioned every year. All projects in the pipeline will now be commissioned on a build operate transfer basis and will have both public and private participation.

World Bank to sanction INR 16,000 crore loan to UP

Projects Today reported that World Bank is likely to sanction a loan of INR 16,000 crore to the UP government. The loan UP Development Policy Loan is in advanced stage of negotiation and likely to credited to UP with in the current fiscal.

The loan will immensely benefit the finances of the state government as the loan will enable UP to retire costly old debt which will reduce the annual interest burden by INR 700 crore.

The objective of the UPDPL is to retire the old high cost debts from national small saving fund loan on the UP government which was about INR 15,250 crore by the end of March 2008. The WB loan will enable the UP government to swap the costly debt with cheaper loan.

OVL to relinquish block in Libya

Projects Today reported that ONGC Videsh is planning to relinquish its onshore exploration block in Ghadames basin in Libya in favor of the National Oil Company as OVL and its partner Turkish Petroleum Overseas Company felt that the prospects were not very attractive commercially.

In the proposed onshore exploration block of Block NC 188, OVL holds 49% stake and Turkish Petroleum Overseas Company is having the remaining 51% participating interest and is the operator.

OVL has taken the approval of its board for the same. After completing the seismic surveys in the area as per the program, two exploratory wells were drilled in Block NC 188 which were plugged and abandoned as dry wells. Subsequently, the exploration phase of the block has been extended till June 11th 2009.

PSL Limited secures orders worth INR 1,225 crore

BL reported that pipe manufacturing company PSL Limited has bagged 2 orders worth INR 1,225 crore from HPCL Mittal Pipelines Limited and Larsen & Toubro.

PSL Limited said that HPCL Mittal Pipelines Limited had placed an order for its entire requirement of steel pipes valued at INR 917 crore for the Mundra Bhatinda crude carrying line for the Bhatinda Refinery. The order would be executed this fiscal

L&T has placed an order for full steel pipe requirement, including coating, for its 220 kilometers long Barmer water pipeline. The order is to be executed at PSL’s Phagi pipe manufacturing facility near Jaipur.

Mr Ashok Punj MD of PSL Limited said that "These deals redefine our position in the market and we expect to complete these projects ahead of schedule."

Refractory brick laying inaugurated at SAIL RSP

BS reported that refractory brick laying of the coke ovens battery number 4 was inaugurated by Mr BN Singh MD of SAIL Rourkela Steel Plant.

With the objective of setting up an environment friendly, the contract for rebuilding battery number 4 was awarded to a Ranchi based company at a cost of INR 142.6 crore. The entire project will be implemented in a schedule time of 24 months. After commissioning of this battery, more than 1,000 tonnes additional hard coke will be available per day to meet the requirements of the blast furnaces to maintain the required production level of hot metal.

Also the coke oven gas available will supplement the energy balance of the plant. It will also facilitate taking up planned repair of other existing batteries without affecting the productivity of the blast furnace.

The environmental control feature of the battery will ensure the pollution free charging of coal into the oven. The chimney height from existing 90 meters to 95 meters will ensure a better combustion and effective evacuation of waste gas.

REC sanctions loan to North Chennai power project

It is reported that Rural Electrification Corporation has sanctioned a loan of INR 3,796 crore to NTPC Tamil Nadu Power Company's North Chennai power project Stage II.

NTPC Tamil Nadu Energy Limited is a 50:50 JV company promoted by NTPC and Tamil Nadu Electricity Board for the project, which will come up at Kuruvimedu village near Chennai.

REC will fund the project single handedly rather than go for a consortium route because it is satisfied with the track record of the promoters. The repayment for the Ennore project will begin only after the project is commissioned and the entire loan will have to be re paid in 15 years.

The first unit of the project, for which BHEL is the contractor, is expected to be commissioned in 2010-11.

Hyundai Motors India to upgrade ITIs in Assam

BS reported that Hyundai Motors India Limited, which had last year upgraded the automobile section of the Industrial Training Institute in Guwahati, is planning to include all the ITIs in the state in a phased manner. Besides, it plans to support other engineering institutes in Assam by supplying training material and providing job opportunities for its students.

Under the plan, Hyundai Motors will supply training material to these institutes and will also train its instructors about the latest automobile technology for the next 5 years. Certificates will be issued by the company to graduates who pass out from these ITIs.

Mr B Mani senior GM of Hyundai Motors India said that "We would include all the ITIs in Assam which have automobile section in a phased manner. Under the Phase I, we upgraded the Guwahati ITI and would include a few more institutes in the next phase."

Mr HS Lheem MD of Hyundai Motors India said that it wants to expand its cooperation in the field of education in Assam.

The company, under the aegis of Hyundai Motor India Foundation, had taken up the Guwahati ITI as the first educational institution to provide such support last year. It has renovated and upgraded the institute's training facility. The renovations were carried on in the classrooms, workshop and the training area to create a more conducive environment for the students.

Mr Mani said that it had invested around INR 30 crore for upgrading Guwahati ITI and would invest further amount as and when required for upgrading other ITIs. Upgrade would include providing special training on the latest automotive technologies to all the trainers at the ITIs. It would provide engine, transmission and other assemblies to the ITIs to enhance the skill and knowledge of the students. He added that presently, 18 trainers from Guwahati ITI have been placed at various dealerships across the state. Assam has 28 ITIs, out of which 18 have automobile sections.

Tyre sector sees 10% growth in 5 years – CARE Report

According to a study by Credit Analysis & Research Limited, Indian tyre industry is expected to clock a tonnage growth of 9% to 10% over the next 5 years.

As per report, while the truck and buses tyres are set to register a compounded annual growth rate of 8%, the light commercial vehicles tyres are poised for a compounded annual growth rate of 14%.

According to the CARE study, the growth in the Indian tyre industry will be fuelled by the expansion plans of the automobile companies, government's focus on development of road infrastructure and sourcing of auto parts by the global Original Equipment Manufacturers. However, the tyre industry has to grapple with raw material price volatility, rupee appreciation and cheap Chinese imports.

The tyre industry in India recorded a compounded annual growth rate of 9.69% during 2002-07. The size of the industry was estimated at INR 19,000 crore in 2006-07 with a total production of 73.6 million units of tyres. In 2006-07, the replacement tyres accounted for 53% of the total tyre tonnage off take, followed by 31% share of OEM and 15% by exports.

Out of the 73.6 million tonnes of tyres, 54.49 million units worth INR 2,600 crore were exported. The exports from India posted a compounded annual growth rate of 13% in unit terms and 18% in value terms between 2002 and 2007.

Japan questions western freight corridor’s feasibility

BS reported that Japanese government, which had shown interest in financing an 800 kilometers long portion of the western dedicated freight corridor between Rewari and Baroda, has now expressed doubts over the project's technical viability and asked the railway ministry to conduct a feasibility study. The portion would cost INR 10,000 crore.

The railways had proposed to lay electric wires at a height of 7.4 meters to run double stack container trains. The Japanese side said that the height was much more than the norm of 6.6 meters in other parts of the world.

Following this, the railways have asked Research Design & Standards Organization to conduct a trial run on a 60 kilometers long stretch in Orissa. The trial is expected to be finished in June 2008. The final report is expected be submitted by the end of June 2008.

Meanwhile, Indian Railways said that it has planned a height of 7.4 meters as most rolling stock in India are flat whereas most other countries in the world use well wagons, which have a lower base.

Mr VK Kaul MD of Dedicated Freight Corridor Corporation of India Limited said that "There would be trial run to see if electrification of the corridor is possible or not. If it succeeds, we will go ahead or look at other options like reducing the height of the wires and using well wagons."

Notice for acquiring land near Nandigram spark protests

ET reported that West Bengal government has issued a notice for acquiring nearly 500 acres of agricultural land at Geonkhali near Nandigram for setting up a ship building yard and downstream units, sparking protest by villagers.

The notice, issued by the district magistrate Mr Anup Agarwal, said that a total of 493 acres would be acquired for setting up a ship building factory. The notification for the shipyard, to be built by the Bharti group in collaboration with the Appejay group, came immediately after the panchayat polls.

It may be noted that at least 150 villagers under the banner of Bhumi Raksha Committee, floated by the Congress, demonstrated today before the panchayat office protesting against the move. They also took out processions yesterday led by a local Congress leader Mr Suman Batabyal. He said that "We will never allow fertile land to be acquired by building promoters under any circumstance."

Suzlon may sell some of its REpower stake – Report

Mr Tulsi Tanti chairman of Suzlon Energy Limited said that it may sell a part of its stake in Germany's REpower as the valuation is attractive.

Mr Tanti said that "It is lucrative for us right now." He added that Suzlon directly owns 33.66% of REpower. It also planned to double its China capacity by 2009-10 from the current 600 MW.

IRFC to raise INR 1000 crore via bonds – Report

ET reported that Indian Railway Finance Corporation is selling bonds to raise up to INR 1000 crore. It is selling bonds in 4 tranches. These are 10 year bonds with bullet repayment, 15 year with amortized equal repayment every year, 20 year with amortized equal repayment every year and 20 year with a bullet repayment.

There is no indicative yield specified by the company and the bonds will be sold via book building. The minimum subscription amount under each of the above tranches is INR 500 million and coupon on the bonds is payable semi annually.

ArcelorMittal Lazaro Cardenas signs for second module upgrade with Tenova HYL

ArcelorMittal Steel Lazaro Cardenas, in the state of Michoacan in Mexico has contracted with Tenova HYL for an upgrade of the second module of their 2 million tonne per year HYL Process plant.

This upgrade will make the plant more environmentally friendly by reducing emissions, as well as reducing natural gas consumption by nearly 20%. The existing HYL plant, a 4 reactor installation in two modules had already upgraded the first module to include a CO2 removal system. The revamp was concluded last year and production results were significantly improved.

Production results at the AMLC HYL plant for 2007 were excellent, with the first CO2 removal system operating in module 1. After evaluating the results of module 1 vs module 2, AMLC decided to implement the same improvements to module 2 of the plant. Engineering work is currently underway and the plant is scheduled to start up with the new CO2 removal system by Q2 of 2009

Tenova HYL is the pioneer of Direct Reduction Technology. Tenova designs and supplies advanced technologies, products and services for the metal and mining industries. Tenova operates close to its customers through a network of 30 companies based in 16 different countries.

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.”

OneSteel Recycling adds steel scrap processor at Port of Tampa

OneSteel Recycling's new steel scrap processing facility opened at the Port of Tampa's Port Sutton area. The AUD 25 million shredder is expected to process about 150,000 pounds of scrap in its first year.

OneSteel said that the facility will reduce the energy, resources and associated greenhouse gases compared with making steel from iron ore. OneSteel added 9.4 acres to its area at the port and will create 30 jobs with the expansion.

The Port of Tampa handles more than 50 million tons of cargo each year.

OneSteel Limited, the recycling company's parent is an Australian based mining, ore processing and steel manufacturing company specializing in long-steel products for the construction, housing and agricultural industries. OneSteel Limited and Smorgon Steel also Australian based merged in August 2007.

Metals USA plans initial public offering

AP reported that Metal processor Metals USA Holdings Corp is planning for an initial public offering of common stock, but did not disclose any terms of the offering in its filing with the Securities and Exchange Commission.

Metals USA said that it could raise up to USD 200 million in the IPO, but that figure was estimated solely to calculate the registration fee and may change.

According to the filing, proceeds will be used to repurchase senior floating rate toggle notes due 2012, of which USD 300 million was outstanding as of March 31st..Any remaining proceeds will be used for general corporate purposes, including working capital, the expansion of production capabilities, research and development and potential acquisitions.

Metals USA previously filed for an IPO in May 2006, but withdrew its proposal in October of last year. A reason for the withdrawal was not disclosed.

Nippon Steel may invest Mozambique mine

Bloomberg reported that Tokyo based Nippon Steel Corp wants to invest in Cia Vale do Rio Doce's USD 1.4 billion planned coal mine in Mozambique to provide raw materials as costs rise.

Mr Shoji Muneoka president of Nippon Steel said that it's interested in the mine. Coking coal prices tripled this year to a record.

He said that “In this extraordinary circumstance of soaring material prices, we have great interest in alternative sources and we like to invest if we have opportunities.”

Mr Muneoka said that “It is possible any company outside Japan looking at our technology and customers will be interested in acquiring us, considering that our current market cap is far from satisfactory.”

Vale in an October statement said that the Mozambique mine will cost USD 1.4 billion to build, The mine may be the largest in the Southern Hemisphere, producing 8.5 million tonnes of coking coal and 2.5 million tonnes of thermal coal a year and may start output in the first quarter of 2011.

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.

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.''

Siemens to supply power plant components for South Korea

Siemens has been awarded an order to supply key components for units five and six of the POSCO Power combined cycle power plant in South Korea. The end user is the largest Korean independent power producer, POSCO Power Corporation. Unit five is scheduled to start commercial operation in December 2010 unit six is due to follow in the summer of 2011. The order volume, which includes gas turbine services defined in a long term program agreement is approximately EUR 265 million.

The POSCO Power combined cycle power plant with a current total capacity of 1,800 MW is located in Incheon near the capital Seoul. Units five and six with an additional capacity of 1,000 MW will be built on the site of the existing units one to four. Siemens will supply four gas turbines, two steam turbines, and six generators. Siemens will service these gas turbines as stipulated in the long term program for a period of twelve years.

South Korea currently has an installed power plant capacity of approximately 73 gigawatts. Power demand in South Korea is forecast to increase by five percent per annum over the next few years. The development plan drawn up by the government in Seoul makes provision for additional power plant capacity amounting to 20 gigawatts by the year 2020. With a capacity of 1,000 MW, the two new natural-gas-fired units will make an important contribution toward meeting the rapidly-increasing power demand in the Seoul metropolitan area in an ecologically-friendly and economical manner.

For more than 40 years, Siemens has been contributing to the country’s industrial development. Mr Michael Süss CEO of Siemens Energy Division Fossil Power Generation said that “Following the orders for the Bugok I and II, Yulchon and Incheon I and II plants, this is the sixth power plant order posted by Siemens in South Korea in recent years.”

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.

French port braces for more strikes

Congo reported that the France's container port at Le Havre which was shut down because of union strikes since Saturday afternoon until at least Sunday afternoon, faces more disruption as the port workers union called for fresh strikes on Tuesday and Thursday.

Since April 2008 major ports in France have been disrupted by strikes of port workers, who are angry at plans to privatize some heavy machinery operations.

Meanwhile, French fishermen kept up their blockade at ports along France's western coast, in protest at the rising cost of diesel fuel.

The blockades have spread to several new ports, including La Turballe and Le Croisic from the port of La Rochelle, which was sealed off by fishermen on Thursday.

The fishermen said the blockades would last until Wednesday. They are demanding the government help them to cope with the high cost of diesel fuel.

ArcelorMittal sells USD 3 billion in two parts - IFR

International Financing Review said that ArcelorMittal sold USD 3 billion in a two part debt sale.

International Financing Review said that the first tranche of the deal was of USD 1.5 billion five year notes, priced at 99.722 to yield 5.439% or 2.35 percentage points over comparable US Treasuries.

The second tranche was of USD 1.5 billion in 10 year notes priced at 99.571 to yield 6.183% or 2.35 percentage points more than treasuries.

International Financing Review said that Goldman Sachs, HSBC and JPMorgan Chase were the active lead managers of the sale.

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.

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.

Rising raw materials prices frightening SSAB – Mr Faxander

According to Mr Olaf Faxander CEO of Swedish specialty steelmaker SSAB, the rise in prices for raw materials was frightening and the volatility unprecedented but that demand for the company's products remained strong.

Mr Faxander during a capital markets conference at Mobile in Alabama said that "2008 is a unique year. Historically, we have never seen such extreme volatility in the prices of raw materials. It is a dramatic turbulence in prices. The prices of raw materials are frightening, actually.”

He added that SSAB would double its already growing share of niche products.

Mr Faxander said that "We will double it in five years. We are well under way.”

In a summary posted on the company's website in conjunction with the conference, SSAB said that its market was developing well this year, with no sign of a slowdown in demand and strong investment in infrastructure related industry.

SSAB also forecast that synergies would amount to SEK 200 million (USD 36 million) in 2008, while investments would exceed 1.7 billion.

Mr Faxander said the outlook for this year was good and that there were no signs of slowdown in our demand. He said the current situation is generally expected to remain throughout 2008. He added that the investment level in infrastructure related industry was still buoyant and was especially strong in developing countries with fast growing economies.

Nucor announces common stock offering

Nucor Corporation announced that it has commenced a public offering of 25,000,000 shares of its common stock. Nucor has granted the underwriters an option to purchase up to an additional 3,750,000 shares of common stock at the public offering price, less the underwriting commission, within 30 days following the closing date. The offering is expected to close on or around May 29th 2008.

Nucor intends to use the net proceeds from the offering for general corporate purposes, including acquisitions, capital expenditures, working capital needs and repayment of debt. In addition, Nucor intends to raise up to USD 1 billion in the debt capital markets in the near term, subject to market conditions.

Banc of America Securities LLC, Citigroup Global Markets Inc and J P Morgan Securities Inc. are acting as Joint Book-Running Managers for the offering.

Quanex appoints Mr Petratis as new CEO

Quanex Building Products Corp a manufacturer of engineered materials and components for the building products market said that it appointed Mr David Petratis as president and chief executive, effective from July 1st 2008.

Mr Petratis who is currently CEO of Schneider Electric's North American operating division will succeed Mr Raymond Jean.

ArcelorMittal announces bond issue

ArcelorMittal on May 19th 2008 completed the pricing of a USD denominated issue of 5 year and 10 year notes, consisting of USD 3,000,000,000 aggregate principal amount split equally between the 5 year and the 10 year issue.

The notes will bear interest at a rate of 5.375% for the 5 year and 6.125% for the 10 year and will mature on June 1st 2013 and June 1st 2018, respectively.

The Notes will be issued by ArcelorMittal and it will be offered and sold under the US Securities Act 1933.

The net proceeds raised will be used to repay existing indebtness.

US weekly crude steel production increase by 1.1%YoY

American Iron & Steel Industries reported that in the week ending May 17th 2008, US’s raw steel production was 2.146 million net tons while the capability utilization rate was 89.9%. Production was 2.121 million net tons in the week ending May 17th 2007, while the capability utilization then was 88.4%. The current week production represents 1.1% increase from the same period in 2007.

Production for the week ending May 17th 2008 is up 0.4% from the previous week ending May 10th 2008 when production was 2.136 million net tons and the rate of capability utilization was 89.5%.

Adjusted YTD production through May 17th08 was 41.736 million net tons at a capability utilization rate of 88.7%. That is a 3.3% increase from the 40.399 million net tons during the same period last year, when the capability utilization rate was 85.1%.

District wise production for the week ending March 15th 2008
1. Northeast Coast: 181
2. Pittsburgh/Youngstown: 214
3. Lake Erie: 86
4. Detroit: 106
5. Indiana/Chicago: 520
6. Midwest: 247
7. Southern: 698
8. Western: 94
(In thousands of net tons)

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

Vietnam exports more billet due to weak domestic demand

It is reported that Vietnam steel billet makers are anxious to export more capacity due to falling domestic demand.

Two of major producers, Van Loi Steel and Dinh Vu Steel are planning to export an estimated 10,000 and 30,000 tonnes steel billets to the Philippines and Southeast Asia due to inflation control on the part of the government.

Vietnam steel billet export price has been marked at USD 800 per tonne which is lower than the regional prices, but the domestic market price has already increased up to USD 950 per tonne.

This may result in the regional producers looking for material in the domestic market instead of importing stock from overseas.

ArcelorMittal announces donation for victims of Sichuan earthquake

ArcelorMittal is donating over CNY 1 million to the Chinese Red Cross Foundation to help the relief efforts in China following the earthquake that struck Sichuan on May 12th 2008.

ArcelorMittal China and its employees donated CNY 160,000 complemented by a CNY 900,000 donation from the ArcelorMittal Foundation. This represents a total of CNY 1,060,000. In addition to the cash donation, ArcelorMittal is offering to design, technically support and build a new earthquake resistant school for the region

ArcelorMittal China has also encouraged its employees to give blood to support disaster relief efforts as reports from quake stricken areas show blood and plasma products are urgently needed.

Mr LN Mittal Chairman & CEO of ArcelorMittal said that “On behalf of ArcelorMittal, I would like to express my deepest sympathies to all the people affected by this tragedy. As a responsible corporate citizen, ArcelorMittal is committed to offering further support to the Sichuan region for the reconstruction effort.”

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."

GCC investing USD 18 billion in new steel plants

Zawya reported that more than USD 18 billion is being invested in 46 steel manufacturing plants throughout the Arabian Gulf in an attempt to close the widening gap between supply and demand for steel - a major component for the construction industry as well as materials handling machinery for manufacturing.

Mr Spencer Felix Exhibition Manager of the Middle East Manufacturing Exhibition which takes place at the Abu Dhabi National Exhibition Centre from November 23rd to 25th 2008 said that "While there is talk of a slowdown in other parts of the world, the growth in the Middle East manufacturing base continues to expand with demand for steel far outstripping supply."

He said that "In the race to plug the supply gap a swathe of new steel plant projects as well as expansions to existing plants have been unveiled across the region with huge potential business opportunities for industry stakeholders."

According to the database of research company Proleads, which monitors major construction projects across the region from initial study to completion, Saudi Arabia with 17 and the United Arab Emirates with 16 are leading the way in steel plant projects individually varying in value from US USD 2 billion to USD 15 million. Oman has six steel plants on the books, Bahrain four and Qatar three.

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.

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.

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.

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.

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."

Fatalities at Istanbul Tuzla shipyards raised to 24 – Report

It is reported that fatalities from accidents at Istanbul's notorious Tuzla shipyards climbed to 24 in the past 10 months, when 2 more workers were killed separate accidents over the weekend.

As per report, on Saturday morning, Mr Deniz Kaskeman was crushed by a 2 tonne steel plate in the Selah shipyard and was pronounced dead on arrival at Doctor Lütfi KÄrdar Kartal Education & Research Hospital. In the 6 months, the Lort Marin Ship Building & Commerce Limited Company, which operated the Selah shipyard, was fined for having unsafe working conditions.

On Saturday night, Mr Murat ÇalÄŸkan, fell from a welding platform at the same shipyard and was pronounced dead in the yard.

Earlier in May 2008, one man was killed and 5 injured in an explosion in the engine room of a ship in build at a Tuzla shipyard.

Top 10 GCC steel plant projects total USD 9.5 billion – Report

According to the database of research company Proleads, the top ten new steel production projects in GCC countries amount to a staggering investment value of USD 9.5 billion. The projects are listed below

1) Al Tuwairqi Group Integrated Steel Complex
The USD 2 billion planned project is for an integrated complex of steel factories in Dammam industrial area. The complex will have a 500,000 tonne per annum railway bar manufacturing plant, a 3 million tonne per annum integrated iron and steel processing and production plant and 800,000 tonne per annum steel pipeline manufacturing plant.

2) Qatar Steel Company Mesaieed Integrated Steel Facility
The USD 1.5 billion project currently being executed is for an integrated steel facility with a hot briquette iron plant and a flat rolled steel products plant. The facility will have a production capacity of 4 million tonne per annum.

3) Saudi Iron & Steel Company Jubail mill expansion 3
The USD 1 billion planned project calls for expanding steel production by 1 million tonnes per year.

4) Sojitz Corporation Steel Plant in UAE
The USD 1 billion planned project in Fujairah is for a plant that will turn iron ore pellets into steel billets with capacity of 1.5 million tonnes a year.

5) Essar Group Steel Plant in Qatar
The USD 800 million project currently being carried out is for a 1.5 million tonnes per year steel rolling mill plant and a 1 million tonne per year hot briquette steel.

6) Al Ruya Industries Hamriya Steel Plant in UAE
This USD 700 million project under study is for an integrated steel making facility in Hamriya free zone.

7) Sohar Industrial Port Company Iron Ore Pellet Plant in Oman
The USD 700 million project is being carried out for an iron ore pellet plant. The plant will receive 7.5 million tonnes of raw materials a year. Sohar will export the pellets to steel producers in the GCC.

8) Boulder Seamless Tube Project in UAE
This USD 600 project is the design phase for a seamless steel tube finishing facility with a capacity of 175,000 tonne per annum in Hamriyah Free Zone. Feedstock will come from Boulder steel mill in Queensland in Australia.

9) Saudi Iron & Steel Company Jubail mill expansion 2
The USD 600 project currently being carried out is for a direct reduction iron plant with a capacity of 1.76 million tonnes per annum. It includes increasing annual production capacity of electric steel making by 1.22 million tonnes per annum.

10) Pan Kingdom Investment Company Jizan Economic City Steel Plant Future Expansion in Saudi Arabia

This USD 600 project is under study for expanding the production capacity of the plant, including a rolling mill, melt shop and a direct reduction iron plant.

Dana Gas plans to invest over USD 500 million in 2008

Dana Gas PJSC has announced investments of over USD 500 million in 2008 in its projects in Northern Iraq, Egypt and the UAE. Its announced investments for 2008, covering all sectors of the gas industry from the upstream through to the downstream, are expected to realize the value of these strategic positions and further boost revenues over the next stage of Dana Gas’s development.

Mr Ahmed Al Arbeed executive director of Dana Gas said that "This year is an important year for the company, as we will be building upon the important milestones and solid foundations achieved last year, and making major investments that will rapidly take Dana Gas to a new level in its growth and development."

Mr Al Arbeed added that "Dana Gas has already established strong positions in all areas of the natural gas business in the UAE, Egypt and Iraq, and we will continue to build upon these as well as expand into new countries in the GCC Region and North Africa, especially in view of the record oil prices currently witnessed. Our focus this year will be implementing the important projects in the UAE and the Kurdistan Region of Iraq, while significantly expanding the drilling program of new wells in Egypt in light of the encouraging new discoveries we have already achieved."

Dana Gas is currently implementing a major integrated gas project in Iraq’s Kurdistan region on a fast track basis in a record time of just one year, in a 50:50 JV partnership with Crescent Petroleum, at a combined investment of USD 650 million. The project, which involves gas development, production, processing and pipeline construction, is the largest private sector energy project in Iraq, and is already over 80% complete.

First gas production from the project is on target for the middle of this year, building up to a production of 300 million cubic feet per day by 2008 end, approximately twice the company’s current production in Egypt. Dana Gas’s agreements with the Kurdistan Regional Government of Iraq were signed in April 2007 and cover a range of energy related services and the building of substantial infrastructure to process and transport natural gas, as well as the development of the first Dana Gas City.

GAIL may get stake in IPI pipeline project – Report

BL reported that GAIL (India) Limited could become a consortium partner in the Pakistan India portion of the Iran Pakistan India gas pipeline project.

A senior official said that "In the portion of the pipeline being constructed from Pakistan to the Indian border, it has been proposed that an Indian company would be a stakeholder." The official also told that as stakeholder the Indian company will also have a place in the management of the consortium.

The proposal was made at the recent ministerial level bilateral meeting between Pakistan and India on issues pertaining to the tri national pipeline project. Three bilateral issues were discussed at the meeting, the structure of the pipeline company which will execute and manage the project, the transportation tariff and the transit fee.

As regards the transit fee to be charged by Pakistan, the official said that it would be de linked from the price of the gas. He added that "The transit fee is a very small element of the total cost and it will be decided at a later stage by the respective governments."

The principles of transportation charges have already been agreed on between the two sides for the over USD 7 billion pipeline project. The transportation charges will be levied on CAPEX plus operating costs basis, based on international competitive bidding. India would now decide whether to have another round of bilateral talks before resuming trilateral talks on the project.

Sipil Construction builds structural steel factory in Turkey

Turkish Daily reported that construction firm Sipil Construction has started to manufacture structural steel in the fourth section of Manisa's organized industry region.

Mr Hakkı Bayraktar chairman of Sipil Construction said that the construction of the factory was completed in a short time and the firm utilized only its own resources. He added that "Covering an area of 15,728 square meters, 10,000 of which is an enclosed area, we completed the infrastructure and started to produce at some units of the factory."

Mr Bayraktar said that "We managed to produce steel colon, which is our first structural steel product and we sent them to Bursa. Having expert engineers and architects, Sipil Construction produces steel products successfully." He added that with a capacity of 5,000 tonnes it will grow in the production of structural steel.

Real estate market to pick up in September – Realtors

Turkish Daily reported that the real estate sector is facing a credit crunch. As per report, most of the companies in the construction sector accept that the booms in land prices as well as the increase in the prices of iron, cement and steel have led them to experience tough times.

Prices in the secondhand house market have dropped by 30%, which means that an apartment that was worth TRL 200,000 can be purchased for less than TRL 150,000 in cash.

Mr Nabi Cücük chairman of Reha Medin Real Estate Agency said that "The real estate sector will pick up in September 2008 as usual even though it is in stagnation at present."

Oman Gas set to venture into upstream gas business

Khaleej Times reported that Oman Gas Company SAOC, which owns and operates Oman’s burgeoning gas transportation network, is diversifying its business portfolio to include a significant role in the upstream side of the natural gas business. The move is in line with its vision to eventually grow into an integrated gas company with interests in, among other areas, upstream gas development, and construction and operation hydrocarbon processing facilities.

Dr Mohammed bin Hamad al Rumhy Omani minister of oil & gas and also chairman of OGC said that "The coming 5 years are likely to witness a great change in OGC's business as it focuses on being commercially more enterprising rather than a mere gas transporter. OGC is turning now to be an integrated gas company which will be taking greater custodianship of the gas energy market in Oman. The company intends to go more upstream starting with its participation in the new gas concession areas."

Mr Yousuf bin Mohammed al Ojaili CEO of OGC said that the aim is to manage gas as a resource on a countrywide scale, implementing strategies to meet the demand in terms of volume as well as quality. He added that "OGC is preparing to enter into partnerships in upstream gas development, as well as in the engineering, construction and operation of hydrocarbon processing facilities. Last year was the start of the journey to take OGC into the next stage of business and responsibilities."

Mr Al Ojaili said that "I am glad to note that this has progressed very well with the full support from the Board and government, and OGC is now getting ready to participate in upstream gas developments and will be teaming up with other government companies in the Sultanate to realize there opportunities."

OGC’s planned foray into the upstream gas business comes against a backdrop of an accelerated expansion of the gas transportation and compression capacity of its network. Work is under way on a new compression station in Fahud on the 32 inch pipeline that supplies gas to Sohar. A similar compression station is also under development at Buraimi to facilitate the import of low pressure gas from Dolphin Energy from the United Arab Emirates to Sohar. Work on both compression projects will be completed in the third quarter of this year.

OGC has also launched work on a new 250km loop line from Saih Rawl to Mukhaizna, which will be integrated with the existing Saih Rawl Salalah pipeline. The project is expected to be completed in the third quarter of this year. New EPC contracts are also due to be awarded for additional compression capacity at Nimr aimed at augmenting supplies to Salalah, where a major methanol scheme is under development, while a new power and desalination plant is envisaged.

Iran calls for foreign investments in petrochemical projects

IRNA reported that Mr Gholam Hossein Nozari Iranian oil minister has invited foreign companies to make investments in the upstream and downstream projects of the country's petrochemical industry.

Mr Nozari made the call in his address to the opening ceremony of the eighth session of Iran's Petrochemical Forum. The two day conference is participated by senior experts of oil and petrochemical industries from 118 Iranian and over 76 foreign companies from 27 countries.

The participants would discuss present and future challenges facing Iran and world's energy sectors and their petrochemical industries, the role of refining in petrochemical industry, prospects of the industry as well as technologies related to petrochemical industry.

Mr Nozari said that foreign companies could make both independent and joint investments in Iran working with their Iranian counterparts by financial and technological partnership. He added that based on the country's 20 Year Vision Plan for Economic, Social and Cultural Development, Iran's petrochemical industry needs about USD 30 billion investment.

Iran’s talks with UAE’s Crescent Oil very positive

Mehr News Agency reported that the latest talks between United Arab Emirates’ Crescent Petroleum and National Iranian Gas Export Company were very positive and in line with securing national interests.

Mr Nosratollah Seyfi MD of National Iranian Gas Export Company said that "We should try harder to reach the scheduled exploration volume of Iran Qatar joint gas field as soon as possible."

Mr Seyfi noted that the Assaluyeh Siri pipeline project will be definitely carried out. He added that "In case of not reaching an agreement with UAE, the produced gas from Khaf gas deposit of Salman field will be allocated for domestic use."

He asserted that either way the 240 kilometers long pipeline was completely economical.

COMCO of China assess investment in Chabahar

Mehr News Agency quoted Mr Mohammad Taher Baqerizadeh MD of Chabahar free trade industrial zone as saying that an engineering delegation from China’s COMCO Machinery & Equipment Corporation paid a visit to the region and reviewed the possible investment opportunities in the zone, located in southeastern Iran.

Mr Baqerizadeh said that in their 6 day visit, the delegation studied the various industries such as fishery, packaging, warehouse and cold storage buildings and some construction projects. He added that the Chabahar Port is the region’s main port for investment due to its appropriate geographical situation.

Chabahar free trade industrial zone was established in 1992 along with the two other free trade zones Qeshm and Kish Island to use global expertise as a tool for the development of the region, accelerating the completion of infrastructures, creation of productive employment, and representation in the global markets.

It gains importance mainly from its geographical location as the shortest and the most secure route connecting central Asian independent states and Afghanistan to warm waters and its proximity to one of the largest oil, gas and mineral resources of the world and as the only ocean port of Iran.

Iran and Slovenia review joint trade commission setup

Mehr News Agency reported that officials of Iran and Slovenia chambers of commerce in a meet have announced the establishment of a joint trade and economic commission in both sides’ capital cities.

Mr Zedniko Pavcek chairman of the Chamber of Commerce & Industry of Slovenia and Mr Javad Mossadeqi secretary general of Iran’s Chamber of Commerce, Industries & Mines reached agreements on promotion of bilateral relations.

Mr Mossadeqi said that the establishment of the commission will prepare the ground for the sides’ private sectors to increase their activities. He also voiced Iran’s preparedness to cooperate with Slovenia in the field of energy as well as tourism. He added that some 70% of Slovenia’s export bound products are for eastern Asia.

The Chamber of Commerce & Industry of Slovenia represents the business community and provides support and advice to companies as well as a full range of professional services aimed at strengthening competitiveness of its members.

IKCO’s permanent expo opens in Sharjah

Mehr News Agency reported that Iran’s giant carmaker Iran Khodro Company is to inaugurate its permanent exhibition in Sharjah on May 20th 2008.

Mr Alireza Aminifar an IKCO’s sales representative said that the fair aims at showcasing Iran’s car industry potentials and capabilities in the UAE. He added that "By offering services complying with international standards, we are after attracting a considerable number of clients in the UAE car market."

Iran Khodro’s products are supplied to both domestic and foreign markets. The company introduced Iran's first national car, Samand, which has been designed based on the Peugeot 405 platform.

Tabreed signs AED 1 billion deal for Ijara syndication

Khaleej Times reported that Tabreed has formally sealed a landmark deal with HSBC Amanah, which lead managed and arranged a 12 year Ijara facility for AED 1 billion. The financing will be used to refinance existing facilities as well as support the on going expansion of cooling projects.

HSBC Amanah, acted as the initial mandated lead arranger and following general syndication was joined at the mandated lead arranger level by Abu Dhabi Commercial Bank, Dubai Islamic Bank, National Bank of Abu Dhabi PJSC, and Standard Chartered Bank. First Gulf Bank participated at the lead arranger level, while Abu Dhabi Investment Company, Badr Al Islami and BBK all acted arrangers, with United Arab Bank as a participant.

Mr Abdulla Matar Al Muhairi CFO of Tabreed said that "District cooling is a capital intensive business and requires huge fund inflows. It is one of the leading financial institutions with a global footing and a strong Islamic finance base. HSBC along with other esteemed partners on this Ijara syndication are the top international financial groups in the world with a proven track record. We believe our dedicated efforts combined with undeterred support from our key financers shall further facilitate our expansion plans. This mammoth Ijara syndication is significant as it also reflects the enormous confidence of the banks on us."

HSBC Amanah is the global Islamic banking division of the HSBC Group, and was established in 1998 and has become one of the leading providers of Islamic financial services worldwide. With more than 150 professionals serving the Middle East, Asia Pacific, Europe and the Americas, HSBC Amanah represents the largest Islamic banking team of any international bank.

UAE joins GCC power grid – Report

UAE news agency WAM reported that UAE has officially joined the GCC power grid in its current phase.

Mr Yousef Ahmed Janahi director of planning at Qatari Water & Electricity Corporation said that UAE has fulfilled its financial obligations as provided for in the relevant agreements. He added that the draft of the multilateral power grid agreement is ready and will be sent to the GCC secretariat.

The USD 1.6 billion project is being carried out in three phases, with the entire grid system connecting the 6 Gulf Arab states set to be completed by 2010. Phase one of the project will link the grids of Qatar, Saudi Arabia, Kuwait and Bahrain.

Danube to invest AED 50 million in a new facility in Ajman

Danube Building Materials has announced its plans to invest AED 50 million in the construction of a new facility in Ajman, which is set to commence its large scale operations in 3 months.

With aims of increasing its production volume to address the mounting building material requirements in the Gulf region, the new facility is expected to supply high quality construction materials to major profile projects in the emirate, including Emirates Commercial City, Ajman Eye City, Al Helio Downtown, Al Zorah Beach project, Marmouka City, Wafi City and Ajman International Airport, along with other projects in UAE.

As the demand for grade ‘A' building materials continues to drive up regional construction costs, which have risen by about 30% in the past 12 months, Danube has recognized the need to establish a new hub to add to its factories in China, Bahrain and the UAE.

The new plant will span 120,000 square feet in Ajman's Al Jarf area, where high quality wood, laminates, multi density fiber boards, steel, aluminum, glass, hardware and sanitary solutions, low to high end flooring, ceiling, doors and kitchen fixtures will be manufactured in bulk.

Mr Rizwan Sajan chairman of Danube Building Materials said that "Our expansion into Ajman, which closely follows the recent launch of our plant in China, is a testament to the rapid growth pace at which we are moving at to leverage the booming construction market in the region. The fact that Danube is the first company to establish a dedicated facility for top grade construction materials to service the many multi-billion Dirham projects planned for Ajman reflects our confidence in this emirate, and highlights our commitment to supporting the growth of the regional market."

Danube has identified Ajman as an ideal location for its new facility due to the massive infrastructural developments being undertaken in the emirate, in addition to its conveniently accessible location. As a result, total investment in Ajman real estate has crossed the AED 400 billion mark in 2007, with the launch of multimillion dirham waterfront ventures, high end commercial projects and budget residential houses strengthening its repute as the newest real estate destination in the UAE.

Danube is one of the largest building suppliers in the UAE and the region with an extensive portfolio of 10,000 selections ranging from MDF, plywood, timber, laminates, veneers to sanitary fittings, hardware, ironmongery, aluminum and glass among others. In 2004, it began its operations in Jebel Ali with a 19,000 square meter warehouse cum office, which serves as its regional hub and caters to booming markets in UAE, Oman, Bahrain and India.

Gulf States may soon need coal imports to keep the lights on

It is reported that Emirates were built on oil and provide fuel to the world but already they need other sources of energy. Now the oil rich Gulf States are planning to import coal. An acute shortage of natural gas has led to the city states of the United Arab Emirates seeking alternative fuels to keep the air cool, the lights on and the water running.

Abu Dhabi is working with Suez, on a nuclear power project but coal is emerging as the best quick fix to avert blackouts as the world’s biggest hydrocarbon exporters struggle to cope with high prices for oil and natural gas, infrastructure weakness and a development boom. Some of the world’s biggest oil exporters may soon find themselves reliant on imported fuel from a leading coal exporter, such as South Africa.

As a result, Abu Dhabi’s national energy company Taqa plans to take a half share in a proposed EUR 500 million coal fired power plant, while Dubai Electricity & Water Authority hopes to start work on a clean coal project this year.

Oman Power & Water Procurement Company indicated in December 2007 that a planned 700 MW power and water desalination plant may need to be fuelled by coal instead of natural gas.

The dramatic transformation is taking place because, for the first time, the Gulf States are beginning to feel the burden of the soaring cost of fossil fuels. In March 2008 Dubai introduced an electricity pricing system that increased tariffs for heavy users. The new tariffs apply only to foreign businesses, expatriates and foreign-owned businesses. Emirates are exempt.

The sudden gas shortage has caught the Gulf States by surprise at a time when demand for power and water desalination is increasing annually at double digit percentage rates. Investment in infrastructure has lagged behind the region’s population expansion and construction boom. Anecdotes abound of apartment complexes left empty because there is not enough capacity in the local electricity grid.

Last summer Abu Dhabi’s oil output fell by 600,000 barrels per day as natural gas was diverted from injection into oil wells to power stations to meet peak demand for electricity. The Emirate has substantial reserves of gas but much of this is earmarked for injection into wells to maintain pressure and to improve oil output. With the crude oil price reaching USD 125 per barrel, the diversion of gas into local power stations is a huge cost to the country.

Meanwhile, the price of natural gas in the Gulf has soared amid shortages and increased global demand. Local gas resources in the Emirates have dwindled, and Abu Dhabi and Dubai are already importing gas by pipeline from Qatar.

Iran, which holds some of the world’s biggest gas reserves, is another option, but relations between the Western friendly Emirates and Iran are uneasy. A project led by Dana Gas, a private sector company based in the Middle East, to bring Iranian fuel across the Gulf to Sharjah has been locked in pricing disputes.

In a desperate attempt to avert power and water shortages in the summer, Dubai entered into a 15 year contract with Royal Dutch Shell last month to supply liquefied natural gas in the summer period from 2010. However, this is an expensive fuel and the Emirates have built their economies on gas at almost nil cost.

Anshan Steel to acquire shares in Panzhihua Steel

It is reported that after two years of frequent visits between each other, Anshan Steel decides to acquire shares in Panzhihua Steel, reflecting that the largest acquisition in Chinese iron and steel industry will start.

People have confidence for the acquisition, Mr Hu Hao, the iron and steel industry analyst in Central China Securities, indicated that two companies will hold over 70% mineral resources in China after the merger and product structures in two companies are complementary.

Rizhao Steel donates CNY 110 million to the earthquake victims

It is reported that Rizhao Iron and Steel Group has donated CNY 110 million to Sichuan earthquake disaster area so far.

In order to support the disaster area, the company organized thousand of people donated blood and many people donated money campaign.

In addition to the CNY 110 million donated by the Group, Rizhao Iron and Steel Group’s staff also donated CNY 2.58 million.

Panzhihua Steel to merge with listed arm

It is reported that Panzhihua Iron & Steel Company one of the largest steelmakers in western China plans to merge all its assets into its listed unit PZH Steel 000629.SZ in a group listing deal worth CNY 7.19 billion.

PZH Steel said in an exchange filing that it will sell 749 million shares to its parent at CNY 9.59 apiece to acquire the assets.

Panzhihua's two other listed units, Chongqing Titanium 000515.SZ and Sichuan Changcheng Special Steel 000569.SZ will also be merged into PZH Steel through share swaps, and will then be delisted.

The deal which was approved by China's state asset regulator last month would more than double PZH Steel's total assets and creates a listed company with CNY 37.5 billion in annual sales and CNY 1.69 billion in net profit.

Masteel produces special steel plates for earthquake hit areas

It is reported that Masteel has finished producing 142 special steel plates of 8 specifications in less than 12 hours after it received the order, which were urgently demanded for rescuing the trapped people from Wenchuan, Sichuan province.

As per report leaders held the meeting on May 17th 2008 that National Development and Reform Commission required Masteel to produce 200 hydraulic hammers used for rescuing and rebuilding work. But it had only 100 in stock resulting in need for producing 100 immediately.

In addition, Masteel also transported hydraulic hammers to earthquake stricken areas with the weight of 3.5 tonnes to over 1 tonne. Magang sent 3 cars and 10 people to Chengdu on May17th 2008.

Lueyang Steel gradually resumes production

It is reported that the first furnace of molten iron of Lueyang Iron and Steel continue production after five day halt due to earthquake.

As per reports, Lueyang Iron and Steel lost CNY 3 million every day during the five days.

Sichuan Companies incur USD 9.6 billion losses on quake

Bloomberg reported that Companies in China's Sichuan province may have incurred CNY 67 billion of losses after the southwestern region was hit last week by the nation's strongest earthquake in 58 years.

The Ministry of Industry and Information said in Beijing that the 7.9 magnitude quake affected 14,207 industrial companies in the province. Bank of China Ltd has reported losses, and the quake damaged and forced aluminum and zinc smelters to shut.

The damages, while equal to less than 0.5% of China's 2007 gross domestic product, may contribute to inflation near a 12 year high by pushing up prices of materials needed for reconstruction. China began three days of national mourning today for the quake, which killed at least 34,000 people and devastated an area larger than South Korea.

Mr Ben Simpfendorfer a strategist at Royal Bank of Scotland Group Plc said in Hong Kong “The real upside risk for the overall economy is inflation as the reconstruction in Sichuan eats up building materials.''

Rising building demand in China and higher costs have already driven up commodities prices. The average domestic price of rebar steel, used in construction is up by 55% in the past year and global copper prices reached a record this year. China's inflation rose 8.5% in April from a year earlier.

The Chinese government didn't say how it arrived at the figure for the economic losses.

Guangdong forms special group for Zhanjiang steel project

It is reported that province Guangdong has founded a special working team for Zhanjiang Steel Project as soon as the project was approved by the Chinese government.

With efforts from province Guangdong, the city of Zhanjiang, Baosteel Group, Shaoshan Steel Group and Guangzhou Steel Group, Zhanjiang Steel Project is progressing and the project plans are being examined specially for environmental approvals.

To support the steel project, Guangdong Province and the city of Zhanjiang has started the construction of more than ten projects including Jianjiang water supply project, Donghai Island Port Highway and railway by line.

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 12mm to 30mm thick plate in 2.5 meter width at around USD 1270 per tonne FOB as base for all classifications. By comparison, Shagang, a Jiangsu based private steel mill, have shot up its offer to USD 1300 per tonne FOB up for its wide ship plate.

(Sourced from MySteel.net)

Import price of chrome ore at Tianjin port