SAIL and Steel Complex Limited sign MoU

Kerala state owned Steel Complex Limited and the Steel Authority of Limited have signed a MoU for starting a joint venture. SAIL and the state government will have equal share in the joint venture.

The MoU was signed in the presence of Mr Ram Vilas Paswan union steel minister and Mr VS Achuthanandan CM of Kerala. Mr G Ojha director personnel of SAIL and Mr PH Kurian secretary Investment Promotion of Kerala government signed the MoU.

Mr Paswan also laid the foundation stone for a rolling mill at the SCL, capable of producing 50,000 tonnes of steel a year.

SCL, which became a subsidiary of the Kerala State Industrial Development Corporation in 1979, began incurring huge losses and was referred to the Board for Industrial and Financial Reconstruction as a sick unit in 1992.

Mr Paswan hints for more measures to cool down steel prices

Mr Ram Vilas Paswan union minister steel, without elaborating, said that the Indian government would take more measures to bring down steel prices.

While speaking at the foundation stone laying ceremony for a rolling mill at Steel Complex Limited in Kerala, he said that steel is one of the key ingredients for building up infrastructure and a vital parameter of the country’s economic growth.

He said that “The recent spurt in prices of steel products has been a matter of great concern and we in the government have been intensely engaged in attempts to address the issue. We have recently announced a package of fiscal measures to contain the steel prices.”

JSW Steel reduces HR and HDG prices

PTI reported that JSW Steel on weekend said that it will reduce HR coil price by INR 500 per tonne and galvanized steel by INR 750 per tonne with immediate effect.

Mr Seshagiri Rao director finance of JSW in a statement said that "As a responsible corporate, we feel the positive step the government has taken by reducing duties should result in direct benefit to the customer, who has been hard pressed by the recent inflationary trends.”

USW evaluating Essar offer for Wheeling Pittsburg

AP reported that the United Steelworkers of America is evaluating the Essar offer to buy Esmark Inc, parent of Wheeling Pittsburgh Steel Corp. USW has the right to reject the bid or mount a competing bid under terms of its contract with Wheeling Pitt.

Mr Ken Aspenleiter, president of Local 1190 of the USW, which includes members at the Steubenville and Mingo Junction Wheeling-Pitt plants as well as the Mountain State Carbon joint venture coke plant at Follansbee, said that “The five union presidents, two contract coordinators and a USW staff representative met Thursday to discuss the events of the past couple of days,”
Mr Aspenleiter said that “The union still has options under the collective bargaining agreement such as the right to bid and successor ship.”

He said that “We will ensure that, no matter who the new partners are, there will be a long-term commitment to steelmaking in the Ohio Valley. The union will make sure that we will have a collective bargaining agreement that is fair and equitable to our members and retirees.”

According to James P Bouchard chairman & CEO of Esmark, the union had 52 days from the announcement of the Essar offer on Wednesday to mount a competitive bid under the successor ship clause or to waive the waiting period.

In 2006, the union backed Esmark’s bid for Wheeling-Pitt over a competing bid by CSN of Brazil, in part because Esmark had a working relationship with the union.

Indian wind power potential estimated at 45,000 MW

Mr Vilas Muttemwar union minister of state for new & renewable energy said that gross wind power potential in India has been estimated at over 45,000 MW, based on the areas having wind power density of 200 watts per square meter or more and assuming land availability in potential areas at 1% and land requirement at 12 hectares per MW.

A total wind power capacity of 8748 MW has been installed in India till 31st March 2008.

State wise details of potential are given below

Potential in MW

State wise & year wise wind power installed capacity as on March 31st 2008 are given below

Capacity in MW

Capacity addition likely to soften cement prices

ET reported that Indian cement industry has added close to 15 million tonne per annum capacity in January to March 2008 quarter, including 10 million tonne in March alone 2008. In addition, 18 million tonne capacity is likely to be added in 2008-09 and 29 million tonne in 2009-10.

The new capacities and ban on export will ensure a much larger supply to the domestic market this year. he massive capacity addition is may bring down cement prices in the near future bringing down the net realization for domestic cement majors.

The report cited Mr AL Kapur MD of Ambuja Cement as saying that "With so much of new capacity coming on stream, the supply may increase more than the market can absorb. In this scenario, prices may come down."

Much of the capacity addition has happened in the north and south, mainly because of the availability of limestone reserves. Rajasthan accounted for 4.6 million tonne, while Andhra Pradesh, Karnataka and Tamil Nadu together added close to 6 million tonne. In the west, Gujarat and Maharashtra have added 3 million tonne. Analysts say north and south will have surplus supply of cement. Cement prices are expected to remain stable in the west, as the export ban will result in enhanced supplies to the region.

Cement production grew 8% to 168 million tonne last fiscal, while consumption grew at 10%. The average price growth was 11% during the year. Analysts estimate that with GDP growth at 8%, cement demand is likely to remain at 10%.

Contract disputes delay NTPC’s Barh project

It is reported that work on National Thermal Power Corporation Limited’s INR 8,700 crore Barh power project in Bihar, already behind schedule for 2 years, has virtually come to a standstill following contractual disputes between the NTPC and two Russian suppliers of key equipment.

Technoprom Exports and Power Machines, the two Russian companies, are demanding more money for the equipment, citing higher steel prices. Technoprom is to supply boilers to the project, while turbines and generators are from Power Machines.

The report cited a senior power ministry official as saying that "Though there were contractual disputes even earlier, the Russian companies want a price escalation in the contract on account of an increase in steel prices. We are in talks with the Russian companies to revive the project."

An official of NTPC said that "There have been inordinate delays in the supply of equipment from Technoprom Exports and Power Machines for units I, II and III. NTPC’s projects are getting chronically delayed. It is also true that the price of steel and raw materials has indeed hardened, which is linked to the timely delivery of equipment. Russian companies work on a government to government intervention, which unfortunately is not the case with NTPC which is a commercial entity."

Indian Railway projects through PPP route

Mr R Velu union minister of state for railways recently said that certain areas such as development of world class stations, setting up of manufacturing units for rolling stock, infrastructure projects for port connectivity through Rail Vikas Nigam Limited and several activities in catering and tourism and hospitality area have been identified for possible execution through public private partnership route.

Some of the projects already executed or sanctioned with private participation are
i) Surendra Nagar Pipavav gauge conversion
ii) Hassan Mangalore gauge conversion
iii)Gandhidham Palanpur gauge conversion
iv) Haridaspur Paradip new railway line
v) Obullavaripalli Krishnapatnam new railway line

Under these models, strategic investors who have interest in the project area invited to participate in project special purpose vehicle as shareholders. The special purpose vehicle is granted a limited concession period after which the project line is repossessed by Indian Railways.

Centre resolves water row with Chhattisgarh

BL reported that centre has hammered out a consensus with the Chhattisgarh government to get the commissioning of NTPC’s INR 12,000 crore Sipat project back on track.

Following a meeting between Mr Jairam Ramesh union minister of state for power and Dr Raman Singh chief minister of Chhattisgarh, a resolution was worked out on the contentious issues of allocation of water for the project and absorbing project oustees.

During the meeting, Mr Ramesh assured Dr Singh that NTPC, which has already provided jobs to 117 unskilled persons from the area, would additionally provide training and offers a stipend to 383 people over three years, following which they would be absorbed in regular jobs in NTPC.

Mr Ramesh said that "It was in the best interest of all stakeholders that a middle path was worked out to ensure that the project goes on stream." He added that he has asked for two weeks to study the situation and ascertain Chhattisgarh’s claims for greater allocation of power. NTPC was originally scheduled to commission its first unit of 500 MW at Sipat in October 2007 and a second unit in March 2008.
In the wake of the agreement, the Chhattisgarh government has ordered release of water for the project from the Hasdeo Bango irrigation canal. The decision would enable NTPC to resume production in the first 500 MW units of the 2,980 MW power plants in the Bilaspur district that was stopped in mid March 2008 after a brief trial run.

The state government had earlier stopped the release of water from the canal for the project following a dispute with the power major over employment to those displaced by the coming up of the mega power project. However, the plans went awry as the Chhattisgarh government decided to revoke water supply to the Sipat project on the grounds that the agreement to supply water was not in perpetuity and that it was unwilling to divert water from the Hasdeo Bango irrigation project. The State Government had, instead, suggested that NTPC could lay its own 50 kilometer long pipeline from the project site to the Mahanadi, rather than depending on the irrigation project, as its water availability declined over the years. Besides, Chhattisgarh also maintained that it could provide water to the Sipat project from Hasdeo Bango only for 2 to 3 years and the NTPC should use the time to lay the pipeline from the Mahanadi.

Duty on cement may not affect domestic prices – Analysts

According to industry analysts, the proposal of imposing 12% ad valorem duty on cement bags that cost INR 250 a bag or more may not have significant impact. This is the second fiscal measure taken by the government in the current financial year after banning cement exports. This will have a marginal effect because hardly 10% of the cement sold in India has the maximum retail price of INR 250 a bag.

Mr HM Bangur president of Cement Manufacturers' Association and also MD of Shree Cement said that "Such a measure will have impact on certain regions of the country where the prices are on the higher side. This will include the north east, Tamil Nadu, Kerala and Mumbai. There could be some costs push in these areas."

Till now, there were 3 excise slabs on cement. Cement at an MRP of less than INR 190 a bag was attracting excise duty of INR 350 a tonne and a bag that cost more than INR 190 and up to INR 250 attracted 12% ad valorem. However, cement that cost more than INR 250 was charged excise at INR 600 a tonne flat.

Industry sources said that it is up to the companies to pass on the effect of the ad valorem hike to the customers or not. For instance, in Mumbai, if a bag of cement cost INR 275, its ad valorem duty was INR 30. Now it will be INR 2.5 to INR 3 more.

Hassan Mangalore rail company breaks even in 2007-08

BL reported that Hassan Mangalore Rail Development Company Limited has reached break even in the second year of its operation. It handled 4.6 million tonnes of freight traffic during 2007-08 as against 1.6 million tonnes in 2006-07. A total of 1,945 trains, including 1,454 loaded with cargo and 491 empty, were run during 2007-08.

Ms Sarla Balgopal director & CEO of HMRDC attributed this to improved operations of freight trains, leading to larger volumes being transported. She said that "It had been expected, when the line was commissioned, that with 4 million tonnes we could break even and that this would happen by the end of the third year. This figure was achieved in the second year itself."

Ms Balagopal said that the bulk of the cargo transported consisted of iron ore. Iron ore contributed to 65% to the total freight traffic handled by the company. Iron ore cargo, which was at 825,000 tonnes in 2006-07, increased to 3 million tonnes in 2007-08. Iron ore for export from Chitradurga and Tumkur districts contributed the largest share to revenue to the tune of 75%. Other cargoes such as limestone cargo contributed 13% and fertilizer 10% to the total freight traffic of the company. HMRDC has set 6 million tonnes of freight handling target for 2008-09.

It may be noted that HMRDC commissioned the Hassan Mangalore railway line for freight traffic on May 5th 2006. The Karnataka government and Indian Railways each hold 40% stake in HMRDC, while New Mangalore Port Trust and Mineral Enterprises Limited hold 9% each. The Karnataka Rail Infrastructure Development Corporation holds 2% stake.

RINL CMD inaugurates ashram for children

It is reported that Mr PK Bishnoi CMD of Rashtriya Ispat Nigam Limitedhas inaugurated the Bhagavan Sri Sathya Sai Deena Janodharana Ashram at Koppaka village of Anakapalle mandal for children.

He expressed the confidence that the children of the ashram would come up in life and achieve success as they were under the right guidance and care of Sri Sathya Sai Seva Organizations. He was all praise for the noble service activities of the organizations.

Mr Y Manohar director personnel of RINL described the ashram as a temple of love and humanity that embraced all needy children irrespective of their caste, creed and religion. He expressed the confidence that the children of the ashram would bring laurels to the ashram.

Goldstone forms JV for solar panels manufacturing unit

Hyderabad based Goldstone Infratech has formed a JV with TF SolarPower and Korea based equipment supplier Jusung Engineering for setting up thin film photovoltaic panels manufacturing unit at the Fab City in Hyderabad.

In the proposed JV, Goldstone will hold a 54% stake and TF SolarPower and Jusung will jointly hold the remaining. The JV will deploy Jusung's patented 3D cell design and manufacturing technology for making thin film photovoltaic panels.

The photovoltaic plant will have a capacity to produce 350 MW, with an investment of INR 2,800 crore and is likely to be scaled up to 1,000 MW involving an investment of INR 16,000 crore after a certain period of time. It is learnt that the initial fabrication capacity will be 52 MW, with an investment of INR 600 crore, with the debt equity ratio of 1.5:1.

Construction work on the project had already begun and the first batch of photovoltaic panel products will be delivered in the first quarter of 2009.

Walchandnagar gets orders from Indian Navy and ISRO

It is reported that Walchandnagar Industries Limited has bagged 2 prestigious orders worth around INR 150 crore from the Indian Navy and Indian Space Research Organization.

WIL is involved in designing, manufacturing and supplying gear boxes to various programs of the Navy for Leander class frigates, survey vessels, aircraft carriers, Corvette class vessels, fleet tankers etc, with horsepower up to 24,000 horse power.

Mr Chirag Doshi MD of Walchandnagar said that "These are two highly prestigious orders received by WIL in our centenary year. The acquisition of these orders highlights our strengths of engineering excellence and high technology manufacturing and fabrication."

WIL has been closely associated with the Navy and ISRO and has partnered these organizations in producing highly critical and sophisticated components. It has been associated with satellite launching vehicle program of ISRO since inception and has supplied a large number of critical components which include flight motor casings and nozzles, flight motor segments, domes, nose caps for SLV, ASLV, GSLV and PSLV programs.

Centre to provide INR 650 crore for Mumbai Metro Project

It is reported that centre is planning to provide INR 650 crore extra budgetary support to part finance Mumbai Metropolitan Region Development Authority's Versova Andheri Ghatkopar Metro Rail Project.

Union finance minister has decided to release the fund as extra budgetary support as the project did not qualify for viability gap funding, which the centre provides for infrastructure projects.

The 12.5 kilometer long proposed project will entail an investment of INR 2,350 crore and is scheduled for completion by 2011.

NLC wins case over sales tax on briquette plant

Neyveli Lignite Corporation has won a case in the Madras High Court by which it would pay a nominal 4% sales tax under the TNGST Act, 1959 instead of 12% demanded by the TN commercial tax officer.

In a recent order, the court held that the fact that it was described as briquetting and carbonization plant would in no way make it either as a plant in running condition or it should be shifted to any other place for use. The intention of the parties was to sell it only as a scrap, and even in the gate pass, it was described only as scrap.

The court also said that the authorities themselves had initially directed that it was taxable at 4% and the parties had also paid that amount. Therefore, without there being any real basis to describe it as first sale and to refuse to accept it as scrap by the order dated April 16th 2007 of the commissioner of commercial taxes was clearly impermissible and contrary to the dictum of this court.

In April 2001, NLC had said that the B&C plant had become useless to any activity, and hence it was decided to dispose it as scrap. An accord was reached between Metals & Scrap Trading Corporation, selling agent of NLC and Chitrahar Traders to sell the plant, and it was dismantled and removed outside NLC.

The Court held that ultimately, goods being what they were, labeling it one way or the other could not help either side. The plant had become unusable and had been closed, and its license had been surrendered. It had been sold only with the condition that the purchaser would dismantle and sell it.

In these circumstances, the writ petition would stand allowed, and the respondent was directed to restore tax at 4% and refund the balance to appropriate parties.

Bharat Forge SEZ land farmers form new company

It is reported that around 1,000 farmers have formed a new company called Khed Developers Limited by selling their lands to Maharashtra government for the development of the Bharat Forge multi product special economic zone at Khed in Pune district.

The new company, which was registered at Pune a few weeks ago, will soon go into business with 250 hectare of developed land inside the SEZ as principal assets.

Out of its total land holdings, 187 hectare belongs to the farmers. The remaining 63 hectares have been contributed by the Bharat Forge Maharashtra Industrial Development Corporation JV, which is promoting the SEZ project and will also have a share in the new business entity.

Sterlite to expand its fiber optic cables facilities

Sterlite Technologies Limited has announced that it is planning to expand its fiber optic cables facilities to an annual manufacturing capacity of 6 million kilometer, from its current capacity of 2 million kilometer. This expansion in conjunction with the optical fiber expansion from 6 million kilometer to 12 million kilometer that would position Sterlite amongst the top 5 global integrated fiber and cable producers.

The expansion milestones of these fiber optic cables facilities have been planned to compliment its ongoing capacity expansion at its optical fiber facilities. The consolidated expansion for fiber and cable expansion is estimated to incur a capital expenditure of about INR 200 crore.

These facilities would be capable of manufacturing its existing range of fiber optic cable products as well as have the intrinsic capability to manufacture cable products as per evolving international telecom standards that are being introduced to cater to high bandwidth applications required by global markets. The optical fiber expansion is on track to complete by June 2009 and the cables expansion would be fully in place by March 2009.

Sterlite is also in advanced stages of discussion with leading global manufacturing equipment and raw material suppliers to streamline its efforts towards the expansion project milestones.

Ambuja Cements Cochin terminal to be ready by December

Exim News Service reported that Ambuja Cements is constructing a dedicated terminal at Cochin Port at a cost of INR 85 crore. This is expected to be ready for operations in December 2008. The terminal may have the capacity to handle about 1 million tonne a year and may be used for domestic distribution.

Ambuja Cements already has 3 terminals at Panvel, Surat and Mul Dwarka ports. It also proposes to acquire 3 more cargo ships at a cost of about INR 150 crore by 2009, taking its fleet to 10.

Mr AL Kapur MD of Ambuja Cements said that "The first of the ships is expected to be delivered in September 2008, while the remaining two will be delivered in 2009."

Modern India to invest INR 2000 crore in Rajasthan

Mumbai based Modern India Limited has sketched INR 2,000 crore investment plans for Rajasthan. Further, it also plans to establish a five star hotel in Udaipur and a special economic zone in other parts of the state.

The INR 900 crore project is scheduled to be completed in 3 years and is being developed through a special purpose vehicle in which MIL is a major stake holder. Besides developing a hotel and SEZ the company also plans to open a jewellery training institute in Rajasthan.

Mr Vijay Kumar Jatia CMD of Modern India said that "We have identified land for a five star hotel in Udaipur. We will soon start acquiring land for the 200 room hotel, which would come near a lake."

He added that the hotel project is expected to cost INR 1,000 crore and it is also interested in setting up a SEZ in Rajasthan. Modern India through its subsidiary, Modern India Property Developers Limited, is already developing an electronic hardware and software SEZ on around 37 acres of industrial land at Khopoli in Maharashtra.

Modern India Limited engages primarily in the trading of textiles in India. It also exports its textile products to other countries. The company’s other activities include export of steel products, including steel pipes and bars to the United States, Germany and Switzerland, sale of software for jewelry industry and CAD machines, development of residential and commercial properties and business center operations.

Modern India Limited announced a 71% increase in net profit at INR 13 million for the quarter to December 2007. Its sales increased by 150% YoY to INR 419.8 million.

Recession report - IMF predicts slower world growth

IMF in its latest World Economic Outlook said that World growth will slow to 3.7% in 2008, in wake of financial crisis United States, other advanced economies lead slowdown Emerging economies are likely to weather storm better, but not insulated Global growth will decelerate in 2008, led by a sharp slowdown in the United States, amid a housing correction and a financial crisis that has quickly spread from the US subprime sector to core parts of the financial system,.

Citing the unfolding financial market turmoil as the biggest downside risk to the global economy, the April 2008 report said the IMF expects world growth to slow to 3.7% in 2008, 0.5 percentage point lower than what was forecast in the January 2008 World Economic Outlook Update.

Further, world growth would achieve little pickup in 2009, and there is a 25% chance that the global economy will record 3 percent or less growth in 2008 and 2009, equivalent to a global recession.

Mr Simon Johnson Chief Economist of IMF said that pointing to the balance of risks around the IMF's projections as lying somewhat to the downside. The principal downside risk comes from the possibility that financial strains could deepen.

And even though the sentiment in financial markets has improved in recent weeks since the Federal Reserve's strong actions with regard to investment banks, he noted that strains in markets can quickly become reinforcing and the possibility of a negative spiral remains a possibility.

Mr Johnson flagged continuing inflation worries, particularly in the wake of increasing commodity prices; large current account surpluses; and the uneven pattern of exchange rate movement around the world" as the other downside risks.

Steel futures contracts: Who's doing what?

Reuters has recently given an update of steel futures contracts across the world as under

1. DUBAI GOLD AND COMMODITIES EXCHANGE

Dubai's international rebar futures contract started trading in October 2007. After a slow start, the volumes began to exceed 500 lots per day within the first 6 to 8 weeks, but the contract could not maintain this pace and has been struggling to attract investors since late December. The Dubai steel contract is for reinforcing bar used in construction. Each contract is for 10 tonnes of grade W460 rebar of 12 meters and allows for both cash settlement and physical delivery, the latter at DGCX approved delivery points in Dubai, which can be used as warehouses for financing under similar terms as per LME warrants.

The DGCX listed four delivery months initially with February 2008 and is due to launch June 2008. Extra delivery months and 13 weekly contracts replacing the front three months depend on greater market liquidity.

The steel contract is the first of four contract suites targeted at the steel supply chain that the DGCX plans to issue. The three others are for stainless steel, flat products and raw materials. But their launch will largely be dependent on the long product suite, which commenced with Dubai rebar, succeeding.

2. LONDON METAL EXCHANGE

The London Metal Exchange, through which most of the world's industrial metals are traded, brought its two regional steel contracts to its open outcry trading floor.

The contracts, which cover steel billet for delivery in the Mediterranean and Far East, have been trading electronically and in the telephone market since February 25.

The first delivery date will be July 28th 2008. LME stocks of steel started to be reported on April 29. Contracts out to 15 months will be available and the lot size is 65 tonnes. The initial delivery location for the Mediterranean contract is Turkey and Dubai, and for the Far East contract South Korea and Malaysia.

3. NEW YORK MERCANTILE EXCHANGE

The world's largest physical commodity exchange, NYMEX, announced last July that it has signed a deal with World Steel Dynamics to launch a steel futures contract based on WSD's steel benchmark index.

At the time of the announcement, the Exchange said it aimed to launch the contracts later in 2007 however the debut has been delayed repeatedly.

Earlier this year, the CME Group Inc's launched a proposal to buy the NYMEX, which to some industry sources, has made the plans for steel contract even more unclear.

The expected contract was announced to be USA hot rolled band steel futures and to be cleared on the NYMEX ClearPort system.

SHANGHAI FUTURES EXCHANGE

The Shanghai Futures Exchange has been trying to launch rebar and steel wire futures for well over a year, but the exchange still lacks support from China's steel industry.

The Exchange has not yet given a date for launching its contracts but the industry thinks it might be shortly after the LME's contracts.

Nucor ready to go global – Mr DiMicco

It is reported that international investments for Nucor Corp are likely to run in the billions of dollars in the next few years as the company turns outside the United States for additional growth. Mr Dan DiMicco CEO of Nucor told analysts last week that Europe and Mexico are likely to be particular targets.

The plans outlined by the company mark a significant shift for Nucor, which to date has not been much of a factor in the steel trade outside the United States. Of the 20.3 million tons of steel Nucor shipped in 2007, only about 2 million tons went to other countries. Half were shipped to nations covered by the North America Free Trade Act. It had no steel production outside the United States until it bought Canadian-based Harris Steel last year.

Mr DiMicco said that the Duferco venture with a final agreement expected next month opens the European Union, Eastern Europe and the Middle East for Nucor. Plans announced in March to build a plate and coiled sheet plant in Mexico give the company a toehold there. Those are where he expects to see the most opportunities in the next three years or so.

Mr DiMicco said that “Let's put it this way. We are looking at billions of dollars of investment, not hundreds of millions of dollars in investments."

ArcelorMittal announces changes US management teams

ArcelorMittal announced changes to its Flat Carbon Americas management team effective immediately.

1. Mr Leonard Chuderewicz will assume the role of VP operationsof Flat Carbon Americas. Previously, Mr Chuderewicz was the COO of ArcelorMittal USA.

2. Mr Andrew Harshaw will assume the role of COO of ArcelorMittal USA. Mr Harshaw was the VP of manufacturing for ArcelorMittal Dofasco.

In his new role, Mr Chuderewicz will support operations at all ArcelorMittal’s flat carbon facilities in North and South America and will report to Mr Louis Schorsch president & CEO of Flat Carbon Americas. He will be responsible for managing the operations at all ArcelorMittal USA facilities and will report to Mr Michael Rippey president & CEO of ArcelorMittal USA.

Mr Schorsch said that “Mr Len is a proven leader with an exceptional operational background and his expertise makes him an excellent addition to the Flat Carbon Americas leadership team. In this new role, Len will support unit CEOs and operational executives to ensure high standards of operational excellence throughout the region. In particular, Mr Len will facilitate integration and sharing of best practices both within the region and with other ArcelorMittal divisions.”

Mr Rippey said that “The experience and contributions Andy brings to us from ArcelorMittal Dofasco are exceptional. His 30 years of leadership, track record of success with health and safety initiatives, as well as his ability to drive quality improvements at Dofasco, make him an excellent choice for this critical position within our USA organization. We wish Len every success as he assumes broader responsibilities within the FCA organization.”

Trinecke zelezarny 2007 profit up by CZK 1 billion

CTK reported that Czech steel maker Trinecke zelezarny had an audited net profit at CZK 3.633 billion in 2007, CZK 1 billion higher than in 2006. Its sales grew by 12% YoY to CZK 35.553 billion and production of pig iron production grew by 41,000 tonnes.

Ms Dusana Chrenekova a spokeswoman of the company told CTK Trinecke zelezarny benefited from the favorable situation on the market and massive investments made in the past years. This was the eleventh time in a row that the company was profitable and last year's profit was record.

Mr Tomas Chrenek supervisory board chairman of Trinecke zelezarny said that "Our production of pig iron, steel and rolled goods, as well as the financial indicators, topped the highest levels seen in the early 1990s.”

Mr Chrenek said that "We invest into the raising of value added of our products by thermal processing or drawing and are introducing new steel brands adding that investments into research were especially important.”

The Trinecke zelezarny Moravia Steel group has been raising its focus on the renewal of production equipment and on environmental projects in the last few years. Since 1997, it has invested over CZK 12 billion around a quarter of which went for environmental projects.

Trinecke zelezarny is the second largest domestic steel producer. It exports products to over fifty countries and it has 5,400 employees.

SA Dorbyl forms JV with Magnetto Wheels

South African automotive components major Dorbyl announced that it has formed a JV company with Italian firm Magnetto Wheels. Under the JV, Dorbyl had disposed of 50% of its interest in its wholly owned subsidiary Guestro Wheels to Magnetto with effect from April 1st 2008.

Disposal of the 50% Dorbyl share in Guestro Wheels amounted to ZAR 20 million. The proceeds were being used by Dorbyl to recapitalize Guestro before the transfer of 50% of the shareholding to Magnetto.

Mr John Newbury chairperson of Dorbyl said that the JV, known as Dorbyl Magnetto Wheels, would benefit from the expertise and global network of Magnetto.

Mr Gabriele Perris Magnetto chairperson of Magnetto said that the company had decided to invest in South Africa to expand its global footprint and to ensure local support for its customers, which have assembly plants in South Africa.

Guestro currently produces close to 1 million steel passenger and truck wheels a year and has plans to grow this to 2 million wheels a year.

Recession reports – What is it in real terms

In macroeconomics, a recession is a decline in a country's real gross domestic product, or negative real economic growth, for two or more successive quarters of a year.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough.

A recession may involve simultaneous declines in coincident measures of overall economic activity such as employment, investment, and corporate profits. Recessions may be associated with falling prices or deflation or alternatively, sharply rising prices or inflation in a process known as stagflation.

A severe or long recession is referred to as an economic depression and a devastating breakdown of an economy essentially, a severe depression, or a hyperinflation, depending on the circumstances is called economic collapse.

BTD Manufacturing acquires Miller Welding & Iron Works

Otter Tail Corporation’s operating company BTD Manufacturing Inc based at Detroit Lakes in Minnesota state of US announced that it has acquired Miller Welding & Iron Works of Washington in Illinois. The transaction, the terms of which were not disclosed, involved an exchange of cash for assets.

Founded by Richard Miller in 1965, Miller Welding is a custom job shop fabricator and finisher. The company manufactures parts, metal fabrications and machined parts for off-road equipment, mining machinry, oil fields and offshore oil rigs, wind industry components, broadcast antennas and farm equipment. Based near Peoria, the company serves several major equipment manufacturers in the region and nationwide, including Caterpillar, Komatsu and Gardner Denver. Miller Welding employs 120 people and generated annual revenues of approximately USD 26 million in 2007.

Mr Chuck Hoge CEO of BTD and the manufacturing platform VP at Otter Tail Corporation said that the acquisition will open up opportunities to expand in existing and new markets. He said that “This is welcome news for the respective customers of BTD and Miller Welding. The complementing production capabilities greatly expand the scope and capacity of what both companies can now offer.,'' Hoge said. And, while Miller Welding currently derives only a small portion of its revenues from the wind energy sector, it has the capabilities to expand significantly. We expect considerable growth and synergies with BTD and other Otter Tail companies, such as DMI Industries, our wind energy tower manufacturer.''

BTD offers design, engineering, prototyping and short-run functions, metal stamping, robotic and hand welding, spot welding, finishing machining, riveting, assembly, plating, heat treating and special packaging. With this acquisition, BTD now employs more than 580 people across its three Minnesota locations and in Illinois.

ThyssenKrupp Brazil steel plant to face cost blow out - Report

Thomson Financial reported that ThyssenKrupp AG's planned factory in Brazil will cost several hundred million euros more than originally anticipated on higher costs.

According to Financial Times, Deutschland newspaper citing sources familiar with the matter, costs for materials and labor will be higher than expected, as well as expenses related to the local geological environment.

The newspaper said that ThyssenKrupp plans to build the factory on alluvial soil near Rio de Janeiro, where hundreds of piles need to be driven into the ground. ThyssenKrupp started building the factory in 2006, with investments planned at EUR 3 billion and the production to start in 2009.

Japan steel majors expect lower profit this year

JMB reported that Japanese major steel makers expect extremely high cost for raw materials and energy to reduce their profit for the year ending March 2009.

Nippon Steel announced the provisional consolidated recurring profit is JPY 370 billion for the year, which is 34.4% lower than previous year when the cost of raw materials, energy and freight increases by around JPY 1 trillion for the year from previous year. They try to increase the steel selling price by around JPY 30,000 per tonne to cover the higher cost. Their profitability could improve depending on how much and how early they would realize the price hike

World steel boom boosts German steelmakers and workforce

It is reported that German companies are riding the crest of a boom in world steel demand, with increased sales also helping propel big increases in the workforce, the first in 35 years in that industry in the country.

German steel industry employed 92,357 people at the end of last year, an annual gain of 1.4% and the first gain since 1973.

Mr Hans Juergen Kerkhoff president of the Steel Business Association during the Hanover Fair, the world’s top show of equipment for heavy industry, told reporters that “We have started this year with a lot of momentum. First quarter output will probably turn out to be 13.5 million tonnes, the best quarter we have had in the period since 1990.”

Despite signs of economic crisis in the world, Mr Kerkhoff forecast full year German steel output would be 48.5 million tonnes, equal to that in 2007.

However, Mr Kerkhoff said that the industry was being hurt by a sharp increase in costs of its raw material as the price of coking coal had risen the most drastically. He added that “Current price lists suggest we face a tripling of costs compared to one year ago.”

Atlas CEO Mr Burr expires

It is reported that Mr Lawrence J Bo Burr president & CEO of Atlas Steel Products died on April 28th following a seven month battle with cancer. He was 63.

Mr Burr a graduate of Rutgers University acquired Atlas Steel Products in 1983 after joining the aluminized steel service center in a sales capacity in 1976. He guided Atlas into the stainless business in the 1990s, directed the company's installation of a tube mill and numerous other capacity enhancements and established the company as a leading supplier of metals for applications requiring heat and corrosion resistance.

He was a member of the Metal Service Center Institute and was past chairman of the Specialty Steel Council, past president of the Northeast Ohio Chapter and past member of the Governmental Affairs Committee and National Board of Directors. He was a member of the Fabricators & Manufacturers Association International, Precision Metalforming Association, ASM International, WINOC, Japan American Society of Pittsburgh and Leadership Cleveland Class of 1988. He also participated in several American Metal Market panel discussions about industry issues and opportunities.

EU and China start high level economic and trade talks

It is reported that the European Commission and the Chinese government launched their new High Level Economic and Trade Dialogue Mechanism in Beijing. The meeting was chaired by Mr Wang Qishan Chinese vice premier and Mr Peter Mandelson EU Trade Commissioner.

As per report the two sides agreed on an ambitious and far reaching remit for the dialogue and began focused discussions. Speaking at the opening of the meeting, Mr Mandelson said that “The EU and China are interdependent in more ways than we are different. We have to deal with the differences frankly and constructively. But the interdependence is a fact of twenty first century life. This reality should drive us to see this dialogue, and others that it complements, as the most important work we do.”

The talk exchange between the two nations covered trade and investment cooperation, balanced economic development, innovation and technology transfer and international economic development. There were then more focused discussions on Energy issues, trade in high tech, Intellectual Property Rights protection and trade facilitation. In future the mechanism will tackle these and other issues including market access, transport, regulatory issues and standards.
The High Level Economic and Trade Dialogue Mechanism is a Chinese initiative and was agreed on at the November 2007 Summit by President Mr Barroso and Premier Mr Wen in order to address the imbalance in trade flows between the EU and China. The broad remit of the HLM is to examine the global trading system; strategic bilateral trade related issues; investment; innovation, technology and IPR and EU China economic cooperation.

Mitsubishi Electric sees raw materials costs this year

Reuters reported that Japan's Mitsubishi Electric Corp expects rising prices of raw materials to cost it an extra JPY 16 billion in the year that began this month, with steel prices making up about 80% of that amount.

Mitsubishi said that higher prices of raw materials, especially copper, added JPY 25 billion to its costs in the year that ended on March 31.

Siemens Q2 project review

1. Orders rose 12%, to EUR 23.371 billion and revenue increased 1% to EUR 18.094 billion. On an organic basis, excluding the net effect of portfolio transactions and currency translation, orders climbed 15% YoY and revenue rose 2%.

2. Siemens substantially completed reviews of projects primarily in fossil power plant solutions and rail transportation, aimed at identifying risks and taking corresponding measures. As a result, Group profit from Operations was EUR 1.203 billion in the second quarter, including charges at Power Generation, Transportation Systems, and Siemens IT Solutions and Services totaling EUR 857 million.

3. These impacts also affected net income, which was EUR 412 million for the quarter, and income from continuing operations, which came in at EUR 565 million.

4. Siemens completed the first tranche of its previously announced share buyback program, with purchases totaling approximately EUR 2.0 billion.

Mr Peter Löscher CEO of Siemens said that “Our order growth in the first half has been excellent on a global basis, and our industry and healthcare sectors combined strong growth with higher earnings. Furthermore, our energy portfolio performed well in most areas, with very strong overall order growth. We have now concluded our project reviews in the fossil power business and, in total we have a clear picture of the relevant risks. We also demonstrated our commitment to increasing transparency and accountability at Siemens. We expect organic revenue to grow at twice the rate of GDP growth in fiscal 2008 and that our full-year Group profit from Operations and income from continuing operations will match the levels we achieved in fiscal 2007.”

OPEC April oil output slips – Report

According to a survey from Reutres, OPEC oil supply fell in April to its lowest this year as a strike cut Nigerian output and top OPEC exporters Saudi Arabia and Iran trimmed production. The survey showed that output from the Organization of the Petroleum Exporting Countries slipped to 31.64 million barrels per day in April from 32.05 million barrels per day in March.

OPEC officials and analysts said that the drop came during a month in which oil prices soared, hitting a record high of USD 119.93 a barrel. It said that the supply decline would probably be temporary, which would come as a relief to consumer countries worried by high prices.

Mr Mike Wittner of Societe Generale said that "It does not signal the start of any big cutting trend. Prices are just too good. Nigeria will bounce back and for the Saudis I think it is minor and seasonal."

He said that Nigeria had the largest drop in supply last month as output was hit by sabotage on a Royal Dutch Shell pipeline and a strike at Exxon Mobil Corp's local unit. Production averaged 1.81 million barrels per day during the month, taking supply below that of Angola, which may unseat Nigeria as Africa's top oil exporter unless the outages are resolved soon.

Officials said that Saudi Arabia and Iran, OPEC's top two exporters, both lowered output in April slightly in response to lower demand from customers for their oil. Saudi output fell by 100,000 barrels per day and Iranian supply eased by 50,000 barrels per day.

World oil demand usually slips in the second quarter as consumers in the northern hemisphere use less heating fuel and refineries carry out maintenance work.

According to Reuters surveys, the lower supply brought OPEC production to the lowest since November, when the group pumped 31.59 million barrels per day.

Forgemasters win third Queen's Award

It is reported that Sheffield Forgemasters outstanding achievement in international trade has been honored with a Queen's Award.

The company took its third Queen's award this time in the International Trade category in the 2008 awards announced on the Queen's birthday on April 21. It follows Export and Technology Awards in 1989 and 1997 respectively.

Over the last three years Forgemasters' export sales have increased by GBP 19 million and nearly two thirds of its production is exported. Main markets include Germany, China, Russia, Norway and Spain.

Mr Graham Honeyman CEO of Forgemasters said that "These are the UK's most prestigious accolades for business related achievement and we are delighted to have secured our third award. It recognizes our continued focus and commitment to delivering our specialized knowledge and products across the globe."

Samuel Manu Tech Q1 result down by 2.9% YoY

Samuel Manu Tech Inc's results for the first quarter of 2008 continued to be impacted by the challenging conditions experienced in the fourth quarter of 2007.

Samuel’s sales for the three months to March 31st 2008 were USD 227.8 million, which represents a decrease of USD 6.8 million or 2.9% from the USD 234.6 million achieved in the comparable period of last year, notwithstanding the positive contribution from recent acquisitions. Part of the decrease is attributable to the economic slowdown in both Canada and the US particularly in the housing, construction, forestry and automotive sectors. In addition, increased competition in certain key markets has resulted in lower selling prices. Furthermore, the strong Canadian dollar has continued to negatively impact Canadian exports and US based sales.

Samuel’s sales of the Packaging segment, at USD 109.5 million, were down USD 11.0 million or 9.1% compared to last year due mainly to lower volumes and selling prices reflecting increased competition and the continued slowdown in the forestry and construction sectors. In addition, the strong Canadian dollar had a negative impact on sales compared to last year.

Samuel’s Metal Processing sales for the quarter were USD 118.3 million, which was up USD 4.2 million or 3.7%. This increase was due to higher sales of steel pressure vessels, stainless and carbon steel tubular products, and roll formed products reflecting the acquisitions of Northland Stainless, Inc. and Associated Tube USA Inc. in August 2007, Tubular Products Company in January 2008, and Omega Joists Inc in February 2008. These increases were offset in part by lower steel pickling sales reflecting a reduction of steel pickling demand from our major Southern Ontario customer. Sales of welded tubular assemblies were relatively flat compared to last year.

Samuel’s net earnings from continuing operations for the first three months of 2008 were USD 3.1 million compared to the USD 5.9 million achieved in the comparable quarter of last year. Operating profit for the first quarter amounted to USD 6.9 million compared to USD 14.1 million in the comparable quarter of last year with decreases in both the Packaging and Metal Processing segments.

PSMC Privatization – 10% shares to be sold soon

APP reported that Mr Syed Naveed Qamar Pakistan’s Federal Minister for Industries, Production, Privatization, Ports and Shipping on Saturday said that 10% shares of Pakistan Steel Mills will soon be off-loaded in stock market to finance PSM modernization and expansion plan.

The Minister, in his comments after visiting various plants of Pakistan Steel, said the process of modernization and expansion of this mega steel mills project would be initiated soon. He said that its’ production capacity would be enhanced from the existing 1.1 million tonnes per year so that the PSM could meet the maximum steel demand of the country.

He added that “Pakistan Steel is a big gift of Shaheed Z.A. Bhutto to the nation. We want to see this as a modern and progressive facility.”

He, however asked the management to enhance the Mills performance further by pursuing the positive economic, industrial , investment and trade policies of the present Government. He appreciated that the capital repair and maintenance work of the coke oven batteries would be completed on the schedule and as a result there would be significant increase in the production of Pakistan Steel.

Ezz Steel plans EGP 1.1 billion bond issue

Reuters reported that Egypt's Ezz Steel announced on Saturday plans for a bond issue worth EGP 1.1 billion (USD 204.8 million) to pay debts owed to banks.

In a newspaper advertisement, the company said it will issue 11 million bonds in one tranche, each with a nominal value of EGP 100 and an 11.5% percent coupon.

Ezz Steel said each investor should buy a minimum of 10 bonds in the public subscription, which starts in two weeks and lasts for up to two months.

Construction work on TAPI pipeline project to start from 2010

The 10th steering committee of oil ministers from Turkmenistan, Afghanistan, Pakistan and India have agreed to start construction work on the much delayed TAPI pipeline project in 2010.

This was stated at a joint press conference by Mr Khwaja Muhammad Asif Pakistan’s minister for petroleum & natural resources, Turkmen minister for oil & gas industry Dr Baymurad Hojamuhamedov, Afghan minister of mines Mr Mohammad Ibrahim Adel and Indian minister for petroleum & natural gas Mr Murli Deora here after the conclusion of the steering committee meeting.

The second meeting of the technical working group of the 4 countries was also held the same day.

The gas pipeline project, to be completed at the cost of USD 7.6 billion, will start supplying 3.2 billion cubic feet gas per day through 56 inch diameter pipeline. The pipeline will start from Dauletabad field in Turkmenistan to Fazilka at the Pakistan India border, passing through Herat and Kandahar in Afghanistan and Multan in Pakistan. Key principles for future gas sales and purchase agreement will be agreed bilaterally between the buyer and sellers under the heads of agreement discussions.

Some countries not favoring keen on gas OPEC

Iran has acknowledged its enthusiasm for an OPEC style body for natural gas producers was not shared by everybody in OPEC and said that experts would hold more talks on the issue this month after a meeting in Tehran.

Deputy ministers and senior experts of the Gas Exporting Countries Forum met in the Iranian capital on Monday and Tuesday to debate the idea, as well as a Russian proposal for a charter for the informal club. Few details have so far emerged about the discussions. Major gas exporters have met informally for several years within the forum, widely seen as a talking shop.

Iran has been pushing for turning it into a more formal body for natural gas producers akin to the 13 member OPEC, whose output decisions can send oil prices up or down on world markets.

Mr Hossein Noghreh kar Shirazi deputy oil minister for international affairs said that "Iran is after taking a central role in the formation of the organization of gas exporting countries, as a country with great gas reserves. But some OPEC members have no inclination toward the formation of this organization."

OPEC includes big gas producers such as Qatar and Algeria, as well as countries sitting on major gas reserves. The gas forum also includes non OPEC members, notably Russia.

Arabtec expects 2008 revenue to hit USD 2.2 billion

Arabtec Holding PJSC expects to hit full year revenue of about AED 8 billion and may expand operations in Saudi Arabia in 2008 as construction costs rise in the UAE.

Mr Riad Kamal chairman of Arabtec said that "Arabtec Construction should hit the AED 6 billion mark, while Arabtec Holding should probably reach AED 8 billion." He added that construction costs may rise more than 30% in the UAE and biggest increases had come from steel and cement.

Arabtec is building the world’s tallest tower in Dubai and this week won its largest ever contract in Russia, a USD 2.7 billion contract to build a 400 meter tall tower in St Petersburg for the oil of arm of Russian national gas company Gazprom. The complex includes office space, along with leisure and entertainment facilities including a library and sports centre.

Arabtec is expanding operations overseas where it hopes to generate as much as 30% of its business by 2010. It has already launched units in Syria, Pakistan, Jordan and Qatar and now plans to add contracts in Saudi Arabia.

Ajman unveils AED 220 billion real estate initiative

Arabian Business reported that Ajman has unveiled an AED 220 billion real estate initiative aimed at developing the emirate’s coastline into a sustainable residential, business and leisure community. Named Al Zorah, the new city will be developed by the Al Zorah Development Company, a JV between the government of Ajman and the Lebanon based Solidere International Limited.

Located along Ajman’s pristine beachfront and creek, Al Zorah will be a self contained, master planned city containing varied residences, offices, retail, schools, hospitals and leisure facilities including marinas and a number of five-star resort hotels. It will be 12 square kilometer in area, with a built up area of 22 million square meters and will have a total of 16 kilometer of sandy white beaches and waterside walks.

Mr Sheikh Rashid bin Humaid Al Nuaimi chairman of Al Zorah Development Company said that "Al Zorah is a milestone for Ajman, reflecting the combination of tradition and innovation that distinguishes the emirate. Already a sought after destination for high value investors, who are drawn by its business friendly regulations and relatively open marketplace, Ajman is entering a new chapter in its development. Al Zorah is a truly spectacular project that will become an international destination."

Dr Nasser Chammaa chairman & CEO of Solidere International said that "Al Zorah combines both natural and urban environments in one; it is an ambitious project, intended to transform Ajman into one of the region’s most sought after places to live, work and play, in an urban environment that also ensures energy conservation and sustainability for future generations. It is well suited to Solidere’s community-focused development approach."

Mr Imad Dana CEO of Al Zorah Development Company said that "This land is alive with nature, there are 30 species of mangroves, over 20 species of birds and countless coastal fish. This natural beauty is central to Ajman’s appeal, but so too is its rich culture. Al Zorah, supported by the know-how and collaboration of Solidere International, will reflect Ajman’s cultural and natural heritage, and express the emirate’s spirit of innovation. It will also be appealing to investors after the government of Ajman issued a special decree giving Al Zorah both free zone and freehold status."

By adapting best practices in environmentally-friendly design and energy efficient infrastructure, Al Zorah will keep its ecological footprint to a minimum; the use of shade and energy efficient construction and materials is expected to significantly limit the use of energy. Al Zorah’s integrated network of walkways, canals, waterways, bicycle paths and public transport facilities will provide ample reason for people to leave their cars at home.

Dubai Properties to move ahead on Rashid Gardens despite cost pressures

Mr Hashim Al Dabal executive chairman of Dubai Properties said that the development of its AED 200 billion mega eco project Mohammed bin Rashid Gardens will not be impacted by soaring construction costs.

Mr Al Dabal said that "There are always big challenges when building in Dubai, sometimes its supply and demand or prices going up or location issues. But there is always a solution, we worry about the market as a whole, not it terms of just one cost area."

Mr Al Dabal said that Dubai Properties would finance the initial work on the project and seek outside investment later on in its development. He added that "Here we will use a two stage strategy where the infrastructure will be funded by the company and later on we will engage other developers and market investors for another source of funding."

The four clusters, themed around wisdom, nature, humanity and commerce, will each have an iconic building at their centers. The House of Wisdom will include a library, international universities, history and science colleges and the Sheikh Mohammed Mosque. The House of Humanity will include the Mohammed bin Rashid Al Maktoum humanitarian & charity establishment, the museum of light, the human civilization museum and other charities such as UNICEF. The House of Commerce will include banks, financial services firms and insurance companies, as well as higher educational institutions that specialize in banking and finance. Dubai Properties will oversee the project, which will be carried out in 6 stages.

It may be noted that labor and raw material costs have soared in the UAE over the last year due to record high oil prices and the falling value of the US dollar, to which the dirham is pegged, putting further pressure on developers already struggling to finish projects on time and on budget.

Chinese rebar export prices to surge this week

It is reported that Chinese export offers for Chinese rebar and wire rod are expected to move up further in May and they are going to reach USD 1000 per tonne FOB soon. While wire rod is forecast to exceed USD 1000 per tonne FOB sooner or later.

Some steel producers have boosted export offer for rebar to USD 960 per tonne to USD 970 per tonne FOB for June shipment and there is strong likelihood that quotation for July shipment would approach USD 1000 per tone FOB or even higher.

The steady rise in domestic market, robust overseas demand and rising production cost are believed to the major drivers. Most steel makers told Mysteel that the output is limited by expensive coke cost. They probably will be forced to cut production if there is not sufficient coke. The low production will lead to less exports and much higher export price.

Some steel mills have already shot up export offers last week citing higher cost and limited export allocation. Some traders indicate that current updated export quotations do not mean higher transaction prices. Actually, they lift prices on purpose so as to scare away some crazy buyers since there is almost no cargo for exports for the moment.

(Sourced from MySteel.net)

Chinese steel mills to face heavier pressure later this year

According to Mr Luo Bingsheng deputy general secretary of the China National Iron and Steel Association, decline in global steel consumption growth is inevitable this year though China's cut of steel export tightened supply on the international market in the first quarter, the supply and demand balance is coming back.

He said that Chinese steel industry should make early preparation and cope with potential risks.

Mr Luo said it's becoming harder for domestic steel supply and demand to go to balance, as the crude steel output may increase in next several months and annualized export is to plunge about 20 million tonnes which means more flowing back to home. Whereas, the domestic consumption growth is expected to come down and annualized crude steel consumption may grow about 11%.

(Sourced from MySteel.net)

Chinese economy to maintain 10% growth in 2008

According to Chinese Academy of Social Sciences 10.7% growth in the China's gross domestic product in 2008 is likely, slower as compared with the previous year.

According to a report released by CASS the added value of the agricultural sector would increase by 3.2% and that of the industrial and the service industries would be 12.2% and 10.9% respectively.

The report on China's economic situation in 2008 said the fixed assets investment would hit CNY 17.03 trillion up by 19.1%YoY still significantly higher than the growth of GDP and consumer price index. The high flying prices would decline in latter half as the government policies start to pay off, but the annual commodity retail price index and the CPI would still be around 4.4% and 5.5%.

The report said the annual per capita disposable income in urban areas would gain 11.1% and that in rural areas would increase by 7.3%. Both the urban and rural income growth would be lower than 2007. The total retail sales of consumer goods would for the first time rose above CNY 10 trillion to CNY 10.46 trillion and continue to be a major factor behind national economic growth.

The report said import and export growth would slow down to 23.3% and 19% because of the uncertainties in international economy, and the trade surplus would be USD 270 billion.

China opens world's longest bridge across Shanghai and Ningbo

It is reported that China opened the world longest cross Sea Bridge linking Shanghai with the booming port city of Ningbo in Zhejiang Province this week. A ceremony in the middle of the 36 kilometer cable stay bridge, which spans Hangzhou Bay near Shanghai, marked the official opening before several hundred spectators and the CNY 11.8 billion Hangzhou Bay Bridge opened to traffic on a trial basis.

The bridge with a 32 kilometer section spanning the East China Sea, begins at Jiaxing near Shanghai and ends at Cixi about 70 kilometer from Ningbo. It will reduce the 400 kilometer drive between Shanghai and Ningbo by 120 kilometers and shave driving time between the two cities from four to two and a half hours.

Construction of the bridge started in November 2003. About 2.45 million tonnes of concrete and 800,000 tonnes of steel were used to build the bridge. It was completed in June 2007.

About 40,000 vehicles are expected to cross the six lane bridge each day at first and this will increase gradually to its capacity of 100,000 vehicles a day in 2026.

Mr Jin Jianming deputy chief supervisor of the bridge construction said "The bridges has become well-known and is expected to attract many visitors. We haven't decided how long the trial period will last. That will depend on the condition of the bridge and we need time to improve operation management."

NDRC proposal to help power firms in China

Reuters reported that shares in Chinese power producers jumped on recently after state media reported that China's top economic planner may submit a proposal to the cabinet within days, seeking assistance for power generating firms squeezed by soaring coal costs and fixed power rates.

China Business News said that officials from coal mines, power firms, the electricity regulator and some industry bodies were recently convened by the National Development and Reform Commission in a failed effort to forge a compromise solution.

The newspaper quoting an unnamed NDRC official reported that still the commission would present its specific suggestions to the State Council as early as before the May Day holidays on how to ease tightness in coal supply. The report did not detail the proposals, but said measures that were discussed included controlling coal prices raise on grid tariffs, providing subsidies or activating a pricing formula that would link coal and power prices.

Shares in top electricity producer Huaneng Power Internationah jumped as much as 6% while Datang Power rose as much as 4.8%. Smaller rival Huadian Power soared 9% to HKD 2.70 even as it posted a 92% fall in first quarter earnings.

China has kept power tariffs essentially unchanged since 2006 despite surges in the cost of coal, which fuels some 80% of the country's power generators, leaving power firms with declining profit margins and making them unwilling to stockpile much coal.

China imports more motor vehicles in first two months

According to China general administration of customs China's motor vehicle imports soared sharply on strong demand at home in the first two months of this year.

The general administration said from January to February China imported 62,000 motor vehicles for USD 2.26 up by 82.6% YoY and 93.4% YoY respectively on the same period of last year. The growth rates were 63.9 percentage points and 80.8 percentage points higher, respectively.

China imports 33,000 vehicles in February alone up by 130% the highest growth rate since January 2007.

Chinese slab export to different countries in Q1 of 2008

It is reported that China has exported only 55,401 tonnes of common carbon slab during January to March 2008 period.

The country wise common carbon slab export destinations are

(In tonnes)

(Sourced from MySteel.net)

New license partner for MAN Diesel in China

It is reported that MAN Diesel SE in Augsburg has signed a license agreement with Weichai Holding Group Company Limited for the production of type 27/38 and 32/40 MAN Diesel four stroke engines. The future MAN Diesel licensee is Shandong Juli a subsidiary of the Weichai Holding Group.

Shandong Juli has a very significant market share in the region for this particular sector but has so far not had any diesel engines capable of using heavy fuel oil in its portfolio of products. With the licensed production of MAN Diesel engines, Shandong Juli will now be able to gain a share of this market too and expand its portfolio of engines to include models with an output of 2,000 KW and beyond. This had become necessary since Shandong Juli's customers are building increasingly large ships that require a commensurately high level of propulsion.

As part of the production of MAN Diesel engines under license, Shandong Juli will be investing in a new large component foundry as well as a new facility for processing, assembling and testing located in the immediate vicinity of the coast.

Alumina sees higher prices as China as output slows down

Bloomberg cited Mr Don Morley chairman of the Melbourne based company in a speech for the annual shareholder meeting sent to the Australian Stock Exchange said Alumina Ltd alumina and aluminum prices will rise as China's production slows. Increasing energy prices and costs in China will limit the nation's production capacity.

He said that “This is likely to be favorable for the alumina market and aluminum and alumina prices.''

Mr Morley said demand for aluminum, used in cars, planes and beverage cans remains robust led by China, the largest consumer of the metal. Aluminum prices have risen 22% in 2008 as supply and energy constraints crimp Chinese supply. He said “Global demand for aluminum and alumina has grown at historically high rates in recent years and this is expected to continue in 2008.''

Anshan eliminates 11 outdated firms in Q1

According to China Environmental Protection Bureau of Anshan city, the city eliminated 11 firms with outdated capacity corrected 7 printing and dyeing firms for their illegally exceeding pollutant discharge and punished 12 for the abnormal operations of their environmental protection facilities in the first quarter of 2008.

The city dismissed 5 of the 40 construction items for the sake of heavy pollution in the quarter.

BHPB bid for Rio –Rusal and Norilsk can challenge BHPB

Reuters reported that United Company RUSAL and Norilsk Nickel should pool their assets to take on global giants like BHP Billiton and seek takeover targets around the world.

Mr Viktor Vekselberg Russian billionaire who is also a major shareholder in the aluminum powerhouse said "The issue of uniting RUSAL and Norilsk Nickel has been discussed for a long time in various forms and configurations. For the Russian economy and for the world economy, the appearance of a new player which could compete with leaders like BHP Billiton is very important."

Mr Vekselberg whose Renova Group owns stakes in UC RUSAL and BP's Russian oil venture TNK-BP said "I think that, having made this step, the shareholders will support further integration of these assets,"

He said Rusal which delayed a long-planned initial public offering last year because of the global credit crunch will make the placement by the end of next year and use its public status as a launch pad, paying for new acquisitions with shares.

He added that further integration with Norilsk Nickel was not a precondition for the public offering. But the combination would have more financial muscle for ambitious takeover attempts.

Nikopol ferroalloy to increase statutory fund

Ukrainian News Agency reported that the shareholders of the Nikopol ferroalloy plant have decided to increase statutory fund by UAH 31.031 million to UAH 418.915 million.

On February 7th 2008 the shareholders approved increase of the statutory fund by UAH 312 million up to UAH 388.884 million via additional issue of shares.

Since March 2007 the plant's shareholders have several times initiated the meetings with the issue of the statutory fund increase included in the agenda, but failed to hold these meetings due to lack of quorum.

Eventually on November 22nd 2007, they approved increase of the statutory fund by UAH 312 million to UAH 388.884 million through issue of additional shares and approved subscription the shares in February 2008.

The plant ended 2007 with a net profit of UAH 4.855 million, increasing net revenues by 72.57% or UAH 1,923.894 million to UAH 4,575.078 million.

Norilsk pondering alliance with Gazmetall and Metalloinvest

According to industry analysts, Norilsk Nickel's minority shareholders are interested in forming an alliance with Gazmetall and Metalloinvest.

The news is that UC RUSAL, Norilsk Nickel, and Metalloinvest are planning joint activities is a confirmation of the three companies' intention to merge. Meanwhile, some experts believe that Norilsk Nickel's shares will remain volatile in the short run.

They noted that these companies are pricing Norilsk Nickel much higher than its current market value.

A merger between UC RUSAL and Norilsk Nickel is less favorable for minority shareholders, as the latter is expected to be undervalued in this case. At the same time, a merger between Norilsk Nickel and Metalloinvest is unlikely if it does not involve UC RUSAL.

Norilsk Nickel shares to be volatile

RBC News reported that Norilsk Nickel shares are likely to be volatile in the near term, as the situation is still uncertain.

The stocks will demonstrate a clear trend once UC RUSAL has announced its intentions regarding its partnership with Norilsk Nickel and the latter company's further development.

Experts said that Russian nickel giant has been priced rather high at USD 60 billion will drive its shares up.

Aker Yards and FLC West to build a shipyard at Primorsk

It is reported that Aker Yards and its Russian partner FLC West want to enter the project of a shipyard which will be built in the port of Primorsk. The cost of the building totals USD 1 billion.

According to Kommersant quoting Mr West Andrey Burlakov general director of FCL currently the companies are negotiating with bank Russain and Summa Capital which together Gasprom neft, controls the Primorsk port.

It should be pointed out that at the end of March Aker Yards ASA announced of selling 70% of its three yards. The buyer is FLC West. FLC West is purchasing from Aker Yards 70% in Aker Yards Ukraine Holding AS. 30% of holding will be owned by Aker Yards. Headquarters of Aker Yards Ukraine Holding AS will stay in Norway. But the holding will have a new name. The sum of the deal totals EUR 291.9 million and expected that the deal will be closed in summer 2008.

Gazprom moving ahead with Arctic shelf development

It is reported that a Gazprom delegation headed by Mr Alexander Ananenkov deputy chairman of the Gazprom Management Committee visited the ship building and machine building companies of Russia's Northwest Region recently.

Mr Alexander Ananenkov recently conducted a meeting in St Petersburg dedicated to the potential of Russian ship building and machine building companies in constructing vessels and special equipment to carry out Gazprom's high priority projects on the Arctic shelf. The participants in the meeting discussed the current status and development prospects for the Arctic shelf hydrocarbon development by Gazprom. The meeting emphasized the crucial importance of creating a new oil and gas production region in the Arctic shelf as a precondition for the long term production build up after 2010.

A special attention was paid to the compliance with engineering and construction schedules as part of the orders already placed with Russian ship building companies by Gazprom. In particular, offshore drilling rigs for high-priority offshore projects, such as the Shtokman and Prirazlomnoye fields’ development, for arranging exploration works in the Yamal offshore areas and the Ob and Taz Bays were discussed.

Representatives of ship building and project engineering companies of the Northwest region presented at the meeting reports on the capability of the Russian ship building industry in constructing offshore equipment and vessels required by Gazprom for the shelf development. The meeting also considered the improvement of the existing regulatory framework in relation to engineering and construction of offshore equipment and vessels.

JSL plans mining unit in Europe

Project Today reported that Indian stainless major Jindal Stainless Limited plans to form a new mining unit based in Europe that will invest in mining assets globally.

As per report, the proposed unit will be formed in the current financial year and will invest in nickel, coal and chrome mines.

PT Antam to meet 2008 nickel target despite smelter shutdown

It is reported that Indonesian nickel, gold and bauxite producer PT Aneka Tambang or Antam will meet its 2008 nickel output target, despite smelter maintenance.

The miner reported first-quarter nickel output of 4,362 tonnes virtually unchanged on the same quarter a year before. This means Antam has fulfilled 26% of its production target of 17,000 tonnes of contained nickel in ferronickel. Operations at two of its three smelters were stable, while output at the other was reduced because of routine maintenance.

Antam said in a statement that "Despite the overhaul of FeNi I smelter and expects to achieve its 2008 ferronickel production target of 17,000 tonnes."

Chinese ferrotungsten market in stable state

Chinese ferrotungsten market appears to be stable with price in Shanghai at CNY 163,000 per tonne, CNY 158,000 per tonne in Hunan and CNY 165,000 per tonne in Hubei Huangshi.

Owing to gloomy ferrotungsten market, both domestic and exports price declined slightly and some enterprises even stopped production temporarily.

In order to make its market more stable, Jiangxi ferrotungsten Group make plan to suspend production for one and half a month in the end of April or the beginning of May. But Hunan Chuangda metallurgical Group is under the operation now.

(Sourced from Ferro-alloy.com)

Chinese titanium ores and concentrates imports in March dip

According to Customs statistics, Chinese titanium ores and concentrates import amount reduced by 37.6% YoY to 87,589 tonnes in March 2008 as compared with 140,371 tonnes in the March 2007. The total value of imports in March 2008 decreased by 6.3% YoY to USD 13.809 million.

The detailsof imports in March are as under
1. Vietnam - 31,858 tonnes as against 52, 012 tonnes in March 2007
2. Australia - 32,751 tonnes as against 60, 523 tonnes in March 2007
3. Gambia 7,381 tonnes as against 514 tonnes in March 2007
4. India - 6,673 tonnes as against 19, 675 tonnes in March 2007
5. Sri Lanka - 2,945 tonnes as against 3,392 tonnes in March 2007

Chinese imports of titanium ores and concentrates totaled 68,262 tonnes in January to March 2008 with import value USD 38.983 million down by 6.2% YoY and up by 42.1% YoY respectively.

Xstrata in talks to buy Macarthur Coal - Report

It has emerged that Xstrata is the mystery bidder that forced Macarthur Coal to announce that it has been approached about a possible takeover.

The report cited sources close to the situation as saying that the two sides are still in talks as they have not yet agreed a price.
Macarthur and its top two shareholders, who it admitted had also been approached, have kept silent about the identity of its suitor since the announcement.

Macarthur announced two weeks ago it had been approached about a possible takeover but until this weekend the identity of the suitor was unknown.

Xstrata is taking advice from Rothschild and JP Morgan is helping Macarthur.

Iron ore price negotiations – China may pay preflight premium

As per reports in Australian media, China is inclined to pay a freight differential to iron ore majors BHP Billiton and Rio Tinto as the battle over the 2008 contract price continues.

The Australian newspaper report said that, in the first sign of a compromise, Chinese steel makers could pay a freight fee, but only based on long-term rates.

The freight differential has been a hot topic for the two parties, with China suggesting it does not need to buy Australian iron ore if prices are hiked.

BHP and Rio claim they should be rewarded for their proximity to China, given that Brazilian miner Vale is compensated for the longer shipping distance between the two nations.

China faces thermal coal supply challenge -NDRC

According to China’s top energy policy maker National Development and Reform Commission, China is struggling to ensure steady fuel supplies to thermal power producers, because the price they pay for coal is not fully in line with market prices.

NDRC said that there are still structural problems and supply tightness for coal and power in several parts of the country. It said that hotter than usual weather is expected this summer as is lower than average rainfall. This will strain thermal power plants by boosting use of energy intensive air conditioning and cutting available hydropower resources.

China said recently it faces electricity shortages of up to 10 GW this summer and its power plants are struggling to turn a profit because margins are squeezed between low state set power prices and soaring coal markets.

Beijing said that in the second and third quarters, however, hotter weather and Olympic demand combined with a mine safety campaign and soaring international coal prices will put coal and power production under pressure.

The statement called for an increase in coal shipments to the Beijing-Tianjin-Tangshan region and central China, and for firms to ensure normal coal and power supply during the Olympics. It also said China should improve monitoring of coal and power supply and demand, and boost coordination between different departments.

Coal distribution policy to be fine tuned to ensure same price for all

Mr Santosh Bagrodia union minister of state for coal clarified that the government does not want to overhaul the new coal distribution policy now being rolled out. He said “The new policy is a well framed policy and we will work under the broad guidelines of it.”

Mr Bagrodia said that he is not looking for any revision of the new policy but all industries should get coal at the same price and this may require some fine tuning in the system. He said that the coal ministry would ensure that small industries get coal at the price charged to bigger industries and that there is no discrimination in pricing.

Mr Bagrodia said that Coal India Limited has to ensure that there is no short supply. He said “We currently have a stock of 47 million tonne and we propose to liquidate it so that there is abundant supply in the market.”

MMTC pig iron export tender price surges

It is reported that MMTC Limited’s latest tender for export for 30,000 tonnes of pig iron has received the highest bid at USD 717 per tonne on FOB basis.

Chinese iron ore import from different countries in Q1 of 2008

It is reported that Chinese import of iron ore during January to march 2008 totaled to 110.664 million tonnes. Considering this, Chinese import of iron ore during 2008 on annualized basis would be 443 million tonnes

Australia, India and Brazil accounted for 82% of China’s total iron ore import

The country wise import volumes and their share are given below

(In million tonnes)

UK urged to act as Mexico aiming to smash worker union

Reuters reported that Mr David Miliband foreign secretary of UK has been urged to intervene against the Mexican government’s systematic attempts to crush and destroy the country’s biggest mining and steel workers’ union.

As per report more than 40 MPs have called on the US government to act over the persecution of the union, which has involved at least one murder, shootings, beatings, kidnap, torture, harassment of families and the illegal removal of the organization’s general secretary.

Mr Michael Leahy general secretary of the British Steel and Clothing Workers’ Union Community, which is leading the campaign in defense of the Mexican workers, has written to Mr Miliband urging him to raise serious concerns with the Mexican government.

In his letter, Mr Leahy also acting in his capacity as the British secretary of the International Metalworkers’ Federation, writes that “I know that you believe that the existence of free and independent trade unions and the practical ability for them to operate are essential hallmarks of any democracy. It appears clear to me… that the current situation in Mexico means that their democracy does not currently qualify to receive such a hallmark.”

A House of Commons motion, signed by more than 40 MPs, calls for the prosecution of those responsible for the illegal removal of former general secretary Napoleon Gomez Urrutia, who has been forced to flee the country after death threats to himself and family.

It calls for the return of illegally seized union funds and an investigation into the involvement of Grupo Mexico, the country’s largest mining company, into the killing of miner Reinaldo Hernandez Gonzales and the detention and torture of 20 of the union’s members.

Community and the IMF have accused the Mexican government of colluding with Grupo Mexico to destroy the National Miners’ and Metalworkers’ Union of Mexico following its campaign against dangerous working conditions and poor wages.

Mr Kiernan unhappy with Territory Resources output in Q1

AAP reported that well known Perth based mining executive Mr Michael Kiernan is not happy with the recent performance of his two key companies, Monarch Gold Mining Company Ltd and Territory Resources Ltd.

Mr Kiernan told shareholders at Territory's general meeting in Perth that iron ore production from its Frances Creek mine in the Northern Territory during the March quarter was disappointing due to an out of balance mine plan.

He said that "This issue is currently being addressed and will be rectified during the current quarter to ensure production is back on track. During the current quarter, a third mining fleet will be engaged to increase production. Production is incrementally being increased, with a target by December 2008 of an annualized rate of 2.4 million tonnes and by June 2009 of three million tonnes.”

He said that AUD 8 million would be spent over the next six months increasing Territory's stockpile area at the Frances mine to 450,000 tonnes.

Centennial Coal to extend production at Mannering Mine

It is reported that Centennial Coal Company Ltd will extend operations at its Mannering Mine which is scheduled to close at the end of June due to improved production and a strong export market.

Centennial Coal in a statement to the ASX said that production at Mannering on the central coast of New South Wales is set to continue into a new area of the mine lease.

Mr Robert Cameron MD of Centennial Coal Company Limited said that “This not only provides for the continued employment of Mannering’s dedicated workforce, but also allows Centennial to optimize the Group’s resources.”

Bangladesh urged to tap coal before gas runs out

Energy Bangladesh reported that experts from home and abroad have asked Bangladesh to mine its huge coal reserves before the depleting natural gas reserves run out but suggested to keep human interests and the nature in focus.

Mr Ajoy Kumar Ghose a former professor of Indian School of Mines said that "Phulbari is the crown jewel in coal inventory of Bangladesh and its development will help transform the economy of the nation. But the government should launch advertisement advocacy for assuaging the sentiments of project-affected people so that development and execution of the project can be facilitated."

Mr Ajoy who is also a director of Central Mine Planning and Design Institute in India said that "This is very important to resettle the displaced habitants properly so that their livelihood and pattern of life do not injure. He said that "Unless we strike some rich gas deposits in near future, sustainable energy development and economic growth may be in serious jeopardy. Coal discoveries in the northwest offer a window of opportunity."

Bangladesh has five coal fields with around 2.55 billion tonnes of reserves, and Phulbari alone can produce 15 million tonnes of coal a year over a 30 year period, officials said.

Bangladesh has already suffered a setback trying to mine coal in the country's northern Phulbaria area, where Britain's Global Coal Management Public Limited Company had to halt activities two years ago after violent protests by local. Residents and environmentalists, saying the project would displace at least 40,000 villagers and severely damage the nature. At least three people were killed and dozens were injured in clashes with police at Phulbari in Dinajpur district around 300 kilometers northwest of capital Dhaka.

Huadian and Yanzhou ink 32 month coal supply contract

It is reported that Huadian Power International Company Limited inked a contract with Yanzhou Coal Mining Company Limited locking the coal supply price in 32 months ending by December 31st 2010.

As per report, the power generation company gets a promise that Yanzhou Coal will supply coal at a price equal to the current market price allowing for the price it sells to any independent third part.

Zou County Power Plant and Huadian Zou County Power Company, which are operating eight generator sets with combined installed capacity of 4,540 megawatts will get the most part of the coal to be supplied under the new contract Huadian and Yanzhou Coal signed.

Huadian predicted that the rest time of 2008 since April 23rd and two fiscal years ending by December 31st 2010, the aforesaid two arms of Huadian will consume no more than 11.5 million tonnes, 15 million tonnes and 15 million tonnes of coal and the corresponding payment to Yanzhou coal will be not higher than CNY 6 billion, CNY 8 billion and CNY 8 billion.

Foreign gold miners facing roadblocks in Venezuela

Reuters reported that Venezuela plans to halt work on at least two gold projects in a mineral rich jungle reserve, in what could be the latest move by President Mr Hugo Chavez against foreign companies.

Canadian miner Crystallex said that the environment ministry denied an exploration permit for its Las Cristinas project, which sits on what could be one of Latin America’s largest gold deposits.

Gold Reserve also said the ministry had communicated a plan to rescind its permit to build its Brisas project, in the same Imataca reserve as Las Cristinas. Mr Doug Belanger president of Gold Reserve in a statement said that "It is unfathomable that the ministry suddenly attacks mining projects in the Imataca.”

Venezuela’s environment ministry told Reuters it was not able to comment, while mining ministry officials said they had not been informed of the situation.

Alcoa wants carbon trading exemption to avoid closures

The Australian Business reported that Australia biggest alumina exporter Alcoa has warned that even a modest carbon cost on aluminum production could lead to plant closures in Australia and moves to higher emitting plants in countries such as China.

Alcoa has told the Garnaut Climate Change Review that the aluminum sector should be awarded free emission permits. Otherwise market shortfall caused by plant closures would be met by competitors in other countries including some with significantly higher emissions.

Mr Alan Cransberg MD of Alcoa Australia said Alcoa had already made substantial cuts in emissions both in Australia and globally, having achieved its 2010 target in 2003.

The aluminum sector's call follows the warning by the Australian Petroleum Production and Exploration Association to the review that an emissions trading scheme in Australia could prompt liquefied natural gas investment to move to Qatar, Malaysia or Nigeria countries that didn't intend to have such a scheme.