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 cabinet approves Sponge Iron Limited merger with NMDC

The Indian cabinet on Thursday approved a proposal to merge unlisted state run firm Sponge Iron India Ltd with National Mineral Development Corp.

Mr P Chidambaram Indian finance minister said that the merger will be completed within six months but gave no financial details. He told reporters that "This will ensure in house supply of desired quality and quantity of iron ore of SIIL's sponge iron plan at Paloncha in Andhra Pradesh.”

Mukand to increase prices by INR 2,000 in June

DNA Money reported that Indian specialty steel major Mukand Limited will increase product prices by INR 2,000 per tonne from June and may go for further revisions if the input costs maintain an upward trend.

Mr Rajesh Shah co CMD of Mukand, told DNA Money that it took a hit in its bottom line in the last financial year because of the rise in raw material prices and n the start of the current financial year.

He added that “After June, we might have to increase prices further if the price of metallurgical coke and iron ore continues to rule high.”

Mukand increased the price of alloy and stainless steel long products by INR 6,000 per tonne.

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.”

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.

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.

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.

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."

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.

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."

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

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

INR in million

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.

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 up to 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.

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."

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 involve 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.

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.

Update on renewable energy generation in Punjab

According to Punjab Energy Development Agency data, the quantum of energy produced in Punjab through new and renewable energy sources is more than 300 million units during 2005-07. Out of this, 77.73 million units were produced during 2005, while 109.35 million units and 128.83 million units of electricity during the years 2006 and 2007 respectively.

This apart, a large number of decentralized renewable energy systems or devices have also contributed to conservation of conventional energy. The state government has planned to achieve 10% contribution to total power generation in the state through renewable energy sources by 2012.

Year wise details of proposed enhancement of renewable energy and corresponding estimated investment during the 11th Plan in Punjab are
Sl Year Production Investment
1 2007-2008 105.45 426.60
2 2008-2009 141.31 688.13
3 2009-2010 373.00 1577.00
4 2010-2011 191.71 1875.39
5 2011-2012 105.12 589.20
Total 916.59 5156.32
Production in million units
Investments in INR crore

Week long fire destroys 3 million tonnes of coal at CIL CCL

Ranchi Express reported that the major fire that had engulfed coal stocked at Piparwar area of Central Coalfield Limited, a week ago, has been controlled. The coal firm had to opt for soil carpeting to control the raging inferno. The fire tenders and water hoses had proved ineffective against the fire.

The officials however failed to quantify the amount of stock that was gutted in the fire. They also denied the fact that the coal stock kept at Piparwar area was more than 3 million tones. As for the causes that led to the fire, the officials said that "Coal being a volatile product, the fire might have been caused due to spontaneous heating and friction. The exact causes would be known only after enquiry, which would begin soon. The enquiry would also ascertain the stock gutted in fire."

On being informed that some could still be seen coming out of the stock area, the official said that the flames have been doused. The area management has kept the whole under observation to ward off any recurrence of fire.

Aditya Birla Group plans huge investments in Orissa

KalingaTimes reported quoted Mr Kumaramangalam Birla chairman of Aditya Birla Group as saying that Orissa is an important investment destination of the group companies and is planning huge investments in the state.

Mr Birla said that all the investments put together would be to the tune of INR 80,000 crore in sectors such as alumina, cement, telecommunication and retail. This includes the investments already made in the ongoing projects.

During his meeting with Mr Navin Patnaik chief minister of Orissa, Mr Birla reportedly discussed about the problems facing the ongoing projects of the group companies and the projects for which memoranda of understanding had been signed.

As regards the Utkal Alumina International Limited's alumina refinery of project at Kashipur in Rayagada district where the affected people have been demanding more benefits, Mr Birla said that it had sought the intervention of the government to resolve the issues involved. Apart from the alumina refinery at Kashipur, the other projects for which the company has signed MoUs include a world class aluminum complex in Koraput and Sambalpur districts at a cost of INR 11,000 crore, and a cement plant in Sundargarh district.

Reliance Power to set up 3,910 MW power plant in MP

FE reported that, after bagging the 4,000 MW ultra mega power project at Sasan in Madhya Pradesh, Reliance Power has launched the development of another coal based project with a generation capacity of 3,910 MW in Madhya Pradesh with an investment of INR 18,000 crore. It has already signed the state support agreement with the Madhya Pradesh government.

The proposed thermal project would be developed on 80:30 debt equity ratio. Of the INR 18,000 crore, it would raise INR 8,900 crore through external commercial borrowings and INR 6,000 crore of rupee loan. The balance would be its equity. Reliance Power has received letter from the Madhya Pradesh Power Corporation for the purchase of 1,200 MW of the proposed project at INR 2.34 per unit.

Official sources said that "The project will be developed in 4 years after signing the power purchase agreement with various utilities. The company is, at present, in talks with Maharashtra, Harayana, Mumbai utilities for the sale of the balance power. It will seek coal linkage of 15 million tonnes for the proposed project."

Sources informed that six units of 600 mw would be installed. Reliance Power would weigh various options of sourcing power plants and equipment from India and foreign manufacturers including Chinese. According to sources, the Madhya Pradesh government has assured to help in the land acquisition and water supply for the project. Further, the project would get mega power project status as Reliance Power proposes to sell power to more than one buyer. The mega power enjoys concession in customs duty on equipments and raw materials.

Essar Group secures 1300 acres for steel project in Orissa

FE reported that Essar Group has acquired 1300 acres, out of the required 1960 acres, for its 6 million tonne steel project in Orissa. Essar is investing INR 15000 crore for the project, which includes an iron ore pellet plant and setting up of a slurry pipeline.

Mr SK Ruia chairman of Essar Group has expressed his satisfaction over the progress of the project. Mr Ruia, along with J Mehera COO for steel business, met the chief minister and discussed about the prospect of the group's various projects in the state.

Mr Mehera said that the work for the slurry pipeline and the pellet project has been started. Equipment supply orders for the projects have been placed with South Korean and German companies.

It may be noted that Essar had signed a MoU in 2005 with the state government to set up a steel plant along with facilities for making iron ore pellet and transporting iron ore slurry through dedicated pipeline from Barbil sector to Paradip.

Gujarat cement firms may cut capacity utilization

BS reported that Gujarat based cement manufacturers may lower their capacity utilization as the export ban last month has led to a situation of oversupply.

A top executive in the Cement Manufacturers' Association said that "The oversupply situation in Gujarat will sharply erode the profitability of cement companies. Some cuts could follow in their capacity utilization."

Gujarat's consumption of cement is 24% less than its overall production. It consumed 11.67 million tonnes of cement in 2007-08 against a production of 15.39 million tonnes. The remaining component was exported.

India exported 3.65 million tonnes of cement and 2.37 million tonnes of clinker in 2007-08, with Gujarat accounting for over 90%. Industry analysts said that the state is facing the immediate impact of export ban and there could soon be a marginal decrease in utilization by around 3% to 4%.

Export tax on steel may affect auto part makers – AMCA

It is reported that Indian government’s attempt to curb steel exports to ensure its availability at a reasonable price in the domestic market may also affect auto parts companies who export castings and forgings. Alarmed by the impact of the government’s decision to impose export tax on steel intermediaries, Automotive Component Manufacturers Association has sought an amendment that would exclude levies on such products.

ACMA has written to the steel ministry seeking clarification. It has stated that the government’s notification, which includes value added steel based products, has resulted in levy of export duty on rough iron and steel castings sold by some of the component companies overseas.

Mr Vishnu Mathur executive director of ACMA said that "Auto component producers exporting semi finished castings and forgings, which are meant for automotive exports, are being affected. This would have an adverse impact on the companies’ exports and the targets laid down in the Automotive Mission Plan."

AMCA has sought clarification or a necessary amendment in the clause so that auto component companies’ exports do not stand at a disadvantage. In the letter to the steel ministry, the association expressed its concern stating that while the main objective of the Government was to discourage steel exports of the basic steel raw material in view of the steep rise in steel prices since January 2008, customs are now imposing export duty on rough iron and steel castings that are being exported to vehicle manufacturers and tier I suppliers under global sourcing contracts.

Lohia Group enters into automobile sector

Lohia Group has announced its foray into the automobile sector with an INR 150 crore investment to launch electric two and three wheeler vehicles in the second half of 2008.

Lohia Group, which has set up a subsidiary called Lohia Auto Industries, will set up a Greenfield manufacturing facility in Kashipur in Uttarakhand, with an installed capacity of 200,000 units a year.

Mr Ayush Lohia VP of Lohia Auto Industries said that "Recently, central and various state governments have taken initiatives to promote environment-friendly vehicles. Keeping in mind this aspect and soaring fuel prices, we have decided to launch electric vehicles in India." He added that the first lot of the electric two wheelers from the Lohia stable would hit the market by August 2008 followed by three wheelers in November 2008.

Commenting on the company's production capacity, he said out of the installed capacity of 200,000 units a year, about 150,000 would be two wheelers and the remaining would be passenger three wheelers. He added that "The capacity is scalable up to 800,000 to 1million in the future."

Mr Lohia said that initially, the facility would have about 60% localisation in components, which would be increased up to 70% to 80% within 3 to 6 months of the launch. It would also set up two research and development centers.

Lohia Group is currently involved in garment and handicraft exports, steel and brass coil business and real estate.

Power deficit in April 2008 worsened – CEA Report

According to the monthly capacity addition report released by Central Electricity Authority, growth in demand and lag in capacity addition worsened power deficit in April 2008.

As per report, peak power deficit for April 2008 went up to 16.7% as against 13.9% in April 2007. Average deficit for April 2008 reached 12.1% as compared with 10.4% in April 2007.

Total capacity addition of 250 MW in April 2008 is also short of the programmed 309 MW. This comes at a time the government has set a capacity addition target of 78,577 MW in the 11th Plan period.

Jaiprakash acquires Bina Power from Aditya Birla group

ET reported that Jaiprakash Power Venture Limited has acquired Bina Power Supply Limited from the Aditya Birla Group for INR 150 to INR 175 crore. Aditya Birla Group had formed BPSCL in the early 1990s to develop a 1,000 MW power plant in two phases of 500 MW each at Bina in Madhya Pradesh, but did not pursue it after the initial progress.

Mr Suren Jain MD of JPVL said that "JPVL has now approached the Madhya Pradesh government for revival of the various approvals required for the setting up of the plant." He added that the first phase of the project would commence operations within 48 months of receipt of all approvals. JPVL plans to commission 500 MW in the first phase at an investment of INR 2,500 crore and subsequently raise the capacity to 1,000 MW.

Post the Bina acquisition, JPVL will have interests in almost 7,000 MW of power assets. These projects, which are at different stages of implementation include 1,000 MW Karcham Wangtoo Hydro Electric Project, 1,320 MW super critical technology coal based power plant at Nigrie in MP, two projects totaling 2,500 MW in Arunachal Pradesh and two projects totaling 720 MW in Meghalaya.

FIPB approves 51:49 JV between FreightCar and Titagarh

BL reported that Foreign Investment Promotion Board has given its assent to the proposed USD 40 million 51:49 JV between FreightCar America and Titagarh Wagons.

Mr Umesh Chowdhary vice CMD of Titagarh Wagons said that in June 2008, boards of the two companies would take a final look at the project, which would manufacture aluminum rail cars.

The project is to be commissioned in two broad phases. In the first phase, prototype and designing work would be carried out and completely knocked down imported cars from Freight America would be assembled at Titagarh’s plant. It is seeking to buy a little more than 100 acres of land to set a manufacturing plant and start production of cars tentatively by the first quarter of 2010.

Panang hydro electric project will destroy Dzongu – Panel

BL reported that the 6 member independent committee on big hydro projects has said that the 280 MW Panang hydro electric project will completely and permanently destroy the environment of Dzongu in North Sikkim.

The members said that the project would not only destroy the place with deep and unique religious sentiments attached but would also destroy the unique Lepcha community’s abode.

According to members, the Sikkim government had hastily committed itself to develop about 42 big hydropower projects without consulting the people of the state and without also considering the implications for the environment, the people’s culture and even the future returns on investment.

The team said that the state government, instead of assessing and realizing the potential of power generation in Dzongu and other regions of the state, had drawn up a MoU with a firm for the Panang project. They added that "The government should suspend or declare a moratorium on the project for 5 years and in the meantime take up the small and micro hydro projects in the region and also see the how the Teesta V project performs."

JFE pipe mill fudges hydraulic test data for API certification

Japanese media reported that Japanese steel major JFE Steel Corp during an internal investigation has discovered that pipes manufactured at its East Japan Works welded pipe factory in Chiba were certified as conforming to API standards without carrying out actual tests for last 5 years. According to testimony given in an internal company investigation by those involved, fabricated graphic data on the strength of steel pipes were simply drawn by employees.

Because those who conducted the strength tests on steel pipes used for oil pipelines said they had fabricated data for more than a dozen years, JFE is now investigating how this practice began as well the workings of its internal checking system. According to company sources, data is printed on special test paper in graph form when a steel pipe undergoes hydraulic pressure testing and pressure is represented on the horizontal axis and time on the vertical axis. The sources said they generally drew false lines on unused test paper with handmade rulers cut from thin plastic.

As the graph form varies according to the kind of steel, they had made more than a dozen kinds of rulers and used pens that contained the same ink as that used by the hydraulic testing machines. The forgery was conducted in a shed near the testing machinery in the factory. Rulers, pens and unused test papers were kept at the ready in the drawers of a desk in the shed.

According to the sources, when they had spare time, they forged data in bulk and stored them there. The sources said they would repeat the test on a single steel pipe, whose data would be passed off as pertaining to other pipes.

The fabricated test papers were kept in the shed and only the test results were reported to the facility's quality guarantee section, which presented test certificates based on the falsified data to consumers across the nation and in the United States.

As per report, data was fabricated on about 2,500 steel pipes, the sources said, which were sold to three domestic companies and 38 companies in the United States and other countries. The company said it would notify its clients about the data fabrications.

Mr Yasushi Yamamura, chief of the general affairs department of the company's East Japan Works said that "We admit that it deviates from the principles of guaranteeing quality and the basic rules of making a contract with customers. We believe there was no problem with the quality of our products but we'll review our product maintenance system."

API standards require that pipes should be reexamined using hydraulic pressure tests and ultrasonic flaw detection or X-ray tests before shipment. API standards stipulate technical conditions to ensure product quality and environmental protection with regard to crude oil production facilities and the transportation of pipelines.

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.

Global DRI production in April 2008 up by 9.5% YoY

International Iron and Steel Institute have released the production figures for direct reduced iron for the month of April 2008. The global production of DRI in April 2008 was 4.729 million tonne up by 9.5% YoY.

India retained the top slot with 1.645 million tonne production.

In million tonnes
Source – IISI

Oil smashes USD 135 record in Asian trade

Oil smashed past USD 135 dollars a barrel for the first time on Thursday, continuing its astonishing rise following unexpected drops in US crude and gasoline stocks in a tight market.

New York's main oil futures contract, light sweet crude for July delivery, briefly rose to a high of USD 135.04 a barrel before easing to USD 134.59 in Asian afternoon trade up by USD 1.42 from its US close. London's Brent crude contract for July was also busting records, rising to a high of USD 134.50 before pulling back to trade at USD 134.36 smashing its intraday peak of USD 133.34 set a day earlier.

In unadjusted terms, New York oil has risen more than fourfold compared with five years ago when it was trading at just below USD 30 a barrel.

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.

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.

Taubensee Steel increase EUR 80 on all wire products

Based on additional May rod increases recently announced by domestic rod producers, Taubensee Steel & Wire Company will be implementing an EUR 80 per tonne price increase on all wire products effective with shipments June 2nd 2008

Taubensee Steel & Wire in a statement said that as the wire industry is experiencing raw material shortages, it is fully prepared to continue meeting your needs and we are committed to maintaining our position as your preferred wire supplier.

Tokyo Steel hikes steel prices for June

Japanese Tokyo Steel has announced to raise its steel price for domestic market in June due to higher cost of raw material.

Price of steel plate went up by JPY 3,000 per tonne and that of long products rose by JPY 5,000 per tonne. The company will add JPY 3,000 per tonne on steel wire.

After the adjustment prices would be as under
1. Hot rolled coil at JPY 115,000 per tonne FOT
2. HRPO at JPY 120,000 per tonne FOT
3. Teardrop plates at JPY 121,000 per tonne FOT
4. Heavy plate at JPY 132,000 per tonne FOT
5. H beam at JPY 128,000 per tonne FOT
6. I beam at JPY 129,000 per tonne FOT
7. U pipe at JPY 131,000 per tonne FOT
8. Rebars at JPY 112,000 per tonne CIF.

(Sourced from YIEH.com)

ArcelorMittal Shelby to hike tube prices

US based ArcelorMittal Shelby Tubular is planning to raise its drawn over mandrel pipe prices by 4%. It is expected that the new price will be effective with contracts shipped after July 6th 2008.

The main reason is that the cost of raw material is continuing to increase. Besides, the elemental and fuel surcharges will still keep applicable.

(Sourced fro YIEH.com)

South Korean slab import prices up

It is reported that South Korean import slab market price has recently sailed past USD 1,000 per tonne. Global slab manufactures’ decreasing production volume, plus the high cost of raw material resource are the main reasons.

Current slab price is quoted at USD 1,040 per tonne from Russia. Besides, a market analyst has predicted that HRC and thick plate/coil prices will rise further.

(Sourced fro YIEH.com)

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.

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

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.

ArcelorMittal completes of consent solicitation

ArcelorMittal announced that its indirect wholly owned subsidiary, ArcelorMittal Financial Services LLC has successfully completed its previously announced consent solicitation with respect to proposed amendments to certain provisions of

1. The Indenture dated March 25th 2004, as amended governing its outstanding USD 422.5 million aggregate principal amount of 9¾% Senior Secured Notes Due 2014 which are secured by USD 422.5 million aggregate principal amount of Series Z First Mortgage Bonds of ArcelorMittal USA Inc

2. The First Mortgage dated April 1st 1928, as amended, governing the First Mortgage Bonds

3. The Security Agreement dated March 25th 2004, entered into in connection with the issuance of the Notes.

The release said that “As of the expiration of the consent solicitation at 5:00 PM on May 21st 2008 the Issuer had received the requisite consents from the holders of outstanding Notes in an amount necessary to approve the Proposed Amendments. On May 21st 2008, in connection with the solicitation of consents, the Issuer executed a supplemental indenture amending the terms of the Indenture. The Supplemental Indenture was entered into by the Issuer, ArcelorMittal USA Partnership, the Guarantors and LaSalle Bank National Association, as Trustee.”

It added that “The Issuer will pay or cause to be paid to each holder of Notes who delivered a valid and unrevoked consent prior to the Expiration Time a one time cash payment of USD 1.25 for each USD 1,000 principal amount of Notes in respect of which a valid and unrevoked consent was delivered. The Consent Payment is expected to be made on May 22nd 2008.”

The consent solicitation was made pursuant to and the complete terms and conditions of the consent solicitation and Proposed Amendments are set forth in, the Consent Solicitation Statement and Prospectus dated April 23rd 2008. The Proposed Amendments are binding on all holders, including non consenting holders of Notes.

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.

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."

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.

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

South Africa wants higher carbon tariffs by 2050

Reuters reported that South Africa wants to significantly increase tariffs on carbon use by 2050 as it strives to reduce harmful emissions.

A South Africa’s government minister said that South Africa, which relies primarily on carbon belching coal fired power stations to generate electricity, is the continent's leading producer of carbon emissions, accounting for more than 50% of the total.

Mr Trevor Manuel finance minister of South Africa in February introduced a 2% kilowatt hour levy on non renewable sources of electricity essentially a carbon tax in a bid to spur greater investment in low carbon technologies.

Mr Marthinus van Schalkwyk environmental affairs and tourism minister said that "We already have our first carbon tax, the one that the minister of finance announced. In principle a carbon tax will be nothing new for South Africa but we do not want to pre empt any cabinet discussion and any decisions.”

He told reporters that "In future there will be a price on carbon. We don't yet know what form that will take.”

An official environmental affairs report said that carbon prices could rise to ZAR 750 per tonne of carbon equivalent by 2050 from ZAR 100 in 2008. The report added that "The rising tax level is designed to approximate a phase of slowing emissions growth, stabilizing emissions and ultimately reducing absolute emissions through a high carbon tax of ZAR 750 in the last decade.”

CSC honored as Supplier of the Year by GM

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

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

Mr Andersson said that “This is the first year for CSC to supply GM and for GM to award a supplier at his first year is not easy. GM commendes CSC’s teamwork for his best performance and GM is pleased to receive CSC into the global steel supply community.”

The GM Supplier of the Year award began as a global program in 1992. Winners are selected by a global team of executives from purchasing, engineering, manufacturing and logistics who base their decisions on supplier performance in quality, service, technology and price. This year, General Motors honored 97 suppliers for their outstanding performance throughout 2007.

Soaring oil prices may end dollar global status - Study

According to a Rice University study, soaring oil prices may cause an energy crisis that will eventually lead to a new world financial system based on multiple currencies instead of the US dollar.

According to a study released by the Houston based university's Institute for Public Policy, the rising inflation fed largely by oil producing countries will force Western governments to tighten monetary policies, undermining export driven economies in China and India. That would undercut energy demand, ending cheap credit worldwide that is fueled by so called petrodollars and further undermining the global economy.

The study's authors wrote that “We think that energy markets may play an important role in bringing about a financial crisis that may transform the global financial system. The US dollar's status would likely come to an end.''

According to the study, written by Mahmoud Amin El Gamal of Rice University and Amy Myers Jaffe of the Baker Institute, China, India and Middle Eastern oil producers such as Saudi Arabia have an interest in working with Western governments to establish a financial system based on a range of currencies that would offer similar stability to the days of the gold standard.

The study said that governments worldwide hold dollar denominated debt, and an orderly transition would allow those countries to diversify their investment holdings over time.

The authors wrote that high oil prices and their effect on the West eventually will cripple exports from China and India, exposing bad loans in their banking systems. They said that a banking crisis in China would require massive rescue packages, costing well above USD 1 trillion and requiring massive sale of dollar denominated assets, thus deepening the crisis.

The dollar fell the most in a month today as oil prices soared, prompting investors to turn to commodities as a safe haven. The Dollar Index traded on ICE futures in New York, which tracks the dollar against currencies of six trading partners, fell to 72.49 from 73.045 yesterday and has fallen 12 percent in the past year.

Concern grows over steel shortages in Thailand

Bangkok Post reported that concern is mounting about a possible steel shortage in Thailand as demand rises in anticipation of work starting on government mega projects. As well, global demand would be pushed up by reconstruction following the earthquake in China and the cyclone in Burma.

The Commerce Ministry of Thailand has asked manufacturers, distributors and importers for weekly reports on their stocks and has dispatched officials to inspect stocks to prevent hoarding. Mr Yanyong Phuangrach the department's director general said that the ministry's Department of Internal Trade plans talks with industry executives later this week or early next week to discuss ways of ensuring adequate steel supplies.

An industry source said that there are signs of price speculation by traders who believe the department will approve increases in steel prices. A Commerce Ministry source said that officials had tentatively approved higher prices for steel bar and sheets.

Last week, local contractors threatened to boycott government projects unless authorities acted within 30 days to deal with skyrocketing material prices. The source said that steel bar prices would increase by THB 8 per kilogram or THB 9 per kilogram from THB 28 per kilogram or to at least THB 36 per kilogram. The new price for steel sheet would be THB 39 to THB 40 per kg up from THB 30 per kilogram to THB 31 per kilogram currently.

The source said that ''Steel manufacturers have been asking to raise prices since the end of April, but the ministry asked them instead to help hold the prices for a while and they agreed, but now the price of raw materials have risen markedly, partially on expected higher demand from China to rehabilitate damaged by the earthquake.”

Mr Vikrom Vajarakupta executive director of the Iron and Steel Institute of Thailand said that world prices remained relatively high, with hot rolled steel at USD 900 to USD 1,000 per tonne compared with about USD 600 at the end of last year. He predicted that prices would ease later this year on ebbing demand in a slowing world economy. He estimated Thailand's steel demand at 13 million tonnes this year, a rise of 3% to 5% from last year.

Corus to supply steel to build aircraft carriers

scunthorpe.co.uk reported that the UK’s ministry of defense has given the Corus steelworks in Scunthorpe the go ahead to help build Britain's largest ever aircraft carriers at a cost of GBP 3.8 billion. The carriers will be the most powerful surface warships ever constructed in the UK. Once they enter service in 2014 and 2016, they are expected to remain in the fleet for up to fifty years.

As per report, Corus will supply more than 80,000 tonnes of steel for the carriers, to be named HMS Queen Elizabeth and HMS Prince of Wales. Rolling will start soon in Scunthorpe of the steel plate to build the hulls of the twin ships.Corus beat off international competition for the lion's share of a GBP 65 million contract to supply the steel. Around 90% of the steel will be manufactured at the company's sites in Scunthorpe, Dalzell in Scotland and Skinningrove in Teesside.

Ms Rachel Cox a Corus spokeswoman said that "It's great news for Corus. This success confirms our ability to produce world class steel and is a welcome boost to our three sites involved in the manufacturing program."

She added that the carriers will be built in sections and assembled at Portsmouth, Barrow in Furness, Glasgow and Rosyth.

Nucor announces prices of common stock offering

Nucor Corporation announced the pricing of its public offering of 25,000,000 shares of its common stock. The offering was priced at USD 74.00 per share.

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

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

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

Metso to invest in China

Reuters reported that Finnish engineering company Metso would invest EUR 20 million in China to expand production capacity and office facilities to respond to the demand growth of automation valves.

As per report Metso will set up a new valve factory and supply centre for Metso's automation division and the new facilities would begin operations in 2010 with production capacity quadrupling from 2007 to 2011.

The report added that Metso would also hire 400 new staff.

Ford Motor cuts North American automotive production

Platts reported that Ford Motor Company is making adjustments to its automotive production plan to shift away from the gas guzzling SUVs and revising downward its near term North American automotive profit outlook and production forecasts. At the same time, it is planning further manufacturing capacity realignments, additional cost reductions and changes to its product mix to respond to the rapidly changing business environment in the US.

While Ford is increasing production in 2008 of its sedans, it is reducing 2008 production of large trucks and SUVs, as gas prices soar and customers move more quickly to smaller and more fuel efficient cars and crossovers.

Ford said that its second quarter vehicle production will be down 15% from Q2 2007 and Q3 production is expected down by 15% to 20% from last year. The fourth quarter is expected to be down 2% to 8% YoY. For the year, Ford now expects US production to be between 15 million and 15.4 million units.

Mr Mark Fields Ford's president of the Americas said that "Rapidly rising commodity prices particularly steel prices and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009.”

Mr Alan Mulally president & CEO of Ford said that "Unless there is a fairly rapid turnaround in US business conditions, which we are not anticipating, it now looks like it will take longer than expected to achieve our North American Automotive profitability goal. Overall, we expect to be about break-even companywide in 2009 with continued strong results in Europe and South America."

He said that "We are profitable and growing outside of North America and our transformation plan in North America is working. The challenge affecting the entire industry is the accelerating shift in consumer demand away from large trucks and SUVs to smaller cars and crossovers combined with a steep rise in commodity prices and the weak US economy."

USW Women of steel demonstrate against toxic trade

The United Steelworkers Women of Steel is hosting a lead screening session to educate families about potentially toxic products and the bad trade policies that are allowing them into our homes. The product screenings are part of the USW's international "Protect Our Kids – Stop Toxic Imports" campaign.

Members of the community are invited to bring toys and other imported items to the United Shopping Plaza where they will be screened for lead and where the USW will provide safety and educational material.

Ms Donna Shaver a member of the USW's Women of Steel who are conducting the lead screening tests here and across the United States and Canada said that "I've been scared to death for the children after hearing about lead on toys like Thomas the Tank Engine, Barbie, Dora the Explorer, Big Bird and on baby bibs, too. We're hoping our campaign helps find poisoned products so we can get them out of our homes, but we also want to draw attention to the root of the problem bad trade deals. These cheap goods from countries like China have an expensive price that is threatening the health and safety of our children and families."

The union is calling upon Congress to support the US Food and Product Responsibility Act, introduced in the Senate by Sen Sherrod Brown, D Ohio and in the House by Rep. Pete Visclosky, D Ind. This legislation would safeguard Americans against toxic food and products by requiring companies producing the goods and importers importing them to take responsibility.

Over the past few months, the USW Women of Steel have conducted lead screening tests similar to the St Croix event in more than 25 cities across North America to educate families about this threat of lead contaminated toys and other products.

Dr Herbert Needleman a University of Pittsburgh professor who pioneered lead research and treatments 30 years ago said that "Products we made safe through regulation of US manufacturers are coming in poisonous through a back door in trade policy.”

PT Krakatau Steel should not go to foreigners - Defense minister

According to Mr Juwono Sudarsono defense minister of Indonesia, state steel company PT Krakatau Steel should be privatized through an initial public offering rather than by being sold to a foreign owned company.

After meeting with Mr Susilo Bambang Yudhoyono president of Indonesian Mr Juwono said the country's largest steel producer should remain under Indonesian control because of its strategic role in supporting the national defense industry.

He said that "I have met with Krakatau's directors and we agreed the company should be privatized through an IPO.” Mr Juwono said the case for an IPO was supported by Krakatau's improved financial and managerial performance during the past 18 months.

Mr Juwono said that foreign acquisition of Krakatau Steel could result in the massive layoffs of existing employees. He said that "It is good the company will have increased profits, but 700 to 1,000 people could lose their jobs.”

Mr Juwono said that top officials at the Defense Ministry, the State Ministry for State Enterprises, the Finance Ministry and the Industry Ministry have yet to meet to decide how Krakatau will be privatized. Mr Juwono said that "I will set up a meeting with all the other relevant ministers as soon as possible because I think it is crucially important for our defense industry.”

Yamato Kogyo acquires US scrap dealer

Yamato Kogyo has announced that its subsidiary Yamato Kogyo America purchased 49% interest of Advanced Steel Recovery, which is US ferrous scrap dealer.

Yamato Kogyo tries to secure steel source through the acquisition of container based scrap exporter.

Yamato Kogyo and GII JV to setup steel plant in Bahrain

Japanese steel maker Yamato Kogyo announced the signing of a deal for construction of a steel plant in Hidd Industrial Area in Bahrain in a JV with Gulf Industrial Investment.

The project with the capacity of 1.5 million tonnes will start operations in 2011.

Rising iron prices threaten contractors in Turkey

Zaman Daily reported that Turkish iron prices have risen to TRL 1,495 per tonne, increasing by 112.7% in the last seven months, thus leaving contractors in a very tight spot. Experts predict that the increase will continue until August 2008. Meanwhile, the government is preparing a price difference enactment for the construction sector in order to shield it from any more increases in the price of materials.

The substantial increase in global iron prices has brought the construction sector, already in difficulty as a result of period of stagnation across economic sectors in Turkey, to the verge of a crisis that has threatened the Turkish economy as a whole.
The increase in iron prices is traced to consumption increases in China, increasing petroleum prices, swelling investments by Arab countries, and numerous other factors. It has been noted that the increase in iron prices has now reached 113% in the period since October 2007.

Prices dropped between May and October in 2007, followed by the record increase. In May 2007, iron was priced at TRL 78,814 per tonne, before dropping to TRL 70,339 over five months. However, prices then increased by 8.43% in November 2007, 12.8% in January 2008, 8.9% in February 2008, 19.5% in March 2008, 19.5% in April 2008 and 11.9% in May 2008, creating a total increase of 112.7% between October 2007 and May 2008.

The state of the construction sector, which accounts for 33% of the national income, is alarming. Contractors, who carry out construction projects for the public sector, are facing financial difficulties as a result of the crisis.

ETA keen on setting up port and shipyard in Gujarat

Exim News Service reported that Dubai’s Emirates Trading Agency, in a letter to the Gujarat government, has reportedly conveyed its interest in setting up a shipbuilding yard and a port in Gujarat. This is apart from its other investments in the state’s maritime infrastructure.

Mr SC Mathur chief nautical officer of Gujarat Maritime Board said that "We have had preliminary meetings with ETA officials regarding their plans for Gujarat. We have invited them to participate in the Vibrant Gujarat Global Investors’ Summit early next year."

At present, APM Terminals, Shell Hazira and DP World have operations in the state. While APM manages the Port Pipavav, Shell Hazira runs an LNG terminal in Hazira. DP World operates a container terminal at Mundra Port.

With the state government encouraging private participation in ports, a number of major foreign players have shown interest in investing in the state. Gujarat has been emerging as a major shipbuilding destination. At the global investors’ summit last year, leading logistics and shipping companies in the port sector had MoUs worth INR 13,500 crore.

ETA Ascon group manages and operates Ajman port and container terminal in the UAE. It recently acquired a shipyard in China with a capacity to build 80,000 DWT vessels, which it plans to upgrade to 120,000 DWT.

Six piers to be commissioned in Khorramshahr Port

Tehran Times reported that concurrent with May 23rd 2008, marking Khorramshahr Liberation Day, six large piers to the total length of 864 meters will be commissioned in the port city of Khorramshahr in Ahvaz southwestern province.

Mr Ali Taheri MD of Ports & Shipping Organization said that construction of the piers has taken 38 months costing SAR 210 billion. He added that the piers have been established by Iranian experts and would develop port activities in the region.

Construction of tallest tower in Bahrain put on halt

Gulf Daily News reported that an ambitious plan to build Bahrain’s tallest tower was halted after it was discovered the project’s plans are years out of date.

As per report, the Manama Municipal Council was now likely to ask the developers to present an up to date impact assessment before giving it the final approval.

The developer Al Khaleej Development Company had been granted initial approval from the Manama Municipal Council to build the 72 storey tower in Bahrain’s Seef District. However, the permission was withdrawn when it emerged the USD 265 million project was based on an impact assessment study from 2005.

Mr Abdulmajeed Al Sebea'a technical committee chairman of Manama Municipal Council said that he did not realize the project was based on 2005 plans and the project should be put on hold. He added that "The technical committee has not revised Tameer's plan properly, because if it had, it would have known that it was done in 2005 and that things have changed significantly since then."

More plants to recycle construction waste needed in Dubai

Mr Klaus Leirer project manager at Emirates Environmental Technology said that at least 50 recycling plants will be required to deal with construction waste in Dubai and reduce the burden on landfill sites. He added that as a first step every construction company should separate waste in particular wood, steel and paper from concrete.

Mr Leirer said that "Sharjah alone produces about a million tonnes of construction waste every year and, therefore, we are not accepting waste from any other emirate. We are keen to expand our facility and double the capacity. Otherwise the landfill burden will increase."

Mr Salah Tahir director general of Sharjah Municipality said that the JV with Emirates Environmental Technology would open up new business opportunities in selling on the byproducts of construction waste. He added that "With this initiative Sharjah will play a leading role both within the UAE and at the regional level in adopting the latest technology in recycling construction waste and converting it into reusable raw materials."

The annual report of Dubai Municipality's Waste Management Department said that the amount of construction and demolition waste generated in Dubai registered a record 163% YoY growth in 2007. In 2007, 27.7 million tonnes was removed from the city's construction sites compared to 10.5 million tonnes in 2006.

Saudi Arabia cancels tender awarded to Russia to build rail line

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

Mr Vladimir Yakunin head of Russian Railway said that "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 South rail line in the Mideast state, which will have a total route of 2,400 kilometers.

The North 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.

It may be noted that Russian Railways announced in January 2008 that it had won a tender to build a 520 kilometers long rail line in Saudi Arabia.

Sorouh picks up 60% stake in Pivot Engineering

Sorouh Real Estate recently announced that it has acquired 60% of Abu Dhabi based construction company Pivot Engineering & General Contracting Company.

Sorouh announced its deal with the local construction company as a logical step in strengthening its ability to deliver on the more than AED 45 billion in projects it currently has under development. It acquired a stake in LLJ Property in a share transaction that extended Sorouh's sales channel to market.

Mr Mounir D Haidar CEO of Sorouh Real Estate said that "Sorouh is delighted to be able to deepen its relationship with Pivot, a company with proven delivery and long history in Abu Dhabi. Given the scale of our developments coming to market in the coming months and years, our construction force needs to be extensive to operate at world-class levels of build and safety."

He added that "It is vital Sorouh keeps its commitment to deliver on time and with optimum quality. With this acquisition and our shareholding in LLJ Property, we have made strategic investments up and down the delivery chain, which put us in a stronger position than ever before."

Mr Fahim Boulos managing partner at Pivot Engineering said that "We feel that this is a very exciting time right now in Abu Dhabi, and to be associated with Sorouh and its projects gives us unprecedented ability to grow and participate in the city's major development plans."

Pivot Engineering established its headquarters in Abu Dhabi in 1978, and has completed a diverse range of construction projects. It has a proven track record of on time delivery while maintaining the highest quality and safety standards.

KNPC declares winners of new refinery in Kuwait

Kuwait National Petroleum Company has announced the winners of multiple tenders to set up the country’s fourth multi billion dollar oil refinery, with a capacity of 615,000 barrels per day.

The assessment has been carried out in line with technical and trade criteria, rather than the lowest price mode and all winning companies had offered the best bids.

Mr Ahmed Nasser Al Mzeal media relation team leader of KNPC said that the first tender, won by an alliance of Japan's JGC and South Korea's GS at a value of USD 4 billion, involves main manufacturing units.

The second tender covering supportive manufacturing unit has been won by the SK Engineering and Construction Limited. This is valued around USD 2.624 billion.

The third tender which will include safety and security, piping of the whole project and utilities was not included among the winners, and will be tendered only for local contractors in the coming few months.

The fourth tender worth USD 1.184 billion, dealing with the site of silos, was awarded to the Korean Dailem Industrial Company.

The fifth tender, valued around USD 1.120 billion and related to sea utilities, has gone to the Hyundai Engineering and Construction of Korea.

Mr Al Mzeal said that "Work on the refinery will start in the coming few weeks." He added that the new refinery aims to produce environmentally friendly fuel for operating power and water plants in Kuwait. Operation is scheduled to begin by May 2012 with a refining capacity of 615,000 barrels per day. Of the total capacity, 200,000 barrels will be destinated for domestic fuel usage, with the remainder to be exported to Asian markets mainly in Korea and Japan.

ADNOC postpones sour gas contract signing

It is reported that Abu Dhabi National Oil Company has postponed the signing of a contract to develop its sour gas reserves after initially planning to make an award by May 2008. As per report, a new date for signing the contract has yet to be set.

Mr Omair Suwaina manager of the onshore division of ADNOC's exploration & production directorate said that they were expecting to sign the contract within a week.

US oil giant ConocoPhillips have been reported to have won the project to develop sour gas at the Shah field, with a price tag of over USD 10 billion. Conoco and ADNOC have yet to make an official announcement on the contract.

This was the largest upstream project open to international companies competing for limited access to the Middle East's oil and gas fields in the past year.

According to report, analysts pegged the price of developing both Shah and a second sour gas field called Bab at USD 10 billion. Now, the cost is as high just for the one field. Reports suggest the cost of sour gas could be three times that of the natural gas the emirate already imports from Qatar through the Dolphin pipeline, leading to industry speculation that the government may opt to rethink its plans.

The UAE’s natural gas reserves of 214.4 trillion cubic feet are the world’s fifth largest after Russia, Iran, Qatar, and Saudi Arabia. Much of the sour gas reserves are inextricably linked to oil production. At the same time, most have high sulphur content, making extraction and processing an expensive business.

South Korea steps up efforts to reach out to Arabian world

Yonhap reported that South Korea is set to launch the country's largest organization of private and public officials aimed at promoting ties with Arab states.

As per report, the new organization called Korea Arab Society is designed to boost people's understanding of Islamic culture and foster human networks, as well as support firms seeking to do business in the region. The organization will be based in Seoul but it will have chapters in member nations, joined by government officials, companies and cultural figures from both sides.

The Korean foreign ministry initially planned to call the body the Middle East Society but changed the name at the request of the 22 Arab states, which want to draw a line between themselves and non-Arab nations in the Middle East such as Israel, Iran and Turkey.

A ranking ministry official said that South Korea and the Arab nations seem to have slightly different main reasons for joining the group. He added that "The South Korean side looks focused on the economic field, while the Arab countries are more interested in cultural exchanges."

In fact, public understanding here of the Arab world has failed to keep abreast with growing economic relations between the two sides. Many Koreans even have prejudice against the Arab world amid a cascade of reports on conflicts and terrorist attacks in the region.

South Korean firms also hope that the organization will help them seek out business opportunities in the region. Around 10 local companies, including oil refiners such as SK, GS, and S oil, will join the society as well as shipbuilder STX and the Korea International Trade Association.

Energy plan for Sindh suffering from stalemate – Ms Nasrin

The International News quoted Ms Nasrin Jalil Naib Nazim of City as saying that energy plan prepared for Sindh is suffering from stalemate for the last 2 years and so far only paper work has been completed.

Ms Jalil said that solar energy panels are being manufactured and exported form the Karachi Export Processing Zone but Karachi is deprived of this facility.

She said that in Gwadar, work on streetlights to be operated with solar energy has been started and there is imperative need to use solar energy here in Karachi.

Ms Jalil said added that for the last 20 years, no work has been done on Thar coal where there are vast reserves of world’s best coal. She said if provincial autonomy is granted, the revenue generated from Thar coal could be spent on development of Sindh.

Iran to boost oil output to 4.3 million barrels per day

IRNA quoted Mr Seifollah Jashnsaz deputy oil minister of Iran as saying that Iran will boost its oil output to 4.3 million barrels per day by the end of the current Iranian year. He added that such a rise is due to major projects implemented by the oil ministry this year.

At present, Iran is producing 4.207 million barrels of oil daily which shows an increase of 105,000 barrels as compared to last year. The surplus oil will be supplied from Darkhovein, Shadegan and Hengam oil fields in Khuzestan province, southwestern Iran.

Kuwait rail network tenders likely by end of 2008

Emirates Business reported that tenders for the construction of the Kuwait Metropolitan Rapid Transit System, the country's first passenger rail network, are expected to be awarded in 2008. Separate tenders will be awarded for each of the 4 lines, which will make up the 165 kilometer network across Dubai.

Mr Hussain Jafar Al Sayegh chairman of AKNAN Global and chief consultant for Kuwait Overland Transport Union said that "We are completing the final design stage and in June 2008, the cabinet will make its approval on the specifications of the project. Invitation for bidders, both local and international, will most likely start in July 2008 and the winners will be announced within 6 months. We are likely to have the tenders awarded by end of 2008."

Mr Al Sayegh said that "This is part of the Kuwaiti government's keenness to involve private sector in most of its projects to encourage innovations. The financing model was chosen following studies by consultants who cited successes of similar government private partnerships in other countries. It is the best financing model. Revenue will not be generated only through ticket sales, there will be better ways of making it a lucrative investment."

As part of the design studies, examples have been drawn from the Dh15.5bn Dubai Metro currently under construction. A team of renowned rail experts is also trying to borrow ideas from some of the best metros in the world while taking into consideration the social and economic needs of Kuwaitis, noted Al Sayegh.

Construction of the project estimated to cost USD 11.3 billion is expected to commence in 2009 and the first phase will be completed within 5 years. For each of the 4 lines, the Kuwaiti government will form a JV with the bidder, with the government owning a 24% share and the bidder 26%. The remaining 50% stake will be sold in an IPO.

The Kuwait Metropolitan RTS is expected to be linked with the National Rail Network, which carry both passengers and freight within 5 line 505.3 kilometer network. It is expected to carry 69.1 million passengers per year, while the national rail is projected to transport 2.3 million passengers a year.

Saudi Arabia to expand oilfield to meet crude demand

Mehr News Agency reported that Saudi Arabia is pushing ahead with a costly project to expand its giant Manifa offshore oilfield, which will add nearly 900,000 barrels per day of heavy crude and meet an expected sharp growth in global demand for this type of crude.

The project is part of a program to lift Saudi's crude output capacity to 12.5 million barrels per day at the end of 2009 from around 11.3 million barrels per day currently to maintain its position as the dominant oil supplier.

The project has already prompted plans to build 2 large refineries with a combined output capacity of 800,000 barrels per day to handle heavy crude, while work is under way to construct a 41 kilometers causeway to link the field to the hub of the Gulf Kingdom's hydrocarbon industry on the eastern coast.

Saudi Aramco is carrying out the Manifa oilfield project, which will boost capacity to 1.2 million barrels per day.

Mr Ali A Al Ajmi VP for project management at Saudi Aramco said that "To meet worldwide energy demand, Saudi Aramco's latest Crude Expansion Program calls for an increase in crude oil production and higher maximum sustained capacity rates. The development of Manifa field was identified as a source for additional crude. In fact, Manifa has been called the launch pad for this expansion."

Describing the project, he said that Manifa's 6 reservoirs are rich in crude oil, qualifying it as a giant field. Its parameters begin close to Saudi Arabia's coastline east of Dhahran in the Eastern Province and stretch due northwest to the maritime borders of Iran and Kuwait. He added that "Manifa extends 15 kilometer offshore, 16 kilometer from Manifa Bay pier and 35 kilometer southwest of Safaniya."

Bahrain to privatize its sanitation facilities

HSBC, in a statement, said that Bahrain intends to privatize its sanitation facilities, a project worth at least USD 1 billion. It has appointed a group comprised of HSBC Bank Middle East, Fichtner Consulting Engineers and legal firm Norton Rose to advise on the deal.

Invitations for tenders for the roughly USD 150 million plant will be issued within weeks.

HSBC added that Bahrain has a population of about 1.05 million and the privatization plans include the construction of a new sewage treatment plant serving 500,000 people.

Turkey becomes export base for automotive manufacturers

Zaman Daily reported that Turkey is growing as an export base for automotive manufacturers and auto related sub industries because of its strategic market location, industry incentives, low cost, abundance of skilled labor, customs union with the EU and high technology and know how.

Emerging from a financial crisis in 2001, Turkey has successfully transformed itself into a highly competitive economy, attracting a sizable portion of foreign investment in the auto sector. Today, the industrial goods account for more than 90% of Turkey's exports, with automobiles the most sold item in this category. All indications show Turkey is on its way to becoming a global automotive hub.

Despite price hikes in raw materials such as steel, the latest figures show Turkey's automotive industry exports rose by 52% YoY in the January to April 2008 period, reaching USD 8.99 billion. Year wise export and import details in Turkey is as follows
Year Exports Imports
2008 5.3 3.3
2007 15.9 12.4
2006 11.9 11.4
2005 9.6 10.6
2004 8.3 10.2
2003 5.3 5.4
2002 3.3 2.3
2001 2.3 1.8
In USD billion

The Turkish automotive sector reached a record level figure of 1.1 million motor vehicles manufactured in 2007 by attracting the attention of giant automotive firms. In the first quarter of 2008, the production figure increased by 42% YoY and projects indicate that another 250,000 vehicles will be produced by year end.

Mr Zafer Caglayan industry & trade minister of Turkey said that "Turkey aims to reach USD 25 billion in automotive exports and to allocate USD 20 billion for research and development by 2011."

Mr Erkut Özarman president of Association of Automotive Parts & Components Manufacturers said that "They expect to sell over 1 million vehicles to foreign markets by the end of this year. The capacity of auto plants reached over 100% this year as compared to 86% last year."

In the meantime new vehicle sales in Turkey shot up by 11.7% YoY in April 2008, reaching 50,956 units. But increasing fuel prices and less than favorable interest rates for loans in the country are major obstacle to domestic car sales. In the first quarter of 2008, 130,000 cars were sold to domestic consumers.

Steel production to reach 30 million tonnes in Iran – Report

Mr Barati Nik Iranian deputy minister of mines & industries visited the progress of the biggest factory of direct iron reduction at Khuzestan Steel Company.

Mr Nik said that "By the end of the fourth development plan, Iran's steel production capacity will be increased to 30 million tonnes. In order to increase the steel production in the country, there are 8 major steel projects being carried out."

He said Shadegan Steel Mill in Shadegan, Mianeh Steel Mill, Chaharmahal Bakhtiari Steel Mill in Azarbayjan, Neiriz Steel Complex, Gha'enat Steel Mill, Sabzevar Steel Complex, Bafq and Baft Steel Mills are the 8 steel projects in 8 different parts of the country for a balanced expansion. Initially an amount of 800,000 tonnes of production capacity was considered for each of them but then after certain changes a production capacity of 1 million tonnes is considered for each of them. Hopefully we will be adding another 5 million tonnes to the available capacity.

Zamzam 2 factory of Khuzestan Steel Mill is the biggest direct iron reduction factory of Iran with a yearly production of 1 million tonnes of sponge iron. With its operation, the steel production capacity at Khuzestan Steel Mill will increase to 3,200,000 tonnes.

Demand for cement and steel to double by 2009 in GCC

GulfNews reported that demand for concrete and reinforcing steel is expected to more than double in 2009 as over USD 1.8 trillion worth of construction projects flood the GCC. Concrete, reinforcing steel and stone cladding are in all in huge demand in the region as the Gulf becomes the epicenter of the world's most concentrated construction boom. However, figures show demand for construction materials will peak next year before dipping in 2010.

According to the report, demand for ready mix concrete across the Gulf is forecast to hit USD 8.6 billion in 2008. This figure will be more than double in 2009 to reach USD 18.7 billion before dipping to USD 15.5 billion in 2010.

It is a similar story for reinforcing steel. It is expected to reach USD 7.5 billion in 2008 and rocket up to USD 16 billion in 2009. But it will fall to USD 13.1 billion in 2010. Stone cladding is expected to reach USD 1.5 billion in 2008, USD 4.3 billion in 2009 and maintain a steady increase of USD 4.5 billion in 2010.

Mr Bernard Walsh MD of DMG World Media Dubai said that "The forecasts are based on the number of projects coming up. Therefore, the number of projects, at the stage where you need cement and steel, will have reduced in 2010. Stone cladding has a delay factor as it's used later on in the construction process. However, as new projects come up and orders for cement and steel are put in, demand could increase again after 2010."

Dr Kashif Naqvi senior procurement analyst at Al Habtoor Engineering Corporation said that "There is a shortage in the clinker and therefore suppliers are unable to produce the quantities. Demand has gone up but supply has gone down."

Mr Naqvi said that Al Habtoor has projects booked for the next 10 years and are specifically looking to import cement from Southeast Asia among other regions to try and keep up with demand. He added that "Now the outside sees the high demand in Dubai and so they are trying to raise their prices from around AED 14 or AED 15 to AED 18."

The top 5 biggest civil building projects currently under way in the Gulf are all in Saudi Arabia, the UAE and Kuwait with a combined value of USD 349 billion.

DWTC awards major construction contract to DTCD

Dubai World Trade Centre officially announced that it has awarded the development contract for the first phase of its Dubai Trade Centre District to Al Jaber LEGT Engineering & Contracting in a deal valued at AED 3.35 billion.

The contract will see ALEC take on the responsibility for the construction of phase 1 of the integrated commercial destination, which will include over 240,000 square meters of Grade A office space, along with a premium range of meeting, retail and hospitality facilities.

Mr Helal Saeed Almarri director general of DWTC said that "We are designing DTCD to be a world class urban destination at the core of Dubai’s commercial district, offering a blend of high end office and retail space complemented by luxury lifestyle offerings. Delivering a consistent standard of excellence across every aspect of the project requires that we leverage the professionalism and expertise of the best in the industry. In awarding ALEC the contract for the first phase of development, we believe we have selected the right firm to enable the highest quality result."

Mr Kez Taylor MD of ALEC said that "As a leading contractor, we have experience with a number of the region’s most iconic projects, and fully understand the enormous responsibility of delivering them on schedule and to the highest possible standard. DTCD is a truly remarkable project that will create a bold new business landmark at the heart of the UAE and we are very proud to be involved in its development."

DWTC’s other partners on the DTCD project include world renowned companies including Hopkins Architects to the WSP Group for structural engineering, and the Mace Group for project management.

DTCD is one of the most significant redevelopment projects currently being undertaken in the region, transforming the entire area surrounding the Dubai International Convention & Exhibition Centre in the commercial heart of Dubai into a business quarter of unsurpassed quality.

Chinese steel export to rebound in May

It is reported that China's steel export might rebound in May given the continuously expanding price difference between domestic and global price. Therefore, the export price has already hit the record high and the price rally looks set to extend through the month of May along with growing export volume.

Shanghai Securities News reported that market analysts predict that Beijing might release further tightening policy once the steel export exceeds the warning line.

Global steel prices have posted remarkable run up so far in May as CRU Global Steel Price Index hits 269 points on May 16th up by 13.1% MoM and 56.1% YoY.

(Sourced from MySteel.net)

Anshan Steel to build 10 million tonne plant in Fujian

Bloomberg reported that Anshan Iron & Steel Group parent of China's second-biggest steelmaker may build a 10 million tonne plant matching an investment plan by a rival that may cost CNY 60 billion.

Mr Zhang Xiaogang president of Anshan said the company is studying the possible venture with Fujian Sangang Company in China's southeastern province of Fujian. He said that “We are still studying the project so nothing has been decided.''

The report added that Chinese steelmakers are expanding capacity to meet higher demand in the world's fastest growing major economy. Baosteel Group Corp, the nation's largest steel producer last month said a planned 10 million tonnes plant may cost CNY 60 billion.

HDG price continue to edge up in China

It is reported that hot dipped galvanized coil price are still going up in China. On Shanghai market, 1.0mm HDG by Anshan steel is being quoted at CNY 7150 per tonne; 0.5mm material by private steel mills at CNY 7280 per tonne up by CNY 250 per tonne and CNY 30 per tonne respectively.

Mysteel forecasts as already forecast in early March, Shanghai price for 1.0mm HDG by Anshan Steel has been quite close to our target of CNY 7200 per tonne. As long as Shanghai price for 1.0mm HDG remain above CNY 6800 per tonne the next target would be CNY 7200 per tonne to CNY 7300 per tonne.

Export offers are still mixed. The range is from USD 1000 per tonne to USD 1150 per tonne FOB for 1.0mm HDG. A tier two steel maker in north China tells Mysteel that it is exporting DX51D/SGCC 1.0mm HDG at about USD 1070 per tonne June production and July shipment. There is an extra of USD 65 per tonne and USD 100 per tonne for 0.55mm to 0.59mm and 0.5mm to 0.54mm material respectively.

Steel mill in North East China is offering DX51D/SGCC 1.0mm HDG at around USD 1130 per tonne to USD 1150 per tonne FOB as base. By comparison, a Tangshan based steel mill is only quoting at USD 995 per tonne FOB for the same product.

Chinese HDG price is expected to remain strong in May and export tonnage for May shipment would see further rise.

(Sourced from MySteel.net)

Baosteel likely changes for Q3 prices

It is reported that Baosteel's delayed Q3 EXW price release has beaten expectations. However, a host of steel experts forecast that the steelmaker will increase price by CNY 200 per tonne to CNY 300 per tonne. Strong operations are still expected for steel industry in Jun.

Baotou Steel was reported to lift its price further recently
1. HR product price was raised by CNY 250 per tonne
2. CR product up by CNY 300 per tonne
3. Large and medium sized section steel up by CNY 250 per tonne.
4. Ex works price for Q2353.0mm HR products stands at CNY 5970 per tonne
5. HR Q2355.5mm price stands at CNY 5800 per tonne
6. CR SPCC1.0mm price stand at CNY 6900 per tonne
7. SPCC1.0mm full hard price stand at CNY 6200 per tonne.
8. HDG price was increased by CNY 300 per tonne
9. SGCC1.0mm price stands at CNY 6950 per tonne.

(Sourced from MySteel.net)

Jinan starts the construction of 4.3 meters wide plate mill

It is reported that Jinan Steel, based in province Shandong, the east of China, started the construction of third heavy plate line. The line is expected to be commissioned in October 2009 and the aim of the line is to expand the capacity of high value added heavy plate.

The width of the new line is 4300mm and the design capacity is 1.8 million tonnes per year.

An official said that wide heavy plate, especially shipbuilding wide heavy plate is popular in end users and this i