SAIL signs limestone pact with RSMML

Steel Authority of India Limited has signed a MoU with country's largest supplier of low silica limestone Rajasthan State Mines and Minerals Limited RSMML for a long term supply of low silica limestone, a critical input for steel making. Mr CS Sharma ED Corporate Materials and Management Group of SAIL and Mr Alok Gupta MD of RSMML signed the MoU.

SAIL said that "RSMML has agreed to supply around 2.1 million tonnes of low silica limestone to SAIL during the current financial year. The volume would gradually increase to around 4.4 million tonnes by 2017-18 in tandem with the planned rise in SAIL's hot metal production capacity in coming years.”

SAIL said that this would ensure security of the input's supply for a period of 10 years starting 2008-09 and also enable RSMML to enhance its capacity in view of assured demand.

RINL commissions high tech strapping machine at section mill

Rashtriya Ispat Nigam Limited is said to have become the first company in the world to adopt the on line embossing of quality parameters on the strapping of its products in the light & medium merchant mill by commissioning the automatic strapping machine at Visakhapatnam Steel Plant.

The strapping machine also helps in easy identification of products quality wise at stockyards thereby avoiding mix up, pilferage and effective quality assurance with little or no re work. The strapping machine is supplied and installed by renowned ITW Signode, who is world leaders in strapping machines.

Mr PK Bishnoi CMD of RINL, while inaugurating the on line strapping machine, emphasized the need to acknowledge and respond to the requirements of the customer during the customer satisfaction year at RINL. He added that every year should be customer satisfaction year.

Mr Bishnoi assured the collective that RINL would adopt automation, but with a human face. He added that "Automation would not throw workers out of job and those displaced in the process of automation will be redeployed as contract workers in other areas of the existing plant and the new capacity coming up."

Mr Ranganath to take over as CMD of KIOCL

Mr K Ranganath director marketing of Coal India Ltd has been appointed Chairman cum Managing Director of Bangalore based of Kudremukh Iron Ore Limited.

Mr Ranganath became director marketing of CIL in October 2005.

KIOCL is a Schedule A Public Sector Unit under the Ministry of Steel.

Mukand 2007-08 net profit dips by 43.99% YoY

Mukand has disclosed a substantial drop in standalone net profit for the year ended March 31st 2008 due to substantial fall in operating margin coupled with marginal sales growth. The profit declined by 43.99% YoY to INR 522.42 million from INR 932.69 million.

Net sales for the 2007-08 climbed by 6.43% YoY to INR 19,267.88 million, while total income during the year rose by 6.33% YoY to INR 19,482.42 million.

Annual results standalone

INR in million

Shree Precoated renamed as Ajmera Realty & Infra India Limited

Ajmera Group has announced the re branding of Shree Precoated Steels Limited, the listed entity of the group and other group companies as Ajmera Realty & Infra India Limited, which would have two focused divisions looking into steel and real estate.

Mr OP Gandhi CFO of Ajmera Realty & Infra India Limited said that "Ajmera over the years has evolved itself into a brand to reckon with. The new entity, Ajmera Reality & Infra India Limited will continue the group legacy by extending the Ajmera name to the diverse interests that group has in field of real estate and steel."

It has procured the necessary approvals from the government. The name change will take effect in different statutory authorities in due course of time. BSE has recently promoted the scrip to Group 'A' category looking at its volume and shareholders interest.

Ajmera Realty & Infra India Limited, formerly known as Shree Precoated Steel Limited is one of the market leaders in both steel and real estates sectors. It is leading manufacturer of cold rolled steels. It also has a global technological collaboration with ThyssenKrupp steel. It has been in the business of real estate development for more than 4 decades and has pioneered many new projects in Mumbai.

Mukand sees 2008-09 revenue increasing by 50% YoY

Mr Niraj Bajaj CMD of Mukand Limited said that it expects revenue to rise 50% in 2008-09 fiscal as investment in new capacity begins to pay off. He added that the company, which invested INR 3 billion in 2007, expects steel making capacity to rise 80% by October 2008 to 0.5 million tonnes.

Mr Bajaj said that "The focus is really to increase capacities between our specialty steel and industrial machinery division." He added that it is able to pass on higher input cost to customers that will help revenue cross INR 30 billion in 2008-09 fiscal.

Mukand has an order backlog of INR 5.8 billion to manufacture heavy duty cranes and process plant equipment. It posted a 45% YoY drop in its consolidated net profit for the financial year 2008-09 on rising input costs of coking coal, iron ore and fuel oil.

Mr Bajaj said that "Because of absolutely unprecedented rise in the cost of major steel making inputs, we saw a dip in profits. The increase has been so stupendous that at one shot we were not able to pass it on to the customers."

Vedanta starts land acquisition for steel project in Orissa

It is reported that Vedanta has started land acquisition for its first ever steel venture at Keonjhar in Orissa.

Vedanta has already floated an outfit called Sterlite Iron & Steel Company for undertaking the INR 12,500 crore project in Orissa and has identified 3,000 acres for the proposed 5.1 million tonne venture.

Official sources said that "This project will be like a forward integration for the group in Orissa as Sesa Goa has iron ore mines in the state which could be utilized for the project. The preliminary planning is on for an integrated environment management program and production requirements."

BEML to supply aluminum wagons to NALCO

It is reported that Bharat Earth Movers Limited has entered into a MoU with National Aluminum Company to collaborate for the production of aluminum wagons for movement of bauxite ore for NALCO.

The wagons will be manufactured by BEML, while the aluminum will be supplied by NALCO for the movement of bauxite from NALCO mines to its plants.

Telecom tower companies facing steel cost pressures

It is reported that rising cost of steel is now beginning to pinch telecom tower companies as well. According to industry estimates, the average cost of a single tower has increased by INR 11,000 to around INR 61,000 now as compared with INR 50,000 in October 2007 due to rising input costs.

This is forcing tower companies to increase their rental prices, which in turn is driving up the operational cost of telecom service providers. Structural steel angles and plates contribute to around 60% of the cellular tower cost.

According to industry experts, average basic cost of angles has increased from INR 28,000 per tonne in October 2007 to INR 43,000 in March 2008. Similar price trend is seen on the plates also. Prices of galvanized hardware have also increased from INR 55,000 per tonne to INR 75,000 per tonne. The impact of this is around INR 1,000 per tower.

Mobile subscriber base is expected to touch 500 million by 2010 for which at least 300,000 more towers are required. Rising steel price may increase the capital expenditure required by INR 330 crore on towers alone. There are a number of companies offering tower infrastructure in India.

While GTL, American Tower Company and Quippo are the major stand alone tower firms, mobile operators including Bharti Airtel, Idea Cellular, TATA Teleservices and Reliance Communications have formed their own tower infrastructure companies in a bid to unlock its value.

TATA Steel refuses land for memorial

Ranchi Express reported that TATA Steel has refused permission for erecting slain Jamshedpur MP Mr Sunil Mahto’s memorial on its land at Ganesh Puja ground in Kadma in Jmshedpur.

Sources said that TATA Steel in a communiqué to the district administration objected to the installation of Mr Mahato’s statue on the disputed plot in Kadam. It added that "This piece of land is being used for public purpose for ages now and can not be allotted to any organization or individual for constructing a statue."

Mr RK Agrawal DC of East Singhbhum said that "We have got TATA Steel’s reply and would soon forward it to the government. They have refused to issue a no objection certificate for the site in question describing it as a public place used in public interest. Moreover, the high court has also ordered status quo on the site."

Uranium shortage hits revenues of Nuclear Power Corporation

It is reported that shortage of uranium and a shut down at four plants dragged down revenues and profit of Nuclear Power Corporation of India Limited for the fiscal ended March 2008. Its net profit dipped by 31% YoY INR 1,078 crore from INR 1,570 crore and income from operations declined by 7% YoY to INR 3,333 crore from INR 3,592 crore.

Mr S Thakur executive director of corporate planning at NPCIL said that due to insufficient uranium supply, power production for the year fell to about 16,960 million units in 2007-08 from 18,000 million units the previous year.

Mr Thakur said that the lack of uranium supply was compounded by the shut down of Narora I, Kaiga III, Rajasthan II and Madras I plants. These 220 MW plants are under going technical up gradation. He added that the average plant load factor has decreased to 60% from 90% achieved last year. The 220 MW plants are now running at 150 to 160 MW so as to optimally use uranium.

He said that some of the uranium mining projects have been hampered due to delay in getting environmental clearances and also on account of the difficult terrain in which the mines are located. A new uranium mill, which was to go online, has also been delayed.

Mr Thakur said the earnings of the corporation have also been affected due to tariff reduction. Per unit tariff which was INR 2.70 in 2006-07, has reduced to INR 2.28 per unit in 2007-08 and the benefits passed to the customers. He added that "As the tariffs are decided for 5 years there is no provision to increase it. It has been affected by employee attrition too."

Coal prices may push up cement cost further – Report

BL reported that cement manufacturers are in a fix due to skyrocketing coal prices, which is pushing up the cost of the commodity even as the government is determined to bring down cement prices. According to industry sources, the industry is facing shortage of domestic coal supplies, coupled with a sharp rise in the import price of coal.

Mr Ramesh Chandro MD of Ckoramaandel Cements said that "The permits of Coal India Limited have been lowered in April 2008 due to shortage of coal. A cement company will now get only 64% of the coal originally allocated to it. This is the second cut in the permit of coal after a 20% cut some time ago." He added that the e auction of coal is also adding to the irregularities in coal prices increasing the production costs.

Current cement prices in different regions

Price in INR per bag

According to Mr Srikant Reddy general secretary of All India Mini Cement Manufacturers Association, coal prices were revised upwards three times last year by major suppliers. He said that "Coal India Limited alone had increased prices three times while cutting the permit by over 25%. Another round of hike is in the offing. All this is likely to push up cement prices further."

Coal prices

In INR per tonne

Meanwhile, to tide over the supply shortage, cement manufacturers are opting for imported coal to a considerable extent. This may push up the cost of production as the price of imported coal has increased significantly over last 6 months.

An official of the Cement Manufacturers Association said that coal contributed to 65% to 70% of the cost of cement and its prices increased more than 100% in the last one year. He added that there was about 5% hike in the cement prices across India in the same period.

Bharat Forge Q4 2008 net up by 29% YoY

Bharat Forge has announced a standalone net profit of INR 82.85 crore for January to March 2008 quarter up by 28.89% YoY. It has also recorded a net profit of INR 64.28 crore in the quarter. Total income rose to INR 576.50 crore from INR 537.87 crore.

For the year ended March 31st 2008, Bharat Forge announced a consolidated net profit of INR 301.52 crore up by 3.76% YoY. It had a net profit of INR 290.59 crore in 2007-08 fiscal. The consolidated total income rose to INR 4,751.57 crore from INR 4,275.21 crore.

For the year ended March 31st 2008, Bharat Forge announced a standalone net profit of INR 273.59 crore up by 13.55% YoY. The standalone total income rose to INR 2,284.90 crore from INR 1,945.3 crore.

Bharat Forge board has also approved the appointment of Mr Sunil Chaturvedi as additional director and also executive director of the company with immediate effect. Further, the board has reviewed its earlier decision of warrants issue to promoter group and has instead decided to issue non convertible debentures with detachable warrants, convertible into equity shares, to the shareholders.

Suzlon Q4 2008 net profit up by 10.2% YoY

Suzlon Energy has announced a net profit of INR 482.55 crore for January to March 2008 quarter up by 10.21% YoY as against INR 437.82 crore in January to March 2007 quarter. Total income was recorded at INR 2,786.83 crore for the quarter up by 32.8% YoY as against INR 2,097.55 crore for quarter ended March 31st 2007.

Suzlon Energy through its Netherlands based subsidiary AE Rotor Holding BV had purchased 100% of the share capital of Eve Holding NV of Belgium for a consideration of INR 2,502.64 crore. The financial figures for the year ended March 31st 2007 include the financial figures of Eve Holding.

By virtue of the acquisition of Eve Holding by AE Rotor, Suzlon Energy has 100% ownership of Belgium based Hansen Transmissions International NV, along with its subsidiaries.

For the year ended March 31st 2008, Suzlon reported a net profit of INR 1,265.71 crore up by 19.2% YoY as against INR 1,061.14 crore in the year ended March 31st 2007. Total income stood at INR 7,051.62 crore for the year ended March 31st 2008 up by 28.9% YoY as against INR 5,468.47 crore.

Port workers seeking DLB merger with Vizag Port Trust

BL reported that National Port Trust Employees’ Union has sought immediate steps for the merger of the Dock Labor Board with the Visakhapatnam port trust, as the issue has been pending for years, even though the union government has taken a decision to do so.

Mr PS Naidu general secretary of National Port Trust Employees’ Union said that "Some stevedores and labor unions with vested interests were blocking the move, but the government should take quick steps to implement it. The issue of wage revision, pending since January 2007, should also be taken up for the labor of all the 12 major ports in India."

The union leaders said that interim relief of 13.5% had been recommended in the last wage revision committee meeting in Mumbai but even that had not been implemented. They also sought filling up of all vacant posts in the port and the dock labor board.

Suzlon Energy order book reaches INR 18,308 crores

Suzlon Energy Limited recently informed BSE that it has an order book position of INR 18,308.59 crore comprising of INR 886.49 crore of domestic orders and INR 17,422.10 crore of export orders as on May 19th 2008.

Chennai Port 2007-08 fiscal net profit up by 54% YoY

BL reported that, riding on high cargo volume and handling bigger ships, Chennai Port Trust has set a record net profit of INR 302 crore during 2007-08 fiscal up by 54% YoY as against INR 197 crore in 2006-07 fiscal. Revenues increased by 32% YoY to INR 890 crore as against INR 674 crore.

Mr K Suresh chairman of Chennai Port Trust said that "The year 2007-08 was the best financial performances for the port trust in the last 10 years. The operating ratio at 64% was the lowest in the last 10 years." He added that this was due to tight budget spending.

Cargo in million tonnes
Others in INR crore

Mr PC Parida financial advisor & chief accounts officer of Chennai Port Trust said that except for the stores department, all the other departments spent less than the budget. He added that "We saved nearly INR 36 crore by way of curtailing expenditure."

Mr Parida said that revenue from cargo handling and storage increased by 40% YoY to INR 286 crore as against INR 246 crore. This is due to 7% increase in traffic throughout during 2007-08 to 57.15 million tonnes. Significantly, during 2007-08, the port handled lesser number of ships, but got higher revenues due to handling bigger ships by way of port and dock charges. In other words, the gross registered tonnes at the port increased to 43.5 million tonnes as compared with 39.9 million tonnes a year ago.

Uranium mining in Meghalaya awaiting approval

BL reported that, with the fuel situation at India’s nuclear power stations worsening, Indian government has offered to look into the feasibility of setting up a nuclear station in Meghalaya, in lieu of getting to mine uranium in the state. According to estimates, mining of uranium in Meghalaya could contribute over 15% of the India’s uranium need in the future.

Government officials said that with Uranium Corporation of India Limited still awaiting the state government’s go ahead to mine uranium in Meghalaya, even though the centre has already given environmental clearance for the project, the union government has decided to try and break the logjam by offering to look into the possibility of setting up of a nuclear reactor in West Khasi Hills district.

Despite the discovery of high quality deposits in the state’s West Khasi Hills region, UCIL has been unable to go ahead with mining due to opposition from some groups, who cited possible health hazards and displacement of people. The mining proposal has often been criticized by various tribal organizations, NGOs and the Khasi Students Union.

The total capacity of the 17 nuclear reactors in India is 4,120 MW electrical at present. Existing nuclear stations recorded a plant load factor of 46.4% in March 2008, mainly as fuel shortages affected generation.

Nuclear energy contributes less than 3% of India’s installed generation capacity currently. India is not well endowed with uranium ore and the short supply of the fuel is becoming the stumbling block for the rapid expansion of nuclear power in the country.

SCI plans to double fleet of offshore supply vessels

BL reported that Shipping Corporation of India is finalizing its acquisition plan for various types of offshore supply vessels such as anchor handlers, platform supply vessels and multi purpose supply vessels.

A spokesman for SCI said that "We will firm up our plan and place it before our board for approval shortly." He added that right now, SCI has 10 such vessels of its own and the plan is to double the fleet size within the next few years. The total cost of the proposed acquisition would depend on the types of vessels to be acquired, ranging from USD 20 million for 80 tonne capacity to USD 100 million for medium systems vehicles each.

The spokesman said that government approval would be needed only if the total cost of acquisition exceeded INR 500 crore. In 2007, the shipping line placed orders for four 80 tonne anchor handlers costing about USD 80 million with Bharti Shipyard, the deliveries being due in 2010-11.

In addition to its own OSVs, SCI also operates 21 other such vessels, including five medium systems vehicles belonging to the Oil & Natural Gas Corporation.

Volkswagen invites 10 German suppliers for Pune unit

It is reported that Volkswagen is inviting as many as 10 of its German suppliers to build their manufacturing units around its proposed site at Chakan in Pune.

Volkswagen is in the final process of selecting these component manufacturing companies, which will supply auto components to the plant. The facilities of all such companies will be situated in Volkswagen's land spread over 240 hectare.

Of the total area of 240 hectare, only about 140 hectares is currently being utilized by Volkswagen alone. It intends to allot plots within its complex to facilitate shops for the component suppliers.

BSEL Infra to invest INR 18,000 crore in Malaysian project

Projects Today reported that Mumbai based BSEL Infrastructure Realty has signed a MoU with Malaysia's Iskandar Regional Development Authority to develop properties in Johar Bharu region of Malaysia.

The new company will be either made a subsidiary of BSEL Infrastructure Realty or its UAE subsidiary BSEL Infrastructure Realty FZE. BSEL invest INR 18,000 crore within a period of 12 years and will use the proceeds from UAE projects to finance these projects.

BSEL will develop 70 million square feet of space in 3 phases with 10 million square feet in the first phase and double in every subsequent phase. It will invest INR 2,500 crore in the first phase and INR 5,000 crore in the next phase.

Cement supply in Mumbai doubles after export ban

BS reported that cement prices in Mumbai may fall after supply of the building material more than doubled following a government ban on exports of the product in April 2008. Sources in Cement Stockiest & Dealers' Association of Bombay said that "Prices may fall by as much as INR 15 for a 50 kilogram bag. Ban on cement exports has increased the supply to Mumbai. We expect a cut in cement prices in the next 15 days."

A Western Railway spokesperson said that "Earlier, we used to get a single rake containing 2,000 tonnes of cement in two to three days. Now, we get is 2 to 3 rakes on a daily basis at our Jogeshwari yard."

In Mumbai, the railway yards for cement are at Jogeshwari, Mulund and Bori Bunder, which is, at present, all flooded with cement bags. Since Gujarat was at the forefront of cement exports, accounting for more than 90% of the entire overseas sales, the ban has meant additional cement being diverted to Rajasthan and Maharashtra.

Mr HM Bangur president of Cement Manufacturers' Association and also MD of Shree Cement said that "Gujarat cannot absorb any more cement, whereas Rajasthan is also a cement surplus state. This has caused an oversupply to Mumbai which could sharply erode the profitability of Gujarat-based cement manufacturers."

Currently, the cement prices in Mumbai are ruling at INR 255 a bag in the wholesale market, whereas on the retail front, they have reached up INR 270 to INR 275 a bag. ACC, UltraTech, Ambuja, Binani, JK Lakshmi, Vasvadatta and Jaishree Cement are the different cement brands sold in Mumbai.

Cement prices in Mumbai have always been in the focus as prices are the highest here among the other metros in the country. The city alone consumes 0.65 million tonnes of cement a month, which is more than the monthly consumption of states like Uttarakhand, Punjab, Himachal Pradesh, Delhi, Bihar, Jharkhand, Orissa and Chhattisgarh.

India exported 3.65 million tonnes of cement and 2.37 million tonnes of clinker in financial year 2008.

Areva to invest INR 700 crore for three manufacturing units

BS reported that Areva T&D India is all set to invest INR 700 crore for three manufacturing facilities and a research and development centre till December 2008. It aims to double its turnover to about INR 4,000 crore in 3 to 4 years.

Areva India is setting up 3 equipment manufacturing plants in Baroda, Padappai and Hosur. The Baroda facility will manufacture 765 kv equipment, including distribution transformers and medium voltage switches. This capacity will be enhanced to produce to 1,200 kv equipment by 2010.

Mr Rathin Basu president & MD of Areva India said that "We have finalized plans to set up 3 manufacturing units with an investment of INR 700 crore by December 2008. The site for the Baroda plant was finalized in January 2008 and the factory will be ready by December 2008 for an investment of about INR 500 crore."

The Hosur facility, which require about INR 100 crore as investment, will be an expanded factory of 1200 kv capacity circuit breakers and instrument transformers. A research and development centre for electrical equipment is also coming up at the site. The Chennai facility will manufacture high voltage switchgears.

Areva India runs 8 electrical equipment manufacturing units at present and manages around 70% of India's transmission and distribution load. Its order book is currently stands more than INR 3,000 crore in deal value.

Lanco to form holding company for power business

Lanco Infratech has announced that it is in the process of forming a holding company to bring all its power projects under one roof.

Mr Venkatesh Babu MD of Lanco Infratech said that "We have appointed PricewaterhouseCoopers to restructure the power business. A report from them is expected in a month." He added that the move would reap financial and operational benefits for Lanco.

Mr Babu said that Lanco Infratech has a portfolio of around 600 MW and this will double in the current year. It has an ambitious target of generating 13,000 MW power by 2013. He added that "We have already received financial closure for 6,000 MW."

Asked whether the holding company would be listed on the bourses, Mr Babu said that could wait since the company has enough funds for projects in the next one and a half years. He said that "We may look at listing the company thereafter. But that will not happen before the first or second quarter of the next financial year."

Lanco had won the Sasan ultra mega power project along with its partner Globeleq. But that was subsequently disqualified as Power Finance Corporation found some anomalies in the submission made by Globeleq.

Lanco has partnered with Genting of Malaysia and submitted the request for qualification for the Tilaiya UMPP coming up in Jharkhand. Lanco is in talks with a couple of overseas private equity players to raise USD 200 million for its realty business.

India may increase retirement age of HEC employees

The Telegraph reported that India government is drawing up a fresh package for Heavy Engineering Corporation Limited to pave the way for increasing the retirement age of employees from 58 year to 60 year and ensure flow of working capital to help execute its burgeoning work orders.

Sources said that Heavy Engineering Corporation has been circulated to a group of secretaries in the finance and labor departments for comments. Once received, it would be incorporated into the main proposal to the union finance minister for his final concurrence before it is placed before the cabinet.

The development comes at a time when the centre has permitted raising the retirement age of Heavy Engineering Corporation directors from 62 year to 65 year, so that capable and even retired PSU executives can be on the board.

Insiders revealed that the package being drafted included a proposal to waive all interest payments on an INR 102 crore bridge loan granted by the centre in 2007 and hike the existing cash credit limit with State Bank of India from INR 150 crore to INR 253 crore.

With HEC’s overall work order valued at over INR 6,000 crore, between March and April 2008 it had bagged orders worth INR 2,508 crore from various SAIL plants. On February 1st 2008, HEC bagged a work order from Bhilai Steel worth over INR 200 crore for augmentation of an ore handling plant and on February 29th 2008, another order for coal handling plant worth INR 500 crore.

FICCI warns of slowdown of investments in steel sector

Federation of Indian Chamber of Commerce & Industry said that the export tax on steel could shrink profit margins and force steelmakers to defer expansion plans worth a trillion rupees.

FICCI said that "The export duty and voluntary price reduction by steel industry would significantly impact the margins of steel sector that could affect their future investment plans."

FICCI said that finished steel output grew by 5.1% YoY in April 2007 to March 2008 period, slowing from previous year's growth of 13.1% and profit margins at 105 iron and steel firms have dipped as a tight interest rate regime raised borrowing costs.

It added that investment projects announced recently by companies like Sterlite Industries, TATA Steel, JSW Steel and Mittal Steel could take backseat.

Indian steelmakers with overseas subsidiaries hit hard by export tax

Reuters reported that recently imposed export tax on carbon steel products has hit hard companies like JSW Steel and Usha Martin, who acquired subsidiaries abroad as part of a de integration strategy for manufacturing primary steel near raw material sources and sending it to finishing mills closer to the markets.

JSW Steel, which acquired 3 finishing mills for USD 900 million in the US as part of an intra family transfer in August 2007, has been exporting 40,000 tonnes of slabs per month to its plate mills in US Jindal United Steel Corporation, Saw Pipes USA and Jindal Enterprises.

Mr Seshagiri Rao finance director of JSW Steel said that these exports would now attract a duty of 15%. JSW Steel is working out the figures and will see whether it makes more commercial sense to procure the slabs locally in the US or to absorb the duty. Mr Rao said that "We may have to reconsider the slabs from the US market the request is not accepted.”

Mr Rao further explained that even if the company did not export the slabs to its international subsidiaries, the domestic market does not have enough rolling capacity to finish the products. JSW has a domestic rolling capacity of 2.5 million tonne against a total crude steel production of 3.6 million tonne.

Usha Martin exports 30,000 tonnes of wire rods and wire ropes per year to subsidiaries in Bangkok, Dubai, UK and the US. These exports account for 8% of annual production and will now be subject to a 10% duty.

Mr P Bhattacharya joint MD of Usha Martin said that it has made a request to the government. Usha Martin has a subsidiary in Thailand, Usha Siam Steel Industries Public Company, which manufactures 30,000 tonne of wire and wire ropes. It acquired Brunton Shaw in UK, which produces 12,000 tonnes of high end steel wire ropes.

He added that “Usha Martin has built a stock at Usha Siam for 3 months that could meet a part of the demand if the duty is not scrapped. Remaining supplies could be imported from Indonesia, China and Japan. For the UK and Dubai subsidiaries, Usha Siam could supply the special wires required.”

Ispat Profiles extends its financial year by 6 months

Ispat Profiles India has extended the closure of the current financial year by 6 months from June 30th 2008 to December 31st 2008. Thus the accounts for the current financial period will be for 18 months from July 1st 2007 to December 31st 2008.

Further, Ispat Profiles India has obtained the required approval from Registrar of Companies West Bengal for the extension of the closure of the current financial year as well as for extension in time for holding the next AGM of the members of the company upto June 2009.

Ispat Profiles India is into the manufacturing of steel products and deals H beams, high value added carbon and alloy steel segments and also makes structural steel. Its products have been approved by major customers and automobile manufacturers. It exports its products to UAE, Malaysia, Indonesia and Singapore.

Hyundai India to hike car prices by up to 2% from June

It is reported that Hyundai Motor Company's India unit will increase the prices of cars by up to 2% from the first week of June 2008 due to a rise in input costs.

Meanwhile, Maruti Suzuki India Limited had raised prices of most models by up to INR 15,119. Mahindra & Mahindra raised prices by up to 2.5%, citing input costs on May 10th 2008.

Mr Vijay Bhatnagar appointed as CEO of ArcelorMittal India

ArcelorMittal recently announced that it has appointed Mr Vijay Bhatnagar as the country CEO for India and will have the ultimate responsibility for all of the company’s operations and projects in India.

As per the release, Dr Sanak Mishra will remain CEO for ArcelorMittal’s Greenfield Steel projects in Jharkhand and Orissa and will report to Mr Vijay Bhatnagar.

Mr MP Singh VP for the mining initiatives globally, will continue to lead its mining projects in India as the CEO of Mining Projects (India).

The senior leadership team for India will operate under close supervision of Mr Pierre Gugliermina, Mr Christophe Cornier, Mr Sudhir Maheshwari and the rest of the general management board of ArcelorMittal.

Shyam DRI expansion public hearing in Orissa

SNS reported that public hearing for expansion of Shyam DRI took place on May 21st 2008 and as many as 53 out of 59 spoke in favor of the proposed expansion to increase steel production and thereby boosting local employment.

Nearly 800 people including activists of the reputed NGOs of the locality participated in the public hearing where ADM of Sambalpur Mr NC Satpathy presided. Regional officer of the state pollution control board Mr SK Sahu and senior scientists were present.

Mr Satpathy said that "Establishment of an industrial training institute, development of local roads, water supply to adjacent villages was also subjects of discussion."

Participants present mainly demanded local employment and pollution control to which the management agreed. It also further agreed to upgrade Rengali hospital with modern equipment and take care of the Oriya schools by appointing skilled teachers.

Meanwhile, the management assured that "As many as 3,060 direct employments and 5,000 indirect employments will be created after the expansion. Hence, employment to the right persons will not be a problem."

Indian government not to raise coal prices in 2008

In a move that could bring some respite to commodity players like cement, steel and the power sector, union coal ministry has decided not to raise prices of coal in 2008.

Mr Santosh Bagrodia union minister of state for coal said that "The government wants to maintain the price. There will not be any increase in prices of coal this year."

Mr Ranganath director marketing of Coal India Limited said that "We will put more and more coal in the market so that the supply is consistent with demand and eventually maintain the prices. We want to hold the prices as we have sufficient volumes to take care of our bottom line."

Mr Ranganath said that CIL would assess the market conditions and if supplies are absorbed, would further add to the volumes on e auction. He added that it is looking to e auction 40 million tonnes of coal in 2008-09.

Besides, the government has increased the amount of coal on e auction 5 times to 15 million tonnes per month from May 2008, from 3 million tonnes of thermal and non coking coal till April 2008.

Power plants fail to maintain inventory – Mr Bagrodia

Mr Santosh Bagrodia union coal minister recently said that there is enough coal supply but everybody wants us to hold the inventory. He added that, while power units are crying hoarse over coal shortage, there is actually a problem of plenty.

Mr Bagrodia said that "Saddled with an inventory of 47 million tonnes, the public sector coal companies are planning special efforts to liquidate 25% of their holdings, besides sharply scaling up the monthly quantity sold under e auction from 3 million tonnes on an average to 15 million tonnes in May 2008."

Mr Bagrodia said that any claim of shortage was because of their failure to maintain the mandatory 21 day inventory. He added that about 27 power units were in critical condition as their stock position was less than 7 days.

He added that "The power ministry is claiming there is a 40 million tonne shortage, but we have 40 million tonnes stock, where is the shortage? There is enough supply, but everybody wants us to hold the inventory."

Referring to the power ministry claim on coal shortage delaying projects, Mr Bagrodia said that there was only 23,000 MW capacity addition last fiscal as against the targeted 100,000 MW.

Referring to imports, he said that 50% was coking coal and the rest was to meet emergency needs brought upon by the units themselves, besides the import of special quality coal.

PFC to invite proposals for Tilaiya UMPP soon

Mr Anil Razdan secretary at union ministry of power said that Power Finance Corporation will soon call for proposals for the 4,000 MW Tilaiya ultra mega power project in Orissa.

Mr Razdan said that the project will start before the end of 2008. He added that the ministry is also looking into the proposal from Orissa government for 3 new sites for setting up UMPPs.

A site near Tilaiya village in Hazaribagh district of Jharkhand has been identified by the Central Electricity Authority in consultation with the government of Jharkhand, for development of a pit head coal fired power project of 4,000 MW with the scope of expansion in future.

Mr Razdan said that if all the planned power plants go on line, then by end of 11th Plan, India would require 40 million tonnes of imported coal. He added that "We are in active dialogue with concerned ministries for faster handling of coal at the ports."

Mr Razdan said that coastal UMPPs do not require large area of land for handling coal because ash content of imported coal is less. There is a possibility of reducing land requirement. He added that "We need to keep in mind that the land requirement for UMPPs is huge and India is a densely populated country."

CIL invites global bid for underground mining technology

It is reported that Coal India Limited is all set to implement a state of the art technology with the thrust to improve productivity of underground coal mining.

Mr KS Kropha joint secretary at union ministry of coal said "We have floated global tenders and are inviting bids from global players to select the best state of art technology. The investment will be funded through internal accruals."

CIL in its invitation for tenders has invited expression of interest for assessment of current status of technology covering the entire gamut of mining and related activities and benchmark them against the best world standards under similar geo mining set ups. It also seeks to prepare a road map for implementation of the relevant technology on mine to mine basis.

During the previous fiscal, coal production from underground mines was only about 12% of the total production. Hence keeping in mind the futuristic needs, the current thinking is to put higher thrust on in underground mining.

Thermax Q4 2008 net profit up by 15.49% YoY

Thermax has disclosed a steady growth in standalone net profit for the January to March 2008 quarter. The profit rose by 15.49% YoY to INR 805.30 million in the quarter from INR 697.30 million in the January to March 2007 quarter. Net sales for the quarter rose by 12.7% YoY to INR 9,221.10 million, while total income for the quarter rose by 12.3% YoY to INR 9,346.60 million.

Quarterly results standalone
Mar 2008 Mar 2007 Change
Net Sales 9221.1 8182.2 12.7%
Net Profit 805.3 697.3 15.4%
Basic EPS 6.76 5.85 15.5%
INR in million

Thermax has disclosed a substantial rise in standalone net profit for the year ended March 2008. During the year, the profit rose by 49.51% YoY to INR 2,807.80 million from INR 1,878.00 million in 2007-07 fiscal. Net sales for the year surged by 47.45% YoY to INR 32,041.70 million, while total income jumped by 46.87% YoY to INR 32,459.40 million.

Annual results standalone
Mar 2008 Mar 2007 Change
Net Sales 32041.7 21730.3 47.4%
Net Profit 2807.8 1878 49.5%
Basic EPS 23.56 15.76 49.4%
INR in million

Essar may raise its bid for Esmark – Report

BS reported that Essar Steel Holdings may raise its bid for US based Esmark after OAO Severstal matched Essar Steel’s USD 17 a share offer, which valued the company at USD 668 million. The report said that Essar Steel will submit its revised bid after negotiating with the United Steel Workers.

The winning bidder will also have to take on a debt of USD 400 million, taking the total exposure to USD 1.1 billion.

The purchase of Esmark will help Essar to integrate its operations in the US with the recently acquired companies, including Canada based Algoma Steel and US based Minnesota Steel. Essar needs a steady supply of steel for its plate making and galvanizing operations at the Wheeling Pitt plant and Sparrows Point, which it recently bought from ArcelorMittal.

Mr Verma appointed as new ED of SAIL RSP

PTI reported that Mr SS Verma has assumed charge as the executive director project of Steel Authority of India’s Rourkela Steel Plant. Mr Verma, who was GM (electrical) of Bhilai Steel Plant, took over charge on May 20th 2008.

A gold medalist in electrical engineering, Mr Verma had joined as a graduate engineer in 1975 in BSP. He made a significant contribution in setting new bench marks in production and productivity in rails and structural mill and encouraging innovations in technology, maintenance and operation practices in central electrical organization.

Hyderabad to invest INR 6,000 crore in expressway project

BS quoted Mr KS Jawahar Reddy VC of Hyderabad Urban Development Authority as saying that it is investing about INR 6,000 crore for an 8 lane access controlled expressway.

Part of the Outer Ring Road project, it would be taken up in 3 phases. In the first phase, a 24 kilometer long road would be laid from Gachibowli to Shamshabad, which is scheduled to be completed by February 2009. In the second phase, a road from Shamshabad to Pedda Amberpet in one stretch and from Narsingi to Patencheru in another would be laid at an estimated cost of over INR 2,440 crore. Five agencies are working on this project on a build, operate and transfer basis. This is likely to be ready by 2010. The third phase would see laying of a 70 kilometer long road connecting Patencheru and Pedda Amberpet.

Mr Reddy said that 33 radial roads would also be laid at a cost of INR 3,000 to 4,000 crore for better connectivity to the city. He added that Andhra government would take financial assistance from the Japan Bank for International Cooperation and would soon call for tenders for the project.

He said that HUDA has also identified land for setting up the digital entertainment city and will soon form a special purpose vehicle for the purpose. It is also planning a health city with participation from global players. He added that "We are trying to liberalize the norms for permission.''

NPCIL and L&T likely to form a JV

PTI reported that Nuclear Power Corporation of India Limited and L&T are likely to form a JV company to manufacture forging materials at an investment of INR 1,500 to INR 2,000 crore.

Mr Sudhinder Thakur executive director corporate planning of NPCIL said that the two companies have taken a decision to form the JV but are yet to finalize other details. He added that "A decision has been taken by both parties to form a JV, but nothing has been finalized yet."

However, an L&T official said that that any opportunity in the power sector for equipment supply is interesting to L&T. He added that "We do not want to deny or confirm this particular development."

East Coast Railway coal handling dips

It is reported that Orissa government’s restriction on day time work and movement due to excessive heat in the state has hit East Coast Railway’s coal loading as the average daily loading having dropped to around 10,000 wagons from the targeted 10,500. Also the stocks of Talcher coal at the railheads dropped to 60,000 tonnes a few days ago.

This prompted the union coal secretary to ask the East Coast Railway to restrict loading only for power houses, shutting out other consumers.

The loading of imported coal at Paradip too has been hit because of the non availability of coal. For the past 10 days, there is no stock of imported coal on account of Steel Authority of India Limited. There is also the problem of congestion at the port.

Mr K Raghuramaiah chairman of Paradip Port Trust attributed the congestion problem at Paradip port to Haldia dock which remained closed to traffic for several days. As a result, Haldia bound ships were now coming to Paradip.

Areva T&D to invest INR 700 crore in 3 Greenfield units in India

BL reported that Areva T&D will operationalize 3 Greenfield manufacturing units in India between December 5th and December 7th 2008 and hire over 1,200 in 2008. The units are coming up in Vadodara in Gujarat, Hosur and Padappai in Tamil Nadu and involves an investment of INR 700 crore.

Vadodara factory will make power transformers up to 765 kV and scale up to 1,200 kV in due course. It will also manufacture distribution transformers and medium voltage switchgear.

The Hosur plant will produce instrument transformers up to 765 kV and later for 1,200 kV. It would also be the R&D centre for instrument transformer product line to support the global needs.

The third Greenfield site at Padappai will manufacture circuit breakers for 765 kV and eventually for 1,200 kV. It would be an expanded capacity compared with the existing plant at Perungudi.

Mr Rathin Basu country president of Areva T&D India said that once these projects start contributing, India’s share, which stands at around 7% of the Areva Group’s total turnover, is expected to grow. He added that "We target to reach about 15% by 2012. The major drivers coming from utilities and industry demands, including steel plants, infrastructure and GIS sub stations."

Areva T&D India has targeted to double its turnover by 2012. It has 8 manufacturing plants at present and employs 3,500 people in India.

NMDC may opt for HIsmelt technology to utilize low grade iron ore

It is reported that National Mineral Development Corporation and three other Indian firms are in talks with Australia’s HIsmelt Corporation, a member of the Rio Tinto Group, to buy a new technology to smelt low grade iron ores and even wastes.

Mr Stephan Weber MD of HIsmelt Corporation said that "NMDC is one of the Indian companies holding talks with us."

Mr Weber said that HIsmelt technology, which has reached the stage of commercialization after 20 years, afforded unparallel flexibility to steel manufacturers, especially to produce high value iron at lower costs.

The advantage of buying this technology is that low grade iron ores and coal can be used, ultimately helping in cutting operational and input costs in the steel manufacturing process. A plant using HIsmelt technology can help produce 800,000 tonnes of steel a year.

Mr Brian McDonald technical & sales manager of HIsmelt Corporation said that "HIsmelt can use iron ore fines, which are sold at a lower price to the lump ones, while coals with higher ash content can also be used." He added that however, in the case of higher ash content in coal, as in India, the plant’s output could be a little lower.

HIsmelt will begin marketing this technology more intensely from 2009 as it is expected to produce to its nameplate capacity of 800,000 tonnes only by the year end. Currently, the pig iron produced in this plant is being exported to South East Asia, while talks are on with cement companies to buy the slag produced from this process.

Bharat Forge to raise INR 400 crore by rights issue

BS reported that Bharat Forge Limited has shelved its INR 300 crore preferential issue to promoters and decided to go in for an INR 400 crore right issue.

In a notification to stock exchanges, Bharat Forge said that instead of preferential issue, an issue of non convertible debentures with detachable warrants, convertible into equity, to existing shareholders will be made. It added that the pricing and the other terms and conditions of the issue shall be determined by a board committee appointed by the board of Bharat Forge Limited.

It may be noted that Bharat Forge had decided to go in for a preferential issue of convertible warrants to promoters to raise INR 300 crore in February 2008.

22 firms submit bids for Ennore container terminal project

It is reported that unlikely partnerships have emerged in the bidding process for a USD 305 million container terminal facility at the Ennore Port in Tamil Nadu, with companies determined to stay in the race till the final lap.

As of May 20th 2008, the last date for submission of initial bids, 22 entities have applied for building the facility. The bidders are as follows
1) International Container Terminal Services of Philippines
2) DP World consortium with IDFC Projects
3) PSA International consortium with ABG Infralogistics
4) Sical Logistics consortium with Macquarie Group
5) NYK Line consortium with Hyundai Merchant Marine
6) Mundra Port SEZ consortium with Neptune Orient Lines
7) GVK Power Infrastructure consortium with Mitsui & Company
8) Vedanta Resources consortium with Eurogate GmbH
9) IL&FS Limited consortium with Punj Lloyd and Pembinaan Redzai
10) Larsen and Toubro consortium with John Keells Holdings
11) Lanco Infratech consortium with JSW Infrastructure and Logistics
12) Terminal Investment consortium with Samsung Heavy Industries, Shipping Corporation of India, Concor, CWC and Hind Terminals
13) Vadinar Oil Terminal consortium with Essar Shipping Ports & Logistics and Wan Hai Lines
14) Saqr Port Authority consortium with RAK
15) IMC consortium with ITD Cementation India and Srei Infrastructure Finance
16) GS Engineering & Construction with Indiabulls Financial Services
17) Group Maritime TCB with GE Maritime and Eredene Capital.

But Ennore Port said that only 6 entities will be pre qualified to submit financial bids for the facility, which will have an annual capacity of 1.5 million TEUs.

Mr Kshitiz Bhasker head of business development at Gammon Infrastructure Projects said that even after qualifying on financial, technical and experience criteria on their own for these projects, many firms face the threat of elimination because of the 6 bidder per project rule.

Gerdau buys 28.88% stake in Acos Villares

Brazilian steelmaker Gerdau Metalurgica announced that it bought 28.88% stake in Acos Villares for BRL 1.3 billion (USD 793 million).

Gerdau Metalurgica said in a statement to the financial market regulator CVM that it acquired the stake from BNDESpar, the investment arm of Brazil's state development bank.

Gerdau Metalurgica would pay for the deal by issuing debentures convertible into shares of Gerdau.

Aços Villares is a part of the Sidenor Group, one of the world’s largest producers of special steels and rolls for rolling mills, which operates plants in Spain and Brazil. Aços Villares is organized into strategic Business Units and produces special steels and rolls for rolling mills. Aços Villares exports a part of its steel production for engineering applications regularly, and more than half of its roll production.

The Gerdau Group started to operate in 1901, establishing Pontas de Paris Nail Factory at Porto Alegre in Brazil and is now the world’s 14th largest steelmaker and the largest producer of long steel in the Americas. It has 272 industrial and commercial facilities, five joint ventures and two associated companies. Gerdau operates in Brazil, Argentina, Chile, Colombia, Peru, Uruguay, Mexico, Dominican Republic, Venezuela, the United States, Canada, Spain and India. Currently, Gerdau has an installed capacity of 24.8 million tonnes of steel per year and supply steel for civil construction, industry and agriculture.

TATA Corus Strip Products to increase base prices by EUR 130 per tonne

TATA Steel’s Corus Strip Products has announced an increase in its base prices for Quarterly contracts in Mainland Europe by a minimum of EUR 130 euros per tonne with effect from July 1st 2008."

It attributed the hike to given tight market conditions and extreme cost increases for raw materials. It said "At the same time Corus Strip will enter into discussions with its customers to discuss the consequences of the extreme cost increases in relation to current annual contracts."

MEPS forecast further increase in steel price in EU

UK based MEPS said that EU prices continue to increase as the steel mills are insisting that they must go up again in period three to reflect the rising costs of production.

MEPS said that “The initiatives are likely to be accepted due to a lack of any competitively priced alternatives. Import volumes into Europe remain very low and this is contributing to already limited availability from local steelmakers. The soaring prices are clearly not driven by demand, which is relatively modest. Inventories, generally, are not growing because it is too costly to finance steel stocks.”

MEPS said that “The German mills are talking of hefty price rises on strip mill products in the third quarter. Service centre inventories of commodity grade coil are adequate with some buyers refusing to place further orders at present. However, availability of the higher specifications appears to be more constrained and some gaps are appearing. Real demand is no better than normal. The strong Euro continues to have a negative effect on exports of manufactured goods.”

MEPS added that “In France, sales of coil are described as average, although some improvement is noted in the automotive sector, as one of France’s two major car manufacturers is ordering extra material on top of its usual annual requirements. Producers are said to be considering a basis rise of at least EUR 100 per tonne. Under current market conditions, prices are not open for negotiation so buyers are placing business not knowing the final cost. They complain that they cannot get enough tonnage.”

MEPS said that “Italian values have continued to move up, albeit at a slower pace, despite fairly flat underlying consumption. Now that the new government is in place, customers feel that public investment could grow in the longer term but no immediate improvement is expected. Import pressure is modest, leaving buyers with little or no alternative but to accept higher prices from local producers who are using inflated raw material costs to justify their demands. Suppliers are talking of further hikes next month.”

MEPS also said that “UK consumption is far from robust. Even the auto sector is softening. Nevertheless, steel selling values for the remainder of period two continue to move up as availability is poor. Traders’ stocks are shrinking rapidly as it becomes increasingly difficult to secure new supplies. Service centre inventories are also depleted because they cannot afford to build them up, partly due to limitations on credit. Shortages are beginning to occur. Some distributors are struggling to recoup the mill increases from end users.”

MEPS said that “In Belgium, the manufacturing and construction sectors are performing well. Inventories are low at the consumers because of the high costs of finance. Service centre stocks are described as reasonable but not excessive with holes appearing for certain grades/sizes. So far, distributors are recovering the higher prices they are paying the mills.”

MEPS added that “Spanish demand is stagnant at best and expected to decline further because of the generally poor economic situation. Meanwhile, prices continue on an upward trend, amidst a lack of credit availability. Customers are only buying what they need and are keeping inventories to a minimum.”

Worker unions oppose Kremikovtzi buy by Arcelor Mittal

Sofia News Agency reported that Bulgaria's Podkrepa Labor Confederation has come out against the likely acquisition of Kremikovtzi by world's leading steel maker Arcelor Mittal and threatened to go on strike in case the deal is sealed.

The Podkrepa trade union insists that the ailing steel maker Kremikovtzi should declared bankrupt and that a new owner to take it over in bid to secure current work places. The trade union said that at least EUR 20 million should be provided to the steel mill for environmental investments under government control.

Denvik reported that the trade unions suspect that ArcelorMittal is not interested in the Kremikovtzi business but actually in the assets of the company once it is declared bankrupt and liquidated. Than it may even shut down the coke production and the blast furnaces, a move that would axe the jobs of two thirds of the 4000 workers. According to the trade unionists, that would leave operational only the electric furnaces to process scrap metal for the needs of the continuous casting lines and the lines for cold and hot rolled products.

EAF gaining currency over BOF

Eco-friendliness is driving steel makers towards EAF, writes Ramesh Kumar & Rohini Varma for SteelGuru readers

Global warming is the buzzword reverberating all over the boardrooms of corporates across the world. This ecological concern is forcing manufacturers to scout around for eco friendly systems and processes to survive longer. Steel makers are no exception and hence the search and switch to better technologies. As a result, Electric Arc Furnace steelmaking is gaining an upper hand over the traditional or conventional Basic Oxygen Furnace.

It is no exaggeration to claim that the iron and steel industry has undergone a technological revolution in the last few years. In a short span of time, this industry has observed the complete disappearance of basic open hearth process. Now there is a complete shift in the steel making industry towards the electric arc furnace technology.

Steel is produced through mainly two methods – Integrated steel making route and EAF route.

Integrated steel making route is based on blast furnace and Basic Oxygen furnace. Main raw materials used in this procedure are iron ore, limestone, coal and recycled steels.

Second technology is Electric Arc Furnace steelmaking. In this advanced technology an electrically heated furnace is used that makes steel from the recycled iron and steel scrap metal. EAF technology is more preferred option as it uses scrap that is otherwise very harmful for the environment. Moreover it consumes lesser energy. A large number of steel making companies have already shifted to this technology. According to the Intergovernmental Panel on Climate Change (IPCC), the steel industry accounts for between 3-4% of total world greenhouse gas emissions.

Innovative Actions
So, more companies are going for the EAF steel manufacturing. Apart from the conventional processes, many steel manufacturing companies are taking more innovative actions. Steel companies all over the world are investing in state-of-the-art systems to improve their operations and yield. Technological advancements over the past 25 years have enabled substantial reductions in CO2 emissions from steel production.

A good example of this is the FINEX iron making process, used by Korean company Posco. The Finex system is an innovative eco-friendly technology that has reduced emissions of environmentally-harmful materials.

This technology reduced the emissions by almost 80% as compared to blast furnace route. In Sept. 2004 the Posco started the construction of 1.5 million metric tons a year plant. So the FINEX technology is expected to emerge as the technology that will be a source of clean steel in 21st century.

Other leading steel companies like Arcelor, Erdemir, China Steel Corporation, US Steel Corporation, Nippon steel, Corus, Blue Scope, Riva etc all are adopting the eco-friendly technologies.

Water Conservation
Another example is set by the CST a subsidiary of Arcelor in Brazil. Here is a water resource management system in which sea water is used as 96% of the total water used for steel manufacturing. Thus this system helps in saving the fresh water. Only 4% of water used comes from local fresh water sources.

In the same way Saldanha Steel ltd., a subsidiary of Mittal Steel South Africa Ltd. uses treated sewage water. Various facilities are being installed for reverse osmosis and to desalinate the water used so that fresh water usage is decreased significantly.

Declining Coal Dependency
Other than these eco-friendly technologies the steel industry will see another change in near future. The output from BOS process will significantly decrease due to diminishing supplies of coking coal and other raw materials. So it will give a boost to steel recycling techniques through EAF.

All the leading companies are going for usage of pulverized coal, natural gas and recycled plastics to replace the metallurgical coke used as the primary reductant and source of chemical energy. This change represents an important development in the steel making process.

Usage of Coke and the process of coke-making are extremely harmful for the environment. Therefore moving away from the use of coke is a new step in the steel making process that will lead to a cleaner steel manufacturing.

Recovery & Reusage
More companies are investing in energy savings with usage of new iron and steelmaking technologies. This is being done through the recovery and re-use of waste gases and through heat recovery from the various steel making processes. These recoveries make steel manufacturing more affordable.

New technologies used are bound to add to the quality of the steel. Still industry needs to invent more technologies to cut CO2 emissions. Further steps can be taken to move away from carbon and give preference to hydrogen and electricity.
The continuous improvements are taking place in EAF process control and the use of ore-based scrap substitute materials such as direct reduced iron, hot briquette iron and pig iron. These further advancements will lead to significantly increased product quality range. These goals can be achieved only by moving towards new and advanced technologies.

Oil surges to USD 134 on supply constraints and weak dollar

It is reported that oil prices surged to a record near USD 134 a barrel on Wednesday after a US government report showed a surprise drop in crude stockpiles, reinvigorating fears of a supply crunch.

US crude settled up USD 4.19 at USD 133.17 a barrel before extending its gains to USD 133.93 by 2025 GMT. London Brent also rose by USD 4.86 to end at USD 132.70.

The US Energy Information Administration reported that crude stockpiles in the world's biggest energy consumer fell 5.4 million barrels last week, countering expectations for a build. Weakness in the US dollar encouraged Wednesday's buying spree by bolstering the purchasing power of buyers holding other currencies.

The gains bring oil up more than 33% so far this year in a rally that has raised alarm bells in consumer countries like the United States, already hard hit by a housing slump and credit crisis.

MHI stands firm against Japanese steel mill push for prices

Lloyd’s List reported that Japan’s fifth largest shipbuilder Mitsubishi Heavy Industries has denied Japanese news reports that it has buckled in negotiations with steel mills and conceded increases of JPY 30,000 (USD 200) per tonne.

A spokesman of MHI told Lloyd’s List that “We have heard the story but it is not true. Our purchasing department has told us that negotiations are continuing.”

A source from another major shipbuilder said that “We don’t believe that MHI has given in. All our sources both internally and externally suggest that negotiations are still ongoing at MHI as they are at the other major yards in Japan.

The senior executive denied that there was any joint effort among the yards involved to resist the steel mills’ demands but added that they were in communication and agreed to let each other know if any had given in under the intense pressure the mills were beginning to bring to bear.

The report said that Japanese shipbuilders have been adopting a siege position since protracted negotiations with the steel mills began in February. But the country’s two major steel mills JFE and Nippon Steel are digging their heels in as their manufacturing costs escalate.
At the start of negotiations the steel mills had originally requested a mark up of JPY 20,000 following their acceptance of a 65% increase in iron ore prices from Vale of Brazil and Australian mining concerns. But as talks progressed the steel suppliers found themselves confronted with further increases from coal suppliers of 300% and subsequently upped their demands for steel plate increases to JPY 30,000 or close to 40%.

In response to the news that MHI may have broken the chain of understanding between the nation’s shipyards that none of them would give in to the demands of the mills.

Kremikovtzi decision to be made in court - Minister

Novoinite cited Mr Petar Dimitrov Bulgarian minister of economy and energy as saying that the decision regarding sale of Kremikovtzi belongs to the Court and the state cannot intervene anymore.

Mr Dimitrov was unwavering regarding the deadline for a final selection of a Kremikovtzi offer, which according to him cannot happen by the end of the week, as per the trade union demand. Mr Dimitrov added that an eventual protest on the part of the trade union would not help in selecting the offer for the plant's purchase.

He said that "Since the Court has been asked to declare the plant insolvent, the forthcoming decision should be nothing else but a legal one. State will do anything within its power to protects the interests of the state creditors of Kremikovtzi, the National Electric Company, Bulgargaz and the Bulgarian State Railways.”

Mr Dimitro clarified that the EUR 30 million loan given to the plant by ArcelorMittal does not mean at all that it has higher chances to become Kremikovtzi owner and that he considers Mr Konstantin Zhevago's offer competitive enough to be considered.

Labor Court rules Rautaruukki Raahe strike as unlawful

Rautaruukki Corporation announced that a Labor Court has issued a judgment on the strikes by workers last week at Rautaruukki’s Raahe Works in Finland.

Rautaruukin Työntekijäin ammattiosastory, the local trade union branch at the works, was ordered to pay the Federation of Finnish Technology Industries compensatory damages of EUR 7,500 for breaking the commitment to industrial peace and to compensate the Federation’s legal costs of EUR 704.

Blaze reported at Gerdau Ameristeel plant in Texas

Daily Light reported that fire fighters responded to a fire reported about 6:17 AM on Tuesday at Gerdau Ameristeel’s plant at Midlothian in Texas State of US.

As per report, the fire was contained to the pre shredded piles at the plant, which recycles steel from old vehicles.

Two piles are made, one containing ferrous parts and one with non ferrous pieces such as plastics and rubber, also known as the fluff pile.

The plant was earlier known as Chaparral Steel.

Air Products to build ASU at Canadian unit of US Steel

Air Products announced the signing of a new long term supply contract between its subsidiary, Air Products Canada Ltd and US Steel Canada, Inc.

In conjunction with this new agreement, Air Products will build a new air separation unit with a high efficiency liquefier facility. The new facility, to be on stream in the fourth quarter of 2009, marks an expansion of Air Products’ oxygen and nitrogen supply to the steel mill and increased merchant liquid argon capacity, as well as a more efficient production of merchant liquid oxygen and nitrogen for Air Products’ operation at its Nanticoke facility.

The new ASU will supply over 1,200 tons per day of gaseous oxygen for US Steel’s operations. The new high efficiency liquefier will produce over 500 TPD of liquid oxygen and liquid nitrogen and increase pure liquid argon production capacity for North American customers in several market applications. The larger and more efficient facility will replace the original Air Products’ plant at the same location.

Mr Alex Masetti vice president Tonnage Gases North America for Air Products said that “We have been supplying the Lake Erie facility’s tonnage industrial gas requirements with our original Nanticoke air separation plant since 1980. This latest investment by Air Products keeps pace with Lake Erie's increased demand for industrial gases and represents another milestone in our long-term relationship. At the same time, the new liquefier will increase our supply capacity and improve our market position in the Eastern Canada and Northeastern U.S. markets for liquid products.”

Bulgarian trade unionists want Kremikovtzi declared bankrupt

It is reported that Bulgaria's Podkrepa Labor Confederation insisted that the troubled Kremikovtzi steel plant be declared bankrupt and that a new owner take over.

Podkrepa has submitted a declaration to the Prime Minister Sergey Stanishev and to the Energy Minister warning that the factory would stop working and workers' protests would follow unless funds for raw materials were provided by the end of the week.

The trade union is also insisting on a recovery plan for Kremikovtzi and the providing of at least EUR 20 million for environmental investments under government control.

Mr Lyudmil Pavlov chairman of Podkrepa's Metallurgy Federation said that the USD 500 million bid of Mr LN Mittal was several times larger than the bid of the Ukrainian tycoon Mr Konstantin Zhevago and his Vorskla Steel but pointed out that the Ukrainian company has made commitments to the social requirements of the workers.

With respect to the Mr Mittal's offer to provide a financial injection of EUR 30 million for the payment of the factory's debts, Mr Pavlov said it was made on the condition the negotiations for the sale of Kremikovtzi would be conducted only with ArcelorMittal.

Mr Pavlov said that "The difference between the two offers is that the first one of ArcelorMittal speaks about the future. The other one refers about how the factory should be operating at present so that it could survive.”

Taiwan to extend ban on billet and rebar exports

The Ministry of Economic Affairs of Taiwan has announced an extension to the ban of rebar and billet export for another three months.

The move is triggered by a concern about tight supply in the global market and is meant to stabilize consumer prices.

The long steel product mills claimed that domestic billet has been in short supply and that imports have decreased; moreover, some mills will cut production due to higher electricity rates. Thefore, the domestic rebar industry will not be affected.

Taiwan’s billet import has dropped to some 10,000 tonne per month as compared to about 300,000 tonnes before.

Japanese steel mills to increase export price of SBQ plates

Japan will soon engage in price talks with China’s buyers on ship plate in the third quarter of 2008.

As per report the price is expected to reach USD 1,230 per tonne FOB which is USD 80 per tonne higher than originally expected.

As the shipbuilding and pipeline industries have shown a strong demand for carbon steel plate, with plate supply unable to meet the requirement, the plate price has risen beyond expectation.

(Sourced from YIEH.com)

Flat product price increase pace slows down in US

Platts reported that flat rolled steel prices continued to gain in the US market for product from domestic mills. The magnitude of the increases by USD 20 to USD 25 per short ton appears to be lessening compared with price gains earlier this year. What is more, US mills are quoting a fairly wide range of price offers for bookings in late June, July and even August.

The prices range from USD 1,060 per short ton ex works for hot rolled coil from ArcelorMittal USA for July to August delivery, to USD 1,125 per short ton ex works from smaller producers such as AK Steel, WCI Steel and Wheeling Pittsburgh.

Other mills fall somewhere in between, according to either their own announcements or reports from buyers. These include Nucor, which is offering HRC at about USD 1,090 per short ton ex works for July; Steel Dynamics, which is said to be quoting the same product at USD 1,090 per short ton ex works for any remaining June tonnage and USD 1,080 per short ton ex works from US Steel.

As a result and based on reported transactions, the Platts price assessments increased to a midpoint of USD 1,050 per short ton for HRC and to USD 1,135 per short ton for CRC, both ex works Indiana.

Some buyers are starting to wonder if the mills offering July HRC at USD 1,125 per short ton ex works, might show some flexibility given the fact that other producers are as much as USD 65 per short ton below such a price.

One Chicago area buyer told Platts that "It is too early to say. They certainly have not backed off yet. It all depends how many tons are available in July. If the market remains tight, I doubt they will back off from USD 1,125 per short ton ex works.”

Japanese April crude steel output up by 4.2% YoY

According to Japan Iron and Steel Federation, Japan's production of crude steel rose 4.2% YoY in April 2008 to 10.15 million tonnes, its 23rd consecutive on year rise. But steel output was down 5.8% MoM from March 2008.

April 2008 productions figures are
Product Volume Change

(Volume in million tonne)
(Change in YoY)

Higher cost effecting electric wire makers profitability in Japan

JMB reported that Japanese 3 electric wire makers out of major 6 firms posted lower consolidated recurring profit for the year ending March 2008 from previous year due to higher yen rate.

As per report Sumitomo Electric Industries, Furukawa Electric and Hitachi Cable expect lower recurring profit for the year ending March 2009 due to higher yen rate, higher depreciation under new accounting system and higher raw materials cost. The major makers try to improve the profitability trough higher sales for strategic products, cost cutting effort and price hike.

Tentative agreement reached between AAM and UAW

It is reported that the United Autoworkers bargaining team has reached a tentative agreement with American Axle Manufacturing. The deal which is presently being voted on by union workers was reached by the bargaining sides on May 16th 2008.

Mr Ron Gettelfinger president of UAW said that "Our members at American Axle have displayed extraordinary solidarity during this strike. The bargaining committee worked extremely hard to achieve this tentative agreement and they have voted to recommend it to the membership."

The strike began in late February and shut down American Axle Manufacturing plants in Michigan and New York.

The strike created a ripple effect, with some partial shutdowns at around 30 different General Motors plants throughout North America.

AK Tube honored for safety performance

AK Steel announced that the Walbridge, Ohio plant of AK Tube LLC has been honored with two awards for its safety performance from the Ohio Bureau of Workers' Compensation, division of Safety and Hygiene.

The awards are the 100% Award for operating the entire year of 2007 without a lost-time injury; and, the Achievement Award for logging a 2007 OSHA incident rate more than 25% lower than the previous year. The awards were presented at the Safety Council of Northwest Ohio's annual industrial safety awards banquet held on May 15th 2008.

Mr James L Wainscott chairman, president & CEO of AK Steel said that "We congratulate our AK Tube Walbridge employees for their outstanding safety achievements in 2007. It is especially significant that they worked the entire year without a single lost-time injury."

Overall, AK Steel led the steel industry in safety during 2007 with a corporate wide injury rate that was 12 times better than the industry average, according to data compiled by the American Iron and Steel Institute.

Japanese HRC export prices to soar

Japan is targeting an export price of USD 1,050 per tonne FOB for hot rolled coil with their South East Asian buyers, while the price to the Middle East and Latin America is USD 1,100 per tonne FOB.

It is believed that the requirement for HR has been strengthening. So, Japan will choose some favorable customers to deal with; otherwise they will give first priority to the domestic market.

(Sourced from YIEH.com)

Aker Yards shares plunge after Mr Saevik sell off

Lloyd’s List reported that shares in Aker Yards fell heavily on the Oslo bourse after it emerged that Mr Per Saevik’s Havyard Invest is seeking to dispose of its entire holding at around 10% below.

Europe’s biggest shipbuilder saw its share price as down by 7.4% at NOK 63.90 as compared with a 1.2% decline in the OSEBX benchmark index, in the wake of Mr Saevik’s decision to sell 11.5 million shares at a minimum price of just NOK 62.50 each.

Pareto Securities and DnB NOR Markets, which will manage the bookbuilding exercise said that after market close on Monday that Havyard was bailing out because it has not secured sufficient influence over the group’s future direction.

“Pareto Securities and DnB NOR Markets have collectively received an order for the sale of 11,450,000 shares in Aker Yards from Havyard Invest, and entities controlled by Per Saevik, due to unsatisfactory support for its strategy for Aker Yards,” the two financial concerns said in a statement.

“The price will be set through a book-building process, whereof a minimum selling price has been set to NKr62.50, representing a discount of approximately 10% from the closing price of the Aker Yards shares.”

Highveld declares special dividend of 1,800 cents

It is reported that South Africa's second biggest steel maker Highveld Steel & Vanadium has declared a special dividend of 1,800 cents per share from proceeds of asset sales.

Hiveld said that it had taken into consideration better than expected trading conditions, its future capital requirements and proceeds from the Rand Carbide disposal.

Hiveld has sold off some of its vanadium assets as a condition to the European Commission approving Russian metals group Evraz buying a majority stake in the South African steel maker.

Air Products and Linde increase production at Bethlehem

East Coast Oxygen a 50/50 production JV between Air Products and Linde North America has expanded the production capacity of its facility at Bethlehem in Pennsylvania. The new liquefaction unit, which was recently commissioned boosts production capacity by almost 600 tons a day and makes this plant one of the largest liquefied nitrogen, oxygen and argon gases production sites in the United States.

Gases produced at the Bethlehem plant are trucked to merchant customers throughout the northeastern US for use in applications such as food chilling and freezing, chemical production and metals manufacturing.

Mr Tom Ward vice president, North America Gases of Air Products said that “This expansion is consistent with Air Products efforts to leverage its existing North America asset base in order to meet the growing needs of its diverse customer base in the region.”

Mr Pat Murphy president of Linde North America said that “This location already provided us with easy access to customers throughout the region. This expansion gives us a cost effective means of improving our ability to supply a growing customer base and to strengthen our East Coast supply network, which runs from Maine to Georgia.”

Vietnam Ho Chi Minh City Metal projects USD 237 million revenues in 2008

VNA reported that Vietnam Ho Chi Minh City Metal Joint Stock Co planned to gain total turnover of VND 3.8 trillion (USD 237.5 million) and a pre tax profit of VND 60 billion (USD 3.75 million ) in 2008. Its dividend was expected to reach between 16-18 percent.

Metal Joint Stock Co said that in the first quarter of the year obtained some VND 1.1 trillion in net revenues, up by 42.2% QoQ and nearly VND 16 billion in after tax profits up by 45% QoQ.

S&P says Nucor ratings outlook unaffected by USD 2 billion equity issuance

Standard & Poor's Ratings Services said that its ratings and outlook on US steel maker Nucor Corp are not affected by the company's announcement that it plans to issue about USD 2 billion of common equity.

S&P said that the proceeds will be used to help fund the company's capital spending and acquisition plans, which will likely greatly exceed internally generated cash, despite favourable operating conditions.

Nucor has been acquiring scrap processors and downstream fabrication businesses and recently announced plans to build a pig iron facility in Louisiana and to invest in two European joint ventures.

POSCO E&C plans USD 1.1 billion IPO

Reuters reported that South Korean construction firm POSCO Engineering & Construction is planning a share sale worth up to KRW 1.17 trillion (USD 1.1 billion) in an initial public offering.

A company official told Reuters that POSCO Engineering & Construction which is 89.5% owned by the POSCO has filed the document with the Korea Exchange and plans to sell the shares in the second half of 2008

Transnet awards ZAR 11.2 billion contract for fuel pipeline

State freight logistics group Transnet announced that it had awarded a ZAR 2.5 billion construction contract for the urgently needed ZAR 11.2 billion multi product fuel pipeline from Durban to southern Johannesburg, to a consortium comprising Group Five Civils and international pipeline and facilities contractor Spiecapag.

The contract would involve the development of a 544 kilometer, 24 inch trunk line from Durban to Jameson Park in Gauteng as well as a 16 inch inland network from Kendal to Waltloo and Jameson Park to Langlaagte through Alrode. The environmental approvals for the inland portion of the network had been obtained and construction was, thus, expected to start in July 2008.

The release added that “Transnet had also contracted with a joint venture, comprising Arup and WorleyParsons to execute the engineering, procurement and construction management, while the purchase of the coated line pipe had been secured from South Africa, through Impumelelo Pipeline.”

Transnet in a statement said that it was confident of completing the project by the third quarter of 2010, which would be after the FIFA World Cup, when fuel demand was expected to peak as football fans used public and private transport to follow their teams during the month long tournament.

But Ms Maria Ramos CEO of Transnet had stated previously that mitigation strategies were being implemented to keep the inland of South Africa wet noting that this planning was being conducted together with the liquid fuels industry itself, as well as the Department of Minerals and Energy. Ms Ramos said that the pipeline construction contract is the single biggest to be awarded by the group since it began rolling out its ZAR 80.3 billion, five year capital investment program across its rail, ports and pipeline businesses.

The pipeline development is seen by many in the liquid fuels sector as key to improving security of supply to South Africa's economic heartland of Gauteng as demand expands and as the existing pipeline network reaches the limits of its capacity.

SA industrial drive hit by high steel prices

Reuters reported that South Africa's manufacturing sector remains resilient amid global pressures, but the price of carbon steel is holding back the country's industrial drive.

Mr Nimrod Zalk chief director of industrial policy at the Department of Trade and Industry said that "One of the constraints that we have raised with respect to our whole industrial drive has been the pricing and availability of steel and particularly carbon steel.”

Mr Zalk who was briefing members of parliament on South Africa's industrial policy action plan said that aside from the higher steel prices, government was also concerned with the lack of investment in the carbon steel sector. He said that "We have actually seen the production of liquid steel decline in South Africa between 2004 and 2007, notwithstanding this large infrastructure, construction investment that's happening and that's a matter of considerable concern to us.”

Mr Zalk said that government is trying to attract new carbon steel investment into the country to enhance competition and increase security of supply, but did not mention specific companies it may be targeting.

South Africa cabinet approved a multi pronged industrial action plan last year to help drive Africa's strongest economy in its quest to achieve a 6% growth rate by 2010.

S Korea expects to be world No 5 shipping power by 2010

It is reported that South Korea expects to become the fifth largest shipping power in the world by 2010 as specialized funds and tax benefits help local companies expand their fleets.

South Korean ministry of land, transport and maritime affairs said that as of 2007 Korea ranked sixth with 36.8 million DWT of registered ships. The ministry added that efforts are currently underway to help shipping companies expand business areas that are vital for sustained growth. It said that shipping companies are to receive assistance in such areas as taking over foreign terminals and logistics companies.

A Korean government official said that "As of May, local shipping companies have ordered 22 million DWTs of ships that will be delivered in the coming years, which should be sufficient to push up Korea's overall ranking by at least one notch.” He said that there has been a 20% annual gain in ships in recent years.

The official said that the move by local shipping companies to pay tonnage taxes instead of corporate income taxes starting in 2004-2005 helped increase the size of vessels operated. This move has helped companies cut ship operation taxes by up to 60%

The expert added that companies have also started to make use of shipping funds that allow companies to purchase vessels using money collected by investors. The investors are given set tax breaks for their investments.

Peabody appoints Mr Thornton head of Australian operations

Peabody Energy announced that it promoted Mr Julian Thornton to MD for Australian Operations overseeing all of Peabody's Australia operations throughout New South Wales and Queensland.

Mr Thornton most recently served as chief operating officer for Australia Operations, following his position as regional operations officer for Peabody's New South Wales operations. He holds a Bachelor of Science degree and Ph.D in Mining Engineering from the University of Wales.

Mr Eric Ford executive VP & COO of Peabody Energy said that "Australia is the fastest growing contributor to Peabody's global coal platform. We are pleased to have Mr Julian at the helm as we increase coal production to meet record world coal markets."

Minnesota Steel financial close expected next week

It is reported that the long awaited financial close for the Minnesota Steel project near Nashwauk is coming up next week. Officials said that Essar Global, the Indian based company who owns the project is close to making an announcement.

The USD 1.6 billion debt financing package has been in the works for months. The mining through steelmaking project would be the first of its kind and holds the promise of 700 jobs when it's running at full capacity.

POSCO purchases Japanese H2 scrap

It is reported that South Korean POSCO invited a public bidding for Japanese H2 scrap on May 15th 2008.

The price is settled at an all time high of USD 69,000 per tonne CNF which is higher than Tokyo Bay's price.

According to information, Japanese H2 scrap export new price is estimated to be around USD 65,500 to USD 66,000 per tonne FOB with South Korea's steel plant’s purchase.

(Sourced from YIEH.com)

ArvinMeritor opens Center of Excellence in Brazil

ArvinMeritor's Light Vehicle Systems business group announced the opening of a new Global Center of Excellence located at Limeira in Sao Paulo of Brazil.

The state of the art 37,000 square foot facility houses research and development for Fumagalli brand steel wheels, with expanded engineering and program management capabilities to support the LVS growth strategy for body and chassis systems in South America.

As the primary regional resource for LVS South America, the Global Center of Excellence includes engineering, program management, sales, testing, validation, quality, sourcing, logistics and finance. The facility joins the company's existing network of technology centers located in China, France, Germany, India, Japan, Mexico, United Kingdom and the United States. It supports local design applications of chassis systems and components, roof systems, door modules, window regulators and motors.

Mr Phil Martens president of LVS ArvinMeritor said that "The Global Center of Excellence provides superior engineering support which is a competitive advantage to our regional customers in growing markets like the BRIC countries of Brazil, Russia, India and China. The center gives our South American customer base access to LVS' full spectrum of advanced smart systems technologies for improved vehicle safety, comfort and performance."

Mr Don Polk vice president and GM Wheels and LVS South America of ArvinMeritor said that "ArvinMeritor is an industry leader with a 60 year history of providing innovative, quality Fumagalli steel wheels in Brazil and Mercosur. The Center of Excellence leverages our wheels innovation and expertise to support our customers with our entire product portfolio of systems solutions."

ArvinMeritor's LVS business is a leading global provider of dynamic motion and control automotive systems and components, with sales of USD 2.2 billion in 2007.

CSC to raise all product prices by 10% in Q3

CENS reported that Taiwan’s China Steel Corporation is plans to raise wholesale prices by 10% or USD 100 per tonne for products to be shipped in the Q3 of 2008

The expected price hike is driven by the anticipated increase in demand for steel products in the wake of a massive 7.9 magnitude earthquake in Sichuan Province of mainland China on May 12. In addition, the steel mills around the capital Beijing have cut production to cope with the needs generated by the upcoming 2008 Beijing Olympic Games.

A domestic manufacturer of stainless steel noted the serious earthquake in Sichuan Province would help boost the demand for steel due to inevitable needs to rebuild buildings and bridges that have collapsed en masse.

Mr T H Chen vice president of CSC said that an upward trend in steel prices as the mainland has cut supply while increasing demand.

Alcoa to reopen Northwest Alloys magnesium plant - Report

Purchasing.com reported that Alcoa is studying the possible restart of its former Northwest Alloys primary magnesium plant at Addy in Wash as magnesium prices have jumped to an average USD 3.35 per short ton in May 2008 from USD 3.03 in April 2008.

Mr Kevin Anton president of Alcoa Materials Management said that “We are evaluating and investigating at what point it would make sense to restart the facility.”

Mr Anton said that “Alcoa is looking at reopening Northwest Alloys because magnesium is used in primary aluminum smelting, so “we are if not the largest then one of the largest buyers of magnesium in the world.”

Northwest Alloys closed in the autumn of 2001 due to high Pacific Northwest power costs from the Bonneville Power Administration.

Northwest Alloys had a projected operating rate of 30,000 tons per year of magnesium in 2001. Back then, spot magnesium sold for USD 1.21 while it is annualized for 2008 at USD 2.89.

According to Roskill Information Services in London, prices are up because magnesium demand has surged globally. In 2007 purchases totaled 860,000 tons that reflected a 60% increase in buys by China to 250,000 tons. Analysts believe China will source almost 30% of global supply of oxide and metallic magnesium again this year to fuel its aluminum smelters, steel furnaces and metal-processing plants.

Base metal prices on LME increase last week

Last week all base metal price surged as people worried that the earthquake in China's Sinchuan province might bring about shortage of raw material supplies.

The three month price of zinc increased to 8.6% to USD 2,365 per tonne

The three month price of aluminum increased by 3.8% to USD 3,040 per tonne
The three month price of copper up by 2.7% to USD 8,439 per tonne

The three month price of nickel decreased by 0.6% to USD 26,400 per tonne due to the weak demand last week

Japan ferrous scrap demand rises by 6.4% in FY 2007

JMB reported that Japanese ferrous scrap consumption increased by 6.4% to 53.346 million tonnes including uses in converter, electric furnace and casting in fiscal 2007 ended March 2008 from previous year.

As per report the consumption increased for 6 years in a row with higher raw steel output. The domestic scrap demand increases with higher cost for steel making including iron ore and coking and higher demand for lower carbon dioxide emission.

Steel prices cross EGP 7000 per tonne in Egypt

Daily Star Egypt reported that a series of leaps brought steel prices to nearly EGP 7,800 per tonne over the past few days, with market chatter suggesting they could clamber as high as EGP 10,000 in the coming months.

Recently, irritated consumers staged a protest at an Al Ezz Steel Rebars warehouse in Qalyubia, accusing steel merchants of hoarding to jack prices even higher and producers of only selling to middlemen.

Mr Tarek Shahin analyst at Beltone Financial said that if the steel supply has been restricted, companies like Al Ezz Steel are probably not to blame. He added that "Steel merchants the ones buying from the companies are traditionally the ones who hold back the supply. Historically, this is not unusual. It is happened many times."

Mr Shahin said that a few months ago, the state hinted that steel merchants should be more closely regulated because of the likelihood of hoarding. The fact that the end price of steel has fluctuated faster than the ex factory price, the price when it is bought from the factory, suggests middlemen may be holding back supply.

While all steel prices have been climbing faster than usual, Al Ezz Steel prices rose nearly every month this year, as opposed to in 2007, when they rose only once, consumer prices have been rising even faster on a weekly or sometimes daily basis.

While the price hikes announced by parliament on May 5th 2008 have stirred a number of inflation worries, Mr Shahin said that they probably did little to change steel prices as companies try to anticipate input cost rises and hedge against them. As the global prices have been rising for some time and the government has made no secret of its intention to strip energy subsidies, the increases were likely passed along preemptively.

Saudi Arabia celebrates 75 years of Aramco

Arab News reported that custodian of the Two Holy Mosques King Mr Abdullah had opened Saudi Aramco’s 75th anniversary celebrations at its premises and commended the company’s role in providing adequate oil supplies to ease the international energy crisis.

Mr Abdullah said that "This Saudi Company has been trying efficiently to support the Kingdom’s international policy in the field of providing suitable energy to confront global crises and, God willing, it will continue to play the same role."

In his keynote speech, Mr Abdullah thanked Saudi Aramco for providing energy for the national development. He said that "I take this opportunity to thank Aramco and its present and previous employees. We are proud of it."

Earlier, Mr Abdullah, accompanied by GCC leaders, visited an exhibition on the Kingdom’s oil industry where Saudi Aramco’s Mr Abdallah S Jum’ah president & CEO of Aramco explained to them the significance of some historic pictures that are being displayed there. The king later laid the foundation for the King Abdul Aziz Knowledge Center, which will be established close to the first oil well.

In his welcome speech, Mr Al Naimi said that the Kingdom has earned the respect of the world because of its positive, moderate economic and oil policies. He thanked the Saudi leadership for its generous support to the company since it was founded in 1933, adding that King Abdullah launched seven giant petroleum projects during the past 10 years.

Mr Jum’ah said that "As a result of King Abdullah’s instructions, our company has made rapid strides in oil and gas exploration, production and building refining, marketing and shipping networks, developing petrochemical industries, acquiring advanced technology and training national cadre."

The festivities at the headquarters of Saudi Aramco in the Eastern Province, which holds much of the Kingdom’s oil, included short plays, traditional sword dances and a rare show featuring school children in bright, long dresses swaying together on stage to patriotic music. Aramco employees will celebrate the anniversary in 11 different sites today with a variety of programs. Long serving employees will also be honored. The theme of the celebrations is 'Energy for Generations' and will focus on the human side of the company as well as its commitment to the Kingdom and global prosperity.

Mr Al Naimi said that "The 75th anniversary is an opportunity to celebrate Saudi Aramco’s great achievements over the years and to highlight the company’s role in contributing to the future of the Kingdom and the world economy. We view this as an opportunity to connect the company’s remarkable past with the exciting promise of the future. The story of Aramco is one of partnership, not only between a group of US oil companies and Saudi Arabia but also among generations of individual Americans, Saudis and the citizens of dozens of other nations."

Saudi Arabia cancels tender awarded to RZD to build rail line

RIA Novosti reported that Saudi Arabia has cancelled an USD 800 million tender won by Russian Railways to build a rail line in the country, for political reasons.

Mr Vladimir Yakunin president of Russian Railways said "This was not a problem relating to technology or RZD. It is a problem in international relations."

RZD was to build a line from Al Zabirah to the King Khalid international airport in central Saudi Arabia, to make up over one fifth of the North and South rail line in the Mideast state which will have a total route of 2,400 kilometer.

The North and South project was launched in Saudi Arabia in 2005 to develop phosphate and bauxite deposits in the country's north and reduce the economy's dependence on oil exports. The entire project was expected to cost over USD 2 billion and was expected to be finished in 2010-2011.

Aldar inks MoU with Arkan to maximize business opportunities

Arabian Business reported that Abu Dhabi's Aldar Properties has agreed a strategic alliance with Arkan Building Materials Company. The two firms signed a MoU, which would maximize business opportunities and link their supply chains.

Mr Ahmed Ali Al Sayegh chairman of Aldar said that "The MoU we have signed today with Arkan is in line of Aldar's commitment to partnering with highly credible suppliers with strong track record for delivery. Through such alliances we can ensure our projects are implemented on time and to the highest quality standards."

Mr Salem bin Mohamed Al Dhaheri chairman of Arkan said that "We are pleased to sign this MoU with Aldar and hope we will be able to develop it into a full fledged partnership for our mutual benefit. We look forward to contributing to Aldar projects by securing a proper supply chain that will allow Aldar to maintain its excellent delivery record."

Aldar has announced developments worth more than USD 65 billion since its inception in 2004. Its portfolio includes Central Market, Al Raha Beach, Coconut Island, Noor Al Ain, Al Gurm Resort, Al Mamoura - the Mubadala Development Company and Environment Agency Abu Dhabi Headquarter Building, and the Yas Island project which is to include a Warner Bros and a Ferrari theme park.

Arkan was incorporated in Abu Dhabi in 2005. Formed by the General Holding Corporation, a company wholly owned by the government of Abu Dhabi, it owns Emirates Cement Factory and Emirates Blocks.

Turkish shipyard fatalities put industry under fire

Today's Zaman reported that booming worldwide demand for cargo ships of every kind has greatly benefited Turkey as an emerging shipbuilding country in recent years, infusing the country with significant amounts of foreign cash and providing an abundance of employment opportunities to local markets.

However, this has come at a cost as labor unions become increasingly uneasy over occupational hazards and safety issues that have led to accidents and deaths, problems that threaten the lucrative shipbuilding industry, the world's fourth largest after Japan, South Korea and China.

The tragic deaths of 2 workers at a Tuzla shipyard last week prompted unions and civil society organizations to call on the government to take swift action in regulating the industry. Since 1983, when shipyards began operating in Tuzla, 74 workers have died from work related accidents. The number of total accidents also shot up to 227 incidents last year from 73 in 2002.

Analysts argue that structural problems, a shortage of skilled workers, the lack of education and a lack of compliance with regulations are at the root of the problems the industry is facing today. Coupled with over-ambitious shipbuilders trying to keep up with orders from customers, crammed shipyards working around the clock invite the risk of accidents and safety mishaps.

Details of accident leading to dead from 2001 to 2008

As of May 20th 2008 per union s